OFFICE LEASE AGREEMENT

OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE AGREEMENT, made this 13 ^th day of APRIL, 1998, by and between JFB JOINT VENTURE LIMITED PARTNERSHIP , a Maryland Limited Partnership, hereinafter called “Landlord” and SCIENTIFIC ENGINEERING SOLUTIONS, INC., a corporation organized and existing under the law of the State of Maryland, having an address at 10010 Junction Drive, Suite 202, Annapolis Junction, MD 20701, hereinafter called “Tenant.”

 

WITNESSETH

 

1. DEMISE, TERM, RENTAL .

 

Landlord hereby leases to Tenant and Tenant hereby hires from Landlord all that certain office space (the “Premises”) known as Suite No. 202 outlined on Exhibit “A” containing a rentable area of 3,812 square feet in the building (“Building”) known as 10010 Junction Drive, Annapolis Junction, MD the Premises to be used and occupied only for general offices and for no other purpose, all in accordance with the Rules and Regulations attached hereto, for the term of Twenty Four (24) months commencing on the 1st day of May 1998, (the “Commencement Date”) and terminating on the 30th day of April 2000, (the “Termination Date”) for the following Base Gross Rent:

 

 

All Base Gross Rent shall be paid in lawful money of the United States of America, (subject to adjustment as hereafter provided) PAYABLE in monthly installments in advance during the term of this Lease on the first day of each month, without offset or deduction of any kind, the first and last installment of rent to be paid at the time of signing this Lease. All rent shall be payable without prior notice or demand to Landlord c/o First National Bank of MD, P.O. Box 6420,

 

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Baltimore, MD 21264-4201, or at such other place as Landlord may from time to time designate by notice in writing.

 

2. ADJUSTMENTS TO RENT .

 

A. The Operating Base Expense of the office area of the Building shall be the actual operating expenses for the year 1998 per square foot of office rentable area therein. If in any calendar year during the term hereof, the Operating Expenses of the office area of the Building should exceed the Operating Base Expense (such excess being hereinafter referred to as the “Operating Expense Differential”), then, as additional rental for that year, Tenant shall pay the Operating Expense Differential to Landlord within thirty (30) days of being notified by Landlord of said amount being due for each rentable square foot of floor space leased hereunder, and any expansion or extensions thereof.

 

B. At any time during the term of this Lease, but not later than ten (10) days prior to the date a rental payment is due, Landlord may deliver to Tenant a written estimate of any additional rents which may be reasonably anticipated hereunder, whereupon the monthly rental for such full or partial calendar year shall be increased by the amount estimated divided by the number of months remaining in the calendar year.

 

C. Statements showing the actual Operating Expenses of the Building and Tenant’s proportionate share thereof (hereinafter referred to as “Statement of Actual Adjustment”) shall be delivered by Landlord to Tenant within ninety (90) days after the end of any calendar year in which additional rental was paid or due by Tenant under the provisions hereof. Within fifteen (15) working days after the delivery by Landlord to Tenant of such Statement of Actual Adjustment, Tenant shall pay to Landlord the amount of any rentals shown as being due and unpaid thereon. Should such Statement of Actual Adjustment show the Tenant

 

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had paid to Landlord an aggregate amount in excess of the additional rental due for the preceding calendar year and Tenant is not then in default hereunder, Landlord shall credit the amount thereof to the monthly rent or rents next becoming due from Tenant.

 

D. If the term of this Lease begins on a day other than the first day of a calendar year, or should this Lease terminate on a day other than the last day of a calendar year, the amount shown as due by Tenant on the Statement of Actual Adjustment shall reflect a proration based on the proportion that the number of days this Lease was in effect during such calendar year bears to 365.

 

E. For purposes of this article, the term “operating Expenses” shall mean any and all costs and expenses paid or incurred by Landlord, or its agents, for any calendar year in connection with the operation, servicing, maintenance and repair of the Building, determined in accordance with generally accepted accounting principles, and ground rent, if any, property taxes, insurance and any tax imposed upon gross receipt of rents, but shall exclude: (1) provisions for depreciation; (2) interest on indebtedness; (3) income taxes; (4) dividends; and (5) other expenses which do not relate to the operations of the Building.

 

F. The obligations of Landlord and Tenant under this Paragraph 2 shall survive the expiration or other termination of this Lease.

 

3. POSSESSION .

 

A. Notwithstanding the date specified in Paragraph 1 for the Commencement Date, the term of the Lease shall not commence until the substantial completion of the construction of all Tenant Improvements as specified in Paragraph 4. Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Premises to Tenant on such date, and Landlord’s non-delivery of the Premises shall not affect this Lease or the obligations of

 

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Tenant under this Lease. The Lease Term shall be extended for a period equal to the delay in delivery of possession of the Premises to Tenant, plus the number of days necessary to end the Lease Term on the last day of a month. If delivery of possession of the Premises to Tenant is delayed, Landlord and Tenant shall, upon such delivery, execute an amendment to this Lease setting forth the Commencement Date and Termination Date of this Lease.

 

B. If Tenant occupies the Premises prior to the Commencement Date, such occupancy shall not advance the Termination Date of the Lease. All of the terms, covenants and provisions of the Lease shall apply from the date of occupancy and possession and the rent shall be paid at the rate herein set forth on a pro rata basis for the early occupancy period.

