L E A S E
THIS LEASE, made in quadruplicate, this 31st day of October, 1999, by
and between CHESAPEAKE SERVICES CORPORATION, a Virginia Corporation, hereinafter
referred to as "Lessor", and DAEDALUS BUILDING SYSTEMS, INC., a Delaware
Corporation, hereinafter referred to as "Lessee."
W I T N E S S E T H:
1. PREMISES. The Lessor does demise and let unto the Lessee, and Lessee
does lease and take from the Lessor, for the term and upon the restrictions and
conditions as set forth in this Lease, the first floor of the premises,
consisting of 4,556 square feet, inclusive of land, building and structures,
located at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, together with all
alley rights and parking rights, if any, easements, rights of way, and
appurtenances in connection therewith or thereunto belonging.
2. USE OF LEASED PREMISES.
a. Use. Lessee shall occupy and use the demised premises for the
operation of an office and facilities for Lessee. Lessee shall not
permit any conduct, which, in the opinion of Lessor, is disreputable.
b. Compliance with Laws. The lessee shall comply with all federal,
state, or municipal laws, ordinances and regulations dealing with the
use of the demised premises, and will save the Lessor harmless from
any damage, penalty, or charge imposed or incurred for the violation
of any such laws, ordinances, or regulations, whether occasioned by
the Lessee, its agents, or any other person using or present upon the
demised premises.
c. Waste and Quiet Conduct. The Lessee shall not commit or suffer to be
committed any waste or any nuisance upon the demised premises. The
Lessee shall keep the demised premises reasonably clean and free of
trash, waste paper and other litter.
d. Utilities and Service. Lessee shall, throughout the term of this
Lease, pay for all electricity, gas, water and every other service,
commodity, or article which may be furnished and supplied to it or to
the demised premises.
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x. Xxxxxx'x Right to Enter. The Lessee shall permit the Lessor and its
authorized agents, at all reasonable times during the period of this
Lease, to enter upon the demised premises for the purpose of inspecting
them.
3. POSSESSION. The Lessor agrees to deliver to Lessee physical
possession of the demised premises upon the commencement of the term hereof,
free and clear of all tenants and occupants and the rights of either. Lessee
agrees to deliver to the Lessor physical possession of the demised premises upon
the termination of the term hereof or any extension thereof, in good condition,
and repair, reasonable wear, damage by fire, or damage from any other cause not
directly attributable to the negligence of Lessee excepted.
4. TERM. The term of this Lease shall be for five (5) years commencing
on the 1st day of November 1999, and ending on the 31st day of October 2004,
unless otherwise terminated or renewed.
5. OPTIONS TO RENEW. Lessee shall have the right to extend the term of
this lease for three optional periods of five (5) years each, if, at the end of
the initial term of this Lease, Lessee is not in default in any of its
obligations imposed in this Lease. The optional term shall be at the rental to
be agreed upon at the time of the exercise of said option and subject to all of
the remaining terms contained in this Lease.
The Lessee shall exercise the option by giving the Lessor written
notice of its intention to do so at least one hundred eighty (180) days prior to
the expiration of the original term.
6. RENT.
a. Minimum Rent. The Lessee shall pay to the Lessor a minimum rent of
Eighty Two Thousand Eight Dollars ($82,008.00) yearly, payable Six
Thousand Eight Hundred Thirty Four Dollars ($6,834.00) monthly, at
which time the rent will increase as adjusted by Paragraph (d)
hereunder.
b. Time of Payment. The minimum rent shall be paid in advance to the
Lessor in monthly installments on the first day of each and every month
of the term without notice or demand and without abatement, deduction
or set-off in the amount as agreed.
