Exhibit 10.12
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE (the "LEASE") made 16th day of July, 1998, by and
between ANNANDALE FINANCIAL CENTER JOINT VENTURE, a Maryland General
Partnership, (hereinafter referred to as "LANDLORD"), and ONESOFT CORPORATION, a
DELAWARE Corporation, (hereinafter referred to as "TENANT").
WITNESSETH, that for and in consideration of the rent hereinafter reserved
and of the mutual covenants and agreements hereinafter set forth, Landlord and
Tenant do hereby mutually agree as follows:
PREMISES 1. Landlord does hereby lease to Tenant, and Tenant does
hereby lease from Landlord, for the term and upon the
covenants and conditions hereinafter set forth, the Premises
described as follows: Approximately FOUR THOUSAND FIVE
HUNDRED NINETY-FIVE (4,595) RENTABLE SQUARE FEET known as
Suite 460 located on the fourth floor of the Building known
as "ANNANDALE FINANCIAL CENTER", located at 0000 Xxxxxx
Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter
referred to as the "Premises").
TERM 2. (a) The term of this Lease shall commence on the earlier
of (i) the "Substantial Completion" of Landlord' s
construction of the Premises or (ii) September 1, 1998 (the
"LEASE COMMENCEMENT DATE"), and expiring FIVE (5) YEARS
after the Lease Commencement Date (the "EXPIRATION DATE").
The period commencing with the Lease Commencement Date (on
the first day of the next calendar month in the event the
Lease Commencement Date does not occur on the first day of a
month) and ending on the last day of the twelfth calendar
month thereafter shall constitute the first "Lease Year" as
such term is used herein. Each successive full twelve (12)
month period during the Lease Term shall constitute a "Lease
Year" and any portion of the Lease Term remaining after the
last twelve month period during said Lease term shall
constitute the last "Lease Year" for the purpose of this
lease.
(b) The term "Substantial Completion" shall mean that date
upon which construction of the improvements to the Premises
(as outlined in Paragraph 28. herein) have been
substantially completed and approved by local officials
having jurisdiction, subject only to normal punch list items
that will not materially or adversely interfere with
Tenant's business operations.
Notwithstanding anything herein to the contrary, Tenant
shall have the opportunity to enter the Premises during the
fifteen (15) day period prior to the Lease Commencement Date
for the purpose of installing computer, data, telephone and
television cable lines, special equipment, furniture,
fixtures, telephones and other personal property, providing
such early entrance does not unreasonably interfere with
Landlord's construction in
/s/ FH, SS
Premises. Any occupancy prior to the Lease Commencement Date
shall be pursuant to all the terms and conditions of this
Lease, except that rent shall not commence until the Lease
Commencement Date. Within fifteen (15) days after the Lease
Commencement Date, Landlord and Tenant shall execute a
Certificate of Commencement.
RENT 3. (a) During and for the Term hereof, commencing on the
Lease Commencement Date, Tenant covenants and agrees to pay
Landlord for the Premises, without notice or demand and
without deduction, set off or abatement, a fixed minimum
guaranteed base rent (hereinafter sometimes referred to as
the "BASE RENT") payable in monthly installments, in
advance, (hereinafter sometimes referred to as "MONTHLY BASE
RENT" ) as follows:
---------------------------------------------------------------
Lease Annual Base Monthly Base Rent Per Square
Year Rent Rent Foot
1 $ 91,900.00 $7,658.33 $20.00
2 96,495.00 8,041.25 21.00
3 101,319.75 8,443.31 22.05
4 106,385.74 8,865.48 23.15
5 111,705.02 9,308.75 24.31
---------------------------------------------------------------
Tenant shall pay all rent to Landlord at the office of
Landlord, or to such other party or at such other address as
Landlord may designate from time to time by written notice
to Tenant. Rent shall be paid on or before the first day of
each and every calendar month, without prior notice, during
the Term hereof, provided, however that the Monthly Base
Rent for the First month of the Term shall be payable upon
execution of this Lease.
(b) Tenant covenants and agrees to pay to Landlord a Late
Fee equal to FIVE percent (5%) of the Monthly Base Rent if
any such payment is not received by Landlord within TEN (10)
days of their due date. In addition, all delinquent payments
due Landlord, including but not limited to, rent and
additional rent, shall bear interest at the rate of TWO
percent (2%) per annum above the "Prime Rate" as published
by Wall Street Journal, New York, New York, as of the date
such payment became due, for the period beginning on the
date such payment became due to the date of payment thereof
by Tenant, provided, however, that nothing herein contained
shall be construed or implemented in such a manner as to
allow Landlord to charge or receive interest in excess of
the maximum rate then
2
allowed by law. All such late fees and interest charges
shall be deemed additional rent due hereunder and shall be
payable with the next installment of Monthly Base Rent.
OPERATING 4. INTENTIONALLY DELETED
EXPENSES AND
REAL ESTATE
TAXES
DELAYED 5. (a) If Landlord shall be unable to give possession of the
POSSESSION Premises on the Lease Commencement Date specified in Section
2 of this Lease for any reason, such failure to do so shall
not affect or impair the validity of this Lease or the
obligations of Tenant hereunder, except as expressly
provided herein, and Landlord shall not be subject to any
liability for damages for such failure to give possession on
said date. In such event, Landlord shall notify Tenant in
writing setting forth a new Lease Commencement Date as
specified in Section 2 of this Lease. Unless such delay is
due to the fault of Tenant, the Base Rent reserved and
covenanted to be paid herein shall not commence until the
date that possession of the Premises is given to Tenant, or
the Premises are available for occupancy by Tenant and
Tenant has been so notified by Landlord, whichever shall
first occur.
(b) If for any reason the Landlord shall be unable to give
possession of the Premises to Tenant more than TWO (2)
months after the Lease Commencement Date specified in
Section 2, then Tenant shall have the option to cancel this
Lease after such date by giving THIRTY (30) days' prior
written notice of such termination to the other party. If
Landlord shall tender possession of the Premises to Tenant
after Tenant has given notice such notice but prior to the
expiration of such THIRTY (30) day period, any notice given
by Tenant shall thereupon be nullified. Upon any such
cancellation becoming effective, Landlord and Tenant shall
be entirely relieved of the obligations hereunder, and any
security deposit given by Tenant to Landlord shall be
returned to Tenant.
USE OF 6. Tenant shall use and occupy the Premises solely as
PREMISES general office space, provided that such use(s) is in
accordance with applicable zoning and other local
governmental regulations. Without the prior written consent
of Landlord, the Premises shall not be used for any other
purposes or uses whatsoever. Tenant shall not use or occupy
the Premises for any unlawful purpose, and shall comply with
all present and future laws, ordinances, regulations, and
orders of the United States of America, Commonwealth of
Virginia, County of Fairfax, and any other public or
quasi-public authority having jurisdiction over the
Premises.
ASSIGNMENT 7. (a) Tenant shall not assign, transfer, mortgage, or
AND otherwise encumber this Lease, or sublet, rent, or permit
occupancy or use of the
3
SUBLETTING Premises, or any part thereof, without obtaining the prior
written consent of Landlord, which shall not be unreasonably
withheld, nor shall any subletting, assignment or transfer
of this Lease or the right of occupancy hereunder be
effected by operation of law or in any manner other than
with the prior written consent of Landlord. Any assignment
or subletting or transfer with or without Landlord's consent
shall not be construed as a waiver or release of Tenant from
liability hereinbefore the payments of rent or the
performances and observance of any of the terms and
conditions of this Lease. The collection or acceptance of
rent from any assignee, subtenant, or occupant shall not
constitute a waiver or release of Tenant from any covenant
or obligation contained in this Lease, nor shall any
assignment or subletting be construed to relieve Tenant from
the obligation to obtain the consent in writing of Landlord
to any further assignment or subletting.
(b) In the event that Tenant desires to assign or sublet all
or a portion of the Premises, Tenant shall give to Landlord
THIRTY (30) days written notice of Tenant's intention to do
same, the name, address and a current financial statement of
the proposed subtenant or assignee, and a copy of the
proposed assignment or sublease, specifying, among other
items, the proposed use, the term and the rent of the
proposed sublease or assignment. Within TEN (10) days after
receipt of said notice, Landlord shall give written notice
to Tenant, stating whether Landlord approves or disapproves
the proposed assignment or sublease, Tenant may sublet or
assign the Premises only after first obtaining the written
consent of Landlord, which consent shall not be unreasonably
withheld as set forth hereinabove.
(c) In the event that Tenant defaults hereunder, Tenant
hereby assigns to Landlord the rent due from any subtenant
or assignee of Tenant and hereby authorizes each such
subtenant or assignee to pay said rent directly to Landlord.
MAINTENANCE 8. Tenant shall keep the Premises, fixtures and equipment
BY TENANT therein in clean, safe sanitary and good order, will suffer
no waste or injury thereto, condition and will, at the
expiration or other termination of this Lease, surrender the
same, broom clean, in the same order and condition in which
they are on the Lease Commencement Date, ordinary wear and
tear excepted. Maintenance and repair of all equipment
and/or fixtures within or for the exclusive benefit of the
Premises, including, but not limited to, kitchen fixtures,
special air conditioning equipment, bathroom fixtures,
computers, or any other type of equipment or improvements,
together with related plumbing, electrical, or other utility
services, whether installed by Tenant or by Landlord on
behalf of Tenant, shall be the sole responsibility of
Tenant, and Landlord shall have no obligation in connection
therewith.
