SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 24, 2002
DIALYSIS CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 0-8527 59-1757642
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1344 Ashton Road, Hanover, Maryland 21076
----------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 694-0500
ITEM 5. OTHER EVENTS
The Company's wholly-owned subsidiary, DCA of Chevy Chase, LLC, entered
into a lease agreement with BRE/Metrocenter LLC for its proposed new dialysis
facility in Bethesda, Maryland. The lease provides the dialysis center with
approximately 4,200 square feet of space and will commence upon completion of
the construction of the facility, but no later than November 1, 2002. The lease
is for ten years, with one five-year renewal option. The Company has guaranteed
the rental payments for the first two years of the lease. This new dialysis
center will be the Company's first in Maryland.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
None
(b) Pro Forma Financial Information
None
(c) Exhibits
(10) Material Contracts
(i) Lease Agreement between DCA of Chevy Chase, LLC and
BRE/Metrocenter LLC and Guaranty of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DIALYSIS CORPORATION OF AMERICA
/s/ Stephen W. Everett
By ---------------------------------
STEPHEN W. EVERETT, President
Dated: September 24, 2002
LAWRENCE E. JAFFE
ATTORNEY AT LAW
777 Terrace Avenue
Hasbrouck Heights, NJ 07604
(201) 288-8282
FAX (201) 288-8208
September 25, 2002
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Dialysis Corporation of America Current Report on Form 8-K
Commission File No. 0-8527
Gentlemen:
Enclosed for filing pursuant to the EDGAR system is the aforementioned
Company's Current Report on Form 8-K with exhibit pursuant to the requirements
of the Securities Exchange Act of 1934.
Very truly yours,
/s/ Lawrence E. Jaffe
Lawrence E. Jaffe
LEJ:nac
Enclosure
cc: Nasdaq Stock Market, Inc.
BASIC LEASE INFORMATION
Lease Date: August _____, 2002
Tenant: DCA of Chevy Chase, LLC, a Maryland limited liability
company
Tenant's Address: c/o Dialysis Corporation of America
1344 Ashton Road, Suite 201
Hanover, Maryland 21076
Contact: Attn: Stephen Everett Telephone: (410) 694-0500
Landlord: BRE/Metrocenter LLC
Landlord's Address: 345 Park Avenue
New York, New York 10154
Managing Agent: Realty Management Company Telephone: (301) 657-8386
Managing Agent's 3 Bethesda Metro Center, Suite 600
Address: Bethesda, Maryland 20814
Premises:
Suite No. B005 in the office building (the "Building")
located in Montgomery County, Maryland, known as 3 Bethesda
Metro Center, Bethesda, Maryland 20814 (the "Land"). The
Premises are outlined on the plan attached to the Lease as
Exhibit A.
Rentable Area of 4,211 square feet, some of which may be common areas
the Premises: or areas to be used in common with others.
Term: 20 months, commencing upon the earlier to occur of:
completion of "Tenant's Work" (as defined in Section 31
below), or November 1, 2002 (the "Commencement Date"), and
ending on the last day of the tenth (10th) lease year.
Basic Monthly $9,825.67 per month, which is based on $28.00 per
Rent: square foot of rentable area, as adjusted annually in
accordance with Section 4(b).
Security Deposit: $9,825.67
Permitted Use: Outpatient dialysis center and related office use.
Tenant's 1.24%, which is the percentage obtained by dividing (a)
Proportionate the square feet of rentable area in the Premises by (b) the
square feet of rentable area of office space in the
Building, subject to adjustment.
Broker: Realty Management Company
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD: BRE/METROCENTER LLC, a Delaware limited
liability company
By: BRE/Metro Member LLC, a Delaware
limited liability company, its Manager
By: /s/ Karen Sprogis
Name: KAREN SPROGIS
Title: Vice President
TENANT: DCA OF CHEVY CHASE, LLC, a Maryland limited
liability company
By: /s/ Stephen W. Everett
Name: STEPHEN W. EVERETT
Title: President
<BTB>
TABLE OF CONTENTS
Page No.
1. DEFINITIONS AND BASIC PROVISIONS . . . . . . . . . . . . . . . . . 1
2. LEASE GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
(a) Rent and Other Charges. . . . . . . . . . . . . . . . . . .1
(b) Adjustment of Rent. . . . . . . . . . . . . . . . . . . . . 2
5. DELINQUENT PAYMENT; HANDLING CHARGES . . . . . . . . . . . . . . . 4
6. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . .4
(a) Good Faith Deposit. . . . . . . . . . . . . . . . . . . . . 4
(b) Security Deposit. . . . . . . . . . . . . . . . . . . . . . .4
7. LANDLORD'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . .5
(a) Services. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Excess Utility Use. . . . . . . . . . . . . . . . . . . . .5
(c) Discontinuance. . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Restoration of Services; Abatement. . . . . . . . . . . . .6
IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE . . . . . . . . .6
(a) Improvements; Alterations. . . . . . . . . . . . . . . . . . 6
(b) Repairs; Maintenance. . . . . . . . . . . . . . . . . . . . .6
(c) Performance of Work. . . . . . . . . . . . . . . . . . . . .6
(d) Mechanic's Liens. . . . . . . . . . . . . . . . . . . . . . .6
(e) Indemnification. . . . . . . . . . . . . . . . . . . . . . . .7
9. USE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
(a) Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
(b) Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Environmental Protection. . . . . . . . . . . . . . . . . . .8
(d) Indemnification. . . . . . . . . . . . . . . . . . . . . . . .8
10. ASSIGNMENT AND SUBLETTING. . . . . . . . . . . . . . . . . . . . .8
(a) Transfers; Consent. . . . . . . . . . . . . . . . . . . . .8
(b) Cancellation. . . . . . . . . . . . . . . . . . . . . . . . .9
(c) Additional Compensation. . . . . . . . . . . . . . . . . . .9
11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY. . . . . . . . . . . . 9
(a) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Waiver of Negligence Claims; No Subrogation. . . . . . .9
(c) Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Conduct of Business. . . . . . . . . . . . . . . . . . . 10
12. SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE. . . . 10
(a) Subordination. . . . . . . . . . . . . . . . . . . . . . . .10
(b) Attornment. . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Notice of Default. . . . . . . . . . . . . . . . . . . . 11
(d) New Financing. . . . . . . . . . . . . . . . . . . . . . . 11
(e) Financial Statements. . . . . . . . . . . . . . . . . . . .11
(f) Assignment of Rents. . . . . . . . . . . . . . . . . . . .11
13. RULES AND REGULATIONS. . . . . . . . . . . . . . . . . . . . . . .11
14. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. FIRE OR OTHER CASUALTY. . . . . . . . . . . . . . . . . . . . . . 12
(a) Damage to Premises. . . . . . . . . . . . . . . . . . . . .12
(b) Substantial Damage. . . . . . . . . . . . . . . . . . . . . .12
(c) Insurance Proceeds. . . . . . . . . . . . . . . . . . . . . .12
16. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
17. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 13
18. REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
19. PAYMENT BY TENANT; NON-WAIVER. . . . . . . . . . . . . . . . . . .14
(a) Payment by Tenant. . . . . . . . . . . . . . . . . . . . . .14
(b) No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 14
20. LANDLORD'S CURE OF DEFAULT BY TENANT REIMBURSEMENT OF EXPENSES 14
21. LANDLORD'S LIEN. . . . . . . . . . . . . . . . . . . . . . . . . . .14
22. SURRENDER OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . .15
23. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
24. CERTAIN RIGHTS RESERVED BY LANDLORD. . . . . . . . . . . . . . . .15
25. SUBSTITUTION SPACE. . . . . . . . . . . . . . . . . . . . . . . . . .16
26. MANAGING AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
27. NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
28. WAIVER OF COUNTERCLAIM AND TRIAL BY JURY. . . . . . . . . . . . 17
29. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
(a) Landlord Transfer. . . . . . . . . . . . . . . . . . . . . . 17
(b) Landlord's Liability. . . . . . . . . . . . . . . . . . . . .17
(c) Parking. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(d) Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . .18
(f) Estoppel Certificates. . . . . . . . . . . . . . . . . . . . 18
(g) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(h) Separability. . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) No Representations by Landlord. . . . . . . . . . . . . . .18
(j) Landlord's Approval. . . . . . . . . . . . . . . . . . . . . 18
(k) Authority. . . . . . . . . . . . . . . . . . . . . . . . . . .18
(l) Amendments; and Binding Effect. . . . . . . . . . . . . . .19
(m) Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . 19
(n) Joint and Several Liability. . . . . . . . . . . . . . . . 19
(o) Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(p) No Merger. . . . . . . . . . . . . . . . . . . . . . . . . . 19
(q) No Offer. . . . . . . . . . . . . . . . . . . . . . . . . . .19
(r) Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(s) Entire Agreement. . . . . . . . . . . . . . . . . . . . . . .19
(t) No Partnership. . . . . . . . . . . . . . . . . . . . . . . .19
(u) Applicable Law. . . . . . . . . . . . . . . . . . . . . . . .19
30. SPECIAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . .19
ii
LIST OF DEFINED TERMS
Page No.
---------
Act. . . . . . . . . . . . . . . . . . . . . .6
ADA. . . . . . . . . . . . . . . . . . . . . .5
AS-IS. . . . . . . . . . . . . . . . . . . F-1
Basic Cost . . . . . . . . . . . . . . . . . .2
Basic Lease Information. . . . . . . . . . . .1
Basic Monthly Rent . . . . . . . . . . . . . .1
Building . . . . . . . . . . . . . . . . . . .i
Collateral . . . . . . . . . . . . . . . . . 11
Commencement Date. . . . . . . . . . . . . . .i
Event of Default . . . . . . . . . . . . . . 10
Financing Party. . . . . . . . . . . . . . . .9
First Trust. . . . . . . . . . . . . . . . . .8
Guarantor. . . . . . . . . . . . . . . . 1, J-1
Initial Basic Cost . . . . . . . . . . . . . .3
Initial Liability Insurance Amount. . . . . . 7
Land . . . . . . . . . . . . . . . . . . . . .i
Landlord . . . . . . . . . . . . . . . . 1, J-1
Lease. . . . . . . . . . . . . . . . . . 1, C-1
Loss . . . . . . . . . . . . . . . . . . 7, C-1
Parking Garage . . . . . . . . . . . . . . . 14
Rent . . . . . . . . . . . . . . . . . . . . 2
Substitution Effective Date. . . . . . . . . 12
Substitution Notice. . . . . . . . . . . . . 12
Substitution Space . . . . . . . . . . . . . 12
Taking . . . . . . . . . . . . . . . . . . . .9
Tenant . . . . . . . . . . . . . . 1, C-1, J-1
Transfer . . . . . . . . . . . . . . . . . . .6
UCC. . . . . . . . . . . . . . . . . . . . . 11
WMATA. . . . . . . . . . . . . . . . . . . . .1
iii
LEASE
THIS LEASE AGREEMENT (this "Lease") is entered into as of August ___, 2002,
between BRE/Metrocenter LLC, a Delaware limited liability company ("Landlord"),
and DCA OF Chevy Chase, LLC, a Maryland limited liability company ("Tenant").
1. DEFINITIONS AND BASIC
The definitions and basic provisions set forth in the Basic PROVISIONS
Lease Information (the "Basic Lease Information") executed by Landlord and
Tenant contemporaneously herewith are incorporated herein by reference for all
purposes.
2. LEASE GRANT
Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant
leases from Landlord, the Premises in its as-is condition. Despite the
foregoing, Landlord, at Landlord's sole cost and expense, shall demolish the
interior of the Premises in accordance with demolition plans that are mutually
acceptable to Landlord and Tenant. Landlord agrees to commence such demolition
work within fourteen (14) days after the date the Lease is fully exected.
