EXHIBIT 10.21
SUBLEASE
THIS SUBLEASE ("Sublease") is entered into as of this 30th day of December,
2004, by and between TMNG STRATEGY, INC. F/K/A CSMG ACQUISITION SUB, INC., a
Delaware corporation, successor in interest by assignment from Cambridge
Strategic Management Group, Inc, with an address of One Boston Place, Boston, MA
02108 ("Sublessor"), and BEST DOCTORS, Inc. a Massachusetts corporation, with an
address of Summer Exchange Building, 101 Arch Street, Suite 500, Boston, MA
02110 ("Sublessee").
RECITALS
WHEREAS, Sublessor is the current lessee under an Amended and Restated
Office Lease Agreement between BRE/One Boston, L.L.C. ("Landlord") and Cambridge
Strategic Management Group, Inc. dated March 6, 2002, as amended by Amendment to
Lease dated June 30, 2002 between Landlord and CSMG Strategy, Inc., attached
hereto and incorporated herein by reference as EXHIBIT A (the "Master Lease")
for the lease of approximately 21,710 rentable square feet (the "Leased
Premises") consisting of portions of the thirty-first (31st) and thirty-second
(32nd) floors of the building known as One Boston Place (the "Building") located
at One Boston Place, Boston, Massachusetts 02108.
WHEREAS, Sublessee wishes to sublet from Sublessor and Sublessor wishes to
sublet to Sublessee certain space on the thirty-second (32nd) floor of the
Building containing approximately 11,366 rentable square feet ("Premises").
NOW, THEREFORE, the parties hereby agree as follows:
1. TERM. Subject to the terms, covenants and conditions set forth in the
Master Lease, Sublessor hereby sublets the Premises, as more fully described on
EXHIBIT B attached hereto and incorporated herein, to Sublessee for a term
beginning February 1, 2005 ("Commencement Date"), and terminating on January 31,
2011 (the "Termination Date") (hereinafter, the "Term"); provided, however,
notwithstanding anything contained herein to the contrary, the Term shall not
extend beyond the original term of the Master Lease and except as otherwise
provided herein, all terms and provisions of the Master Lease shall be
incorporated herein and shall be part of this Sublease.
2. SIGNAGE. At its sole cost and expense, Sublessor shall cause the
Landlord to provide Building standard signage in the lobby and floor directories
of the Building.
3. RENT. Commencing on the Commencement Date and on the first day of each
month thereafter during the Term, Sublessee shall pay to Sublessor rent in the
amount of $284,150.00 ($25.00 per rentable square foot) annually payable without
setoff or demand in monthly payments of $ 23,679.17 due on the first day of the
month for which rent is applicable. Rent checks shall be made payable to
Sublessor and delivered to the Sublessor's address set forth on the first page
of this Sublease, or at such address as shall be designated by Sublessor or its
designee. Additionally, Sublessee is responsible for all phone charges, purchase
or lease of equipment, and all other costs and expenses incurred by Sublessee in
its use of the Premises, except as otherwise set forth in this Sublease.
Sublessee shall also be responsible for Sublessee's pro rata share of the amount
by which the Operating Expenses (as that term is defined in the Master Lease)
relating to the Premises exceed
Operating Expenses for the Operating Expense Base Year of calendar year 2005;
provided, however, notwithstanding the above, Sublessee shall also pay
Sublessee's pro rata share of electricity costs and HVAC distribution which
Sublessor must pay Landlord pursuant to the provisions of the Master Lease.
Sublessee shall also be responsible for it's pro rata share of any increase in
Taxes over the fiscal year 2005. Subject to the provisions of paragraph 16 of
this Sublease, the parties hereto agree that all charges billed by the Landlord
to Sublessor shall be accurate and binding upon Sublessee unless otherwise
disputed by Sublessor.