 

4. CONSTRUCTION OF PREMISES .

 

There is attached hereto Exhibit “B” setting forth what construction is necessary to prepare the Premises for Tenant’s occupancy and further setting forth the responsibility of Landlord and Tenant respectively, for undertaking such construction and the responsibility of each for the cost of same. Any additions to the attached exhibits which result in additional costs shall be handled as change orders and paid for by Tenant upon execution of change orders.

 

5. ACCEPTANCE OF PREMISES .

 

By entry and commencement of use and occupancy of the Premises, Tenant acknowledges that Tenant has examined the Premises and thereby shall be deemed to accept the same as being in the condition called for by this Lease.

 

6. MECHANIC’S LIENS .

 

Tenant shall, within ten (10) days after notice from Landlord, discharge any mechanic’s lien for material or labor claimed to have been furnished to the Premises on Tenant’s behalf

 

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(except for work contracted for by Landlord) and shall indemnify and hold harmless the Landlord from any loss incurred in connection therewith.

 

7. BUILDING SERVICES .

 

Landlord shall furnish heat and pair-conditioning during the hours from 8:00 a.m. to 6:00 p.m., Monday to Friday and 8:00 a.m. to 1:00 p.m. on Saturday, inclusive, except holidays, as required in Landlord’s sole and reasonable judgment for the comfortable occupancy of the Premises by Tenant, and will cause the Premises to be cleaned and cared for, and will also furnish electricity for lighting the Premises and small (desk top) business machines. Business machines shall be deemed to include such equipment as typewriters, adding machines, proof machines, bookkeeping machines, word processors and personal computers now in general use. Tenant will pay, however, for all electric current furnished, if any, for specialized tabulation and electronic computing equipment and other similar equipment and machinery using more electricity than the business machines enumerated above. In such case, a separate meter therefore shall be installed at Tenant’s cost and said electric current shall be paid for by Tenant at the prevailing rate charged to Landlord by the utility company. If Tenant, requests heat and air-conditioning after the regular hours set forth above, the Tenant agrees to pay Landlord for such additional heat and air-conditioning based on the actual cost to Landlord. Landlord agrees to replace standard building fixture light bulbs in the lighting fixtures whenever necessary. Landlord shall not be liable for any failure to supply said services unless failure is due to gross negligence on Landlord’s part.

 

8. ASSIGNMENT AND SUBLETTING .

 

A. Tenant shall not assign, pledge, mortgage or otherwise transfer or encumber this Lease nor sublet all or any part of the Premises or permit employees without

 

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Landlord’s prior written consent, which consent may not be unreasonably withheld by the Landlord. If the Tenant hereunder is a corporation, any transfer sale, pledge, or other disposition of more than 50% of the ownership interests shall be deemed such an assignment.

 

B. Tenant’s request for consent shall be in writing and contain the name, address, and description of the proposed assignee or subtenant, and its most recent financial statement and other evidence of financial responsibility, the intended use of the Premises, the terms and conditions of the proposed assignment or subletting and, in the case of any subletting,, the amount of the proposed sub-rents. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law. Any subtenants, assignees or transferees consented to by Landlord shall become directly liable to Landlord for all obligations of Tenant hereunder, without relieving Tenant (or any guarantors of Tenant’s obligations hereunder) of any liability therefore, and Tenant shall remain liable for all obligations to Landlord arising under this Lease during the term hereof plus any extension.

 

C. Any rental received by Tenant in excess of the rent reserved under this Lease or any payment made to Tenant in consideration of such assignment or subletting shall be paid over to Landlord as additional rent.

 

9. ALTERATIONS, IMPROVEMENTS AND TRADE FIXTURE .

 

A. Upon completion of the Tenant Improvements in accordance with Paragraph 4 hereof, Landlord shall assign to Tenant all warranties relating to such Tenant Improvements and shall have no further obligation to make any alterations or improvements to the Premises except as provided in Paragraph 10A hereof.

 

B. Tenant further covenants that it will at no time or times make any alterations, improvements or changes of any kind to the Premises without first submitting the

 

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plans thereof and securing the prior written consent of the Landlord, which consent shall not be unreasonably withheld. Tenant may either:

 

1. Contract with Landlord or Landlord’s agent to make alterations and improvements at Tenant’s expense, or

 

2. May contract with any licensed contractor to make alterations and improvements after first providing the following items to Landlord:

 

a) approval of the Fire Marshal of the authority having jurisdiction (City or State), and

 

b) copy of a building permit issued by the local authority having jurisdiction (City or County) or evidence from the authority that no permit is required, and

 

c) copy of license of contractor performing the work, and

 

d) copy of insurance certificate from contractor naming the Landlord as an additional insured and showing evidence of coverage as follows:

 

 

e) release of mechanic’s liens for all work to be performed, and

 

C. Tenant further covenants that if it makes alterations and improvements to the Premises that:

 

1. During the construction period, Landlord or Landlord’s agent will have access to the premises to verify that all work is in accordance with approved plans. Tenant shall reimburse Landlord for all reasonable costs incurred for inspection services, if conducted by a third party service.

