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Exhibit 10.2
LEASE
BY AND BETWEEN
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
("Landlord")
AND
SEQUOIA IMAGING LLC
("Tenant")
Multi-tenant Office Lease
for Maryland
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TABLE OF CONTENTS
1. TERMS ..................................................................3
2. DELIVERY OF POSSESSION .................................................1
3. PAYMENT OF RENT ........................................................4
4. SECURITY DEPOSIT .......................................................4
5. USES ...................................................................5
6. LATE CHARGES ...........................................................6
7. REPAIRS AND MAINTENANCE ................................................7
8. UTILITIES AND SERVICES .................................................7
9. COST OF SERVICES AND UTILITIES .........................................9
10. PROPERTY TAXES ........................................................11
11. TENANT'S INSURANCE ....................................................13
12. LANDLORD'S INSURANCE ..................................................14
13. DAMAGE OR DESTRUCTION .................................................14
14. MACHINES AND EQUIPMENT; ALTERATIONS AND ADDITIONS:
REMOVAL OF FIXTURES ...................................................15
15. ACCEPTANCE OF PREMISES ................................................16
16. TENANT IMPROVEMENTS ...................................................17
17. ACCESS ................................................................17
18. WAIVER OF SUBROGATION .................................................17
19. INDEMNIFICATION .......................................................18
20. ASSIGNMENT AND SUBLETTING .............................................18
21. ADVERTISING ...........................................................19
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22. LIENS .................................................................19
23. DEFAULT ...............................................................20
24. SUBORDINATION .........................................................24
25. SURRENDER OF POSSESSION ...............................................24
26. NON-WAIVER ............................................................25
27. HOLDOVER ..............................................................25
28. CONDEMNATION ..........................................................25
29. NOTICES ...............................................................26
30. MORTGAGEE PROTECTION ..................................................26
31. COSTS AND ATTORNEYS' FEES .............................................26
32. BROKERS ...............................................................26
33. LANDLORD'S LIABILITY AND DEFAULT ......................................27
34. ESTOPPEL CERTIFICATES .................................................27
35. FINANCIAL STATEMENTS ..................................................28
36. TRANSFER OF LANDLORD'S INTEREST .......................................28
37. RIGHT TO PERFORM ......................................................28
38. SUBSTITUTED PREMISES ..................................................29
39. SALES AND AUCTIONS ....................................................29
40. NO ACCESS TO ROOF .....................................................29
41. SECURITY ..............................................................29
42. AUTHORITY OF TENANT ...................................................29
43. NO ACCORD OR SATISFACTION .............................................30
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44. MODIFICATION FOR LENDER ...............................................30
45. PARKING ...............................................................30
46. GENERAL PROVISIONS ....................................................30
47. RULES AND REGULATIONS .................................................32
48. LANDLORD'S LIEN .......................................................32
49. WAIVER OF JURY TRIAL ..................................................33
50. RIGHT OF FIRST REFUSAL ................................................33
EXHIBIT A - LOCATION AND DIMENSIONS OF PREMISES
EXHIBIT B - DECLARATION OF LEASE COMMENCEMENT
EXHIBIT C - TENANT WORK FUNDINGS
EXHIBIT D - RULES AND REGULATIONS
EXHIBIT E - "RIGHT OF FIRST REFUSAL" SPACE
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LEASE
THIS LEASE is made this 18th day of August, l995, by and between
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation, ("Landlord"), c/o
▇▇▇▇▇▇▇▇ ▇▇▇▇ Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and Sequoia Imaging LLC, a limited liability corporation ("Tenant") with a
mailing address of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
R E C I T A L S:
Landlord, for and in consideration of the rents and all other charges and
payments hereunder and of the covenants, agreements, terms, provisions and
conditions to be kept and performed hereunder by Tenant, demises and leases to
Tenant, and Tenant hereby hires and takes from Landlord, the premises described
below ("Premises"), subject to all matters hereinafter set forth and upon and
subject to the covenants, agreements, terms, provisions and conditions of this
Lease for the term hereinafter stated.
NOW THEREFORE Landlord and Tenant agree to the following, unless
otherwise specifically modified by provisions of this Lease:
1. TERMS.
1.1 Premises. The Premises demised by this Lease are approximately
7,227 rentable square feet located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Building") located in ▇▇▇▇▇▇ County, Maryland, together with a nonexclusive
right to use parking and other common areas. The location and dimensions of the
Premises are shown on Exhibit A, attached hereto and incorporated herein by
reference. No easement for light or air is incorporated in this Premises.
1.2 Agreed Areas.
Total rentable area of the building: 68,943 sq. ft.;
Area of Premises: 7,227 rentable sq. ft.;
Tenant's percentage of the Building: 10.48%
1.3 Lease Term. Lease Commencement Date: September 15, 1995
Lease Expiration Date: sixty (60) months after Lease
Commencement Date. In the event the Lease Commencement Date is a date other than
the first day of a calendar month, the Lease Term shall run for the number of
months set forth above from the first day of the calendar month following the
Lease Commencement Date.
1.4 Rent. The basic rent ("Rent") is $7,500.00 per month during months
1-12 of the Term; and $8,500.00 per month during months 13-24 of the Term; and
$9,500.00 per month
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during months 25-36 of the Term; and $10,000.00 per month during months 37-48 of
the Term; and $10,500.00 per month during months 49-60 of the Term. In addition
to the Rent, Tenant shall pay as additional rent increases in Operating Costs as
described in Section 9, increases in Property Taxes as described in Section 10,
and Rent increases as described in Section 1.5, all of which shall be deemed
additional rent due under this Lease.
1.6 Notice and Payment Addresses.
NOTICE ADDRESSES:
If to Landlord: Principal Mutual Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Real Estate Equities
And a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇ NE, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Tenant: Sequoia Imaging LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Either party may, by written notice, designate a new address to which all
notices hereunder shall be directed.
Payment Address:
Principal Mutual Life Insurance Company
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
1.7 Lease Year. Each twelve (12) month period within the Lease Term
shall be referred to herein as a "Lease Year." The first Lease Year shall
commence on the Lease Commencement Date and terminate on the last day of the
twelfth full calendar month after such Lease Commencement Date. Each subsequent
Lease Year shall commence on the date immediately following the last day of the
preceding Lease Year and shall continue for a period of twelve (12) full
calendar months, except that the last Lease Year of the Lease Term shall
terminate on the date this Lease expires or is otherwise terminated.
2. DELIVERY OF POSSESSION.
If Landlord is unable to deliver possession of the Premises to Tenant on
the date set forth in Section 1.3 above, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom. If such delay in delivery of the Premises results from a
cause other than Tenant Delay (as hereinafter defined), the date set forth in
Section 1.3 above shall be extended to the date on which Landlord delivers
possession of the Premises to Tenant. The foregoing notwithstanding, subject to
Tenant Delays, in the event Landlord fails to deliver possession of the Premises
to Tenant in the condition contemplated in Exhibits A and C on or before January
1, 1996. Tenant shall have the right to terminate this Lease by written notice
to Landlord at any time thereafter until the date Landlord actually delivers the
Premises. "Tenant Delay" shall mean any and all delays resulting from
(i) Tenant's inability or failure timely to meet its obligations under this
Lease, including without limitation, all obligations of Tenant under the terms
of Exhibit C attached hereto; (ii) any delays caused by Tenant's contractor or
subcontractors; (iii) the inclusion in the improvements requested to be
performed in the Premises of any items requiring a long lead time for
procurement and/or installation; or (iv) any changes or change orders requested
by Tenant. Should Landlord tender possession of the Premises to Tenant prior to
the date set forth in Section 1.3 above, and Tenant shall to accept such prior
tender, and the date set forth in Section 1.3 shall be changed to reflect the
date of such tender of possession and accordingly, such occupancy shall be
subject to all terms, covenants and conditions of this Lease, including the
payment of Rent and increases in Operating Costs and Property Taxes (as such
terms are hereinafter defined).
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3. PAYMENT OF RENT.
Tenant shall pay Landlord the Rent, increases in Operating Costs and
Property Taxes and any other additional rent or other payments due under this
Lease without prior notice, deduction or offset, in lawful money of the United
States. Rent (including any monthly payments of Estimated Costs Allocable to the
Premises (as defined below) payable in accordance with this Lease) shall be paid
in advance on or before the first day of each month, except that the first
month's Rent shall be paid upon the execution hereof, at the address noted in
Section 1.6, or to such other party or at such other place as Landlord may
hereafter from time to time designate in writing. Rent and other amounts due
under this Lease for any partial month at the beginning or end of the Lease Term
shall be prorated. All other payments required to be made by Tenant to Landlord
under this Lease for which the payment period is not otherwise specified herein
shall be made no later than five (5) business days after Landlord provides an
invoice to Tenant specifying the amount of such payment obligation.
4. SECURITY DEPOSIT.
As security for its full and faithful performance of this Lease, Tenant
shall pay Landlord a security deposit of Nine Thousand Two Hundred and No/100
Dollars ($9,200.00) upon execution of this Lease. If Tenant defaults with
respect to any covenant or condition of this Lease, including but not limited to
the payment of Rent, additional rent or any other payment due under this Lease,
and the obligation of Tenant to maintain the premises and deliver possession
thereof back to Landlord at the expiration or earlier termination of the Lease
Term in the condition required herein, then Landlord may (without any waiver of
Tenant's default being deemed to have occurred) apply all or any part of the
security deposit to the payment of any sum in default or any other sum which
Landlord may be required or deem necessary to spend or incur by reason of
Tenant's default. In such event, Tenant shall, upon demand, deposit with
Landlord the amount so applied to replenish the security deposit. If Tenant
shall have fully complied with all of the covenants and conditions of this
Lease, but not otherwise, the amount of the security deposit then held by
Landlord shall be repaid to Tenant within thirty (30) days after the expiration
or sooner termination of this Lease. In the event of a sale or transfer of
Landlord's estate or interest in the Building, Landlord shall have the right to
transfer the security deposit to the purchaser or transferee, and Landlord shall
be considered released by Tenant from all liability for the return of the
security deposit.
5. USES.
5.1 Permitted Uses. The Premises are to be used only for general
office purposes ("Permitted Uses") and for no other business or purpose. No act
shall be done in or about the Premises that is unlawful or that will increase
the existing rate of insurance on the Building. In the event of a breach of this
covenant, Tenant shall pay to Landlord any and all increases in insurance
premiums resulting from such breach. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance or any
other act or thing which disturbs the quiet enjoyment of any other tenant in the
Building. If any of the Tenant's office machines or equipment or other
activities within the Premises disturb any other tenant in the Building, then
Tenant shall provide adequate insulation, or take such other action, or cease
such objectionable activities, as may be
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necessary to eliminate the noise or disturbance. Tenant, at its expense, shall
comply with all laws relating to its use or occupancy of the Premises and shall
observe such reasonable rules and regulations as may be adopted and made
available to Tenant by Landlord from time to time for the safety, care and
cleanliness of the Premises or the Building and for the preservation of good
order therein.
