FIRST AMENDMENT TO LEASE
AGREEMENT (this "Agreement") made as of the 1st day of September,
2004 by and between REP A10 LLC, a Delaware limited liability
company having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Landlord"), and
Scientific Industries, Inc., a Delaware corporation having an office
at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter called
"Tenant").
RECITALS
WHEREAS, AIP Associates, predecessor-in-interest to Landlord and
Tenant entered into an Agreement of Lease dated as of October __,
1989 (the "Lease") for the lease of 25,000 square feet of space (the
"Demised Premises" or "Premises") in the building located at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "Building");
WHEREAS, Tenant, by written notice to Landlord dated as of
December 16, 1998, exercised its option pursuant to Article 38 of
the Lease, to extend the term of the Lease to and including December
31, 2004; and
WHEREAS, Landlord and Tenant desire to amend the Lease to, among
other things, extend the term of the Lease to and including January
31, 2010 (the "Extended Expiration Date").
NOW, THEREFORE, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the
receipt and sufficiency of which being hereby acknowledged, the
parties agree as follows:
ARTICLE I
Definitions
1.1 The recitals are specifically incorporated into the
body of this Agreement and shall be binding upon the parties hereto.
1.2 Unless expressly set forth to the contrary and except
as modified by this Agreement, all capitalized or defined terms
shall have the meanings ascribed to them in the Lease.
ARTICLE II
Lease Modifications
Effective as of the date hereof, the Lease is and shall be modified
and amended as follows:
2.1 Term. Article 1 of the Lease is hereby modified and
amended to provide that the termof the Lease is extended to and
including the Extended Expiration Date, unless sooner terminated
pursuant to any of the provisions of the Lease. All references made
in the Lease to the "Expiration Date" or otherwise to the date upon
which the term of the Lease expires shall mean and refer to the
Extended Expiration Date.
2.2 Rent. Article 3 of the Lease is hereby modified and
amended as follows:
2.2.1 From the date hereof to and including December 31, 2004,
Rent shall be payable in accordance with the provisions of Article
38 of the Lease.
2.2.2 From January 1, 2005 to and including the Extended
Expiration Date, Rent shall be payable as follows:
From January 1, 2005 to and including December 31, 2005, the
Rent shall be $168,750.00, payable in equal monthly installments of
$14,062.50.
From January 1, 2006 to and including December 31, 2006, the
Rent shall be $175,500.00, payable in equal monthly installments of
$14,625.00.
From January 1, 2007 to and including December 31, 2007, the
Rent shall be $182,520.00, payable in equal monthly installments of
$15,210.00.
From January 1, 2008 to and including December 31, 2008, the
Rent shall be $189,820.80, payable in equal monthly installments of
$15,818.40.
From January 1, 2009 to and including December 31, 2009, the
Rent shall be $197,413.68, payable in equal monthly installments of
$16,451.14.
From January 1, 2010 to and including January 31, 2010, the Rent
shall be payable in one (1) monthly installment of $17,109.18.
2.2.3 Notwithstanding the rent schedule contained in Section
2.2.2 above, provided Tenant has not defaulted under any of its
obligations hereunder, Tenant shall be relieved of its obligation to
pay the monthly installment of Rent due with respect to the month of
January, 2005.
2.3 Taxes. Article 5(B) of the Lease is hereby modified
and amended by deleting "1989/90" and inserting "2003/2004" in its
place.
2.4 Tenant's Alterations. Article 9 of the Lease is hereby
modified and amended by inserting the following at the end thereof:
With respect to any and all alterations, installations,
additions and improvements (each, an "Alteration") permitted by
Landlord to be performed by or on behalf of Tenant in the Demised
Premises, Tenant will deliver to Landlord certificates evidencing
Worker's Compensation Insurance and Contractor's General Liability
Insurance in the amount reasonably satisfactory to Landlord (but in
no event less than the amounts set forth in paragraph 59 herein)
prior to the commencement of such work. Landlord shall have the
right to elect to cause Tenant to remove any Alterations and/or
improvements installed by Tenant at the end of the term. If Landlord
elects to have Tenant remove same, Tenant shall do so and repair, at
its own cost and expense, any damage to the Demised Premises caused
by said removal.