 

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2. Within 30 days of completion of construction, Tenant will furnish Landlord copies of Fire Marshal’s Final Inspection Report and Certificate of Occupancy or use, issued by the local authority having jurisdiction.

 

3. At the end of the lease period, at Landlord’s sole option, the Tenant will remove all alterations and improvements and restore premises to its prior condition at Tenant’s sole cost (ordinary wear and tear excluded).

 

All improvements, alterations, replacements and building service equipment made or installed by or on behalf of Tenant and permanently affixed to the Improvements shall immediately upon completion or installment thereof be and become the property of Landlord without payment therefor by Landlord, but subject to the provisions of this Lease; provided that all machinery, equipment (other than building service equipment), trade fixtures, movable partitions, furniture and furnishings installed by Tenant or maintained on the Premises, even if permanently affixed thereto, shall remain the property of Tenant, and Tenant shall, if not in default, be entitled to remove the same or any part thereof at any time during the Lease term, but Tenant shall, at its expense, repair any and all damage to the Premises resulting from or caused by such removal. The interest of Tenant in any property which is not so removed shall at the end of the time provided for removal thereof vest in Landlord.

 

10. REPAIRS .

 

A. Landlord . Other than the initial construction of the Premises pursuant to Paragraph 4, Landlord shall not be required to make any repairs or improvements to the Premises except structural repairs necessary for safety and inhabitability.

 

B. Tenant . At the expiration or other termination of this Lease or upon abandoning the premises, Tenant shall leave the same, and during the term thereof shall keep the

 

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same, including carpeting and partitioning, in good order and condition, ordinary wear and tear and damage by the elements excepted, and, for that purpose, Tenant shall make all necessary repairs and replacements. Tenant shall also remove all dirt, rubbish, waste and refuse from the Premises and all its property there from at the and of the term of this Lease, to the end that Landlord may again have and repossess the same not later than midnight on the date upon which this lease or any renewal or extension thereof ends. Tenant shall not do or commit or suffer to be done or committed upon the Premises any act or thing contrary to then laws, rules or regulations prescribed from time to time, by any of the constituted Federal, State, County or Municipal authorities.

 

11. ACCESS TO PREMISES .

 

The Landlord shall have the right at all reasonable times, including times other than regular business hours for emergency repairs, to enter the Premises for the purpose of examining or inspecting the same, providing services or maintenance, or making such repairs or alterations therein as the Landlord shall deem necessary. During the last one hundred eighty (180) days of the term, the Landlord may exhibit the Premises to prospective new tenants.

 

12. SURRENDER OF PREMISES AND HOLDOVER .

 

If Tenant continues in possession of the Premises after the expiration or termination of the term hereof, or any renewals or extensions thereof, without Landlord’s consent, Tenant shall pay a rental equal to One Hundred Fifty Percent (150%) of the monthly rental and additional rent then payable hereunder, but nothing in this section shall be construed as consent by Landlord to such possession of the Premises by Tenant after the term hereof. Tenant shall, at least sixty (60) days before the expiration of the term hereof, any renewals or extensions thereof, give the Landlord written notice of its intentions to surrender the Premises. In the event such notice is not

 

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given and Tenant holds possession of the Premises after the expiration of the term hereof, or any renewals or extensions thereof, with Landlord’s consent, Tenant shall become a tenant from month to month at a rental equal to one and one-half times (1.5 x) the monthly rental and other charges than payable hereunder.

 

13. NEGATIVE COVENANTS OF TENANT .

 

Tenant covenants that it will not:

 

(a) Damage the Premises or any other part of the Building, or use any part of the Building not designated for use by Tenant;

 

(b) Conduct itself or permit its agents, employees, invitees and guests to conduct themselves in a manner which, in Landlord’s reasonable judgment, interferes with the rights granted by Landlord to other tenants of the Building or is improper or unsafe;

 

(c) Vacate or desert the Premises prior to termination of the Lease or permit the same to become empty or unoccupied;

 

(d) Occupy the Premises in any manner or for any other purpose than as set forth in Paragraph 1 hereof;

 

(e) Do anything which would result in the cancellation or suspension or, increase in the premium of, any fire or other insurance policy carried by Landlord;

 

(f) Remove any of Tenant’s property from the Premises except such as can be carried by Tenant and as would be reasonable and customary for persons occupying similar space to remove; or

 

(g) Do or permit to be done anything that might constitute a public or private nuisance or cause waste.

 

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14. DEFAULT AND REMEDIES .

 

A. The following events shall be deemed to be events of default by Tenant under this Lease Agreement:

 

(i) Tenant shall fail to pay any installment of Gross Base Rent, additional rent or any other charge or assessment against Tenant pursuant to the terms hereof within five (5) business days of when due;

 

(ii) Tenant shall fail to comply with any term, provision, covenant or warranty made under this Lease by Tenant, other than the payment of the Gross Base Rent or additional rent or any other charge or assessment payable by Tenant, and shall not cure such failure within fifteen (15) days after notice thereof to the Tenant;

 

(iii) Tenant or any guarantor of the Lease shall become insolvent, or shall make a transfer in fraud of creditors or shall make an assignment for the benefit of creditors;

 

(iv) Tenant or any guarantor of this Lease shall file a petition under any Section or Chapter of the United States Bankruptcy Code, as amended, or under any similar law or statue of the United States or any State thereof, or there shall be filed against Tenant or any guarantor of this Lease a petition in bankruptcy or insolvency or a similar proceeding, or Tenant or any guarantor shall be adjudged bankrupt or insolvent in proceedings filed against Tenant or any such guarantor;

 

(v) a receiver or trustee shall be appointed for Premises or for all or substantially all of the assets of Tenant or of any guarantor of this Lease;

 

(vi) Tenant shall abandon or vacate all or any portion of the Premises or fail to take possession thereof as provided in this Lease; or

 

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(vii) Tenant shall do or permit to be dons anything which creates a lien upon the Premises.