4
HOURS OF 9. The regularly scheduled hours of operation for Building
OPERATION shall be between EIGHT O'CLOCK (8:00 a.m.) to SIX O'CLOCK
(6:00 p.m.), Monday through Friday, and eight O'CLOCK (8:00
a.m.) to ONE O'CLOCK (1:00 p.m.) Saturday. Holidays on which
said water for the HVAC system shall not be provided except
at additional cost are: New Year's Day, Washington's
Birthday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day, and Easter Sunday. Such
holidays shall be observed on the dates on which the same
are observed by the federal government. If Tenant desires
air conditioning/heat and or other utilities or services
beyond the hours of operation as hereinabove set forth, and
of mutually satisfactory written agreements are made with
Landlord, or its agent, not less than TWENTY-FOUR (24) hours
in advance of the requirement, Landlord shall use its best
efforts to furnish such air conditioning/heating and/or
other utilities or services to tenant, and Tenant agrees to
pay Landlord the additional costs of such services in an
amount equal to ONE HUNDRED TEN percent (110%) of the total
direct costs of providing such additional services on an
overtime basis. Provided, however, that Landlord and its
agent shall not be liable for failure to furnish or for
suspension or delay in furnishing any or all of such
services caused by breakdown, maintenance or repair work,
strike, riot, civil commotion, or any other cause or reason
whatsoever beyond the control of Landlord.
Building Services. Throughout the Term, Landlord agrees that
-----------------
the Building will be maintained in a manner befitting a
first-class rental office building in the Annandale,
Virginia area and that it will furnish, or cause to be
furnished, the following services to the Premises and
Building, excluding emergency conditions beyond Landlord
control:
(a) Normal and usual cleaning and janitorial services after
5:00 p.m. on business days.
(b) Automatically operated elevator services TWENTY-FOUR
(24) hours a day, SEVEN (7) days a week, 365 days a year;
(c) All electric bulbs and fluorescent tubes in light
fixtures in the public areas of the Building and all
standard light bulbs and fluorescent tubes in the Premises;
(d) An intercom type security access system located at the
front door of the Building. Tenant shall be given access
cards into the Building 24 hours a day, 7 days a week, 365
days a year;
(e) Normal and usual maintenance of the life-safety systems,
the elevators, the Garage and all Building improvements and
facilities;
(f) Heating, ventilating and air-conditioning to the
Premises between
5
the hours of 8:00 a.m. and 6:00 p.m. on business days and
between the hours of 8:00 a.m. to 1:00 p.m. Saturday,
excluding holidays;
TENANT 10. (a) Tenant shall not make or permit anyone to make any
ALTERATIONS alterations, additions, or improvements, structural or
otherwise, or install any fixtures (hereinafter collectively
referred to as "Alterations"), in or to the Premises or the
Building without the prior written consent of Landlord. All
of such Alterations permitted by Landlord must conform to
all rules and regulations established from time to time by
the Underwriters' Association of the local area and by the
Landlord and conform to all requirements of the Federal,
State and local governments. Prior to the commencement of
work on any Alterations, the Landlord's written approval
must be obtained as to (i) the contractor(s) and
subcontractor(s) selected to perform such work, and (ii)
comprehensive plans and Specifications showing all the
proposed Alterations, including detailed descriptions of the
effect of the proposed Alterations on the mechanical and
electrical systems of the Building. Landlord shall have the
right to stop such work if the Landlord or its designated
agent determines that such work is not being done in a
workmanlike manner or in accordance with the plans and
specifications provided to Landlord. In such event, Tenant
shall promptly correct the problem(s) which give rise to the
work stoppage, and if Tenant fails to do so within a time
period determined by Landlord to be reasonable, then
Landlord may, at its sole option, correct such problem(s),
or complete the Alterations, or remove the Alterations and
restore the Premises to their original condition, and Tenant
shall be liable for the costs of such action as additional
rent. Copies of all plats, plans, sketches, permits,
samples, etc. which are prepared or obtained in the course
of such Alterations shall be provided to the Landlord or its
designated agent no later than TEN (10) days after such are
prepared or obtained. The Tenant agrees to pay to the
Landlord or its designated agent a reasonable inspection fee
and to allow inspection from time to time during the period
of construction of all Alterations. In addition, Tenant
agrees to furnish "as built" plans and specifications for
all Alterations within a reasonable period of time after
completion of Alterations, and to pay to Landlord, or its
designated agent, a reasonable fee for updating the master
reproducible Building blueprint to show the Alterations.
(b) Prior to commencing construction on any Alterations
approved by Landlord, Tenant agrees to obtain and deliver to
Landlord written and unconditional waivers of mechanic's and
materialman's liens upon the Property for all work, labor
and services to be performed and materials to be furnished,
by them in connection with such work, signed by all
contractors, subcontractors, materialmen, and laborers to
become involved in such work. If notwithstanding the
foregoing, any mechanic's or materialmen's lien is filed
against the Property for work claimed to have been done for,
or materials claimed to have been furnished to,
6
Tenant, such lien shall be discharged by Tenant within ten
(10) days thereafter, at Tenant's sole cost and expense, by
the payment thereof or by filing any bond required by law.
If Tenant shall fail to discharge any such mechanic's or
materialman's lien, Landlord may, at its option, its written
consent to Tenant's making any such Alterations, such
written consent shall not be deemed to be an agreement or
consent by landlord to subject Landlord's interest in the
Property to any mechanic's or materialman's liens which may
be filed in respect of any such Alterations Made by or on
behalf of Tenant .discharge the same and treat the cost
thereof and any legal expenses incurred in connection
therewith, as additional rent payable with the installment
of Monthly Base Rent next becoming due; it being hereby
expressly covenanted and agreed that such discharge by
Landlord shall not be deemed to waive or release the default
of Tenant in not discharging the same. It is understood and
agreed by Landlord and Tenant that any such Alterations
shall be constructed on behalf of Tenant. It is further
understood and agreed that, in the event Landlord shall give
its written consent to Tenant's making any such Alterations,
such written consent shall not be deemed to be an agreement
or consent by landlord to subject Landlord's interest in the
Property to any mechanic's or materialman's liens which may
be filed in respect of any such Alterations made by or on
behalf of Tenant.
(e) All Alterations, including wall-to-wall carpet and wall
covering, to, in or upon the Premises shall, unless the
Landlord elects otherwise, become the property of Landlord
and shall remain upon the Premises and be surrendered with
Premises at the expiration or termination of this Lease, or
any renewal or extension period, without disturbance,
molestation or injury. Should the Landlord elect that
Alterations made by the Tenant upon the Premises be removed
upon the expiration or termination of this Lease, or any
renewal period, the Tenant hereby agrees to cause same to be
removed at the Tenant's sole cost and expense, and to
restore the Premises to the original improved condition, on
or before the expiration or termination of this Lease or any
renewal period. Should Tenant fail to remove the same or
restore the Premises, the Landlord may cause same to be
removed and/or the Premises to be restored at the Tenant's
expense, and the Tenant hereby agrees to pay to the Landlord
the cost of such removal and/or restoration together with
any and all damages which the Landlord may suffer and
sustain by reason of the failure of the Tenant to remove the
same and/or restore the Premises as herein provided.
(f) If Tenant is not in default in the performance of any of
its obligations under this Lease, Tenant shall have the
right to remove, prior to the expiration of the Term of this
Lease, all movable equipment, furniture or furnishings which
are not affixed to the Premises or the Building and which
were installed in the Premises at the expense of Tenant. If
such property of Tenant is not removed by Tenant prior to
the
7
expiration or termination of this Lease, the same shall
become the property of Landlord and shall be surrendered
with the Premises as a part thereof, or, at Landlord's
option, Landlord may cause the same to be removed and the
Premises to be restored to their original improved
condition, and Tenant hereby agrees to pay to Landlord the
cost of such removal and restoration together with any and
all damages which Landlord may suffer and sustain by reason
of the failure of Tenant to remove the same and restore the
Premises or Building as herein provided.
ADVERTISING 11. Except as otherwise herein provided, Tenant agrees that
no sign, advertisement, display or notice shall be
inscribed, painted or affixed on any part of the outside or
inside of the Premises or Building, except on the
directories and doors of offices, and then only in such
size, color and style as the Landlord shall approve.
Landlord shall have the right to prohibit any advertisement,
or display of items of the Tenant, wherever display or
notice and may charge the Tenant for any costs incurred by
Landlord in connection with such removal.
DELIVERIES 12. No freight, furniture or other bulky matter of any
description shall be received into the Building or carried
in the elevators, except as approved by the Landlord. All
moving of furniture, material and equipment in the Building
outside the Premises must be with the prior written consent
of the Landlord and in accordance with Landlord's reasonable
rules and instructions; however, Landlord shall not be
responsible for any damage to, or charges for, moving the
same. Tenant agrees to remove promptly from the public
area(s) within or adjacent to the Building any of Tenant's
personal property there delivered or deposited. Landlord
shall have the right to prescribe the weight, method of
installation, and position of safes or other heavy fixtures
or equipment. All damage done to the Building by delivery,
maintaining or removal of any fixture or article of Tenant's
furniture or equipment, shall be repaired at the expense of
Tenant.