4. MASTER LEASE. Subject to all the terms, covenants and conditions set
forth in this Sublease including the Sublessor's obligation to reimburse
Landlord for Operating Expenses, Sublessee agrees to, assumes and shall perform
and observe all the terms and conditions to be performed on the part of
Sublessor (as Tenant) with respect to the Premises pursuant to the Master Lease,
which arise and accrue during the Sublease Term. During the Term of this
Sublease, Sublessee agrees not to do or omit to do (where Sublessee has a legal
duty to act) anything which would cause Sublessor to be in breach of the Master
Lease, as incorporated herein. Sublessee acknowledges that it has received a
complete and correct copy of the Master Lease and further acknowledges that its
duly authorized agent has read and has full knowledge of all of the terms,
covenants, conditions, rules and regulations, if any, of the Master Lease. This
Sublease is and shall be at all times subject and subordinate to the Master
Lease, and the terms and conditions of the Master Lease shall be considered
incorporated into this Sublease, as set forth in this Section, and in the event
there is any conflict between the terms of this Sublease and the Master Lease
with respect to obligations owed by Sublessor or Sublessee to Landlord or to the
Landlord's rights, (except with respect to Base Rent, Rent, Operating Expense
Base Year, Tax Base Year, pro rata share, Commencement Date, Term, and Security
Deposit - in which case the terms of the Sublease shall control) the terms of
the Master Lease shall govern. Wherever in the Master Lease the word "Tenant" is
used, it shall mean the "Sublessee" herein, and wherever in the Master Lease the
word "Landlord" is used, it shall mean the "Sublessor" herein, and wherever the
word "Premises" is used, it shall mean the Premises subleased hereunder. The
following provisions of the Master Lease shall not be incorporated into this
Sublease: the last sentence of Article 17; Article 32; Article 34 and Article
39.
Anything contained in this Sublease to the contrary notwithstanding, the
existence of this Sublease is dependent and conditioned upon the existence of
the Master Lease, and in the event of the cancellation or termination of the
Master Lease for any reason, this Sublease shall thereupon be terminated without
the need for further action and (except for any cancellation or termination
caused by a default of Sublessor, as Tenant under the Master Lease or as
Sublessor under this Sublease, or any cancellation or termination voluntarily
entered into by Sublessor) without liability to Sublessor. If Sublessee is not
in default under the terms and conditions hereof, any such termination shall be
without liability between Sublessor and Sublessee, except for such liability
theretofore accruing or as otherwise provided herein; however, if Sublessee is
in default, the provisions hereof including those of default shall control as to
Sublessee's liability. Sublessor hereby covenants that (a) it shall not agree to
any termination, cancellation, or other modification or amendment of the Master
Lease that might adversely affect the rights of Sublessee under this Sublease,
(b) that Sublessor shall promptly perform all of its obligations under the
Master Lease which are not otherwise to be performed by Sublessee under this
Sublease and (c) that it shall promptly forward to Sublessee copies of all
default notices and operating expense and tax statements received from Landlord.
Notwithstanding the foregoing or anything else in this Sublease to the
contrary, Sublessee shall have no obligation to (i) cure any default of
Sublessor under the Master Lease; (ii) perform any obligation of Sublessor under
the Master Lease that arose prior to the Commencement Date; (iii) repair any
damage to the Premises caused by Sublessor; (iv) indemnify Sublessor or Landlord
with respect to any act, omission, negligence or willful misconduct of
Sublessor, or its agents, employees or contractors; (v) remove any Alteration
Work or Lines installed in the Premises prior to the Commencement Date of the
Sublease; (vi) pay for any overtime utilities for which Sublessor is liable
under the Master Lease unless such utilities have been requested by Sublessee;
and (vii) bring the Premises into compliance with any laws with which the same
do not comply as of the Commencement Date except if caused by Sublessee's
particular use.
5. SUBLEASE AND ASSIGNMENT. Except for those transactions permitted under
the Master Lease, Sublessee shall not, either voluntarily, or by operation of
law, sell, hypothecate, assign or transfer this Sublease, or sublet the Premises
or any part thereof, or permit the Premises or any part thereof to be occupied
by anyone other than Sublessee or Sublessee's employees without the prior
written consent of Sublessor in each instance, which consent shall not be
unreasonably withheld, conditioned or delayed for more than 10 days. In the
event Sublessee sublets or assigns any part of the Premises as set forth above
and receives rent in excess of $25.00 per rentable square foot ("Excess Rent"),
then any Excess Rent shall be immediately paid to Sublessor upon receipt by
Sublessee. Sublessor shall be notified in writing by Sublessee of any sale,
assignment, mortgage transfer, or subletting or other transfer of this Sublease,
whether or not Sublessor's consent is required. Any sale, assignment, mortgage
transfer, or subletting or other transfer of this Sublease which is not in
compliance with the provisions of this paragraph 5 shall be null and void and
shall, at the option of Sublessor, terminate this Sublease. The consent by
Sublessor to any sale, assignment, mortgage transfer, or subletting or other
transfer: (i) shall not be construed as relieving Sublessee from obtaining the
express written consent of Sublessor to any further assignment or subletting;
and (ii) shall not release Sublessee from any liability or obligation hereunder
whether or not then accrued.
