10
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 9th day of September, 2002,
by and between POT SPRING CENTER LIMITED PARTNERSHIP, whose address is ▇.▇. ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a Maryland limited partnership, hereinafter
called "Landlord", and ELECTROGRAPH SYSTEMS, INC., whose address is ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, hereinafter called "Tenant".
W I T N E S S E T H :
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THAT in consideration of the rents and covenants hereinafter
set forth, Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, certain space in the building known as the Pot Spring Professional
Center, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
hereinafter called the "Building". The Building and other facilities related
thereto are located on a parcel of land, hereinafter called the "Building Area".
This Lease shall be for the term, upon the rents, and subject to the terms and
conditions hereinafter set forth.
1. LEASED PREMISES.
The portion of the Building leased hereunder is hereinafter
referred to as the "Leased Premises" and contains approximately three thousand
two hundred eighty (3,280) square feet of leasehold space, Suite 100, as shown
on the architectural plans attached hereto as "Exhibit A" and made a part
hereof. For the purposes of determining the square footage of the Leased
Premises, leasehold space is calculated by measuring from the outside of any
exterior walls of the Leased Premises to the center line of any partitions
constructed which separate the Leased Premises from the remaining or adjacent
premises of the Building.
2. TENANT'S LEASEHOLD IMPROVEMENTS.
2.01. Alterations at Landlord's Expense. Landlord agrees to
complete all improvements to the Leased Premises as shown on the architectural
plans attached hereto as "Exhibit A" at Landlord's sole cost and expense, except
that Tenant shall pay for the audio visual alarm device, the data cabling, and
the cost of the carpet over and above $8.40 per square yard.
2.02. Alterations at Tenant's Expense. Upon completion of the
improvements by Landlord in Section 2.01 above, Tenant agrees to accept the
Leased Premises in an "AS IS" condition without calling upon Landlord to make
any additional expenditures or to perform any other work for the preparation of
the Leased Premises for its use. Landlord represents and warrants that all
improvements and installations will be in good working condition. Tenant shall
at its own cost and expense make any other alterations and installations in the
Leased Premises required for Tenant's business (the "Leasehold Improvements"),
using a contractor or contractors who shall have been approved in writing by
Landlord, which consent shall not be unreasonably withheld. Tenant will comply
at its own expense with all present and future governmental requirements arising
out of, in connection with, or necessitated by the Leasehold Improvements.
2.03. Approval of Plans. Before commencing the construction or
installation of any Leasehold Improvements, Tenant shall submit to Landlord or
its agent for Landlord's written approval, which approval shall not be
unreasonably withheld, the plans and specifications for the Leasehold
Improvements. No work shall be commenced thereunder without such written
approval and all work to be done by Tenant shall be performed in strict
accordance with said approved plans and specifications without any deviation
therefrom, unless first approved in writing by Landlord.
2.04. Additional Preconditions. Before commencing any
Leasehold Improvement work, Tenant shall also comply with the following
requirements:
(a) Permits. Obtain all necessary consents, authorizations, and licenses
from federal, state, and/or municipal authorities having jurisdiction over the
work to be done and no Leasehold Improvements shall be commenced unless and
until all such necessary consents, authorizations, and licenses shall have first
been obtained by the Tenant and/or its contractor or other persons doing the
Leasehold Improvement work on behalf of Tenant;
(b) Contracts. Enter into a contract with its contractor and/or other
persons responsible for constructing or installing the Leasehold Improvements,
which contract shall provide, among other things, that said Leasehold
Improvement work shall be done in a good, workmanlike manner in accordance with
the plans and specifications previously approved and consents, authorizations,
and licenses previously obtained and which contract shall provide that the
contractor or other persons above referred to will look solely to Tenant for
payment and will hold Landlord and the Leased Premises free from all liens and
claims of all persons furnishing labor or materials therefor, or both, and will
also provide that similar waivers of the right to file liens shall be obtained
from any and all subcontractors or materialmen. A copy of said contract,
together with a duly executed waiver of the right to file liens executed by the
contractor or other persons above referred to, shall be furnished to Landlord.
The contract shall further provide that all labor employed in construction or
installing the Leasehold Improvements shall be such as, in the sole judgment of
Landlord, not to be unreasonably withheld, shall cause no labor difficulty or
other jurisdictional dispute with respect to any other workers or groups of
workers then employed in or about the Building.
2.05. Indemnification. Tenant shall indemnify and save
harmless Landlord against any and all bills for labor performed and equipment,
fixtures, and material furnished to Tenant in connection with any Leasehold
Improvements and against any and all liens, bills or claims therefor or against
the Leased Premises and from and against all loss, damages, costs, expenses,
suits, claims, and demands whatsoever. If Landlord shall incur any expense on
account of Tenant's failure to pay any such liens, bills or claims, or on
account of Tenant's failure to comply with any regulation, law, or order of any
lawful authority, then any such reasonable expense so incurred by Landlord shall
be deemed additional rent under this Lease, due and payable by Tenant to
Landlord, along with accumulated interest thereon pursuant to Section 29 hereof,
on the first day of the month immediately following the payment of the same by
Landlord. Tenant or any contractor or contractors employed by Tenant or any
other persons constructing or installing Leasehold Improvements shall be fully
covered by workmen's compensation insurance and the certificate thereof shall be
furnished to Landlord before commencement of any work by any such contractor or
persons. Tenant covenants and agrees to indemnify and hold Landlord harmless
from any and all claims for personal injury, death, or property damage
occasioned during the progress or as a result of the construction or
installation of any Leasehold Improvements.