5.2 Hazardous Substances. The term "Hazardous Substances," as used in
this Lease shall mean all pollutants, contaminants, toxic or hazardous wastes,
or any other substances, the use and/or removal of which is required or the use
of which is restricted, prohibited or penalized by an "Environmental Law," which
term shall mean any federal, state or local law, ordinance or other statute of a
governmental or quasi-governmental authority relating to pollution or protection
of the environment. Tenant hereby agrees that (i) no activity will be conducted
on the Premises that will produce any Hazardous Substances, except for such
activities that are a part of the ordinary course of the Tenant's business
activities (the "Permitted Activities") provided said Permitted Activities are
conducted in accordance with all Environmental Laws and have been approved in
advance in writing by Landlord, and Tenant shall be responsible for obtaining
any required permits and paying any fees and providing any testing required by
any governmental agency; (ii) the Premises will not be used in any manner for
the storage of any Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Tenant's business (the
"Permitted Materials") provided such Permitted Materials are properly used,
stored and disposed of in a manner and location meeting all Environmental Laws
and said Permitted Materials have been approved in advance in writing by
Landlord, and Tenant shall be responsible for obtaining any required permits and
paying any fees and providing any testing required by any governmental agency;
(iii) no portion of the Premises will be used as a landfill or a dump; (iv)
Tenant will not install any underground tanks of any type; (v) Tenant will not
allow any surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute, a public or private
nuisance; (vi) Tenant will not permit Hazardous Substances to be brought onto
the Premises, except for the Permitted Materials described above, and if so
brought or found located thereon, the same shall be immediately removed, with
proper disposal, and all required cleanup procedures shall be diligently
undertaken pursuant to all Environmental Laws at Tenant's sole cost and expense.
Landlord or Landlord's representative shall have the right but not the
obligation to enter the Premises for the purpose of inspecting the storage, use
and disposal of Permitted Materials to ensure compliance with all Environmental
Laws. Should it be determined, in Landlord's sole opinion, that said Permitted
Materials are being improperly stored, used or disposed of, then Tenant shall
immediately take such corrective action as requested by Landlord. Should Tenant
fail to take such corrective action within twenty-four (24) hours, Landlord
shall have the right to perform such work on Tenant's behalf and at Tenant's
sole expense, and Tenant shall promptly reimburse Landlord for any and all costs
associated with said work. If at any time during or after the Term of the Lease,
the Premises is found to be so contaminated or subject to said conditions,
Tenant shall diligently institute proper and thorough cleanup procedures at
Tenant's sole cost, and Tenant agrees to indemnify and hold Landlord harmless
from all claims, demands, actions, liabilities, costs, expenses, damages and
obligations of any nature arising from or as a result of the use of the Premises
by Tenant. The foregoing indemnification and the responsibility of Tenant shall
survive the termination or expiration of this Lease.
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6. LATE CHARGES.
6.1 Tenant hereby acknowledges that late payment to Landlord of Rent
or additional rent or other sums due hereunder will cause Landlord to incur
administrative costs and loss of investment income not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. If
any Rent, additional rent or other sum due from Tenant is not received by
Landlord or Landlord's designated agent within five (5) days after the date due,
then Tenant shall pay to Landlord a late charge equal to five percent (5%) of
such overdue amount, plus any reasonable attorneys' fees and costs incurred by
Landlord by reason of Tenant's failure to pay Rent and other charges when due
hereunder. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the administrative cost that Landlord will incur by
reason of Tenant's late payment. Landlord's acceptance of such late charges
shall not constitute a waiver of Tenant's default with respect to such overdue
amount or stop Landlord from exercising any of the other rights and remedies
granted hereunder.
6.2 In addition to the administrative late charge provided for under
Section 6.1, above, if any Rent, additional rent or other sum due from Tenant to
Landlord is not paid as and when due under this Lease, such unpaid amount shall
bear interest from the date due until the date paid at an annual rate of
interest equal to the lesser of (a) the prime rate of interest as published in
the Wall Street Journal (or any successor publication thereto) from time to time
plus two percent (2%), or (b) the highest annual rate of interest permitted
under applicable law.
Initials:
Landlord [SIG] Tenant [SIG]
----------------------- -----------------------
7. REPAIRS AND MAINTENANCE.
Landlord shall maintain, or cause to be maintained, the common areas of
the Building, such as lobbies, elevators, stairs, and corridors, the roof,
foundations, and exterior walls of the Building, and the underground utility and
sewer pipes outside the exterior walls of the Building, if any, provided that,
to the extent any of such repairs is rendered necessary by the negligence or
willful misconduct of Tenant, its agents, customers, employees, independent
contractors, guests or invitees, Tenant shall be obligated to reimburse Landlord
for all costs sustained by Landlord in connection with such repair, as
additional rent hereunder, which reimbursement shall be due no later than ten
(10) days after Landlord's written demand. Subject to Landlord's right of access
pursuant to Article 17, Tenant shall be exclusively responsible for the repairs
and maintenance to the interior of the Premises, and Landlord shall be under no
obligation to inspect the Premises. Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair, and Landlord shall make commercially reasonable efforts to commence such
repair and diligently pursue such to completion. Failure to so report such
defects shall make Tenant responsible to Landlord for any liability incurred by
Landlord by reason of such conditions. Tenant hereby waives the right to make
repairs at Landlord's expense under any other law, statute or ordinance now or
hereafter in effect. All expenses incurred by Landlord pursuant to this Article
7 (to the extent not payable directly by Tenant
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as above provided) will be included within "Other Operating Costs" as defined in
Section 9.1.1.2, below.
8. UTILITIES AND SERVICES.
8.1 Hours of Service. From 8:00 am. to 8:00 p.m. on weekdays ("Normal
Business Hours") and from 9:00 a.m. to 1:00 p.m. on Saturday ("Saturday
Mornings") (excluding those holidays set forth in the Rules and Regulations
attached hereto as Exhibit D), Landlord shall furnish to the Premises
electricity for lighting and operation of low-power usage office machines (such
as personal computers), water, heat and air conditioning, and elevator service.
During all other hours, Landlord shall furnish such services except for heat and
air conditioning.
8.2 Additional Services. If requested by Tenant, Landlord shall
furnish heat and air conditioning at times other than Normal Business Hours and
Saturday Mornings and the cost of such services as established by Landlord shall
be paid by Tenant as additional rent, payable as provided in Section 3. If the
quantity or kind of utilities or services furnished by Landlord to the Premises
to meet Tenant's requirements is excessive or abnormal relative to the utilities
and services consumed by office tenants generally, Tenant shall reimburse
Landlord upon demand for the additional cost resulting from Tenant's excessive
or abnormal consumption. Landlord shall also provide toilet room supplies,
window washing at reasonable intervals, and customary Building janitorial
service or other types of services provided or caused to be provided by Landlord
to Tenant which are in addition to the services ordinarily provided Building
tenants, all of which shall constitute Other Operating Costs and shall be
payable as provided in Section 9.1.1.2 of this Lease. Landlord shall not be
liable for any loss, injury or damage to property caused by or resulting from
any variation, interruption, or failure of such services due to any cause
whatsoever, or from failure to make any repairs or perform any maintenance. In
no event shall Landlord be liable to Tenant for (a) any damage to the Premises,
or (b) any loss, damage or injury to any property therein or thereon, or (c) any
claims for the interruption of or loss to Tenant's business or for any indirect
damages or consequential losses occasioned by bursting, rupture, leakage or
overflow of any plumbing or other pipes or other similar cause in, above, upon
or about the Premises or the Building. If any public utility or governmental
body shall require Landlord or Tenant to restrict the consumption of any utility
or reduce any service to the Premises or the Building, Landlord and Tenant shall
comply with such requirements, without any abatement or reduction of the Rent,
additional rent or other sums payable by Tenant hereunder.
8.3 Recycling Regulations. Tenant shall comply, at its sole cost and
expense, with all orders, requirements and conditions now or hereafter imposed
by any ordinances, laws, orders and/or regulations (hereinafter collectively
called "regulations") of any governmental body having jurisdiction over the
Premises or the Building, whether required of Landlord or otherwise, regarding
the collection, sorting, separation and recycling of waste products, garbage,
refuse and trash (hereinafter collectively called "waste products") including
but not limited to the separation of such waste products into receptacles
reasonably approved by Landlord and the removal of such receptacles in
accordance with any collection schedules prescribed by such regulations.
Landlord reserves the right (a) to refuse to accept from Tenant any waste
products that are not prepared for collection in accordance with any such
regulations, (b) to require Tenant to arrange for waste product collection at
Tenant's sole cost
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and expense, using a contractor reasonably satisfactory to Landlord, and (c) to
require Tenant to pay all costs, expenses, fines, penalties or damages that may
be imposed on Landlord or Tenant by reason of Tenant's failure to comply with
any such regulations.
9. COST OF SERVICES AND UTILITIES.
9.1 Definitions. In addition to the Rent, Tenant shall pay to Landlord
increases under this Section 9 as additional rent. The increases shall be made
as provided herein, using the following definitions:
9.1.1 "Operating Costs" shall include Costs of Utilities and Other
Operating Costs.
9.1.2 "Costs of Utilities" shall mean all expenses paid or
incurred by Landlord for electricity, including any surcharges imposed, water,
gas, sewers, oil and utility services provided to or used by Tenant.
9.1.3 "Other Operating Costs" shall mean all other expenses paid
or incurred by Landlord for maintaining, operating, repairing, and managing the
(i) Building, (ii) the personal property used in conjunction therewith, (iii)
the Building roof, and (iv) the land upon which the Building is situated. Such
costs shall include, without limitation, supplies, cleaning services, window
glass replacement and repair, landscaping services of independent contractors,
compensation (including employment taxes and fringe benefits) of all persons who
perform duties in connection with the operation, maintenance and repair of the
Building, insurance premiums, permits and inspection fees, management fees,
legal fees and costs incurred in connection with contesting the amounts or the
imposition of any Property Taxes, any capital expenditures incurred either to
reduce Operating Costs (e.g., an energy management system), to comply with any
governmental law, order, regulation or other requirement (e.g., a code-mandated
life safety system or Americans with Disabilities Act requirements), or to
replace existing equipment and machinery necessary to the day to day operations
of the Building, or which are capital replacements (i.e., replacements of common
area or common usage Building components and systems in lieu of capital repairs
otherwise required to be made thereto, but excluding replacement of the Building
roof, parking lot and/or garage), provided that any capital replacement which
does not result in a quantifiable reduction of Operating Costs shall be
amortized over the useful life thereof, not to exceed ten (10) years, and only
the amortized annual portion, together with interest at a rate of twelve percent
(12%) per annum, shall be recoverable by Landlord under this Section 9 in any
one year; and accounting fees and any other expense or charge whether or not
hereinbefore described which, in accordance with generally accepted accounting
and management practices, would be considered an expense of maintaining,
operating or repairing the Building, excluding: (a) costs of any special
services rendered to individual tenants (including Tenant), for which a special,
separate charge shall be made (and shall be payable within ten (10) days of
written demand); (b) Property Taxes (as defined in Section 10.1.1); (c)
depreciation or amortization of costs which are capitalized in accordance with
generally accepted accounting practices (except that Operating Costs shall
include those capital expenditures, or amortization thereof, as applicable,
which are set forth
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above); (d) any other item for which reimbursement is received out of Landlord's
insurance, (e) leasing commissions; (f) interest or amortization of mortgages,
(g) refinancing costs, and (h) costs incurred in renovating or otherwise
improving, decorating, painting or redecorating space for tenants or other
occupants of vacant space. Operating Costs shall not include any other item
already being charged to Lessee as part of Operating Costs under a different
category pursuant to the provisions of this Lease (i.e., Tenant shall not be
charged twice for the same Operating Cost item);
9.1.4 "Calendar Year" shall mean the twelve-month period
commencing January 1 and ending December 31.
