CERTAINCONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY “[***]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH(I) NOT MATERIAL AND (II) IS THE TYPE THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. SUBLEASE
Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY “[***]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL.
SUBLEASE
This sublease agreement (“Sublease”) is dated as of April 22, 2022 and it is by and between SICART ASSOCIATES LLC corporation (“Sublandlord”) a Delaware limited liability company having an office at 152 West 57th Street, 54th Floor, New York, NY 10019, and SQL TECHNOLOGIES CORP. D/B/A “SKY TECHNOLOGIES” (“Subtenant”), a NASDAQ listed corporation (symbol SKYX) with offices at 2855 W. McNab Road, Pompano Beach, Florida 33069.
WHEREAS, Carnegie Hall Tower II L.L.C. (“Landlord”), as lessor, and Sublandlord, as lessee, entered into a lease agreement dated August 31, 2016 (the “Lease”) providing for Sublandlord to rent and occupy the northern portion of the fifty-fourth (54th) floor (the “Premises”) having an agreed rentable area of 3,397 square feet in the building known as Carnegie Hall Tower located at 152 West 57th Street, New York, New York (the “Building”) for a term expiring on February 28, 2027; and
WHEREAS, the parties desire to provide for the subletting of the Premises as hereinafter set forth.
NOW THEREFORE, it is hereby agreed that:
1. DEMISE AND TERM; CONDITIONS OF SUBLEASE.
(a) Sublandlord represents and warrants that Exhibit #1, attached hereto and made a part hereof, is a true and complete copy of the Lease as redacted, and that such redactions relate solely to certain inapplicable financial and other matters that will not interfere with Subtenant’s performance of its obligations hereunder or under the Lease. The Premises is shown in Exhibit “A” of the Lease.
(b) Sublandlord hereby leases to Subtenant, and Subtenant hereby hires from Sublandlord, the Premises as provided in this Sublease. The term of this Sublease (the “Sublease Term”) shall commence on the date (the “Sublease Commencement Date”) that is the earlier to occur of (i) the date that the Premises is delivered by Sublandlord in the “Required Condition” (as defined in Section 12(a) hereof) and Subtenant is entitled to possession of the Premises and (ii) the date that Subtenant takes possession of the Premises (subject to understanding that Subtenant’s entry and access into the Premises solely for measurement and inspection prior to the Sublease Commencement Date as set forth below in paragraph (f) of this Section 1 shall not be deemed mean that Subtenant has taken possession of the Premises). The Sublease Term shall end on February 27, 2027 (the “Fixed Sublease Expiration Date”) or such earlier date that this Sublease shall terminate as provided herein (the “Sublease Expiration Date”). However, in no event shall the Sublease Commencement Date occur prior to the date that the fully executed “Landlord Consent” (as defined in Section 27 hereof) to this Sublease has been signed and delivered by Landlord; and if such date that the Landlord Consent has been fully executed and delivered is later than the date that would otherwise be the Sublease Commencement Date, then the Sublease Commencement Date shall be the date that the Landlord Consent is signed and delivered by Landlord.
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(c) Subtenant waives the right to recover any damages which may result from Sublandlord’s failure to timely deliver possession of the Premises. If Sublandlord shall not timely deliver possession of the Premises in the manner required hereunder and provided Subtenant is not responsible for such inability to give possession, the Sublease Commencement Date hereunder shall not occur until Sublandlord shall deliver possession of the Premises to Subtenant, and no such failure to timely deliver possession shall in any way affect the validity of this Sublease or the obligations of Subtenant hereunder or give rise to any claim for damages by Subtenant or claim for rescission of this Sublease, nor shall the same in any way be construed to extend the Sublease Term. The parties agree that this Section 1(c) constitutes an express provision as to the time at which Sublandlord shall deliver possession of the Premises to Subtenant, and Subtenant hereby waives any rights to rescind this Sublease or recover damages which Subtenant might otherwise have pursuant to Section 223-a of the Real Property Law of the State of New York or any other law of like import now or hereafter in force.
(d) The foregoing notwithstanding, as Subtenant’s sole remedies, and in lieu of any recovery of monetary damages from Sublandlord, if the Sublease Commencement Date has not occurred by the date (the “Deadline Date”) that is six (6) business days after the Landlord Consent has been fully executed and delivered, then, at Subtenant’s election (a) the “Initial Abatement” [as defined below in Section 9(c) of this Sublease] shall be increased by an amount equal to one (1) day of Fixed Rent for each day that elapses after the Deadline Date to the Sublease Commencement Date, or (b) Subtenant may elect to terminate this Sublease by written notice to Sublandlord, whereupon this Sublease shall be deemed null and void and of no effect (except for those provisions expressly stated herein to survive a termination), the Pre-Paid Rent and the Security Deposit shall be refunded within five (5) business days of such termination, and neither Sublandlord nor Subtenant shall have any further obligation or liability to the other party with respect to this Sublease (except for those provisions expressly stated herein to survive such termination). However, the Deadline Date shall be postponed by one day for each day that the Sublease Commencement Date is delayed due to force majeure.
(e) Upon determination of the Sublease Commencement Date, Sublandlord and Subtenant, at the request of either party, shall enter into an agreement confirming such date, but the failure of either or both of the parties to do so shall not affect the Sublease Commencement Date determined in accordance with this Sublease.
(f) Prior to the Sublease Commencement Date upon reasonable prior notice, Sublandlord shall allow Subtenant to enter and access the Premises for measurement and inspection only.
2. SUBORDINATE TO LEASE.
This Sublease is subject and subordinate to the Lease and the matters to which the Lease is or shall be subject and subordinate.
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3. INCORPORATION BY REFERENCE.