2.06. Intentionally Omitted.
3. TERM.
The term of this Lease shall commence on December 1, 2002 and
shall be for a period of five (5) years, expiring on November 30, 2007. After
the execution of this Agreement, each of the parties hereto agrees, upon demand
of the other, to execute a declaration in recordable form expressing the
commencement and termination dates of the Lease Term.
4. RENT.
Tenant hereby covenants and agrees to pay Landlord, without
notice or demand and without setoff of any kind, as Rent all of the following:
4.01. Annual Rent. An annual rent (hereinafter referred to as
"Annual Rent") which during the first year of the Initial Term shall be in the
sum of FORTY-TWO THOUSAND SIX HUNDRED THIRTY-SIX DOLLARS ($42,636.00). Said
amount shall be payable in equal monthly installments of THREE THOUSAND FIVE
HUNDRED FIFTY-THREE DOLLARS ($3,553.00) in advance, on the first day of each
full calendar month during the first year of the Lease term. The Annual Rent
payable hereunder shall increase at the rate of three percent (3%) during each
year of the Term of this Agreement. The rent for the first month of the term of
the Lease shall be paid simultaneously upon the execution of this Lease.
4.02. Additional Rent.
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4.02.1. Expense Adjustment. The Leased Premises constitutes
approximately ten percent (10%) of the total leasable space within the Building.
Tenant hereby covenants and agrees to pay Landlord as additional rent ten
percent (10%), being Tenant's proportionate share, of the following:
(a) all taxes paid or incurred by Landlord pursuant to
Section 9 below;
(b) all insurance premiums paid or incurred by Landlord
pursuant to Section 10 below.
(c) all Common Areas Expense paid or incurred by
Landlord pursuant to Section 8 below.
4.02.2. A statement of the anticipated monthly expense
adjustments for the period between the commencement of the term of this
Agreement and the end of the current calendar year are attached as "Exhibit B"
to this Agreement. Tenant shall pay these expense adjustments on a monthly
basis, without notice or demand, concurrently with the payment of the Annual
Rent. Tenant shall continue to make said monthly payments until notified by
Landlord of a change thereof. The current expenses are estimated to be ONE AND
50/100 DOLLARS ($1.50) per square foot per annum, payable in equal monthly
installments of FOUR HUNDRED TEN DOLLARS ($410.00). By March 1 of each year,
Landlord shall endeavor to give Tenant a statement showing the total expense
adjustments for the Building for the prior calendar year and Tenant's allocable
share thereof, prorated from the commencement of rental. In the event the total
of the monthly payments made by Tenant for the prior calendar year are less than
the Tenant's actual share of such expense adjustments, then Tenant shall pay the
difference in a lump sum within ten (10) days after receipt of such statement
from Landlord and shall concurrently pay the difference in monthly payments made
in the then calendar and the amount of monthly payments which are then
calculated as monthly expense adjustments based on the prior year's experience.
Any over-payment by Tenant shall be credited towards the monthly expense
adjustments next coming due. The actual expense adjustments for the prior year
shall be used for purposes of calculating the anticipated monthly expense
adjustments for the then current year with actual determination of such expense
adjustments after each calendar year as above provided; except that in any year
in which resurfacing of parking or driveway facilities is contemplated Landlord
shall be permitted to include the anticipated cost of same as part of the
estimated monthly expense adjustments. Even though the term has expired and
Tenant has vacated the Leased Premises, when the final determination is made of
Tenant's share of said expense adjustments for the year in which this Agreement
terminates, Tenant shall immediately pay any increase due over the estimated
expense adjustments previously paid and, conversely, any overpayment made shall
be immediately rebated by Landlord to Tenant. Failure of Landlord to submit
statements as called for herein shall not be deemed to be a waiver of Tenant's
requirement to pay sums as herein provided.
4.02.3 Other Obligations as Additional Rent. All charges,
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costs and expenses which the Tenant is required to pay hereunder, together with
all interest and penalties that may accrue thereon in the event of the Tenant's
failure to pay such amounts, and all damages, costs and expenses which the
Landlord may incur by reason of any default of the Tenant or failure on the
Tenant's part to comply with the terms of this Agreement, shall be deemed to be
additional rent and, in the event of nonpayment by the Tenant, the Landlord
shall have all rights and remedies with respect thereto as the Landlord has for
the nonpayment of the Annual Rent.
4.03. Manner of Payment, Late Charges. All Rent payable by
Tenant to the Landlord under this Agreement shall be paid to Landlord at the
office of Landlord herein designated by it for notices. Tenant will promptly pay
all Rent herein prescribed when and as the same shall become due and payable.
Tenant shall pay a "late charge" not in excess of eight percent (8%) of any
installment of Rent (or any other charge or payment as may be considered
additional rental under this Lease) when paid more than ten (10) days after the
due date thereof to cover the extra expense involved in handling delinquent
payments. In addition to the eight percent (8%), Tenant agrees to pay any
attorney fees incurred by Landlord as a result of the Tenant's delinquent
payment for Rent beyond the applicable grace period of ten (10) days.
