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EXHIBIT 10.3
JACKSON SQUARE OFFICE PARK
DEED OF LEASE
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THIS DEED OF LEASE (the "Lease") is made as of 22 September, 2004,
by
and between LJ HOLDING, L.C., a Virginia limited liability com any
with an
office at 10300 Spotsylvania Avenue, Suite 101, Fredericksburg,
Virginia 22408
("Landlord"), and EOIR TECHNOLOGIES, INC. P.O. Box 1240,
Spotsylvania, Virginia
22553, ("Tenant").
WITNESSETH THAT:
In consideration of the mutual covenants, promises and
agreements
herein contained, Landlord hereby lets and demises to Tenant, and
Tenant hereby
leases from Landlord all those certain premises comprising Building
No. 2 (the
"Building"), in the Jackson Square Office Park (the "Office Park"),
as the
Building and Office Park are shown on a layout plan attached hereto
as Exhibit
"A," and known as 4701 Carr Drive, Fredericksburg, Spotsylvania
County, Virginia
22408, containing approximately 10,000.00 square feet (the
"Premises").
THE PARTIES DO HEREBY AGREE AND COVENANT AS FOLLOWS:
1. COMMENCEMENT DATE/LEASE TERM/EXTENSION/OCCUPANCY.
A. The date on which the latter of Landlord or Tenant shall ratify
this
Lease shall be the Commencement Date. The Premises are accepted by
Tenant in an
"as is" condition.
B. The Lease shall commence on the Commencement Date and run
until
midnight October 31, 2009 (the "Lease Term"). Notwithstanding the
aforesaid,
Tenant shall have the rights set forth in Paragraph 42 hereof.
C. Provided Tenant is not in default at the time of exercise,
Tenant
shall have the right to enter into an extension of the Lease for an
additional
three (3) year term at a mutually acceptable rental rate; provided,
however, in
no event shall the rental rate for any extension period be less
than the rental
rate paid in the last year of the original Lease. The extension
option shall be
exercised by Notice to Landlord given a minimum of ninety (90) days
prior to the
expiration of the original Lease Term.
D. Tenant may not enter or occupy the Premises prior to the
Commencement Date without Landlord's express written consent.
Occupancy of the
Premises by Tenant shall be conclusive evidence that Tenant has
accepted the
Premises as suitable in its then current condition.
2. BASE RENT. Commencing on November 1, 2004, Tenant shall pay to
Landlord an
annual base rent ("Base Rent") of One Hundred Fifty Thousand and
00/100 Dollars
($150,000.00) payable in equal monthly installments of Twelve
Thousand Five
Hundred and 00/100 Dollars ($12,500.00). The installments of Base
Rent shall be
paid on the first day of each calendar month at the place
designated by
Landlord.
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3. BASE RENT ESCALATION. Commencing on the first day of November,
2005, and on
the first day of each November thereafter during the Lease Term
(each of such
dates being herein referred to as an "Adjustment Date"), the Base
Rent in effect
immediately preceding the Adjustment Date shall be increased by an
amount equal
to the product of the Base Rent in effect immediately proceeding
the Adjustment
Date then at hand (which Base Rent shall be annualized if the year
in which the
Commencement Date occurs is a partial year, and which Base Rent
shall not
reflect any rental abatement or deferral) multiplied by four
percent (4%). Such
computation shall constitute the Base Rent, as adjusted, payable in
equal
monthly installments, commencing on the Adjustment Date then at
hand and
continuing on the first day of each month thereafter until the next
Adjustment
Date or the end of the Lease Term, whichever is applicable.
4. MAINTENANCE/OPERATING EXPENSES/UTILITIES/TAXES. Tenant shall be
responsible
for all maintenance and repairs to the interior of the Premises.
The HVAC,
plumbing and electric systems of the Premises shall be maintained
by the Tenant
with qualified and licensed contractors. Repairs or replacement of
major system
components of the existing HVAC, plumbing or electric system shall
be the
responsibility of the Tenant up to a maximum expense of Three
Thousand and
00/100 Dollars ($3,000.00) annually. The Landlord shall be
responsible for the
cost of repairs or major component replacement which exceeds
$3,000.00 annually,
and in such event, Landlord may elect to coordinate and contract
for such work.