6. NOTICES. Any notice required or permitted to be given under this
Sublease shall be given in person (with written acknowledgement of receipt), by
special courier, by nationally recognized overnight delivery service that
provides tracking, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
SUBLESSOR: TMNG Strategy, Inc. f/k/a CSMG Acquisition Sub, Inc.
7300 College Boulevard - Suite 302
Overland Park, KS 66210
Attn: Chief Financial Officer
SUBLESSEE: Best Doctors, Inc.
Before the Commencement Date:
Summer Exchange Building
101 Arch Street, Suite 500
Boston, Massachusetts 02110
Attn: Mr. Evan Falchuk
After the Commencement Date:
At the Premises
Attn: Mr. Evan Falchuk
With Copies to:
Torpy & Garner, LLC
One Washington Mall, 15th Floor
Boston, MA 02108
Each of Sublessor and Sublessee shall have the right to change the address set
forth herein for notice purposes upon written notice to the other party. Notices
given under the Master Lease shall be given in accordance therewith but to the
addresses set forth above.
7. DEFAULT. In the event that Sublessee shall default in any of its
obligations under this Sublease (including its obligations under the Master
Lease) as incorporate herein), after notice and the expiration of applicable
cure periods, where applicable, Sublessor shall be entitled to exercise all
remedies available to Landlord under the Master Lease, and all remedies
available under applicable law.
8. BINDING EFFECT. This Sublease shall be binding upon and inure to the
benefit of the parties hereto, their successors and permitted assigns.
9. APPLICABLE LAW. The laws of the Commonwealth of Massachusetts shall be
employed in and govern the interpretation of all covenants, terms and conditions
of this Sublease.
10. NO PARTNERSHIP RELATIONSHIP. Notwithstanding anything to the contrary,
Sublessor shall not be construed or held to be a partner or associate of
Sublessee in the conduct of its business, it being expressly understood and
agreed that the relationship between the parties hereto is and at all times
shall remain that of Sublessor and Sublessee.
11. ACCEPTANCE OF PREMISES. Sublessee acknowledges and agrees that the
Premises are being sublet herein in their current "AS IS" condition and by
entering on or taking possession of the Premises, Sublessee shall be deemed to
acknowledge that the Premises are in good and satisfactory condition; provided,
however, the Premises shall be delivered to Sublessee with interior stairwell
being enclosed in a manner that makes the space above it usable, and in a good,
workmanlike manner, in compliance with all laws (the "Stairwell Construction").
Upon the execution of this Sublease, Sublessor shall commence and diligently
pursue until completion, the Stairwell Construction.
12. RIGHT OF ACCESS. Sublessor and its agents shall have free access to the
Premises during all reasonable business hours for the purpose of examining the
same to ascertain if they are in good repair and to permit the Landlord under
the Master Lease to make reasonable repairs, to the extent permitted under the
Master Lease. Sublessor shall notify Sublessee at least twenty-four (24) hours
in advance. , except in the event of an emergency, where no notice shall be
required. Any entry made hereunder shall include the use of diligent efforts by
the entering party not to interfere with the use and enjoyment of the Premises
by Sublessee nor to interfere with Sublessee's business
operations. Sublessor shall have the right to exhibit same to prospective
subtenants upon reasonable notice to Sublessee during the last 6 months of the
Term or any extensions of this Sublease. Sublessee shall have access to the
Premises twenty-four (24) hours per day, seven (7) days per week, subject,
however, to any rights of Landlord specifically reserved in the Master Lease and
to the rules and regulations of the Landlord.
13. END OF TERM. At the expiration or earlier termination of this Sublease,
or any renewal term, Sublessee shall surrender the Premises to Sublessor in as
good condition and repair as reasonable use thereof will permit, reasonable wear
and tear, damage by fire or other casualty, taking by eminent domain excepted,
and will leave the Premises broom clean. Sublessee shall have the right, prior
to said expiration or promptly following a termination, to remove any equipment,
furniture, trade fixtures or other personal property in the Premises owned by
Sublessee, provided that Sublessee promptly repairs any damage to the Premises
caused by such removal. In the event of holding over by Sublessee after the
expiration or termination of this Sublease, Sublessee shall pay rent at twice
the amount of the then current rate on a monthly basis. Any holding over with
consent of Sublessor in writing shall thereafter constitute a Sublease for
month-to-month.
