Page 1
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") made as of the _____ day of _______, 2003,
between Central United Life Insurance Company, a Texas corporation with its
principal place of business at Wortham Tower, 2727 Allen Parkway, Houston, Texas
sometimes hereinafter referred to as "Lessor" and GraphOn Corporation, a
Delaware corporation of 105 Cochrane Circle, Morgan Hill, CA 95037 sometimes
referred to herein-after as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor currently owns the entire five-story office building
containing 65,000 square feet located at 6 Loudon Road, Concord, New Hampshire,
on a parcel of land consisting of approximately 3.96 acres shown as Lot #2 on a
certain plan entitled "Survey for Earl Flanders, Location Concord, New
Hampshire" dated October 6, 1975, prepared by Rayco Engineering recorded at
Merrimack County Registry of Deeds as Plan #4160 (the "Premises");
WHEREAS, Lessor and Lessee desire that a portion of the 2nd floor of the
Office Building be leased to Lessee for its exclusive occupancy ("Lessee's
Quarters"), and that portions of the Office Building shall be used in common by
Lessee and other tenants ("Quarters Used in Common");
WHEREAS, portions of the Premises have been designed for the parking of
motor vehicles ("Parking Facilities"); and
WHEREAS, the Lessee's Quarters, Quarters Used in Common and Parking
Facilities are together hereinafter sometimes referred to as the "Leased
Premises".
NOW THEREFORE, in consideration of the covenants and agreements contained
herein, and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Term The initial term of this Lease shall be for a period of one (1)
year commencing on November 01, 2003 and ending October 31, 2004 payable on a
month to month basis. Lessee shall give Lessor a one (1) month advance written
notice of any changes in the lease within this term.
2. Leased Premises.
A. Lessee's Quarters. Lessor does hereby lease to Lessee for its
exclusive use the Lessee's Quarters which are designated by red
diagonal lines on the plan of the 2nd Floor Office Building (the "2nd
Floor Plan") attached hereto. The area so designated shall be
occupied exclusively by the Lessee.
B. Quarters Used in Common. Lessor grants to Lessee the right (i) to
use in common with Lessor and other tenants, the Quarters Used in
Common designated by green diagonal lines on the 2nd Floor Plan and
(ii) to use in common with other tenants, certain portions of the
Office Building necessary for access to Lessee's Quarters which shall
include, without limiting the generality of the foregoing, the common
hallway, stairways, stairwells, lobby, rest room facilities,
elevators and certain pipes, ducts, conduits and wires.
C. Parking Facilities. Lessee agrees that its use, and the use of the
Parking Facilities by its employees, agents and invitees, shall be
limited solely to the Parking Facility located directly south of the
Office Building and in accordance with the markings and use
restrictions generally applicable from time to time to the Parking
Facility. Lessor shall permit Lessee to use the driveways and
walkways for access to and from the Office Building.
D. Smoking Area. Lessee agrees that smoking is not permitted on the
Premises except in certain areas or facilities designated by Lessor
from time to time ("Smoking Area"). Lessee agrees that its use of the
Premises, and the use by its employees, agents and invitees, for
smoking shall be limited solely to the Smoking Area(s) designated
from time to time.
3. Base Rent. Lessee shall pay to Lessor annual rent in the amount of
($60,027.00) the "Base Rent", which Base Rent is calculated at Seventeen Dollars
($17.00) per square foot for Three Thousand Five Hundred and Thirty One (3,531)
square feet (except for any fractional months at the beginning and end of each
term which shall be prorated). Lessee shall make payments in equal monthly
installments of Five Thousand Two Dollars and Twenty Five Cents ($5,002.25)in
advance on the first day of each month.
4. Utilities. Lessor shall pay all utility charges with respect to the
Lessee's Quarters and Quarters Used in Common (except telephone charges) and
shall at its expense provide heat, water, interior lighting, air conditioning
and electricity for Lessee's Quarters in quantities reasonably appropriate for
standard office occupancy.
5. Repairs, Cleaning and Other Services. Lessor shall at its own expense
maintain in good repair and state of cleanliness the Office Building (including
without limitation, the roof, exterior walls, foundation, doors and windows, and
utility systems) the walkways, driveways, Parking Facilities and the Quarters
Used in Common, including without limiting the generality of the foregoing, all
plumbing and air conditioning, elevators, and standpipe fire prevention system.
Lessor shall maintain the unattended elevator service and remove snow from the
Parking Facilities, driveways and walkways.