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c. Additional Annual Rent. The Lessee shall pay to the Lessor
additional rent which shall be the rent as hereinafter defined.
d. Rent Adjustment. The monthly base rent shall be increased on the 1st
of each year during the term hereof, beginning in 2001, in accordance
with the Index now known as "United States Bureau of Labor Statistics,
Consumer Price Index, All Urban Consumers," 1967 = 100 Base, All Items,
Washington, DC, SMSA (hereinafter referred to as the "Index"). Such
adjustment shall be computed by multiplying the Monthly Base Rent for
the immediately preceding month (hereinafter "Existing Monthly Base
Rent") by one hundred percent (100%) of a fraction, having as a
numerator the Index published for the month prior to the month in which
the adjustment becomes effective, and having as a denominator the Index
most recently published prior to the Lease Commencement Date, and
subtracting the integer 1. Any resulting positive number shall then be
added to the Existing Monthly Base Rent to determine the Adjusted
Monthly Base Rent.
Formula for Rent Adjustment in 2001:
CPI Index for 01/2000
Existing Monthly Base Rent x 1.00 ------------------
CPI Index for 01/2001 + Existing Monthly Base Rent = Adjusted Monthly Base Rent.
Provided, however, that the amount payable by Tenant under this Lease
as Monthly Base Rent shall not be less than the Monthly Base Rent for the
immediately preceding month.
e. If such Index shall be discontinued with no successor or comparable
successor Index, or if a substantial change is made in the term or
number of items contained in this Index, or if the Index ceases to use
1967 = 100 as the basis for calculation, the parties shall attempt to
agree upon a substitute formula, but if the parties are unable to agree
upon a substitute formula, then the matter shall be determined by
arbitration in accordance with the rules of the American Arbitration
Association then prevailing.
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NOTWITHSTANDING THE ABOVE, THE INCREASE IN ANY GIVEN YEAR SHALL NOT
EXCEED THREE (3%) PERCENT.
f. Late Charge. Lessee shall pay a late charge of five percent (5%) of
any rental, minimum or additional, received by Lessor later than ten
(10) days after the due date.
7. LIENS AND OTHER OBLIGATIONS. Lessee will not create or permit to be
created or to remain, and will discharge, any lien, security interest,
encumbrance or charge upon the demised premises or any part thereof or upon
Lessee's leasehold interest therein; provided that the existence of any
mechanic's lien or right in respect thereof shall not constitute a violation of
this section if it is bonded or insured.
8. REAL ESTATE TAXES. Lessor shall be obligated to pay all real
property taxes (including extraordinary and/or special assessments) which may be
levied or assessed by any lawful authority against the land, buildings and other
improvements as additional rent.
9. FURNITURE, FIXTURES AND EQUIPMENT. All furniture, fixtures and
equipment furnished to or installed in or on the demised premises at the
Lessee's expense shall belong to and be the property of the Lessee and the
Lessee shall have the right to remove said furniture, fixtures and equipment
from said leased premises at any time during the term of this Lease, provided
said Lessee is not then in default in the payment or rent or other charges as
provided in this Lease.
Lessee shall have the right, prior to and during the term of this
Lease, at any time and from time to time, to install such equipment, fixtures
and furnishings as Lessee may desire to place in the demised premises, without
liability by Lessee therefor, except for negligence of Lessee, its agents or
employees. Lessor shall not be liable to Lessee for any loss, damage, or
destruction of any equipment, fixtures or furnishings placed upon the demised
premises by Lessee except for any such loss, damage or destruction caused by
negligence or willful misconduct on the part of Lessor, its agents, contractors
or employees.
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10. QUIET POSSESSION. The Lessor agrees that the Lessee, upon paying
the rent and performing the covenants of this Lease, may quietly have, hold and
enjoy the demised premises and all rights granted Lessee in this Lease during
the term hereof or any extension thereof.
11. INDEMNIFICATION AND NON-LIABILITY OF LESSOR. Lessee covenants and
agrees to indemnify and save Lessor harmless against any and all claims by any
person, firm, corporation or governmental authority, arising from the
occupation, use, possession, conduct or management of or from any work done in
or about the demised premises or from the subletting of any part thereof. Lessee
also covenants and agrees to indemnify and save Lessor harmless against and from
any and all claims arising from (1) any breach or default on the part of Lessee
in the performance of any covenant or agreement to be performed by Lessee
pursuant to this Lease; and (2) any act of negligence by Lessee or any of its
agents, contractors, servants, employees or licensees.