5. SECURITY DEPOSIT.
Concurrently with the execution of this Lease, Tenant has deposited
with the Landlord the sum of THREE THOUSAND NINE HUNDRED SIXTY-THREE DOLLARS
($3,963.00) (herein called the "Security Deposit") as security for the faithful
performance by Tenant of the terms and conditions of this Agreement. Landlord
shall have no obligation to account for the Security Deposit except as provided
herein, and such Security Deposit may be commingled with Landlord's other funds
without any liability to Tenant on account thereof. In the event Tenant defaults
in the performance or observance of any of the terms, covenants and conditions
of this Agreement, Landlord may use, apply or retain the whole or any part of
the Security Deposit to the extent required for the payment of any installment
of Rent or for any such which Landlord may expend or be required to expend by
reason of Tenant's default in respect to any of the terms, covenants, and
conditions of this Agreement, including any damages or deficiency in the
reletting of the Leased Premises. In the case of every such use, application or
retention of any such sum, Tenant on demand shall pay to Landlord the sum so
used, applied or retained which shall be added to the Security Deposit so that
the same shall be restored to its original amount. In the event Tenant shall
faithfully and fully comply with all of the terms, covenants and conditions of
this Agreement, the Security Deposit shall be returned to Tenant at the end of
the term and after the delivery of the exclusive possession of the Leased
Premises to the Landlord.
6. USE.
The Leased Premises are leased to Tenant solely for the
purpose of conducting therein a general business office and such use is
permitted under the applicable zoning laws for the Building. Tenant shall not
use or permit the Leased Premises or any part thereof to be used for any purpose
or purposes other than the purpose or purposes for which the Leased Premises are
leased. No use shall be made or permitted to be made of the Leased Premises or
acts done which will increase the existing rate of insurance on the Building or
related areas or cause the cancellation of any insurance policy covering the
Building or related areas or any part thereof, nor shall Tenant sell or permit
to be kept, used or sold in or about the Leased Premises any article which may
be prohibited by the standard form of fire insurance policies. Tenant shall not
commit or suffer to be committed any waste upon the Leased Premises or any
public or private nuisance or any other act or thing which may disturb the quiet
enjoyment of any other tenant in the Building. Tenant shall not use the Leased
Premises or permit the same to be used in whole or in part for any purpose or
use that is deemed to be in violation of any of the laws, ordinances,
regulations or rules of any public authority or organization at any time. A
judgment of any court of competent jurisdiction, governmental administrative
agency or the admission by Tenant in any action or proceeding against Tenant
that Tenant has violated any such laws, ordinances, regulations or rules in the
use of the Leased Premises, shall be deemed to be a conclusive determination of
the fact between Landlord and Tenant.
7. COMMON AREA AND FACILITIES.
During the term of this Lease, Tenant shall have the right of
nonexclusive use, in common with others, of the driveways, footways and parking
area provided that such use shall be subject to such rules and regulations as
Landlord may from time to time prescribe governing the same; and provided that
Landlord shall at all times have full and exclusive control, management and
direction thereof. Landlord shall further have the right to police the same; to
assign specific parking area for tenants and for visitors; to close temporarily
all or any portion of the parking areas as may be required for proper
maintenance and/or repair; to change the location, layout and arrangement of
parking areas, driveways and footways from time to time; and, to do and perform
such other acts in and to such areas as, in the use of its business judgment,
the Landlord shall determine to be advisable in order to improve the overall
operation and/or make more convenient the use thereof by tenants of the
Building.
It is understood and agreed by the Tenant that the Landlord
shall not employ any security or parking personnel for either the Building or
the Leased Premises or furnish any type of system to control the use of parking
spaces by either the Tenant, its customers or other third parties. However, in
the event that the tenants leasing eighty percent (80%) of the total leasehold
premises of the Building request the Landlord to employ any of the
aforementioned personnel or systems, Landlord shall provide and employ said
personnel or system and the costs thereof shall be borne by the Tenant based on
the percentage that Tenant's Leased Premises bears to the total leasehold
premises occupied by all tenants of the Building, said costs not deemed by
Landlord to be within the definition of "Common Areas Expense" as defined in
Section 8 of this Agreement. In addition, the cost of any reserved parking
designations, implemented to control the use of parking spaces by the Tenant or
its clients, customers or patients, whether by marking or sign, shall be borne
by the Tenant, said costs not deemed by Landlord to be within the definition of
"Landlord's operating cost" as defined in Section 8 of this Agreement.
8. COMMON AREAS EXPENSE.
Landlord will, subject to the expense adjustment reimbursement
provisions described in Section 4.02.1, operate and maintain the common areas
and facilities described in Section 7. For the purpose of this Section 8,
"Common Areas Expense" shall be those costs of operating and maintaining the
common facilities in a manner deemed by Landlord, in its sole discretion, to be
reasonable and appropriate and for the best interests of the tenants in the
operation of the Building, including, without limitation, the following:
(a) All costs and expense of operating, maintaining,
repairing, lighting, cleaning, painting, striping, insuring (including liability
for personal injury, death and property damage and workmen's compensation
insurance coverage personnel), removing snow, ice and debris and/or amortization
of machinery and equipment used for such operations; and
(b) All costs and expense for the replacement of paving,
curbs, walkways, landscaping, drainage and lighting facilities; and
(c) All costs and expense of grass cutting, fertilizing,
planting, replanting and replacing flowers, shrubs or other exterior decorations
within the Building Area; and
(d) Painting and decoration of all common areas; and
(e) All other expenses which would be considered as an expense
of owning, maintaining, operating or repairing the Building, including a
management fee, under sound accounting principles, subject however, to the
limitations specified under Section 7 and 12 of this Agreement.