6. Condition of Lessee's Quarters. Lessee shall at its own expense
maintain the Lessee's Quarters in good repair and state of cleanliness. Lessee,
accompanied by Lessor, may enter the Lessee's Quarters in advance of the term of
this Lease for the purpose of inspection. Lessee may install in the Lessee's
Quarters at its own expense fixtures, equipment, window coverings, furnishings
and other effects for the purpose of decorating the interior of the Lessee's
Quarters.
7. Right of Entry. The Lessor may enter Lessee's Quarters for the
reasonable purposes, such as but not limited to, the making of repairs or
renovations to, or the showing of the Lessee's Quarters to prospective tenants,
at any reasonable time during normal business hours and upon 24 hours prior
notice and in a manner that does not interfere with Lessee's use thereof.
8. Restrictions. Lessee agrees that it shall not permit any portion of the
Lessee's Quarters to be used (i) so as to cause unreasonable noise or other
nuisance; (ii) so as to consume unreasonable amounts of heat, electricity or
water; or (iii) for the conduct of activities involved in the promotion,
distribution or sale of alcohol, tobacco, gambling or pornographic materials or
activities, (iv) for the performance of medical or related procedure for
abortion or euthanasia; (v) for the use, storage, generation, transportation or
disposal of hazardous waste; or (vi) for the conduct of any acts prohibited by
law. Lessee shall not make or permit to be made any structural alteration,
improvement or addition in or to the Lessee's Quarters unless approved in
writing by the Lessor or sublease Lessee's Quarters or assign this Lease without
Lessor's consent, which consent shall not be unreasonably withheld. Lessor's
consent to any such assignment or sublease shall not be deemed a waiver with
regard to the requirement for its consent to any future assignment or subleases.
9. Eminent Domain or Destruction. If the Leased Premises or any
substantial portion thereof shall be taken by the exercise of the right of
eminent domain or shall be destroyed or damaged by fire, water or other
unavoidable casualty or by action of any public authority, or shall suffer any
direct consequential damage for which Lessor and Lessee, or either of them,
shall be entitled to compensation by reason of anything done in pursuance to any
public or other authority during this Lease or any extension thereof, then this
Lease shall terminate at the election of either party hereto which election may
be made, whether or not Lessor's entire interest has been divested; and if
neither party shall so elect, then in case of such taking, destruction or damage
rendering the premises unfit for use and occupation, a just proportion of said
rent according to the nature and extent of the injury shall be abated until the
Leased Premises, or in the case of a partial taking that portion which may
remain thereof, shall have been put by Lessor at its sole cost and expense in
proper condition for use and occupation. Lessor reserves and excepts all rights
to damages to the Leased Premises by reason of anything lawfully done in
pursuance of any public or other authority; and by way of confirmation, Lessee
grants to Lessor all Lessee's rights to such damages and covenants to execute
and deliver such further instruments of assignment thereof as Lessor may from
time to time request. Lessor or Lessee shall give the other party notice of its
decision to terminate this Lease within ninety (90) days after any such
occurrence giving rise to such party's right to so terminate. If the Lease is
not terminated, Lessor shall promptly commence to restore the Leased Premises.
10. Waste. Lessee agrees that it will not suffer any waste on the Leased
Premises and that it will peaceably quit and deliver to Lessor the Lessee's
Quarters when required to do so under the terms of this Lease in as good order
and condition, reasonable wear and tear and unavoidable casualties excepted, as
the same were delivered to Lessee on the date hereof.
