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Lease Agreement

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This Lease Agreement involves

SGS INTERNATIONAL, INC.

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Title: LEASE
Governing Law: Virginia     Date: 5/5/2006

LEASE, Parties: sgs international  inc.
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Exhibit 10.30

LEASE

THIS DEED OF LEASE, dated as of the day of April, 2005, by and between SOUTHERN GRAPHIC SYSTEMS, INC., a Kentucky corporation, hereinafter referred to as “Tenant”, and 5301 LEWIS ROAD, L.L.C., a Virginia limited liability company, hereinafter referred to as “Landlord.”

WITNESSETH, that for and in consideration of the rent hereinafter reserved, and the covenants contained herein, the parties hereby agree as follows:

 

1.

Leased Premises.

Landlord hereby leases to Tenant the portion of real property located at 5301 Lewis Road, Henrico County, Virginia, which is outlined in red on Exhibit A attached hereto, including a building located thereon containing a total of 88,384 square feet, a layout of which is attached hereto as Exhibit B , together with any easements which are located between the Premises and Lewis Road (the “Adjacent Parcel”) necessary to provide access to the foregoing premises from Lewis Road across the adjacent undeveloped land of Landlord (outlined in yellow on Exhibit C attached hereto) (the “Premises”). The Premises shall include all existing on-site parking (a minimum of 126 parking spaces), and all other paved areas located on the Premises. Provided, however, Landlord retains the right to relocate the parking designated on Exhibit A as “future parking”, at Landlord’s sole cost and expense, provided that the Premises shall thereafter continue to have a minimum of 126 parking spaces.

 

2.

Term and Possession.

2.1. Term . The term of this Lease shall be for ten (10) years and three (3) months commencing May 1, 2005 (hereinafter referred to as the “Commencement Date”). The term of this Lease, as the same may be extended pursuant to Section 41, shall be referred to herein as the “Term”.

2.2. Exclusive Possession . Subject to any rights expressly reserved to Landlord herein, Tenant shall have exclusive access to the Premises, and shall have the right, in its sole discretion, to prevent access across the Premises by any future tenant of the Adjacent Parcel.

2.3 Option to Terminate . Tenant shall have the right, at its sole option, to terminate this Lease at any time after the end of the eighty seventh (87 th ) month after the Commencement Date, provided that (i) Tenant is not then in default of any of its obligations hereunder, (ii) Tenant shall provide written notice of such termination at least two hundred seventy (270) days prior to the early termination date, and (iii) Tenant shall pay to Landlord, on or before the early termination date, an amount equal to the unamortized cost of (a) the Tenant Improvements (as defined herein), and (b) the total brokerage commissions paid by Landlord to Fischer & Company, both of which items are to be amortized at the rate of eight and one-half percent (8.5%) per annum over the original Term,.

2.4. Preparation of Premises . The rights and obligations of Landlord and Tenant with respect to the preparation of the Premises for occupancy by Tenant shall be governed by the provisions of Exhibit D attached hereto (the “Work Letter”).


3.

Rent

3.1. Rent . Tenant shall pay to Landlord as rent for the Premises the amounts set forth below, payable without deduction, demand or offset, in equal monthly installments (hereinafter referred to as the “Basic Monthly Rental”), in advance on the first day of each calendar month during the Term commencing on the first day of the Term, and continuing on the first day of each month thereafter during the Term, mailed to P. O. Box 6482, Richmond, Virginia 23230, or hand delivered to 4801 Radford Avenue, Richmond, Virginia 23230. Rent checks shall be made payable to Landlord. Should the Term commence or terminate on a day other than the first day or the last day (as the case may be) of a calendar month, the parties agree that rental for the first and last month of the Term shall be prorated and rent for the remaining months shall be due and payable on the first of the month as provided above. As used herein the term “Rent” shall mean all amounts of Basic Monthly Rental as well as all additional rent or other payments which Tenant is obligated to pay to Landlord, including, without limitation, the amortization of the Tenant Allowance as provided in Exhibit D hereto. Tenant shall not pay the Basic Monthly Rental more than one (1) month in advance of its due date.

 

 

 

 

 

 

 

 

 

 

 

Month

  

Annual Rate/S.F.

  

Rent/Mo.

  

Rent/Ann.