9.1.5 "Base Services Year" shall mean the First Full Calendar Year
of Building Operation or the Calendar Year in which the Lease Commencement Date
occurs, whichever is later.
9.1.6 "First Full Calendar Year of Building Operation" shall mean
January 1, 1995 to December 32, 1995.
9.1.7 "Actual Costs" shall mean the actual expense paid or
incurred by Landlord for Operating Costs during any Calendar Year of the Lease
Term.
9.1.8 "Actual Costs Allocable to the Premises" shall mean the
Tenant's share of the Actual Costs determined by Tenant's percentage of the
Building described in Section 1.2.
9.1.9 "Estimated Costs Allocable to the Premises" shall mean
Landlord's estimate of Actual Costs Allocable to the Premises for the following
Calendar Year to be given by Landlord to Tenant pursuant to Section 9.3.
9.2 Actual Base Amount. Actual Costs Allocable to the Premises for the
Base Services Year shall be deemed the "Actual Base Amount".
9.3 Estimated Costs Allocable to the Premises. Prior to the
commencement of each Calendar Year (except the Base Services Year) during the
Lease Term, Landlord shall furnish Tenant a written statement of the Estimated
Costs Allocable to the Premises for such Calendar Year and a calculation of the
payments to be made by Tenant as follows: One-twelfth (1/12th) of the amount, if
any, by which such amount exceeds the Actual Base Amount shall be payable by
Tenant as additional rent as provided in Section 3 for each month during such
Calendar Year. If at any time or times during such Calendar Year, it appears to
Landlord that the Estimated or Actual Costs Allocable to the Premises will vary
from Landlord's estimate by more than five percent (5%) on an annualized basis,
Landlord may, by written notice to Tenant, revise its estimate for such Calendar
Year and payments by Tenant of the Estimated Costs Allocable to the Premises for
such Calendar Year shall be based on such revised estimate.
9.4 Actual Costs. Within one hundred twenty (120) days after the close
of each Calendar Year during the Lease Term, Landlord shall deliver to Tenant a
written statement setting forth the Actual Costs Allocable to the Premises
during the preceding Calendar Year. If such costs for any
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Calendar Year exceed Estimated Costs Allocable to the Premises paid by Tenant to
Landlord pursuant to Section 9.3, Tenant shall pay the amount of such excess to
Landlord as additional rent within thirty (30) days after receipt of such
statement by Tenant. If such statement shows such costs to be less than the
amount paid by Tenant to Landlord pursuant to Section 9.3, then the amount of
such overpayment by Tenant shall be credited by Landlord to the next Rent
payable by Tenant.
9.5 End of Term. If this Lease terminates on a day other than the last
day of a Calendar Year, the amount of any adjustment to Estimated Costs
Allocable to the Premises with respect to the Calendar Year in which such
termination occurs shall be prorated on the basis which the number of days from
the commencement of such Calendar Year to and including such termination date
bears to 365; and any amount payable by Landlord to Tenant or Tenant to Landlord
with respect to such adjustment shall be payable within thirty (30) days after
delivery by Landlord to Tenant of the statement of Actual Costs Allocable to the
Premises with respect to such Calendar Year.
9.6 Further Adjustment. In the event Landlord shall furnish any
utility or service which is included in the definition of Operating Costs to
less than 95% of the rentable area of the Project because (i) the average
occupancy level of the Project for the Base Services Year and/or any subsequent
Calendar Year was not ninety-five percent (95%) or more of full occupancy, (ii)
any such utility or service is not required by or provided to one or more of the
tenants or occupants of the Project, or (iii) any tenant or occupant is itself
obtaining or providing any such utility or services, then the Actual Costs for
such year shall be increased to equal the total expenses that Landlord
reasonably estimates it would have incurred if Landlord had provided all such
utilities and services to all tenant and occupants in the Project, and shall be
allocated among the tenants by the Landlord to reflect those costs which would
have occurred had the Project been ninety-five percent (95%) occupied during the
year in question and such utilities and services provided to all tenants. The
intent of this Section 9.6 is to ensure that the reimbursement of all Operating
Costs is fair and equitably allocated among the tenants receiving the utilities
and services in question.
10. PROPERTY TAXES.
10.1 Contribution to Property Taxes. In addition to the Rent provided
in Section 1.4, and the increases in Operating Costs provided in Section 9,
Tenant shall pay to Landlord as additional rent its share of increases in
Property Taxes under this Section 10. Tenant's share of Property Taxes shall be
determined as provided herein, utilizing the following definitions:
10.1.1 "Property Taxes" shall mean any form of assessment,
license, fee, rent tax, levy, penalty (if a result of Tenant's delinquency), or
tax (other than net income, estate, succession, inheritance, transfer or
franchise taxes), imposed by any authority having the direct or indirect power
to tax, or by any city, county, state or federal government or any improvement
or other district or division thereof, on the Building or any part thereof (or
on Landlord with respect thereto), the land, the parking area, or any other
legal or equitable interest of Landlord in the same, or any rental income
derived therefrom, excluding personal property taxes payable by Tenant on the
property of Tenant located within the Premises, as indicated in Section 10.4
herein.
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10.1.2 The Term "Calendar Year" shall mean the period defined in
Section 9.1.4.
10.1.3 The term "Base Tax Year" shall mean the first full Calendar
Year during which Property Taxes are payable on the Building assessed as
substantially completed, or the first full Calendar Year in which the Lease
Commencement Date occurs, whichever is later.
10.1.4 The term "Tenant's Share of Property Taxes" shall mean the
amount of Property Taxes payable during any Calendar Year by Landlord
multiplied by Tenant's percentage of the Building described in Section 1.2.
10.2 Estimated Increases in Tenant's Share of Property Taxes. Prior to
the commencement of each Calendar Year (except the Base Tax Year), Landlord
shall furnish Tenant with a written statement setting forth the estimate of
Tenant's Share of Property Taxes for such Calendar Year. One-twelfth (1/12th) of
the amount, if any, by which such estimated Tenant's Share of Property Taxes
exceeds the Tenant's Share of Property Taxes for the Base Tax Year shall be
payable by Tenant as additional rent as provided in Section 3.
10.3 Actual Property Taxes. Within one hundred twenty (120) days after
the close of each Calendar Year during the Lease Term, Landlord shall deliver to
Tenant a written statement setting forth the Tenant's Share of Property Taxes
during the preceding Calendar Year. If such amount exceeds the Tenant's
estimated Share of Property Taxes pursuant to Section 10.2, Tenant shall pay the
amount of such excess to Landlord as additional rent within thirty (30) days
after receipt of such statement by Tenant. If such statement shows such amount
to be less than the amount paid by Tenant to Landlord pursuant to Section 10.2,
then the amount of such overpayment shall be credited by Landlord to the next
immediate Rent payable by Tenant.
10.4 Taxes on Tenant's Personal Property. Tenant shall pay, prior to
delinquency, all personal property taxes payable with respect to all property of
Tenant located in the Premises or the Building and shall provide promptly, upon
request of Landlord, written proof of such payment.
10.5 End of Term. If this Lease terminates on a day other than the last
day of a Calendar Year, the amount of any adjustment between the estimated and
actual Tenant's Share of Property Taxes with respect to the Calendar Year in
which such termination occurs shall be prorated on the basis of a 365-day year;
and any amount payable by Landlord to Tenant or Tenant to Landlord with respect
to such adjustment shall be payable within thirty (30) days after delivery by
Landlord to Tenant of the statement of Tenant's Share of Property Taxes with
respect to such Calendar Year.
11. TENANT'S INSURANCE.
11.1 Tenant shall during the Term of this Lease, procure at its expense
and keep in force the following insurance: (i) Commercial general liability
insurance naming the Landlord and Landlord's managing agent as additional
insureds against any and all claims for bodily injury and property damage
occurring in or about the Premises. Such insurance shall have a combined single
limit of not less than One Million Dollars ($1,000,000) per occurrence with a
Two Million Dollar ($2,000,000)
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aggregate limit and excess umbrella liability insurance in the amount of Two
Million Dollars ($2,000,000). If Tenant has other locations that it owns or
leases, the policy shall include an aggregate limit per location endorsement.
Such liability insurance shall be primary and not contributing to any insurance
available to Landlord and Landlord's insurance shall be in excess thereto. In no
event shall the limits of such insurance be considered as limiting the liability
of Tenant under this Lease; (ii) Personal property insurance insuring all
equipment, trade fixtures, inventory, fixtures and personal property located
within the Premises for perils covered by the causes of loss -- special form
(all risk) and in addition, coverage for flood, earthquake and boiler and
machinery (if applicable). Such insurance shall be written on a replacement cost
basis in an amount equal to one hundred percent (100%) of the full replacement
value of the aggregate of the foregoing; (iii) Workers' compensation insurance
in accordance with statutory laws and employers' liability insurance with a
limit of not less than One Hundred Thousand Dollars ($100,000) per employee and
Five Hundred Thousand Dollars ($500,000) per occurrence; (iv) Business
interruption and/or loss of rental insurance in an amount equivalent to six (6)
months Rent and increases in Operating Costs and Property Taxes payable by
Tenant hereunder, which shall not contain a deductible greater than an amount
equal to seventy-two (72) hours of the Rent in effect at such time (or an
equivalent amount expressed in dollars), and which shall name Landlord as an
additional insured; and (v) Such other insurance as which may be required by
Landlord's beneficiaries or mortgagees of any deed of trust or mortgage
encumbering the Premises.
11.2 The policies required to be maintained by Tenant shall be with
companies rated AX or better in the most current issue of Best's Insurance
Reports. Insurers shall be licensed to do business in the state in which the
Premises are located and domiciled in the USA. Any deductible amounts under any
insurance policies required hereunder shall not exceed One Thousand Dollars
($1,000). Certificates of insurance (certified copies of the policies may be
required) shall be delivered to Landlord prior to the Lease Commencement Date
and annually thereafter at least thirty (30) days prior to the expiration date
of the old policy. Tenant shall have the right to provide insurance coverage
which it is obligated to carry pursuant to the terms hereof in a blanket policy,
provided such blanket policy expressly affords coverage to the Premises and to
Landlord as required by this Lease. Each policy of insurance shall provide
notification to Landlord at least thirty (30) days prior to any cancellation or
modification to reduce the insurance coverage.
11.3 In the event Tenant does not purchase the insurance required by
this Lease or keep the same in full force and effect, Landlord may, but shall
not be obligated to, purchase the necessary insurance and pay the premium.
