Exhibit 10.8
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") made as of the 10th day of September, 1998,
between CML Realty Corp. , a New Hampshire corporation with its principal place
of business at 6 Loudon Road, Concord, Merrimack County, New Hampshire,
sometimes hereinafter referred to as "Lessor" and Corel Inc. referred to
hereinafter as "Lessee or "Tenant."
W I T N E S S E T H:
WHEREAS, Lessor currently owns the entire five-story office building
containing 61,956 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" or "Office
Building");
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 five (5)
years commencing an October 15, 1998 and ending October 31, 2003.
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.
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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 can 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 parkings 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 Two
Hundred and Eight Thousand Dollars ($208,000.00) the "Base which Base Rent is
calculated at Sixteen Dollars ($16.00) per square square foot for Thirteen
Thousand (13,000) 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 Seventeen Thousand Three Hundred Thirty Three
Dollars and Thirty Three Cents ($17,333.33) in advance on the first day of each
month.
4. ADDITIONAL RENT. Commencing as of January, 1, 2000 and each year
thereafter on the anniversary date thereof, Lessee agrees to Day Lessor as
additional rent a sum equal to Twenty Percent (20%) of the if any, by which the
cost to Lessor for (i) real estate taxes for the Premises for the tax year
beginning April 1, 1999, and (ii) water, heating, and electricity for the
Premises actually consumed during the calendar year ending on the immediately
preceding December 31, 1999 is greater than the individual cost to the Lessor
for the like items for the tax year beginning April 1, 1995 and for actual
consumption during the calendar year ending December 31, 1998.
Lessee's share of the additional rent shall be calculated by Lessor for
each rental year as soon as all of the foregoing costs become Lessee's share
shall be prorated in
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accordance with the portion of the preceding calendar year during which this
Lease was in effect. Lessee shall pay the additional rent, if applicable, for
each calendar year within thirty (30) days of Lessee's receipt of written notice
by Lessor of the amount of suh additional rent due. Lessor shall provide upon
written request by Lessee copies of the bills for real estate taxes, water,
heating and electricity.
5. UTILITIES. Subject to reimbursement by Lessee pursuant to Paragraph 4
herein, 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.
6. REPAIRS, CLEANING AND OTHER SERVICES. Lessor shall at its own expense
maintain in good repair and state of cleanliness the Office (including without
limitation, the roof, exterior walls, foundation, doors and windows, and utility
systems) the walkwavs, 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 retention system. Lessor
shall maintain the unattended elevator service and remove snow from the Parking
Facilities, driveways and walkways.
7. 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 ii 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. Such items that Lessee installs shall remain property of Lessee
throughout the Term of this Lease and upon expiration or termination therein.
7A. LEASEHOLD IMPROVEMENTS, Lessor shall be responsible for all Leasehold
Improvements as mutually agreed between Lessor and Lessee including but not
limited to:
- demolition of existing fit-up
- carpet and base replacement
- complete construction of office environment as per specifications
- quality ceiling tiles and appropriate placement of lighting grid
- electrical requirements as per specifications
- HVAC installation and balancing as per specifications
- any other work necessary to meet Building Code requirements.
("Leasehold Improvements")
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(i) All Leasehold Improvements must be substantially completed in
accordance with the specifications mutually agreed upon by both
parties by no later than October 15, 1998.
(ii) Fixturing Period. Lessee may enter premises, rent free, on October 7,
1998 for installation of voice and data cabling and any other
equipment to establish a normal working environment.
(iii) If Leasehold Improvements are not completed by October 15, 1998,
Lessee has the right to occupy the Lessee's quarters rent free until
such time as Leasehold Improvements are completed.
8. 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.
9. 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 pornography 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.
10. 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
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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 t:o such party's right to so terminate. If the Lease is not terminated,
Lessor shall promptly commence to restore the Leased Premises.
11. 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.
12. DEFAULT AND TERMINATION. 1) If Lessee shall neglect or fail to make any
rental payment within thirty (30) days after its due date provided that Lessee
is given a reasonable opportunity to cure such default, 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 terminate this agreement. Lessor shall have all rights described
herein and this Lease shall also terminate if (i) the leasehold hereby created
shaIl be taken on execution or by other process of law, (ii) any assignment
shaIl 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
raze. In addition, Lessee shall pay Lessor's expenses, including, but not
limited to, court costs and
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attorneys' fees, incurred in enforcing any obligation of this Lease with which
Lessee has not complied. 2) Not withstanding any other provisions in this
contract and provided that notice is given no earlier than April 30, 2001,
either party may terminate this agreement by providing a six (6) month prior
written notice to the other party.
13. 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.
14. 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, such
consent not to be unreasonably withheld. 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. Lessor shall
provide to Lessee no less than ninety (90) days written notice of any assignment
of this Lease.
15 . 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 or by facsimile, confirmation receipt required.
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CML Realty Corp. Corel Corporation
ATTENTION: Douglas G. Noyes ATTENTION: Director, Facility Management
6 Loudon Road, Suite 503 1600 Carling Ave.
Concord, NH 03301 Ottawa, Ontario K1Z 8R7 Canada
Copy to Corel's Legal Department
Fax No. 603-224-1795 Fax No. 613-725-2691
16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties concerning the subject matter and supersedes all prior
statements, representations, discussions, negotiations land and agreements both
oral and written and embodies the entire agreement between Lessor and Lessee and
may not be modified, changed or altered in any way except in writing by
authorized signing officers of each party.
17. SUBORDINATION TO MORTGAGES. This Lease is subordinated to mortgages in
favor of The Penn Mutual Life Insurance Company and Christian Mutual Life
Insurance Company, as recorded in Merrimack County Registry of Deeds and to any
subsequent mortgages. The Lessee shall, when requested, promptIy execute and
deliver any such instrument as may be reasonably necessary or helpful to
evidence the subordination of this Lease to any such mortgages and/or to permit
additional assignment of Lessor's rights herein. Tenant's subordination and
obligations hereunder shall be conditioned upon Lessor's delivery to tenant of a
non-disturbance agreement from each such mortgage holder.
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IN WITNESS WHEREOF, CML Realty Corp., Lessor, and Corel Inc., Lessee, have
executed this Lease in original counterparts on the date written above.
Witness: CML REALTY CORP., LESSOR
By:
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Douglas G. Noyes
Its: Duly authorized individual
Witness: COREL INC, LESSEE
By:
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Michael O'Reilly
Its: Vice President Finance, CFO,
Treasurer
By:
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Mitch Desrochers
Its: Controllers
STATE OF NEW HAMPSHIRE
County of Merrimack
The foregoing instrument was acknowledged before me this14th day of
September, 1998 by Douglas G. Noyes, duly authorized individual of CML Realty
Corp.
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Justice of the Peace/Notary Public
The foregoing instrument was acknowledged before me this 10th of September,
1998 by Michael O'Reilly, Vice President Finance, CFO, Treasurer and Mitch
Desrochers, Controller of Corel Inc.
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Justice of the Peace/Notary Public
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