3. TERM; EXTENSION TERM
(a) If the Commencement Date is not the first day of a calendar month, then
the Term shall be extended by the time between the Commencement Date and the
first day of the next calendar month. If this Lease is executed before the
Premises become vacant or otherwise available and ready for occupancy by Tenant,
or if any present occupant of the Premises holds over and Landlord cannot
acquire possession of the Premises before the Commencement Date or if Landlord
is unable to deliver possession of the Premises to Tenant on the Commencement
Date for any other reason, other than for Tenant's delay as specified herein,
then (a) Tenant's obligation to pay Rent hereunder shall be waived until
Landlord tenders possession of the Premises to Tenant, (b) the Term shall be
extended by the time between the scheduled Commencement Date and the date on
which Landlord tenders possession of the Premises to Tenant (which date will
then be defined as the Commencement Date), (c) Landlord shall not be in default
hereunder or be liable for damages therefor, and (d) Tenant shall accept
possession of the Premises when Landlord tenders possession thereof to Tenant;
provided however, that if Landlord has not tendered possession of the Premises
to Tenant one year after the Commencement Date, then Landlord may terminate this
Lease by written notice to Tenant. In such event, Landlord shall refund any
security deposit and advance rental payment theretofore paid by Tenant, and the
parties shall thereupon be relieved of any and all liability hereunder. By
occupying the Premises, Tenant shall be deemed to have accepted the Premises in
their condition as of the date of such occupancy. Tenant shall execute and
deliver to Landlord, concurrently with the delivery of the Premises, Exhibit C,
confirming (i) the Commencement Date, (ii) that Tenant has accepted the
Premises, and (iii) that Landlord has performed all of its obligations with
respect to the Premises. The first "lease year" during the term hereof shall be
the period commencing on the Commencement Date and terminating on the last day
of the twelfth (12th) full calendar month after the Commencement Date. Each
subsequent "lease year" during the term hereof (including any extensions or
renewals) shall commence on the date immediately following the last day of the
preceding lease year, and shall continue for a period of twelve (12) full
calendar months, except that the last lease year during the term hereof shall
terminate on the date this Lease expires. In the event that the Lease Term has
not commenced within three (3) years after the date specified as the
Commencement Date in the Basic Lease Information, then this Lease shall
automatically terminate at the expiration of such three (3) year period,
whereupon the parties shall thereupon be relieved of any and all further
liability hereunder.
(b) Provided that (i) this Lease shall be in full force and effect, and
(ii) Tenant shall not then be in default, and (iii) Tenant shall then be
occupying one hundred percent (100%) of the Premises, Tenant shall have the
right, at Tenant's sole option, to extend the Lease for one (1) consecutive
additional period of five (5) years (such additional period being herein
referred to as an "extension term", if exercised, and included in the definition
of the Term). The extension term shall be on the same terms, covenants and
conditions as set forth herein with respect to the original term of this Lease,
except that the minimum annual rent payable during the extension term shall be
determined pursuant to Section 3(c) below. In the event Tenant shall wish to
exercise the option to extend, it shall give written notice of such exercise to
Landlord, not less than three hundred sixty-five (365) days prior to the
expiration of the then-current term. If Tenant shall fail to exercise such said
option to extend, Landlord shall be relieved of any and all liability created by
the grant of such option.
(c) During the first lease year of the extension term, if exercised,
minimum annual rent shall be computed as an amount equal to the greater of (a)
the minimum annual rent payable during the last lease year of the immediately
preceding term, or (b) the then-prevailing fair market rent for the Premises.
Landlord and Tenant shall employ the procedure and the timetable described below
for the purpose of computing the fair market rent for the Premises and the
minimum annual rent properly payable during the first lease year of the
extension term. In the event Landlord and Tenant are unable to agree upon the
current fair market rent payable during the first lease year of the extension
term within sixty (60) days of Landlord's receipt of Tenant's notice to extend,
then the fair market rent for the first lease year of the extension term shall
be determined by a board of three (3) disinterested real estate appraisers, one
(1) of whom shall be named by Landlord, one (1) by Tenant, and the two (2) so
appointed shall select a third. Said appraisers shall each be practicing
appraisers in Montgomery County, Maryland, specializing in the field of
commercial real estate, having no less than ten (10) years experience in such
field, recognized as ethical and reputable within their field, and certified as
MAI or an equivalent professional certification. Landlord and Tenant agree to
make their appointments promptly within ten (10) days after the expiration of
the sixty (60) day period, or sooner if mutually agreed upon. Within fifteen
(15) days after both such appraisers have been appointed, the two (2) appraisers
shall promptly select a third appraiser. Within fifteen (15) days after the
third appraiser is selected, each appraiser shall submit his or her
determination of said fair market rent for the first lease year of the extension
term. Subject to the first sentence of Section 3(c) hereof, the minimum annual
rent for the first lease year of the extension term shall be the average of the
three (3) determinations; provided, however, that if two of the appraisers are
within five percent (5%) of each other and the third appraiser is not within
five percent (5%) of either of the other two appraisals, then the average of the
two appraisals which are within five percent (5%) of each other shall be used.
In arriving at their individual rate determinations, each appraiser shall
consider and analyze all the components of the Lease and apply them to current
market factors. Landlord and Tenant shall pay the fee of the appraiser selected
by it and they shall equally share the payment of the fee of the third
appraiser. Notwithstanding the foregoing, Landlord and Tenant may at any time
after appointing the appraisers, agree upon the minimum annual rent payable
during the first lease year of the extension term and such mutual agreement
shall supersede the appraisers' determinations. Commencing on the first day of
the second lease year of the extension term, and continuing on the first day of
each lease year thereafter, the minimum annual rent then in effect shall be
increased by multiplying the then minimum annual rent by one hundred three
percent (103%).
4. Rent
(a) Basic Monthly Rent.
(i) Tenant covenants and agrees to pay to Landlord for the Premises,
without previous notice or demand therefor, and without deduction, set-off
or abatement, a minimum annual rent, subject to adjustment as provided in
Paragraph 4(a)(iii) below, in the amount of One Hundred Seventeen Thousand
Nine Hundred Eight and 00/100 Dollars ($117,908.00) payable in equal
monthly installments, in advance, of Nine Thousand Eight Hundred
Twenty-Five and 67/100 Dollars ($9,825.67) (hereinafter referred to as the
"BASIC MONTHLY RENT"), on the first day of each and every calendar month
during the term hereof, with the first such monthly installment to be paid
at the time of execution of this Lease. Basic Monthly Rent for any partial
month shall be prorated at the rate of one-thirtieth (1/30th) of the Basic
Monthly Rent per day.
2
(ii) The minimum annual rent for the first lease year as provided in
Paragraph 4(a)(i) above is calculated on a basis of Twenty-Eight and 00/100
Dollars ($28.00) per square foot of rentable area in the Premises.
Commencing on the first day of the Second lease year, and continuing on the
first day of each lease year thereafter, minimum annual rent shall be
increased by multiplying the then applicable minimum annual rent by 103%,
as set forth below.
(iii) Pursuant to Section 4(a)(ii) above, commencing on the first day
of the second lease year, the minimum annual rent shall increase as
follows:
Period Minimum Annual Rent Basic Monthly Rent
Lease Year 2 $121,445.24 $10,120.44
Lease Year 3 $125,088.59 $10,424.05
Lease Year 4 $128,841.24 $10,736.77
Lease Year 5 $132,706.47 $11,058.87
Lease Year 6 $136,687.66 $11,390.64
Lease Year 7 $140,788.28 $11,732.36
Lease Year 8 $145,011.92 $12,084.33
Lease Year 9 $149,362.27 $12,446.86
Lease Year 10 $153,843.13 $12,820.26
(b) Ground Rent: Landlord pays minimum annual ground rent to the Washington
Metropolitan Area Transit Authority "WMATA"WMATA) for the land underlying the
Bethesda Metro Center development, which includes the office building, the
hotel, the parking facility and the food court/retail arcade. WMATA is entitled
to additional percentage rent equal to 7.5% of Gross Income (as defined in the
land lease between WMATA and Landlord) in excess of $31,000,000 per annum,
calculated on a calendar year basis for total annual ground rent. Accordingly,
Tenant covenants and agrees to pay to Landlord as additional rent during the
term of the Lease a sum (in addition to the Basic Monthly Rent and any other
charges provided for herein) equal to Tenant's pro rata share of any increase in
ground rent payments to WMATA allocable to Gross Income generated by the office
building and food court/retail arcade over the amount paid by Landlord for the
calendar year preceding the Commencement Date of this Lease. If in any calendar
year there is no increase in the amount paid to WMATA over the amount paid for
the calendar year preceding the Commencement Date, then Tenant shall not be
entitled to any refund nor to any credit for future years. For purposes of this
paragraph, Tenant's pro rata share shall be determined as a fraction, with the
numerator being the rentable area of the Premises set forth in this Lease, as
may be increased by additional space or expansion space leased by Tenant, and
the denominator being the total rentable area in the office building and food
court/retail arcade. Any increases in additional percentage rent shall be
prorated for fractional portions of any calendar year during the term of the
Lease. Tenant agrees to pay Landlord its share of the increases in additional
percentage rent payments for each year during the term hereof within thirty (30)
days after Tenant receives an invoice setting forth Tenant's pro rata share.
Copies of payments made to WMATA shall be accepted by the Tenant as conclusive
evidence of the amount of said additional percentage rent payments.
(c) Operating Expenses. Tenant shall pay to Landlord, as additional rent,
Tenant's pro rata share of any increase in the "Basic Cost" (as hereinafter
defined) over the "Initial Basic Cost" (as hereinafter defined). "Basic Cost,"
as that term is used herein, shall consist of all operating expenses of the
Building and shall consist of all expenditures to maintain all facilities in the
operation of the Building and such additional facilities in subsequent years as
may be determined by Landlord to be necessary. The term "operating expenses" as
used herein shall mean all expenses, costs and disbursements (but not
replacement of capital investment items or specific costs billed to and paid by
specific tenants) of every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the ownership and operation of
the Building, including but not limited to, the following:
3
(1) Wages and salaries of all employees engaged in on-site property
management, and in operating and maintenance or security of the
Building, including taxes, insurance and benefits relating thereto.
(2) All supplies and materials used in operation and maintenance or
security of the Building.
(3) Cost of all utilities including surcharges for the Building, including
the cost of water, sewer, power, heating, lighting, air conditioning
and ventilating for the Building.
(4) Cost of all maintenance and service agreements for the Building and
the equipment therein, including but not limited to, security and
energy management services, window cleaning, elevator maintenance and
janitorial service.
(5) Cost of all insurance relating to the Building, including the cost of
casualty and liability insurance applicable to the Building and
Landlord's personal property used in connection therewith.
(6) Cost of repairs and general maintenance (excluding repairs and general
maintenance paid by proceeds of insurance or by Tenant or other third
parties).
(7) Property management costs, including a management fee for the manager
of the Building.
(8) The costs of any additional services not provided to the Building at
the lease commencement date but thereafter provided by Landlord in the
prudent management of the Building.
(9) The cost of any capital improvements or alterations made to the
Building after the lease commencement date that reduce other operating
expenses or are required under any governmental law or regulation that
was not applicable to the Building at the time it was constructed,
such cost thereof to be amortized over such reasonable period as
Landlord shall determine together with interest on the unamortized
balance at the rate of twelve percent (12%) per annum or such higher
rate as may have been paid by Landlord on funds borrowed for the
purpose of constructing said capital improvements.
(10) Real Estate taxes and special assessments levied or assessed on the
land and on the building improvements of which the demised premises is
a part.
