**Exhibit 10.8**

 

**LEASE AGREEMENT**

 

THIS LEASE AGREEMENT, made as of this 1st day of July 2001, by and between Sarcom Properties, Inc havingits principal place of business at 8405Pulsar Drive, Columbus, Ohio 43240, hereinafter referred to as “Landlord”,and Sarcom Desktop Solutions, Inc., having its principal place of business at8337 Green Meadows Drive N., Lewis Center, Ohio 43035, hereinafter referred toas “Tenant.”

 

1.             DEMISED PREMISES

 

Landlord, in consideration of the rent to be paid and the covenants tobe performed by Tenant, does hereby demise and lease unto Tenant, and Tenant hereby rents from Landlord, approximately 144,000 square feet of space in a certainfacility, together with the real estate upon which it is located, and all improvements located therein, located at 8337 Green Meadows Drive in the City of Lewis Center, State ofOhio, as is more particularly described on Exhibit A attached hereto and made a part hereof (saidbuilding, improvements, and real estate shall be hereinafter referred to as the“Premises”.)

 

2.             TERM

 

The term of this lease shall commence on July 1, 2001 and terminate onDecember 31, 2004 unless sooner terminated as provided herein.

 

3.             RENT

 

(a)           Tenant shall pay to Landlord during eachyear of the Term hereof annual fixed rental for the Premises in the amount of Eight Hundred Seventy Six Thousand andNo/100 Dollars ($876,000.00) per year(“Fixed Rental”), payable in twelve (12) equal monthly installments of SeventyThree Thousand and No/100 ($73,000.00) each.

 

(b)           In the event Tenant elects to receive anyportion of the Tenant Allowance, as defined below, the Fixed Rental payable byTenant for the Premises shall increase on a pro rata basis, based upon theportion of the Tenant Allowance taken, as illustrated below. For example, ifTenant takes $30,000.00 of the $100,000.00 available Tenant Allowance, theFixed Rental shall increase by a percentage calculated as follows: the amountof Tenant Allowance taken ($30,000.00) times an interest rate of 2.74% over thetotal Tenant Allowance available ($100,000.00), or 82% in this case. The FixedRental payable by Tenant ($876,000.00 annually, above) shall increase by .82% and, in this example, shall become $883,183.20 per year, payablein, twelve (12) equal monthlyinstallments of Seventy Three Thousand Five Hundred Ninety Eight and 60/100Dollars ($73,598.60). In the event that Tenant elects to receive the entireTenant Improvement Allowance, as defined below, the Fixed Rental payable byTenant for the Premises shall be Nine Hundred Thousand and No/100 Dollars($900,000.00) per year, payable in twelve (12) equal monthly installments ofSeventy Five Thousand and No/100 Dollars ($75,000.00) each.

 

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The monthly installment of the Annual FixedRental is due in advance on or before the fifth day of each and every calendarmonth during the term of this lease, to landlord at Sarcom Properties, Inc.,8405 Pulsar Drive, Columbus, Ohio 43240, or such other place as Landlord mayfrom time to time designate in writing without prior demand thereof and withoutany set-off or deduction whatsoever. In the event that the commencement date ofthe term of this Lease shall occur on a day other than the first day of acalendar month, the first rental payment shall be prorated on the basis of athirty (30) day month and shall be due and payable on the commencement date.

 

(c)           Tenant shall pay any and all sums of moneyor charges required to be paid by Tenant as additional rent under this Leasepromptly when the same are due, without any deduction or set-off whatsoever. Tenant’sfailure to pay any such amounts or charges when due shall carry with it thesame consequences as the failure to pay Fixed Rental. All such amounts orcharges shall be payable to Landlord at the place where rent is payable.

 

(d)           In the event that (i) Tenant shall fail topay Fixed Rental payments on the date when due and such non-payment continuesfor five (5) or more calendar days after the same be due and payable, or (ii)Tenant shall fail to pay any other rental payment or charge due from Tenant toLandlord hereunder on the date when due and such non-payment continues for five(5) or more calendar days after the same be due and payable, and Tenant doesnot cure the default in (d)(i) or (ii) above within ten (10) calendar daysafter written demand by Landlord that the default be cured, Tenant shall pay alate payment charge equal to one and one-half percent (1.5%) per month of theamount of such payment from the due date thereof until paid by Tenant. In likemanner, all othr obligations, benefits and moneys which may be due to Landlordfrom Tenant under the terms hereof, or which are paid by landlord because ofTenant’s default hereunder, shall bear interest at the lesser of (i) thehighest rate then allowable by law or (ii) the rate of three percent (3%) perannum above the prime rate announced by Bank One, Columbus, NA of Columbus, Ohio as its prime rate as ofthe due date, (in either instance the “Default Rate”) from the due date untilpaid or, in the case of sums paidby Landlord, because of Tenant’s default hereunder, from the dale such payments are made by Landlord until the dateLandlord is reimbursed by Tenant

 

4.             USE OF PREMISES

 