(a) The terms, covenants and conditions of the Lease are incorporated herein by reference so that, except as set forth in Paragraph (b), Paragraph (c), and Paragraph (d) of this Section 3, and except to the extent that such incorporated provisions are inapplicable to, inconsistent with, or modified by the provisions of this Sublease, all of the terms, covenants and conditions of the Lease that bind or inure to the benefit of the lessor thereunder shall, in respect to this Sublease, bind or inure to the benefit of Sublandlord, and all of the terms, covenants and conditions of the Lease that bind or inure to the benefit of the lessee thereunder shall, in respect of this Sublease, bind or inure to the benefit of Subtenant, with the same force and effect as if such incorporated terms, covenants and conditions were completely set forth in this Sublease, and as if the words “Owner” and “Tenant”, wherever the same appear in the Lease, were construed to mean, respectively, “Sublandlord” and “Subtenant” in this Sublease, and as if the words “demised premises” or “Demised Premises”, wherever the same appear in the Lease, were construed to mean “Premises” in this Sublease, and as if the word “Lease” or words of similar import, wherever the same appear in the Lease, were construed to mean this “Sublease”. References in the Lease to the “Term” and words of similar import shall mean the “Sublease Term” of this Sublease. References in the Lease to the “Commencement Date” shall mean the “Sublease Commencement Date” of this Sublease. References in the Lease to the “Expiration Date” shall mean the “Fixed Sublease Expiration Date” or the “Sublease Expiration Date”, as the case may be, of this Sublease. References in the Lease to the “Base Rent” shall mean the “Fixed Rent” set forth in this Sublease. References to the “Security Deposit” in the Lease shall mean the $161,357.00 Security Deposit of Subtenant as described below. Notwithstanding the foregoing, the time limits contained in the Lease for the giving of notices, making of demands or performing of any act, condition or covenant on the part of the tenant thereunder, or for the exercise by the tenant thereunder of any right or remedy, are changed for the purposes of incorporation herein by reference by shortening the same in each instance by five (5) days, so that in each instance Subtenant shall have five (5) days less time to observe or perform hereunder than Sublandlord has as the tenant under the Lease, unless such period is ten (10) or fewer days, in which instance Subtenant shall have two (2) days less time to observe or perform hereunder than Sublandlord has as the lessee thereunder.
(b) The following provisions of the Lease shall not be incorporated herein by reference and shall not apply to this Sublease: Article 37; Article 38; all references to “Rent Commencement Date”, “Owner’s Work” or “Post-Commencement Work” contained in the Lease; paragraph 42(c); paragraph 43(a); Article 46; Article 49; Article 54; and Article 57.
(c) The following provisions of the Lease are modified for the purposes of incorporating them into this Sublease: the references to a letter of credit in Article 34 or elsewhere in the Lease shall be deemed to mean the cash Security Deposit of Subtenant as described in this Sublease; the references in Article 39 to electricity being furnished on a “rent inclusion” basis shall not apply as Subtenant shall pay Sublandlord the “ERI Sum” described in the Lease as additional rent under this Sublease as described below.
(d) Anything contained in this Sublease or the incorporated provisions of the Lease to the contrary notwithstanding, any alterations of the Premises by or for Subtenant, any actual or constructive assignment of this Sublease by Subtenant, and any sub-subletting, licensing or other occupancy agreement with respect to all or any part of the Premises by Subtenant shall require the prior written consent of Sublandlord and Landlord except as otherwise provided in Section 15(e) of this Sublease. Sublandlord shall not unreasonably withhold or delay its consent as to any matter that Landlord has consented to, subject to the provisions of Section 13 of this Sublease.
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4. PERFORMANCE BY SUBLANDLORD.
(a) Any obligation of Sublandlord that is contained in this Sublease by incorporating the provisions of the Lease (by reason of the same being an obligation of the Owner under the Lease) may be observed or performed by Sublandlord using reasonable efforts, after notice from Subtenant, to cause Landlord to observe and/or perform the same, and Sublandlord shall have a reasonable period of time to enforce its rights to cause such observance or performance. Anything contained herein or in the incorporated provisions of the Lease to the contrary notwithstanding, Sublandlord shall not be required to perform any obligation of Landlord under the Lease, and Sublandlord shall have no liability to Subtenant for the failure of Landlord to perform any obligation under the Lease, unless such failure is caused by the willful breach of the Lease by Sublandlord or the negligence or willful misconduct of Sublandlord. In no event shall Sublandlord have any liability for any of the representations of the Landlord contained in the Lease nor shall Sublandlord be required to furnish any of the services that are required to performed or provided by Landlord under the Lease. Sublandlord shall use commercially reasonable efforts to have Subtenant obtain the services of Landlord that the lessee is entitled to under the Lease for the Premises at Subtenant’s sole cost, risk, and expense. Subtenant shall not in any event have any rights in respect of the Premises greater than Sublandlord’s rights under the Lease. Sublandlord shall not be responsible for any failure or interruption, for any reason whatsoever, of the services or facilities that are appurtenant to, or supplied at or to, the Premises, including, without limitation, electricity, heat, air conditioning, water, elevator service and cleaning service, if any. No failure to furnish, or interruption of, any such services or facilities shall give rise to any (a) abatement or reduction of Subtenant’s obligations under this Sublease, (b) constructive eviction, whether in whole or in part, or (c) liability on the part of Sublandlord. Sublandlord shall have no obligation to provide any services whatsoever but Sublandlord shall not interfere with any services that Landlord is supposed to provide. The foregoing notwithstanding, if any breach of the Lease by Landlord gives rise to a rent abatement or refund under the Lease, Sublandlord shall pass along such abatement or refund to Subtenant on a proportionate basis. For example, if rent is 100% abated for ten (10) days under the Lease during the Sublease Term due to Landlord’s failure to provide services or for any other fault of Landlord, then rent would be 100% abated under this Sublease for such ten (10) day period.