12. INSURANCE. Lessee will continuously maintain insurance against such
risks as are customarily insured against by businesses of like size and
character, paying as the same shall become due all premiums in respect thereto,
including but not limited to the following:
a. General public liability insurance against claims of bodily
injury, death or property damage occurring on, in or about the
demised premises, such insurance to afford protection to Lessor of
not less than One Million Dollars ($1,000,000.00) with respect to
bodily injury or death to any one person, and not less than One
Million Dollars ($1,000,000.00) with respect to any one accident,
and not less than Two Hundred Fifty Thousand Dollars ($250,000.00)
with respect to property damage. Policies for such insurance shall
name the Lessor, Lessee and such lending institutions that Lessor
may name as assureds as their respective interests may appear.
Copies of all insurance policies shall be delivered to Lessor.
13. MAINTENANCE AND REPAIR. During the term of this Lease, Lessor will,
at its own expense, keep the demised premises and all equipment, all
improvements, interior and exterior, including, without limitation, roof
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parking, masonry, heating, air conditioning, electrical and plumbing systems, in
good repair and operating condition, making from time-to-time all necessary
repairs and replacements thereof.
The Lessor hereby covenants and agrees that it will commence repair
work within fifteen (15) days from receipt of written notice by Lessee
specifying the necessary repairs. Failure of the Lessor to reasonably commence
and complete such necessary repairs shall constitute a default under this
agreement, and Lessee shall be entitled to all remedies upon default as provided
hereunder, including the right, but not hereby the obligation, to make such
repairs for the Lessor and the expense thereof shall constitute and may be
deducted from the rent.
Lessor shall be required to rebuild or make any repairs, renewals, or
replacements of the demised premises or other improvements on the demised
premises of any nature whatever. Lessee may, at its own expense, make any
additions, modifications or improvements to the demised premises that it may
deem desirable for its business purposes that do not adversely affect the value
of the demised premises or the structural integrity of any building or other
structure forming a part thereof, provided that such additions, modifications or
improvements are located wholly within the boundary lines of the demised
premises. All such renewals, replacements, additions, modifications and
improvements shall become a part of the demised premises.
14. ENTRY AND INSPECTION. The Lessee shall permit Lessor and his agents
to enter the demised premises at all reasonable times for any of the following
purposes: to inspect the same; to maintain the building in which the said
premises are located; to make such repairs to the demised premises as the Lessor
may elect to make; to post notices of non-responsibility for all alterations,
additions or repairs. The Lessor shall have such right of entry and the right to
fulfill the purpose thereof without any rebate of rent to the Lessee for any
loss of occupancy or quiet enjoyment of the demised premises thereby occasioned.
15. DAMAGE AND CONDEMNATION. If all or any part of the demised premises
is destroyed or damaged by fire or other casualty prior to the end of the term
of this Lease, the Lessor will promptly repair and rebuild or replace the
property damaged or destroyed to substantially the same condition as prior to
such damage or destruction. The Lessor or Lessee, as the case may be, shall
apply so much of the net proceeds of insurance received on account of such
damage or destruction as may be necessary to the cost of such repair and
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rebuilding. If such net proceeds shall be inadequate to pay the full cost of
such repair and rebuilding, Lessor will pay the excess cost thereof. Any balance
of such net proceeds remaining after payment of the cost of such repair and
rebuilding shall be the property of Lessor and shall be paid to the Lessor. Any
disbursement of insurance proceeds by a holder of a Deed of Trust shall be
deemed to have been made by the Lessor. If any holder of a Deed of Trust shall,
in lieu of disbursing any portion of insurance proceeds to which the Lessee is
entitled, apply them to the indebtedness secured by the Deed of Trust, the
Lessor shall provide an equivalent sum from other sources.