9. REAL ESTATE TAXES.
Landlord shall be responsible for and shall pay to each and
all appropriate taxing authorities or third parties all taxes as hereinafter
defined in this Section. Tenant shall pay, as additional rent, its proportionate
share (as defined in Section 4.02.1 of this Agreement) of a sum equal to that
percent of the total real property tax ▇▇▇▇, including water and sewer benefit
charges and assessments, which shall be in excess of the real property taxes
assessed against the Building for the fiscal year 2002/2003 in the amount of
$27,429.95, which shall be considered the base tax year.
"Taxes" shall mean with respect to the Building (including all
land, buildings and improvement) all present and future real estate taxes,
assessments, ad valorem charges, front foot benefit charges and all other
governmental impositions and/or levies, whether or not now customary or within
the contemplation of the parties hereto and regardless of whether the same shall
be extraordinary or ordinary, general or special, foreseen or unforeseen, or
similar or dissimilar to any of the foregoing. "Taxes shall further mean any
advances or escrow deposits paid or made to any taxing authority or third party
such as lender on account of any of the foregoing. If during the term of this
Lease or any extension thereof the method of taxation prevailing at the
commencement of the term of this Lease shall be altered or eliminated so as to
cause all or any part of the items listed in the preceding sentences of this
paragraph to be replaced or supplemented by a capital levy, tax, imposition or
otherwise, on the rents or income received from the Building (provided the tax
on such income is not a tax levied on taxable income from all sources
generally), then the charge to the Landlord resulting from such modified or
replaced method of taxation shall be deemed to be within the definition of
"taxes".
All reasonable expenses incurred by Landlord (including
attorneys' fees and costs) in contesting, appealing and/or negotiating against
any increase in taxes or any increase in the assessment of the Building shall be
included as an item of taxes for the purpose of computing additional rent due
under Section 4.02.1.
10. INSURANCE.
Landlord shall maintain at all times during the term of this
Agreement the following policies of insurance for the Building, which shall
cover the improvements to the Leased Premises, but which shall not include
Tenant's personal property located therein:
(a) Fire and extended insurance coverage.
(b) Rental insurance, as required by the Landlord's mortgagee
or lender.
(c) Umbrella liability insurance with maximum coverage of
up to Three Million Dollars ($3,000,000.00).
(d) Flood insurance, as required by Landlord's mortgagee or
lender.
(e) Owned and non-owned automobile insurance, as required
by Landlord's mortgagee or lender.
(f) Any other insurance that may, from time to time, be
required by Landlord's mortgagee or lender.
Tenant shall pay, as additional rent, its proportionate share (as
defined in Section 4.02.1 of this Agreement) of a sum equal to that percent of
the total insurance ▇▇▇▇ (as defined herein) which shall be in excess of the
insurance charges for the year 2002/2003 in the amount of $4,299.00, which shall
be considered the base insurance year.
11. UTILITIES.
The respective parties to this Agreement understand and agree
that the Tenant shall have separate electrical service for the Leased Premises
and shall apply to the appropriate public utility for the electrical services
for the Leased Premises and, accordingly, shall be billed directly for all
electrical services to the Leased Premises.
Tenant shall pay promptly when due the charges for all other
utility services rendered or furnished to the Leased Premises (whether by meter
or sub-meter), together with all taxes, levies or other charges on such
utilities. Tenant charges for water and sewer service (if any) furnished to the
Leased Premises shall be a pro rata share of the respective ▇▇▇▇ for the
Building based upon the number of plumbing fixtures located within the Leased
Premises. If Tenant defaults in the payment of any such charges or taxes,
Landlord may, at its option, pay the same for and on Tenant's account, in which
event Tenant shall promptly reimburse Landlord thereof. Landlord will provide
and maintain the necessary mains and electrical conduits to bring water and
electricity to the premises. Landlord shall under no circumstances be liable to
Tenant in damage or otherwise for any interruption in utility services to the
Leased Premises caused by the making of any repairs or improvements to the
Building or to the Building Area.
12. JANITORIAL SERVICES AND TRASH REMOVAL.
Tenant shall provide, at its own expense, such janitorial
services as are necessary to maintain the Leased Premises in a sanitary, good
and safe condition. It is understood and agreed by the Tenant that the Landlord
shall not employ a janitor or furnish janitorial services to either the Building
or the Leased Premises. However, Landlord shall provide cleaning and maintenance
services for the common areas of the Building as described within the definition
of "Common Areas Expense" in Section 8 of this Agreement.
13. RULES AND REGULATIONS.
Tenant agrees to be bound by such Rules and Regulations as may
be adopted, promulgated and amended by Landlord pertaining to and for the
purpose of maintaining and operating the Building and the Building Area in a
clean and orderly manner, preserving the safety and good order thereof, and
furthering the convenience of welfare of all of the tenants in the Building
Area. A copy of these Rules and Regulations may be reasonably amended from time
to time by Landlord. Said Rules and Regulations and any reasonable amendments,
changes or additions thereto which Landlord may hereafter make are hereby
incorporated in this Lease and shall be binding upon Tenant as if fully set
forth herein, provided that said Rules and Regulations shall in no way be in
conflict with any of the terms and conditions of this Lease. Any amendments or
additions to the Rules and Regulations shall be effective upon written notice
thereof to Tenant in the manner provided in Section 34 hereof.