The "Initial Basic Cost" is stipulated to be the actual operating
expenses incurred for the Building during the calendar year in which the
Commencement Date occurs, per square foot of rentable area of the Building. In
the event that the actual Basic Cost for any lease year during the term of this
Lease exceeds the Initial Basic Cost set out above, Tenant shall pay its
proportionate share of the year's increases in the Basic Cost for such year over
the Initial Basic Cost. Notwithstanding any other provision herein to the
contrary, it is agreed that in the event the Building is not fully occupied
during any calendar year, an adjustment shall be made in computing the Basic
Cost for such year so that the Basic Cost shall be computed for such year as
though the Building had been ninety-five (95%) percent occupied during such
year. In the event that specific tenants are billed directly for certain
charges normally covered under operating expenses, Tenant's pro rata share will
be appropriately adjusted.
(d) Additional Rent Estimates and Adjustments.
(i) In order to provide for current monthly payments of additional
rent, from time to time Landlord shall submit to Tenant a written statement
of Landlord's estimate of the amount of the increases described in Sections
4(b) and 4(c) above, together with the amount of Tenant's additional rent
which is estimated to result from such increases. Tenant shall pay each
month one-twelfth (1/12th) of Tenant's pro rata share of Landlord's
estimate of the increase in such year of (A) Basic Cost over the Initial
Basic Cost, and (B) amounts payable by Tenant under Section 4(b) above.
Landlord may revise its estimate of such amounts at any time during a
calendar year by written notice to Tenant, setting forth such revised
estimate and Tenant's pro rata share of the estimated increase. In such
event, all monthly payments made by Tenant after such notice shall be in an
amount calculated on the basis of such revised estimate. Tenant shall, in
4
all cases, continue to make monthly payments of such amounts based on the
last estimate received from Landlord until it receives a revised or updated
estimate.
(ii) If payment of additional rent begins on a date other than January
1st under this Lease, in order to provide for current payments of
additional rent through December 31st of that partial calendar year,
landlord shall submit to tenant a statement of Landlord's estimate of
Tenant's additional rent for that partial year, stated in monthly
increments, resulting from the charges described in Sections 4(b) and 4(c)
above. Tenant shall make the monthly incremental payments of estimated
additional rent together with its installments of Basic Monthly Rent.
(iii) After the end of each calendar year, Landlord will as soon as
reasonably practicable submit to Tenant a statement of the actual increases
incurred under Sections 4(b) and 4(c) above. If the estimated amounts paid
by Tenant during the previous year were less than the actual amounts that
were payable by Tenant under Sections 4(b) and 4(c) above for such year,
Tenant shall pay Landlord, within thirty (30) days of Tenant's receipt of
such statement, the full amount of the underpayment. If the estimated
amounts paid by Tenant during the previous year exceeded the actual amounts
that were payable by Tenant under Sections 4(b) and 4(c) above for such
year, the excess shall be credited toward payment of the next installment
of Basic Monthly Rent to be paid by Tenant after Tenant receives said
statement from Landlord. If the amount paid by Tenant during the last
calendar year of the Term exceeds the amounts payable by Tenant under
Sections 4(b) and 4(c) above for such year, Landlord shall pay Tenant the
excess amount within thirty (30) days after Landlord's submission to Tenant
of the aforesaid statement for such calendar year.
(e) Additional Rent. Tenant shall pay as additional rent and without
notice, abatement, deduction or set-off, all sums, costs and expenses which
Tenant, in any of the provisions of this Lease, or through a separate agreement
relating to the Premises, assumes or agrees to pay, including but not limited to
tenant work, and in the event of any non-payment thereof, the Landlord shall
have (in addition to all other rights and remedies) all the rights and remedies
provided herein or by law in the case of non-payment of the Basic Monthly Rent.
All payments due to Landlord, including the Basic Monthly Rent, additional rent,
increases in ground rent payments, utilities and all other rent, reimbursements
and charges (collectively referred to herein as "RENTRENT") due under the terms
of this Lease, shall be made at the offices of Realty Management Company, or
such other address of which Tenant is given written notice by Landlord. Rent
checks are to be made payable to BRE/Metrocenter LLC, or such other person,
firm, or corporation as the Landlord may hereafter designate in writing. All
payments due to Landlord not paid within ten (10) days of the date such payment
is due (the "Grace Period") shall bear interest as provided under Section 5
herein. In the event that (i) Tenant fails to pay any amount that is due to
Landlord under this Lease on the date it is due, and (ii) Tenant pays such
overdue amount prior to the expiration of the Grace Period for payment of such
amount, then Tenant shall not be deemed in default under this Lease in
connection with such late payment.
5. DELINQUENT PAYMENT;
Tenant and Landlord acknowledge and agreethat they have HANDLING CHARGES
entered into this Lease for commercial purposes. All payments required of Tenant
hereunder shall bear interest from the date due until paid at the lesser of 15%
per annum or the maximum lawful rate. In addition, Landlord may charge Tenant a
fee equal to 5% of the delinquent payment to reimburse Landlord for its cost and
inconvenience incurred as a consequence of Tenant's delinquency. In no event,
however, shall the charges permitted under this Section or elsewhere in this
Lease, to the extent the same are considered to be interest under applicable
law, exceed the maximum lawful rate of interest. Despite the foregoing, Landlord
shall waive such interest and late charge on the first (1st) occasion during any
twelve (12) month period in which Tenant does not timely pay Rent, provided that
Tenant pays such installment of Rent to Landlord within five (5) days after the
date Tenant receives notice that such amount is past due.
6. SECURITY DEPOSIT
(a) Good Faith Deposit. Tenant, concurrently with the execution of this
Lease, has deposited with Landlord a Good Faith Deposit in the amount of Nine
Thousand Eight Hundred Twenty-Five and 67/100 Dollars ($9,825.67), to be held by
5
the Landlord without interest, and which shall be applied to the first payment
of Basic Monthly Rent hereunder. Should Tenant fail, for any reason, to enter
into occupancy of the Premises when possession of same have been tendered by the
Landlord, the Good Faith Deposit shall be forfeited by Tenant. Such forfeiting
by Tenant of the Good Faith Deposit shall not be deemed to be liquidated
damages, nor limit Tenant's liability hereunder.
(b) Security Deposit. Contemporaneously with the execution of this Lease,
Tenant shall pay to Landlord, in immediately available funds, the Security
Deposit, which shall be held by Landlord without liability for interest and as
security for the performance by Tenant of its obligations under this Lease. The
Security Deposit is not an advance payment of Rent or a measure or limit of
Landlord's damages upon an Event of Default (defined below). Landlord may, from
time to time and without prejudice to any other remedy, use all or a part of the
Security Deposit to perform any obligation which Tenant was obligated, but
failed, within the applicable notice and cure period, to perform hereunder.
Following any such application of the Security Deposit, Tenant shall pay to
Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. Within a reasonable time after the Term ends,
provided Tenant has performed all of its obligations hereunder, Landlord shall
return to Tenant the balance of the Security Deposit not applied to satisfy
Tenant's obligations. If Landlord transfers its interest in the Premises, then
Landlord may assign the Security Deposit to the transferee and Landlord
thereafter shall have no further liability for the return of the Security
Deposit.
7. LANDLORD'S OBLIGATIONS
(a) Services. Provided no Event of Default exists, Landlord shall use all
reasonable efforts to furnish to Tenant (i) water (hot and cold) at those points
of supply provided for general use of tenants of the Building; (ii) heated and
refrigerated air conditioning as appropriate, on Monday through Saturday, from
5:30 a.m. to 5:30 p.m. (the "Tenant's Business Hours") and at such temperatures
and in such amounts as are reasonably considered by Landlord to be standard;
(iii) elevators for ingress and egress to the floor on which the Premises are
located, in common with other tenants, provided that Landlord may reasonably
limit the number of elevators to be in operation at times other than during
customary business hours and on holidays; (iv) replacement of Building-standard
light bulbs and fluorescent tubes, provided that Landlord's standard charge for
such bulbs and tubes shall be paid by Tenant; and (v) electrical current during
Tenant's Business Hours other than for computers, electronic data processing
equipment, special lighting, equipment that requires more than 110 volts.
Landlord shall maintain the common areas of the Building in reasonably good
order and condition, except for damage occasioned by Tenant, or its employees,
agents or invitees. If Tenant desires any of the services specified in this
Section at any time other than times herein designated, such services shall be
supplied to Tenant upon the written request of Tenant delivered to Landlord
before 3:00 p.m. on the business day preceding such extra usage, and Tenant
shall pay to Landlord the cost of such services within ten (10) days after
Landlord has delivered to Tenant an invoice therefor. As of the date of this
Lease, Landlord's current charge for after hours heating and cooling, which
charge is subject to increase in the future, is equal to the sum of: (i) Thirty
Five Dollars ($35.00) per hour, (ii) fifty cents per hour for each heat pump,
and (iii) a programming charge of One Hundred Twenty and 00/100 Dollars
($120.00).
(b) Excess Utility Use. Landlord shall use reasonable efforts to furnish
electrical current for computers, electronic data processing equipment, special
lighting, equipment that requires more than 110 volts, through the then-existing
feeders and risers serving the Building and the Premises, and Tenant shall pay
to Landlord the cost of such service within ten (10) days after Landlord has
delivered to Tenant an invoice therefor. Landlord may determine the amount of
such additional consumption and potential consumption by either or both: (i) a
survey of standard or average tenant usage of electricity in the Building
performed by a reputable consultant selected and paid for by Landlord; or (ii) a
separate meter in the Premises installed, maintained, and read by Landlord.
Tenant shall not install any electrical equipment requiring special wiring or
requiring voltage in excess of 110 volts or otherwise exceeding Building
capacity unless approved in advance by Landlord, which approval shall not be
unreasonably withheld. The use of electricity in the Premises shall not exceed
the capacity of existing feeders and risers to or wiring in the Premises. Any
risers or wiring required to meet Tenant's excess electrical requirements shall,
upon Tenant's written request, be installed by Landlord, at Tenant's cost, if,
6
in Landlord's sole and absolute judgment, the same are necessary and shall not
cause permanent damage or injury to the Building or the Premises, cause or
create a dangerous or hazardous condition, entail excessive or unreasonable
alterations, repairs, or expenses, or interfere with or disturb other tenants of
the Building. If Tenant uses machines or equipment (other than general office
machines, excluding computers and electronic data processing equipment) in the
Premises which affect the temperature otherwise maintained by the air
conditioning system or otherwise overload any utility, Landlord may install
supplemental air conditioning units or other supplemental equipment in the
Premises, and the cost thereof, including the cost of installation, operation,
use, and maintenance, shall be paid by Tenant to Landlord within ten (10) days
after Landlord has delivered to Tenant an invoice therefor.
(c) Discontinuance. Landlord's obligation to furnish services as provided
in this Lease shall be subject to the rules and regulations of the supplier of
such services and governmental rules and regulations. Landlord may, upon not
less than thirty (30) days' prior written notice to Tenant, discontinue any such
service to the Premises, provided Landlord first arranges for a direct
connection thereof through the supplier of such service. Tenant shall, however,
be responsible for contracting with the supplier of such service and for paying
all deposits for, and costs relating to, such service.
(d) Restoration of Services; Abatement. Landlord shall use reasonable
efforts to restore any service that becomes unavailable; however, such
unavailability shall not render Landlord liable for any damages caused thereby,
be a constructive eviction of Tenant, constitute a breach of any implied
warranty, or, except as provided in the next sentence, entitle Tenant to any
abatement of Tenant's obligations hereunder. However, if Tenant is prevented
from making reasonable use of the Premises for more than seven (7) consecutive
days because of the unavailability of any such service, Tenant shall, as its
exclusive remedy therefor, be entitled to a reasonable abatement of Rent for
each consecutive day (after such 7-day period) that Tenant is so prevented from
making reasonable use of the Premises, unless the failure to furnish such
services and utilities is caused by Tenant's acts or omissions. In the event
that such services and utilities are unavailable, Landlord shall use
commercially reasonable efforts to restore such services and utilities.