 

B. Upon the occurrence of any of the aforesaid events of default, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever;

 

(i) terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord and if Tenant fails to do so, Landlord may without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim of damages therefore; Tenant hereby agreeing to pay to Landlord on demand the amount of all loss and damage which Landlord may suffer by reason of such termination, whether through inability to relet the Premises on satisfactory terms or otherwise;

 

(ii) enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying said demised premises or any part thereof, without being liable for prosecution or any claim of damages therefore and, if Landlord so elects, relet the Premises on such terms as Landlord may deem advisable, without advertisement, and by private negotiations, and receive the rent therefore, Tenant hereby agreeing to pay to Landlord the deficiency, if any, between all rent reserved hereunder and the total rental applicable to the Lease Term hereof obtained by Landlord re-letting, and Tenant shall be liable for Landlord’s expenses in restoring the Premises and all costs incident to such re-letting;

 

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(iii) enter upon the demised Premises without being liable for prosecution or any claim of damages therefore, and do whatever Tenant is obligated to do under the terms of this Lease, and Tenant agrees to reimburse Landlord on demand for any expenses including, without limitation, reasonable attorney’s fees which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease and Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action, whether caused by negligence of Landlord or otherwise; or

 

(iv) declare immediately due and payable all rent and other charges and assessments against Tenant due and to become due under this Lease.

 

C. Pursuit of any of the foregoing remedies shall not preclude pursuit of any other remedy herein provided or any other remedy here provided constitute an election of remedies thereby excluding the later election of any alternate remedy, or a forfeiture or waiver of any areas Base Rent, additional rent or other charges and assessments payable by Tenant and due to Landlord hereunder or of any damages accruing to Landlord by reason of violation of any of the terms, covenants, warranties and provisions herein contained. No action taken by or on behalf of Landlord shall be construed to be an acceptance of a surrender of this Lease. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default. In determining the amount of loss or damage which Landlord may suffer by reason of termination of this Lease or the deficiency arising by reason of any re-letting of the Premises by Landlord as above provided, allowance shall be made for expense of repossession and the Gross Base Rent and additional rent herein provided, for the period from the time of an event of default until the end of the term hereof, shall be deemed to be equal to the highest Base Rent and additional rent

 

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required to be paid hereunder by Tenant during any preceding Lease year multiplied by the number of calendar years or portions thereof remaining in the term hereof. Tenant agrees to waive its right to jury trial and to pay to Landlord all costs and expenses incurred by Landlord in the enforcement of this Lease, including without limitation, the reasonable fees of Landlord’s attorneys when such attorneys are employed by Landlord to effect collection of any sums due hereunder or to enforce any right or remedy of Landlord.

 

15. LANDLORD’S OBLIGATIONS .

 

Landlord’s obligations hereunder shall be binding upon Landlord only for the period of time that Landlord owns the Building; and, upon termination of that ownership, Tenant, except as to any obligations which have then matured, shall look solely to Landlord’s successor in interest in the Building for the satisfaction of each and every obligation hereunder.

 

16. LANDLORD’S LIABILITY .

 

Landlord shall have no personal liability under and of the terms, conditions or covenants of this Lease and Tenant shall look solely to the equity of the Landlord in the Building of which the Premises form a part for the satisfaction of any claim, remedy or cause of action accruing to Tenant as a result of the breach of any covenant of this Lease by Landlord.

 

17. LATE PAYMENT .

 

In the event that any payment required by Tenant under the provisions hereof shall not be paid when due, Tenant shall, upon demand, pay a late charge to Landlord in an amount computed at 18% per annum of each dollar so overdue and such late charge shall be deemed “rent” for all purposes under this lease.

 

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18. TENANT’S INDEMNIFICATION AND LIABILITY INSURANCE .

 

A. Tenant hereby agrees to indemnify and hold Landlord harmless from any loss or damages whatsoever (including reasonable attorney’s fees) arising out of the use and occupancy of the Premises by Tenant and to further secure this indemnification, on or before the first day of the month of each lease year, by delivering to Landlord a certificate of a policy or renewal policy of Public Liability Insurance insuring Landlord and Tenant and their partners, officers, employees, agents and representatives against loss or damage arising from injury to persons or property occurring within the Premises, which policy, or renewal policy shall:

 

(i) provide that it is noncancellable without thirty (30) days proper written notice to Landlord,

 

(ii) have the following limits: not less than One Million Dollars ($1,000,000.00) in respect of bodily injury or death to one person, and to the limit of not less than Three Million Dollars ($3,000,000.00) in respect to one accident,

 

(iii) name Landlord as an additional insured; and

 

(iv) be accompanied by proof of payment of the premium therefore.