1-3

  

$

0.00

  

$

0.00

  

$

0.00

4-15

  

$

4.75

  

$

34,985.33

  

$

419,824.00

16-27

  

$

4.85

  

$

35,685.04

  

$

428,220.48

28-39

  

$

4.95

  

$

36,398.74

  

$

436,784.89

4D-51

  

$

5.05

  

$

37,126.72

  

$

445,520.59

52-63

  

$

5.15

  

$

37,869.25

  

$

454,431.00

64-75

  

$

5.25

  

$

38,626.63

  

$

463,519.62

76-87

  

$

5.35

  

$

39,399.17

  

$

472,790.01

88-99

  

$

5.46

  

$

40,187.15

  

$

482,245.81

100-111

  

$

5.57

  

$

40,990.89

  

$

491,890.73

112-123

  

$

5.68

  

$

41,810.71

  

$

501,728.54

3.2 Operating Expenses . Tenant shall be responsible for the payment of, or reimbursement to Landlord for amounts incurred by Landlord, as operating expenses of the Premises, including, without limitation, all real estate taxes, insurance premiums for insurance coverage that is required pursuant to this Lease (except for the pollution liability insurance policy required under Section 11.7 of this Lease, for which Landlord shall pay up to $100,000 of the premium cost), and all maintenance expenses for maintenance required to be performed by Landlord (except for certain maintenance and repair expenses which are the sole responsibility of Landlord, pursuant to and to the extent set forth in Section 8.1 hereof). Such maintenance expenses shall include the cost of repairing and maintaining parking lots; access roads; truck passageways; routine non-capital repairs to the roof or roof membrane; drains, gutters and downspouts; landscaped areas; exterior walkways; water, sanitary sewer and storm sewer systems located outside the building; and the HVAC system (together with real estate taxes and insurance premiums, the “Operating Expenses”). Landlord estimates that the Operating Expenses for 2005 shall be $1.45 per square foot. Payments made by Landlord under the HVAC maintenance contract and the snow removal contract, or any similar, generally consistent replacement contracts, shall be included in the Operating Expenses and be reimbursed by Tenant to Landlord. . All Operating Expenses that are contracted services shall be at rates that are competitive in the Richmond, Virginia metropolitan area for similar properties. Tenant shall pay to Landlord on the first day of each month during the Term, beginning May 1, 2005, an

 

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amount equal to 1/12 th of the anticipated Operating Expenses for the applicable Lease year. Landlord shall deliver to Tenant on or before February 28 th of each year during the Lease Term a reconciliation of the Operating Expenses for the previous Lease Year, which shall include sufficient detail to insure that the Operating Expenses relate exclusively to the Premises, and not to the Adjacent Parcel, and shall also deliver Landlord’s estimate of Operating Expenses for the then current Lease Year. If Tenant has over paid Operating Expenses for the preceding Lease year, then the amount of the overpayment shall be credited against the next succeeding month or months of Operating Expense payments by Tenant or, at Tenant’s option, such overpayment shall be refunded to Tenant within ten (10) days of Tenant’s request therefor. If Tenant has underpaid Operating Expenses for the preceding Lease year, Tenant shall pay the balance due to Landlord within thirty (30) days after receipt of Landlord’s reconciliation.

3.3. Tenant’s Expenses . Except as provided in Section 3.2 above, Tenant shall be responsible for the maintenance and repair of all non-structural portions of the Premises. In addition, Tenant shall enter into a contract providing for annual maintenance and testing of the sprinkler system, or assume such a contract from Landlord, which contract shall be reasonably acceptable to Landlord and Tenant, and Tenant shall provide the results of all such service and testing to Landlord. Tenant shall also be responsible for entering into an annual agreement for the provision of a security system (for burglary protection and monitoring of the sprinkler system), at its sole cost and expense, which contract shall be reasonably acceptable to Landlord.

3.4. Late Payment . Tenant hereby recognizes and acknowledges that if Rent is not received when due, Landlord will suffer damages and additional expense thereby and Tenant therefore agrees, in addition to such other remedies as are available to Landlord, to pay as additional rent (if not waived by Landlord) a service charge equal to five percent (5%) of any sum due hereunder which is not paid within seven (7) days of its due date. Notwithstanding the foregoing, Tenant shall only be required to pay such service charge if more than two (2) payments are not paid within seven (7) days of their due dates in the course of any calendar year. If Tenant fails to pay Rent within fifteen (15) days of its due date, such payment shall bear an interest rate of ten percent (10%) per annum. Furthermore, should Tenant fail to pay Rent when due three times during any calendar year, Landlord or its managing agent, Porter Realty Company, Inc. ( “Porter” ) shall have the right to require that Rent be made by certified or cashier’s check, or wire transfer.

