Exhibit 10.4
LEASE
THIS LEASE is made as of August 24th, 2000, by and between Xxxxx Xxxxxx,
LLC ("Landlord"), and Young Design, Inc ("Tenant").
1. DESCRIPTION OF PREMISES. Landlord, in consideration of the rents
to be paid by Tenant and other covenants of Tenant contained herein, does hereby
lease to Tenant the parcels (each, a "Parcel") described on Exhibit A (the
"Premises").
2. TERM. The term of this lease shall be for a period of Ten (10)
years, commencing on the First (1st) day of January, 2001 (the "Commencement
Date"), and ending at midnight on December 31, 2010, provided, however, that
this lease shall be renewable for two (2) five year periods, upon Tenant giving
Landlord written notice of its intent to renew at least One hundred and eighty
days (180) days prior to the expiration of the then current term.
3. RENT. Tenant agrees to pay Landlord, without demand, deduction or
offset, annual rental at the initial rate of $16.50 per square foot. Rent shall
be adjusted annually on the anniversary of the Commencement Date and such
adjustment shall be equal to One hundred and three percent (103%) of the prior
period just ended during the term of the lease.
Beginning on the first anniversary of the Commencement Date
and annually on each anniversary of the Commencement Date thereafter, rent shall
increase for each succeeding lease year by an amount equal to One hundred and
three percent (103%) of the prior period just ended during the term of the
lease.
Annual rent shall be divided into twelve (12) equal
consecutive payments and shall be paid on the first (1st) day of every month
commencing on January 1, 2001, and continuing on the first (1st) day of each
month thereafter during the term of this lease and any renewals thereof. If the
term of this lease shall commence or expire on a day other than the first day of
a calendar month, the rent for any partial month shall be prorated. All rent
payments shall be paid to Landlord at its address specified below, or such other
place as Landlord designates in writing for the initial year of the lease. The
initial monthly rent payment shall be in the amount of $ 20,625.00 and shall be
due and payable at the execution of this lease agreement. Landlord shall grant
Tenant two months free rent at the beginning of the lease for purposes of tenant
renovations.
4. SECURITY DEPOSIT: Tenant shall deposit with the Landlord, with
the execution of this lease and thereafter maintain with Landlord the sum of
Twenty Thousand Six Hundred and Twenty Five dollars which shall be held by
Landlord, without interest to Tenant, as security for the full and faithful
performance by Tenant of Tenant's obligations pursuant to this Lease. If Tenant
fails to pay any amount which Tenant is obligated to pay pursuant to this Lease,
Landlord may, at its option (but Landlord shall not be obliged to), apply an
portion of such security fund to the amount owed by Tenant. Any such application
by Landlord shall not waive the default created by Tenant's failure to pay. If
any portion of the security deposit is so applied by Landlord, Tenant shall,
within ten (10) days after demand from Landlord, restore the security deposit
held by Landlord to its original amount. The security deposit, less amounts
properly charged against same, shall be refunded to Tenant within thirty (30)
days after Tenant has paid all amounts owed and performed all of its obligations
pursuant to this Lease.
5. ACCEPTANCE OF PREMISES. Occupancy of the Premises by Tenant shall
constitute its acceptance of same. Tenant acknowledges that Landlord has not
made any warranties or representations, oral or written, as to the use or
fitness of the Premises for any particular purpose.
6. USE AND COMPLIANCE WITH LAW. Tenant shall not use, or permit the
Premises, or any part thereof, to be used, for any purpose or purposes other
than the purpose or purposes for which the Premises are hereby leased and no use
shall be made or permitted to be made of the [Illegible]
7. QUIET ENJOYMENT AND COVENANT OF TITLE. Landlord covenants that it
has full right and power to acquire subject property of this lease. Landlord
also covenants that ownership of the property is scheduled to pass to Landlord
prior to commencement date of this lease. Landlord and Tenant agree that if
title does not pass to Landlord by September 30, 2000 then Landlord must notify
Tenant and this lease is null and void Landlord must refund all deposit money
paid to Landlord at the execution of this Lease. Landlord covenants that once
Landlord has title to the property it has full right and power to execute this
lease and to grant the estate demised herein, and that Tenant, upon payment of
the rents herein reserved and performing the terms, conditions, and covenants
herein contained, shall peacefully and quietly have, hold, and enjoy the
Premises during the full term of this lease.