Should Landlord not elect to contract for such work, Tenant shall
request the
Landlord's written approval to incur costs for such repairs, which
shall not be
unreasonably withheld. The Tenant shall submit documentation of
incurred repair
costs for reimbursement by the Landlord. Reimbursement by the
Landlord to the
Tenant for previously approved repair costs beyond the $3,000.00
shall be made
within thirty (30) days of written request therefore.
Tenant shall be responsible for all janitorial services with
respect to
the interior of the Premises, including such routine matters as
light bulb
replacement and provisions of supplies for restroom and kitchen
facilities, if
any. Tenant shall contract with a reputable supplier of such
janitorial
services, with the scope of work for such supplier to be consistent
with
janitorial services typically supplied to office tenants. Tenant
shall keep the
Premises neat, clean and sanitary and shall not itself and shall
not permit any
person to destroy, deface, damage, impair or remove any part of
Premises or the
facilities or appurtenances thereto.
Tenant, at its sole cost and expense, shall arrange for and pay
all
charges when due for water, gas, electricity, heat, cable and any
other utility
services provided to, used by or consumed on the Premises. Tenant
hereby
covenants and agrees to indemnify and save Landlord harmless from
and against
any and all claims, losses and expenses arising from the
installation and
maintenance of such utility services and from all costs for any and
all utility
services provided to, used by or consumed on the Premises. Tenant
shall pay its
Pro Rata Share of all utilities serving the common areas of the
Business Park or
the Building generally including electric, water and sewer, gas,
heat, cable and
any other utility services ("Project Utilities"), which Project
Utilities are
part of the Operating Expenses.
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Landlord shall be responsible for maintenance and repairs to the
roof,
foundation, all structural components and the exterior of the
Building and the
common areas of the Building and Office Park. Landlord shall be
responsible for
the payment of operating expenses, taxes and the insurance to be
maintained by
Landlord (as distinguished from insurance to be maintained by
Tenant, which
Tenant insurance shall be paid for by Tenant).
5. PAYMENT/ADDITIONAL RENT. All sums of money or charges required
to be paid by
Tenant under this Lease other than Base Rent shall be deemed
Additional Rent
hereunder and all remedies applicable to the non-payment of Base
Rent shall be
applicable thereto. Additional Rent shall accrue commencing on the
Commencement
Date Hereof. All Base Rent and Additional Rent (collectively
"Rent") shall be
paid without prior notice or demand therefor as to Base Rent and
within ten (10)
days of written notice as to Additional Rent (unless tenant has
previously been
given a schedule of Additional Rent and due dates therefore, in
which case no
notice will be required therefore), and without any counter-claim,
set-off,
deduction, recoupment, credit or defense whatsoever, it being
understood and
agreed that Tenant's covenant to pay the Rent is hereby deemed to
be, and shall
be, independent of the obligations of Landlord hereunder. All
payments shall be
applied to the earliest amount then due. No receipt and/or
acceptance by
Landlord of any sums shall be deemed a waiver of any default by
Tenant, with the
exception of the default identified in Paragraph 19E below, which
may be cured
by payment of all Rent and Additional Rent that is currently then
due. Landlord
shall have the right to require Rent payments to be made by money
order, by
cashier's check or certified check. A late charge in the amount of
five percent
(5 %) of any overdue amount shall be immediately due and owing by
Tenant to
Landlord as Additional Rent for any payment delinquent seven (7)
days after the
due date. Payment of the Rent and Additional Rent (including the 5
% late
charge) within fifteen 15 days of the original due date shall cure
such default.
6. TENANT'S POSSESSION. Tenant's right of possession shall commence
on the
Commencement Date.
7. SECURITY DEPOSIT. Upon execution of this Lease by Tenant, Tenant
shall
deposit with Landlord the sum of Twelve Thousand Five Hundred and
00/100 Dollars
($12,500.00), to be held by Landlord as a security deposit
("Security Deposit"),
to insure the full and faithful performance by Tenant of each and
every term,
provision, covenant and condition of this Lease. The Security
Deposit or any
portion not so used, applied or retained shall be refunded to
Tenant after
termination of the tenancy and delivery of possession of the
Premises to
Landlord. Tenant shall not utilize the Security Deposit as rent. If
any part of
the Security Deposit shall have been utilized by Landlord in
accordance with the
terms hereof or applicable law, Tenant shall immediately deposit
with Landlord a
sum equal to the amount so applied by Landlord so Landlord shall
have the full
Security Deposit on hand at all times during the Term.