 

4.

Financial Responsibility.

Tenant shall provide to Landlord, upon Landlord’s request and only in connection with a sale or refinance of the Premises and no more often than once per calendar year during the Term, reasonable financial information concerning Tenant’s financial condition, provided the recipient(s) of such financial information first execute and deliver to Tenant Tenant’s form confidentiality agreement.

 

5.

Use.

The Premises shall be used and occupied only for general office, manufacturing, assembly, storage, distribution uses, and any other lawful uses, and in strict accordance with all applicable laws and regulations of governmental authorities. It shall be Tenant’s responsibility to obtain assurance that the Premises is property zoned for Tenant’s contemplated use. Tenant shall not use or permit or suffer the use of the Premises for any unlawful or offensive business or purpose; use or permit the walls, fences or roof of the Premises to be used for advertising

 

3


purposes without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned; or operate diesel-powered forklifts upon or about the Premises at any time. Tenant shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than one tenant in the building containing the Premises, wilt tend to disturb such other tenants. Tenant shall not store inventory, supplies or personal property outside of the building.

 

6.

Utilities.

The Premises are separately metered for all public utilities for Tenant’s utility consumption. Tenant agrees to pay when due all utility charges incurred in connection with its use and occupancy of the Premises, including, but not limited to, electricity, gas, water, sewer and telephone and to immediately transfer all utility accounts into its own name and to make all required deposits at the Commencement Date. Tenant shall at all times keep the Premises adequately heated to prevent the sprinkler system and water pipes from freezing. Tenant shall keep all utilities connected and in use during the entire Term. Should Tenant discontinue the use of any utility during the term, Landlord may pay all fees for the re-connection and reasonable use of the utilities during the remainder of the Term and any costs incurred by Landlord shall be charged to Tenant as additional rent due within thirty (30) days of demand.

 

7.

Condition of Promises.

7.1. Guaranties . Landlord agrees that Tenant may have the benefit of any guarantees or warranties which Landlord holds or may receive on any equipment or systems in the Premises for whatever period said guarantees and warranties may apply. This shall not, however, relieve Tenant from any responsibility for damage caused by its negligence or for maintenance or repairs as provided for in Section 8.3 below. Nothing herein contained shall constitute any representation that such guarantees and warranties are assignable or that Landlord warrants performance by the guarantor or warrantor.

7.2. Acceptance of Premises . Subject to construction of the Tenant Improvements, as provided in the Work Letter, and further subject to the obligations of Landlord set forth in Section 7.3 below, Tenant hereby accepts the Premises and any equipment thereon in their condition existing as of the Commencement Date or the date that Tenant takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county, state and federal laws, ordinances and regulations governing and regulating the use of the Premises (or any equipment thereon), and any easements, covenants, restrictions or other matters of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto, and further subject to latent defects in materials and workmanship. Landlord shall deliver the Premises to Tenant on the Commencement Date in full compliance with the Americans With Disabilities Act, 42 U.S.C. § 12101 et seq, {the “ADA”). If any Improvements are required to be made to the Premises pursuant to the ADA after the Commencement Date resulting from a change in the use of the Premises by Tenant from the previous tenant’s use of the Premises, such cost shall be paid by Tenant or reimbursed to Landlord within thirty (30) days after written request, accompanied by copies of invoices for such work. Tenant shall cause all alterations and Improvements to the Premises made by or on behalf of Tenant after the Commencement Date to be in full compliance with the ADA. Except as provided in this Section, Tenant shall have no responsibility with respect to insuring compliance of the Premises with the ADA. Tenant acknowledges that neither Landlord nor Porter has made any representation or warranty as to the present or future suitability of the Premises or any

 

4


equipment thereon for the conduct of Tenant’s business. Neither Landlord nor Porter shall be under any duty to instruct Tenant or others as to the use of arty equipment on the Premises.