14. REPAIRS.
Tenant will keep the interior of the Leased Premises, together
with all electrical, plumbing and mechanical installations therein, servicing
the Leased Premises, in good order and repair and will make all replacements at
its own expense. Landlord represents and warrants that all installations are in
good working order. Tenant will surrender the Leased Premises at the expiration
of the term, or at such other time as it may vacate the premises, in as good
condition as when received, excepting depreciation caused by ordinary wear and
tear and damage by fire, unavoidable accident, or act of God. Tenant must engage
the services of a reputable heating, ventilating and air conditioning company
and obtain on an annual basis, a one-year service policy for the heating,
ventilating and air conditioning equipment for the Leased Premises, and
replacing of filters contained within the equipment on at least a bi-annual
basis. Cost of this policy shall be borne by the Tenant and a copy of same must
be mailed to Landlord within ten (10) days of occupancy in the initial year of
the term of the Lease and ten (10) days after the first day of each and every
subsequent year of occupancy during the term of this Lease. If Tenant fails to
obtain an annual service policy as herein described, or fails to provide
Landlord with a copy of said policy within ten (10) days as required herein,
Landlord shall have the right to obtain such policy and charge Tenant for the
cost of said policy, said cost to be paid by Tenant as additional rent under
this Lease.
Tenant will promptly repair at its own expense any damage to
the Leased Premises caused by bringing into the premises any property for
Tenant's use or by the installation or removal of such property, regardless of
fault or by whom such damage shall be caused, unless caused by Landlord, its
agents, employees or contractors; and, in default of such repairs by Tenant,
Landlord shall make the same and Tenant agrees to pay the cost thereof to
Landlord promptly upon Landlord's demand therefor.
Tenant shall be responsible for the maintenance, cleaning and
repair of all interior and exterior doors, windows and glass which comprise the
Leased Premises.
15. PUBLIC LIABILITY INSURANCE.
With respect to the Leased Premises, Tenant will keep in force
at its own expense, so long as this Agreement remains in effect, Comprehensive
General Liability insurance (providing among other coverages: Blanket
Contractual, Personal Injury, Independent Contractors, Products/Completed
Operations Hazard, Automobile Liability/Comprehensive Form and Workers'
Compensation) with companies and in a form acceptable to Landlord with a minimum
of One Million Dollars ($1,000,000.00) of combined single limit general
liability coverage, naming both Landlord and Tenant as insured parties; and
Tenant will further deposit the policy or policies of such insurance or
certificates thereof, with Landlord. If Tenant shall not comply with its
covenants made in this Section, Landlord may at its option, cause insurance as
aforesaid to be issued, and in such event Tenant agrees to pay the premium for
such insurance promptly upon Landlord's demand. A certificate of insurance with
the aforementioned coverage must be issued not later than ten (10) days prior to
Tenant, its agents or contractors entering the Leased Premises for occupancy or
to prepare the Leased Premises for occupancy. Also, whenever an insurance policy
is renewed or a policy issued, Tenant shall immediately cause a "Certificate of
Insurance" to be delivered to Landlord.
16. INDEMNITY BY TENANT.
Tenant will indemnify Landlord and save it harmless from and
against any expenses, loss or liability paid, suffered or incurred as the result
of any breach by Tenant, Tenant's agents, servants, employees, customers,
contractors, visitors or licensees, of any covenant or condition of this Lease,
and any and all claims, actions, damages, liability and expense in connection
with loss of life, personal injury and/or damage to property arising from or out
of the occupancy or use by Tenant of the Leased Premises or any part thereof or
any other part of the Building Area, or occasioned wholly or in part by any act
or omission of Tenant, Tenant's agents, servants, employees, customers,
contractors, visitors or licensees; provided, however, that this indemnification
shall not apply to any such injury, loss, damage or liability arising from any
omission, fault, negligence or misconduct on the part of the Landlord, its
agents, servants, employees, contractors or licensees.
17. FIRE OR OTHER CASUALTY.
If the Leased Premises, or any other portion of the Building
including areas of ingress and egress, shall, through no fault of Tenant or
Tenant's agents, servants, employees, customers, contractors, visitors or
licensees, be damaged by fire, the elements, unavoidable accident or other
casualty, but the Leased Premises are not thereby rendered untenantable in whole
or in part, Landlord shall promptly at its own expense cause such damage to be
repaired, and the rent shall not be abated; if by reason of such occurrence, the
Leased Premises shall be rendered untenantable only in part, Landlord shall
promptly at its own expense cause the damage to be repaired, and the rent
meanwhile shall be abated proportionately as to the portion of the Leased
Premises rendered untenantable; if by reason of such occurrence the Leased
Premises shall be rendered wholly untenantable, Landlord shall promptly at is
own expense cause such damage to be repaired, and the rent meanwhile shall be
abated in whole, unless within sixty (60) days after said occurrence Landlord
shall give Tenant written notice that it has elected not to reconstruct the
destroyed premises in which event, this Agreement and the tenancy hereby created
shall cease as of the date of said occurrence, the rental to be adjusted as of
such date. All of the above notwithstanding, if Landlord, in its absolute
discretion, shall desire, within a reasonable time after the occurrence of any
such accident or casualty (even though the Leased Premises may not have been
affected by the same) to demolish, rebuild or reconstruct the Building, then,
upon written notice from Landlord to Tenant, this Agreement shall terminate on a
date to be specified in such notice, and all rent payable hereunder shall be
adjusted as of the time of the occurrence of any such accident or casualty.