EQUIPMENT 13. Tenant shall not install or operate in the Premises any
electrically operated equipment or other machinery, except
typewriters, adding machines, copiers, personal computers,
and such other office machinery and equipment as is normally
used in the operation of Tenant's business, without
obtaining the prior written consent of Landlord, which shall
not be unreasonably withheld or delayed, but may be
conditioned upon the payment by Tenant of additional rent in
compensation for any excess consumption of water and/or
electricity as may result from the operation of said
equipment or machinery. Tenant shall not install any
equipment of any kind or nature which shall or may
necessitate changes, replacements, or additions to, or cause
an abnormal increase in its use of the water, plumbing,
heating, air conditioning, or electrical systems, which
serve the Premises, without the prior written consent of
Landlord. Such consent shall not be withheld unreasonably,
but may be conditioned
8
upon the payment of Tenant of the cost of such changes,
replacements, additions, or increased use. Notwithstanding
the foregoing, in the event that office equipment or
mechanical equipment used by Tenant in the Premises shall
cause noise or vibration that may be transmitted to any part
of the Building to such a degree as to be objectionable to
Landlord or any other tenant, Tenant shall install, at its
own expense, vibration eliminators or silencing devices
sufficient to eliminate such noise and/or vibration. Tenant
shall not install in the Premises any fixtures, equipment,
machinery, furniture or furnishings which place a load upon
the floor exceeding the designed floor load capacity.
INSPECTIONS; 14. Tenant agrees to allow Landlord, its agents or employees
ENTRY to enter the Premises at all reasonable times to examine,
inspect or protect the same; to prevent damage or injury to
the same and/or to any other portion of the Building; to
make such alterations, additions, improvements and repairs
to the Premises or adjacent portions of the Building as
Landlord may deem necessary or desirable; or to exhibit the
same to prospective tenants during the last SIX (6) months
of the Term of this Lease, or any renewal or extension
period, or to prospective purchasers of the Building or any
portion thereof at any time. None of the same shall be
construed as an eviction, actual or constructive. The rent
reserved shall not xxxxx while such alterations, additions,
improvements or repairs are being made, or because of such
inspections or exhibitions, whether by reason of loss or
interruption of Tenant's business or otherwise. Landlord
agrees to make all reasonable efforts to minimize any
disruption of Tenant's business by reason of such
activities. Landlord's right of entry for any purpose shall,
however, be subject to any State or Federal laws and
regulations that may currently enlist or may become
applicable because of any secret, confidential, or other
restricted activities carried on by tenant in the Premises.
INSURANCE 15. (a) Insurance Rating. Tenant will not conduct or permit
----------------
to be conducted any activity other than normal office
business nor will Tenant place any equipment in or about the
Premises or the Property which will, in any way, increase
the rate of property and casualty or other insurance on the
Property. If any increase in the rate of property and
casualty insurance or other insurance is stated by any
insurance company or by the applicable Insurance Rating
Bureau to be due to any activity or equipment of Tenant in
or about the Premises or the Property, such statements shall
be conclusive evidence that the increase in such rate is due
to such activity or equipment, and, as a result thereof,
Tenant shall be liable for such increase and shall reimburse
Landlord therefor upon demand. Any such sum due Landlord
shall be considered additional rent payable hereunder.
(b) Liability Insurance. Tenant shall carry public liability
-------------------
insurance with a company or companies licensed to do
business in the
9
Commonwealth of Virginia and rated not lower than Level A,
Class XII, as rated in the most recent edition of "Best's
Key Rating Guide" for insurance companies. Said insurance
shall cover all liability of Tenant and its authorized
representatives arising out of and in connection with
Tenant's use or occupancy of the Premises and the Property.
Said insurance shall be in minimum amounts set forth in the
rules and regulations established by Landlord from time to
time such amounts to be reasonable for Tenant's type of
business; a copy of the current rules and regulations is
attached hereto as Exhibit A. Said insurance shall name
Landlord, and the building management agency as additional
insured, as their interests may appear, and shall contain an
endorsement that said insurance shall remain in full force
and effect notwithstanding that the insured has waived his
right of action against any party prior to the occurrence of
a loss. A current Certificate of Insurance from such insurer
shall be delivered to Landlord's agent prior to the Lease
Commencement Date and renewals thereof shall be delivered to
Landlord's agent at least THIRTY (30) days prior to the
expiration of any such policy. Each policy shall contain an
endorsement that will prohibit its cancellation prior to the
expiration of THIRTY (30) days after written notice to
Landlord of such proposed cancellation.
(c) Waiver of Subrogation. Each party hereby waives, and
---------------------
shall have included in its liability insurance policies for
the Building and/or property insurance covering Tenant's
contents, furniture, furnishings, fixtures and other
property, appropriate clauses pursuant to which each party's
insurance carriers waive, all rights of subrogation against
the other party, its principals, agents and employees, with
respect to losses payable under such policies, or
appropriate clauses setting forth that such policies shall
not be invalidated should the insured waive in writing prior
to a loss any or all right of recovery against any party for
losses covered by such policies. If either party at any time
is unable to obtain inclusion of either of the clauses
described in the preceding sentence, then such party shall
have the other party named in such policies as an additional
insured, as their interests may appear. If either party
shall be named as an additional insured in accordance with
the foregoing provisions, and if the main insured shall not
be in default hereunder, and, if progress satisfactory to
Landlord is being made with regard to repairs to any damage
to the Premises or improvements therein, the additional
insured shall promptly endorse to the order of the main
insured, without recourse, any check, draft or order for the
payment of money representing the proceeds of any such
policy, or representing any other payment under such
policies, and the additional insured hereby irrevocably
waives any and all rights in and to such proceeds and
payments. Each party shall advise the other party promptly
as to the coverage or language of the clauses included in
its insurance policies pursuant to this paragraph and shall
notify the other party promptly of any cancellation or
change of the terms of any such policies which would affect
such clauses. All Certificates of Insurance
10
provided hereunder shall set forth the waiver of subrogation
provisions contained in the subject policy.
(d) Property and Casualty Insurance. Tenant covenants and
-------------------------------
agrees to maintain standard property and casualty insurance
covering its property located in, on or about the Premises.
Said insurance shall be replacement cost, all risk coverage
for all leasehold improvements other than the building
standard improvements. Tenant shall deliver a Certificate of
Insurance from its insurer to Landlord's agent prior to the
Lease Commencement Date, and renewals thereof shall be
delivered to Landlord's agent at least THIRTY (30) days
prior to the expiration of any such policy.
DAMAGES TO 16. All breakage, injury or damage to the Premises or to
PREMISES OR Property, including damage to carpeting, wall finishes, and
BUILDING other items of improvement thereto, in any way caused by
Tenant or its agents, employees, contractors, visitors,
guests and invitees, shall be repaired at the expense of the
Tenant, except those covered by standard fire and extended
coverage perils insurance. Landlord shall make, or cause to
be made, such necessary repairs, alterations and
replacements, structural, nonstructural or otherwise, and
any charge, costs or damages so incurred by the Landlord
shall be paid by the Tenant. Landlord shall be entitled to
regard such charges, costs or damages as additional rent,
payable with the installment of Monthly Base Rent next
becoming due under this Lease. This provision shall be
construed as an additional remedy granted to Landlord and
not in limitation of any other rights and remedies which
Landlord has or may have.
WAIVER OF 17. (a) Tenant's Property and Personal Injury. All personal
LIABILITY -------------------------------------
INDEMNITY property of Tenant (for the purposes of this Section, the
term "Tenant" shall include Tenant, its agents, employees,
contractors, visitors, guests and invitees) contained in the
Premises shall be and remain there at the sole risk of
Tenant. Landlord and/or its agents and employees shall not
be liable for any accident or damage to property of Tenant
resulting from the use or operation of elevators, heating,
cooling, electrical or plumbing apparatus, water, steam, or
any other cause; nor shall they be liable for any personal
injury to Tenant arising from the use, occupancy and/or
condition of the Premises or Property unless such injury
shall directly result directly from the gross negligence or
willful misconduct of Landlord; nor shall they be liable in
any event for any interruption or loss of Tenant's business.
Notwithstanding any other language contained herein,
Landlord and/or its agents and employees shall not be liable
to Tenant for any loss, damage or injury to person or
property, even if the same is caused by their negligence or
willful misconduct, to the extent that Tenant is compensated
therefore by Tenant's insurance.
11
(b) Tenant's Indemnity. Tenant shall indemnify and hold
------------------
Landlord and it's agents and employees harmless from all
loss, damage, liability, cost or expense incurred, suffered,
or claimed by any person or entity by reason of injury,
loss, or damage to any person, property or business
resulting from any default hereunder by Tenant, or from
Tenant's willful act, negligence or negligent or unlawful
use of the Premises or the Property or anything therein,
including but not limited to, water, steam, electricity, or
other facilities or equipment. Landlord and/or its agents
and employees assume no liability or responsibility
whatsoever with respect to the conduct and operation of the
business to be conducted by Tenant in the Premises, and
shall not be liable for any accident or injury to any person
or property which are caused by the conduct and operation of
Tenant's business. Tenant agrees to indemnify and hold
harmless Landlord, its agents and employees, against all
such claims.