7.3 Landlord shall replace the existing roof and replace HVAC units RTU 1-17 and SS-1 as promptly as practicable, taking into consideration the requirements of the last paragraph of the Work Letter. Landlord shall replace HVAC units RTU 18-21 when needed, pursuant to the recommendation of Colonial Mechanical Corporation or the HVAC vendor reasonably approved, in writing, by Landlord under contract for the Premises. Exhibit E attached hereto depicts alt of the HVAC units, by number.

 

8.

Maintenance and Repairs.

8.1. Structural Maintenance . Landlord shall maintain in good condition and repair the structure of the Premises including the roof, roof membrane, drains, gutters, downspouts, foundation, exterior walls, floor slab, parking areas, driveways and sidewalks. The sprinkler system suspended in the Premises shall be the sole responsibility of Tenant. Landlord shall make all repairs becoming necessary by reason of any structural defect in the Premises; provided, however, that Landlord shall not be required to make any repairs necessitated by reason of any act or omission by Tenant, its employees, agents, licensees, invitees or anyone entering the Premises by force, but if Landlord does make any such repairs, Tenant agrees to promptly, within thirty (30) days after receipt of demand, reimburse Landlord for the full cost thereof. Any capital repairs to the roof or roof membrane, drains, gutters, downspouts, foundation or exterior walls shall be made at Landlord’s sole cost and expense. Notwithstanding the foregoing, the cost of any other repairs or maintenance incurred by Landlord shall constitute Operating Expenses. Landlord shall be responsible, at its sole cost and expense, for all repairs or replacements to the HVAC systems costing over $500.00; provided, however, that the figure of $500 shall be increased by $250 on the fifth anniversary of the Commencement Date, and on the first day of each fifth year thereafter during the Term including any renewals or extensions thereof. Tenant shall be responsible for the repair of any pipes or sprinkler systems rendered inoperative or damaged by Tenant ’s failure to keep the Premises adequately heated and for any damages or injuries caused by such failure. No liability shall be imposed on Landlord because of any injury or damage to personal property, or because of any interference with the services and facilities listed above, caused by accidents, riots, strikes, or any other reason beyond the control of Landlord, and Landlord shall be under no duty to restore any of such services and facilities or to make any of the repairs for which Landlord is obligated, except after receipt of written notice from Tenant of a need therefor, and there shall be a reasonable period of time within which Landlord may make such repairs. Any costs which would be considered capital expenses under generally accepted accounting principles shall not be treated as Operating Expenses, and shall be paid solely by Landlord. Landlord hereby represents and warrants to Tenant that, as of the Commencement Date, (i) all building systems are in good working order, (ii) Landlord is not aware of any structural or major repairs required to be effected to the Premises; (iii) Landlord has not received any notice of noncompliance with laws with respect to the Premises, which has not been remedied; and (iv) to the best of Landlord’s knowledge, the Premises presently complies with all laws applicable to the structural components, base building systems and common areas of the Premises.

8.2. Snow and Ice Removal . Landlord shall enter into an annual contract for snow removal, which contract shall be reasonably acceptable to Tenant, the cost of which shall be an Operating Expense. Such contract shall provide that snow removal shall be provided upon the accumulation of three (3) inches of snow and that chemicals which may cause damage to concrete and other paved areas shall not be used.

 

5


8.3 Other Maintenance. Repairs and Replacements . Except as otherwise expressly provided in Section 8.1 and except to the extent a guarantor or warrantor performs under Section 7.1, Tenant shall, at its own expense, during the Term, keep the non-structural portions of the Premises in good order and condition, and make all repairs and do all acts of maintenance becoming necessary in, upon or about the Premises, at Tenant’s expense and shall maintain the floors and walls in a clean condition.

 

9.

Alterations.