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8. INDEMNIFICATION. Tenant hereby waives all claims against
Landlord for damage
to any property or injury to, or death of, any person in, upon, or
about the
Premises, arising at any time and from any cause other than by
reason of the
gross negligence or willful misconduct of Landlord, its agents,
employees,
representatives, or contractors. Tenant shall, and hereby agrees
to, indemnify
and hold Landlord harmless from any loss, cost, claim, expense and
the like,
including damage to any property or injury to, or death of, any
person relating
to the Premises or Tenant's failure to comply with the terms of
this Lease
unless such damage is caused by the gross negligence or willful
misconduct of
Landlord.
9. LEGAL REQUIREMENTS. Tenant shall, at its own expense, comply
with all laws,
orders, ordinances and regulations of Federal, state and local
authorities and
with directions of public rules, recommendations, requirements and
regulations
respecting all matters of occupancy, condition or maintenance of
the Premises.
The foregoing shall include Tenant's compliance with the Americans
with
Disabilities Act of 1990, U.S.C. ss. 12101 et sec. as amended from
time to time
with regard to the interior improvements made by Tenant. Wherever
the term
"Legal Requirements" appears in this Lease, such term shall be
deemed to include
the foregoing requirements.
10. OFFICE PARK LAYOUT; OTHER TENANTS; SIGNAGE.
A. Landlord expressly reserves the right to reconfigure the layout
of
the Office Park at any time, provided no such reconfiguration shall
change the
layout of the Premises or, unless required to satisfy Legal
Requirements,
materially and negatively impact access to the Building or the
location of the
Building, without the Tenant's consent, which consent will not be
unreasonably
withheld, conditioned or delayed. Landlord makes no express or
implied
representation or warranty to Tenant with respect to the
composition of the
other tenants in the Office Park.
B. Tenant's suite entry signage and Building signage, if any, shall
be
provided by the Tenant at Tenant's expense, the exact location to
be mutually
agreed upon by Landlord and Tenant and shall be in compliance with
all local
governmental restrictions that apply.
11. INSPECTION AND REPAIR/ACCESS. Landlord, its agents or
employees, and
mechanics authorized by Landlord shall and may, from time to time,
at all
reasonable hours, enter the Premises to render services and make
adjustments in
connection therewith, customary or necessary in the construction,
remodeling, or
maintenance of the Premises and for all other proper purposes.
Except in the
case of an emergency, Landlord shall give Tenant notice prior to
entering the
Premises. Landlord shall have the right, upon reasonable notice to
Tenant,
during the last six months of the Term to show the Premises to
prospective
tenants, and at any time during the Term, to show the Premises to
prospective
purchasers. Landlord agrees to use commercially reasonable efforts
to minimize
interference with Tenant's business operations when entering the
Premises. The
Tenant reserves the right to provide an escort to accompany the
Landlord, its
authorized agents or employees, and mechanics while within the
Premises.
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12. ALTERATIONS. Other than those alterations set forth on Exhibit
B attached
hereto, which such alterations are hereby approved by Landlord (the
"Approved
Alterations"), Tenant shall not make any alterations or additions
to the
Premises without the prior written permission of Landlord, which
permission
shall not be unreasonably withheld. Notwithstanding the foregoing,
Tenant shall
have the right to make strictly decorative alterations to the
Premises without
Landlord's prior written permission.
Landlord shall provide an allowance of up to Thirty-five Thousand
and
00/100 Dollars ($35,000.00) toward the direct cost of the Approved
Alterations
("Alteration Allowance"). Upon completion of the Approved
Alterations, Tenant
shall provide to Landlord documentation and evidence as to the
direct cost of
the Approved Alterations. Within thirty (30) days of receipt of
said
documentation, Landlord shall reimburse Tenant the amount of said
direct cost up
to the amount of the aforesaid Alteration Allowance.
13. REQUIRED ALTERATIONS. If at any time during the Term Landlord
should be
required by any governmental authority to make repairs, alterations
or additions
to the Premises occasioned by the use which Tenant makes of the
Premises,
Landlord shall cause such repairs, alterations or additions to be
made and
Tenant shall be solely responsible for all costs and expenses
associated with
such repairs, alterations or additions.