Tenant shall repay to Landlord, as additional rent, any and all reasonable
expenses (including attorneys' fees) and damages which Landlord may sustain by
reason of the failure of Tenant to obtain and maintain insurance.
12. LANDLORD'S INSURANCE.
At all times during the Lease Term, Landlord will maintain (a) fire and
extended coverage insurance covering the Building in an amount sufficient to
prevent Landlord from being a co-insurer under its policies of insurance, but in
no event less than the replacement cost of the building, and (b) public
liability and property damage insurance in an amount customary for properties
which are
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comparable to the Building, determined by Landlord in its sole discretion.
Landlord shall also have the right to obtain such other types and amounts of
insurance coverage on the Building and Landlord's liability in connection with
the Building as are customary or advisable for a first class office building in
the Columbia-Baltimore metropolitan area, as determined by Landlord in
Landlord's sole discretion. Tenant acknowledges and agrees that all premiums for
insurance obtained by Landlord pursuant to this Article 12 shall be included
within "Other Operating Costs", as such term is defined in Section 9.1.1.2,
above.
13. DAMAGE OR DESTRUCTION.
13.1 Damage Repair. If the Premises shall be destroyed or rendered
untenantable, either wholly or in part, by fire or other casualty, Landlord may,
at its option, (i) terminate this Lease effective as of the date of such damage
or destruction, or (ii) restore the Premises to their previous condition,
subject to Section 13.4 below, and in the meantime the Rent shall be abated in
the same proportion as the untenantable portion of the Premises bears to the
whole thereof, and this Lease shall continue in full force and effect. If the
damage is due, directly or indirectly, to the fault or neglect of Tenant, or its
officers, contractors, licensees, agents, servants, employees, guests, invitees
or visitors, there shall be no abatement of Rent, except to the extent Landlord
receives proceeds from any applicable insurance policy of Tenant to compensate
Landlord for loss of Rent. The provisions of this Section are in lieu of any
statutory termination provision allowable in the event of casualty damage.
13.2 Termination for Material or Uninsured Damages. If the Building
shall be destroyed or damaged by fire or other casualty insured against under
Landlord's fire and extended coverage insurance policy to the extent that more
than twenty percent (20%) thereof is rendered untenantable, or if the Building
shall be materially destroyed or damaged to the extent that the restoration of
such, in Landlord's sole discretion, is not economical or feasible, or if the
Building shall be materially destroyed or damaged by any other casualty other
than those covered by such insurance policy, notwithstanding that the Premises
may be unaffected directly by such destruction or damage, Landlord may, at its
election, terminate this Lease by notice in writing to Tenant within sixty (60)
days after such destruction or damage. Such notice shall be effective thirty
(30) days after receipt thereof by Tenant.
13.3 Business Interruption. Other than rental abatement as and to the
extent provided in Section 13.1, no damages, compensation or claim shall be
payable by Landlord for inconvenience or loss of business arising from
interruption of business, repair or restoration of the Building or Premises.
13.4 Repairs. Landlord's obligations should it elect to repair, shall
be limited to the base Building, common areas and the interior improvements
installed by Landlord. Anything herein to the contrary notwithstanding, if the
Premises are destroyed or damaged during the last twelve (12) months of the
Lease Term, then Landlord may, at its option, cancel and terminate this Lease as
of the date of the occurrence of such damage.
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14 MACHINES AND EQUIPMENT; ALTERATIONS AND ADDITIONS: REMOVAL OF FIXTURES.
14.1 Tenant shall not place a load upon the floor of the Premises
exceeding eighty (80) pounds live load per square foot without Landlord's prior
written consent. Business machines, mechanical equipment and materials belonging
to Tenant which cause vibration, noise, cold, heat or fumes that may be
transmitted to the Building or to any other leased space therein to such a
degree as to be reasonably objectionable to Landlord or to any other tenant in
the Building shall be placed, maintained, isolated, stored and/or vented by
Tenant at its sole expense so as to absorb and prevent such vibration, noise,
cold, heat or fumes. Tenant will not install or operate in the Premises any
electrical or other equipment, other than such equipment as is commonly used in
modern offices (specifically excluding mainframe computers), without first
obtaining the prior consent in writing of Landlord, who may condition such
consent upon the payment by Tenant of additional rent in compensation for excess
consumption of water and/or electricity, excess wiring and other similar
requirements, and any changes, replacements or additions to any base building
system, as may be occasioned by the operation of said equipment or machinery.
14.2 Tenant shall not make or allow to be made any alterations,
additions or improvements to or on the Premises without first obtaining the
written consent of Landlord and where alterations are non-structural in nature,
such consent not to be unreasonably withheld. Any such alterations, additions or
improvements, including, but not limited to, wall covering, paneling and
built-in cabinet work, but excepting movable furniture and trade fixtures, shall
be made at Tenant's sole expense, according to plans and specifications approved
in writing by Landlord, in compliance with all applicable laws, by a licensed
contractor, and in a good and workmanlike manner conforming in quality and
design with the Premises existing as of the Lease Commencement Date, shall not
diminish the value of the Building or the Premises and shall at once become a
part of the realty and shall be surrendered with the Premises. Upon the
expiration or sooner termination of the Lease Term, Tenant shall, upon written
demand by Landlord, at Tenant's sole expense, with due diligence, remove any
alterations, additions, or improvements made by Tenant, designated by Landlord
to be removed, and repair any damage to the Premises caused by such removal.
Tenant shall remove all of its movable property and trade fixtures which can be
removed without damage to the Premises at the termination of this Lease, either
by expiration of the Lease Term or other cause, and shall pay Landlord any
damages for injury to the Premises or Building resulting from such removal. All
items of Tenant's personal property that are not removed from the Premises or
the Building by Tenant at the termination of this Lease or when Landlord has the
right of reentry, shall be deemed abandoned and become the exclusive property of
Landlord, without further notice to or demand upon Tenant. If the Premises are
not surrendered as and when aforesaid, Tenant shall indemnify Landlord against
all claims, losses, cost, expense (including reasonable attorneys' fees) and
liability resulting from the delay by Tenant in so surrendering the same,
including without limitation any claims made by any succeeding occupant founded
on such delay. Tenant's obligation under this Paragraph 14.2 shall survive the
expiration or termination of this Lease.
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15. ACCEPTANCE OF PREMISES.
Except to the extent that Landlord has expressly agreed in this Lease to
perform certain tenant improvement work in the Premises, Tenant shall be deemed
to have accepted the Premises on the Lease Commencement Date in their "as is"
condition. If tenant improvements are to be constructed by Landlord in the
Premises, the acceptance of the Premises by Tenant shall be deferred until
receipt by the Tenant of an architect's certificate of readiness certifying that
the Premises are ready for occupancy. Within five (5) days after the architect
gives such notice, Tenant shall make such inspection of the Premises as Tenant
deems appropriate, and, except as otherwise notified by Tenant in writing to
Landlord within such period, Tenant shall be deemed to have accepted the
Premises in their condition as of the date of the architect's certificate. If,
as a result of such inspection, Tenant discovers minor deviations or variations
from the plans and specifications for Tenant's improvements of a nature commonly
found on a "punch list" (as that term is used in the construction industry),
Tenant shall promptly notify Landlord of such deviations and Landlord shall
commence the correction of the punch list and diligently pursue such to
completion; provided, however, that Landlord shall have the final and conclusive
determination as to which items constitute punch list items. The existence of
such punch list items shall not postpone the Lease Commencement Date of this
Lease nor the obligation of Tenant to pay Rent, additional rent or any other
charges due under this Lease. Landlord and Tenant hereby agree to execute a
Declaration, substantially in the form attached hereto as Exhibit B, to confirm
the Lease Commencement Date. Failure to execute said Declaration shall not
affect the commencement or expiration of the Lease Term.
16. TENANT IMPROVEMENTS.
If Landlord has agreed to make any improvement to the Premises, the
provisions governing the planning, construction, scope of work and terms of
payment shall be set forth in Exhibit C, which, if attached hereto, is
incorporated herein by this reference.
17. ACCESS.
Tenant shall permit Landlord and its agents to enter the Premises at all
reasonable times to inspect the same; to show the Premises to prospective
tenants upon reasonable prior notice (excepting emergency situations), or
interested parties such as prospective lenders and purchasers; to exercise its
rights under Section 47; to clean, repair, alter or improve the Premises or the
Building; to discharge Tenant's obligations when Tenant has failed to do so
within a reasonable time after written notice from Landlord; to post notices of
nonresponsibility and similar notices and "For Sale" signs' and to place "For
Lease" signs upon or adjacent to the Building or the Premises at any time within
twelve (12) months of the expiration of the Lease Term. Tenant shall permit
Landlord and its agents to enter the Premises at any time in the event of an
emergency. When reasonably necessary, Landlord may temporarily close entrances,
doors, corridors, elevators or other facilities without liability to Tenant by
reason of such closure.
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18. WAIVER OF SUBROGATION.
Whether the loss or damage is due to the negligence of either party or
its agents or employees, or any other cause, each party to this Lease hereby
releases the other party and its agents and employees from responsibility for
and waives its entire claim of recovery for (i) any loss or damage to the
personal property of the party making such waiver located in the Building,
including the Building itself, arising out of any of the perils which are
covered by Tenant's property insurance policy, with extended coverage
endorsements, or (ii) loss resulting from business interruption or loss of
rental income, at the Premises, arising out of any of the perils which may be
covered by the business interruption or by the loss of rental income insurance
policy which can be obtained by such party. Tenant shall cause its insurance
carrier(s) to consent to such waiver of all rights of subrogation against the
other party, and to issue an endorsement to all policies of insurance obtained
by such party confirming that the foregoing release and waiver will not
invalidate such policies.
19. INDEMNIFICATION.
(a) Subject to Section 18 (Waiver of Subrogation), above, Tenant shall
indemnify and hold harmless Landlord, its agents, employees, officers,
directors, partners and shareholders from and against any and all liabilities,
judgments, demands, causes of action, claims, losses, damages, costs and
expenses, including reasonable attorney's fees and costs, arising out of the
use, occupancy, conduct, operation, or management of the Premises by, or the
willful misconduct or negligence of, Tenant, its officers, contractors,
licenses, agents, servants, employees, guests, invitees, or visitors (but only
if such visitors, guests, invitees are within the Premise) in or about the
Building. This indemnification shall survive termination of this Lease. This
provision shall not be construed to make Tenant responsible for loss, damage,
liability or expense resulting from injuries to third parties to the extent same
is caused by the negligence of Landlord, or its officers, contractors,
licensees, agents, employees or invitees, or of other tenants of the Building.
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19 (b) Subject to Section 18 (Waiver of Subrogation), above, Landlord
shall indemnify and hold harmless Tenant, its agents, employees, officers,
directors, partners and shareholders from and against any and all liabilities,
judgments, demands, causes of action, claims, losses, damages, costs and
expenses, including reasonable attorney's fees and costs, arising out of the
operation, management or maintenance of the Building (exclusive of the Premises)
by Landlord and its employees, agents and contractors, or the willful misconduct
or negligence of, Landlord, its officers, contractors, agents, servants, and
employees wherever occurring. This indemnification shall survive termination of
this Lease. This provision shall not be construed to make Landlord responsible
for loss, damage, liability or expense resulting from injuries to third parties
to the extent same is caused by the negligence of Tenant, or its officers,
contractors, licensees, agents, employees or invitees, or of other tenants of
the Building.