(e) Janitorial. Tenant, at Tenant's sole cost and expense, shall provide
char and janitorial service to the Premises such that the Premises are
maintained in a clean and neat manner at all times.
8. IMPROVEMENTS;
(a) Improvements; Alterations. Improvements to the ALTERATIONS; REPAIRS
Premises shall be installed at the expense of Tenant only in accordance with
MAINTENANCE plans and specifications which have been previously submitted to and
approved in writing by Landlord, which consent shall not be unreasonably
withheld. After the initial Tenant improvements are made, no alterations or
physical additions in or to the Premises may be made without Landlord's prior
written consent, which consent shall not be unreasonably withheld. Tenant shall
not paint or install lighting or decorations, signs, window or door lettering,
or advertising media of any type on or about the Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
All alterations, additions, or improvements (whether temporary or permanent in
character, and including without limitation all air-conditioning equipment and
all other equipment that is in any manner connected to the Building's plumbing
system) made in or upon the Premises, either by Landlord or Tenant, shall be
Landlord's property at the end of the Term and shall remain on the Premises
without compensation to Tenant. Approval by Landlord of any of Tenant's drawings
and plans and specifications prepared in connection with any improvements in the
Premises shall not constitute a representation or warranty of Landlord as to the
adequacy or sufficiency of such drawings, plans and specifications, or the
improvements to which they relate, for any use, purpose, or condition, but such
approval shall merely be the consent of Landlord as required hereunder.
Notwithstanding anything in this Lease to the contrary, Tenant shall be
responsible for the cost of all work required to comply with the retrofit
requirements of the Americans with Disabilities Act of 1990, and all rules,
regulations, and guidelines promulgated thereunder, as the same may be amended
from time to time, necessitated by any installations, additions, or alterations
made in or to the Premises at the request of or by Tenant or by Tenant's use of
the Premises regardless of whether such cost is incurred in connection with the
initial buildout, if any, required in the Premises or in other areas of the
Building.
7
(b) Repairs; Maintenance. Tenant shall maintain the Premises in a clean,
safe, operable, attractive condition, and shall not permit or allow to remain
any waste or damage to any portion of the Premises. Tenant shall repair or
replace, subject to Landlord's direction and supervision, any damage to the
Building caused by Tenant or Tenant's employees, agents, contractors, or
invitees. If Tenant fails to make such repairs or replacements within fifteen
(15) days after the occurrence of such damage, then Landlord may, upon five (5)
days prior written notice to Tenant (except in the event of an emergency, in
which event no notice shall be required), make the same at Tenant's cost. In
lieu of having Tenant repair any such damage outside of the Premises, Landlord
may repair such damage at Tenant's cost. The reasonable cost of any repair or
replacement work performed by Landlord under this Section shall be paid by
Tenant to Landlord within ten (10) days after Landlord has delivered to Tenant
an invoice therefor.
(c) Performance of Work. All work described in this Section shall be
performed only by Landlord or by contractors and subcontractors approved in
writing by Landlord, which approval shall not be unreasonably withheld. Tenant
shall cause all contractors and subcontractors to procure and maintain insurance
coverage against such risks, in such amounts, and with such companies as
Landlord may reasonably require, and to procure payment and performance bonds
reasonably satisfactory to Landlord covering the cost of the work. All such work
shall be performed in accordance with all legal requirements and in a good and
workmanlike manner so as not to damage the Premises, the primary structure or
structural qualities of the Building, or plumbing, electrical lines, or other
utility transmission facility. All such work which may affect the structure, the
HVAC, electrical system, mechanical system, life-safety system or plumbing
system must be approved by the Building's engineer of record.
(d) Mechanic's Liens. Tenant shall not permit any mechanic's liens to be
filed against the Premises or the Building for any work performed, materials
furnished, or obligation incurred by or at the request of Tenant. If such a lien
is filed, then Tenant shall, within ten (10) days after Landlord has delivered
notice of the filing to Tenant, either pay the amount of the lien or diligently
contest such lien and deliver to Landlord a bond or other security reasonably
satisfactory to Landlord. If Tenant fails to timely take either such action,
then Landlord may pay the lien claim without inquiry as to the validity thereof,
and any amounts so paid, including expenses and interest, shall be paid by
Tenant to Landlord within ten (10) days after Landlord has delivered to Tenant
an invoice therefor.
(e) Indemnification. Tenant shall defend, indemnify and hold Landlord
harmless from and against any and all expenses, liens, claims or damages,
including reasonable attorneys' fees, for injury to person or property which may
or might arise, indirectly or directly, by reason of the making of any
alteration, addition or improvement. If any alteration, addition or improvement
is effected without the prior consent of Landlord, Landlord may remove or
correct the same and Tenant shall be liable for any and all expenses of this
work. All rights given to Landlord herein, shall be in addition to any other
right or remedy of Landlord contained in this Lease. The provisions of this
Section shall survive for three (3) years from the expiration or earlier
termination of this Lease.
9. USE
(a) Use. Tenant shall continuously occupy and use the Premises only for the
Permitted Use and shall comply with all laws, orders, codes, rules, and
regulations relating to the use, condition, and occupancy of the Premises.
Landlord represents and warrants to Tenant that the zoning for the Premises
permits the Premises to be used for the Permitted Use. The Premises shall not be
used for any use which is disreputable or creates extraordinary fire hazards or
results in an increased rate of insurance on the Building or its contents or the
storage of any hazardous materials or substances. If, because of Tenant's acts,
the rate of insurance on the Building or its contents increases, then Tenant
shall pay to Landlord the amount of such increase on demand. Tenant shall
conduct its business and control its agents, employees, contractors and invitees
in such a manner as not to create any nuisance or interfere with other tenants
or Landlord in its management of the Building.
(b) Compliance. Tenant shall, at Tenant's sole expense, (i) comply with all
laws, orders, ordinances, and regulations of federal, state, county, and
municipal authorities having jurisdiction over the Premises, (ii) comply with
any directive, order of citation made pursuant to law by any public officer
8
requiring abatement of any nuisance or which imposes upon Landlord or Tenant any
duty or obligation arising from Tenant's occupancy or use of the Premises or
from conditions which have been created by or at the request or insistence of
Tenant, or required by reason of a breach of any of Tenant's obligations
hereunder or by or through other fault of Tenant; (iii) comply with all
insurance requirements applicable to the Premises; and (iv) cause the Premises
to comply with the Americans With Disabilities Act of 1990, 42 U.S.C. 12101 et
seq., as amended from time to time (the "ADA") and all rules and regulations
promulgated to further the purpose of the ADA. If Tenant receives notice of any
such directive, order, citation or of any violation of any law, order,
ordinance, regulation or any insurance requirement, Tenant shall promptly notify
Landlord in writing of such alleged violation and furnish Landlord with a copy
of such notice. In furtherance of the foregoing, and provided Tenant shall first
have obtained Landlord's prior written consent in accordance with the provisions
of Section 8 of the Lease (which Tenant agrees to promptly request), Tenant
shall, at Tenant's sole cost and expense, make such changes, alterations,
renovations or modifications to the Premises in accordance with the provisions
of Section 8 of the Lease (except for structural repairs) which are necessitated
or required by any such law, ordinance, rule, regulation, directive or insurance
requirement.
(i) Legal. Tenant shall not use or permit the Premises or any part
thereof to be used in violation of any present or future applicable law,
regulation or ordinance, or of the certificate of occupancy issued for the
Building or the Premises, and shall immediately discontinue any use of the
Premises which is declared by any governmental authority having
jurisdiction to be in violation of law or said certificate of occupancy.
Tenant will not use or permit the Premises to be used for any purposes that
interfere with the use and enjoyment of the Building by Landlord or the
other tenants, or which violate the requirements of any insurance company
insuring the Building or its contents, or which, in Landlord's sole
discretion, impair the reputation of the Building. Landlord acknowledges
that the Permitted Use of the Premises is not an impairment to the Building
or an interference with the use and enjoyment of the Building by other
tenants of the Building. Tenant shall refrain from and discontinue such use
immediately upon receipt of written notice from Landlord.
(ii) Fire and Safety. Tenant shall not do, or permit anything to be
done in the Premises, or bring or keep anything therein, which will in any
way increase the rate of fire insurance on the Building, or invalidate or
conflict with fire insurance policies on the Building, fixtures or on
property kept therein. Tenant agrees that any increases of fire insurance
premiums on the Building or content caused by the occupancy of Tenant and
any expense or cost incurred in consequence of negligence or the willful
action of Tenant, Tenant's employees, agents, servants, invitees, or
licensees shall be deemed additional rent and paid as accrued.
(c) Environmental Protection. Tenant and Tenant's employees, contractors
and agents shall not dispose of or generate, manufacture, store, treat or use
any oil, petroleum or chemical liquids or solids, liquid or gaseous products or
any hazardous waste or hazardous substance including, without limitation,
asbestos (hereinafter collectively referred to as "hazardous waste"), as those
terms are used in the Comprehensive Environmental Response. Compensation, and
Liability Act of 1980, or in any other federal, state or local law governing
hazardous substances (hereinafter collectively referred to as the "Act"), as
such laws may be amended from time to time at, upon, under or within the
Premises or the Building or the land on which it is built, or into the plumbing
or sewer or water system servicing the Premises or the Building, nor shall
Tenant, its employees, contractors or agents cause or permit the discharge,
spillage, uncontrolled loss, seepage or filtration of any hazardous waste at,
upon, under or within the Premises or the Building or the Land or into the
plumbing or sewer or water system servicing the same. Tenant shall comply in all
respects with the requirements of the Act and related regulations, and shall
notify Landlord immediately in the event of its discovery of any hazardous waste
at, upon, under or within the Premises or the Building or the Land, or of any
notice by a governmental authority or private party alleging that a disposal of
hazardous waste on or near the Premises may have occurred. Tenant further agrees
to provide Landlord full and complete access to any documents or information in
Tenant's possession or control relevant to the question of the generation,
treatment, storage or disposal of hazardous waste on or near the Premises.
(d) Indemnification. Tenant shall indemnify Landlord against all costs,
expenses, liabilities, losses, damages, injunctions, suits, fines, penalties,
9
claims, and demands, including, without limitation, remediation and clean-up
costs, reasonable attorneys' fees, arising out of any violation of or default in
the covenants of this Section. The provisions of subsection (b) of this Section
shall survive for three (3) years from the expiration or earlier termination of
this Lease. The provisions of subsection (c) [and Tenant's indemnification
obligations with respect to the provisions of subsection (c)] of this Section
shall survive the expiration or earlier termination of this Lease.
10. ASSIGNMENT AND SUBLETTING
(a) Transfers; Consent. Subject to the provisions of Section 10(b) below,
Tenant shall not, without the prior written consent of Landlord (which Landlord
may grant or deny in its sole discretion), (i) advertise that any portion of the
Premises is available for lease, (ii) assign, transfer, or encumber this Lease
or any estate or interest herein, whether directly or by operation of law, (iii)
permit any other entity to become Tenant hereunder by merger, consolidation, or
other reorganization, (iv) if Tenant is an entity other than a corporation whose
stock is publicly traded, permit the transfer of an ownership interest in Tenant
so as to result in a change in the current control of Tenant, (v) sublet any
portion of the Premises, (vi) grant any license, concession, or other right of
occupancy of any portion of the Premises, or (vii) permit the use of the
Premises by any parties other than Tenant (any of the events listed as items (i)
through (vii) above being a "Transfer"). If Tenant requests Landlord's consent
to a Transfer, then Tenant shall provide Landlord with a written description of
all terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness and character. Tenant shall reimburse
Landlord for its reasonable attorneys' fees and other reasonable expenses
incurred in connection with considering any request for its consent to a
Transfer. If Landlord consents to a proposed Transfer, then the proposed
transferee shall deliver to Landlord a written agreement whereby it expressly
assumes the Tenant's obligations hereunder; however, any transferee of less than
all of the space in the Premises shall be liable only for obligations under this
Lease that are properly allocable to the space subject to the Transfer, and only
to the extent of the Rent it has agreed to pay Tenant therefor. Landlord's
consent to a Transfer shall not release Tenant from performing its obligations
under this Lease, but rather Tenant and its transferee shall be jointly and
severally liable therefor. Landlord's consent to any Transfer shall not waive
Landlord's rights as to any subsequent Transfers. If an Event of Default occurs
while the Premises or any part thereof are subject to a Transfer, then Landlord,
in addition to its other remedies, may collect directly from such transferee all
rents becoming due to Tenant and apply such rents against Basic Monthly Rent.
Tenant authorizes its transferees to make payments of Rent directly to Landlord
upon receipt of notice from Landlord to do so.
(b) Corporate Transfer. Notwithstanding anything to the contrary contained
herein, Tenant may assign its entire interest under this Lease to a wholly owned
corporation or entity or controlled subsidiary or parent of the Tenant or to any
successor to Tenant or Guarantor by purchase, merger, consolidation or
reorganization (hereinafter collectively referred to as "Corporate Transfer")
without the consent of Landlord, provided (i) Tenant is not in default under
this Lease; (ii) if such proposed transferee is a successor to Tenant by
purchase, said proposed transferee shall acquire all or substantially all of the
stock or assets of Tenant's or Guarantor's business or, if such proposed
transferee is a successor to Tenant or Guarantor by merger, consolidation or
reorganization, the continuing or surviving corporation shall own all or
substantially all of the assets of Tenant or Guarantor; (iii) such proposed
transferee shall have a net worth which is equal to or greater than Tenant's net
worth as of the date of the Corporate Transfer; and (iv) such proposed
transferee assumes all the obligations of Tenant hereunder. Tenant shall give
Landlord written notice at least thirty (30) days prior to the effective date of
such Corporate Transfer. As used herein, the term "controlled subsidiary" shall
mean a corporate entity wholly owned by Tenant or at least fifty-one percent
(51%) of whose voting stock is owned by Tenant. Notwithstanding anything in this
Lease to the contrary, (x) any assignment or subletting shall (i) be on a form
reasonably acceptable to Landlord and (ii) shall be subject to the terms of this
Lease, and (y) Tenant shall pay to Landlord a reasonable fee for processing any
sublease or assignment.
10
(c) Cancellation. Landlord may, within thirty (30) days after submission of
Tenant's written request for Landlord's consent to a Transfer, cancel this Lease
(or, as to a subletting or assignment, cancel as to the portion of the Premises
proposed to be sublet or assigned) as of the date the proposed Transfer was to
be effective. If Landlord cancels this Lease as to any portion of the Premises,
then this Lease shall cease for such portion of the Premises and Tenant shall
pay to Landlord all Rent accrued through the cancellation date relating to the
portion of the Premises covered by the proposed Transfer and all brokerage
commissions paid or payable by Landlord in connection with this Lease that are
allocable to such portion of the Premises. Thereafter, Landlord may lease such
portion of the Premises to the prospective transferee (or to any other person)
without liability to Tenant. The provisions of this Section 10(c) shall not be
applicable to any transaction that is governed by the provisions of Section
10(b) above.
(d) Additional Compensation. Tenant shall pay to Landlord, immediately upon
receipt thereof, all compensation received by Tenant for a Transfer that exceeds
the Basic Monthly Rent and Tenant's share of electrical costs and excess utility
costs pursuant to Section 7 herein allocable to the portion of the Premises
covered thereby.
11. INSURANCE; WAIVERS;
(a) Insurance. Tenant shall at its expense procure and SUBROGATION;
INDEMNITY maintain throughout the Term the following insurance policies: (i)
comprehensive general liability insurance in amounts of not less than a combined
single limit of $3,000,000 (the "Initial Liability Insurance Amount") insuring
Tenant, Landlord, Managing Agent, and any holder of a First Trust (as
hereinafter defined) against all liability for injury to or death of a person or
persons or damage to property arising from the use and occupancy of the
Premises, (ii) contractual liability insurance coverage sufficient to cover
Tenant's indemnity obligations hereunder, (iii) insurance covering the
replacement cost of all leasehold improvements and Tenant's property and
improvements in the Premises, (iv) workman's compensation insurance, containing
a waiver of subrogation endorsement reasonably acceptable to Landlord, and (v)
business interruption insurance. Tenant's insurance shall provide primary
coverage to Landlord when any policy issued to Landlord provides duplicate or
similar coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. Tenant shall furnish certificates of such insurance and such
other evidence satisfactory to Landlord of the maintenance of all insurance
coverages required hereunder, and Tenant shall, in good faith, use its best
efforts to obtain a written obligation on the part of each insurance company to
notify Landlord at least thirty (30) days before cancellation or a material
change of any such insurance. All such insurance policies shall be in form, and
issued by companies, reasonably satisfactory to Landlord.
(b) Indemnity by Tenant. Excluding any wanton or wilful act or gross
negligence by Landlord or its agents and employees, Tenant shall indemnify
Landlord, Landlord's Managing Agent, and their respective agents and employees
and save them harmless from and against any and all claims, actions, damages,
liabili-ties and expense in connection with loss of life, personal injury and/or
damage to property arising from or out of any occurrence in, upon or at the
Premises, or the occupancy or use by Tenant of the Premises or any part thereof,
or occasioned wholly or in part by any act or omission of the Tenant, its
agents, contractors, employees, invitees or licensees. In the event that
Landlord, Landlord's Managing Agent, or their respective agents or employees
shall, without fault on its or their part, be made a party to any litigation
commenced by or against Tenant, then Tenant shall protect and hold the same
harmless and shall pay all costs, expenses and reasonable attorneys' fees
incurred or paid in connection with such litigation.
11
(c) Indemnity by Landlord. Excluding any wanton or wilful act or gross
negligence by Tenant, or its agents and employees, Landlord shall indemnify
Tenant, its agents, employees and invitees and save them harmless from and
against any and all claims, actions, damages, liabilities and expenses in
connection with loss of life, personal injury and/or damage to property
occasioned wholly or in part by any act or omission of the Landlord, its agents,
employees, contractors, invitees or licensees. In the event that Tenant, its
agents or employees shall, without fault on its or their part, be made a party
to any litigation commenced by or against Landlord, then Landlord shall protect
and hold the same harmless and shall pay all costs, expenses, and reasonable
attorneys' fees incurred or paid in connection with such litigation.
(d) Waiver of Subrogation. Landlord and Tenant mutually covenant and agree
that each party, in connection with any all-risk property insurance policies
required to be furnished in accordance with the terms and conditions of this
Lease, or in connection with any all-risk property insurance policies which they
obtain insuring such insurable interest as Landlord or Tenant may have in its
own properties, whether personal or real, shall expressly waive any right of
subrogation on the part of the insurer against the Landlord (and any mortgagee
requested by Landlord) or Tenant as the same may be applicable, which right to
the extent not prohibited or violative of any such policy is hereby expressly
waived, and Landlord and Tenant each mutually waive all right of recovery
against each other, their agents, or employees for any loss, damage or injury of
any nature whatsoever to property for which either party is required by this
Lease to carry insurance.
(e) Conduct of Business. The Landlord and its Managing Agent
assume no liability or responsibility whatever with respect to the conduct and
operation of the Tenant's business to be conducted in the Premises, nor with
respect to the conduct and operation of any other use of the Premises which the
Landlord may by prior written consent permit.
12. SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE
(a) Subordination. This Lease shall be subject and subordinate to any first
mortgage or first deed of trust (each such mortgage or deed of trust shall
hereinafter be referred to as the "First Trust") which may now or hereafter
affect such leases or the real property of which the Premises form a part, and
to all renewals, modifications, consolidations, replacements and extensions
thereof. Provided that the beneficiary of the First Trust grants its written
consent to any additional subordination of this Lease, this Lease shall be
subject and subordinate to all ground or underlying leases and to all other
mortgages and/or other deeds of trust which may now or hereafter affect such
leases or the real property of which the Premises form a part, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Subject to obtaining the written consent of the beneficiary of the First Trust
with respect to subordinating this Lease to the lien of any mortgage, deed of
trust or ground lease other than the First Trust, the foregoing subordination
provisions shall be self-operative and no further instrument of subordination
shall be required. In either of the foregoing situations, this Lease shall not
have priority to (i) the prior right, claim and lien of such mortgages in, to
and upon any award or other compensation heretofore or hereafter to be made for
any taking by eminent domain of any part of the Premises, and to the right of
disposition thereof in accordance with the provisions of the said mortgages,
(ii) the prior right, claim and lien of such mortgages in, to and upon any
proceeds payable to Landlord under all policies of fire and rent insurance upon
the Premises and to the right of disposition thereof in accordance with the
terms of the said mortgages, and (iii) any lien, right, power or interest, if
any, which may have arisen or intervened in the period between the recording of
the mortgages and the execution of this Lease, or any lien or judgment which may
arise any time under the terms of this Lease. Tenant agrees to execute and
deliver, within five (5) days after Landlord's written request, such further
instrument or instruments confirming this subordination as shall be desired by
Landlord or by any ground lessor, mortgagee or proposed mortgagee; and Tenant
hereby constitutes and appoints Landlord as Tenant's attorney-in-fact to execute
any such instrument or instruments. Tenant agrees that, at the option of the
holder of any mortgage or of the trustee under any deed of trust, this Lease may
be made superior to said mortgage or first deed of trust by the insertion
therein of a declaration that this Lease is superior thereto, with such
exceptions as to proceeds of insurance and takings or other matters as such
holder or trustee may specify.
(b) Attornment. In the event any proceedings are brought for the
foreclosure of, or in the event of exercise of the power of sale under, any deed
of trust to secure debt given by Landlord and covering the Premises, the party
secured by any such deed of trust shall have the right to recognize this Lease
and, in the event of any foreclosure sale under such deed of trust, this Lease
shall continue in full force and effect at the option of the party secured by
such deed of trust or the purchaser under any such foreclosure sale. If such
party elects to recognize this Lease, then (x) Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
owner and landlord under this Lease, and (y) such party, as landlord: (i) shall
recognize Tenant's rights to continue to occupy the Premises and exercise and
enjoy all of its rights hereunder, and so long as Tenant complies with the terms
and provisions of this Lease; (ii) shall not be bound by payments of Rent more
12
than one (1) month in advance of their due date; (iii) shall have no obligation
for the return of any security deposit not actually received by such party; (iv)
shall not be bound by any amendment or modification to the Lease to which such
party has not consented in writing; (v) shall not be subject to any claim,
defense or set off which could be asserted against any predecessor Landlord; and
(vi) shall have no liability for any default by any predecessor Landlord.
(c) Notice of Default. Tenant agrees to give any mortgagee(s) and/or trust
deed holder(s), by certified or registered mail, postage prepaid, return receipt
requested, a copy of any notice of any failure by Landlord to fulfill any of its
obligations under this Lease, provided that prior to such notice Tenant has been
notified in writing (by way of notice of assignment of rents and leases, or
otherwise) of the addresses of such mortgagee(s) and/or trust deed holder(s).
Tenant further agrees that the mortgagee(s) and/or trust deed holder(s) shall
have such time as may be necessary to cure such failure as long as any
mortgagee(s) and/or trust deed holder(s) has commenced and is diligently
pursuing the remedies necessary to cure such failure (including, but not limited
to, time to take possession and/or commence foreclosure proceedings, if
necessary, to effect such cure). Notwithstanding anything herein to the
contrary, so long as any mortgagee(s) and/or trust deed holder(s) has commenced
and is diligently pursuing the remedies necessary to cure such failure
(including, but not limited to, taking possession and/or commencing foreclosure
proceedings, if necessary, to effect such cure), Tenant shall have no right to
terminate this Lease as a result of any such failure by Landlord.
(d) New Financing. In the event that any trust or mortgage lender providing
financing in connection with the Building requires, as a condition of such
financing, that modifications to this Lease be obtained, and provided that such
modifications (i) are reasonable, (ii) do not adversely affect Tenant's use of
the Premises as herein permitted, and (iii) do not increase the Rent and other
sums required to be paid by Tenant hereunder, then Landlord may submit to Tenant
a written amendment to this Lease incorporating such required modifications,
and, in the event Tenant does not execute and return to Landlord such written
amendment within seven (7) days after the same has been submitted to Tenant,
then Landlord shall thereafter have the right, at its sole option, to cancel
this Lease. Such option shall be exercisable by Landlord giving Tenant written
notice of cancellation, immediately whereupon this Lease shall be canceled and
terminate, and any money or security therefor deposited by Tenant with Landlord
shall be returned to Tenant, subject to the provisions of Section 6 of this
Lease, and both Landlord and Tenant shall thereupon be relieved from any and all
further liability or obligation hereunder.
(e) Financial Statements. Tenant agrees, from time to time [but in no event
more than two (2) times per calendar year], upon not less than fifteen (15) days
prior written notice by Landlord, to deliver to Landlord such financial
statements as Landlord may reasonably request.
(f) Assignment of Rents. If, at any time and from time to time, Landlord
assigns this Lease or the Rent payable hereunder to the holder of any mortgage
or deed of trust on the Premises or the Building, or to any other party for the
purpose of securing financing (the holder of any such mortgage and any other
such financing party are referred to herein as the "Financing Party"), whether
such assignment is conditional in nature or otherwise, the following provisions
shall apply:
(i) such assignment to the Financing Party shall not be deemed an
assumption by the Financing Party of any obligations of Landlord hereunder
unless such Financing Party shall, by written notice to Tenant,
specifically otherwise elect.
(ii) except as provided in (i) above, the Financing Party shall be
treated as having assumed Landlord's obligations hereunder [subject to
Sections 12(b) and 29(b) of this Lease] only upon foreclosure of its
mortgage or deed of trust (or voluntary conveyance by deed in lieu thereof)
and the taking of possession of the Premises from and after foreclosure.
Tenant hereby agrees to enter into such agreements or instruments
as may, from time to time, be reasonably requested in confirmation of the
foregoing.
13
13. RULES AND REGULATIONS
Tenant shall comply with the rules and regulations of the Building which
are attached hereto as Exhibit B. Landlord may, from time to time, change such
rules and regulations for the safety, care, or cleanliness of the Building and
related facilities, Tenant shall be responsible for the compliance with such
rules and regulations and all amendments thereto by its employees, agents, and
invitees.
14. CONDEMNATION
Condemnation. In the event the whole or a substantial part of the Premises
or the Building shall be taken for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to said authority to prevent such taking
(collectively referred to herein as a "taking"), Landlord shall have the right
to terminate this Lease effective as of the date possession is required to be
surrendered to said authority, and Rent shall be apportioned as of that date.
For purposes of this Section, a substantial part of the Premises or the Building
shall be considered to have been taken if, in Landlord's sole opinion, the
taking shall render it commercially undesirable for Landlord to permit this
Lease to continue or to continue operating the Building. Tenant shall not assert
any claim against Landlord or the taking authority for any compensation arising
out of or related to such taking. In the event of any taking, Landlord shall be
entitled to receive the entire amount of any award without deduction for any
estate or interest of Tenant and Tenant hereby assigns to Landlord all of
Tenant's rights, title and interest in and to any such award. If Landlord does
not elect to terminate this Lease, the Rent payable by Tenant pursuant to
Section 4 shall be adjusted (based on the ratio that the number of square feet
of rentable area taken from the Premises bears to the number of rentable square
feet in the Premises immediately prior to such taking) as of the date possession
is required to be surrendered to said authority. Nothing contained in this
Section shall be deemed to give Landlord any interest in any award made to
Tenant for the taking of personal property and fixtures belonging to Tenant, as
long as such award is made in addition to and separately stated from any award
made to Landlord for the Premises and the Building. Landlord shall have no
obligation to contest any taking.
15. FIRE OR OTHER CASUALTY
(a) Damage to Premises. If the Premises shall be damaged by fire or other
casualty, then, except as otherwise provided in subsections (b), (c) and (d)
hereof, Landlord, at Landlord's expense, shall promptly restore the Premises,
and Tenant, at Tenant's sole expense, shall promptly restore all leasehold
improvements installed in the Premises by Tenant or at Tenant's request and its
own furniture, furnishings, trade fixtures and equipment. Landlord shall not be
liable for any delay which may arise by reason of adjustment of insurance on the
part of Landlord, or on account of labor problems, or any other cause beyond
Landlord's reasonable control, or for any inconvenience, interruption or injury
to the business of Tenant resulting from such damage, or in any delay in
repairing such damage. If the damage or destruction is such as to make the
Premises or any substantial part thereof untenantable (in Landlord's reasonable
business judgment), and provided that such damage or destruction is not due in
whole or part to the act or omission of Tenant or Tenant's agents, employees or
invitees, the Basic Monthly Rent shall abate proportionately (based on
proportion of the number of square feet rendered untenantable to the total
number of square feet of the Premises), from the date of the damage or
destruction until the date the Premises has been restored by Landlord.
(b) Substantial Damage. If the Premises are substantially damaged or are
rendered substantially untenantable by fire or other casualty, or if Landlord's
architect certifies that the Premises cannot be repaired within one hundred
twenty (120) working days of normal working hours, said period commencing with
the start of the dates of the damage, or if Landlord shall decide not to restore
or repair the same, or if more than fifty percent (50%) of the gross leasable
area of the Building is rendered untenantable (even if the Premises is
undamaged) or if Landlord shall decide to demolish the Building or not to
rebuild it, then Landlord may, within ninety (90) days after such fire or other
casualty, terminate this Lease by giving Tenant a notice in writing of such
decision, and thereupon the term of this Lease shall expire by lapse of time
upon the third day after such notice is given, and Tenant shall vacate the
Premises and surrender the same to Landlord. Upon the termination of this Lease
under the conditions hereinbefore provided, Tenant's liability for Rent, to the
extent not abated under subsection (a) above, shall cease as of the date of such
termination.
14
(c) Insurance Proceeds. The proceeds payable under all casualty insurance
policies maintained by Landlord on the Premises shall belong to and be the
property of Landlord, and Tenant shall not have any interest in such proceeds.
Tenant agrees to look to Tenant's casualty insurance policies for the
restoration and replacement of all of the improvements installed in the Premises
by Tenant or at Tenant's request and Tenant's fixtures, equipment and
furnishings in the Premises, and in the event of termination of this Lease, for
any reason, following any such damage or destruction, Tenant shall promptly
assign to Landlord or otherwise pay to Landlord, upon Landlord's request, the
proceeds of said insurance (excepting only the proceeds payable with respect to
Tenant's trade fixtures, equipment, and furnishings). Notwithstanding anything
to the contrary in this Section or in any other provision of this Lease, any
obligation (under this Lease or otherwise) of Landlord to restore all or any
portion of the Premises shall be subject to Landlord's receipt of approval of
the same by the mortgagee(s) of Landlord (and any other approvals required by
applicable laws), as well as receipt from any such mortgagee(s) of such fire and
other hazard insurance policy proceeds as may have been assigned to any such
mortgagee; it being agreed that if Landlord has not received such approval(s)
and proceeds within one hundred and eighty (180) days after any such casualty,
then Landlord shall have the option to terminate this Lease, at any time
thereafter, upon notice to Tenant.
(d) Tenant's Right of Termination. In the event the Premises is damaged by
fire or other casualty, such damage is not caused by Tenant or by its employees,
contractors or agents and such damage is not repaired within two hundred seventy
(270) days after the date of the damage, then Tenant shall have the right,
exercisable upon written notice to Landlord within ten (10) days after the
expiration of such two hundred seventy (270) day period, to terminate this
Lease. In the event that Tenant timely delivers such notice of termination to
Landlord, then, unless Landlord, within thirty (30) days after its receipt of
such termination notice, delivers the Premises to Tenant in substantially the
same condition (excluding Tenant's fixtures, equipment and furnishings) that
existed immediately prior to such damage, then this Lease shall terminate and
the parties shall be relieved of all further liability hereunder. In the event
Tenant fails to timely exercise such termination right, Tenant shall be deemed
to have irrevocably waived its right to terminate this Lease on account of such
damage.
16. TAXES
Tenant shall be liable for all taxes levied or assessed against personal
property, furniture, or fixtures placed by Tenant in the Premises. If any taxes
for which Tenant is liable are levied or assessed against Landlord or Landlord's
property and Landlord elects to pay the same, or if the assessed value of
Landlord's property is increased by inclusion of such personal property,
furniture or fixtures and Landlord elects to pay the taxes based on such
increase, then Tenant shall pay to Landlord, upon demand, that part of such
taxes for which Tenant is primarily liable hereunder.
17. EVENTS OF DEFAULT
Each of the following occurrences shall constitute an "Event of Default":
(a) Tenant's failure to pay Rent, or any other sums due from Tenant to
Landlord under the Lease (or any other lease executed by Tenant for
space in the Building), when due;
(b) Tenant's failure to perform, comply with, or observe in any material
respect any other agreement or obligation of Tenant under this Lease
(or any other lease executed by Tenant for space in the Building or
for which Tenant is a guarantor);
(c) the filing of a petition by or against Tenant (the term "Tenant" shall
include, for the purpose of this Section, any guarantor of the
Tenant's obligations hereunder) (i) in any bankruptcy or other
insolvency proceeding; (ii) seeking any relief under any state or
federal debtor relief law; (iii) for the appointment of a liquidator
or receiver for all or substantially all of Tenant's property or for
Tenant's interest in this Lease; or (vi) for the reorganization or
modification of Tenant's capital structure;
(d) Tenant shall desert or vacate any portion of the Premises; and
15
(e) the admission by Tenant that it cannot meet its obligations as they
become due or the making by Tenant of an assignment for the benefit of
its creditors.
18. REMEDIES
Upon any Event of Default, Landlord may, in addition to all other rights
and remedies afforded Landlord hereunder or by law or equity, take any of the
following actions:
(a) Terminate this Lease by giving Tenant written notice thereof, in which
event, Tenant shall pay to Landlord the sum of (i) all Rent accrued
hereunder through the date of termination, (ii) all amounts due under
this Lease, and (iii) an amount equal to (A) the total Rent that
Tenant would have been required to pay for the remainder of the Term
discounted to present value at a per annum rate equal to the "Prime
Rate" as published on the date this Lease is terminated by The Wall
Street Journal, Southwest Edition, in its listing of "Money Rates",
minus (B) the then present fair rental value of the Premises for such
period, similarly discounted; or
(b) Terminate Tenant's right to possession of the Premises without
terminating this Lease by giving written notice thereof to Tenant, in
which event Tenant shall pay to Landlord (i) all Rent and other
amounts accrued hereunder to the date of termination of possession,
(ii) all amounts due from time to time under this Lease, and (iii) all
Rent and other sums required hereunder to be paid by Tenant during the
remainder of the Term, diminished by any net sums thereafter received
by Landlord through reletting the Premises during such period.