(b) If Subtenant gives Sublandlord written notice reasonably claiming that Landlord is not performing, fulfilling or observing Landlord’s covenants, agreements and obligations contained in the Lease, setting forth with reasonable specification and detail the nature of such non-performance, and requesting that Sublandlord seek performance by Landlord, Sublandlord shall reasonably promptly request Landlord that Landlord perform and use commercially reasonable efforts to cause Landlord to so perform, fulfill or observe (at Subtenant’s expense); it being agreed, however, that Sublandlord shall not be required bring a lawsuit, proceeding or action against Landlord.
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5. NO BREACH OF LEASE. Neither Sublandlord nor Subtenant shall not do or permit to be done any act or thing that will constitute a breach or violation of any term, covenant or condition of the Lease by the lessee thereunder, whether or not such act or thing is permitted under the provisions of this Sublease.
6. NO PRIVITY OF ESTATE. Nothing contained in this Sublease shall be construed to create privity of estate or privity of contract between Subtenant and Landlord.
7. INDEMNITY; INSURANCE.
(a) During the Sublease Term, Subtenant shall have sole custody and control of the Premises. Accordingly, Subtenant shall indemnify, defend and hold harmless Sublandlord from and against all claims, actions, losses, costs, damages, expenses and liabilities, including, without limitation, reasonable attorneys’ fees and expenses, which Sublandlord may incur or pay by reason of (i) any accidents, damages or injuries to persons or property occurring in, on or about the Premises, except to the extent caused by the negligence or willful misconduct of Sublandlord and/or Sublandlord’s employees, agents, contractors, employees and invitees (subject to the terms of Section 8 hereof) (ii) any breach or default hereunder on Subtenant’s part, (iii) any work done or Alterations performed in or to the Premises by Subtenant and/or Subtenant’s employees, agents, contractors, invitees or any other person claiming through or under Subtenant, or (iv) any act, omission or negligence on the part of Subtenant and/or Subtenant’s employees, agents, customers, contractors, invitees, or any other person claiming under or under through Subtenant. Sublandlord shall indemnify, defend and hold harmless Subtenant from and against all claims, actions, losses, costs, damages, expenses and liabilities, including, without limitation, reasonable attorneys’ fees and expenses, which Subtenant may incur and pay by reason of (i) any breach or default hereunder or under the Lease on Sublandlord’s part, or (ii) Sublandlord’s failure to timely pay the Base Rent or Additional Rent to the Landlord pursuant to the Lease. The respective indemnification provisions of this Sublease are subject to the waiver of subrogation and insurance provisions of this Sublease and the incorporated provisions of the Lease, with the understanding that neither party shall be liable to the other for consequential, indirect, punitive or special damages (but nothing contained herein shall relieve Subtenant of liability to Sublandlord for holding over after the end of the Sublease Term).
(b) Subtenant shall (i) maintain with respect to the Premises all insurance that Sublandlord is required to maintain under the Lease, naming Sublandlord, Landlord and any other parties required by the Lease as additional insureds or loss payees, as applicable, and (ii) prior to the Sublease Commencement Date, and in advance of taking possession of the Premises, performing any work, or moving in any of its personal property, shall deliver to Sublandlord appropriate certificates of such insurance, including copies of endorsements or clauses in the applicable insurance policies that evidence waivers of subrogation and naming of additional insureds. Subtenant shall deliver to Sublandlord evidence of each renewal or replacement of a policy prior to the expiration of such policy. If Landlord requires sooner delivery of certificates of insurance, Subtenant shall furnish the same on a timely basis.
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(c) Anything contained in this Sublease to the contrary notwithstanding, Subtenant acknowledges and agrees with Sublandlord that if Subtenant has not provided the insurance certificates required of Subtenant as of the Sublease Commencement Date, Sublandlord may refuse to give Subtenant keys to, or possession of the Premises until the required certificates of insurance are delivered to Sublandlord but the commencement of the term of this Sublease and Subtenant’s rental obligations shall not be postponed. Sublandlord’s refusal to deliver possession for lack of the required insurance shall not support a right of Subtenant to rescind or any other remedy of Subtenant. The provisions of this paragraph are deemed to be an express “provision to the contrary” within the meaning of New York Real Property Law Section 223-A.
(d) Subject to the provisions of Paragraph 7(b) above, Sublandlord shall maintain all insurance that Sublandlord is required to maintain under the Lease.
(e) Subtenant’s liability insurance shall name as additional insureds the Landlord and the members, entities or individuals comprising Landlord, and the holder of any mortgage on the Building plus Sublandlord and its members, shareholders, employees, officers, directors and agents. Subtenant’s property insurance shall include waiver of subrogation in favor of the parties that are named as additional insureds in Subtenant’s liability insurance policies.
(f) Sublandlord shall have the same remedies for Subtenant’s breach of this Sublease that Landlord has for Sublandlord’s breach of the Lease.
8. MUTUAL WAIVER OF SUBROGATION. Without affecting any other rights or remedies, Sublandlord and Subtenant each hereby release and relieve the other, and they each waive their entire right to recover damages against the other, for loss or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Sublandlord or Subtenant, as the case may be, so long as the insurance is not invalidated thereby.
9. RENT.
(a) Subtenant shall pay to Sublandlord rent (“Fixed Rent”) of $322,715.00 per annum, payable in equal advance monthly installments of $26,892.92 on the first day of each month during the Sublease Term (except as expressly provided otherwise in this Sublease) without prior demand, offset or deduction. The Fixed Rent does not include electricity charges, i.e., the “ERI Sum” described in the Lease, hereinafter called the “Fixed Electricity Charge”, which shall be paid by Subtenant at the rate of $11,040.25 per year ($920.02 per month) in advance monthly installments on the first day of each month in the Sublease Term without prior demand, offset or deduction, except as otherwise provided in Section 9(b) below. The Fixed Rent is subject to increases as provided in Section 9(d) below.