20. ASSIGNMENT AND SUBLETTING.
20.1 Landlord's Consent. Tenant shall not assign, encumber, mortgage,
pledge or license the Premises or this Lease, or sublease all or any part of the
Premises, or permit the use of the Premises by any party other than Tenant,
without the prior written consent of Landlord. When Tenant requests Landlord's
consent to such assignment or sublease, it shall notify Landlord in writing, at
least thirty (30) days prior to the commencement date of the proposed sublease
or assignment, of the name and address of the proposed assignee or subtenant and
the nature and character of the business of the proposed assignee or subtenant
and shall provide financial information including financial statements of the
proposed assignee or subtenant. Tenant shall also provide Landlord with a copy
of the proposed sublet or assignment agreement. Landlord shall have the option
(to be exercised within thirty (30) days after Landlord's receipt of Tenant's
request with all required information included) to cancel this Lease effective
as of the commencement date stated in the proposed sublease or assignment. If
Landlord shall not exercise its option within the time set forth above, its
consent to any proposed assignment or sublease shall not be unreasonably
withheld.
20.2 Approved Subleases and Assignments. If Landlord approves an
assignment or sublease as herein provided, Tenant shall pay to Landlord, as
additional rent due under this Lease, the difference, if any, between the Rent
plus increases in Operating Costs and Property Taxes payable by Tenant hereunder
allocable to that part of the Premises affected by such assignment or sublease
pursuant to this Lease, subtracted from the rent and any additional rent payable
by the assignee or subtenant to Tenant. No consent to any assignment or sublease
shall constitute a further waiver of the provisions of this section, and all
subsequent assignments or subleases may be made only with the prior written
consent of Landlord. An assignee of Tenant, at the option of Landlord, shall
become directly liable to Landlord for all obligations of Tenant hereunder, but
no sublease or assignment by Tenant shall relieve Tenant of any liability
hereunder. Any assignment or sublease without Landlord's prior written consent
shall be void, and shall, at the option of the Landlord, constitute a default
under this Lease. Tenant shall pay to Landlord a Two Hundred Fifty and no/100ths
Dollars ($250.00) processing fee, which shall accompany any proposed assignment
or sublease delivered by Tenant to Landlord, and shall in addition reimburse
Landlord for Landlord's reasonable attorneys fees and out-of-pocket expenses
incurred in connection with Landlord's review of such sublease or assignment. If
at any time during the Lease Term any part or all of the shares of Tenant's
stock or Tenant's
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partnership interests shall be transferred by sale, assignment, merger,
operation of law or other disposition so as to result in a transfer of more than
twenty-five percent (25%) of Tenant's stock or partnership interests, such
transfer shall be deemed an assignment and, therefore, prohibited without the
express prior written consent of Landlord not to be unreasonably withheld.
Notwithstanding the foregoing, in the event of a transfer or sale of 100% of
Tenant's assets to a third party, Tenant may assign this Lease to such a third
party provided the financial condition of such third party is equal to or better
than the financial condition of the Tenant at the time the Lease was initially
executed.
21. ADVERTISING.
Tenant shall not display any sign, graphics, notice, picture, or poster,
or any advertising matter whatsoever, anywhere in or about the Premises or the
Building at places visible from anywhere outside or at the entrance to the
Premises without first obtaining Landlord's written consent thereto, such
consent to be at Landlord's sole discretion. Tenant shall be responsible to
maintain any permitted signs and remove the same at Lease termination. If Tenant
shall fail to do so, Landlord may do so at Tenant's cost. Tenant shall be
responsible to Landlord for any damage caused by the installation, use,
maintenance or removal of any such signs.
22. LIENS.
Tenant shall keep the Premises and the Building free from any liens
arising out of any work performed, materials ordered or obligations incurred by
or on behalf of Tenant, and Tenant hereby agrees to indemnify and hold Landlord,
its agents, employees, independent contractors, officers, directors, partners,
and shareholders harmless from any liability, cost or expense for such liens.
Tenant shall cause any such lien imposed to be released of record by payment or
posting of the proper bond acceptable to Landlord within ten (10) days after the
earlier of imposition of the lien or written request by Landlord. Tenant shall
give Landlord written notice of Tenant's intention to perform work on the
Premises which might result in any claim of lien at least ten (10) days prior to
the commencement of such work to enable Landlord to post and record a Notice of
Nonresponsibility or other notice deemed proper before commencement of any such
work. If Tenant fails to remove any lien within the prescribed ten (10) day
period, then Landlord may do so at Tenant's expense and Tenant's reimbursement
to Landlord for such amount, including attorneys' fees and costs, shall be
deemed additional rent.
23. DEFAULT.
23.1 Tenant's Default. A default under this Lease by Tenant shall exist
if any of the following occurs:
23.1.1 If Tenant fails to pay Rent, additional rent or any other
sum required to be paid hereunder within five (5) days of the due date thereof,
whether or not demand shall have been made for the same; or
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23.1.2 If Tenant fails to perform any term, covenant or condition
of this Lease except those requiring the payment of money to Landlord as set
forth in Section 23.1.1 above, and Tenant fails to cure such breach within
fifteen (15) days after written notice from Landlord where such breach could
reasonably be cured within such fifteen (15) day period; provided, however, that
where such failure could not reasonably be cured within the fifteen (15) day
period, that Tenant shall not be in default if it commences such performance
within the fifteen (15) day period and diligently thereafter prosecutes the same
to completion, such grace period not to exceed a maximum of thirty (30) days in
the aggregate, and no such grace period to be permitted in the event of any one
or more of the following: (i) there exists a risk of prosecution of the
Landlord, (ii) there exits a reasonable possibility of danger to the health or
safety of the Landlord, the Tenant, Tenant's invitees, or any other occupants
of, or visitors to, the Building, (iii) the default relates to the maintenance
of insurance obligations, (iv) the default relates to the assignment and
subletting provisions, and (v) the default relates to a violation of Section 5.2
of this Lease; the determination as to whether or not any such conditions exist
to be made in Landlord's sole discretion; and
23.1.3 If Tenant or any guarantor of this Lease shall (i) make an
assignment for the benefit of creditors, (ii) acquiesce in a petition in any
court in any bankruptcy, reorganization, composition, extension or insolvency
proceedings, (iii) seek, consent to or acquiesce in the appointment of any
trustee, receiver or liquidation of Tenant or of any guarantor of this Lease and
of all or any part of Tenant's or such guarantor's property, (iv) file a
petition seeking an order for relief under the Bankruptcy Code, as now or
hereafter amended or supplemented, or by filing any petition under any other
present or future federal, state or other statute or law for the same or similar
relief, or (v) fail to win the dismissal, discontinuation or vacating of any
involuntary bankruptcy proceeding within sixty (60) days after such proceeding
is initiated; or
23.1.4 If Tenant shall have abandoned or vacated the Premises; or
23.1.5 The chronic delinquency by Tenant in the payment of
monthly Rent, or any other periodic payments required to be paid by Tenant under
this Lease. "Chronic delinquency" shall mean failure by Tenant to pay Rent, or
any other periodic payments required to be paid by Tenant under this Lease,
within three (3) days after written notice thereof for any three (3) months
(consecutive or nonconsecutive) during any twelve (12) month period. In the
event of a chronic delinquency, at Landlord's option, Landlord shall have the
additional right to require that Rent be paid by Tenant quarter-annually, in
advance.
23.2 Remedies. Upon a default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, any one or more of which Landlord may resort
cumulatively, consecutively, or in the alternative:
23.2.1 Landlord may continue this Lease in full force and effect,
and this Lease shall continue in full force and effect as long as Landlord does
not terminate this Lease, and Landlord shall have the right to collect Rent,
additional rent and other charges when due.
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23.2.2 Landlord may terminate this Lease, or may terminate
Tenant's right to possession of the Premises, at any time by giving written
notice to that effect, in which event Landlord may (but shall not be obligated
to) relet the Premises or any part thereof. Upon the giving of a notice of the
termination of this Lease, this Lease (and all of Tenant's rights hereunder)
shall immediately terminate, provided that, without limitation, Tenant's
obligation to pay Rent, increases in Operating Costs, increases in Property
Taxes, and any damages otherwise payable under this Article 23, shall survive
such termination and shall not be extinguished thereby. Upon the giving of a
notice of the termination of Tenant's right of possession, all of Tenant's
rights in and to possession of the Premises shall terminate but this Lease shall
continue subject to the effect of this Article 23. Upon either such termination,
Tenant shall surrender and vacate the Premises in the condition required by
Section 25, and Landlord may re-enter and take possession of the Premises and
all the remaining improvements or property and eject Tenant or any of the
Tenant's subtenants, assignees or other person or persons claiming any right
under or through Tenant or eject some and not others or eject none. This Lease
may also be terminated by a judgment specifically providing for termination. Any
termination under this section shall not release Tenant from the payment of any
sum then due Landlord or from any claim for damages or Rent, additional rent or
other sum previously accrued or thereafter accruing against Tenant, all of which
shall expressly survive such termination. Upon such termination Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in attempting to
relet the Premises or any part thereof, including, without limitation, broker's
commissions, expenses of cleaning and redecorating the Premises required by the
reletting and like costs. Reletting may be for a period shorter or longer than
the remaining Lease Term. No act by Landlord other than giving written notice to
Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the
Premises or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a constructive or
other termination of Tenant's right to possession or of this Lease, either of
which may be effected solely by an express written notice from Landlord to
Tenant. On termination, Landlord has the right to remove all Tenant's personal
property and store same at Tenant's cost and to recover from Tenant as damages:
(a) The worth at the time of award of unpaid Rent,
additional rent and other sums due and payable which had been earned at the time
of termination; plus
(b) The worth at the time of award of the amount by
which the unpaid Rent, additional rent and other sums due and payable which
would have been payable after termination until the time of award exceeds the
amount of such rent loss that Tenant proves could have been reasonably avoided;
plus
(c) The worth at the time of award of the amount by
which the unpaid Rent, additional rent or other sums due and payable for the
balance of the Lease Term after the time of award exceeds the amount of such
rent loss that Tenant proves could be reasonably avoided; plus
(d) Any other amount necessary which is to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease, or which, in the ordinary course of
things, would be likely to result therefrom, including, without limitation, any
costs or expenses incurred by Landlord: (i) in retaking possession of the
Premises;
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(ii) in maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or a portion thereof, including such
acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or
(iv) for any other costs necessary or appropriate to relet the Premises; plus
(e) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
the laws of the State in which the Premises are located.