18. ALTERATIONS BY TENANT.
Unless the Landlord shall elect that all or part of any
alterations consented to by the Landlord in writing shall remain after
expiration of the Lease Term, the Leased Premises shall be restored to their
original condition (except as to any part of said alterations which the Landlord
shall elect to remain) by the Tenant before the expiration of its tenancy, at
its own expense. The original condition shall mean the condition of the Leased
Premises as of the commencement of this Lease, ordinary wear and tear excepted.
Upon said election by Landlord, any such alterations, improvements, betterments
and mechanical equipment, including but not limited to heating and air
conditioning systems, shall become the property of the Landlord as soon as they
are affixed to the Leased Premises, and all rights, title and interest therein
of the Tenant shall immediately cease, unless otherwise agreed to in writing.
The Landlord shall have the sole right to collect any insurance for any damage
of any kind to any of the improvements placed upon the Leased Premises by the
Tenant. If the making of any such alterations, or the obtaining of permits or
franchise therefor shall directly or indirectly result in a franchise, minor
privilege or other tax or assessment, such tax or assessment shall be paid,
immediately upon its levy, by the Tenant.
19. SIGNS.
Without the prior written consent of the Landlord, such
consent not to be unreasonably withheld, the Tenant covenants and agrees that it
will not place or permit any signs, lights, awnings or poles in or about the
Leased Premises, nor paint or make any change in, to or on the outside of the
Leased Premises, nor do anything on or to the outside of the Leased Premises to
change the uniform architecture, paint or appearance of said building. In the
event such consent is given, the Tenant agrees to pay any minor privileges or
other tax therefore immediately when due.
Landlord shall provide at its own cost a wall plaque with the
name of Tenant's business and install such plaque on the exterior of the Leased
Premises.
20. INGRESS AND EGRESS.
The Tenant further covenants and agrees not to pile anything
on the sidewalk or parking lot in the front, rear or sides of the Building or
block said sidewalk, and not to do anything that directly or indirectly will
take away any of the rights of ingress or egress from any other tenant of the
Landlord or do anything which will, in any way, change the uniform and general
design of any property of the Landlord of which the Leased Premises hereby
leased shall constitute a part or unit.
21. LANDLORD'S SIGNS.
Intentionally omitted.
22. WATER DAMAGE.
The Tenant covenants and agrees that the Landlord shall not be
held responsible for and the Landlord is hereby released and relieved from, and
forever saved harmless from, any liability by reason of or resulting from damage
or injury to person or property of the Tenant or of anyone else, directly or
indirectly, caused by (a) dampness or water in any part of the Leased Premises
or in any part of any other property of the Landlord or of others and/or (b) any
leak or break in any part of the Leased Premises or in any part of any other
property of the Landlord or of others or in the pipes of the plumbing or heating
works thereof, no matter how caused except in the event of gross negligence by
the Landlord.
23. EMINENT DOMAIN.
If during the Lease term all or a substantial part of the
Leased Premises be taken by eminent domain, this Agreement shall terminate as
of, and the Rent shall be apportioned to and ▇▇▇▇▇ from and after, the date of
taking, and Tenant shall have no right to participate in any award or damages
for such taking and hereby assigns all of its right, title and interest therein
to Landlord. For purposes of this Paragraph, "a substantial part of the Leased
Premises" shall mean such part thereof that the remainder of the Leased Premises
is rendered inadequate and cannot practicably be repaired and improved so as to
be made adequate to permit Tenant to carry on its business to substantially the
same efficiency as before the taking.
If during the Lease term less than a substantial part of the
Leased Premises (as hereinabove defined) be taken by eminent domain, this
Agreement shall remain in full force and effect according to its terms; and
Tenant shall have no right to participate in any award or damages for such
taking and hereby assigns all of its right, title and interest therein to
Landlord, and Landlord shall at its expense, up to but not in excess of the
amount of the award or damages received, promptly make such repairs and
improvements as shall be necessary to make the remainder of the Leased Premises
adequate to permit Tenant to carry on its business to substantially the same
extent and with substantially the same efficiency as before the taking. If, as a
result of such taking, any part of the Building is rendered permanently or
temporarily unusable, the Annual Rent shall be reduced in an amount as may be
fair and reasonable; however, not to exceed forty percent (40%) of the
proportion which the Building Area so taken or made unusable bears to the
building area space usable by Tenant prior to such taking. If the unuseability
is temporary, the rental abatement shall be apportioned from the date of taking
to the date when full usability is restored. If the taking shall not render any
part of the Building unusable, there shall be no abatement of Rent.
For the purpose of this Section, "taking under the power of
eminent domain" shall include a negotiated sale or lease and transfer of
possession to a condemning authority under bona fide threat of condemnation for
public use, and Landlord alone shall have the right to negotiate with the
condemning authority and conduct and settle all litigation connected with the
condemnation. As hereinabove used, the words "award or damages" shall, in the
event of such sale or settlement, include the purchase or settlement price.
Nothing herein shall be deemed to prevent Tenant from claiming
and receiving from the condemning authority, if legally payable, compensation
for the taking of Tenant's own tangible property and damages for Tenant's loss
of business, business interruption, or removal and relocation.
In no event shall a taking of less than ten percent (10%) be
deemed a taking of a "substantial part of the Leased Premises".