BANKRUPTCY 18. All of the terms and provisions of this paragraph 18 are
made expressly subject to and governed by the provisions of
the United States Bankruptcy Code and the orders, rulings
and other determination of any bankruptcy court of
appropriate jurisdiction relating to the Tenant and/or this
Lease. Thus, any provision of this paragraph which is
contrary to or in any way inconsistent with the provisions
of the United States Bankruptcy Code or any order, ruling or
other determination of any bankruptcy court of appropriate
jurisdiction shall, be deemed invalid and of no force and
effect.
(a) In the event that Tenant shall become a Debtor under
Chapter 7 of the Bankruptcy Code, and the Trustee or Tenant
shall elect to assume this Lease for the purpose of
assigning the same or otherwise, such election and
assignment may only be made if all of the terms and
conditions of subsection (b) and subsection (d) of this
Section 18 are satisfied. If such Trustee shall fail to
elect or assume this Lease within sixty (60) days after the
filing of the Petition, this Lease shall be deemed to have
been rejected. Landlord shall be thereupon immediately
entitled to possession of the Premises without further
obligation to Tenant or Trustee, and this Lease shall be
canceled, but Landlord's right to be compensated for damages
in such liquidation proceeding shall survive.
(b) In the event that a Petition for reorganization or
adjustment of debts is filed concerning Tenant under
Chapters 11 and 13 the Bankruptcy Code, or a proceeding is
filed under Chapter 7 of the Bankruptcy Code and is
transferred to Chapter 11 or 13, the Trustee or Tenant, as
Debtor-In-Possession, must elect to assume this Lease within
SEVENTY-FIVE (75) days from the date of the filing of the
Petition under Chapters 11 or 13, or the Trustee or
Debtor-In-Possession shall be deemed to have rejected this
Lease. No election by the Trustee or Debtor-In-Possession to
assume this Lease, whether under Chapters 7, 11 or 13, shall
be effective unless each of the following conditions, which
12
Landlord and Tenant acknowledge are commercially reasonable
in the context of a bankruptcy proceeding of Tenant, have
been satisfied, and Landlord has so acknowledged in writing:
(1) The Trustee or the Debtor-in-Possession has cured,
or has provided Landlord adequate assurance (as defined
below) that:
(A) Within TEN (10) days from the date of such
assumption the Trustee will cure all monetary defaults under
this Lease; and
(B) Within THIRTY (30) days from the date of such
assumption the Trustee will cure all non-monetary defaults
under this Lease.
(2) The Trustee or the Debtor-in-Possession has
compensated, or has provided to Landlord adequate assurance
(as defined below) that within TEN (10) days from the date
of assumption, Landlord will be compensated for any
pecuniary loss incurred by Landlord arising from the default
of Tenant, the Trustee, or the Debtor-in-Possession as
recited in Landlord's written statement of pecuniary loss
sent to the Trustee or the Debtor-in-Possession.
(3) The Trustee or the Debtor-In-Possession has
provided Landlord with adequate assurance of the future
performance of each of Tenant's, Trustee's or
Debtor-In-Possession's obligations under this Lease;
provided, however, that:
(A) The Trustee or Debtor-In-Possession shall also
deposit with Landlord as security for the timely payment of
rent, an amount equal to THREE (3) months' base Rent and
other monetary charges accruing under this Lease; and
(B) If not otherwise required by the terms of this
Lease, the Trustee or Debtor-In-Possession shall also pay in
advance on the date Monthly Base Rent is payable,
ONE-TWELFTH (1/12) of Tenant's annual obligations under this
Lease for operating expenses real estate taxes, and similar
charges.
(C) The obligations imposed upon the Trustee or
Debtor-In-Possession shall continue with respect to Tenant
or any assignee of the Lease after the completion of
bankruptcy proceedings.
(4) The assumption of the Lease will not:
(A) Breach any provision in any other lease,
mortgage, financing agreement or other agreement by which
Landlord is bound
13
relating to the Building; or
(B) Disrupt, in Landlord's judgment, the tenant mix
of the Building or any other attempt by Landlord to provide
a specific variety of commercial tenants in the Building
which, in Landlord's judgment, would be most beneficial to
all of the tenants of the Building and would enhance the
image, reputation, and profitability of the Building.
(C) For purposes of this subsection (b), Landlord
and Tenant acknowledge that, in the context of a bankruptcy
proceeding of Tenant, at a minimum "adequate assurance"
shall mean:
(i) The Trustee or the Debtor-In-Possession has and
will continue to have sufficient unencumbered assets after
the payment of all secured obligations and administrative
expenses to assure Landlord that the Trustee or
Debtor-In-Possession will have sufficient funds to fulfill
the obligations of Tenant under this Lease, and to keep the
Premises stocked with inventory and properly staffed with
sufficient employees to conduct a fully-operational,
actively promoted business on the Premises; and
(ii) The Bankruptcy Court shall have entered an
Order segregating sufficient cash payable to Landlord and/or
the Trustee or Debtor-In-Possession shall have granted valid
and perfected first lien and security interest and/or
mortgage in property of Tenant, Trustee or Debtor-In-
Possession, acceptable as to value and kind to Landlord, to
secure to Landlord the obligation of the Trustee or Debtor-
In-Possession to cure the monetary and/or non-monetary
defaults under this Lease within the time period set forth
above.
(c) In the extent that this Lease is assumed by a Trustee
appointed for Tenant or by Tenant as Debtor-In-Possession
under the provisions of subsection (b) hereof and Thereafter
Tenant is liquidated of debts under Chapters 11 or 13 of the
Bankruptcy Code, then, and in either of such events,
Landlord may, at its option, terminate this Lease and all
rights of Tenant hereunder, by giving Tenant written notice
of its election to so terminate, by no later than THIRTY
(30) days after the occurrence of either of such events.
(d) If the Trustee or Debtor-In-Possession has assumed the
Lease pursuant to the terms and provisions of subsections
(a) or (b) herein, for the purpose of assigning (or elects
to assign) Tenant's interest under this Lease, or the estate
created thereby, to any other person, such interest or
estate may be so assigned only if Landlord shall acknowledge
in writing that the intended assignee has provided adequate
assurance as defined in this subsection (d) of future
performance of all of the terms, covenants
14
and conditions of this Lease to be performed by Tenant.
For purposes of this subsection (d), Landlord and Tenant
acknowledge that, in the context of a bankruptcy proceeding
of Tenant, at a minimum "adequate assurance of future
performance" shall mean that each of the following
conditions have been satisfied, and Landlord has so
acknowledged in writing:
(1) The assignee has submitted a current financial
statement audited by a Certified Public Accountant which
shows a net worth and working capital in amounts determined
to be sufficient by Landlord to assure the future
performance by such assignee of Tenant's obligations under
this Lease;
(2) The assignee, if requested by Landlord, shall have
obtained guarantees in form and substance satisfactory to
Landlord from one or more persons who satisfy Landlord's
standards of creditworthiness;
(3) Landlord has obtained all consents or waivers from
any third party required under any lease, mortgage,
financing arrangement or other agreement by which Landlord
is bound in order to permit Landlord to consent to such
assignment.
(e) When, pursuant to the Bankruptcy Code, the Trustee or
Debtor-In-Possession shall be obligated to pay reasonable
use and occupancy charges for the use of the Premises or any
portion thereof, such charges shall not be less than the
Base Rent as defined in this Lease and other monetary
obligations of Tenant for the payment of operating expenses,
real estate taxes, and similar charges.
(f) Neither Tenant's interest in the Lease, nor any lesser
interest of Tenant herein, nor any estate of Tenant hereby
created, shall pass to any trustee, receiver, assignee for
the benefit of creditors, or any other person or entity, or
otherwise by operation of law Under the laws of any state
having jurisdiction of the person or property of Tenant
(hereinafter referred to as the "state law") unless Landlord
shall consent to such transfer in writing. No acceptance by
Landlord of rent or any other payments from any such
trustee, receiver, assignee, person or other entity shall be
deemed to have waived, nor shall it waive the need to obtain
Landlord's consent of Landlord's right to terminate this
Lease for any transfer of Tenant's interest under this Lease
without such consent.
(g) In the event the estate of Tenant created hereby shall
be taken in execution or by other process of law, or if
Tenant or any guarantor of Tenant's obligations hereunder
(hereinafter referred to as the "guarantor") shall be
adjudicated insolvent pursuant to the provisions of
15
any present or future insolvency law under state law, or if
any proceedings are filed by or against the guarantor under
the Bankruptcy Code, or any similar provisions of any future
federal bankruptcy law, or if a Receiver or Trustee of the
property of Tenant or the guarantor shall be appointed under
state law by reason of Tenant's or the guarantor's
insolvency or inability to pay its debts as they become due
or otherwise, or if any assignment shall be made of Tenant's
or the guarantor's property for the benefit of creditors
under state law, then and in such event Landlord may, at its
option, terminate this Lease and all rights of Tenant
hereunder by giving Tenant written notice of the election to
so terminate within THIRTY (30) days after the occurrence of
such event.
As used in this Section 18, the term "Tenant" shall include
any surety or other guarantor of this Lease.