The "worth at the time of award" of the amounts referred to
in Sections 23.2.2(a) and (b) is computed by allowing interest at the maximum
interest rate allowed by law on the unpaid rent and other sums due and payable
from the termination date through the date of award. In lieu of the amounts
recoverable by Landlord pursuant to clauses (b) and (c) of this Section 23.2.2,
above, but in addition to the amounts specified in clauses (a), (d), and (e) (or
any other portion of this Article 23), Landlord may, at its sole election,
recover "Indemnity Payments," as defined hereinbelow, from Tenant. For purposes
of this Lease "Indemnity Payments" means an amount equal to the Rent and other
payments provided for in this Lease which would have become due and owing
thereunder from time to time during the unexpired Lease Term after the effective
date of the termination, but for such termination, less the Rent and other
payments, if any, actually collected by Landlord and allocable to the Premises.
If Landlord elects to pursue Indemnity Payments in lieu of the amount
recoverable under clauses (b) and (c), above, Tenant shall, on demand, make
Indemnity Payments monthly, and Landlord may ▇▇▇ for all Indemnity Payments at
any time after they accrue, either monthly, or at less frequent intervals.
Tenant further agrees that Landlord may bring suit for Indemnity Payments at or
after the end of the Lease Term as originally contemplated under this Lease, and
Tenant agrees that, in such event, Landlord's cause of action to recover the
Indemnity Payments shall be deemed to have accrued on the last day of the Lease
Term as originally contemplated. In seeking any new tenant for the Premises,
Landlord shall be entitled to grant any concessions it deems reasonably
necessary. In no event shall Tenant be entitled to any excess of any rental
obtained by reletting over and above the rental herein reserved. Tenant waives
redemption or relief from forfeiture under any other present or future law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any default of Tenant hereunder.
23.2.3 Landlord may, with or without terminating this Lease,
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Tenant. No re-entry or taking possession of
the Premises by Landlord pursuant to this section shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant.
23.2.4 Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors, does hereby
specifically waive and surrender any and all rights and privileges, so far as is
permitted by law, which Tenant and all such persons might otherwise have under
any present or future law (1) to the service of any notice to quit or of
Landlord's intention to re-enter or to institute legal proceedings, which notice
may otherwise be required to be given, except that Landlord shall be required to
obtain appropriate legal process to obtain possession of the Premises, and shall
provide any such notice as is required in connection with obtaining legal
process. (2) to
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redeem the Premises, (3) to re-enter or repossess the Premises, (4) to restore
the operation of this Lease, with respect to any dispossession of Tenant by
judgment or warrant of any court or judge, or any re-entry by Landlord, or any
expiration or termination of this Lease, whether such dispossession, re-entry,
expiration or termination shall be by operation of law or pursuant to the
provisions of this Lease, (5) to the benefit of any law which exempts property
from liability for debt or for distress for rent or (6) to a trial by jury in
any claim, action proceeding or counter-claim arising out of or in any way
connected with this Lease.
24. SUBORDINATION.
(A) Subject to Section 24(B) below, this Lease is and shall at all
times be and remain subject and subordinate to the lien of any mortgage, deed of
trust, ground lease or underlying lease now or hereafter in force against the
Premises, and to all advances made or hereafter to be made upon the security
thereof. Tenant shall execute and return to Landlord any documentation requested
by Landlord in order to confirm the foregoing subordination within ten (10) days
after Landlord's written request. If Tenant does not provide Landlord with such
subordination documents within ten (10) days after Landlord's written request,
then Tenant hereby authorizes Landlord to execute such subordination documents
acting as duly authorized agent for Tenant. In the event any proceedings are
brought for foreclosure, or in the event of the exercise of the power of sale
under any mortgage or deed of trust made by the Landlord covering the Premises,
Tenant shall attorn to the purchaser at any such foreclosure, or to the grantee
of a deed in lieu of foreclosure, and recognize such purchaser or grantee as the
Landlord under this Lease. Tenant agrees that no mortgagee or successor to such
mortgagee shall be (i) bound by any payment of Rent or additional rent for more
than one (1) month in advance, (ii) bound by any amendment or modification of
this Lease made without the consent of Landlord's mortgagee or such successor in
interest, (iii) liable for damages for any breach, act or omission of any prior
landlord, (iv) bound to effect or pay for any construction for Tenant's
occupancy, or (v) subject to any claim of offset or defenses that Tenant may
have against any prior landlord.
(B) Landlord agrees that the future subordination of this Lease
provided for under Section 24(A), above, shall be subject to the condition that
the mortgagee execute and deliver a Subordination. Non-Disturbance and
Attornment Agreement, in such mortgagee's standard form, providing, inter alia,
that as long as Tenant is not in default hereunder, Tenant's right of possession
and other leasehold rights shall not be disturbed in the event of a foreclosure
of such mortgage or deed of trust (subject to the commercially reasonable
conditions and other limitations set forth in such standard form agreement),
which Tenant agrees to promptly execute and deliver to such mortgagee.
25. SURRENDER OF POSSESSION.
Upon expiration of the Lease Term, Tenant shall promptly and peacefully
surrender the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable use and wear and tear
excepted, all to the reasonable satisfaction of Landlord. If the Premises are
not surrendered in accordance with the terms of this Lease, Tenant shall
indemnify Landlord and its agent, employees, independent contractors, officers,
directors, partners, and
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shareholders against any loss or liability including reasonable attorneys' fees
and costs, and including liability to succeeding tenants for any actual losses
suffered, resulting from delay by Tenant in so surrendering the Premises. This
indemnification shall survive termination of this Lease.
26. NON-WAIVER.
Waiver by Landlord of any breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant, or
condition(s), or any subsequent breach of the same or any other term, covenant
or condition of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent.
27. HOLDOVER.
If Tenant shall, without the written consent of Landlord, hold over after
the expiration of the Lease Term, Tenant shall be deemed a tenant at sufferance,
which tenancy may be terminate as provided by applicable state law. During such
tenancy, Tenant agrees to pay to Landlord, each month, damages equal to one
hundred fifty percent (150%) of the Rent and additional rent payable by Tenant
for the last month of the Lease Term. Tenant shall give to Landlord thirty (30)
days prior written notice of any intention to quit the Premises. Tenant shall be
entitled to thirty (30) days prior written notice to quit the Premises, except
in the event of non-payment of rent in advance or the breach of any other
covenant or the existence of a default, or upon expiration of the Lease Term as
provided herein, in which event Tenant shall not be entitled to any notice to
quit, the unusual notice to quit being hereby expressly waived.
28. CONDEMNATION.
If twenty percent (20%) or more of the Premises or of such portion of the
Building as may be required for the reasonable use of the Premises, are taken by
eminent domain or sale under threat of condemnation by eminent domain, this
Lease shall automatically terminate as of the date title vests in the condemning
authority, and all Rent, additional rent, and other payments shall be paid to
that date. Landlord reserves all rights to damages to the Premises for any
partial or entire taking by eminent domain, and Tenant hereby assigns to
Landlord any right Tenant may have to such damages or award, and Tenant shall
make no claim against Landlord or the condemning authority for damages for
termination of Tenant's leasehold interest or for interference with Tenant's
business. Tenant shall have the right to claim and recover from the condemning
authority compensation for any loss which Tenant may incur for Tenant's moving
expenses, business interruption or taking of Tenant's personal property (not
including Tenant's leasehold interest).
29. NOTICES.
All notices and demands which may be required or permitted to be given to
either party hereunder shall be in writing, and shall be delivered personally or
sent by United States certified mail, postage prepaid, return receipt requested,
or by Federal Express or other reputable overnight carrier,
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to the addresses set out in Section 1.6, and to such other person or place as
each party may from time to time designate in a notice to the other. Notice
shall be deemed given upon the earlier of actual receipt, refusal of delivery or
on the date which is four (4) days after the date of mailing.
30. MORTGAGEE PROTECTION.
Tenant agrees to give any mortgagee(s) and/or trust deed holder(s), by
registered mail, a copy of any notice of default served upon the Landlord,
provided that prior to such notice Tenant has been notified in writing (by way
of notice of assignment of rents and leases, or otherwise) of the addresses of
such mortgagee(s) and/or trust deed holder(s). Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the mortgagee(s) and/or trust deed holder(s) shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
if within such thirty (30) days any mortgagee and/or trust deed holder(s) has
commenced and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary to effect such cure), in which event Tenant shall not have the right
to pursue any claim against Landlord, such mortgagee and/or such trust deed
holder(s), including but not limited to any claim of actual or constructive
eviction, so long as such remedies are being so diligently pursued.
31. COSTS AND ATTORNEYS' FEES.
If either party shall bring any action against the other party, arising
out of this Lease, including any suit for the recovery of Rent, additional rent
or other payments hereunder, or possession of the Premises, the losing party
shall pay to the prevailing party a reasonable sum for attorneys' fees and costs
in such suit, at trial and on appeal and such attorneys' fees and costs shall be
deemed to have accrued on the commencement of such action.
32. BROKERS.
Tenant represents and warrants to Landlord that neither it nor its
officers or agents nor anyone acting on its behalf has dealt with any real
estate broker other than CB Commercial Real Estate in the negotiating or making
of this Lease, and Tenant agrees to indemnify and hold Landlord, its agents,
employees, partners, directors, shareholders and independent contractors
harmless from all liabilities, costs, demands, judgments, settlements, claims
and losses, including reasonable attorneys fees and costs, incurred by Landlord
in conjunction with any such claim or claims of any other broker or brokers
claiming to have interested Tenant in the Building or Premises or claiming to
have caused Tenant to enter into this Lease.
33. LANDLORD'S LIABILITY AND DEFAULT.
Anything in this Lease to the contrary notwithstanding, covenants,
undertakings and agreements herein made on the part of the Landlord are made and
intended not for the purpose of binding
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Landlord personally or the assets of Landlord but are made and intended to bind
only the Landlord's interest in the Premises and Building, as the same may, from
time to time, be encumbered and no personal liability shall at anytime be
asserted or enforceable against Landlord or its stockholders, officers or
partners or their respective heirs, legal representatives, successors and
assigns on account of the Lease or on account of any covenant, undertaking or
agreement of Landlord in this Lease. In addition, in no event shall Landlord be
in default of this Lease unless Tenant notifies Landlord of the precise nature
of the alleged breach by Landlord, and Landlord fails to cure such breach within
fifteen (15) days after the date of Landlord's receipt of such notice and
diligently pursue to completion (provided that if the alleged breach is of such
a nature that it cannot reasonably be cured within such fifteen (15) day period,
then Landlord shall not be in default if Landlord commences a cure within such
fifteen (15) day period and diligently thereafter prosecutes such cure to
completion). In no event shall Tenant have any right to terminate this Lease by
virtue of any uncured default by Landlord.