(b) The first monthly installment of Fixed Rent in the sum of $26,892.92 plus $920.02 for one month of the Fixed Electricity Charge shall be paid on the execution of this Sublease by Subtenant in the total sum of $27,812.94 (the “Prepaid Rent”) and applied to first rents coming due under this Sublease. If the Sublease Commencement Date shall not be the first day of a month, then, once the Sublease Commencement Date is known, the Pre-Paid Rent for such partial month shall be prorated on a per diem basis, and any excess amount paid on the execution of this Sublease shall be credited to the next rents coming due under this Sublease.
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(c) If Subtenant is not in default under this Sublease and it remains in full force and effect, Subtenant shall be entitled to a rent abatement in the total sum of $53,785.83 (the “Initial Abatement”) which will be applied in reduction of Subtenant’s rental obligation coming due under this Sublease immediately following the application of the Prepaid Rent. If this Sublease shall be terminated for Subtenant’s default, any portion of the Initial Abatement previously issued to Subtenant shall be paid to Sublandlord as Additional Rent and any portion of the Initial Abatement not previously issued shall be waived by Subtenant.
(d) As used herein, “Sublease Year” means successive twelve (12) calendar month periods, with the first (1st) Sublease Year to begin on the first day of the month in which the Sublease Commencement Date occurs. On the first day of the second (2nd) Sublease Year, the Fixed Rent shall be multiplied by one hundred three percent (103%) to equal $332,396.45 per year ($27,699.70 per month). On the first day of the third (3rd) Sublease Year, and on the first day of each Sublease Year thereafter during the Sublease Term, the Fixed Rent (as previously increased under this paragraph) shall be multiplied by one hundred three percent (103%). The cumulative compounded annual three percent (3%) increases in Fixed Rent described in this paragraph are in lieu of the tax and operating expense escalation charges set forth in Articles 37 and 38 of the Lease. The foregoing provisions of this paragraph are illustrated in the chart below:
FIXED RENT
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(e) Fixed Rent and all other amounts (“Additional Rent”) payable by Subtenant to Sublandlord under the provisions of this Sublease shall be paid promptly when due, without notice or demand therefor, and without deduction, abatement, counterclaim or setoff. However, Additional Rent shall be payable within ten (10) days after it is billed (but payment shall be without prejudice to any dispute raised within 60 days after the end of such 10 day period), and Subtenant shall provide Sublandlord with an email address to send bills electronically to Subtenant. Fixed Rent and Additional Rent shall be paid to Sublandlord by wire transfer to such account of Sublandlord as shall be designated by Sublandlord from time to time. As of the date hereof, the wiring instructions therefor are as follows: Account Name:_[***], Bank: [***], ABA Routing Number for wired funds: [***], ABA Routing Number for ACH transfers: [***]; Account Number: [***]. No payment by Subtenant or receipt by Sublandlord of any lesser amount than the amount stipulated to be paid hereunder shall be deemed other than on account of the earliest stipulated Fixed Rent or Additional Rent. Sublandlord may accept any payment without prejudice to Sublandlord’s right to recover the balance due or to pursue any other remedy available to Sublandlord. Any provisions in the Lease incorporated herein by reference (whether capitalized or lower case) referring to “fixed rent,” “annual rent,” “Base Rent,” “rent,” “additional rent,” “escalations,” “payments” or “charges” or words of similar import shall be deemed to refer to Fixed Rent and Additional Rent due under this Sublease.
(f) The Fixed Rent to be paid by Subtenant to Sublandlord under this Sublease is in lieu of the Base Rent which Sublandlord remains obligated to pay Landlord under the Lease. Subtenant shall pay all additional rent described in the Lease with respect to the Premises in and for the Term of this Sublease and any holdover period (but Subtenant shall have no right to hold over) as Additional Rent under this Sublease except if and as expressly provided otherwise in this Sublease. Subtenant shall perform all obligations of the lessee under the Lease with respect to the Premises during the Sublease Term except if and as expressly provided otherwise in this Sublease. Sublandlord shall timely pay to Landlord all amounts of Base Rent and Additional Rent due and owing to Landlord under the Lease.
(g) The Additional Rent obligations of Subtenant shall include, but not be limited to, payment for any extra cost services provided to Subtenant or the Premises that Sublandlord is liable for under the Lease in and for the Sublease Term pursuant to Article 50, Article 53, Article 61 or otherwise.
10. ELECTRICITY, UTILITIES AND OTHER CHARGES.
(a) The electricity charges under Article 39 of the Lease for the Premises are not included in the Fixed Rent payable by Subtenant as described above. If Sublandlord pays to Landlord, the utility company, or any other third-party provider, the electricity or other utility charges that Subtenant is responsible for (separate from the Fixed Electricity Charge), Subtenant shall reimburse Sublandlord within ten (10) business days after demand as Additional Rent.
(b) Except to the extent provided by Landlord to Sublandlord without additional charge under the Lease, Subtenant shall pay as Additional Rent under this Sublease all water, sprinkler, steam, chilled water, and other utility and energy costs, and related charges and administrative fees and taxes thereon related to the Premises and payable by Sublandlord as lessee under the Lease, if any, within ten (10) business days following Sublandlord’s delivery of an invoice therefor; provided, however, in no event shall Sublandlord have any direct obligation to provide any of the foregoing.