CASUALTY 19. In the event of damage by fire or other casualty to the
Premises or any part thereof, this Lease shall not be
terminated unless otherwise provided hereinafter, but
Landlord shall diligently proceed to repair and restore the
same. During the period that Tenant is deprived of the use
of the damaged portion of the Premises, provided that such
damage was not caused by the negligence or willful
misconduct of Tenant, its agents, employees, contractors,
visitors, guests or invitees, the rent for the remainder of
the Premises shall be that portion of the total rent which
the area remaining that can be occupied bears to the total
area of the Premises, so long as Tenant shall be able to
operate its business normally; if Tenant shall be unable to
operate its business normally, then rent shall be abated
during such period. If during the Term of this Lease the
Premises shall be so damaged by fire or other casualty as to
be untenantable, then unless said damage be repaired within
ONE HUNDRED TWENTY (120) days after said fire or other
casualty, either party, upon written notice to the other
party given at any time following the expiration of ONE
HUNDRED TWENTY (120) days thereafter, may terminate this
Lease, in which case the rent and additional rent shall be
apportioned and paid to the date of said fire or other
casualty. In the event that the Building is so severely
damaged or destroyed by fire or other casualty (although the
Premises may not be affected) that Landlord shall decide
within SIXTY (60) days following such event of casualty not
to rebuild or construct the Building, then Landlord shall
give written notice to Tenant and this Lease and the tenancy
hereunder shall terminate in accordance with such notice.
CONDEMNATION 20. (a) Tenant agrees that if the Premises or a substantial
part thereof shall be taken, or sold under the threat of
condemnation, for public or quasi-public use or purpose by
or to any competent authority, this Lease shall fully
terminate as of the date of any such taking. Tenant shall
have no claim against Landlord and shall have no claim or
right to any portion of the award which may be made to
Landlord as a result of any such
16
condemnation; all rights of Tenant to damages therefor, if
any, are hereby assigned by Tenant to Landlord. Upon such
condemnation or taking, the Term of this Lease shall cease
and terminate from the date of such taking or condemnation,
and Tenant shall have no claim against Landlord for the
value of any unexpired term of this Lease, leasehold
improvements, or good will. Notwithstanding the foregoing,
Tenant shall be free to pursue a separate claim against the
condemning authority for the depreciated value of its
leasehold improvements, provided that any award to Tenant
shall not result in a diminution of any award to Landlord.
(b) If less than a substantial part of the Premises is taken
or condemned, the rent for the remainder of the Premises
shall be that portion of the total rent which the area
remaining that can be occupied bears to the total area of
the Premises, effective on the date when title vests in such
governmental authority. The Lease shall otherwise remain in
full force and effect. For purposes hereof, a substantial
part of the Premises shall be considered to have been taken
if Tenant shall be unable to operate its business in its
normal and customary manner.
DEFAULT 21. (a) It is agreed that Tenant shall be in default if
Tenant shall fail to pay the rent (including any additional
rent) at the time the same shall become due and payable as
provided hereunder in Section 3(a) of this Lease, and Tenant
shall not cure such default within TEN (10) days after the
date due and payable for payment of such rent; or if Tenant
shall breach, violate, fail, or neglect to keep and perform
any of the other terms, covenants, or conditions herein
contained, or contained in the Building Instruments, and
Tenant shall not cure such breach within THIRTY (30) days
after written demand by Landlord therefor, or, if such
breach cannot reasonably be cured within such period, Tenant
shall fail to diligently attempt to cure such breach, or if
the Premises shall become vacant or abandoned (provided that
Landlord shall not construe any vacation or abandonment of
the Premises before the expiration of the Term hereof as a
default so long as Tenant continues to comply with all
covenants and conditions of the Lease).
(b) In the event of default by Tenant, then and in each such
case, Landlord may treat the occurrence of such event as a
breach of this Lease, and in addition to any and all other
rights or remedies of Landlord in this Lease or at law or in
equity provided, it shall be, at the option of Landlord,
without further notice or demand of any kind to Tenant or
any other person:
(i) The right of Landlord, even though it may have relet the
Premises as hereinbelow provided, to declare the Lease Term
ended and to re-enter the Premises and take possession
thereof and remove all persons therefrom, and Tenant shall
have no further claim thereon or thereto;
17
(ii) The right of Landlord to bring suit for the collection
of rent and other charges, as it accrues pursuant to the
terms of this Lease, and damages (including without
limitation reasonable attorneys' fees and the cost of
renovating the Premises) without entering into possession of
said Premises or canceling this Lease;
(iii) The right of Landlord to re-enter or retake possession
of the Premises from Tenant by summary proceedings or
otherwise and to remove, or cause to be removed, Tenant or
any other occupants from the premises in such manner as
Landlord shall deem advisable with or without legal process
and using self-help if necessary, and it is agreed that the
commencement and prosecution of any action by Landlord in an
unlawful detainer, ejectment or otherwise or any execution
of any judgment or decree obtained in any action to recover
possession of the Premises or any other re-entry and removal
shall not be construed as an election to terminate this
Lease whether or not such entry or re-entry be had or taken
under summary proceedings or otherwise, and shall not be
deemed to have absolved or discharged Tenant from any of its
obligations or liabilities for the remainder of the Term.
Tenant shall, notwithstanding any such entry or re-entry,
continue to be liable for the payment of rent and the
performance of the other covenants, conditions and
agreements by Tenant to be performed as set forth in this
Lease, and Tenant shall pay to Landlord all monthly
deficits, after any such reentry, in monthly installments as
the amounts of such deficits from time to time are
ascertained. In the event of any such ouster, Landlord shall
have the right but not the duty to rent or lease the
Premises to some other person, firm or corporation (whether
for a term greater or less than or equal to the unexpired
portion of the Term or whether the space leased by the new
lease includes more or less floor area than the Premises)
upon such terms and conditions and for such rental as the
Landlord may deem proper and to collect said rental and any
other rental that may thereafter become payable. In such
event, the rentals received by Landlord from such reletting
shall be applied: first, to the payment of any indebtedness
other than the rent due hereunder from Tenant to Landlord;
second, to the payment of any cost of such reletting
(including without limitations the making of any
alterations, repairs or decorations in the Premises which
Landlord deems advisable); third, to the payment of the cost
of any alterations and repairs to the Premises; third, to
the payment of rent due and unpaid hereunder, and the
residue, if any, shall be held by Landlord and applied in
payment of future rent as the same may become due and
payable hereunder. Should that portion of such rentals
received from such reletting during any month, which is
applied to the payment of rent hereunder, be less than the
rent payable during that month by Tenant hereunder, then
Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly; Tenant
shall have no right to any excess. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses,
including, but not limited to,
18
brokerage commissions and attorneys' fees, incurred by
Landlord in such reletting or in making such alterations and
repairs not covered by the rental received from such
reletting. Nothing herein contained shall be construed as
obligating the Landlord to relet the whole or any part of
the Premises whatsoever. In the event of any entry or taking
possession of the Premises as aforesaid, Landlord shall have
the right, but not the obligation, to remove therefrom all
or any part of the personal property located therein and may
place the same in storage at a public warehouse at the
expense and risk of the owner or owners thereof. The terms
"re-enter or "re-entry" as used in this Lease are not and
shall not be restricted to their technical meaning but are
used in their broadest sense.
(c) If Landlord elects to terminate this Lease under the
provisions set forth above, Landlord may recover from Tenant
as damages (all of which shall be immediately due and
payable from Tenant to Landlord), in addition to its other
remedies:
(i) Any unpaid rent, including interest thereon,
which is due and owing at the time of such termination; plus
(ii) That rent, including interest thereon, which
would have been earned after termination until the time of
judgment; plus
(iii) A sum representing liquidated damages and not
penalty in an amount equal to the excess of the Base Rent
for the Premises at the time of termination and the
additional rent provided for in Section 4 above for the year
in which this Lease shall be terminated multiplied by the
number of years and fraction of a year then constituting the
remainder of the Term hereof, over the rental value of the
Premises at the time of termination for such unexpired Term,
discounted at a rate of SEVEN percent (7%) per annum to
present value, less commissions, advertising, cost of
repairs and other expenses incidental to reletting of such
Premises.
Nothing herein contained shall limit or prejudice the right
of the Landlord to prove and obtain as liquidated damages in
any bankruptcy, insolvency, receivership, reorganization or
arrangement proceeding an amount equal to the maximum
allowed by any statute or rule of law governing such
proceedings and in effect at the time when such damages are
to be proved, whether or not such amount be greater, equal
to or less than the amount of the excess referred to in the
preceding sentence. In determining the rental value of the
Premises, the commercially reasonable rental realized by any
reletting accomplished or accepted by Landlord within a
reasonable time after termination of this Lease, shall be
deemed, prima facie, to be the rental value.
19
(iv) Any other amount necessary to compensate Landlord for
all the detriment directly caused by Tenant's failure to
perform its obligations under this Lease or which in the
ordinary course of things would be likely to result
therefrom including without limitation to cost of renovating
the Premises and reasonable attorneys' fees; plus
(v) At Landlord's election, such other amounts, in addition
to or in lieu of the foregoing, as may be permitted from
time to time by applicable law.