16. CONDEMNATION. If the demised premises or any part thereof shall be
taken by any governmental or quasi-governmental authority pursuant to the power
of eminent domain, Lessee agrees to make no claim for any rights which Lessee
may have to any portion of any award made as a result of such taking. The
foregoing notwithstanding, Lessee shall be entitled to claim, prove and receive
in the condemnation proceedings such awards as may be allowed for relocation
expenses and for fixtures and other equipment installed by it which shall not,
under the terms of this Lease, be or become the property of the Lessor at the
termination hereof, but only if such awards shall be made by the condemnation
court in addition to and stated separately from the award made by it for the
land and the building or part thereof so taken.
If the nature, location or extent of any proposed condemnation is such
that the demised building will be substantially taken, then the Lessor may
terminate this Lease by giving at least sixty (60) days' written notice of
termination to the Lessee at any time after such condemnation and this Lease
shall terminate on the date specified in such notice.
17. SUBORDINATION. This Lease is subject and subordinate to any and all
mortgages or Deeds of Trust now or hereafter placed on the property of which the
demised premises are a part.
18. CUSTOM AND USAGE. Any law, usage, or custom to the contrary
notwithstanding the Lessor shall have the right at all times to enforce the
covenants and conditions of this Lease in strict accordance with the terms
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hereof, notwithstanding any conduct or custom on the part of the Lessor in
refraining from so doing at any time or times. The failure of the Lessor at any
time to enforce its rights under such covenants and conditions strictly in
accordance with the same shall not be construed as having created a custom in
any way or manner contrary to the specific covenants and conditions of this
Lease or as having in any way or manner modified or waived same.
19. CONTROL OF LESSEE. Lessee may transfer all or part of its interest
to a Partnership or Corporation controlled by Lessee so long as Lessee remains
in the actual conduct of the business and both the new entity as well as Lessee
are primarily liable.
20. EVENTS OF DEFAULT. Each of the following shall be deemed both a
default by the Lessee and a breach of this Lease:
a. A default in the payment of the rent herein reserved, or any part
thereof, for a period of ten (10) days after it shall become due and
payable (it being specifically understood and agreed that the term
"Rent" includes minimum annual rent, CPI adjustment, and any payments
due for any other consideration under the lease that is identified as
rent in this Lease);
b. A default in the payment of any other money payment due under the
terms of this Lease.
c. The appointment of a receiver to take possession of all or
substantially all of the assets of the Lessee;
d. A general assignment by the Lessee for the benefit of creditors;
e. The acquiescence by the Lessee to the appointment of a creditor's
committee;
f. The dissolution or the commencement of any action for the
dissolution or liquidation of the Lessee;
g. Any action taken or suffered by the Lessee under any insolvency or
bankruptcy act;
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h. The rendering of a final judgment or decree against Lessee for the
payment of money and execution and levy thereupon, which execution and
levy be not dismissed within ten (10) days after such date of execution
and levy.
21. LESSOR'S RIGHT TO CURE. In the event of any breach hereunder by the
Lessee, the Lessor may immediately or at any time thereafter, without notice,
breach for the account and at the expense of the Lessee. If the Lessor at any
time by reason of such breach, is compelled or elects to pay any sum of money or
incurs any expenses, including reasonable attorney's fees, in instituting,
prosecuting or defending any action to enforce or protect the Lessor's rights
hereunder, such sum and expenses, together with interest, costs and damages
shall be deemed to be additional rent hereunder and shall be due from the Lessor
to the Lessor on the first day of the month following the Lessor's payment of
such sums or expenses.
22. LESSOR'S REMEDIES. Upon the happening of any of the aforementioned
defaults, this Lease shall, at Lessor's option, cease and determine and shall
operate as a Notice to Quit, any written Notice to Quit being hereby expressly
waived. Lessor may proceed to recover possession of said premises by virtue of
any legal process as may at the time be in operation and force in like cases
relative to proceedings between Lessor and Lessee, and Lessee shall pay for any
Court costs relative to such proceedings and a reasonable attorney's fee and
Lessor may, at its option, re-enter and re-rent the demised premises for the
account of the Lessee, and in such event, Lessee shall remain liable to Lessor
for any and all deficiencies in the rent under this Lease.