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(c) Subtenant shall be solely responsible for and pay as Additional Rent under this Sublease upon ten (10) business days demand all additional rent and other actual out-of-pocket charges incurred or due by Sublandlord to Landlord under the Lease as a result of (i) a breach of this Sublease by Subtenant, (ii) any demand by Subtenant for any additional or overtime services (including, without limitation, overtime HVAC, above-standard cleaning, above-standard refuse removal, overtime freight elevator and condenser water, if any), and (iii) any additional costs or charges incurred as a result of Subtenant’s use and occupancy of the Premises (including, without limitation, charges as a result of high-density occupancy or charges as a result of the issuance of any access cards to the Building for Tenant’s employees or personnel).
(d) If Subtenant requires any utilities or other services that are not provided by Landlord under the Lease (such as internet service), subject to the terms and conditions of the Lease, Subtenant shall make all arrangements therefor directly with the provider and pay all costs thereof.
(e) Subtenant shall obtain its own telecommunications services (voice, video, data, and internet) at Subtenant’s sole cost, risk, and expense and Sublandlord shall have no liability whatsoever with respect to telecommunications.
11. USE. Subtenant shall use and occupy the Premises only for the uses permitted under the Lease, and for no other purpose. Subtenant shall not violate the prohibitions on use contained in the Lease. No representation or warranty is made by Sublandlord, and nothing contained in this paragraph or elsewhere in this Sublease, shall be deemed to be a representation or warranty by Sublandlord that the Premises may be lawfully used for Subtenant’s intended purposes; and Sublandlord shall have no liability whatsoever to Subtenant if such use is not permitted by the present certificate of occupancy or any applicable zoning or other law or ordinance. Subtenant shall comply with (a) the Lease, (b) any certificate of occupancy relating to the Building or the Premises, if any, (c) all present and future laws, statutes, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments asserting jurisdiction over the Premises and (d) all requirements applicable to the Premises of the board of fire underwriters and/or the fire insurance rating or similar organization performing the same or similar function. Sublandlord shall comply with all of the obligations of the lessee under the Lease, including, but not limited to, any obligation of Sublandlord as the lessee under the Lease to remedy conditions in violation of law prior to the Sublease Commencement Date, other than those obligations that are the obligation of Subtenant pursuant to this Sublease.
12. CONDITION OF PREMISES.
(a) On the Sublease Commencement Date, Sublandlord shall deliver the Premises to Subtenant vacant and free of Sublandlord’s personal property (other than the “Furniture” defined below), broom clean and otherwise in “as is” condition (the “Required Condition”). Prior to the Sublease Commencement Date, Sublandlord shall remove all items of Sublandlord’s personal property not identified as Furniture.
(b) Sublandlord shall have no obligation to furnish, render or supply any work, labor, services, fixtures, equipment, decorations or other items to make the Premises ready or suitable for Subtenant’s occupancy. Sublandlord has not made and does not make any representations or warranties as to the physical condition of the Premises, or any other matter affecting or relating to the Premises, except if and as expressly provided in this Sublease. In making and executing this Sublease, Subtenant has relied solely on such investigations, examinations and inspections as Subtenant has chosen to make or has made. Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for full and complete investigations, examinations, and inspections.
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(c) Sublandlord shall have no obligation to provide any services to Subtenant or the Premises, and any services required to be performed and/or paid for by the lessee under the Lease, including, but not limited to, any HVAC service, maintenance, repair or replacements, shall be performed and paid for by Subtenant as required by the Lease.
13. CONSENTS AND APPROVALS.
A. In any instance when Sublandlord’s consent or approval is required under this Sublease, Sublandlord’s refusal to consent to or approve any matter or thing shall be deemed reasonable if, inter alia, such consent or approval has not been obtained from Landlord under the Lease. If Subtenant shall seek the approval or consent of Sublandlord and Sublandlord shall fail or refuse to give such consent or approval pursuant to the terms of this Sublease or the Lease, Subtenant shall not be entitled to any damages for any withholding or delay of such approval or consent by Sublandlord, it being intended that Subtenant’s sole remedy shall be an action for injunction or specific performance.
B. For Subtenant’s assignments, sub-subleases, construction and the like that require Landlord consent under the Lease, Sublandlord shall consent to any matter that Landlord consents to, and if Landlord’s consent is conditional, Sublandlord’s consent shall be subject to the same conditions. The provisions of the previous sentence are subject to Subtenant indemnifying Sublandlord for all claims, demands, causes of action, damages, costs, fees and expenses with respect to any matter that Sublandlord has consented to or that Sublandlord’s consent is not required for. For example, if Subtenant performs any “specialty” installations (as described in Article 48 of the Lease) with Landlord’s consent, Subtenant shall be responsible for the removal and restoration obligations of the lessee in the Lease when the Sublease Term ends, and such obligations shall survive the end of the Sublease Term.
14. TERMINATION OF LEASE.
(a) If for any reason the term of the Lease shall terminate prior to the expiration of this Sublease, this Sublease shall thereupon be terminated (except as to such provisions that this Sublease expressly provides shall survive a termination) and, except if such termination is due to a breach by Sublandlord of the terms of this Sublease or the Lease, Sublandlord shall not be liable to Subtenant by reason thereof.
(b) Any and all applicable termination rights of the lessee under Lease shall be exercisable only by Sublandlord in the exercise of its good faith discretion.
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15. ASSIGNMENT AND SUBLETTING.
(a) Subtenant shall not, by the sale of all or substantially all of its assets, the sale of fifty percent (50%) or more of any class of its capital stock or voting securities or equity interest, a transfer of control of Subtenant by operation of law or otherwise, assign, sell, mortgage, pledge or in any other manner transfer or encumber this Sublease or any interest therein, or sub-sublet the Premises or any part or parts thereof, or grant any concession or license or otherwise permit occupancy of all or any part of the Premises by anyone other than Subtenant (any of the foregoing, a “Transfer”), without the prior written approval of Landlord and Sublandlord in each instance, which approval from Landlord and Sublandlord shall be granted or withheld in accordance with the terms and conditions of the Lease (with respect to Sublandlord’s consent, as incorporated by reference). The provisions of this paragraph are subject to Section 15(e) below.