(d) In the event of default, all of the Tenant's fixtures,
furniture, equipment, improvements, additions, alterations,
and other personal property shall remain on the Premises and
in that event and continuing during the length of said
default, Landlord shall have the right to take exclusive
possession of same and to use the same, rent or charge free,
until all defaults are cured or, at its option, at any time
during the Lease Term, to require Tenant to forthwith remove
same. In connection with the foregoing, Landlord shall have
a lien upon the property of Tenant in the Premises during
the Lease Term for the amount of any unpaid rent or other
sum due from Tenant hereunder. Except upon expiration of
this Lease where no default exists in the payment of rent or
other sums due from Tenant hereunder, Tenant shall not
remove any of Tenant's property from the Premises without
the prior written consent of Landlord, other than pursuant
to sale thereof in the regular course of its business, and
Landlord shall have the right and privilege at its sole
option and discretion, to take possession of all property of
Tenant in the Premises, to store the same in said Premises,
or to remove it therefrom and store it in such place as may
be selected by Landlord, at Tenant's risk and expense, in
accordance with such lien and of any rights of distraint it
may possess against Tenant's said property.
(e) In the event of a breach or threatened breach by Tenant
of any of the covenants or provisions hereof, Landlord shall
have the right of injunction and the right to invoke any
remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not therein provided
for; and in such event Landlord shall be entitled to recover
from Tenant, payable as additional rent hereunder, any and
all reasonable expenses as Landlord may incur in connection
with its efforts to secure such injunctive relief or other
remedy at law or in equity, such as court costs and
attorneys' fees. Landlord and Tenant hereby expressly waive
trial by jury in any action, proceeding or counterclaim,
brought by either of them against the other, on any matter
whatsoever arising out of or in any way connected with this
Lease, their relationship as Landlord and Tenant, Tenant's
use and occupancy of the Premises and/or any claim of injury
or damage. If Landlord shall commence any proceeding for
non-payment of rent, or any other payment of any kind to
which Landlord may be entitled or which it may claim
hereunder, Tenant will not
20
interpose any counterclaim or set-off of whatever nature or
description in any such proceeding, the parties hereto
specifically agreeing that Tenant's covenants to pay rent or
any other payments required of it hereunder are independent
of all other covenants and agreements herein contained,
provided, however, that this shall not be constructed as a
waiver of Tenant's rights to assert such a claim in any
separate action brought by Tenant. Tenant further waives any
right of defense which may have to claim a merger, and
neither the commencement of any action or proceeding
settlement thereof nor entering of judgment shall bar
Landlord from bringing subsequent actions or proceedings
from time to time. Mention in this Lease of any particular
remedy shall not preclude Landlord from any other remedy at
law or in equity to which it may be entitled. Tenant hereby
expressly waives any and all rights of redemption granted by
or under any present or future laws in event of Tenant being
evicted or dispossessed for any cause, or in the event of
Landlord obtaining possession of the Premises by reason of
the violation by Tenant of any of the covenants and
conditions of this Lease, or otherwise.
(f) It is further provided that, if legal proceedings are
instituted hereunder, and a compromise or settlement thereof
shall be made, it shall not be constituted as a waiver of
any breach of any covenant, condition or agreement herein
contained.
(g) No payment by Tenant or receipt by Landlord of a lesser
amount than the Monthly Base Rent herein stipulated shall be
deemed to be other than on account of the earliest
stipulated rent then due, nor shall any endorsement or
statement on any check or any letter accompanying any check
or payment of rent be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice
to Landlord's right to recover the balance of such rent or
to pursue any other remedy.
(h) Should Tenant fail to pay rent (including any additional
rent) as and when the same is due, Landlord shall not be
required to wait until the expiration of the Term hereof to
xxx for Landlord's loss or damages, but shall have the right
to xxx from time to time to recover unpaid rent and other
damages as provided in this Lease. Landlord shall have the
option to declare the entire balance of the Base Rent
(including annual increases as provided herein) immediately
due and payable upon failure by Tenant to cure any default
within the time prescribed herein. Landlord shall have the
further option to defer action until the expiration of the
Term, in which event the cause of action shall not be deemed
to have accrued until the date of expiration. All rights and
remedies of Landlord under this Lease shall be cumulative
and shall not be exclusive of any other rights and remedies
provided to Landlord under applicable law.
21
(i) If, prior to the commencement of the Term of this Lease,
Tenant notifies Landlord of or otherwise unequivocally
demonstrates an intention to repudiate this Lease, Landlord
may, at its option, consider such anticipatory repudiation a
breach of this Lease. In addition to any other remedies
available to it hereunder or at law or in equity, Landlord
may retain all rent paid upon execution of the Lease and the
security deposit, if any, to be applied to damages of
Landlord incurred as a result of such repudiation,
including, without limitation, attorneys' fees, brokerage
fees, costs of reletting and loss of rent. It is agreed
between the parties that for the purpose of calculating
Landlord's damages, in a building which has other available
space at the time of Tenant's breach, Landlord shall have no
obligation to rent the Premises prior to other space in the
Building.
SUBORDINATION 22. This Lease is subject and subordinate to all ground or
underlying leases, if any, and to any deeds of trust which
may now or hereafter affect this Lease or the Property, and
to all renewals, modifications, consolidations, replacements
and extensions thereof. Notwithstanding the foregoing,
Tenant shall have the right to keep the Lease in full force
and effect so long as Tenant shall fully comply with all the
terms of this Lease. This clause shall be self-operative and
no further instrument of subordination shall be necessary to
effect the subordination of this Lease to the lien of any
such lease, mortgage or deed of trust. In confirmation of
such subordination, however, Tenant shall execute promptly
any such certificate or subordination agreement that
Landlord may request. Tenant hereby constitutes and appoints
Landlord as Tenant's attorney-in-fact to execute any such
certificate(s) for and on behalf of Tenant, said appointment
to be a power coupled with an interest and irrevocable
during the Term of this Lease. In the event of any
proceeding to terminate any ground or underlying lease, or
in the event of any proceeding for the foreclosure of any
mortgage or deed of trust to which this Lease is
subordinate, the ground lessor, purchaser, assignee or other
successor to Landlord's rights, shall have the option to
terminate or cancel this Lease; if this Lease is not so
terminated or canceled, Tenant shall attorn to the Lessor
thereunder or to the purchaser at the foreclosure sale.
Upon request and with reasonable notice from Tenant,
Landlord shall obtain a non-disturbance agreement on
Tenant's behalf from each existing Mortgagee (and any future
mortgagees upon request by Tenant) on such Mortgagees's
commercially reasonable standard form (and in recordable
form) agreeing that such Mortgagee or any purchaser in a
foreclosure sale shall recognize and be bound by the terms
of this Lease upon a foreclosure or deed in lieu thereof (as
long as no Event of Default exists hereunder).
HOLDOVER 23. If Tenant shall remain in the Premises, with the
knowledge and
22
PROVISIONS written consent of Landlord, after the expiration of the
Term of this Lease, or any renewal or extension thereof,
Tenant shall become a tenant from month to month at ONE
HUNDRED TEN PERCENT (110%) of the monthly rental for the
last month of the Lease Term, commencing on the first day
next after the Lease Expiration Date. Tenant shall give to
Landlord at least THIRTY (30) days written notice of any
intention to quit the Premises, and Tenant shall be entitled
to THIRTY (30) days written notice to quit except in the
event of default hereunder. All other terms and conditions
of this Lease shall remain in full force and effect.
Provided, however, that in the event that Tenant shall hold
over without Landlord's knowledge and consent, then at any
time prior to Landlord's acceptance of rent from Tenant as a
monthly tenant hereunder, Landlord, at its option, may
re-enter and take possession of the Premises without
process, or by any legal proceeds in force in the
jurisdiction in which the Building is situated.
SUCCESSORS' 24. It is agreed that all rights, remedies and liabilities
OBLIGATION hereunder given to or imposed upon either of the parties
hereto shall extend to their respective heirs, successors,
executors, administrators and assigns. This provision shall
not be deemed to grant Tenant any right to assign this Lease
or to sublet the Premises, except as set forth in Section 7
above. Tenant acknowledges Landlord might not be, now or in
the future, the owner of the fee interest in the Premises,
the Building and/or Land. The term "LANDLORD" as used in
this Lease is hereby defined to be only the then current
owner or mortgagee in possession of the Premises. In the
event of any sale or sales by the then current Landlord
hereunder to any party then, from and after the closing of
such sale or lease transaction, the Landlord whose interest
is thus sold or leased shall be and hereby is completely
released and forever discharged from and of all covenants,
obligations and liabilities of Landlord hereunder thereafter
accruing.
RULES AND 25. The Tenant covenants that the rules and regulations set
REGULATIONS forth in Exhibit A, attached hereto and incorporated herein
by reference, and such other and further rules and
regulations as the Landlord may make and furnish to the
Tenant, and which in Landlord's judgment are necessary or
appropriate for the general well-being, safety, care and
cleanliness of the Premises and the Building together with
the appurtenances, shall be faithfully kept, observed and
performed by Tenant, and by Tenant's agents, servants,
employees and guests unless waived in writing by the
Landlord. All such rules and regulations shall be enforced
in a consistent manner by Landlord against all tenants in
the Buildings. Any failure by Landlord to enforce any rule
or regulation against any party shall not be deemed a waiver
of such rule or regulation or of Landlord's further right to
enforce the same.