14. HEADINGS. The paragraph captions contained in this Sublease are for the
convenience of the parties only and shall not be considered in the construction
or interpretation of any provision hereof.
15. ENTIRE AGREEMENT. This Sublease contains the entire agreement between
the parties and supersedes any and all other prior oral and written agreements
between the parties regarding the subject matter contained herein and may not be
changed or terminated orally but only by an agreement in writing and signed by
all parties.
16. INDEMNIFICATION AND RELEASE. Each party hereto shall and hereby does
indemnify and hold the other harmless from and against any and all losses,
damages, liabilities or costs (including reasonable attorneys' fees) resulting
or arising from: (a) the other party's use of the Premises or the conduct of the
other party hereto's business or profession in the Premises and/or Building; (b)
any activity, work, or thing done, permitted or suffered by each party hereto in
or about the Premises and/or Building; (c) any breach or default beyond
applicable notice and cure periods in the performance of any obligation on each
party hereto's part to be performed under the terms of this Sublease and/or the
Master Lease; or (d) any negligent acts or omissions of each party hereto, or of
each party hereto's agent or employees.
Neither Sublessor nor its agents shall be liable for any loss or damage to
property of Sublessee, its employees, invitees or licensees which loss or damage
occurs within the Building or the Premises, whether by theft, casualty or
otherwise, nor for any injury or damage to property resulting from Sublessor's
acts or omissions, or any fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Building or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface, or from any other place or resulting from dampness or any other
cause whatsoever, unless caused by or due to the negligence or willful
misconduct of Sublessor, its agents, servants or employees. Neither Sublessor
nor its agents shall be liable for any latent defect in the Premises or in the
Building. Sublessee shall send prompt notice to Sublessor and Landlord in case
of fire or accidents in the Premises or of defects in the fixtures or equipment
in the Premises that Sublessor or Landlord is required to maintain. Sublessee
hereby
acknowledges that Sublessor shall not be liable for any interruption of
Sublessee's business for any cause whatsoever unless due to willful misconduct
or negligence of Sublessor, or any of its agents, servants or employees.
Sublessor shall have no duty to perform any obligations of the Landlord
under the Master Lease and shall under no circumstances be responsible for or
liable to Sublessee for any default, failure or delay on the part of Landlord in
the performance of any obligations under the Master Lease, subject to
Sublessor's obligations under this paragraph. No such default of Landlord shall
affect this Sublease or waive or defer the performance of any of Sublessee's
obligations hereunder (except as otherwise permitted under the Master Lease or
by law); provided, however, that in the event of such default or failure,
Sublessor agrees, upon notice from Sublessee, and at Sublessee's expense, to
make demand upon Landlord to perform its obligations under the Master Lease.
In the event that following such demand by Sublessor, Landlord shall
continue to fail or refuse to comply with any of the respective provisions of
the Master Lease or shall have breached any representation or warranty made by
it under the Master Lease applicable to the Premises, Sublessee shall have the
right to exercise in the name of Sublessor all of the rights to enforce
compliance on the part of Landlord or to obtain remedies against Landlord for
breach of any representation or warranty made by Landlord under the Master
Lease, all as are available to the Sublessor with respect to the Leased
Premises. Sublessor shall reasonably cooperate with and execute, all at
Sublessee's expense (except to the extent that Landlord's non-compliance is due
to the acts of Sublessor), all instruments and supply information reasonably
requested by Sublessee in order to enforce such compliance.
17. FACSIMILE SIGNATURES. The parties hereto hereby agree that, for
purposes of execution of this Sublease, facsimile signature shall constitute
original signatures.
18. COUNTERPARTS. This Sublease may be executed in two or more counterparts
and by the different parties hereto on separate counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute
but one and the same instrument.
19. BROKERAGE. Sublessee and Sublessor warrant and represent that it has
dealt only with Cushman & Wakeman and CB Richard Ellis/Whittier Partners
("Brokers") in regard to this Sublease and that no lease commission is due to
any other broker or consultant employed and/or engaged by the Sublessee or
Sublessor. Sublessor shall be responsible for paying any and all lease
commissions owed to the Brokers.