8. MAINTENANCE AND REPAIR. Tenant shall maintain and repair the
Premises during the full term of this Lease, and any extension thereof, and pay,
as additional rent, as and when due to the persons or entities who are owed
money in connection therewith, all costs of such maintenance and repair. Tenant
shall promptly advise Landlord of all such work and provide evidence
satisfactory to Landlord that Tenant has paid the entire cost thereof. Tenant
shall provide and pay for all maintenance and repair of and to the Premises and
appurtenant grounds and facilities, including, but not limited to, parking lot
maintenance and repair, landscape maintenance and repair, roof maintenance and
repair, elevator maintenance and repair, and HVAC maintenance and repair.
9. UTILITIES. Tenant agrees to pay when due all utility charges
incurred in connection with its use and occupancy of the Premises, including,
but not limited to, electricity, fuel, gas, telephone, janitorial services and
other utilities and/or services supplied to or/for the Premises.
10. ALTERATIONS BY TENANT. Tenant shall not make or suffer to be
made any alteration, addition or improvements to the Premises, or any part
thereof, without the prior written consent of Landlord, and any alteration,
addition, or improvement to the Premises made by Tenant, without such consent
including without limitation, any partitions (non-portable) or affixed
carpeting, shall at once become a part of the Premises and belong to Landlord.
If Landlord consents to the making of any alteration, addition or improvement to
of the Premises by Tenant, the same shall be made by Tenant at its sole cost and
expense and only after Landlord's written approval of any contractor or person
selected by Tenant for that purpose. Upon the termination of this lease, Tenant,
at its sole cost and expense, shall promptly both remove all of Tenant's movable
furniture, portable partitions, non-built-in bookshelves, machinery and
equipment and trade fixture, together with any alteration, addition or
improvement made by Tenant and shall repair any damage to the Premises caused by
such removal. If not so removed at the termination of Lease, the same shall
become the property of Landlord.
11. REPAIRS. Tenant, at its sole cost and expense, shall at all
times during the term hereof provide for the routine care and maintenance of the
Premises and every part thereof, including, without limitation, any
appurtenances and fixtures, windows, doors and skylights (but excluding other
than routine maintenance and the exterior walls and roof), in good and sanitary
order, condition and repair, ordinary wear and tear, and wear and tear or damage
thereto occasioned by fire, failure to provide other than routine maintenance,
earthquake, acts of God or the elements along excepted. Upon the termination of
this lease, Tenant shall surrender the Premises in the same condition as when
received, ordinary wear and tear, and wear and tear or damage occasioned by
fire, earthquake, failure to provide other than routine maintenance and require,
acts of God or the elements excepted. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, add to,
remodel, improve, repair, decorate or paint the Premises or any part thereof
except Landlord will maintain the structural foundation and roof of the building
and provide other than routine maintenance and repairs, and that no
representations respecting the condition of the Premises have been made by
Landlord to Tenant except as may be specifically hereinafter set forth.
12. CONSTRUCTION LIENS. Tenant shall keep the Premises free from any
liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. In the event that Tenant shall not, within ten (10) days
following the imposition of any such lien, cause the same to be released of
record. Landlord shall have, in addition to all other remedies provided herein
and by law, the [Illegible]
13. CONSTRUCTION DEPOSIT, It is understood that Landlord has leased
premises to Tenant with the understanding that certain improvements (Exhibit B)
will be made by tenant to the premises. Tenant has agreed to deposit, as
collateral, without interest, with Landlord the sum of $350,000 upon the
execution of this lease. Landlord agrees to release the funds as the work is
completed. Within thirty days of Tenant request, Landlord shall refund any
unused portion of the deposit, subject to Landlords approval that all
improvements that Tenant has agreed to make to premises have been made and that
there are no construction/mechanics liens on the property.