(a)           Tenant shall use the Premises for generalwarehousing, configuration, distribution andlight manufacturing of computer products clammed under Section 310.0 ofthe Ohio Basic Building Code, effective September 1, 1992, being in either theS-1 Moderate Hazard Storage Uses or the S-2 Low Hazard Storage Uses (seeExhibit B), or any combination of the two, office uses, training and educationuses and for no other purpose without the prior written consent of theLandlord, which shall not beunreasonably withheld Landlord and Tenant have been provided an inspectionreport, issued by Jezerinac Geers & Associates, Inc., dated December 15,2000, attached hereto as Exhibit C (“Inspection Report”), which includesrecommendations for the mediation of certain structural defects of the Premises.Landlord covenants to perform any and all actions required for the remediationof the structural defects disclosed by the Inspection Report, as needed,throughout the Term of this Lease. Subject to Landlord’s obligations ‘describedin the preceding sentence, Tenant agrees and accepts the Premises in an “as is”condition and acknowledges that neither Landlord nor any officer, partner,agent, or employee of the Landlord has made any other representation orwarranty regarding the Premises, its condition or Tenant’s use and occupancythereof, or undertaken any covenant, unless expressly set forth in this Lease.

 

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(b)           Landlord shall, at its sole expense, comply with all laws, ordinances, ordersand regulations of federal, state, county, and municipal authorities and withany direction of any public officer or off, pursuant to law, and with anyrestrictions of record; which shall impose any liability, order or duty uponLandlord or Tenant with respect to Tenant’s use or occupancy of the Premisesincluding compliance wit : the Americans with Disabilities Act of 1990.

 

5.             INSURANCE

 

(a)           Tenantagrees: that, at its own cost and expense, it shall procure and continue inforce, the name of Landlord and Tenant, general liability Insurance, on an occurrencebasis, against any and all claims for injuries to persons or damage to propertyoccurring in, about, or upon the Premises, in including the interior and exteriorcommon areas, if any, and including all damagefrom signs, fixtures or other appurtenances, now or hereafter erectedupon the Premises, during the term of this Lease. Such insurance shall at alltimes be in an amount not less than One Million Dollars ($1,000,000.00) onaccount of bodily injury to or death of one (1) person and Two Million Dollars($2,000,000.00) on account of bodily injuries or death of more than one personas a result of any accident or disaster, and Five Hundred Thousand Dollars($500,000.00) for property damage in any one accident. Such insurance shall bewritten by a company or companies authorized to engage in the business ofgeneral liability insurance in the State of Ohio, and a certificate of all suchpolicies procured by Tenant in compliance herewith shall be delivered toLandlord at least fifteen (15) days prior to the time such insurance isrequired to be carried by Tenant, and thereafter at least fifteen (15) daysprior to the expiration of any such policy. Such policy shall bear anendorsement stating that the insurer agrees to notify Landlord not less thanten (10) days in advance of modification or cancellation thereof.

 

(b)           Tenant agrees that, atits own cost and expense, it shall procure and continue in force, for thebenefit of the Landlord, insurance insuring the building, the fixtures andother property located therein, on an all-risk basis, including, but notlimited to, the perils of fire, with fall extended coverage, vandalism andmalicious mischief, sprinkler leakage, collapse, and falling objects, in anamount not less than One Hundred Percent (100%) of full insurable replacementvalue thereof, without credit for depreciation, and in all events sufficient inamount to prevent the insured from being a co-insurer within the terms of thepolicy or policies in question. Tenant shall also maintain, to the extentapplicable, insurance against loss or damage from the explosion of boilers,heating apparatus or other pressure vessels installed in the building, or anypart thereof, and shall further maintain such other insurance in such amountsand against such insurable risks as may from time to time be reasonablyrequired by Landlord. All policies shall provide that loss thereunder shall bepayable to Landlord or, if Landlord should so request, to any mortgagee ofLandlord, provided that Landlord shall hold the proceeds of any such policiesand make the same available to Tenant under conditions of disbursementsatisfactory to said mortgagee and on the basis of work completed. Suchinsurance shall be written by a company or companies authorized to engage inthe busies of fire and extended coverageinsurance in the State ofOhio, and a certificate of all such .policies procured by Tenant in compliance herewith shall bedelivered to Landlord atleast fifteen (15) days prior tothe time 

 

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such insuranceis required to be carried by Tenant, and therefor at least fifteen (15) daysprior to the expiration of any such policy. Such policy shallbear an endorsement stating that the insureragrees to notify Landlord not less than ten (10) days in advance ofmodification or cancellation thereof.

 

(c)           If the Tenant at anytime during the term hereof should fail to secure or maintain the aboveinsurance required in Article 5(a) and 5(b), the Landlord shall be permitted toobtain such insurance in the Tenant’s name or as the agent of the Tenant. Anyamount paid by the Landlord for such insurance shall become immediately due andpayable as rent by Tenant to Landlord, together with interest thereon at theprime rate charged by Bank One, Columbus, NA of Columbus, Ohio as of the date of payment, from the date of payment byLandlord until paid by Tenant. Any such payment by Landlord shall not be deemedto be a waiver of any other rights which the Landlord may have under theprovision of this lease or as provided by law.