34. ESTOPPEL CERTIFICATES.
Tenant shall, from time to time, within ten (10) days of Landlord's
written request, execute, acknowledge and deliver to Landlord or its designee a
written statement stating: the date the Lease was executed and the date it
expires; the date the Tenant entered occupancy of the Premises; the amount of
Rent, additional rent and other charges due hereunder and the date to which such
amounts have been paid; that this Lease is in full force and effect and has not
been assigned, modified, supplemented or amended in any way (or specifying the
date and terms of any agreement so affecting this Lease); that this Lease
represents the entire agreement between the parties as to this leasing; that all
conditions under this Lease to be performed by the Landlord have been satisfied
(or specifying any such conditions that have not been satisfied); that all
required contributions by Landlord to Tenant on account of Tenant's improvements
have been received (or specifying any such contributions that have not been
received); that on this date there are no existing defenses or offset which the
Tenant has against the enforcement of this Lease by the Landlord; that no Rent
has been paid more than one (1) month in advance; that no security has been
deposited with Landlord (or, if so, the amount thereof); or any other matters
evidencing the status of the Lease, as may be required either by a lender making
a loan to landlord to be secured by a deed of trust or mortgage against the
Building, or a purchaser of the Building. It is intended that any such statement
delivered pursuant to this paragraph may be relied upon by a prospective
purchaser of Landlord's interest or a mortgagee of Landlord's interest or
assignee of any mortgage upon Landlord's interest in the Building. If Tenant
fails to respond within ten (10) days of receipt by Tenant of a written request
by Landlord as herein provided, Tenant shall be deemed to have given such
certificate as above provided without modification and shall be deemed to have
admitted the accuracy of any information supplied by Landlord to a prospective
purchaser or mortgagee.
35. FINANCIAL STATEMENTS.
Within fifteen (15) days after Landlord's request, Tenant shall deliver
to Landlord the current financial statements of Tenant, and financial statement
of the two (2) years prior to the current financial statements year, with an
opinion of a certified public accountant, including a balance sheet
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and profit and loss statement for the most recent prior year, all prepared in
accordance with generally accepted accounting principles consistently applied.
36. TRANSFER OF LANDLORD'S INTEREST.
In the event of any transfer(s) of Landlord's interest in the Premises or
the Building, other than a transfer for security purposes only, the transferor
shall be automatically relieved of any and all obligations and liabilities on
the part of Landlord accruing from and after the date of such transfer, and
Tenant agrees to attorn to the transferee.
37. RIGHT TO PERFORM.
If Tenant shall fail to pay any sum of money, other than Rent and
additional rent, required to be paid by it hereunder or shall fail to perform
any other act on its part to be performed hereunder, and (except in the event of
emergency in which case no grace or cure period shall be applicable or required)
such failure shall continue for ten (10) days, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such other act on Tenant's part
to be made or performed as provided in this Lease. Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies
in the event of the nonpayment of sums due under this section as in the case of
default by Tenant in the payment of Rent. All sums paid by Landlord and all
penalties, interest and costs in connection therewith, shall be due and payable
by Tenant on the next day after such payment by Landlord, together with interest
thereon at the maximum rate of interest permitted by law from such date to the
date of payment.
38. SUBSTITUTED PREMISES.
Landlord shall have the right at any time, upon giving Tenant not less
than thirty (30) days' notice in writing, to provide and furnish Tenant with
reasonably comparable space elsewhere in the Building of approximately the same
size as the Premises and to place Tenant in such space. In the event of any such
relocation of Tenant, Landlord shall pay for Tenant's reasonable moving costs.
Should Tenant refuse to permit Landlord to move Tenant to such new space by the
end of such thirty (30) day period, Landlord in such event shall have the right
to forthwith cancel and terminate this Lease. If Landlord moves Tenant to such
new space, this Lease and each and all of its terms, covenants and conditions
shall remain in full force and effect and be deemed applicable to such new
space, and such new space shall thereafter be deemed to be the "Premises".
39. SALES AND AUCTIONS.
Tenant may not display or sell merchandise outside the exterior walls and
doorways of the Premises and may not use such areas for storage. Tenant agrees
not to install any exterior lighting, amplifiers or similar devices in or about
the Premises. Tenant shall not conduct or permit to be conducted any sale by
auction in, upon or from the Premises whether said auction be voluntary,
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involuntary, pursuant to any assignment for the payment of creditors or pursuant
to any bankruptcy or other insolvency proceedings.
40. NO ACCESS TO ROOF.
Tenant shall have no right of access to the roof of the Premises or the
Building and shall not install, repair or replace any aerial, fan, air
conditioner or other device on the roof of the Premises or the Building without
the prior written consent of Landlord.
41. SECURITY.
Tenant hereby agrees to the exercise by Landlord and its agents and
employees, within their sole discretion, of such security measures as it deems
necessary for the Building.
42. AUTHORITY OF TENANT.
If Tenant is a corporation or partnership, each individual executing this
Lease on behalf of said corporation or partnership represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation or partnership, and that this Lease is binding upon said corporation
or partnership.
43. NO ACCORD OR SATISFACTION.
No payment by Tenant or receipt by Landlord of a lesser amount than the
Rent and other sums due hereunder shall be deemed to be other than on account of
the earliest rent or other sums due, nor shall any endorsement or statement on
any check or accompanying any check or payment be deemed an accord and
satisfaction; and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Rent or other sum and to pursue
any other remedy provided in this Lease.
44. MODIFICATION FOR LENDER.
If in connection with obtaining financing for the Building or any portion
thereof, Landlord's lender shall request reasonable modifications to this Lease
as a condition to such financing, or as a condition to such Lender's approval of
this Lease, Tenant shall not unreasonably withhold, delay, or defer its consent
to such modification provided such modifications do not materially adversely
affect Tenant's rights hereunder.
45. PARKING.
Tenant shall have the right to park in the Building parking facilities in
common with other tenants of the Building upon such terms and conditions,
including the imposition of a reasonable parking charge, if the same is
established by Landlord at any time during the term of this Lease.
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Tenant agrees not to overburden the parking facilities and agrees to cooperate
with Landlord and other tenants in use of the parking facilities. Landlord
reserves the right in its absolute discretion to determine whether the parking
facilities are becoming overburdened and to allocate and assign parking spaces
among Tenant and other tenants, and to reconfigure the parking area and modify
the existing ingress to and egress from the parking area as Landlord shall deem
appropriate.
46. GENERAL PROVISIONS.
46.1 Acceptance. This Lease shall only become effective and binding
upon full execution hereof by Landlord and delivery of a signed copy to Tenant.
46.2 Joint Obligation. If there be more than one Tenant, the
obligations hereunder imposed shall be joint and several.
46.3 Marginal Headings, Etc. The marginal headings, Table of Contents,
lease summary sheet and titles to the articles of this Lease are not a part of
the Lease and shall have no effect upon the construction or interpretation of
any part hereof.
46.4 Choice of Law. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Premises are located (without
regard to the choice of law and/or conflict of law principles applicable in such
State).
46.5 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, inure to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
46.6 Recordation. Except to the extent otherwise required by law,
neither Landlord nor Tenant shall record this Lease, but a short-form memorandum
hereof may be recorded at the request of Landlord.
46.7 Quiet Possession. Upon Tenant's paying the Rent reserved hereunder
and observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the Lease Term hereof, free from any disturbance
or molestation by Landlord, or anyone claiming by, through or under Landlord,
but in all events subject to all the provisions of this Lease.
46.8 Inability to Perform. This Lease and the obligations of the Tenant
hereunder shall not be affected or impaired because the Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so, and
Landlord's obligation shall be excused during the period in which it is unable
to fulfill such obligations, if and to the extent such inability or delay is
caused by reason of strike, labor troubles, acts of God, or any other cause
beyond the reasonable control of the Landlord.
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46.9 Partial Invalidity. Any provision of this Lease which shall prove
to be invalid, void, or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision(s) shall remain in full force
and effect.
46.10 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, whenever possible, be cumulative with all other
remedies at law or in equity.
46.11 Entire Agreement. This Lease contains the entire agreement of the
parties hereto and no representations, inducements, promises or agreements, oral
or otherwise, between the parties, not embodied herein, shall be of any force or
effect.
46.12 Survival. All indemnities set forth in this Lease shall survive
the expiration or earlier termination of this Lease.
46.13 Consents. If any provision of this Lease subjects any action,
inaction, activity or other right or obligation of Tenant to the prior consent
or approval of Landlord, Landlord shall be deemed to have the right to exercise
its sole and unfettered discretion in determining whether to grant or deny such
consent or approval, unless the provision in question states that Landlord's
consent or approval "shall not be unreasonably withheld", in which event
Landlord's consent shall be subject to Landlord's sole, but reasonable,
discretion.
46.14 Saving Clause. In the event (but solely to the extent) the
limitations on Landlord's liability set forth in Section 8.2 of this Lease would
be held to be unenforceable or void in the absence of a modification holding the
Landlord liable to Tenant or to another person for injury, loss, damage or
liability arising from Landlord's omission, fault, negligence or other
misconduct on or about the Premises, or other areas of the Building appurtenant
thereto or used in connection therewith and not under Tenant's exclusive
control, then such provision shall be deemed modified as and to the extent (but
solely to the extent) necessary to render such provision enforceable under
applicable law. The foregoing shall not affect the application of Article 33 of
this Lease to limit the assets available for execution of any claim against
Landlord.
46.15 Reservation. Nothing herein set forth shall be deemed or construed
to restrict Landlord from making any modifications to any of the parking and/or
common areas serving the Building and/or Premises as of the date of execution
hereof, and Landlord expressly reserves the right to make any modifications to
such areas as Landlord may deem appropriate, including but not limited to, the
addition or deletion of temporary and/or permanent improvements therein, and/or
the conversion of areas now dedicated for the non-exclusive common use of
tenants (including Tenant) to the exclusive use of one (1) or more tenants or
licensees within the Building.
47. RULES AND REGULATIONS.
Tenant agrees to comply with the Rules and Regulations attached hereto as
Exhibit D, and with any reasonable additions thereto and modifications thereof
adopted from time to time by Landlord and
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delivered to Tenant. Landlord shall not be responsible to Tenant for the
nonperformance of any of said rules and regulations by any other tenants or
occupants of the Building.
48. LANDLORD'S LIEN.
As security for the performance of Tenant's obligations, Tenant grants to
Landlord a lien upon and a security interest in Tenant's existing or hereafter
acquired personal property, inventory, furniture, fixtures, equipment and other
assets which are located in the Premises or used in connection with the business
to be conducted in the Premises. Tenant shall promptly execute, acknowledge and
deliver to Landlord any documents submitted to Tenant evidencing or establishing
such lien and security interest. Such lien shall be in addition to Landlord's
rights of distraint. During any period Tenant is in default under this Lease,
Tenant shall not sell, transfer or remove from the Premises such personal
property, inventory, furniture, fixtures, equipment and assets. Landlord also
shall, to the extent permitted by law, have (in addition to all other rights) a
right of distress for rent as security for all Rent, additional rent and any
other sums payable under this Lease.
49. WAIVER OF JURY TRIAL.
Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either of them against the other on all matters
arising out of this Lease, or the use and occupancy of the Premises. If Landlord
commences any summary proceeding for non-payment of Rent, Tenant will not
interpose (and waives the right to interpose) any counterclaim in any such
proceeding.
50. "RIGHT OF FIRST REFUSAL.