14. SUBLEASING, ASSIGNMENT. Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer or permit any other person to occupy or use the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not
release Tenant from any of Tenant's obligations hereunder or be deemed to be a
consent to any subsequent similar or dissimilar assignment, transfer,
hypothecation, subletting, occupation or use by any other person. Any such
assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall, at the option of Landlord, exercised by written
notice to Tenant, terminate this Lease. The leasehold estate under this Lease
shall not, nor shall any interest therein, be assignable for any purpose by
operation of law without the written consent of Landlord.
15. DAMAGE TO PREMISES. If the Premises are damaged or destroyed,
Landlord shall promptly repair or rebuild the same if, in Landlord's sole
judgment, such repair or rebuilding can be made within sixty (60) days after
such damage or destruction in which event this Lease shall remain in full force
and effect. If there shall be damage to or destruction of the Premises and such
damage or destruction is not the result of the act, neglect, default or omission
of Tenant, its agents, employees of invitees, Tenant shall be entitled to a
reduction of rent while such repair is being made in the proportion to the
interference, if any, to which such damage interferes with the business carried
on by Tenant in the Premises. If such repair cannot be made within sixty (60)
days, Landlord and Tenant shall each have the option to give notice to the other
at any time within thirty (30) days after occurrence of such damage or
destruction terminating this Lease as of a date specified in such notice which
shall be not less than thirty (30) nor more than sixty (60) days after the
giving of such notice. If such notice of termination is so given, this Lease and
all interest of Tenant in the Premises shall terminate on the date specified in
such notice (unless earlier terminated as otherwise herein provided), and the
rent, proportionately reduced upon the condition and as hereinabove in this
paragraph provided, shall be paid up to the date of such termination. Landlord
hereby agrees to refund to Tenant any rent theretofore paid for any period of
time subsequent to such date. Notwithstanding any of the provisions of this
Lease, Landlord shall in no event be required to repair or replace any damage or
destruction by other cause whatsoever to any panelings, decorations, partitions,
railing, ceilings, floor coverings, trade or office fixtures, machinery or
equipment or any other property of Tenant or its customers or improvements
installed on the Premises by Landlord.
16. PAST DUE RENTS. Tenant recognizes and acknowledges that if rent
payments are not received when due, Landlord will suffer damages and additional
expense thereby and Tenant therefore agrees that a late charge equal to ten
percent (10%) of the late rent may be assessed by Landlord as additional rental
if Landlord has not received any rent or additional rent due pursuant to this
Lease within five (5) days after its due date. If any check given in payment of
rent is not honored when due, Landlord may require that subsequent rent payments
be made by certified or cashier's check.
17. INSURANCE; TAXES. Tenant shall pay, as additional rent, in full,
in advance, on the Commencement Date, all fire and casualty and liability
insurance premiums and, all taxes including but not limited to real estate taxes
attributable to the premises.
18. LIABILITY. Landlord and its agents shall not be liable for any
injury to persons or loss or damage to property resulting from any cause other
than the gross negligence or willful misconduct of Landlord, its agents and
employees. Tenant shall indemnify and save Landlord harmless from all suits.
19. INSPECTION OF PREMISES. Landlord and Landlord's agents shall
have free access during normal business hours to the Premises for the purposes
of inspection, maintenance and repair and at all times for emergency purposes.
20. CONDEMNATION. If all or a part of the Premises sufficient to
render same unusable for Tenant's purposes or all means of access to the
Premises shall be condemned for a period in excess of ninety (90) days or sold
under threat of condemnation, this lease shall terminate and Tenant shall have
no claim against Landlord or to any portion of the award in condemnation for the
value of any unexpired term of this lease. Tenant may seek to recover
independently compensation from the condemning authority for moving expenses,
the value of any of Tenants property taken (other than Tenant's leasehold
interest in the Premises) or other compensable loss or damage. In the event of a
temporary taking of ninety (90) days or less, this lease shall not terminate,
but the term hereof shall be extended by the period of the taking and the rent
shall xxxxx in proportion to the area taken for the period of such taking.