9.1. Installation . Tenant shall not make any alterations, additions, modifications or improvements (the “Alterations”) to the Premises affecting the structure of the Premises or costing in excess of $50,000.00 per occurrence without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned, nor without the consent of any mortgagee to the extent required. Any expenses incurred by Landlord in supervising construction of any non-structural Alterations shall be paid by Landlord. If Tenant makes any structural Alterations, Tenant shall reimburse Landlord the reasonable cost incurred by Landlord to supervise such structural Alterations. If Tenant desires to make any Alterations requiring Landlord’s consent, plans for same shall first be submitted to and approved in writing by Landlord, and same shall be done by Tenant, at its own expense, and Tenant agrees that all such work shall be done in a good and workmanlike manner and in accordance with applicable laws and regulations, that the structural integrity of the building shall not be impaired, that no penetration of the roof or any roofing membrane shall occur, that no liens shall attach to the Premises by reason thereof, and that Tenant will secure all necessary permits pertaining to the aforementioned Alterations. In the event that Tenant makes Alterations to the Premises which do not require Landlord’s consent Tenant shall provide to Landlord a copy of all plans for same for information purposes only and, upon completion of such Alterations, Tenant shall provide Landlord a copy of the “as built” plans for Landlord’s files. Tenant will not suffer or permit any contractor’s, subcontractor’s or supplier’s lien (a “Lien”) to be filed against the Premises or any part thereof by reason of work, labor services or materials supplied or claimed to have been supplied to Tenant; and if any Lien shall at any time be filed against the Premises or any part thereof, Tenant, within thirty [30) days after receipt of written notice of the filing thereof, shall cause it to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shall fail to cause such Lien to be discharged within the period aforesaid, then in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge it either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings. Any amount so paid by Landlord, plus all of Landlord’s costs and expenses associated therewith (including, without limitation, reasonable legal fees), shaft constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand with interest from the date of advance by Landlord at the rate of eight percent (8%) per annum.

9.2. Ownership and Removal . The Alterations, additions, modifications and improvements referred to in Section 9.1, if consented to in writing by Landlord, or if Landlord’s consent is not required shall become part of the real property as soon as they are affixed thereto and Landlord shall not require that Tenant remove all or any part of such Alterations prior to the expiration of the Term. Tenant may, at its expense, remove any non-structural alterations provided that Tenant repairs any damage to the Premises resulting from the removal of such alterations, as Tenant’s sole cost and expense.

 

6


10.

Personal Property.

Intentionally deleted.

 

11.

Environmental.

11.1 Tenant represents and warrants to Landlord that, during the term of this Lease, no Hazardous Substance (defined below) will be spilled, released, discharged, disposed, placed or otherwise caused to be located in the air, soil or water in, under or upon the Premises by Tenant.

11.2 Tenant agrees to defend, indemnify, and hold Landlord, its agents, representatives, officers, shareholders, directors and employees and its successors and assigns (collectively, the “Landlord Indemnities”), harmless against any and all liabilities, including but not limited to, losses, damages, actions, costs, fees of attorneys, consultants and experts and other expenses of any nature whatsoever which may be asserted against any of the Landlord Indemnitees, on account of any grounds whatsoever, including without limitation, any suit, administrative proceeding, citation, remediation demand, or judgments by any person or entity arising out of the spillage, release, discharge, disposal, or placement in or upon the air, soil or water in, under or upon the Premises caused by the sole actions or inactions of Tenant, its employees, agents, contractors and of Tenant’s invitees (the “Tenant Parties”) of any Hazardous Substance subsequent to the Commencement Date and during the term of Tenant’s occupancy of the Premises.

11.3 Landlord agrees to defend, indemnify, and hold Tenant, its agents, representatives, officers, shareholders, directors and employees and its successors and assigns (collectively, the “Tenant Indemnitees”), harmless against any and all liabilities, including but not limited to, losses, damages, actions, costs, fees of attorneys, consultants and experts and other expenses of any nature whatsoever which the Tenant Indemnitees may sustain, suffer or incur or which may be asserted against any of the Tenant Indemnitees, or on account of any grounds whatsoever, including without limitation, any suit, administrative proceeding, citation, remediation demand, or judgments by person or entity arising out of any past or future spillage, release, discharge, disposal, or placement in or upon the air, soil or water in, under or upon the Premises by anyone other than a Tenant Party during the term of this Lease of any Hazardous Substance.

11.4 For purposes of this Lease, the term “Hazardous Substance” shall mean any substance, chemical, or waste that is or shall be listed or defined as hazardous, toxic, or dangerous under Applicable Environmental Law (defined below), and any petroleum products.

11.5 For purposes of this Lease, the term “Applicable Environmental Law” shall include, but not be limited to, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 et seq .; the Resource Conservation and Recovery Act (“RCRA”), 42, U.S.C. §§ 6901 et seq .; the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq .; the Clean Air Act, 42 U.S.C. §§ 7401 et seq .; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1471 et seq .; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2619; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; as they have been amended from time to time, and their concomitant regulations; and any similar state and local laws and ordinances and the regulations implementing such statutes.