23. RE-LETTING. Should Lessor elect to re-enter, as herein provided, or
should it take possession pursuant to legal proceedings or pursuant to any
notice provided by law, it may either terminate this Lease, or it may, from time
to time, without terminating this Lease, make such reasonable alterations and
reasonable repairs as may be necessary in order to re-let the premises, and
re-let said premises or any part thereof for such term or terms (which may be
for a term extending beyond the term of this Lease) and at such rental or
rentals and upon other terms and conditions as Lessor in its discretion may deem
advisable; upon each such re-letting, all rentals received by the Lessor from
such re-letting shall be applied first to the payment of any indebtedness, other
than rent due hereunder from Lessee to Lessor; second, to the payment of any
costs and expenses of such re-letting, including brokerage fees and attorney's
fees and of costs of such reasonable alterations and reasonable repairs; third,
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to the payment of rent due and unpaid hereunder; and the residue, if any, shall
be held by Lessor and applied in payment of future rent as the same may become
due and payable hereunder. If such rentals received from such re-letting during
any month be less than that to be paid during that month by Lessee hereunder,
Lessee shall pay any such deficiency to Lessor. Such deficiency shall be
calculated and paid monthly. No such re-entry or taking possession of said
premises by Lessor shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention be given to Lessee or
unless the termination thereof be decreed by a Court of competent jurisdiction.
Notwithstanding any such re-letting without termination, Lessor may, at any time
thereafter, elect to terminate this Lease for nay-such previous breach. Should
Lessor at any time terminate this Lease for any breach, in addition to any other
remedies it may have, it may recover from Tenant damages it may incur by reason
of such breach including reasonable attorney's fees and other costs of
recovering the demised premises.
24. ASSIGNMENT. The Lessee shall not assign this Lease or any interest
therein, and shall not sublet the demised premises or any part thereof, or
permit another person or entity to occupy or use the demised premises without
consent of said Lessor, which shall not be unreasonably withheld.
In the event Lessee assigns, sublets or allows the occupation or use
of the demised premises by another person or entity, Lessor shall be entitled to
fifty percent (50%) of any and all rental payments made or due by such a
sublessee in excess of the payments required hereunder from the Lessee, and
Lessee covenants and agrees to remain primarily liable for all payment required
under this Lease.
25. CAPTIONS AND HEADINGS. Captions and headings are for convenience
and reference only.
NOTICES. All notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall be deemed to have been
given when delivered or mailed by first class, registered or certified mail,
postage prepaid, addressed to Lessee at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, or if to Lessor, at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000. The Lessor and Lessee may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, approvals, consents,
requests or other communications shall be sent or persons to whose attention the
same shall be directed.
26. SEVERABILITY. If any provision of this Lease shall be held invalid
by any Court of competent jurisdiction, such holding shall not invalidate any
other provision hereof.
27. VIRGINIA LAW TO GOVERN. This Lease shall be governed by the
applicable laws of the Commonwealth of Virginia.
28. ENTIRE UNDERSTANDING. This Lease embodies the entire understanding
and all agreements between the parties. No party has made or shall be bound by
any agreement or representation to the other party which is not expressly set
forth herein.
29. BINDING ON SUCCESSORS. The covenants and conditions contained
herein shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors and assigns of all the parties hereto. All of the parties
hereto shall be jointly and severally liable hereunder.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be
executed in their respective name all as of the day and year first hereinabove
written.
LESSOR:
CHESAPEAKE SERVICES CORPORATION,
a Virginia Corporation
By: /s/
-------------------------
XXXXXX X. XxXXXXXXX
President
LESSEE:
DAEDALUS BUILDING SYSTEMS, INC.
a Delaware Corporation
By: /s/
-------------------------
Xxxxxxxx X. Xxxxxx-XXXXX
Vice President
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