21. DEFAULT. (a) If Tenant does not pay any rent or other sum
payable by Tenant pursuant to this lease and such default continues for a period
of ten (10) days after written notice is given to Tenant (provided, however,
that no written notice shall be required if Landlord has previously given
written notice of failure to pay rent during the then current calendar year), or
if Tenant shall fail to perform any other covenant, agreement, or obligation of
Tenant pursuant to this lease and such default continues for thirty (30) days
after written notice thereof is given to Tenant, or if Tenant should become
bankrupt or insolvent or any debtor proceedings are taken by or against Tenant,
or if Tenant vacates or attempts to vacate the Premises, then Landlord shall
have the following rights and remedies:
(i) Landlord may terminate this lease by written notice to
Tenant, in which event this lease, all rights of Tenant, and all
duties of Landlord shall immediately cease and terminate, and
Landlord may re-enter and take possession of the Premises, remove
all persons and property from the Premises and store such property
in a public warehouse or elsewhere at the cost of, and for the
account of, Tenant and enjoy the Premises free of Tenant's estate
pursuant to this lease, without prejudice, however to any and all
rights of action against Tenant that Landlord may have for rent,
damages, or breach of this lease, in respect of which Tenant shall
remain and continue liable notwithstanding such termination;
(ii) Landlord shall have the right to re-enter the Premises
and remove all persons and property from the Premises and store such
property in a public warehouse or elsewhere at the cost of, and for
the account of, Tenant, without terminating this lease. Landlord
shall have the right to take such action without service of notice
except as may be expressly required herein or by applicable law and
without resort to legal process (unless required by law) and without
being deemed guilty of trespass or becoming liable for any loss or
damage which may be occasioned thereby. If Landlord elects to
re-enter the Premises as aforesaid, Landlord may, at any time
thereafter, elect to terminate this lease by giving written notice
to Tenant of such election. Whether or not Landlord elects to
re-enter the Premises or takes possession of the Premises pursuant
to legal proceedings or pursuant to any notice required by law,
Landlord may, at its option, re-let the Premises or any portion
thereof for the benefit of Tenant for such term or terms (whether
shorter or longer than the term of this lease) and at such rental
and upon such other terms and conditions as Landlord in its sole
discretion, deems advisable, and, at the expense of Tenant, Landlord
shall have the right to make such repairs or alterations to the
Premises as Landlord deems necessary in order to re-let same.
Provided this lease has not been terminated by Landlord, upon each
such re-letting, all rentals actually received by Landlord from such
re-letting applicable to the unexpired term of this lease shall be
applied as follows: First, to the payment of any costs and expenses
of such re-letting, including costs incurred by Landlord for
brokerage fees, legal fees and alterations and repairs to the
Premises; Second, to the payment of any indebtedness other than rent
due hereunder from Tenant; Third, to payment of any unpaid portion
of rent then due. On the scheduled expiration date of this lease,
relieve Tenant of any of its liabilities or obligations hereunder which arose
prior to or by reason of such termination, whether or not the Premises are
re-let.
22. LEGAL COSTS AND EXPENSES. In case suit shall be brought for an
unlawful detainer of the Premises or for the recovery of any rent due under the
provisions of this lease or because of the failure of performance or observance
of any other term, covenant or condition herein contained on the part of
Landlord or Tenant, the unsuccessful party in such suit shall pay to the
prevailing party therein a reasonable attorney's fee which shall be fixed by the
Court of competent jurisdiction. If Landlord should be named as a defendant in
any suit brought against Tenant in connection with or arising out of this lease,
Tenant shall pay Landlord its costs and expenses incurred in such suit and
reasonable attorneys' fee unless in such suite there is an express finding made
that the conduct or omission complained of constituted negligence on the part of
Landlord.