All Alterations (other than those performed by Landlord or its
construction affiliate) made to the Demised Premises shall be
subject to Landlord's construction inspection fee of (a) 10% of the
cost thereof up to a maximum of $100,000.00, and (b) 5% of the
portion of the cost thereof exceeding $100,000.00. In receiving such
fee, Landlord assumes no responsibility for the quality or manner in
which such work is performed. Tenant shall not, without the express
written consent of Landlord, enter upon the roof or attach or
install anything thereon or make any Alterations thereto, other than
as reasonably necessary to perform repairs and maintenance with
respect to roof-top heating, ventilating and air conditioning
equipment.
2.5 Insurance. Article 12 of the Lease is hereby modified
and amended by deleting Article 12(c) and inserting the following in
lieu thereof:
Tenant shall reimburse Landlord, as additional rent, within ten
(10) days of Landlord's invoice, for Tenant's Pro Rata Share (as
defined in Article 36 of this lease) of all premiums for fire
insurance upon the Demised Premises, including extended coverage,
rental value, vandalism and malicious mischief, as well as
environmental and liability insurance which is maintained during the
Term of this lease by Landlord. Notwithstanding the foregoing, from
the date hereof through and including the January 31, 2010, Tenant's
burden for reimbursing Landlord for the cost of maintaining
environmental insurance on the Demised Premises and Real Property
shall not exceed $1,250 per year.
2.6 Assignment/Subletting. Article 17 of the Lease is
hereby modified and amended by:
2.6.1 inserting the following as a new Article 17(E):
(E) Landlord agrees that it shall not unreasonably withhold its
consent to a subletting or assignment in accordance with the terms
of this Article 17. In determining reasonableness, there shall be
taken into account the character and reputation of the proposed
subtenant or assignee, the specific nature of the proposed
subtenant's or assignee's business and whether same is in keeping
with other tenancies in the building; the financial standing of the
proposed subtenant or assignee; and the impact of all of the
foregoing upon the Building and the other tenants of Landlord therein.
Landlord shall not be deemed to have unreasonably withheld its
consent if it refuses to consent to a subletting or assignment to an
existing tenant in any building which is owned by Landlord or its
affiliate or to a proposed subtenant or assignee with whom Landlord
is negotiating a lease or if at the time of Tenant's request, Tenant is
in default, beyond applicable grace and notice periods provided
herein for the cure thereof, of any of the terms, covenants and
conditions of this lease to be performed by Tenant, or, if
Landlord's lender's consent to such transaction is required and same
is not granted. Landlord hereby recognizes that Symbol Technologies
is currently occupying a portion of the Demised Premises as a
subtenant and consents thereto.
2.6.3 inserting the following as a new Article 17(F):
(F) Without affecting any of its other obligations under this
lease, except with respect to any permitted assignment or
subletting under Article 17(C) hereof, Tenant will pay Landlord
as additional rent one half of any sums or other economic
consideration, which (i) are due and payable to Tenant as a
result of any permitted assignment or subletting whether or not
referred to as rentals under the assignment or sublease (after
deducting therefrom the reasonable costs and expenses incurred by
Tenant in connection with the assignment or subletting in
question provided such costs were approved by Landlord when it
approved the assignment or sublease); and (ii) exceed in total
the sums which Tenant is obligated to pay Landlord under this
lease (prorated to reflect obligations allocable to that portion
of the Demised premises subject to such assignment or sublease),
it being the express intention of the parties that Landlord and
Tenant shall share any profit by reason of such sublease or
assignment. The failure or inability of the assignee or
subtenant to pay rent pursuant to the assignment or sublease
will not relieve Tenant from its obligations to Landlord under
this Paragraph 62(j). Tenant will not amend the assignment or
sublease in such a way as to reduce or delay payment of amounts
which are provided in the assignment or sublease approved by
Landlord. Notwithstanding the foregoing, the provisions of this
Article 17(F) shall not apply with respect to the existing sublease
with Symbol Technologies.