 

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11.6 Tenant has delivered to Landlord an additional Phase II Environmental Assessment (the “Additional Report” ) from BB&L, dated January      , 2004 at Landlord’s expense (such reimbursement to Tenant shall not exceed $50,000). Landlord and Tenant acknowledge and agree that the environmental condition of the Premises, as provided in the Additional Report, has established the base line of existing environmental conditions located at the Premises. Tenant shall promptly deliver copies of any updates of the Additional Report to Landlord, without cost or expense to Landlord.

11.7 On or before August 1, 2005, Landlord shall provide to Tenant a 10-year pollution liability insurance policy, reasonably acceptable to Tenant, with coverage commencing on August 1, 2005 issued by an insurer reasonably acceptable to Tenant, with $10,000,000 coverage limits. If Tenant extends or renews the Term of this Lease pursuant to any right contained herein, Landlord shall, at its sole cost and expense, obtain a similar pollution liability insurance policy for the renewal or extension term, provided that the policy can be renewed at substantially the same rate.

 

12.

Insurance.

12.1. Fire and Extended Coverage . Landlord shall, at all times during the Term, obtain and keep in force hazard insurance on the building in which the Premises are situated, in amounts not less than one hundred percent (100%) of the replacement cost of the building and the improvements (excluding footings and foundations). Tenant agrees, in addition to the provisions of Section 11, that it shall not do anything to cause Landlord’s insurance against loss by fire or such other hazards as are covered and protected against under policies of insurance commonly referred to and known as “all risk coverage” or “designated risk,” as well as public liability insurance, to be cancelled or that will prevent Landlord from procuring same in acceptable companies and at standard rates. Tenant shall further do everything reasonably possible and consistent with the conduct of Tenant’s business to enable Landlord to obtain the lowest possible rates for insurance on the Premises. “Insurance Costs” means all insurance premiums payable by Landlord in order to procure and maintain in force fire and extended coverage insurance with vandalism, malicious mischief, earthquake and sprinkler damage endorsements, liability insurance, rent loss insurance, plate glass insurance and such other insurance as may be required pursuant to the foregoing provisions, or deemed advisable by Landlord in connection with its ownership and operation of the building or complex of which the Premises are a part, all with such reasonable limits of coverage as Landlord may deem advisable. Tenant shall pay to Landlord, as an Operating Expense, the Insurance Costs.

12.2. Liability Insurance and Indemnification of Landlord . Landlord and Porter shall not be liable to Tenant for and Tenant does hereby release Landlord, Porter and their respective agents and employees from liability for any injury, loss or damages to Tenant or to any other person or property occurring upon the Premises or the approaches thereto or the parking facilities in or adjacent thereto from any cause, except Landlord’s negligence or willful misconduct. Tenant agrees to indemnify and save Landlord, Porter and their respective agents and employees harmless against and from any and all liability, damages, expenses, including reasonable attorneys’ fees, claims and demands of every kind, that may be brought against Landlord, for or on account of any damages, loss or injury to persons or property in or about the Premises during the Term unless caused by the negligence or willful misconduct of Landlord, its agents, employees or contractors. The foregoing indemnification shall survive the expiration or earlier termination of this Lease. Tenant also covenants and agrees, at its own expense, to maintain on all its personal property, a policy of property insurance on an all-risk form under blanket policies consistent with common, prudent industry practice, coverage written in the

 

8


manner in which Tenant customarily insures comparable risks. Tenant further agrees to carry, at its own expense, at all times, during the Term, commercial general liability insurance with a financially responsible insurance company, a bodily injury and property damage combined single limit policy of at least $3,000,000 per occurrence and $10,000,000 aggregate. All such policies maintained by Tenant for liability arising out of Tenant’s use and occupancy of the Premises but excluding Landlord’s repair and maintenance obligations, shall name each of Landlord and Porter as additional parties insured, and shall contain a provision that the same may not be cancelled or materially modified without giving Landlord and the Agent at least thirty (30) days’ prior written notice. In addition, certificates evidencing that such policies are in effect, shall be delivered to Landlord and Porter no later than the Commencement Date, and renewals shall be delivered prior to the expiration or cancellation of any such policy. If Tenant fails to comply with its covenant to maintain insurance as provided herein, Landlord may, at its option, cause insurance as aforesaid to be issued and, in such event, Tenant shall pay promptly when due the premiums for such insurance as additional rent hereunder. Prior to procuring such insurance, Landlord shall provide Tenant with five (5) days written notice of Landlord’s intent sent by U.S. registered or certified mail or by an independent overnight courier service.