 

(d)           Eachof the parties hereby waives all causes of action and rights of recovery against the other party, its agents, officers andemployees, for any loss or damage occurring to the Premises or theimprovements, fixtures, merchandise and personal property of every kind locatedin and about the Premises resulting from any perils fully and effectivelycovered by insurance, regardless of cause or origin, including negligence ofeither party, its agents, officers and employees,to the extent of any recovery under any policy or policies of insurance,provided that the same will notbe invalidated in whole or in part by reason hereof.

 

6.             MAINTENANCEOBLIGATIONS

 

(a)           Landlordshall make repairs or replacements of those items disclosed by the inspection report attached hereto as Exhibit C to theextent such repairs or replacements are necessary. Landlord otherwise shall be under no obligation to rebuild, replace, maintain or make repairs of any nature, structural or otherwise, to the Premises duringthe term of this Lease or any extension or renewal thereof. Tenantshall, during the term of this Lease, and any extension thereof, maintain thePremises, and, at its own expanse, make all repairs and replacements, orordinary or extraordinary, structural or otherwise, required to keep thePremises and all heating, air conditioning, plumbing and electrical system andall fixtures and equipment, in good order and repair. All repairs and replacements made by Tenant shall be equal inquality to the original work. Notwithstanding anything herein to the contrary,Landlord shall be responsible, at its sole cost and expense, for compliancewith all laws, ordinances, orders, codes and regulations of federal, state, county, and municipal: authorities and with any direction of any public officer or officers, pursuant to law, and with any restrictions of record, whichrequire structural, changes to thePremises. Landlord hereby representsthat as of the date hereof ,the roof and all structural components related thereto are not in need of any repairs orreplacement and are in goodcondition.

 

(b)           Tenant shall, at its sole cost and expense, maintain all parking areas,driveways and access roadways situated the Premises in good condition and repair and reasonablyclear of snow and debris, and shall at its expense adequately illuminate theparking areas and driveways situated on the Premises during business hours.

 

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(c)           Tenantshall, at its sole east and expense, maintain and keep open, free from obstruction and in good repair, allelectric, water, sewer and other utilitylines and connections, conduits, pipes, catch basins, manholes, poles,lighting fixtures and other related facilities situated in, under or on thePremises.

 

(d)           In the event Tenant should neglect to maintain the Premises, Landlord shall have the right (but notthe obligation) to cause repairsor corrections to be made. Any amounts paid by the Landlordfor such repairs or corrections shall become immediately due and payable as rent by Tenant to Landlord, together withinterest thereon at the Default Rate.

 

Any such payments by Landlord shall not be deemed to be a waiver of any other rights which the Landlord may have under the provisions of this Lease or as provided by law.

 

7.             REAL ESTATE TAXES AND ASSESSMENTS

 

(a)           Tenant shall pay as additional rent, during the term of this Lease orany renewal or extension thereof, as promptly as the same become due andpayable, all personal property taxes and real estate taxes and assessments,both general and special, and any other public charges of any nature, ordinaryor extraordinary, now or hereafter levied, assessed, charged or imposed uponthe Premises during the term pf this Lease, or now or hereafter arising inrespect of the occupancy, use or won of the Premises, or any part thereof, byTenant. Landlord agrees to reimburse Tenant for any real estate taxes andassessments, both general and speciallevied, assessed, charged or imposed upon the Premises prior to thecommencement of the term of this Lease. Tenant shall furnish to the Landlordupon demand receipts evidencing payment of all such taxes, assessments andpublic charges. Upon termination of this Lease, all such taxes, assessments andpublic charges for the then calendar year shall be prorated between the partiesusing in the case of taxes the rateand valuation in effect for the preceding year unless the rate andvaluation for the current year are known.

 

(b)           IfTenant fails to pay such tames, assessments, or charges, Landlord may,at his option, pay such taxes,assessments, or charges, together withall penalties and interest which may have been added thereto because ofTenant’s delinquency or default, and may likewise redeem the Premises, or anypart thereof, or the building or improvements situated thereon, from any taxsale or sales. Any such amounts so paid by Landlord shall become immediatelydue and payable as rent by Tenant to Landlord, together with interest thereonat the prime rate charged by Bank One, Columbus, NA of Columbus, Ohio, as ofthe due date, from the date of payment by Landlord until paid by Tenant. Anysuch payment by Landlord shall not be deemed to be a waiver of any rights whichthe landlord may have under the provisions of this lease or as provided by law.

 

8.             NETLEASE

 

It is the purpose and intent of Landlord, and Tenant that the rentpayable by Tenant hereunder shall be absolutely net to Tenant so that his Leaseshall yield, net, to Landlord, the rent specified in Article 3 hereof, and thatall costs, expenses or obligations of every kind and nature whatsoever relatingto the Premier, except interest and amortization required to be paid byLandlord on any mortgage, shall be paid by Tenant. Tenant hereby agrees to andshall indemnify and save Landlord harmless from and against any such costs,expenses and obligation.