2.6.4 inserting the following as a new Article 17(G):
In the event Tenant shall request Landlord's consent to a
proposed assignment of this lease or proposed sublease of all or
a portion of the Demised Premises, Tenant shall pay or reimburse
to Landlord, as additional rent, the reasonable attorney fees
incurred by Landlord in processing such request.
2.7 Renewal Option. Article 38 of the Lease is hereby
deleted in its entirety and the following is hereby inserted in lieu
thereof:
38. Renewal Option. Tenant shall have the right, to be
exercised as hereinafter provided, to extend the term of this
lease for one period of five (5) years (the "Renewal Term") upon
the following terms and conditions: (a) That at the time of
the exercise of such right and at the commencement of the
Renewal Term, Tenant shall not be in default under this lease,
(b) That Tenant shall notify Landlord in writing that Tenant
intends to exercise this option no earlier than the date that is
eighteen (18) months prior to the Expiration Date and no later
than the date that is twelve (12) months prior to the Expiration
Date, (c) That at the time of the exercise of such right and at
the commencement of the Renewal Term, Tenant shall not have
assigned this lease, (d) That the Renewal Term shall be upon the
same terms, covenants and conditions as in this lease provided,
except that (i) there shall be no further option to extend this
lease beyond the one (1) Renewal Term referred to above; (ii)
the Premises shall be delivered in its then "as is" condition;
and (iii) the Rent to be paid by Tenant during the Renewal Term
shall be as follows:
During the first year of the Renewal Term, the Rent shall equal
the Fair Market Annual Minimum Rent (as hereinafter defined),
but in no event less than $205,310.16. Said sum shall be payable
in equal monthly installments.
During each of the second through fifth years of the Renewal
Term, the Rent shall be increased by four (4%) percent per annum
over the Rent payable for the prior year. Said sums shall be
payable in equal monthly installments.
"Fair Market Annual Minimum Rent" shall mean the rate Landlord
generally receives for new leases for comparable space in the
Building as of the date which is six (6) months prior the
Expiration Date. Fair Market Annual Minimum Rent shall
not mean "net effective rent to Landlord". In determining fair
market annual minimum rent, no adjustment shall be made in
consideration of and Tenant shall not be entitled to a credit
for Tenant improvements, brokerage commissions, rent
concessions and other concessions which Landlord may typically
offer to other tenants.
Time shall be of the essence with respect to all of Tenant's
obligations under this Paragraph 38. This Renewal Option is
personal to Scientific Industries, Inc., and is non-transferable
by operation of law or otherwise.
2.8 Landlord Alterations. Tenant hereby acknowledges that
all work which was required to be performed by Landlord under the
Lease has been performed. Tenant accepts the Demised Premises in its
current "as is" condition and acknowledges that Landlord shall not
be obligated to perform any work or make any installations or incur
any expense in order to prepare the Demised Premises for Tenant's
continued occupancy.
ARTICLE III
Broker
3.1 Landlord and Tenant each represents to the other that
this Agreement was not brought about by any broker and all
negotiations with respect to this Agreement were conducted
exclusively between Landlord and Tenant. Landlord and Tenant agree
that if any claim is made for commissions by any broker through or
on account of any acts of a party, such party will hold the other
party free and harmless from any and all liabilities and expenses in
connection therewith, including such other party's reasonable
attorney's fees and disbursements.
ARTICLE IV
Ratification
4.1 Tenant represents and warrants that the Lease is
presently in full force and effect, that no event of default has
occurred on the part of Landlord and that Tenant has no defense or
right of offset in connection with Landlord's performance under the
Lease to this date.
4.2 The parties hereby ratify and confirm all of the terms,
covenants and conditions of
the Lease, except to the extent that those terms, covenants and
conditions are amended, modified or varied by this Agreement. If
there is a conflict between the provisions of the Lease and the
provisions of this Agreement, the provisions of this Agreement shall
control.
4.3 This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors
and/or assigns.
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Lease as of the day and year first above written.
REP A10 LLC
By: Rechler Equity I LLC,
its managing member
By: Rechler Equity MM I LLC,
its managing member
By: Rechler Equity LLC,
its managing member
By:/s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________
Name:
Title:
SCIENTIFIC INDUSTRIES, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO