Exhibit 10.17
BANNISTER
PROPERTIES
704 MAXWELL DRIVE
Raleigh, NC 27603
Phone: 919-779-1523, Fax:
919-779-1560
COMMERCIAL LEASE
AGREEMENT
THIS LEASE, made
this 15 TH
day of
APRIL 2005 , by and between
SDA. LLC
(“Landlord”) whose
address is
704 MAXWELL DRIVE, RALEIGH, NC 27603
and
SIGNATURE SPECIAL EVENTS
SERVICES
(‘Tenant”) whose address
is
285 Bucheimer Road, Frederick, MD
21701
WITNESSETH:
PREMISES
1. Landlord, for and in
consideration of the rents, covenants, agreements, and stipulations
hereinafter mentioned, provided for and covenanted to be paid, kept
and performed by Tenant, leases and rents unto Tenant, and Tenant
hereby leases and takes upon the terms and conditions which
hereinafter appear, the following described property (hereinafter
called the Premises), to wit:
Address:
1206-1218 MANAGEMENT WAY, GARNER, NC
27529
Legal Description:
APPROXIMATELY 29,750 SF OF WAREHOUSE WITH
OFFICE
x
See attached Exhibit B for
legal description of premises.
TERM
2. The Tenant shall have and hold
the Premises for a term of SEVEN (7) YEARS beginning on
the 1ST day of MAY, 2005 , and ending on the
30TH day of APRIL, 2012 at midnight, unless sooner
terminated as hereinafter provided. The first Lease Year
Anniversary shall be the date twelve (12) calendar months
after the first day of the first full month of the term hereof and
successive Lease Year Anniversaries shall be the date twelve
(12) calendar months from the previous Lease Year
Anniversary.
RENTAL
3. Tenant agrees to pay Landlord or
its Agent without demand, deduction or set off, an annual rental of
$ 148,750 payable in equal monthly installments of $
12,395.83 in advance on the first day of each calendar month
during the term hereof. Upon execution of this Lease, Tenant shall
pay to Landlord the first month’s rent due hereunder. Rental
for any period during the term hereof which is less than one month
shall be the pro-rated portion of the monthly rental due. On each
Lease Year Anniversary the annual rental payable hereunder (and
accordingly the monthly installments) shall be adjusted. (See
Addendum A).
x
by any change in the Consumer Price
Index, Urban Wage Earners and Clerical Workers, All Cities (CPI-W,
1982-1984=100) (“Index”) by multiplying the then
effective annual rental by the value of said Index for the month
two months prior to the Lease Year Anniversary and dividing the
product by the value of said Index for the month two months prior
to the previous Lease Year Anniversary (in the instance of the
first Lease Year Anniversary the value of the Index for the month
two months prior to the first full month of the term hereof). In
the event the Index ceases to be published there shall be
substituted for the Index the measure published by the US
Department of Labor which most nearly approximates the
Index;
x
as follows:
NOTE: CPI IS CAPPED AT 3% PER YEAR
NOTE: AS LONG AS TENANT IS NOT IN
DEFAULT WITH SAID LANDLORD, TENANT SHALL HAVE THE OPTION TO RENEW
THIS LEASE AGREEMENT FOR ONE ADDITIONAL TERM OF FIVE
(5) YEARS. THE TERMS AND CONDITIONS SHALL REMAIN THE SAME
EXCEPT THE RENT SHALL BE NEGOTIATED AT THAT TIME; TENANT MUST
NOTIFY SAID LANDLORD, NO LATER THAN 120-DAYS PRIOR TO
THE
EXPIRATION OF THE INITIAL SEVEN-YEAR TERM, OF
ITS INTENT TO EXTEND THIS LEASE AGREEMENT. NOTIFICATION MUST BE
DONE IN WRITING VIA CERTIFIED MAIL.
x
If this box is checked, Tenant shall
pay all rental to Landlord’s Agent at the following
address:
704 MAXWELL DRIVE, RALEIGH, NC
27603
LATE CHARGES
4. If Landlord fails to receive any
rent payment within 15 days after it becomes due, Tenant
shall pay Landlord, as additional rental, a late charge equal to
FIVE percent (5%) of the overdue amount or $
50.00 whichever is greater, plus any actual bank fees
incurred for returned or dishonored checks. The parties agree that
such a late charge represents a fair and reasonable estimate of the
cost Landlord will incur by reason of such late payment.
SECURITY DEPOSIT
|
5.
|
x If this box is checked, Agent shall hold the
Security Deposit and shall be entitled to the interest
thereon.
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UTILITY BILLS
|
6.
|
(a) Tenant
shall pay the following utilities:
|
ALL UTILITIES, INCLUDING BUT NOT
LIMITED TO: Power, Water, Gas/Propane, Trash, etc.
(b) Landlord shall pay the following
utilities:
NONE
Responsibility to pay for a utility
service shall include all metering, hook-up fees or other
miscellaneous charges associated with the installation and
maintenance of such utility in said party’s name.
COMMON AREA COSTS; RULES AND
REGULATIONS
7. If the Premises are part of a
larger building or group of buildings, Tenant shall pay as
additional rental monthly, in advance, its pro rata share of common
area maintenance costs as hereinafter more particularly set forth
in the Special Stipulations (see Paragraph 38). The Rules and
Regulations, if any, attached hereto are made a part of this Lease.
Tenant agrees to perform and abide by these
Rules and Regulations, if any, and such other
Rules and Regulations, if any, as may be made from time to time by
Landlord.
USE OF PREMISES
8. The Premises shall be used
for
OFFICE & WAREHOUSE STORAGE
purposes only and no other. The
Premises shall not be used for any illegal purposes, nor in any
manner to create any nuisance or trespass, nor in any manner to
vitiate the insurance or increase the rate of insurance on the
Premises. In the event Tenant’s use of the Premises results
in an increase in the rate of insurance on the Premises, Tenant
shall pay to Landlord, upon demand and as additional rental, the
amount of any such increase.
TAX AND INSURANCE
ESCALATION
9. Tenant shall pay upon demand as
additional rental during the term of this Lease, and any extension
or renewal thereof;
x
The amount by which all taxes
(including but not limited to, ad valorem taxes, special
assessments and any other governmental charges) on the Premises for
each tax year exceed all taxes on the Premises for the tax year
2004 ; or
x
the excess cost of fire and extended
coverage insurance including any and all public liability insurance
on the building over the cost of the first year of the Lease term
for each subsequent year during the term of this Lease.
INDEMNITY;
INSURANCE
10. Tenant agrees to and hereby does
indemnify and save Landlord harmless against all claims for damages
to persons or property by reason of Tenant’s use or occupancy
of the Premises, and all expenses incurred by Landlord because
thereof, including attorney’s fees and court costs.
Supplementing the foregoing and in addition thereto, Tenant shall
during the term of this Lease and any extension or renewal thereof,
and at Tenant’s expense, maintain in full force and effect
comprehensive general liability insurance with limits of $
1,000,000 per person and $ 1,000,000 per accident,
and property damage limits of $ 1,000,000 , which insurance
shall contain a special endorsement recognizing and insuring any
liability accruing to Tenant under the first sentence of this
paragraph and naming Landlord as additional insured. Tenant shall
provide evidence of such insurance to Landlord prior to the
commencement of the term of this Lease. Landlord and Tenant each
hereby release and relieve the other, and waive any right of
recovery,
for loss or damage arising out of or incident to
the perils insured against which perils occur in, on or about the
Premises, whether due to the negligence of Landlord or Tenant or
their agents, employees, contractors and/or invitees, to the extent
that such loss or damage is within the policy limits of said
comprehensive general liability insurance. Landlord and Tenant
shall, upon obtaining the policies of insurance required, give
notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease. (See
Addendum A).
REPAIRS BY
LANDLORD
11. Landlord agrees to keep in good
repair the roof, foundation and exterior walls of the Premises
(exclusive of all glass and exclusive of all exterior doors) and
underground utility and sewer pipes outside the exterior walls of
the building, except repairs rendered necessary by the negligence
or intentional wrongful acts of Tenant, its agents, employees or
invitees. If the Premises are part of a larger building or group of
buildings, then to the extent that the grounds are common areas,
Landlord shall maintain the grounds surrounding the building,
including paving, the mowing of grass, care of shrubs and general
landscaping. Tenant shall promptly report in writing to Landlord
any defective condition known to it which Landlord is required to
repair and failure to report such conditions shall make Tenant
responsible to Landlord for any liability incurred by Landlord by
reason of such conditions.
REPAIRS BY TENANT
12. Tenant accepts the Premises in
their present condition and as suited for the uses intended by
Tenant. Tenant shall, throughout the initial term of this Lease,
and any extension or renewal thereof, at its expense, maintain in
good order and repair the Premises, including the building and
other improvements located thereon, except those repairs expressly
required to be made by Landlord hereunder. Unless the grounds are
common areas of a building(s) larger than the Premises, Tenant
further agrees to care for the grounds around the building, agrees
to return the Premises to Landlord at the expiration or prior
termination of this Lease, in as good condition and repair as when
first received, natural wear and tear, damage by storm, fire,
lightning, earthquake or other casualty alone excepted. Tenant,
Tenant’s employees, agents, contractors or subcontractors
shall take no action which may void any manufacturers or installers
warranty with relation to the Premises. Tenant shall indemnify and
hold Landlord harmless from any liability, claim, demand or cause
of action arising on account of Tenant’s breach of the
provisions of this paragraph.
ALTERATIONS
13. Tenant shall not make any
alterations, additions, or improvements to the Premises without
Landlord’s prior written consent. Tenant shall promptly
remove any alterations, additions, or improvements constructed in
violation of this Paragraph upon Landlord’s written request.
All approved alterations, additions, and improvements will be
accomplished in a good and workmanlike manner, in conformity with
all applicable laws and regulations, and by a contractor approved
by Landlord, free of any liens or encumbrances. Landlord may
require Tenant to remove any alterations, additions or improvements
(whether or not made with Landlord’s consent) at the
termination of the Lease and to restore the Premises to its prior
condition, all at Tenant’s expense. All alterations,
additions and improvements which Landlord has not required Tenant
to remove shall become Landlord’s property and shall be
surrendered to Landlord upon the termination of this Lease, except
that Tenant may remove any of Tenant’s machinery or equipment
which can be removed without material damage to the Premises.
Tenant shall repair, at Tenant’s expense, any damage to the
Premises caused by the removal of any such machinery or
equipment.
REMOVAL OF
FIXTURES
14. Tenant may (if not in default
hereunder) prior to the expiration of this Lease, or any extension
or renewal thereof, remove all fixtures and equipment which it has
placed in the Premises, provided Tenant repairs all damage to the
Premises caused by such removal.
DESTRUCTION OF OR DAMAGE TO
PREMISES
15. If the Premises are totally
destroyed by storm, fire, lightning, earthquake or other casualty,
this Lease shall terminate as of the date of such destruction and
rental shall be accounted for as between Landlord and Tenant as of
that date. If the premises are damaged but not wholly destroyed by
any such casualties, rental shall abate in such proportion as
effective use of the Premises has been affected and Landlord shall
restore Premises to substantially the same condition as before
damage as speedily as is practicable, whereupon full rental shall
recommence.
GOVERNMENTAL
ORDERS
16. Tenant agrees, at its own
expense, to comply promptly with all requirements of any legally
constituted public authority made necessary by reason of
Tenant’s occupancy of the Premises. Landlord agrees to comply
promptly with any such requirements if not made necessary by reason
of Tenant’s occupancy. It is mutually agreed, however,
between Landlord and Tenant, that if in order to comply with such
requirements , the cost to Landlord or Tenant, as the case
may be, shall
exceed a sum equal to one year’s rent,
then Landlord or Tenant, whichever is obligated to comply with such
requirements, may terminate this Lease by giving written notice of
termination to the other party by registered mail, which
termination shall become effective sixty (60) days after
receipt of such notice and which notice shall eliminate the
necessity of compliance with such requirements by giving such
notice unless the party giving such notice of termination shall,
before termination becomes effective, pay to the party giving
notice all cost of compliance in excess of one year’s rent,
or secure payment of said sum in manner satisfactory to the party
giving notice.
CONDEMNATION
17. lf the whole of the Premises, or
such portion thereof as will make the Premises unusable for the
purposes herein leased, is condemned by any legally constituted
authority for any public use or purpose, then in either of said
events the term hereby granted shall cease from the date when
possession thereof is taken by public authorities, and rental shall
be accounted for as between Landlord and Tenant as of said date.
Such termination, however, shall be without prejudice to the rights
of either Landlord or Tenant to recover compensation and damage
caused by condemnation from the condemner. It is further understood
and agreed that Tenant shall not have any rights in any award made
to Landlord by any condemnation authority.
ASSIGNMENT AND
SUBLETTING
18. Tenant shall not, without the
prior written consent of Landlord, which shall not be unreasonably
withheld, assign this Lease or any interest hereunder, or sublet
the Premises or any part thereof, or permit the use of the Premises
by any party other than the Tenant. Consent to any assignment or
sublease shall not impair this provision and all later assignments
or subleases shall be made likewise only on the prior written
consent of Landlord. The Assignee of Tenant, at option of Landlord,
shall become directly liable to Landlord for all obligations of
Tenant hereunder, but no sublease or assignment by Tenant shall
relieve Tenant of any liability hereunder.
EVENTS OF DEFAULT
19. The happening of any one or more
of the following events (hereinafter any one of which may be
referred to as an “Event of Default”) during the term
of this Lease, or any renewal or extension thereof, shall
constitute a breach of this Lease on the part of the Tenant:
(a) Tenant fails to pay the rental as provided for herein;
(b) Tenant abandons or vacates the Premises; (c) Tenant
fails to comply with or abide by and perform any other obligation
imposed upon Tenant under this Lease;
(d) Tenant is adjudicated bankrupt; (e) a
permanent receiver is appointed for Tenants property and such
receiver is not removed within sixty (60) days after written
notice from Landlord to Tenant to obtain such removal;
(f) Tenant, either voluntarily or involuntarily, takes
advantage of any debt or relief proceedings under any present or
future law, whereby the rent or any part thereof is, or is proposed
to be reduced or payment thereof deferred; (g) Tenant makes an
assignment for benefit of creditors; or (h) Tenant’s
effects are levied upon or attached under process against Tenant,
which is not satisfied or dissolved within thirty (30) days
after written notice from Landlord to Tenant to obtain satisfaction
thereof.
REMEDIES UPON
DEFAULT
20. Upon the occurrence of Event of
Default, Landlord may p