REPRESEN 26. Landlord's Covenants. Landlord covenants that it has the
--------------------
right to
23
TATIONS, make this Lease for the Term aforesaid, and that if Tenant
WARRANTIES shall pay the rent and performs all of the covenants, terms,
AND conditions, and agreements of this Lease to be performed by
COVENANTS OF Tenant, Tenant shall, during the Term, be able to freely,
LANDLORD peaceably and quietly occupy and enjoy the full possession
of the Premises without molestation or hindrance by Landlord
or any party claiming through or under Landlord, subject to
other provisions contained in this Lease.
(a) Landlord shall maintain during the term of this Lease,
all risk coverage for the Building in the amount of the full
replacement value thereof together with comprehensive
general liability insurance.
(b) Landlord represents and warrants to Tenant as follows:
To the best of Landlord's knowledge after due inquiry, no
governmental regulated hazardous or toxic substances have
been used, processed, released, discharged, generated,
treated, stored or disposed of on the Premises, the Building
or the land upon which the Building is located (the "Land")
and no hazardous or toxic substances currently exist on or
about the Premises, the Building or the Land and, to the
best of Landlord's knowledge, any adjacent property. In the
event Landlord becomes aware of any governmental regulated
hazardous or toxic substances that have been used,
processed, released, discharged, generated, treated, stored
or disposed of on the Premises, the Building or the land
upon which the Building is located (the "Land"), Landlord
shall remove or otherwise contain any such substances within
thirty (30) days after Landlord becomes aware of such
hazardous or toxic substances.
RESERVATIONS 27. Tenant hereby acknowledges that the Landlord retains the
OF RIGHTS OF following rights: (i) to change the street address and/or
ADDRESS name of the Building and/or name of the Building and/or the
arrangement and/or location entrances, passageways, doors,
doorways, corridors, elevators, stairs, toilets, or other
public parts of the Building and to make improvements,
alterations, additions, installations, eliminations and
changes to the Building, Land, parking facilities, or any
part thereof, provided that such changes do not unreasonably
interfere with Tenant's use and occupancy of the Premises or
conduct of its business (except in the event of an
emergency); (ii) to erect, use, and maintain pipes and
conduits in and through the Premises; (iii) to grant to
anyone the exclusive right to conduct any particular
business or undertaking in the Building; (iv) to install and
maintain signs on the Building and/or Land; and (v) have
passkeys to the Premises. Landlord may exercise any or all
of the foregoing rights without being deemed to be guilty of
an eviction, actual, or constructive, or a disturbance or
interruption of the business of Tenant or Tenant's use or
occupancy of the Premises.
CONSTRUCTION 28. Landlord's Standard Work. It is understood and agreed
OF LEASEHOLD ------------------------
that Tenant will take the Premises in "AS-IS" condition upon
commencement
24
IMPROVEMENTS of this Lease Agreement. All Leasehold Improvements existing
in the Premises upon occupancy of Tenant or made by or for
Tenant after commencement of any lease term with Landlord
shall remain as the sole property of the Landlord, and in no
event shall Tenant remove any Leasehold Improvements from
the Premises.
Landlord agrees that it will perform a reasonable turnkey
build-out for Tenant, at Landlord's sole cost and expense,
up to a maximum allowance of EIGHT AND 00/100 DOLLARS
($8.00) PER SQUARE FOOT, providing building standard work
using building standard specifications, materials and color
selections, in quantities necessary to build-out the
Premises substantially in accordance with Tenant's Plans,
which plans shall be mutually agreed upon by Landlord and
Tenant, and shall be attached hereto and made a part hereof
as Exhibit "B".
MECHANIC 29. Tenant shall not do, or suffer to be done, any act,
LIENS matter or thing whereby the Premises (or Tenant's interest
therein), or any part thereof, may be encumbered by any
mechanics' or materialmen's lien and/or any other lien or
encumbrance. Tenant shall discharge, within ten (10)
business days after the date of filing, any mechanic's, or
materialmen's or other liens filed against the Premises, or
Tenant interest therein, or any part thereof, purporting to
be for work or material furnished, or to be furnished, to
Tenant.
25
PARKING 30. Landlord agrees to provide for the use of Tenant in
common with others, a surface parking area adjacent to the
Building in which the Demised Premises are located. The
Landlord reserves the right to promulgate rules and
regulations relating to the use of such surface parking
area, including such limitations as may, in the opinion of
the Landlord, be necessary and desirable. Tenant and
Tenant's employees shall park their vehicles only in those
portions of the parking areas designated for employee
parking by the Landlord. Further, Tenant and its employees
are expressly prohibited from parking in any portion of the
parking area designated or marked for visitor parking only.
Tenant, shall within FIVE (5) days after taking possession
of the Demised Premises, furnish Landlord or its agent with
the vehicle license numbers assigned to Tenant's vehicles
and the vehicles of Tenant's employees, and shall thereafter
notify the Landlord or its agent of any changes within FIVE
(5) days after such changes occur. In the event that the
Tenant or any of its employees shall park their vehicles in
any portion of the parking area other than that portion
designated for that purpose, then the Landlord shall have
the right, at Landlord's option, to assess Tenant a fine or
penalty for any such improperly parked vehicle, and/or to
have any such improperly parked vehicle towed at Tenant's
expense. As an inducement to enter into this Lease
Agreement, Landlord agrees to assign SIX (6) parking spaces
in the parking lot of the Building specifically designated
for Tenant.
GENDER 31. Feminine or neuter pronouns shall be substituted for the
masculine form, and the plural shall be substituted for the
singular number, in any place or places herein in which the
context may require such substitution or substitutions.
Landlord and Tenant, as a matter of convenience, have been
referred to in neuter form.
NOTICES 32. All notices required or desired to be given hereunder by
either party to the other shall be hand delivered or given
by certified or registered mail, first-class postage
prepaid, return receipt requested. Notices to the respective
parties shall be addressed as follows:
To LANDLORD:
ANNANDALE FINANCIAL CENTER JOINT VENTURE
c/o Southern Management Corporation
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
To TENANT:
ONESOFT CORPORATION
ATTN: Xxxxx XxXxxxxx, IV, President
0000 Xxxxxx Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx XX 00000
26
Either party may, by like written notice, designate a new
address to which such notices shall be directed.
ESTOPPEL 33. Tenant agrees, at any time and from time to time, upon
CERTIFICATES not less than FIVE (5) days prior written notice by
Landlord, to execute, acknowledge and deliver to Landlord a
statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or if there have
been modifications, that the Lease is in full force and
effect as modified and stating the modification); (ii)
stating the dates to which the rent and any other charges
hereunder have been paid by Tenant; (iii) stating whether or
not to the best knowledge of Tenant, Landlord is in default
in the performance of any covenant; (iv) stating the address
to which notices to Tenant should be sent; and (v) any other
information as may be reasonably required. Any such
statement delivered pursuant hereto may be relied upon by
any owner of the Building or the Land; any prospective
purchaser of the Building or the Land, any mortgagee or
prospective mortgagee of the Building or the Land or of
Landlord's interest in either, or any prospective assignee
of any such mortgagee.
SECURITY 34. To secure the full faith performance by Tenant of all of
DEPOSIT the obligations, covenants, conditions and agreements to be
fulfilled, kept, observed, and performed by Tenant, Tenant
shall tender Landlord the sum of SEVEN THOUSAND SIX HUNDRED
FIFTY-EIGHT AND 33/100 DOLLARS ($7,658.33) which sum shall
be held as a security deposit ("SECURITY DEPOSIT") and
applied towards its damages and/or remedies in the event of
Tenant's default. Landlord's rights against Tenant in the
event of Default shall in no way be limited or restricted by
this security deposit. Upon the expiration of this Term (or
any renewal or extension thereof in accordance with this
Lease), Landlord shall, provided that tenant is not in
default under the terms hereof, return and pay back such
security deposit to tenant, less such portion thereof as
Landlord shall have appropriated to cure any default by
tenant with respect to any of Tenant's aforesaid
obligations, covenants, conditions and agreements and no
damages or expenses incurred by Landlord. In the event of
any default by Tenant hereunder, Landlord shall have the
right, but not the obligation, to apply all or any portion
of the Security Deposit to cure such default, in which
event, Tenant shall be obligated to promptly deposit with
the Landlord the amount necessary to restore the Security
Deposit to its original amount. In the event of the sale or
transfer of Landlord's interest in the Building, Landlord
shall have the right to transfer the Security Deposit to
such purchaser or transferee in which event Tenant shall
look only to the new Landlord for the return of the Security
Deposit and Landlord shall thereupon be released from all
liability to Tenant for the return of such Security Deposit.
GOVERNING 35. The parties agree that the laws of the Commonwealth of
Virginia
27
LAW shall govern the validity, performance and enforcement of
this Lease.
BROKERS 36. Landlord and Tenant each represent and warrant that
neither of them has employed any broker to negotiate the
terms of this Lease.
WAIVER OF 37. No delay in exercising or failure to exercise any right
BREACH or power hereunder by Landlord shall impair any such right
or shall be construed as a waiver of any breach or default,
or as acquiescence thereto. One or more waivers of any
covenants, terms or conditions of this Lease by Landlord
shall not be construed by the other party as a waiver of a
continuing or subsequent breach of the same covenant, term
or condition. The consent or approval by Landlord to or of
any act by Tenant of a nature requiring consent or render
unnecessary consent to or approval of any subsequent similar
act. No provision of this Lease shall be deemed to have been
waived by Landlord, unless such waiver be in writing signed
by Landlord.