20. SUBLESSOR'S REPRESENTATIONS AND WARRANTIES. Sublessor represents and
warrants that (i) the Master Lease is presently in full force and effect and has
not been modified except as set forth in this Sublease; (ii) Sublessor is the
holder of the entire interest of the Tenant under the Master Lease; (iii) the
copy of the Master Lease attached hereto as Exhibit A is true, accurate and
complete and has not been modified, amended or terminated; (iv) the term of the
Master Lease has commenced and expires after January 31, 2011; (v) Sublessor as
Tenant is not in default under the Master Lease and Sublessor's monetary
obligations as Tenant under the Master Lease have been paid to the date hereof;
and (vi) Landlord is not in default under the Master Lease, nor has Landlord
done or failed to do anything which with notice, the passage of time, or both,
could ripen into a default.
21. PARKING. During the Term, at Sublessee's sole cost and expense,
Sublessee shall have the exclusive right to use two (2) parking spaces located
in the Washington Square Garage adjacent to the Building.
22. LANDLORD CONSENT. The effectiveness of this Sublease is conditioned
upon the consent of Landlord
23. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor a letter of
credit issued by a banking institution of sufficient financial standing (as
Sublessor shall reasonably determine) having an office in Newton or Boston,
Massachusetts, or Kansas City, Missouri, against which such letter of credit may
be drawn in the amount of Two Hundred Forty Thousand Dollars ($240,000.00) (such
amount, as the same may be reduced in accordance with the provisions hereof, the
"SECURITY DEPOSIT"). The letter of credit shall be unconditional, irrevocable
and in favor of Sublessor, its successors or assigns, and shall provide that it
may be drawn upon "at sight" upon presentation by Sublessor to the issuer of
only a statement certified by Sublessor to the effect that a default by
Sublessee has occurred under its Sublease with Sublessor and that Sublessee has
failed to cure such default within the applicable period, if any, of notice and
grace, or that Sublessor is otherwise entitled to draw thereunder pursuant to
the terms and conditions of this Sublease. The letter of credit shall provide
that it shall remain in force for a period beginning on the Commencement Date
and ending January 31, 2011, or for a lesser period provided any letter of
credit expiring prior to January 31, 2011 shall be replaced not later than sixty
(60) days prior to its expiration by a letter of credit on all of the terms
otherwise required hereunder and the failure to timely replace such letter of
credit shall be a default with respect to which Sublessor shall have the right
to draw the full amount of the letter of credit and retain the same as a cash
security deposit. Provided that Sublessee is not in default hereunder beyond
applicable notice and cure periods, and provided that Sublessee has provided
Sublessor with audited financial statements prepared in accordance with
accounting principals generally accepted in the United States of America which
provide evidence that the Sublessee has positive net income for the most recent
fiscal year, then during each 12 month period in the Term and within thirty (30)
days of providing such audited financial statements, the amount of the letter of
credit shall reduce by twenty percent (20%) from the preceding year. The
Security Deposit shall serve as security for the prompt, full and faithful
performance by Sublessee of the terms and provisions of this Sublease. In the
event that Sublessee is in default hereunder and fails to cure within any
applicable time period under this Sublease, or in the event that Sublessee owes
any amounts to Sublessor upon the expiration of this Sublease, Sublessor may use
or apply the whole or any part of the Security Deposit for the payment of
Sublessee's obligations hereunder. The use or application of the Security
Deposit or any portion thereof shall not prevent Sublessor from exercising any
other right or remedy provided hereunder or under any law and shall not be
construed as liquidated damages. In the event the Security Deposit is reduced by
such use or application, Sublessee shall deposit with Sublessor within ten (10)
days after written notice a new letter of credit (supplementing the existing
partially drawn letter of credit which Sublessor shall retain if Sublessor drew
less than the full amount drawable thereunder) in the amount drawn by Sublessor
under the existing letter of credit and otherwise complying with all terms and
conditions of the letter of credit hereunder. Any remaining portion of the
letter of credit (as reduced by any amount drawn thereon pursuant hereto) shall
be returned to Sublessee within thirty (30) days after Sublessee has vacated the
Premises and complied with all the terms of this Sublease.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
the day and year first written above.
SUBLESSOR
TMNG Strategy, Inc. f/k/a CSMG Acquisition Sub,
Inc., a Delaware corporation
By:
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Name: Donald E. Klumb
Date: Title: Chief Financial Officer
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SUBLESSEE
Best Doctors, Inc.
By:
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Name:
Date: Title:
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CONSENT OF LANDLORD
The undersigned, the Landlord of the Master Lease, hereby consents to this
Sublease.
BRE/One Boston, L.L.C.
By:
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Name:
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Title:
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Date:
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EXHIBIT A
COPY OF MASTER LEASE
EXHIBIT B
PREMISES