 

B. Notwithstanding the provisions of this Lease, in any event of loss or damage to the Building, the Premises and/or any contents, each party shall look first to any insurance in its favor before making any claim against the other party; and to the extent possible without additional cost, each party shall obtain for each policy of such insurance, provisions permitting waiver of any claim against the other party for loss or damage within the scope of the insurance, and each party, to such extent permitted, for itself and its insurers waives all such insured claims against the other party.

 

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19. FIRE OR OTHER CASUALTY .

 

In the event the Premises are totally destroyed by fire or other casualty or are damaged to such an extant that Landlord desires to raze or remodel the Building then the term hereby created shall end on the date of such fire or casualty, and Tenant shall pay the rent apportioned to the time of such fire or casualty and shall surrender possession of the Premises. If, however, the Premises, in the judgment of Landlord, can be repaired within sixty (60) working days so as to be in as good condition as they are at the beginning of the term, the Lease and the term herein created shall not be affected except that rent shall be apportioned or suspended while such repairs are being made. If, however, the Premises are slightly damaged by fire, accident or other casualty and are not thereby rendered unfit for occupancy, then the same shall be repaired by Landlord with reasonable promptness, and no abatement or apportionment of the rant shall be made.

 

20. CONDEMNATION .

 

A. If title to any part of the Premises is taken for any public or quasi-public use by virtue of the exercise of the power of eminent domain or by private purchase in lieu thereof, or if title to so much of the Building of which the Premises are a part is taken that a reasonable amount of reconstruction thereof will not in Landlord’s sole discretion result in the Premises or the Building being reasonably suitable for use for the purpose for which they are designed, than, in either event, this Lease shall terminate, at the option of Landlord on the data that the condemning authority actually takes possession to the part so condemned or purchased.

 

B. It this Lease is terminated under the provisions of this Paragraph, rent shall be apportioned and adjusted as of the date of termination. Tenant shall have no claim against Landlord or against the condemning authority for the value of any leasehold estate or for the value of the unexpired term of this Lease.

 

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C. If there is a partial taking of the Premises or the Building and this Lease is not thereupon terminated under the provisions of this Section, then this Lease shall remain in full force and effect, and Landlord shall, within a reasonable time thereafter, repair and restore the remaining portion of the Premises, should they be affected, to the extent necessary to render the same tenantable, and shall repair or reconstruct the remaining portion of the Building to the extent necessary to make the same a complete architectural unit; provided that such work shall not exceed the scope of the work required to be done by Landlord in originally constructing such Building or the Premises and the Landlord shall not be required to expend more than the net proceeds of the condemnation award which are paid to Landlord in complying with its obligations hereunder.

 

D. All compensation awarded or paid upon a total or partial taking of the Premises or the Building shall belong to and be the property of Landlord without any participation by Tenant. Nothing herein shall be construed to preclude Tenant from prosecuting any claim directly against the condemning authority for loss of business, moving expenses, and damage to, and cost of removal of, trade fixtures, furniture, and other personal property belonging to Tenant; provided, however, that no such claim shall diminish or adversely affect Landlord’s award.

 

E. After any partial taking of the Premises which does not result in a termination of this Lease, the Base Gross Rent for the remainder of the term hereof shall be reduced by the same percentage as the floor area of the space taken bears to the total floor area in the Premises.

 

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21. GOVERNMENTAL REGULATIONS .

 

Tenant agrees, at Tenant’s sole cost and expense, to promptly comply with all requirements of any legally constituted public authority made necessary by reason of Tenant’s occupancy of the Premises.

 

22. GOVERNING LAWS .

 

This Lease shall be construed, governed and enforced in accordance with the laws of the State of Maryland.

 

23. HAZARDOUS MARTIALS

 

A. Tenant shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises by Tenant, its agents, employees, contractors or invitees, except for such Hazardous Material as is necessary or useful to Tenant’s business.

 

B. Any Hazardous Material permitted on the Premises as provided in Paragraph 23.A. above, and all containers therefore, shall be used, kept, stored and disposed of in a manner that complies with all Federal, State and local laws or regulations applicable to any such Hazardous Material.

 

C. Tenant shall not discharge, leak or emit, or permit to be discharged, leaked or emitted, any material into the atmosphere, ground, sewer system or any body of water, if such material (as reasonably determined by the Landlord, or any governmental authority) does or may, pollute or contaminate the same, or may adversely affect (a) the health, welfare or safety of persons, whether located on the Premises or elsewhere, or (b) the condition, use or enjoyment of the Building or any other real or personal property.

 

D. At the commencement of each Lease Year, Tenant shall disclose to Landlord the names and approximate amounts of all Hazardous Material which Tenant intends to store, use or dispose of on the Premises in the coming Lease Year. In addition, at the

 

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commencement of each Lease Year, beginning with the second Lease Year, Tenant shall disclose to Landlord the names and amounts of all Hazardous Materials which were actually used, stored or disposed of on the Premises if such materials ware not previously identified to Landlord at the commencement of the previous Lease Year.

 

E. As used herein, the term “Hazardous Material” means (a) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder; (b) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; (c) any “oil, petroleum products, and their by-products”; and (d) any substance which is or becomes regulated by any Federal, State or local governmental authority.