 

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9.             ALTERATIONSAND INSTALLATIONS

 

(a)           Tenantshall not make any alterations, installations, additions or improvements in orto the Premises without Landlord’s prior written consent in each and everyinstance, which consent will not be reasonably withheld. Any of the foregoingwork consented to by Landlord shall be done by competent contractors, approvedby Landlord, in a good and workmanlike manner and at Tenant’s sole expense,unless otherwise agreed to in writing by the parties. Tenant shall, for allapproved alterations, at its sole cost and expense, obtain and provide Landlordwith a copy of all construction or alteration permits and with certificates ofoccupancy upon completion and shall otherwise comply with all applicable laws and regulations. If the:construction work is expected to cost in excess of Ten Thousand Dollars($10,000.00 ), Landlord shall have theright to require Tenant tosubmit evidence of the availability of funds for such work.

 

(b)           All alterations, upon, additions, orimprovements in or to the Premises, whether installed by Landlord or Tenant,shall become Landlord’s property and shall remain upon and be surrendered withsaid Premises without disturbance or injury upon the termination this Lease by Lapse of time or otherwise, all without payment or credit to Tenant,unless otherwise agreed to inwriting by Landlord and Tenant.

 

(c)           All articles of personal property and tradefixtures owned or installed by Tenant at its expense on the Premises shallremain the property of Tenant any may be removed by Tenant at any time,provided that Tenant is not in default hereunder and that Tenant shall promptlyrepair at its expense any and all damage to the Premises caused by such removal.Landlord shall not be responsible or liable to Tenant for any loss or damagethat may be occasioned by or through the acts or omissions of Landlord or ofpersons occupying adjourning Premises, or for any loss or damage resulting tothe Tenant or its property from damage or destruction to the Premises or frombursting, stoppage or leakage of water, gas, sewer or steam pipes or any damageor loss of property within the Premises from any causes whatsoever.

 

10.           DAMAGE OR DESTRUCTION

 

In the event of loss or destruction at orwage or injury to the Premises, or any part thereof, by fire, the elements orany other cause whatsoever, Tenant shallhave no right to terminate this Lease or to surrender the Premises, whether ornot the Premises are thereby rendered untenantable or unfit for occupancy. Whetheror not such loss, destruction or damage shall be covered by insurance and whether or not the insurance proceedsare adequate for the purpose, Tenant shall promptly repair, restore or rebuildthe damaged portions of the Premises to a condition as nearly as reasonablypossible to the condition they were in immediately prior to such damage ordestruction, or with such changes and alterations as may be agreed to byLandlord and Tenant. Landlord shall have the right to approve all suchconstruction n plans. Landlord agrees to disburse to Tenant, or its contractor,insurance proceeds received by Landlord, under conditions or disbursementssatisfactory to Landlord and its mortgagee which are reasonableand customary in the community andon the basis of work completed. Such repairs, restoration, replacements or rebuilding shall be prosecuted and completed with reasonablediligence.

 

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11.           SUBORDINATION TO MORTGAGES

 

Provided Tenant receives a Subordinationand Non-Disturbance Agreement ina form reasonably acceptable toTenant, Tenant agrees that thisLease shall be subject and subordinate to any mortgages that may hereafterbe placed upon thePremises and to any and all advances to any be made thereunder and to the interest thereon,and any and all renewals, replacements and extensions thereof, provided, that any such mortgage or aseparate agreement furnished by such mortgagee to Tenant provides in substance,that if by foreclosure or otherwise such mortgagee or any successor in interestshall come into possession ofthe Premises or become the owner of the same or take over the rights of Landlordin the same, it will not disturb the possession, use or enjoyment, of the Premises byTenant, its successors or assigns,nor disaffirm this Lease or Tenant’s rights or estate so long as, all of theobligations of Tenant are fully performedin accordance with the terms of this Lease: Tenant agrees that any mortgagee may elect to have this Lease a priorlien to its mortgage and in the event of such election and upon notification,by any mortgagee to Tenant to that effect, this Lease shall be deemed prior inlien to the said mortgage whether this Lease is dated prior to or subsequent tothe date of said mortgage. At the request of Landlord, Tenant shall execute anddeliver to Landlord whatever Instruments may be required for the foregoingpurposes.

 

12.           ASSIGNMENT AND SUBLETTING

 

(a)           Tenant shall not, without Landlord’s prior consent, which may not beunreasonably withheld:

 

(1)           assign,hypothecate, mortgage, encumber, or convey this Lease;

 

(ii)           allow any transfer thereof or any lien uponTenant’s interest by operation oflaw;

 

(iii)          sublet the Premises or any part thereof; or

 

(iv)          permit the use or occupancy of the Premises or any part thereof by anyone other than Tenant (items (i) through(iv), collectively, a “Transfer”).