14. MECHANIC'S LIENS. In the event any mechanic's lien is filed
against the
Premises as a result of any services or labor provided, or
materials furnished,
by or on Tenant's behalf, or claimed to have been provided by or on
Tenant's
behalf, Tenant shall (i) immediately notify Landlord of such lien,
and (ii)
within ten (10) calendar days after the filing of any such lien,
discharge and
cancel such lien of record by payment or bonding in accordance with
the laws of
the Commonwealth of Virginia, all at Tenant's sole cost and
expense. Landlord
acknowledges and agrees that Tenant shall not be responsible for
any mechanic's
liens arising in connection with the construction of the
Improvements to be
performed by Landlord.
15. USES/EXCLUSIVITY. The Premises will be used solely for business
office
purposes and for no other purpose without Landlord's consent, which
consent will
not be unreasonably withheld if such additional use is consistent
with the
operation of a first-class Office Park, is compatible with the
other uses within
the Office Park, does not compete with any other use in the Office
Park or
violate any other exclusive granted any other tenant in the Office
Park. If any
governmental licenses or permits shall be required for the proper
and lawful
conduct of Tenant's business on the Premises, then Tenant shall
procure and
maintain same at Tenant's expense. Tenant will not use or allow the
Premises to
be used for any disorder4y or unlawful purposes or in any manner
offensive to
others.
16. PARKING AND COMMON FACILITIES., Tenant shall have the
reasonable use, in
common with others, of the parking areas, roadways, means of
ingress and egress
and service and common areas of the Office park, subject to
Landlord's right to
designate reserved parking spaces for tenants and visitors and
subject to
Landlord's adoption of reasonable rules and regulations. Landlord
shall maintain
the common and parking areas in good condition consistent with a
first-class
Office park.
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17. ASSIGNMENT/SUBLET. Tenant shall not assign this Lease or sublet
the Premises
or any portion thereof, or transfer possession or occupancy thereof
to any other
person or persons, or transfer any interest in the Lease or the
Premises without
the prior written consent of Landlord which consent shall not be
unreasonably
withheld, and provided that the use of the assignee or sublessee is
permitted
pursuant to Paragraph 15 hereof. Landlord agrees to respond to any
request as
expeditiously as possible and, in any event, to use good faith
efforts to
respond within thirty (30) days of receipt of a request.
18. INSURANCE.
A. Tenant, at Tenant's sole cost and expense, shall obtain and
maintain
in effect at all times during the Term, policies providing for
primary insurance
coverage of the following types: Property Insurance (excluding the
exterior and
structural components and common areas of the Building) and
Liability Insurance
covering Tenant's activities in the Premises and common areas of
the Building
and Office Park, and Tenant's Worker's Compensation Insurance.
Tenant's
liability insurance shall be in the minimum amount of One Million
Dollars
($1,000,000), combined single limit, written on an occurrence
basis. All
insurance policies required to be maintained by Tenant shall be
acceptable to
Landlord, in Landlord's sole discretion, and shall comply with
Landlord's
requirements for the provisions of such policies, including,
without limitation,
requirements regarding scope of coverage, limits of coverage, terms
and
conditions of coverage, qualification of carriers, named insureds,
notice of
cancellation provisions and waiver of subrogation rights.
B. Neither the issuance of any insurance policy required hereunder,
nor
the minimum limits established by Landlord with respect to Tenant's
insurance
coverage, shall be deemed to limit or restrict in any way Tenant's
liability
arising under or out of this Lease. Tenant shall deliver to
Landlord a duplicate
original or certified copy of each insurance policy required by
Landlord,
together with evidence of payment of all applicable premiums.
Tenant's insurance
shall specifically provide that unless Landlord has been given
thirty (30) days'
prior written notice, such insurance policy shall not be canceled
and shall
remain in full force and effect. Tenant shall not do or permit to
be done any
act or thing in or upon the Premises which shall increase the rate
or rates of
any insurance referred to hereinabove. If by reason of failure of
Tenant to
comply with this provision, the rate or rates of any insurance
coverage referred
to above shall at any time be higher than it otherwise would be,
and if Landlord
is required to or has elected to obtain and maintain any such
insurance
coverage, then Tenant shall reimburse Landlord on demand as
Additional Rent for
such increased premium(s).
C. Insurance covering the exterior and structural components of
the
Building and the common areas of the Building and Office Park shall
be obtained
by Landlord, which insurance shall be in the amount of the
replacement value of
such items.
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19. DEFAULTS.
A. If Tenant refuses to take possession of the Premises within
sixty
(60) days after the Commencement Date;
B. If Tenant vacates or abandons the Premises and permits the same
to
remain unoccupied and unatten