 

F. Tenant hereby agrees that it shall be fully liable for all costs and expenses related to the use, storage and disposal of Hazardous Material kept on the Premises by the Tenant, and the Tenant shall give immediate notice to the Landlord of any violation or potential violation of the provisions of Paragraph 23.B. above. Should a violation be caused by any action of Tenant, then Tenant shall defend, indemnify and hold harmless Landlord and its Agents, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses (including, without limitation, attorney and consultant fees, court coats and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to (a) the presence, disposal, release, or threatened release of any such Hazardous Material which is on, from, or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise; (b) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous

 

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Material; (c) any lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Material; and/or (d) any violation of any laws applicable thereto. The provisions of this Paragraph 23.F. shall be in addition to any other obligations and liabilities Tenant may have to Landlord at law or equity and shall survive the transactions contemplated herein and shall survive the termination of this Lease.

 

24. SUBORDINATION .

 

This Lease is subject to and subordinate to any and all mortgages now or hereafter placed upon the Building, but as long as Tenant is not in default and performs its obligations hereunder, Tenant shall not be disturbed in its possession of the Premises and this Lease shall remain in full force and effect. This subordination shall be self-executing, but Tenant agrees, upon demand of Landlord, to execute, acknowledge and deliver such instruments as shall be requested by any mortgagee or proposed mortgagee to confirm each subordination, and Tenant agrees to execute an attornment agreement in favor of any mortgagee, provided Landlord shall deliver to Tenant, upon Tenant’s demand and in exchange for the foregoing instruments, a Non-Disturbance Agreement executed by any present or future mortgagee of the premises.

 

25. ESTOPPEL CERTIFICATE .

 

Tenant does hereby agree that, within ten (10) days following request of Tenant by Landlord or by Landlord’s mortgagee, Tenant shall deliver to such requesting party, in form satisfactory to such requesting party, (however, substantially in the form attached hereto as Exhibit “C”) a written statement to the effect that there are no defaults of Landlord or defenses or offsets against Landlord under this Lease, that the Lease (plus any modifications and amendments shall be identified) is unmodified and in full force and affect, that the rent has

 

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commenced to accrue, that the rent and all other charges have been paid as of the dates to which such charges have been paid and that Tenant has accepted and is occupying the Premises.

 

26. SEVERABILITY .

 

In the event that any portion of this Lease shall be held to be unenforceable or void, such determination shall not, in any event, affect the provisions and enforceability of the remainder of this Lease.

 

27. FIRST AND LAST MONTH’S RENT .

 

The first and last month’s rent in the amount of Ten Thousand Three Hundred Twenty-Four and 17/100 , Dollars ($ 10,324.17 ) shall accompany this Lease, when returned for approval by the Landlord. If this Lease is not approved by the Landlord within thirty (30) days of its submission to the Landlord, the above sum will be refunded in full.

 

28. NOTICES .

 

All notices required to be given by either party hereto to the other shall be in writing. All such notices shall be deemed to have been properly given if sent by United States registered or certified mail, return receipt requested, postage prepaid, addressed to Landlord at 92 Read’s Way, Suite 100, New Castle, Delaware 19720, and addressed to Tenant at Premises or to such other address as either party may hereafter designate in writing by notice given in the aforesaid manner.

 

29. BINDING EFFECT .

 

All rights and liabilities herein given to, or imposed upon the respective parties hereto, shall extend to and bind the server and respective heirs, executors, administrators, successors and assignees of said parties.

 

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30. CAPTIONS .

 

The captions identifying the various sections of the Lease are for convenience or reference only and are not to be used in construing this Lease.

 

31. RELOCATION .

 

Landlord hereby reserves the right to relocate the Tenant to another area of the Building or Buildings within the same complex. Landlord shall provide sufficient notice of its intention to relocate Tenant and will construct at its sole cost and expense the new premises to the same general specifications as the original premises. Landlord shall also be responsible for all moving costs.

 

32. AUTHORITY .

 

Tenant represents and warrants to Landlord that Tenant is a Maryland Corporation, duly organized and validly existing; that this Lease has been approved by all necessary parties, is validly executed by an authorized officer of Tenant and is binding upon and enforceable against Tenant in accordance with its terms; and that the name and address of Tenant’s resident agent in the State of Maryland is Mr. Reggie Daniel . Tenant shall notify Landlord promptly of any change in the name or address of such resident agent.

 

33. ENTIRE AGREEMENT .

 

It is expressly understood and agreed by and between the parties hereto that this Lease, and any Riders that may be attached hereto, sat forth all the promises, agreements, conditions and understandings between Landlord or his agents and Tenant relative to the Premises, and that there are not promises, agreements, conditions or understandings either oral or written, between them other than are herein set forth. It is further understood and agreed that, except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them.

 

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34. RIDERS :

 

Attached hereto and incorporated into this Office Lease Agreement are Riders numbered 1 through 2 .

 

IN WITNESS WHEREOF the parties hereto have caused 3 copies of this Lease to be executed the day and year first above written.