Provided that Tenant is not in default under this Lease, Tenant shall have a one
time right of first refusal to lease the 1.123 square feet of space adjacent to
its premises on the third floor of the building (Exhibit E). Tenant's right of
first refusal shall exist only at the time of the initial leasing of the
adjacent space. If Tenant desires to exercise said right to lease adjacent
space, the lease shall be at the same price and on the same economic terms
contained in any bonafide offer to lease such space received by Landlord, which
Landlord desires to accept. Upon receipt of such offer, Landlord shall notify
Tenant thereof in a manner provided for herein for notice. Tenant shall have
five (5) business days after receipt of such notice to elect to exercise its
right of first refusal by giving Landlord written notice of Tenant's election to
lease such adjacent space. If Tenant exercises its right of first refusal in the
manner provided for above, then Tenant shall execute a lease for the adjacent
property in accordance with the same economic terms set forth in said bonafide
offer within ten (10) days of exercising its right of first refusal.
Notwithstanding the foregoing, the right of first refusal shall automatically be
null and void and have no further effect upon termination of the Lease. This
right of first refusal is granted exclusively to Tenant and not to any assignee
or sublettee of Tenant.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, in
triplicate, on the day and year first above written.
LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Assistant Director
Commercial Real Estate/Equities
--------------------------------
TENANT:
SEQUOIA IMAGING, LLC
---------------------------------------
By: /s/ ▇▇▇▇ ▇. WESKER
------------------------------------
Name: ▇▇▇▇ ▇. Wesker
----------------------------------
Title: Chief Operating Officer
--------------------------------
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EXHIBIT A
BY AND BETWEEN
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
AND
SEQUOIA IMAGING LLC
[GRAPHIC]
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EXHIBIT B
Declaration by Landlord and Tenant
As to Date of Delivery and Acceptance of
Possession, Commencement Date and
Rentable Square Feet
Attached to and made part of the Lease dated the ___ day of___________,
1994, entered into by and between Principal Mutual Life Insurance Company, an
Iowa corporation as Landlord, and Sequoia Imaging LLC, a limited liability
corporation, as Tenant.
Landlord and Tenant do hereby declare that (a) the Commencement Date is
hereby established to be _______________, (b) and that the Term of the Lease
shall terminate _______________ months after Lease Commencement Date and, (c)
for purposes of this Lease, there are ___ Rentable Square Feet in the Demised
Premises, the Tenant's Operating Expense Percentage is _____, and Tenant's Real
Estate Tax Percentage is ____%. The lease is in full force and effect as of the
date hereof, Landlord has fulfilled all of its obligations under the Lease
required to be fulfilled by Landlord on or prior to such date subject to any
provisions of the Lease, and Tenant has no right of set-off against any rentals.
WITNESS: LANDLORD:
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By:
---------------------------- --------------------------------
ATTEST OR WITNESS: TENANT:
(Corporate Seal)
SEQUOIA IMAGING LLC
By: By:
------------------------- --------------------------------
Title:
-----------------------------
Dated:________________, 19__
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EXHIBIT C
TO
LEASE
BY AND BETWEEN
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
AND
SEQUOIA IMAGING LLC
1. Delivery. All initial and subsequent improvements to the Premises
shall be performed by Landlord in accordance with this Exhibit C and/or Section
14 of the Lease, and, except as expressly provided herein, shall be performed at
Landlord's sole expense.
2. Landlord's Work. Landlord agrees to cause the construction of all
tenant improvements to the Premises substantially in accordance with the
Approved Plans (as defined below), and otherwise in accordance with the terms
and conditions set forth hereinafter.
3. Plans and Specifications. Landlord and Tenant have agreed upon
construction drawings and plans and specifications for the construction of the
Premises as referenced in Exhibit A attached to this Lease and made a part
thereof (the approved plans and specifications being hereinafter referred to as
the "Approved Plans"), Landlord shall enter into a construction contract with a
general contractor to construct the initial improvements within the Premises in
accordance with the Approved Plans and otherwise in accordance with the terms of
this Lease. Except as hereafter provided, Landlord shall be responsible for all
matters that must be accomplished to complete the initial improvements,
including filing plans and other required documentation with the proper
governmental authorities and securing all necessary permits for the performance
of any and all work required to be performed under the Approved Plans, all of
which will be deemed part of Landlord's Work and, upon completion of Landlord's
Work, all approvals and permits necessary for Tenant to occupy the Premises
including all final inspections for Tenant's use and occupancy. The foregoing
notwithstanding, Tenant will be responsible for any electrical inspection
approvals associated with the installation of Tenant's fixtures and equipment
post delivery.
4. Intentionally Omitted
5. Change Orders. Tenant shall be allowed to make change orders to
the Approved Plans provided that (i) any such proposed change order shall be
submitted to Landlord and Landlord shall have five (5) business days after
receipt thereof to review and approve same (provided that, in the event
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Landlord does not approve all items set forth in said proposed change order,
Landlord and Tenant will work together expeditiously and in a commercially
reasonable manner to reach agreement on any such proposed change order), (ii)
Tenant shall be obligated to pay any and all costs associated with such change
order(s) ("Excess Costs"), in accordance with the terms set forth in Paragraph 7
below, and (iii) any delay caused in the performance of the Work as a result of
such change order(s) (either directly or indirectly) shall constitute a Tenant
Delay for purposes of Section 2 of the Lease.
6. Payment of Costs.
Except as set forth in Section 5 above and Section 7, below, Landlord
shall be responsible for and shall pay when due all costs associated with the
preparation of plans and the performance of Landlord's Work (as specified in
Exhibit "A") incurred in accordance with this Exhibit C. Tenant shall be
responsible for all Excess Costs. Tenant to pay any excess costs associated with
Landlord's Work on a timely basis so as to avoid the assertion of any statutory
and/or common law lien against the Premises, Building or Project or otherwise
shall constitute a default by Tenant and a Tenant Delay for all purposes of the
Lease.
7. General Provisions Regarding Construction. In performance of
Landlord's Work in accordance with this Lease, Landlord agrees to use reasonable
efforts to ensure that all such work is performed in a diligent and timely
fashion. Except as specifically set forth above in this Exhibit C, the
completion of the initial improvements and the acceptance of the Premises by
Tenant shall be governed by the terms and conditions of Sections 2, 14, and 15
of the Lease.
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EXHIBIT D
BY AND BETWEEN
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
AND
SEQUOIA IMAGING LLC
CURRENT RULES AND REGULATIONS
1. The common areas in front of Premises shall not be obstructed by the
Tenant or used for any purposes other than ingress and egress from and to the
Tenant's offices. The Landlord shall in all cases retain the right to control or
prevent access thereto by any person whose presence, in the Landlord's judgment,
would be prejudicial to the safety, peace, character or reputation of the
Building or of any tenant of the Property.
2. The toilet rooms, water closets, sinks, faucets, plumbing and other
service apparatus of any kind shall not be used by the Tenant for any purpose
other than those for which they were installed, and no sweepings, rubbish, rags,
ashes, chemicals or other refuse or injurious substances shall be placed therein
or used in connection therewith by the Tenant.
3. No skylight, window, door or transom of the Building shall be covered
or obstructed by the Tenant, and no window shade, blind curtain, screen, storm
window, awning or other material shall be installed or placed on any window or
in any window space, except as approved in writing by the landlord except for
the existing blinds. If the Landlord has installed or hereafter installs any
shade, blind or curtain in the premises, the Tenant shall not remove it without
first obtaining the Landlord's written consent hereto.
4. No sign, lettering, insignia, advertisement, notice or other thing
shall be inscribed, painted, installed, erected or placed in any portion of the
premises which may be seen from outside the Building, or on any window, window
space or other part of the exterior or interior of the Building, unless first
approved in writing by the Landlord. Names on suite entrances shall be provided
by and only by the Landlord and at the Landlord's expense, using in each
instance lettering of a design and in a form consistent with the other lettering
in the Building, and first approved in writing by the Landlord, such consent not
to be unreasonably withheld. The Tenant shall not erect any stand, booth or
showcase or other article or matter in or upon the premises and/or the Building
without first obtaining the Landlord's written consent thereto, such consent not
to be unreasonably withheld.
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5. The Tenant shall not place any additional lock upon the door within the
premises or elsewhere upon the Property without Landlord's written consent, and
shall surrender all keys or all such locks at the end of the Term. The Landlord
shall provide the Tenant with one set of keys to the premises when the Tenant
assumes possession thereof.
6. The Tenant shall not do or permit to be done anything which obstructs or
interferes with the rights of any other tenant of the Property. The Tenant shall
not keep anywhere within the Property any matter having an offensive odor, or
any kerosene, gasoline, benzine, camphene, fuel or other explosive or highly
flammable material. No bird, fish or other animal shall be brought into or kept
in or about the premises.
7. If the Tenant desires to install signalling, telegraphic, telephonic,
protective alarm or other wires, apparatus or devices within the premises, the
Landlord shall direct where and how they are to be installed and, except as so
directed, no installation, boring or cutting shall be permitted. The Landlord
shall have the right (a) to prevent or interrupt the transmission of excessive,
dangerous or annoying current of electricity or otherwise into or through the
Building or the premises, (b) to require compliance with such reasonable rules
as the Landlord may establish relating thereto, and (c) in the event of
noncompliance with such requirements or rules, immediately to cut wiring or do
whatever else it considers necessary to remove the danger, annoyance or
electrical interference with apparatus in any part of the Building. Each wire
installed by the Tenant must be clearly tagged at each distributing board and
junction box and elsewhere required by the Landlord, with the number of the
office to which such wire leads and the purpose for which it is used, together
with the names of the Tenant or other concern, if any, operating or using it.
8. The Tenant shall have access to the premises at all reasonable times.
The Landlord shall in no event be responsible for admitting or excluding any
person from the premises. In case of invasion, hostile attack, insurrection, mob
violence, riot, public excitement or other commotion, explosion, fire or any
casualty, the Landlord shall have the right to bar or limit access to the
Building to protect the safety of occupants of the Property, or any property
within the Property.
9. Tenant and its employees, agents and invitees, shall observe and
comply with the driving and parking signs and markers on the premises
surrounding the Building.
10. The Landlord shall have the right to rescind, suspend or modify the
Rules and Regulations and to promulgate such other Rules or Regulations as, in
the Landlord's reasonable judgment, are from time to time needed for the safety,
care maintenance, operation and cleanliness of the Building, or for the
preservation of good order therein. Upon the Tenant's having been given notice
of the taking of any such action, the Rules and Regulations as so rescinded,
suspended, modified or promulgated shall have the same force and effect as if in
effect at the time at which the Tenant's lease was entered into (except that
nothing in the Rules and Regulations shall be deemed in any way to alter or
impair any provision of such lease).
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11. The use of any room within the Building as sleeping quarters is strictly
prohibited at all times.
12. Legal holidays are hereby defined as New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. On ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇'▇ Birthday, Veterans Day, Washington's Birthday and Columbus Day,
HVAC will be provided from 8:00 am to 2:00 pm.
13. Landlord shall use reasonable effort to equitably enforce the Rules and
Regulations; however, nothing in these Rules and Regulations shall give any
Tenant any right or claim against the Landlord or any other person if the
Landlord does not enforce any of them against any other tenant or person
(whether or not the Landlord has the right to enforce them against such tenant
or person), and no such nonenforcement with respect to any tenant shall
constitute a waiver of the right to enforce them as to the Tenant or any other
tenant person.
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EXHIBIT E
BY AND BETWEEN
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
AND
SEQUOIA IMAGING LLC
[GRAPHIC]
39