24. INSPECTION AND ENTRY BY LANDLORD.
Tenant will permit, and hereby authorizes Landlord, its
agents, employees and contractors to enter the Leased Premises and all parts
thereof during business hours and upon reasonable notice to Tenant (or at any
time in case of any emergency) to install, inspect, maintain, use, repair,
replace, remove and inspect pipes, ducts, conduits and wires passing into,
through, above or beneath the Leased Premises for the service to other parts of
the Building and to enforce or carry out any provision of this Lease.
25. NO ASSIGNMENTS OR SUBLETTING.
Tenant will not assign this Lease in whole or in part, nor
sublet all or any part of the Leased Premises, without the written consent of
Landlord first obtained, which consent will not be unreasonably withheld.
Consent by Landlord to any assignment or subletting shall not constitute a
waiver of the necessity for such consent to any subsequent assignment or
subletting. This prohibition against assigning or subletting shall be construed
to include prohibition against any assignment or subletting by operation of law.
26. NOTICE OF DEFAULT TO LANDLORD AND MORTGAGEE AND RIGHT TO CURE.
If Landlord shall fail to perform any covenant, term or
condition of this Agreement required to be performed by Landlord, Tenant shall
give, by certified mail, a notice of default to the Landlord, which shall
specifically set forth the nature of the nonperformance by the Landlord and
shall give the Landlord thirty (30) days within which to cure such default or
nonperformance. Said notice of default shall be a condition precedent to the
institution by Tenant of any judicial proceedings for nonperformance or default
against the Landlord. Tenant agrees to give any mortgagee and/or Trust Deed
Holders, by certified mail, a copy of any notice of default served upon the
Landlord, provided that prior to such notice, Tenant has been notified, in
writing, of the address of such mortgagees and/or Trust Deed Holders. Tenant
further agrees that if Landlord shall fail to cure such default within the time
provided for in this Lease Agreement, then the mortgagees and/or Trust Deed
Holders 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 Holders 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 this Lease shall not be terminated while such remedies are being so
diligently pursued.
27. DEFAULT BY TENANT.
27.01. Events of Default. Any of the following events
shall constitute a default by Tenant:
(a)If the Rent shall be in arrears beyond the
applicable grace period for same; or
(b) If Tenant shall have failed to perform any other
term, condition or covenant of this Agreement on its part to be performed for a
period of ten (10) business days after notice of such failure from Landlord; or
(c)If the Leased Premises are vacant, unoccupied or
deserted for a period of fifteen (15) days at any time during the Term by the
voluntary acts of Tenant; or
(d)If Tenant is adjudicated a bankrupt or insolvent
by a court of competent jurisdiction or if any such court enters any order,
judgment or decree finally approving any petition against Tenant seeking
reorganization, liquidation, dissolution or similar relief or a receiver,
trustee, liquidator or conservator is appointed for all or substantially all of
Tenant's assets and such appointment be not vacated within twenty (20) days
after the appointment, or if Tenant seeks or consents to any of the relief
hereinabove enumerated in this subparagraph (d) or files a voluntary petition in
bankruptcy or insolvency or makes an assignment of all or substantially all of
its assets for the benefit of creditors or admits in writing of its inability to
pay its debts generally as they come due or files Articles of Dissolution with
the appropriate authority of the place of its incorporation; or
(e)If Tenant's leasehold interest under this
Agreement is sold under execution, attachment or decree of court to satisfy any
debt of Tenant or any lien (including mechanic's lien) against Tenant's
leasehold interest.
27.02. Landlord's Remedies. In the event of default,
Landlord in addition to any and all legal and equitable remedies it may have,
shall have the following remedies:
(a)To distrain for any Rent in default; and
(b)At any time after default, without notice, to
declare this Agreement terminated and enter the Leased Premises with legal
process; and in such event Landlord shall have the benefit of all provisions of
law now or hereafter in force respecting the speedy recovery of possession from
Tenant holding over to the same extent as if this Agreement had not been entered
into and Tenant waives any and all provisions for notice under such laws.
In the event of such termination, Tenant shall immediately be
liable to Landlord for the sum of the following: (i) all Rent then in arrears,
without apportionment to the termination date; (ii) all other liabilities of
Tenant then accrued under this Agreement; (iii) all of Landlord's costs and
expenses (including reasonable counsel fees) in connection with such default and
recovery of possession; (iv) the amount by which the Rent, apportioned from the
date of termination to the end of the stated term of this Agreement exceeds the
then fair rental value of the Leased Premises for such period; and (v) any other
damages recoverable by law.
27.03. Remedies Cumulative. No mention in this Agreement of
any specific right or remedy shall preclude Landlord from exercising any other
right or from having any other remedy, or from maintaining any action to which
it may otherwise be entitled either at law or equity; and the failure of
Landlord to insist in any one or more instances upon a strict performance of any
covenant of this Lease or to exercise any option or right herein contained shall
not be construed as a waiver of relinquishment for the future of such covenant,
right or option, but the same shall remain in full force and effect unless the
contrary is expressed in writing by Landlord.
28. SUBORDINATION.
This Lease shall be subject to and subordinate at all times to
the lien of any mortgages and/or deeds of trust now or hereafter made on the
Leased Premises and to all advances made or hereafter to be made thereunder.
This subordination provision shall be self-operative and no further instrument
of subordination shall be required. The Tenant agrees to execute any documents
necessary, subsequent to the execution of this Agreement, which are required to
effect a subordination.