 

(b)           IfTenant desires the consent of the Landlord to an Assignment or Subletting ofall or a part of the Building Premises (thatportion of the Premises being assignedor sublet shall hereinafter referredto as “Subject Premises”), Tenant shall submit to Landlord:

 

(i)            theproposed sublease or assignment,which is not to commence priorto the first day of the month immediately following the month in which the thirtieth (30th) day following the submission to Landlord occurs; and

 

(ii)           sufficientinformation to pent Landlord todetermine the acceptability ofthe financial responsibility and charterof Sublessee or Assignee.

 

(iii)          the proposed sublease or assist shall be only for the remaining term or renewal term existing at the time the sublease or assignment is proposed; theSublessee or Assignee shall have no, right to exercise any renewal options.

 

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(c)           Landlord within thirty (30) days afterreceipt of such documents may:

 

(i)            terminate this Lease for the Subject Premises on the date the Sublessee or Assignment was to havebeen commenced; or

 

(ii)           so terminatethis Lease for the, Subject Premises andlease the Subject Premises, directly to Sublessee or Assignee; and

 

(iii)          if this Lease for the Subject Premisesbe so terminated, Tenant shallremain liable, for the above fixedif this Lease for the Subject’ Premisesbe so terminated, Tenant shall annual renal to the termination die even thoughsuch may be billed subsequently.

 

(1)           IfLandlord either terminates this Lease for the Subject Premises or terminatesthis Lease for the Subject Premises and leases the Subject Premises directly toSublessee or Assignee, Tenant’s liability and this Lease shall remain in fullforce and effect for the remainder of the Premises and the term if the Subleaseis for less than the entire Premises or remaining term:

 

(d)           IfLandlord does not either terminate this Lease for the Subject Premises orterminate this Lease for the Subject Premises and lease the Subject Premisesdirectly to Sublessee or Assignee pursuant to paragraph (c) above, Landlord illnot reasonably withhold its consent except that such consent need not begranted if:

 

(i)            in the reasonable judgment of Landlord the purposes for whichthe Sublessee or Assignee intends touse the Subject Premises are not in keeping with the use provisionscontained within this Lease;

 

(ii)           the SubjectPremises is not regular in shape with appropriate meansof ingress and egress and suitable for normal renting purposes;

 

(iii)          Space exists in the Building which may beleased directly from Landlord without considering an Assignment or Sublease;

 

(iv)          Tenant is in default under this Lease;

 

(v)           in the reasonable judgment of the Landlord,the intended use of the SubjectPremises will increase the cost ofinsurance for the Building; and

 

(vi)          consent will, cause Landlord to violate any covenant extended to anyother Tenant, Sublessee, or Assignee.

 

(e)           If Landlord grants consent:

 

(i)            the terms and conditions of this Lease,including among other things, Tenant’s liability for the Subject Premisesshall in no way be deemed or modified, abrogated or amended;

 

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(ii)           the consent shall nut be deemed a consent toany further subletting or assignment by either Tenant, Sublessee or Assignee;

 

(iii)          If Tenant shall fail topay the rent as defined in Article 15, if all or any part of the leasedPremises are then assigned or sublet, Landlord, in addition to any otherremedies provided by this Lease or provided by law, may at its option, collectdirectly from the Assignee or Sublessee all rents becoming due to Tenant byreason of the Assignment Sublease, and Landlord shall have a security interestin all properties on the leased Premises to secure payment of such sums. Anycollection directly by Landlord from the Assignee or Sublessee shall not beconstrued to constitute a novation or release of Tenant from the furtherperformance of its obligations under this Lease.

 

(f)            NoAssignment under this paragraph shall be valid or effective until there isdelivered to Landlord a duplicate original of the written instrument ofassignment in recordable form containing the name and address of the Assigneeand the assumption by the Assignee of this Lease and of all obligations underthis Lease to be performed by Tenant after the effective date of the assignment.No sublease consented to by Landlord shall be valid or effective until aduplicate original thereof shall be delivered to Landlord.

 

(g)           Notwithstanding anything in this Leaseto the contrary, a sale of the stock or ownership interests of Tenant shall not be deemed to be a Transfer for purposes this Lease. Moreover Tenantshall have the right (a “Permitted Transfer”) to assign this Lease in connection with any of the following: (1) sale of less than fiftypercent (50%) of: the stock or ownershipinterests of Tenant, (2) sale or transfer of fifty percent (50%) or moreof the stock or ownership interestsof Tenant, provided the transferee isin a comparable or superior financialcondition than Tenant at thetime of the transfer (3) merger or consolidationof Tenant, or (4) an assignment or sublet to an entity which iscontrolled by, controlling orunder common control withTenant, in each :case witherLandlord’s consent Landlord shall haveno right to increase the Rent under this Lease, to recapture any or all of the Premises or terminate the Lease orto seek the payment of any costs of the Landlord in connection with such permitted transfer. Anysublet or assignment hereunder shall notrelease or discharge Tenant of or from any liability, whether past,present, or future, under this Lease, and Tenant all continue fully liable thereunder; provided, however, in the case of an assignment effected pursuant to the preceding provision, Tenant shall be released and discharged of its obligations and liabilities hereunderso long as any such assignee has net worth equal to or in excess of the networth of Tenant and executes an instrument in writing fully assuming all of the obligations : and liabilities imposed upon Tenant under this Lease and delivers the same toLandlord where upon Tenant shall be released of all such future accruingliability. Tenant shall deliver toLandlord promptly after the effective date, of any such Transfer, an executed copy of each such sublease orassignment