 

ATTEST/WITNESS		JFB JOINT VENTURE LIMITED PARTNERSHIP
[Illegible]		By:		[Illegible]
				General Partner
				Landlord
		SCIENTIFIC & ENGINEERING SOLUTIONS, INC.
[Illegible]		By:		[Illegible]
				Tenant

 

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RIDER #1 TO OFFICE LEASE AGREEMENT

 

RULES AND REGULATIONS

 

1. No sign, picture advertisement or notice shall be displayed by Tenant on any part of the Premises or the Building except on the directories and doors of offices and then only in such size, color and style as Landlord shall approve. Any such sign, approved by Landlord, shall be painted or installed for Tenant by Landlord at Tenant’s expense. No awnings, curtains, blinds, shades or screens shall be attached to or hung in or used in connection with any window or door of the Premises without the prior consent of the Landlord and including approval by the Landlord of the quality, type, design, color and manner attached.

 

2. Tenant agrees that its use of electrical current shall never exceed the capacity of existing feeders, risers or wiring installation. Any additional electrical wiring shall be done by Landlord’s electrician or supervised by such electrician, and Tenant shall bear the expense of such additional materials and installation.

 

3. The Tenant shall not do or permit to be done in or about the Premises or the Building anything which shall increase the rate of insurance on the Building or its property or obstruct or interfere with the rights of other tenants of Landlord or annoy them in any way, including, but not limited to, using any musical instrument, making loud or unseemly noises or singing, etc., nor use the Premises for sleeping, lodging or cooking by any person at any time except with permission of Landlord. Tenant will be permitted to use for its own employees within the Premises a conventional coffeemaker. No vending machines of any kind will be installed, permitted or used on any part of the Premises. No part of said Building or Premises shall be used for gambling, immoral or other unlawful purposes. No intoxicating beverage shall be sold or used in said Building or the Premises without prior written consent of the Landlord. No area outside of the Premises shall be used for storage purposes at any time.

4. No bicycle, vehicles, birds or animals of any kind shall be brought into said Building or kept in or about the Promises.

 

5. The sidewalks, entrances, passages, corridors, halls, elevators and stairways in the Building shall not be obstructed by Tenant or used for any purposes other than those for which same were intended as ingress and egress. No windows, floors or skylights that reflect or admit light into the Building shall be covered or obstructed by Tenant. Toilets, wash basins and sinks shall not be used for any purpose other than those for which they were constructed, and no sweeping, rubbish or other obstructing substances shall be thrown therein. Any damages resulting to them, or to heating apparatus, from misuse, by Tenant or its employees shall be borne by Tenant.

 

6. Only one key for each office in the Premises will be furnished Tenant without charge. No additional lock, latch or bolt of any kind shall be placed upon any door nor shall any changes be made in existing locks or mechanisms thereof without written consent of Landlord. At the termination of the Lease, Tenant shall return to Landlord all keys furnished to Tenant by Landlord or otherwise procured by Tenant and in the event of loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.

 

7. Landlord shall have the right to prescribe the weight, position and manner of installation of heavy articles such as safes, machines and other equipment which Tenant may use in the Premises. No safes, furniture, boxes, large parcels or other kind of freight shall be taken to or from the Premises or allowed in any elevator, hall or corridor at any time except by permission of and at times allowed by Landlord. Tenant shall make prior arrangements with Landlord for use of elevator for the purpose of transporting such articles and such articles may be taken in or out of said Building only between or during such hours as may be arranged with and

 

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designated by Landlord. The persons employed to move the same must be approved by Landlord. In no event shall any weight be placed upon such floor by Tenant so as to exceed 50 pounds per square foot of floor space without prior written approval of Landlord.

 

8. Tenant shall not cause or permit any unusual or objectionable gases, liquids or odors to be produced upon or permeate from the premises and no flammable, combustible or explosive fluid, chemical or substances except gas and electricity for lighting the Premises shall be brought into the Building.

 

9. The Building shall be open to Tenant and its employees 365 days a year, 24 hours a day. The building shall be open to business visitors between the hours of 8:00 a.m. and 6:00 p.m., Monday to Friday and 8:00 a.m. and 1:00 p.m. an Saturday. At all times other than the visitor hours listed above, every person, including Tenant, its employees and visitors entering and leaving the Building may be questioned by a watchman as to that person’s business therein and may be required to sign such person’s name on a form provided by Landlord for excluding any person from the Building during such other times or for admission of any person to the Building at any time or for damages or loss or theft resulting therefrom to any person including Tenant.

 

10. Unless explicitly permitted by the Lease, Tenant shall not employ any person other than Landlord’s employees for the purpose of cleaning and taking care of the Premises. Landlord shall not be responsible for any loss, theft, mysterious disappearance of or damage to any property, however occurring, unless due to Landlord’s gross negligence. Only persons authorized by the Landlord may furnish ice, drinking water, towels and other similar services within the Building and only at hours and under regulations fixed by Landlord.

 

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11. Tenant shall observe strict care not to leave the windows open when it rains or snows and for any fault or carelessness in any of these respects, shall make good any injury sustained by Landlord or any other Tenant. No painting shall be done, nor shall any alterations by made, to any part of the Premises by putting up or changing any partitions, doors or windows, nor shall there by any nailing, boring or screwing into the woodwork or plastering, nor shall any connection be made to the electric wires or gas or electric fixtures, without the consent in writing on each occasion of Landlord. All glass, locks and trimmings in or upon the doors and windows of the Building shall be kept whole and in good repair. Tenant shall not injure, overload or deface the Building, the woodwork or the walls of the Premises, nor carry upon the Premises any noisome, noxious, noisy or offensive business.