29. PERFORMANCE BY LANDLORD.
If Tenant shall fail to perform any covenant or duty required
of it by this Agreement or by law, Landlord shall have the right (but not the
duty) to enter the Leased Premises, if necessary, to perform the same with
notice (or without notice in the event of an emergency), but the reasonable cost
thereof shall be deemed to be additional rent.
30. ASSIGNMENT BY LANDLORD.
If Landlord should ever assign this Agreement or the Rent
hereunder to a creditor as security for a debt or otherwise, Tenant shall, after
notice of such assignment and upon demand by Landlord or the assignee, pay all
sums thereafter becoming due Landlord hereunder to the assignee and give all
notices required to be given Landlord hereunder both to Landlord and the
assignee and have all policies of insurance required hereunder endorsed so as to
protect the assignee's interest as it may appear and deliver such policies, or
certificates thereof, to the assignee.
31. FORECLOSURE.
In the event the Leased Premises are sold at any foreclosure
sale or sales, by virtue of any judicial proceedings or otherwise, this
Agreement shall continue in full force and effect and Tenant agrees, upon
request, to attorn to and acknowledge the foreclosure purchaser or purchasers at
such sale as Landlord hereunder.
32. WAIVER.
The failure of the Landlord to insist upon a strict
performance of any of the terms, conditions and covenants herein contained shall
not be deemed a waiver of any rights or remedies that the Landlord may have and
shall not be deemed a waiver of any subsequent breach or default in the terms,
conditions and covenants herein contained.
33. RECORDATION COST.
In the event this Agreement or any substitution for this
Agreement is recorded, all costs of recordation, including state and county
documentary stamp taxes, recordation taxes and transfer taxes imposed thereon
shall be borne by the party recording this Agreement.
34. NOTICES.
All notices, demands and requests required under this
Agreement shall be in writing. All such notices, demands and requests shall be
deemed to have been properly given if sent by United States registered or
certified mail, return receipt requested, postage prepaid, addressed to the
addresses of Landlord and Tenant first above written unless either of the
parties has so notified the other of a change in address, in which case the most
recent address shall be used.
35. ESTOPPEL CERTIFICATES.
Tenant agrees at any time hereafter upon not less than five
(5) days' prior notice by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Agreement is unmodified and
in full force and effect (or if there have been modifications, that the same is
in full force as modified and stating the modifications). Such certificate shall
state the dates to which the rent and other charges have been paid in advance,
if any, and whether or not to the best knowledge of the signer of such
certificate Landlord is in default in performance of any covenant, agreement or
condition contained in this Agreement; if applicable, specifying each such
default of which the signer may have knowledge, it being intended that any such
statement delivered hereunder may be relied upon by third parties not a party to
this Agreement.
36. QUIET ENJOYMENT.
If and so long as Tenant pays the Rent and performs and
observes all the covenants and provisions hereof, Tenant shall quietly enjoy the
Leased Premises, subject, however, to the terms and provisions hereof.
37. TERMINATION.
This Agreement and the tenancy hereby created shall cease and
terminate at the end of the Lease Term, or any extension or renewal thereof,
without the necessity of any notice from either Landlord or Tenant to terminate
the same, and Tenant hereby waives notice to vacate the Leased Premises and
agrees that Landlord shall be entitled to the benefit of all provisions of law
respecting the summary recovery of possession of premises from a tenant holding
over to the same extent as if statutory notice had been given.
38. HOLDING OVER.
Any holding over after the expiration of the Lease Term by
Tenant shall be deemed to be a tenancy from month-to-month and except for the
term thereof shall be on the same terms and conditions specified herein, so far
as are applicable.
39. NO OPTION.
The submission of this Agreement for examination does not
constitute a reservation of any option for the Leased Premises, and this
Agreement becomes effective as a lease only upon execution and delivery thereof
by Landlord and Tenant.
40. ENTIRE AGREEMENT.
This writing is intended by the parties as a final expression
of their agreement and as a complete and exclusive statement of the terms
thereof, all negotiations, considerations and representations between the
parties having been incorporated herein. No course of prior dealings between the
parties or their affiliates shall be relevant or admissible to supplement,
explain or vary any of the terms of this Agreement. Acceptance of, or
acquiescence in, a course of performance rendered under this or any prior
agreement between the parties or their affiliates shall not be relevant or
admissible to determine the meaning of any of the terms of this Agreement. No
representations, understandings or agreements have been made or relied upon in
the making of this Agreement other than those specifically set forth herein.
This Agreement can only be modified in writing signed by all of the parties
hereto or their duly authorized agents.
41. CORPORATE APPROVAL.
If Tenant is a corporation, Tenant shall provide to Landlord,
within ten (10) days of its execution of this Agreement, a copy of an executed
resolution by its Board of Directors, authorizing the execution of this
Agreement and authorizing the individual executing this Agreement to execute
said Agreement on behalf of and in the name of the Corporation. If Tenant shall
fail to provide the executed resolution within the time period required under
this Section, Landlord may, at its option, declare this Agreement to be null and
void and of no further force or effect.
AS WITNESS, the hands and seals of the parties hereto the day and
year first above written.
WITNESS: LANDLORD:
POT SPRING CENTER LIMITED PARTNERSHIP
▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇ By:/S/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., General Partner
WITNESS: TENANT:
ELECTROGRAPH SYSTEMS, INC.
▇▇▇ ▇▇▇▇▇▇ By: /S/ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇, President