23. HOLDING OVER. If Tenant remains in possession of the Premises
after the expiration or termination of this lease without Landlord's written
consent, such possession be construed as an extension of this lease on a
month-to-month basis, upon the terms and conditions applicable to the last year
of the preceding term except for the rental amount which shall be increased by
125% over the preceding period. Acceptance of rent by Landlord during any
holdover tenancy at sufferance shall not waive the default created by Tenant's
holdover or Landlord's consent to the month-to-month tenancy created by the
holdover. The provisions of this paragraph are in addition to, and do not affect
Landlord's right of re-entry or other rights provided hereunder or at law.
24. SURRENDER OF PREMISES. Tenant shall surrender the Premises at
the termination of the lease term, broom-cleaned, with all rubbish removed, free
of subtenancies, and in good condition and repair, reasonable wear and tear
excepted. Tenant shall deliver all keys to Landlord or Landlord's agent.
25. NOTICES. Any notices required pursuant to this lease shall be in
writing. Addresses to which notices shall be sent are as follows:
TO TENANT: Young Design, Inc
0000 Xxx Xxxxxxx
Xxxxx Xxxxxx, Xx 00000
Attn: Xxxxxx X. Xxxxxx
TO LANDLORD: Xxxxx Xxxxxx, LLC
0000 Xxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xx 00000
Attn: Xxxxxx Xxxxxxxxxx
Either party may at any time designate by written notice to
the other a change of address for notices. All notices, demands and quests which
are addressed as provided above and are (i) deposited in the United States mail,
registered or certified, postage prepaid, return receipt requested, or (ii)
accepted for overnight delivery by a guaranteed overnight courier, delivery
charges prepaid or with delivery not conditioned upon payment of charges, shall
be deemed to have been given for all purposes hereunder two (2) days after such
notice shall have been deposited in the United States mail or one (1) day after
such notice shall have been accepted for delivery by the applicable overnight
delivery service. Notices given by personal service shall be deemed received on
the date of such personal service.
26. SUCCESSOR AND ASSIGNS. This lease shall bind and inure to the
benefit of the successors, assigns, heirs, executors, administrators and legal
representatives of the parties hereto. This provision shall not give Tenant by
implication any right to assign its rights or interest pursuant to this lease.
27. PERFORMANCE BY LANDLORD AND TENANT. If Tenant fails to perform
any of its obligations hereunder Landlord [Illegible]
which shall thereafter accrue, and shall not waive Landlord's right to assert
any other right, claim or cause of action. Acceptance by Landlord of rent from
Tenant during the existing of any default shall not constitute a waiver of such
default, or a waiver of the right of Landlord to insist upon Tenant's strict
compliance with the terms of this lease.
29. PARAGRAPH HEADINGS. The paragraph headings of this lease are
used for convenience only, and are in no way to be construed as a part of this
lease or as a limitation on the scope of the particular provision to which they
refer.
30. INVALIDITY; CONSTRUCTION. If any provision of this lease shall
be held to be invalid, whether generally or as to specific facts or
circumstances, the same shall not affect in any respect whatsoever the validity
of the remainder of this lease, which shall continue in full force and effect.
Any provision held invalid as to any particular facts and circumstances shall
remain in full force and effect as to all other facts and circumstances. This
lease has been drafted in mutual contribution of language and is not to be
construed against either party hereto as belong the drafter hereof or causing
the same to be drafted.
31. GOVERNING LAW. This lease and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the Commonwealth
of Virginia.
32. TIME IS OF THE ESSENCE. Time is of the essense in this lease and
of each and all of its provisions.
33. ENTIRE AGREEMENT. This lease, together with the attached
exhibits and riders, if any, contains the entire agreement of the parties
related to this transaction, supersedes all prior negotiations and agreements
and represents their final and complete understanding. This lease may not be
modified orally, through course of performance or in any manner other than by
agreement in writing, signed by the parties hereto.
IN WITNESS WHEREOF, this lease has been duly executed by the parties
hereto as of the date and year first above written.
LANDLORD By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Title: President/Managing Member
Date: 8/24/00
TENANT By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Title: CFO
Date: 8/24/00