 

13.           ACCESSTO THE PREMISES

 

(a)           Landlordor Landlord’s agents shall have theright to enter the Premises at all reasonable times with reasonable notice toexamine the same and to make such repairs as Tenant is obligated tomake hereunder, but has failedto make after written notice from Landlord.Landlord shall be allowed to take all materials and equipment into the Premises that may be required tocarry out only of the foregoing Landlord agrees, however, to use its best effortsto prevent any unnecessary inconvenience to Tenant in exercising any of theforegoing rights.

 

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(b)           Afterprior notice to Tenant, Landlord may exhibit the Premises to prospectivepurchasers, lenders and tenants at reasonable times. During the last onehundred eighty (180) days of this Lease, or any renewal term, Landlord mayenter the Premises for the purpose of altering, renovating, decorating,repairing or otherwise preparing the Premises for reletting.

 

(c)           Landlord reserves unto itself, however, theuse of the roof, exterior walls and the area above and beneath the Premises,together with the right to install, maintain, use, repair and replacepipes, ducts, conduits, wires, and structural elements leading through thePremises in location which  shall notmaterially inter a with Tenant’s use thereof and serving other parts of theBuilding Premises at Landlord’s expense.

 

(d)           Landlord may exercise all or any of theforegoing rights without being deemed guiltyof an eviction or disturbance of Tenant’s use and possession, without beingliable in any manner to Tenant, and without elimination or abatement of rent,or payment of other compensation.

 

(e)           Notwithstandinganything herein to the contrary, Landlord’s rights under this paragraph arelimited to Tenant related purposes or purposes which will directly benefit Tenant.

 

14.           MECHANICS LIENS

 

If a mechanics lien is filed against thePremises for, or purporting to be for, labor or material alleged to have beenfurnished; or to be furnished to, or for Tenant or any Sublessee of Tenant atthe Premises, Tenant shall cause such lien to be discharged within fifteen (15) days after written notice from Landlord, by bonding proceedings or otherwise. If Tenant shall fail totake such actions as shell cause such lien to be discharged within said fifteen(15) day period, Landlord may, at its optima pay the amount of such lien or maydischarge the same by bonding proceedings and, in the event of such bondingproceedings, Landlord may require the linear to prosecute the appropriateaction to enforce the lienor’s claim. Any such amount paid or expense incurredby Landlord, or any expense incurredor sum of money paid by Landlord by reason of the failure of Tenant to comply withthe foregoing provision of this paragraph, or in defending any such action,shall become immediately due and payable as rent by Tenant to Landlord,together with interest thereon at the rate of the prime rate charged by BankOne, Columbus, NA of Columbus, Ohio as of the date of payment, from the date of payment by Landlorduntil paid by Tenant. Any such payment byLandlord shall not be deemed to be a waiver of any rights which the Landlord may have under the provision of this Leaseor as provided by law.

 

15.           REMEDIESOF LANDLORD

 

(a)           If Tenant shall fail to pay to Landlord other amounts provided herein to be paid to Landlord within ten (10) days after rendition of a statement therefor, or defaults inthe prompt and full performance ofany of Tenant’s covenants and dentshereunder; and said default is not corrected within fifteen (15) daysafter notice from Landlord of said default (or if such default is of such a nature that it cannot be cured completely within such fifteen (15) day period, if Tenant shall not have promptly commencedto cure the defaultwithin said fifteen (15) day 

 

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period orshall have not diligently prosecutedthe curative work tocompletion), or if the leaseholdinterest of Tenant be levied upon under execution, or be attached, or if any voluntary or involuntary petition or similarpleading under anyAct of Congress relating to bankruptcy shall be filed by or against Tenant, or if any voluntary or involuntaryproceedings in any courtor tribunal shall be instituted by oragainst Tenant, or any guarantor of this Lease, to declare Tenant or any guarantor of this Lease insult or finable to pay the debts of Tenant orany guarantor of thisLease, or if Tenant or any guarantor ofthis Lease make an assignment for the benefitof creditors or if a receiver be appointedfor any property ofTenant, or if Tenant abandons the Premises, then and in any suchelection and with or without demand whatsoever forthwithterminate this Lease and Tenant’s right to possession of said Premises,or Landlord may, without this Lease, terminate Tenant’s right to possession of the Premises.

 

(b)           Upon the termination of thisLease, or upon the termination of Tenant’s rights to possessionwithout termination of this Lease, Tenant: shall surrender possession and vacatethe Premises immediately, and Landlord may enterinto and repossess the Premises with ourwithout process of law and remove all persons and property therefrom in the same manner and with the same right as if this Lease had not been made, and for the purposeof such entry and repossession Tenant waives any notice provided by Law orotherwise to be given in connection therewith.