12.3 Liability and Indemnification of Tenant . Tenant shall not be liable to Landlord and/or Porter (in all cases) for, and Landlord hereby releases Tenant from liability for any injury, loss or damages to Landlord or to any other person or property occurring upon the Premises or the approaches thereto or the parking facilities in or adjacent thereto from any cause, except for Tenant’s negligence or willful misconduct. Landlord agrees to indemnify and save Tenant harmless against and from any and all liability, damages, expenses, including reasonable attorneys’ fees, claims and demands of every kind that may be brought against it, for or on account of any damages, loss or injury to persons or property in or about the Premises during the Term, unless caused by the negligence or willful misconduct of Tenant, its agents, employees or contractors. The foregoing indemnification shall survive the expiration or earlier termination of this Lease. Landlord also covenants and agrees to carry at all times during the Term, commercial general liability insurance with a financially responsible insurance company , a bodily injury and property damage combined single limit policy of at least $3,000,000 per occurrence, with $10,000,000 aggregate. Such policy shall name each of Tenant, Landlord and Porter as a party insured, as their interests may appear , and shall contain a provision that the same may not be cancelled or materially modified without giving Tenant at least thirty (30) days prior written notice. In addition, certificates evidencing that such policies are in effect shall be delivered to Tenant no later than the Commencement Date, and renewals shall be delivered prior to the expiration or cancellation of any such policy. If Landlord fails to comply with this covenant to maintain insurance as provided herein, Tenant may, at its option, cause insurance as aforesaid to be issued and, in such event, such expenses shall not be included within the Operating Expenses for the year in which such premiums are paid by Tenant. Prior to procuring such insurance, /Tenant shall provide Landlord with five (5) days written notice of Tenant’s intent sent by U.S. registered or certified mail or by an independent overnight courier service.

12.4 Waiver of Subrogation . Each party hereto, and anyone claiming through or under them by way of subrogation, waives and releases any cause of action it might have against the other party and Porter and their respective employees, officers, members, partners, trustees and agents, on account of any loss or damage that is insured against under any insurance policy required to be obtained hereunder (to the extent that such loss or damage is recoverable under such Insurance policy) that covers the Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold improvements or business and which names Landlord and

 

9


Porter or Tenant, as the case may be, as a party insured. Each party hereto agrees that it will cause its insurance carrier to endorse all applicable policies waiving the carrier’s right of recovery under subrogation or otherwise against the other party. During any period while such waiver of right of recovery is in effect, each party shall look solely to the proceeds of such policies for compensation for loss, to the extent such proceeds are paid under such policies.

 

13.

Permits – Compliance with Laws.

13.1. Permits . Tenant shall, at its own expense, promptly obtain from the appropriate governmental authorities any and all permits, licenses and the like required to permit Tenant to occupy the Premises for the purposes herein stated, except for any permits that Landlord is required to obtain in order to satisfy Landlord’s obligations under the Work Letter. This requirement shall not relieve Tenant of its liability for rent from the Commencement Date.

13.2. Compliance with Laws . Tenant shall promptly comply with all statutes, laws, ordinances, orders, rules, regulations and requirements of the federal, state and local governments and of the Board of Fire Underwriters, affecting the Premises or applicable to the use of the Premises, whether material or incidental to such use, and shall be responsible for the correction, prevention and abatement of nuisances or violations in, upon or connected with the Premises during the Term. Tenant shall also promptly comply with all changes in such statutes, laws, ordinances, orders, rules, regulations and requirements. Tenant shall bear the full cost and risk of all such compliance, including the cost of any alterations, additions, or improvements required by such statutes, laws, ordinances, orders, rules, regulations and requirements, whether or not structural in nature. Tenant shall bear full responsibility and liability for any failure of the Premises to so comply. To the extent that any alterations, additions, changes or improvements are required by such statutes, laws, ordi


 
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