SEVERABILITY 38. If any term or provision of this Lease or the
application thereof to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of
this Lease, or the application of such term or provision to
persons or circumstances other than to those as to which it
is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of the Lease shall be
valid and be enforced to the fullest extent permitted by
law.
CAPTIONS FOR 39. The titles of the sections and paragraphs throughout
CONVENIENCE this Lease are for convenience and reference only, and the
words contained therein shall be in no way held to explain,
modify, amplify or aid in the interpretation, construction
or meaning of the provisions of this Lease.
DUPLICATE 40. This Lease may be executed in one or more counterparts,
COUNTERPARTS AS each of which shall be an original, and all of which shall
ORIGINALS constitute one and the same instrument
ENTIRE 41. This Lease constitutes the entire agreement between the
AGREEMENT parties and no earlier statements or prior written matter
shall have any force or effect. Tenant is not relying on any
representations or agreements other than those contained-in
this Lease. This Lease shall not be modified or canceled
except by written instrument executed by both parties.
(SIGNATURES ON FOLLOWING PAGE.)
28
WITNESSETH the following signatures and seals:
WITNESS LANDLORD:
ANNANDALE FINANCIAL CENTER
JOINT VENTURE
a Maryland general partnership
/S/ Xxxxxx X. Xxxx By: /S/ Xxxxx X. Xxxxx
------------------ ------------------------------
Its: Agent
-----------------------------
Date July 20, 1998
-----------------------------
ATTEST TENANT:
ONESOFT CORPORATION
A Delaware corporation
/S/ Xxxx Xxxxxxxx By /S/ Xxxxxxxxx X. Xxxxxxx, III
----------------------------- -----------------------------
Corporate Secretary [SEAL]
Its Chief Financial Officer
-----------------------------
Date July 16, 1998
----------------------------
29
EXHIBIT A
RULES AND REGULATIONS OF THE BUILDING
The Tenant covenants that the following "RULES and REGULATIONS", and such
other and further Rules and Regulations as the Landlord may make and which in
the Landlord's judgement are needful for the general well being, safety, care
and cleanliness of the Premises and the building of which they are a part
together with their appurtenances, shall be faithfully kept, observed and
performed by the Tenant, and by his agents, servants, employees and guests
unless waived in writing by the Landlord.
a. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls or other parts of the Building not occupied by any
tenant shall not be obstructed or encumbered by any tenant or used for any
purpose other than ingress or egress to and from the Premises. Landlord shall
have the right to control and operate the public portions of the Building, and
the facilities furnished for the common use of the tenants, in such manner as
Landlord reasonably deems best for the benefit of the tenants generally. No
tenant shall permit the visit to the Premises of persons in such numbers or
under such conditions as to materially interfere with the use and enjoyment by
other tenants of the entrances, corridors, elevators and other public portions
or facilities of the Building.
b. No awning or other projections shall be attached to the outside walls of
the building, without the prior written consent of Landlord. Notwithstanding the
existing window coverings, no drapes, blinds, shades, or screens shall be
attached to or hung in, or used in connection with, any window or door of the
Premises, without the prior written consent of Landlord. Such awnings,
projections, curtains, blinds, screens or other fixtures must be of a quality,
type, design, and color, and attached in a manner approved by Landlord.
c. The doors leading to the corridors or main halls shall be kept closed
during business hours except as they may be used to ingress or egress. No
additional locks shall be placed upon any doors of the Premises, nor shall any
changes be made in existing locks or the mechanisms thereof; except that Tenant
shall have the right at its expense to install security locks on all entry doors
and fire doors opening into the Premises, and also on the doors to any offices
within the Premises, provided Tenant at the termination of its occupancy shall
provide Landlord all keys either furnished to, or otherwise procured by Tenant,
and in the event of the loss of any keys so furnished, Tenant shall pay to
Landlord the cost to replace. Tenant further agrees that, should Landlord so
require, Tenant will at its expense remove any additional locks which it
installed or caused to be installed, reinstall the original hardware, and repair
to Landlord's reasonable satisfaction a damage to doors or frames. Tenant agrees
to give access upon reasonable request to any such locked area(s).
d. Tenant -shall not construct, maintain, use or operate within the
Premises or elsewhere in the Building of which the Premises form a part or on
the outside of the Building, any equipment or machinery which produces music,
sound or noise which is audible beyond the Premises.
e. There shall be no marking, painting, drilling into or in any way
defacing any part of the Premises or the Building with the exception of affixing
wall decorations, shelving and like items within the Premises. No Tenant shall
throw anything out of the doors or windows or down the corridors or stairs.
f. The employees of the Landlord are prohibited as such from receiving any
packages or other articles delivered to the Building for the Tenant, and should
any such employee receive any such packages or articles, he or she in so doing
shall be the agent of the Tenant and not of the Landlord.
g. The water and wash closets and other plumbing fixtures shall not be used
for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein. All
reasonable costs for damages resulting from any misuse of the fixtures shall be
borne by the Tenant who1 in whose servants, employees, agents, visitors, or
licensees, shall have caused same.
h. No vehicles or animals, except for animals whose function is to assist
disabled persons, of any kind shall be brought into or kept in or about the
Premises or the Building, and no cooking shall be done or permitted by the
Tenant on the demised premises except in kitchens constructed as part of Tenant
Improvements. No Tenant shall cause or permit any objectionable odors to be
produced upon or emanate from the Premises.
i. Neither Tenant, nor any of Tenant's servants, employees, agents,
visitors or licensees, shall at any time bring or keep upon the Premises any
inflammable, combustible or explosive fluid, chemical or substance except normal
and customary office supplies.
j. Canvassing, soliciting and peddling in the Building is prohibited and
Tenant shall cooperate to prevent the same.
k. Any person employed by Tenant to do janitorial work within the Premises
must first obtain Landlord's consent and such person shall, while in the
Building and outside of said demised premises, comply with all instructions
issued by the superintendent of the Building.
l. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires.
m. Access plates to under floor conduits must be left exposed. Where carpet
is installed, carpet must be cut around access plates. Electric and telephone
floor distribution boxes must remain accessible at all times.
n. Tenant shall use reasonable efforts to adjust thermostat, if adjustable
to the setting which uses the least amount of energy upon leaving the Premises
daily.
o. Mats, trash, or other objects are not permitted in the public corridors.
p. Landlord and/or its parking contractor shall have the right to establish
reasonable rules and regulations for the use of all parking facilities at the
Building.
q. Landlord shall have the right to determine when Tenant may move its
property; i.e., furnishings, files, etc., into or out of the Premises. Tenant
shall request permission from Landlord for any such move, and shall abide by
Landlord's reasonable rules regarding any such move.
r. Tenant shall purchase and maintain comprehensive public liability and
property damage insurance on the Premises, protecting Landlord and Tenant
against loss, cost, or expense by reason of injury or death to persons or damage
to or destruction of property by reason of the use and occupancy of the Premises
by Tenant and its invitees, such insurance to be carried by reputable companies
and having limits of not less than $1,000,000.00 for injury to or death of any
one person, $1,000,000.00 for each accident and $1,000,000.00 for property
damage.
s. No tenant shall purchase spring water, ice, coffee, soft drinks, towels
or other like service, from any company or persons whose repeated violations of
the Building regulations have caused, in Landlord's opinion, a hazard or
nuisance to the Building and/or its occupants.
t. Landlord reserves the right to exclude from the Building at all times
any person who is not known or does not properly identify himself/herself to the
Building management or night watchman on duty. Landlord may at its option,
require all persons admitted to or leaving the Building between the hours of
6:00 P.M. and 8:00 A.M, Monday through Friday, and at all times on Saturdays,
Sundays and legal holidays, to register. Tenant shall be responsible for all
persons for whom he authorizes entry into or exit out of the Building, and shall
be liable to Landlord for all acts of such persons.
u. The Premises shall not be used for lodging or sleeping or for any
illegal purpose. The Premises shall never, at any time, be used for any immoral,
disorderly, unlawful or hazardous purposes nor for any other purposes than
hereinbefore specified; and will not manufacture any commodity therein.
v. Landlord shall not maintain suite finishes which are nonstandard, such
as kitchen appliances, wallpaper, special light, etc. However, should the need
for repairs arise, at Tenant's request, Landlord will arrange for the work to be
done at the Tenant's expense. Tenant shall have the right to select a contractor
for said repairs subject however to Landlord's reasonable approval.
w. No auction sales shall be conducted in the Building without Landlord's
consent.
x. No tenant shall use any other method of heating than that provided by
the Landlord without the Landlord's consent.
y. When reasonably necessary to control the climate, and upon request of
Landlord, Tenant shall keep window coverings closed at the appropriate time of
day to prevent direct solar penetration of the Premises.
Landlord agrees to advise Tenant in writing of any additions to, deletions
from, or changes in the foregoing Rules and Regulations. In the event that
Tenant is in violation of any Building rule or regulation, Landlord shall notify
Tenant in writing of the same, and shall allow Tenant a reasonable period of
time within which to comply with such rule and regulation.
Failure of Tenant to comply within such period of time shall constitute a
material default under the terms and conditions of this Lease.