11. Default and Termination. If Lessee shall neglect or fail to make any
rental payment within ten (10) days after its due date or if Lessee shall fail
to cure (or to commence to cure) a default in the performance of any of the
other of Lessee's covenants within thirty (30) days after date of notice of such
default by Lessor, or if Lessee, having commenced to cure a default within the
thirty (30) days period, shall fail to complete the curing of the default
without unreasonable delay, Lessor lawfully may immediately or any time
thereafter and without demand or notice or the necessity of compliance with any
statute in any manner relating to summary process, enter the Lessee's Quarters
and repossess the same and expel Lessee and those claiming through or under
Lessee and remove their effects forcibly if necessary, without being deemed
guilty of any manner of trespass and without prejudice to any rights or remedies
Lessor may be entitled to in law or at equity. Upon such entry all rights of
Lessee under this Lease shall terminate. Lessor shall have all rights described
herein and this Lease shall also terminate if (i) the leasehold hereby created
shall be taken on execution or by other process of law, (ii) any assignment
shall be made of Lessee's property for the benefit of creditors, (iii) a
receiver, guardian, conservator, trustee in bankruptcy or similar officer shall
be appointed by a court of competent jurisdiction to take charge of all or part
of Lessee's property, or (iv) Lessee commits any act of bankruptcy, or if a
petition is filed by Lessee under any bankruptcy or insolvency law and the same
shall not be dismissed within thirty (30) days from the date upon which it is
filed. Lessee covenants that if the Lease is terminated, Lessee shall be liable
to Lessor for payment of a sum equal to the amount of the rent and other
payments called for hereunder for the remainder of the original term and any
extensions thereof, less any amounts received by Lessor as a result of Lessor's
lease of the Lessee's Quarters to a third party. Lessor shall make reasonable
efforts to lease the Lessee's Quarters at rent equal to the prevailing local
rate. In addition, Lessee shall pay Lessor's expenses, including, but not
limited to, court costs and attorneys' fees, incurred in enforcing any
obligation of this Lease with which Lessee has not complied.
12. Indemnification. Lessee shall indemnify and save Lessor harmless from
any and all liability, loss, damage, expenses, causes of action, suits, claims
or judgments arising from loss of life, injury to person or property resulting
from or based upon the actual injury to person or property resulting from or
based upon the actual or alleged use, operation, delivery to or transportation
from any or all of the Leased Premises or their location or condition, except
for any such liability arising from Lessor's acts of negligence; or from any
loss or damage from Lessee's failure to perform its obligations under this
Lease; and shall, at its own cost and expense, defend any and all suits which
may be brought against Lessor, either alone or in conjunction with others, upon
any such liability or claim or claims and shall satisfy, pay and discharge any
and all judgments and fines that may be recovered against Lessor, and pay
Lessor's expenses, including reasonable attorneys' fees, incurred in enforcing
any obligation of this Lease which has not been complied with by Lessee. In
alike manner, the lessor shall indemnify and hold harmless the Lessee from any
and all liability and claims which are the lessor's responsibility and shall pay
all expenses, including reasonable attorney's fees, to defend and or settle
claims which are judged the responsibility of the Lessor.
13. Successors. The conditions, agreements, covenants and provisions
contained herein shall extend to and be binding upon the successors and assigns
of Lessor and Lessee; provided, however, that Lessee shall not assign this Lease
or sublease the Lessee's Quarters without written consent of Lessor. No "for
lease" sign or advertisement of any type shall be placed by Lessee on the
Premises without the advance written consent of Lessor, which consent may be
withheld by Lessor in Lessor's absolute discretion. No sublease rental amount
below the then current standard price quoted by Lessor for comparable space
shall be publicized by Lessee or shall be communicated by Lessee to any real
estate agent or broker.
14. Notices. All notices which may be given under the terms of this
instrument shall be in writing and, if mailed, shall be sent by registered or
certified mail, return receipt required, or by a nationally recognized express
delivery service, to the respective parties at the addresses shown below or to
such other address as the parties have notified each other of by such written
notice.
Central United Life Insurance Company GraphOn Corporation
ATTENTION: Douglas G. Noyes ATTENTION: William D. Swain, CFO
6 Loudon Road, Suite 503 105 Cochrane Circle
Concord, NH 03301 Morgan Hill, CA 95037
15. Entire Agreement. This Lease contains the entire agreement between the
parties and may be amended only by a written instrument executed by the parties
to this Lease.
IN WITNESS WHEREOF, Central United Life Insurance Company, Lessor,
and GraphOn Corporation, Lessee, have executed this Lease in original
counterparts on the date written above.
Witness:
CENTRAL UNITED LIFE INSURANCE CO., LESSOR
By:_____________________________________
Douglas G. Noyes
Its: Duly authorized individual
Witness:
GRAPHON CORPORATION, LESSEE
By:______________________________________
William D. Swain
Its: CFO
STATE OF NEW HAMPSHIRE
County of Merrimack
The foregoing instrument was acknowledged before me this _____,day of
______________, 2003 by Douglas G. Noyes, duly authorized individual of Central
United Life Insurance Company.
- ---------------------------------------------
Justice of the Peace/Notary Public
STATE OF CALIFORNIA
County of ___________
The foregoing instrument was acknowledged before me this _____ day of
______________, 2003 by William D. Swain, CFO of GraphOn Corporation.
- ---------------------------------------------
Justice of the Peace/Notary Public