Landlord shall not be liable for, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the
Premises or to collect Rent due for such reletting. Tenant shall not
be entitled to the excess of any consideration obtained by reletting
over the Rent due hereunder. Reentry by Landlord in the Premises shall
not affect Tenant's obligations hereunder for the unexpired Term;
rather, Landlord may, from time to time, bring action against Tenant
to collect amounts due by Tenant, without the necessity of Landlord's
waiting until the expiration of the Term. Unless Landlord delivers
written notice to Tenant expressly stating that it has elected to
terminate this Lease, all actions taken by Landlord to exclude or
dispossess Tenant of the Premises shall be deemed to be taken under
this Section. If Landlord elects to proceed under this Section, it may
at any time elect to terminate this Lease under subsection (a) above.
In the event of the employment of an attorney by the Landlord or its
Managing Agent, because of the material violation by Tenant of any
term or provision of the Lease, including non-payment of Rent as due,
Tenant shall pay, and agrees to pay, reasonable attorneys' fees,
litigation costs and all other costs incurred therein by Landlord.
(c) All rights and remedies of Landlord herein enumerated shall be
cumulative. In the event of any material breach by Tenant of any of
the covenants or provisions of this Lease, then regardless of whether
the Term of this Lease has commenced, this Lease has been terminated,
or Landlord has recovered possession of the Premises, Landlord shall
have the right of injunction and the right to invoke any remedy
allowed at law or in equity, and mention in this Lease of any
particular remedy shall not preclude Landlord from any other remedy at
law or in equity.
19. PAYMENT BY TENANT; NON WAIVER
(a) Payment by Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (i) obtaining possession of the Premises, (ii)
removing and storing Tenant's or any other occupant's property, (iii) repairing,
restoring, or otherwise putting the Premises back into the condition that
existed as of the date of this Lease, (iv) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (v) performing Tenant's obligations which
Tenant failed to perform, and (vi) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default.
(b) No Waiver. Landlord's acceptance of Rent following an Event of Default
shall not waive Landlord's rights regarding such Event of Default. No waiver by
16
Landlord of any violation or breach of any of the terms contained herein shall
waive Landlord's rights regarding any future violation of such term or violation
of any other term.
20. LANDLORD'S CURE OF DEFAULT BY TENEANT REIMBURSEMENT OF EXPENSES
If the Tenant defaults in the making of any payment or in the doing of any
act herein required to be made or done by Tenant and such default continues
after the expiration of any applicable notice and cure period, then the Landlord
may, but shall not be required to, make such payment or do such act, and if the
Landlord shall incur any charge or expense on behalf of Tenant under the terms
of this Lease, the amount of expense thereof, if made or done by the Landlord,
shall be paid by Tenant to Landlord, and shall constitute additional rent
hereunder, due and payable with the monthly installment of Rent next due and
payable after Landlord sends a written invoice therefor; provided, however, that
the making of such payment or the doing of such act by the Landlord shall not
operate to cure such default by Tenant, or to estop Landlord from the pursuit of
any remedy to which Landlord would otherwise be entitled.
21. LANDLORD'S LIEN
In addition to the statutory landlord's lien, Tenant grants to Landlord, to
secure performance of Tenant's obligations hereunder, a security interest in all
equipment, fixtures, furniture, improvements, and other personal property of
Tenant now or hereafter situated on the Premises, and all proceeds therefrom
(the "Collateral"), and the Collateral shall not be removed from the Premises
without the consent of Landlord until all obligations of Tenant have been fully
performed. Upon the occurrence of an Event of Default, Landlord may, in addition
to all other remedies, without notice or demand except as provided below,
exercise the rights afforded a secured party under the Uniform Commercial Code
of the State in which the Building is located (the "UCC"). In connection with
any public or private sale under the UCC, Landlord shall give Tenant five-days'
prior written notice of the time and place of any public sale of the Collateral
or of the time after which any private sale or other intended disposition
thereof is to be made, which is agreed to be a reasonable notice of such sale or
other disposition. Tenant grants to Landlord a power of attorney to execute and
file any financing statement or other instrument necessary to perfect Landlord's
security interest under this Section, which power is coupled with an interest
and shall be irrevocable during the Term. Landlord may also file a copy of this
Lease as a financing statement to perfect its security interest in the
Collateral.
22. SURRENDER OF PREMISES
No act by Landlord shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid
unless the same is made in writing and signed by Landlord. At the expiration or
termination of this Lease, Tenant shall deliver to Landlord the Premises with
all improvements located thereon in good repair and condition, reasonable wear
and tear (and condemnation and fire or other casualty damage not caused by
Tenant, as to which Section 15 shall control) excepted, and shall deliver to
Landlord all keys to the Premises. Provided that Tenant has performed all of its
obligations hereunder, Tenant may remove all unattached trade fixtures,
furniture, and personal property placed in the Premises by Tenant (but Tenant
shall not remove any such item which was paid for, in whole or in part, by
Landlord). Additionally, Tenant shall remove such alterations, additions,
improvements, trade fixtures, equipment, wiring (including, without limitation,
computer and telephone cabling and wiring) installed by or on behalf of Tenant,
and furniture as Landlord may request. Tenant shall repair all damage caused by
such removal. All items not so removed shall be deemed to have been abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed
of by Landlord, at Tenant's sole cost, without notice to Tenant and without any
obligation to account for such items. The provisions of this Section shall
survive the expiration or earlier termination of this Lease.
23. HOLDING OVER
If Tenant fails to vacate the Premises at the end of the Term, then Tenant
shall be a tenant at will and, in addition to all other damages and remedies to
which Landlord may be entitled for such holding over, Tenant shall pay, in
addition to the other Rent, a daily Rent equal to the greater of (a) 150% of the
daily Rent payable during the last month of the Term, or (b) the prevailing
rental rate in the Building for similar space. Tenant shall hold Landlord
harmless from all loss and damages, direct and consequential, which Landlord may
suffer in the loss of a prospective tenant of the Premises and in defense of
claims by other parties against Landlord arising out of the holding over by
Tenant, including, without limitation, attorneys' fees which may be incurred by
Landlord in defense of such claims. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.
24. CERTAIN RIGHTS RESERVED BY LANDLORD
Provided that the exercise of such rights does not unreasonably interfere
17
with Tenant's occupancy of the Premises, Landlord shall have the following
rights:
(a) to decorate and to make inspections, repairs, alterations, additions,
changes, or improvements, whether structural or otherwise, in and about the
Building, or any part thereof; for such purposes, to enter upon the Premises
and, during the continuance of any such work, to temporarily close doors,
entryways, public space, and corridors in the Building; to interrupt or
temporarily suspend Building services and facilities; and to change the
arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, or other public parts of the Building;
(b) to take such reasonable measures as Landlord deems advisable for the
security of the Building and its occupants, including without limitation
searching all persons entering or leaving the Building; evacuating the Building
for cause, suspected cause, or for drill purposes; temporarily denying access to
the Building; and closing the Building after normal business hours and on
Saturdays, Sundays, and holidays, subject, however, to Tenant's right to enter
when the Building is closed after normal business hours under such reasonable
regulations as Landlord may prescribe from time to time which may include by way
of example, but not of limitation, that persons entering or leaving the
Building, whether or not during normal business hours, identify themselves to a
security officer by registration or otherwise and that such persons establish
their right to enter or leave the Building;
(c) to change the address of the Building and/or the name by which the
Building is designated; and
(d) to enter the Premises at all reasonable hours to show the Premises to
prospective purchasers, lenders, or tenants.
25. SUBSTITUTION SPACE
(a) From time to time during the Term, Landlord may substitute for the
Premises other space that has an area at least equal to that of the Premises and
is located in the Building or in any other comparable building managed by
Landlord or an affiliate of Landlord (the "Substitution Space").
(b) If Landlord exercises such right by giving Tenant notice thereof
("Substitution Notice") at least sixty (60) days before the effective date of
such substitution, then (i) the description of the Premises shall be replaced by
the description of the Substitution Space; and (ii) all of the terms and
conditions of this Lease shall apply to the Substitution Space except that (A)
if the then unexpired balance of the Term shall be less than one year, then the
Term shall be extended so that the Term shall be one year from the Substitution
Effective Date (defined below), and (B) if the Substitution Space contains more
square footage than the Premises, then the Basic Monthly Rent then in effect
shall be increased proportionately (provided that such increase shall not exceed
105% of the Basic Monthly Rent due for the Premises) and shall be subject to
adjustment as herein provided. The effective date of such substitution (the
"Substitution Effective Date") shall be the date specified in the Substitution
Notice or, if Landlord is required to perform tenant finish work to the
Substitution Space as provided herein, then the date on which Landlord
substantially completes such tenant finish work. If Landlord is delayed in
performing the tenant finish work by Tenant's actions (either by Tenant's change
in the plans and specifications for such work or otherwise), then the
Substitution Effective Date shall not be extended and Tenant shall pay Rent for
the Substitution Space beginning on the date specified in the Substitution
Notice.
(c) Tenant may either accept possession of the Substitution Space in its
"as is" condition as of the Substitution Effective Date or require Landlord to
alter the Substitution Space in the same manner as the Premises were altered or
were to be altered. Tenant shall deliver to Landlord written notice of its
election within ten (10) days after the Substitution Notice has been delivered
to Tenant. If Tenant fails to timely deliver notice of its election or if an
Event of Default then exists, then Tenant shall be deemed to have elected to
accept possession of the Substitution Space in its "as is" condition. If Tenant
timely elects to require Landlord to alter the Substitution Space, then (i)
notwithstanding as provided herein, if the then unexpired balance of the Term is
more than one year, but less than three years, then the Term shall be extended
so that it continues for three years from the Substitution Effective Date, and
18
(ii) Tenant shall continue to occupy the Premises (upon all of the terms of this
Lease) until the Substitution Effective Date.
(d) Tenant shall move from the Premises into the Substitution Space and
shall surrender possession of the Premises as provided in Section 22 by the
Substitution Effective Date. If Tenant occupies the Premises after the
Substitution Effective Date, then Tenant's occupancy of the Premises shall be a
tenancy at will (and, without limiting all other rights and remedies available
to Landlord, including instituting a forcible detainer suit), Tenant shall pay
Rent for the Premises as provided in Section 23 and all other Rent due therefor
until such occupancy ends; such amounts shall be in addition to the Rent due for
the Substitution Space.
(e) If Landlord exercises its substitution right, then Landlord shall
reimburse Tenant for Tenant's reasonable out-of-pocket expenses for moving
Tenant's furniture, equipment, supplies and telephone equipment from the
Premises to the Substitution Space and for reprinting Tenant's stationery of the
same quality and quantity of Tenant's stationery supply on hand immediately
prior to Landlord's notice to Tenant of the exercise of this relocation right.
If the Substitution Space contains more square footage than the Premises, and if
the Premises were carpeted, Landlord shall supply and install an equal amount of
carpeting of the same or equivalent quality and color.
26. MANAGING AGENT
Tenant is hereby notified that the Landlord has appointed Realty Management
Company as its Managing Agent. The Landlord has authorized said Managing Agent
to act for, and in the name of, the Landlord for any and all purposes under this
Lease, including, but not limited to, the execution thereof, and Tenant shall
direct any and all notices and inquiries of any kind whatsoever pursuant to and
regarding this Lease to said Managing Agent. The Landlord reserves the right to
substitute any other person, firm or corporation for said Managing Agent, upon
written notice thereof by the Landlord to Tenant, Tenant hereby acknowledges the
authority of any such Managing Agent to act for, and in the name of, the
Landlord for any and all purposes under the Lease, and Tenant shall direct any
and all notices and inquiries of any kind whatsoever pursuant to or regarding
this Lease to said Managing Agent.