(b) Sublandlord’s refusal to consent to any Transfer shall be deemed reasonable if consent to such Transfer has not been obtained from Landlord under the Lease. The provisions of this paragraph are subject to Section 15(e) below.
(c) If this Sublease shall be assigned or if the Premises or any part thereof be further sublet or occupied by anybody other than Subtenant, Sublandlord may, after default by Subtenant, collect rent from the assignee, subtenant or occupant, and, if Sublandlord does so, it shall apply the net amount collected to the Base Rent, Additional Rent and other charges herein reserved, but no such assignment, sub-subletting, occupancy or collection shall be deemed a waiver of Subtenant’s covenants under this Section 15, or the acceptance by Sublandlord of the assignee, sub-subtenant or occupant as sublessee hereunder or a release of Subtenant from the further performance by Subtenant of any of the terms, covenants and conditions of this Sublease on the part of Subtenant to be performed hereunder.
(d) In the event of any Transfer (whether or not consented to), Subtenant shall (x) pay all fees and costs, if any, that Sublandlord is required to pay to Landlord under the Lease in connection with such Transfer and (y) reimburse Sublandlord for all reasonable, third-party fees actually incurred by Sublandlord in connection with such Transfer (including, without limitation, reasonable attorneys’ fees).
(e) The foregoing notwithstanding, the parties acknowledge and agree that as long as Subtenant is a public corporation having its common stock listed on a national securities exchange, a change of ownership or control of Subtenant will not require the consent of Sublandlord or Landlord; and the acceptable form of Landlord Consent shall include such a provision.
16. ALTERATIONS.
A. Subtenant shall not make, cause, suffer or permit the making of any alterations, changes, replacements, improvements, installations or additions (“Alterations”) in, to or about the Premises, without the prior written approval of Sublandlord and Landlord in each instance if and as required in accordance with the applicable terms and conditions of the Lease (with respect to Sublandlord’s consent, as incorporated by reference). All Alterations shall be subject to the applicable terms and conditions of the Lease, including without limitation obtaining the consent of Landlord to the contractors performing the Alterations and giving prior notice. Subtenant shall (x) pay all fees and costs, if any, that Sublandlord is required to pay to Landlord under the Lease in connection with such Alterations, (y) reimburse Sublandlord for all reasonable, third-party fees actually incurred by Sublandlord in connection with such Alterations (including, without limitation, reasonable attorneys’ fees) and (z) indemnify, defend and hold Sublandlord harmless on demand with respect to any and all claims and demands relating to Alterations. In any event, Subtenant shall not make any Alteration that Landlord will require removal of when the term of the Lease ends without assuming the restoration and removal obligations as to such Alteration set forth in the Lease.
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B. Subtenant has advised Sublandlord that Subtenant is engaged in the business of marketing technology for the installation of electrical fixtures such as lighting fixtures and ceiling fans. Accordingly, Subtenant wants to replace two existing linear LED fixtures (at the locations in the existing lounge area shown in Exhibit #3, attached hereto and made a part hereof), with electrical fixtures, lighting fixtures and ceiling fans and display such fixtures at other locations in the Premises (the “Permitted Work”). The acceptable form of Landlord Consent for the Sublease shall include Landlord’s consent for the Permitted Work subject to Subtenant’s submission of the requisite plans, drawings, specifications, and any necessary building permits for Landlord’s review and approval, and Subtenant’s compliance with the other applicable provisions of the Lease relating to Subtenant’s performance of the Permitted Work, including, but not limited to, the requirement that Tenant remove Tenant’s Permitted Work and restore the Premises to the condition it was in prior to the performance of the Tenant’s Permitted Work upon expiration or sooner termination of the Sublease.
17. BROKERAGE. Subtenant and Sublandlord each represent to the other that it has not dealt with any broker, agent or finder in connection with this Sublease other than NEWMARK and PIONEER GROUP, LLC Subtenant and Sublandlord each agree to indemnify, defend and hold the other harmless from and against any costs and expenses (including, without limitation, reasonable attorneys’ fees) resulting from a breach by the indemnifying party of the foregoing representation. Sublandlord shall compensate NEWMARK and PIONEER GROUP, LLC for this Sublease pursuant to a separate agreement between Sublandlord and them, provided that this Sublease is fully executed and delivered by the parties and approved by the Landlord as necessary for this Sublease to become effective.
18. WAIVER OF JURY TRIAL AND RIGHT TO COUNTERCLAIM. Each party hereby waives all right to trial by jury in any summary or other action, proceeding, or counterclaim arising out of or in any way connected with this Sublease, the relationship of Sublandlord and Subtenant, the Premises (including the use and/or occupancy thereof) and any claim of injury or damages with respect thereto. Subtenant also hereby waives all right to assert or interpose a counterclaim (but not the right to assert any mandatory counterclaims) in any summary proceeding or other action or proceeding brought by Sublandlord to recover or obtain possession of the Premises or for nonpayment of Base Rent or Additional Rent. The provisions of this Section 18 shall survive the expiration or earlier termination of this Sublease.
19. HOLDOVER. If vacant and exclusive possession of the Premises is not surrendered to Sublandlord on the expiration or earlier termination of this Sublease, Sublandlord shall be entitled to the remedies contained in the Lease and Subtenant shall indemnify Sublandlord for any and all liability to Landlord arising from such holding over by Subtenant or anyone claiming under or through Subtenant. The provisions of this Section 19 shall survive the expiration or earlier termination of this Sublease.
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20. SECURITY DEPOSIT.