 

(c)           If Landlord elects toterminate Tenant’s right to possession only, without terminating this Lease asabove provided, Landlord may remove from the Premises and all property foundtherein (subject to the waiver of notice provisions of subparagraph (b) above),and such repossession shall not release Tenant from Tenant’s obligation to paythe rent reserved herein. After such repossession of the Premises by Landlordwithout termination of this Lease, Landlord agrees to make reasonable effortsto rent the Premises, or any part thereof; as agent of Tenant or otherwise, tosuch person, firms or corporations as Landlord: shall in its sole discretionconsider financially responsible and suitable as a Tenant or Tenants and forsuch time and upon such terms as Landlordin Landlord’s sole discretion, may determine, and for the purpose of such relenting,Landlord may make repairs, alterations and additions to the Property andredecorate the same to the extent reasonably deemed by Landlord as necessary,and Tenant shall, upon demand, pay the cost thereof together with Landlord’sexpenses (including but not limited to attorney’s fees and any broker’scommissions) of reletting. However, in no event shall Tenant be responsiblefor any costs for such repairs; alterations and additions in and to thePremises and redecorate the Premises in the event Landlord terminates Tenant’sright to possession during thefinal six (6) months of the Term; providedsuch termination is not a result of Tenant’s failure to pay sums due under the Lease; after notice, as provided in the Lease. If the rentscollected by Landlord upon any such reletting are not sufficient to pay monthly and annually the fullamount of the rent and other sums provided herein to be paid by Tenant to Landlord, together with the costsof such repairs, alterations,additions, redecorating and expenses, or if Landlord has not received any rentsfrom reletting, Tenant shall pay to Landlord the amount of each monthly and annual deficiencyupon demand. If the rent so collected from any such reletting is more thansufficient to pay the full amount of the rent reserved herein together with the cost of suchrepairs, alterations, additions, redecorating and expenses, Landlord, at the end of the stated term of this Lease, shall be under noobligation to account to Tenant for any surplus.

 

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(d)           If Landlord elects to terminate this Lease as above provided, Landlordshall be entitled to recover as damages an amount equal to the then presentvalue of the rent and other sums provided hereunto be paid by Tenant to Landlordfor the entire remainder of the state Leaseterm.

 

(e)           Anyand all property which may be removed from the Premises by Landlord may be handled, removed, stored orotherwise disposed of by Landlord at the risk and expense of Tenant, and Landlord shall in no event be responsible for the preservation orsafekeeping thereof, or be deemed liable to Tenant in conversion or otherwise.

 

(f)            If Tenant shall default in performing any term,covenant or condition of this Lease, which default may be cured by the expenditure of money, Landlord, at Landlord’s option,may, but shall not be obligated .to on behalf Tenant, expend such sums as may be necessary to perform and fulfill such terns, covenant or condition, and anyand any sums so owed by Landlord, with interest thereon at the Default Rate, shall be deemed to beadditional rent, and shall be repaid by Tenant to Landlord on demand, but nosuch payment or expenditure by Landlord shall be deemed a waiver of Tenant’sdefault nor shall it affect any other remedy of Landlord by reason of suchdefault.

 

(g)           All rights and remedies of Landlord hereinset forth are in addition to any and all rights and remedies allowed by law andequity.

 

16.           INDEMNITY

 

(a)           Tenant Agrees to indemnify and save harmless Landlord from and againstany and all claims as a result of or arising out of, directly or indirectly,any of the following:

 

(i)            the breach by Tenant or any of its agents,contractors, employees, customers, visitors or. licensees of any covenant oragreement of Lease on the part of Tenant to be performed or observed.

 

(ii)           Tenant’s use or occupancy of the Premises orany part thereof or any sidewalk, drive or space adjacent thereto.

 

(iii)          the carelessness, negligence or improperconduct of Tenant or any of its agents, contractors, employees, customers,visitors or licenscees.

 

(b)           Tenant further agrees to indemnify and save harmless Landlord from andagainst all costs, damages, expenses, losses, fines, liabilities and counselfees paid, suffered or incurred as a result of any of the above-describedclaims or any actions or proceedings brought thereon; and in case any action orproceeding is brought against Landlord by reason of any such claim, upon noticefrom Landlord, Tennant agrees to resist or defend at Tenant’s expense suchaction or proceeding by counsel satisfactory to Landlord.

 

(c)           Tenant’s liability under this Article 16 and this Lease extends to theacts and omissions of any subtenant or assignee of Tenant and any agent,contractor, employee customer, visitor or licensee of any such subtenant orassignee.

 

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(d)           Landlordshall indemnify, protect, defend and hold harmless, Tenant and its officers, agents, partners, members andemployees from and against any and all claims arising from Landlord or Landlord’sagents or employees, negligent willful acts or Landlord’s failure to affirmativelyperform its obligationshereunder, in which eventLandlord shall indemnify, defend and hold harmless Tenant and its officers,agents, partners and employees from any obligations, liabilities, costs,damages, claims and expenses of whatevernature arising as a result thereof.