27. NO WAIVER
No provision of this Lease shall be deemed to have been waived by Landlord,
unless such waiver be in writing signed by Landlord. No waiver by Landlord of
any breach by Tenant of any of the terms, covenants, agreements, or conditions
of this Lease shall be deemed to constitute a waiver of any succeeding breach
thereof, or a waiver of any breach of any of the other terms, covenants,
agreements, and conditions herein contained. No custom or practice which may
occur or develop between the parties in connection with the terms of this Lease
shall be construed to waive or lessen Landlord's right to insist upon strict
performance of the terms of this Lease, without a written notice thereof from
Landlord to Tenant. No employee of Landlord or of Landlord's agents shall have
any authority to accept the keys of the Premises prior to termination of the
Lease, and the delivery of keys to any employee of Landlord or Landlord's agents
shall not operate as a termination of the Lease or a surrender of the Premises.
The receipt by Landlord of any payment of Rent with knowledge of the breach of
any covenant of this Lease shall not be deemed a waiver of such breach. The
failure of Landlord to enforce any of the Rules and Regulations made a part of
this Lease, or hereafter adopted, against Tenant or any other tenant in the
Building shall not be deemed a waiver of any such Rules and Regulations.
28. WAIVER OF COUNTERCLAIM AND TRIAL BY JURY
Landlord and Tenant waive their right to trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matter whatsoever arising out of or in any way connected with this
lease, the relationship of landlord and tenant, tenant's use of or occupancy of
the premises, and any emergency statutory or any other statutory remedy. Except
for mandatory counterclaims that would be waived if not interposed by Tenant,
Tenant shall not interpose any counterclaim or counterclaims or claims for
set-off, recoupment or deduction of rent in a summary proceeding for nonpayment
of rent or other action or summary proceeding based on termination, holdover or
other default in which landlord seeks repossession of the premises from Tenant.
29. MISCELLANEOUS
(a) Landlord Transfer. Landlord may transfer, in whole or in part, the
Building and any of its rights under this Lease. If Landlord assigns its rights
19
under this Lease, then Landlord shall thereby be released from any further
obligations hereunder.
(b) Landlord's Liability. In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns of Tenant covenant and agree
that in the event of any actual or alleged failure, breach or default hereunder
by Landlord: (a) the sole and exclusive remedy shall be against the interest of
Landlord in the Building; (b) neither Landlord nor (if Landlord is a
partnership) any partner of Landlord nor (if Landlord is a corporation) any
shareholder of Landlord, nor (if Landlord is a limited liability company) any
member of Landlord, nor Managing Agent specified in Section 26 hereof nor (if
Managing Agent is a partnership) any partner of Managing Agent nor (if Managing
Agent is a corporation) any shareholder of Managing Agent shall be personally
liable with respect to any claim arising out of or related to this Lease; (c) no
partner, member or shareholder of Landlord nor any partner or shareholder of
Managing Agent shall be sued or named as a party in any suit or action (except
as may be necessary to secure jurisdiction of Landlord); (d) no service of
process shall be made against any partner, member or shareholder of Landlord nor
against any partner or shareholder of Managing Agent (except as may be necessary
to secure jurisdiction of Landlord); (e) any judgment granted against any
partner, member or shareholder of Landlord or against any partner or shareholder
of Managing Agent may be vacated and set aside at any time as if such judgment
had never been granted; and (f) these covenants and agreements are enforceable
both by Landlord and also by any partner, member or shareholder of Landlord and
by any partner or shareholder of Managing Agent.
(c) Parking. Tenant shall be permitted to use three (3) undesignated
vehicular parking spaces in the parking garage associated with the Building (the
"Parking Garage") for every one thousand (1,000) gross square fee of space
leased in the Building during the initial Term at such rates and subject to such
terms, conditions and regulations as are from time to time charged or applicable
to patrons of the Parking Garage. Tenant's sole recourse for the failure or
inability to provide Tenant with such parking spaces as provided herein, shall
be against the Parking Garage operator only, and Tenant shall not have any
claims against Landlord in connection therewith.
(d) Force Majeure. Other than for Tenant's monetary obligations under this
Lease and obligations which can be cured by the payment of money (e.g.,
maintaining insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or any
other causes of any kind whatsoever which are beyond the control of such party.
(e) Brokerage. Landlord and Tenant each warrant to the other that aside
from the Broker it has not dealt with any broker or agent in connection with the
negotiation or execution of this Lease. Tenant and Landlord shall each indemnify
and hold harmless the other against all costs, expenses, attorneys' fees, and
other liability for commissions or other compensation arising by reason of a
breach by the indemnifying party of the aforesaid representation and warranty.
(f) Estoppel Certificates. From time to time, Tenant shall furnish to any
party designated by Landlord, within ten (10) days after Landlord has made a
request therefor, a certificate signed by Tenant confirming and containing such
factual certifications and representations as to this Lease as Landlord may
reasonably request.
(g) Notices. All notices and other communications given pursuant to this
Lease shall be in writing and shall be (i) mailed by first class, United States
Mail, postage prepaid, certified, with return receipt requested, and addressed
to the parties hereto at the address specified in the Basic Lease Information,
(ii) hand delivered to the intended address, or (iii) sent by prepaid telegram,
cable, facsimile transmission, or telex followed by a confirmatory letter.
Notice sent by certified mail, postage prepaid, shall be effective three (3)
business days after being deposited in the United States Mail; all other notices
20
shall be effective upon delivery to the address of the addressee. The parties
hereto may change their addresses by giving notice thereof to the other in
conformity with this provision.
(h) Separability. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws, then the remainder of
this Lease shall not be affected thereby and in lieu of such clause or
provision, there shall be added as a part of this Lease a clause or provision as
similar in terms to such illegal, invalid, or unenforceable clause or provision
as may be possible and be legal, valid, and enforceable.
(i) No Representations by Landlord. Neither Landlord nor any employee or
agent of Landlord has made any representations, warranties, agreements or
promises with respect to the Premises or the Building except as herein expressly
set forth, and no rights, privileges, easements or licenses are granted to
Tenant except as herein expressly set forth.
(j) Landlord's Approval. Whenever Landlord's consent or approval is
required under the terms of this Lease, Landlord may grant or deny such consent
or approval in its sole discretion unless otherwise specified herein.
(k) Authority. Landlord and Tenant hereby covenant each for itself, that it
has full right, power and authority to enter into this Lease upon the terms and
conditions herein set forth. Tenant does hereby covenant and warrant that Tenant
is a duly authorized and existing corporation, qualified to do business in the
jurisdiction in which the Premises is located, that the corporation has full
right and authority to enter into this Lease, and that each and both of the
persons signing on behalf of the corporation were authorized to do so. If Tenant
signs as a partnership, each of the persons executing this Lease on behalf of
Tenant does hereby covenant and warrant that Tenant is a duly formed and validly
existing partnership, that the partnership has full right and authority to enter
into this Lease, and that each of the persons signing on behalf of the
partnership were authorized to do so.
(l) Amendments; and Binding Effect. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by Landlord or Tenant unless such waiver is
in writing signed by the waiving party, and no custom or practice which may
evolve between the parties in the administration of the terms hereof shall waive
or diminish the right of either party to insist upon the performance by the
other in strict accordance with the terms hereof. The terms and conditions
contained in this Lease shall inure to the benefit of and be binding upon the
parties hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is
for the sole benefit of Landlord and Tenant, and, other than any holder of a
First Trust, no third party shall be deemed a third party beneficiary hereof.
(m) Quiet Enjoyment. Provided Tenant has performed all of the terms and
conditions of this Lease to be performed by Tenant, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Term, without hindrance from
Landlord or any party claiming by, through, or under Landlord, subject to the
terms and conditions of this Lease.
(n) Joint and Several Liability. If there is more than one Tenant, then the
obligations hereunder imposed upon Tenant shall be joint and several. If there
is a guarantor of Tenant's rent obligations hereunder, then the rent obligations
hereunder imposed upon Tenant shall be the joint and several rent obligations of
Tenant and such guarantor, and Landlord need not first proceed against Tenant
before proceeding against such guarantor nor shall any such guarantor be
released from its guaranty for any reason whatsoever.
(o) Captions. The captions contained in this Lease are for convenience of
reference only, and do not limit or enlarge the terms and conditions of this
Lease.
(p) No Merger. There shall be no merger of the leasehold estate hereby
created with the fee estate in the Premises or any part thereof if the same
person acquires or holds, directly or indirectly, this Lease or any interest in
this Lease and the fee estate in the leasehold Premises or any interest in such
fee estate.
21
(q) No Offer. The submission of this Lease to Tenant shall not be construed
as an offer, nor shall Tenant have any rights under this Lease unless Landlord
executes a copy of this Lease and delivers it to Tenant.
(r) Exhibits. All exhibits and attachments attached hereto are incorporated
herein by this reference.
Exhibit A - Outline of Premises
Exhibit B - Building Rules and Regulations
Exhibit C - Commencement of Lease
Exhibit D - Guaranty
(s) Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. The normal rule of construction
that any ambiguities be resolved against the drafting party shall not apply to
the interpretation of this Lease or any Exhibits or amendments hereto.
(t) No Partnership. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or create any other relationship between the parties hereto other than
that of Landlord and Tenant.
(u) Applicable Law. The laws of the jurisdiction in which the Premises are
located shall govern the validity, performance and enforcement of this Lease.
30. SPECIAL PROVISIONS
Intentionally Deleted.
31. CONSTRUCTION
(a) Landlord shall pay to Tenant the sum of One Hundred Forty Seven
Thousand Three Hundred Eighty-Five and 00/100 Dollars ($147,385.00) (the
"Construction Allowance") as a reimbursement to Tenant for the costs of
performing alterations and improvements to the Premises (the "Tenant's Work").
The Construction Allowance shall be paid by Landlord to Tenant in accordance
with the provisions of Section 31(b) below. Despite the foregoing, Tenant shall
pay all costs by performing the Tenant's Work that are in excess of the
Construction Allowance.
(b) Provided that Tenant is not in default of any monetary provision of
this Lease or any other material term of this Lease, Landlord shall pay the
Construction Allowance (or applicable portion thereof) to Tenant within thirty
(30) days after the last to occur of the following (A) final completion of all
of Tenant's Work in accordance with (i) the terms of this Lease, and (ii) plans
and specifications that have been approved in writing by Landlord, (B) evidence
of the satisfaction of the requirements of governmental authorities with respect
thereto, (C) receipt of releases of lien from all contractors and materialmen
who supplied labor or materials for the Tenant's Work, (D) Landlord's receipt of
paid invoices evidencing that Tenant has actually paid to materialmen and
contractors who have supplied materials or labor for the Tenant's Work an amount
equal to or in excess of the Construction Allowance, and (E) Tenant having
commenced to use the Premises for business purposes in accordance with the terms
of this Lease. Notwithstanding anything herein to the Contrary, in the event
Tenant has not fully utilized the Construction Allowance (or any portion
thereof) within twelve (12) months after the date of this Lease, Landlord shall
have no obligation to pay to Tenant any portion of the unused Construction
Allowance.
(c) Landlord shall be entitled to receive a construction supervisory fee in
the amount of three percent (3%) of the cost of performing the Tenant's Work
(the "Construction Supervisory Fee"), and Tenant hereby authorizes Landlord to
deduct the Construction Supervisory Fee from the Construction Allowance.
22
DATED as of the date first written above.
LANDLORD: BRE/METROCENTER LLC, a Delaware limited
liability company
By: BRE/Metro Member LLC, a Delaware limited
liability company, its Manager
By: /s/ Karen Sprogis
---------------------------
Name: KAREN SPROGIS
---------------------------
Title: Vice President
---------------------------
TENANT:
By: DCA OF CHEVY CHASE, LLC, a Maryland
limited liability company
By: /s/ Stephen W. Everett
---------------------------
Name: STEPHEN W. EVERETT
---------------------------
Title: President
---------------------------
23