(a) Cash Security Deposit. A cash security deposit in the sum of $161,357.50 shall be delivered upon Subtenant’s execution of this Sublease and held in accordance with the incorporated provisions of Article 34 of the Lease.
(b) In the event Sublandlord assigns or otherwise transfers its interest in the Lease and this Sublease, Sublandlord shall have the right to transfer the Security Deposit hereunder to the transferee, and Sublandlord shall, after notice to Subtenant of such transfer, including the name and address of the transferee, be released by Subtenant from all liability for the return of the Security Deposit. In such event, Subtenant agrees to look solely to the transferee for the return of the Security Deposit. The foregoing notwithstanding, Sublandlord shall not assign this Sublease independent of an assignment of the Lease, Sublandlord shall not be relieved of any liability to Subtenant under this Sublease in connection with Sublandlord’s assignment except if, as, and to the extent that, Landlord relieves Sublandlord of liability as the lessee under the Lease.
21. SURRENDER. Subtenant shall, on or prior to the expiration or earlier termination of this Sublease (i) remove all of Subtenant’s movable fixtures and movable partitions, telephone and other equipment, computer systems, trade fixtures, furniture, furnishings and other items of personal property which are removable without material damage to the Building and any other items required to be removed in accordance with and subject to applicable provisions of the Lease (as incorporated by reference), including any alterations made by Subtenant and (ii) otherwise surrender to Sublandlord the Premises, vacant, broom-clean and in good order and condition ordinary wear and tear excepted. (The “Furniture” shall be disposed of in accordance with the terms of Section 30 hereof.) In the event that any Alterations to the Premises are performed by or on behalf of Subtenant that Landlord requires removal of and any restoration of the Premises to the original condition, Subtenant shall be liable for such removal and restoration prior to the expiration or earlier termination of this Sublease. Subtenant agrees to reimburse Sublandlord for all costs and expenses incurred in removing and storing Subtenant’s property, or repairing any damage to the Premises caused by or resulting from Subtenant’s failure to comply with the provisions of this Section 21. The provisions of this Section 21 shall survive the expiration or earlier termination of this Sublease. It is understood and agreed that any removal and restoration obligations under the Lease with respect to any alteration made by Sublandlord shall remain the sole responsibility of Sublandlord.
22. NO WAIVER. Sublandlord’s receipt and acceptance of Fixed Rent or Additional Rent, or Sublandlord’s acceptance of performance of any other obligation by Subtenant, with knowledge of Subtenant’s breach of any provision of this Sublease, shall not be deemed a waiver of such breach. Subtenant’s payment of Fixed Rent or Additional Rent with knowledge of Sublandlord’s breach shall not be deemed to be a waiver by Subtenant. No waiver by either party of any term, covenant or condition of this Sublease shall be deemed to have been made unless expressed in writing and signed by the waiving party. Sublandlord’s remedies shall be cumulative and the mention of any particular remedy shall not negate the existence of any and all other remedies for breach available to Sublandlord at law or in equity.
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23. SUCCESSORS AND ASSIGNS. The provisions of this Sublease, except as herein otherwise specifically provided, shall extend to, bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns. In the event of any assignment or transfer by Sublandlord of the leasehold estate under the Lease and this Sublease, the Sublandlord shall be entirely relieved and freed of all obligations that arise or accrue under this Sublease after the effective date of such assignment or transfer except as otherwise provided in Section 20(b) of this Sublease.
24. LIABILITY OF SUBLANDLORD AND SUBTENANT. Sublandlord’s employees, officers, directors, members or shareholders, disclosed or undisclosed, shall have no personal liability under this Sublease. Subtenant’s employees, officers, directors, members or shareholders, disclosed or undisclosed, shall have no personal liability under this Sublease.
25. INTERPRETATION. Irrespective of the place of execution or performance, this Sublease shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed within the State of New York without regard to conflicts of law or other principles which could apply the laws of any other jurisdiction. The captions, headings and titles, if any, in this Sublease are solely for convenience of reference and shall not affect its interpretation. This Sublease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Sublease to be drafted. Each covenant, agreement, obligation or other provision of this Sublease binding upon Subtenant shall be deemed and construed as a separate and independent covenant of Subtenant, not dependent on any other provision of this Sublease unless otherwise expressly provided in this Sublease. This Sublease may be executed in one or more counterparts, each of which shall constitute an original and all of which when taken together shall constitute one and the same instrument. Signatures pages transmitted via facsimile or other electronic means shall be acceptable and be deemed to be an original signature page.
26. NOTICES. All notices, requests, demands and other communications with respect to this Sublease shall be in writing, shall be delivered by hand (against signed receipt) or sent by registered or certified mail (return receipt requested), or nationally recognized overnight courier (with verification of delivery) to the following addresses:
If to Sublandlord prior to the Sublease Commencement Date:
Sicart Associates, LLC
152 West 57th Street – 54th Floor
New York, NY 10019
646 ###-###-####
Attention: Mr. Bogumil Baranowski
Email – [***]
If to Sublandlord on or after the Sublease Commencement Date:
Sicart Associates, LLC
2062 Lee Avenue
Merrick NY 11566
646 ###-###-####
Attention:_Ms. Patsy Jaganath
Email:_ [***]
Tel: [***]
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If to Subtenant prior to the Sublease Commencement Date:
At the address set forth on page 1 of this Sublease, with an additional copy to:
Thompson Hine LLP
41 High Street, Suite 1700
Columbus, Ohio 43215-6101Attention:_Rob D. Powell, Esq.