 

12. If Tenant requires wiring for a bell or buzzer system, such wiring shall be done by the electrician of the Landlord only and no outside electrician shall be allowed to do work of this kind unless by the written permission of the Landlord or its representatives. If telegraph or telephone service is desired, the wiring for same shall be done as directed by the electrician of the Landlord or by some other employee of Landlord who may be instructed by Landlord to supervise same and no boring or cutting for wiring shall be done unless approved by Landlord or its representatives, as stated. The electric current shall not be used for power or heating unless written permission to do so shall first have been obtained from Landlord or its representatives in writing and at an agreed cost to Tenant.

 

13. Tenants and occupants shall observe and obey all parking and traffic regulations as imposed by Landlord on the lot on which the Building is located. Landlord in all cases retains the power to designate “no parking” zones, traffic right-of-ways, and general parking area procedures. Failure of Tenant to comply with such regulations constitutes a violation of the Lease.

 

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14. Canvassing, peddling, soliciting and distribution of handbills or any other written materials in the Building are prohibited and Tenant shall cooperate to prevent the same.

 

15. Landlord shall have the right, exercisable without notice and without liability to Tenant, to change the name and street address of the Building.

 

16. Landlord may waive any one or more of these Rules and regulations for the benefit of any particular tenant, but not such waiver by Landlord shall be construed as a waiver of such Rules and regulations in favor of any other tenant, nor prevent Landlord from hereafter enforcing any such Rules and Regulations against any or all of the Tenants in the Building.

 

17. These Rules and Regulations are in addition to and shall at be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.

 

18. Landlord reserves the right to make such other and reasonable Rules and Regulations as in its judgment may from time to time be needed for the safety, care and cleanliness, building and for the preservation of good order therein.

 

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RIDER #2 TO OFFICE LEASE AGREEMENT

 

OPTION TO RENEW

 

THIS RIDER is attached to and forms a part of a certain Lease dated                      , 1998, between JFB JOINT VENTURE LIMITED PARTNERSHIP, a Maryland Limited Partnership (hereinafter called “Landlord”) and SCIENTIFIC & ENGINEERING SOLUTIONS, INC. (hereinafter called “Tenant”).

 

Tenant shall have the Option to Renew this Lease for an additional 3 year term, subject to any pre-existing rights of other parties, upon giving notice of intention to renew to Landlord not less than One Hundred Eighty (180) days prior to the expiration of the original term hereof. All the terms and conditions of this Lease shall remain in full force and effect during the renewal term except that there shall be no further right of renewal, and the Base Gross Rent during the renewal shall be based on the current rental market value of the premises as of the commencement data of the option period, but not less than ninety seven percent (97%) the rate paid in the last year of the initial term or any extensions thereof.

 

Each option granted to Tenant in this Lease is personal to Tenant, affiliate or related company and may not be exercised or be assigned, voluntarily, by or to any person or entity other than Tenant, affiliate or related company without prior written consent of Landlord, which shall not be unreasonably withheld. Option to Renew does not extend to any subtenant.

AS WITNESS the hands and seals of the parties hereto the day and year first above written.

 

ATTEST/WITNESS
				JFB JOINT VENTURE UNITED PARTNERSHIP
[Illegible]				By:		[Illegible]
						General Partner
						Landlord
				SCIENTIFIC & ENGINEERING SOLUTIONS, INC.
[Illegible]				By:		[Illegible]
						Tenant

 

2

EXHIBIT “B”

 

TENANT IMPROVEMENTS

 

Landlord and tenant hereby agree that tenant shall occupy the demised premises in an “as is” condition, and that Landlord shall not he responsible to provide any physical improvements to the space whatsoever as a condition of this current agreement.

 

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EXHIBIT “C”

 

Tenant Estoppel Certificate

 

Lessor:                                         

 

Lessee:                                         

 

Identification of Leased Premises:

 

Approximately                                          square feet within a warehouse and office building on land known as                                                                                                                                                                                                                                                                                                                                                                                    , as more fully set forth in the lease.

 

Date of original Lease:                                         

 

Date(s) of any Amendments:                                              

 

The undersigned, the Tenant named above of the premises identified above (the Premises) to induce                                                               , (the “Lender”) to make a loan to Landlord hereby certifies to Lander the following:

 

1. The undersigned has accepted and is in, possession of and occupies the Premises under the Lease, which is in full force and effect. The initial term of the Lease commenced on                                          199          .

 

2. There have been no modifications or changes in the Lease, except by those Amendments listed above.

 

3. The undersigned is paying the full Lease rental, which on the rental payment due in                                                               , 19          , is                      basic minimum rent per month, and is also paying its proportionate share (                      %) of real estate taxes, insurance premises over Base Year, and of expenses of snow removal, parking lot maintenance and grass cutting.

 

4. No rent or other sum payable under the Lease has been paid for more than thirty days in advance of its duo data.

 

5. To the knowledge of Tenant, the Landlord is not in defau