Email:_[***]
If to Subtenant after the Sublease Commencement Date:
SQL Technologies Corp. d/b/a “Sky Technologies”
152 West 57th Street – 54th Floor
New York, NY 10019
Attention: Patty Barron, COO
Email:_[***]
or to such other address or addresses as Sublandlord or Subtenant may designate from time to time. Any such notices, requests, demands and other communications shall be deemed to have been received on the third (3rd) business day after the mailing thereof if mailed in accordance with the terms hereof or upon hand delivery if delivered by hand or one business day following deposit with the overnight courier if delivered by overnight courier. Notice delivered by legal counsel to the parties on behalf of such counsel’s client in accordance with the terms of this Section 26 shall be deemed effective notice. Anything contained herein or in the Lease to the contrary notwithstanding, electronic copies of all notices shall be sent simultaneously by email to the parties at the email addresses shown above subject to the right of either party to change its email addresses for notices on at least five (5) days prior notice to the other party.
27. CONSENT OF LANDLORD UNDER LEASE.
A. This Sublease shall convey no rights to Subtenant until Landlord shall have given its written consent hereto in accordance with the terms of the Lease in form and substance reasonably satisfactory to Sublandlord and Subtenant (the “Landlord Consent”). Sublandlord and Subtenant shall use good faith efforts to obtain the Landlord Consent promptly following the date hereof, including, without limitation, Subtenant furnishing financial and other relevant information about Subtenant. If Landlord fails or refuses to give Landlord Consent to this Sublease for any reason whatsoever within forty-five (45) days after the date that the parties have signed and delivered this Sublease and Sublandlord has collected the Pre-Paid Rent and the Security Deposit due upon execution hereof, (i) Sublandlord shall not be obligated to take any further action to obtain Landlord Consent and (ii) Sublandlord and Subtenant each may elect to terminate this Sublease by written notice to the other, whereupon this Sublease shall be deemed null and void and of no effect (except for those provisions expressly stated herein to survive a termination), the Pre-Paid Rent and the Security Deposit shall be refunded within five (5) business days of such termination, and neither Sublandlord nor Subtenant shall have any further obligation or liability to the other party with respect to this Sublease (except for those provisions expressly stated herein to survive such termination). Any counsel fees or other charges required to be paid to, or for the Landlord or its agent(s) in connection with the application for the Landlord Consent shall be shared equally by the parties and such obligations shall survive any cancellation for lack of the Landlord Consent.
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B. The acceptable form of Landlord Consent for the Sublease shall include Landlord’s consent for the Permitted Work [defined in Section 16(b) of this Sublease] subject to Subtenant’s submission of the requisite plans, drawings, specifications, and any necessary building permits for Landlord’s review and approval, and Subtenant’s compliance with the other applicable provisions of the Lease relating to Subtenant’s performance of the Permitted Work, including, but not limited to, the requirement that Tenant remove Tenant’s Permitted Work and restore the Premises to the condition it was in prior to the performance of the Tenant’s Permitted Work upon expiration or sooner termination of the Sublease.
C. It shall be a material provision of the Landlord Consent that Landlord accept and agree to the provisions of Section 15(e) of this Sublease.
D. The parties shall sign and deliver the Landlord Consent once it is in form and substance reasonably acceptable to both of them.
28. SEVERABILITY. If any provision hereof is held invalid or unenforceable, the remainder shall be valid and enforceable to the fullest extent permitted by law.
29. SIGNS. Subtenant may not install any sign, other than in accordance with and subject to the Lease, including without limitation obtaining the prior written approval of Landlord and Sublandlord in each instance, which approval from Landlord and Sublandlord shall be granted or withheld in accordance with the terms and conditions of the Lease (with respect to Sublandlord’s consent, as incorporated by reference). Sublandlord shall have no liability to Subtenant for the failure of Landlord to consent to Subtenant’s sign. Subtenant shall be solely responsible for the costs for any installation, maintenance and removal such sign(s). Sublandlord shall cooperate with Subtenant so that Landlord puts Subtenant’s name on the ground floor lobby building directory promptly after issuance of the Landlord Consent in accordance with Article 45 of the Lease provided that there is a ground floor lobby building directory.
30. FURNITURE. Sublandlord had previously outfitted the Premises with certain office equipment and furniture (the “Furniture”) as more particularly described in Exhibit#2, attached hereto and made a part hereof. Sublandlord is subletting the Premises to Subtenant with the Furniture in place “as is” for a rental charge of one dollar ($1.00) only for the Furniture. Sublandlord is making no representations or warranties as to the condition, merchantability or fitness for any particular purpose of the Furniture. Sublandlord shall have no responsibility for the repair, maintenance and replacement of the Furniture. Subtenant may not, without Sublandlord’s written approval, remove the Furniture from the Premises during the Term. Subtenant shall insure, repair, replace and maintain the Furniture in the same condition it was delivered in (reasonable wear and tear excepted) at Subtenant’s sole cost, risk and expense, as personal property rented to Subtenant. When the Sublease Term ends, Subtenant shall return the Furniture to Sublandlord in the Premises in the same condition that such Furniture was delivered in, reasonable wear and tear excepted. Subtenant’s obligations under this Section 30 shall survive the end of the Sublease Term.
31. DISCLOSURE. Each of the parties to this Sublease hereby acknowledges and agrees that the other party may disclose this Sublease and its exhibits to the extent such party’s counsel reasonably determines such disclosure is necessary for such party to comply with the requirements of any applicable laws and the rules and regulations of any stock exchange upon which the securities of one of the parties is listed.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this Sublease as of the day and year first above written.
| SICART ASSOCIATES, LLC | |||
| By: | /s/ Bogumil Baranowski | ||
| Name: | Bogumil Baranowski | ||
| Title: | Managing Member | ||
| SQL TECHNOLOGIES CORP. | |||
| By: | /s/ John P. Campi | ||
| Name: | John P. Campi | ||
| Title: | Chief Executive Officer | ||
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Exhibit #1
Redacted Lease
[EXHIBIT #1 of this Sublease has been attached behind Exhibit #3 of this Sublease.]