 

17.           ESTOPPEL CERTIFICATES

 

At any time and from time to time, Tenantagrees, upon request in writing from Landlord, to execute; acknowledge anddeliver to Landlord a statement in writing certifying, if true, that this Leaseis unmodified and in full force and effect (or if there have beenmodifications, that the same in full force and effect as modified and stating themodifications) and the dates to which the rent and other charges have beenpaid.

 

18.           UTILITIES

 

Tenant, agrees during the term hereof to payall charges for electricity, water, sewer, gas, heat, telephone and otherutility services used, consumed or wasted upon the Premises. Landlord shall notbe liable for the quality; quantityor any interference with such utilities.

 

19.           EMINENT DOMAIN

 

(a)           If the whole of the Premises shall be takenin appropriation proceedings or by any right of eminent domain (including aconveyance in lieu thereof) then this Lease shall terminate from the timepossession thereof is required from public use and from that date on theparties shall be released from further obligations thereafter accruinghereunder.

 

(b)           If less than twenty-five Percent (25%) of thefloor space of the building occupied by Tenant on. the Premises shall be sotaken, the Lease term shall cease only with respect to the part so taken as ofthe day possession thereof is required forpublic use, and Tenant shallpay rent up to that day with appropriate refund by Landlord of such rent as mayhave been paid in advance for the portion so taken for a period subsequent tothe date of the taking.

 

(c)           If twenty-five Percent (25%) or more of thespace of the building occupied by Tenant shall be so taken, then the term ofthis Lease shall cease only as to the part so taken from the date possessionthereof is required for public use and Tenant shall pay rent up to that daywith an appropriate refund by Landlord of such rent as may have been paid inadvance for a period subsequent to the date of the taking; provided, however,that either party shall have the right to terminate this Lease in such event asto the entire Premises upon notice in writing thereof made upon the other partywithin thirty (30) days after such taking of possession.

 

(d)           If,following a taking of a portion of the Premises by eminent domain, this Leaseis not terminated under the provisions of this Article, there shall be anequitable adjustment of the rent based upon the portion of the Premises taken,and Landlord shall make all necessary alterations to the Premises so as to makethe Premises a complete architectural unit.

 

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(e)           Tenant agrees that Landlordshall be entitled to collect from any condemning authority the entire awardthat may be made in any condemnation or appropriation proceeding withoutdeduction therefrom for any estate or rights vested in or owned by Tenant, andTenant shall not have any claim against Landlord by reason of any condemnationor taking of the whole or part of the Premises, nor any claim to the amount or any portion thereof which may be awardedas damages or paid as the result of any condemnation or taking; provided, however,that Landlord shall not be entitled to any separate award made to Tenant forloss of business, depreciation to and cost of removal of stock and fixtures.

 

20.           NO WAIVER

 

(a)           Noreceipt of money by Landlord from Tenant with knowledge of the breach of anycovenants of this Lease, or after the termination hereof, or after the serviceof any notice, or after the commencementof any suit or after final judgment for possession of the Premises shall bedeemed a waiver of such breach, nor shall it reinstate, continue or extend theterm of this Lease or affect any such notice, demand or suit.

 

(b)           No payment by Tenant or, receipt by Landlordof a lesser amount than the monthly rent. herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shallany endorsement or statement on anycheck or any letter accompanying any check or payment as rent be deemedan accord and satisfaction, and Landlord may accept such check or paymentwithout prejudice to Landlord’s right to recover the balance of such rent o r pursue any other remedyin this Lease provided.

 

(c)           No delay or failure on the part of Landlordin exercising or enforcing any right, power, or privilege hereunder shalloperate as a waiver thereof, nor shall any single or partial exercise of anyother right, power or privilege.

 

(d)           No act done or thing said by Landlord orLandlord’s agent or employees shall constitute a cancellation, termination. ormodification of this Lease, or a waiver of any covenant, agreement or conditionhereof, nor relieve Tenant from Tenant’s obligation to pay the rents reservedor other charges to be paid hereunder. Any waiver or release by Landlord andany cancellation, termination or modification of this Lease must be in writingsigned by Landlord.

 

21.           NOTICES

 

Whenever it shall be necessary or desirablefor Landlord to serve any notice or demand upon the other, such notice ordemand shall be sent by U.S. PostalService certified mail with return receipt,recognized courier service such as Federal Express or personal delivery. Notice may be given on behalf of either party by their attorney. Notices shall be addressed tothe Landlord at the address where the last previous rental payment was paid. Noticesshall be addressed to Tenant at 8337 Green Meadows Drive, Lewis Center, Ohio43035. Notice sent. as aforesaidshall be deemed to have been served at the time the same is delivered orrefused. Either party shall have the right to change the address for notices bygiving written notice of such change to the other party.

 

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22.           RECORDING

 

This Lease shall not be recorded. However, ifeither of the parties hereto desires to record a statutory memorandum to this Lease, Landlord and Tenant agreeto execute and deliver to the other a recordable memorandum of this Leasecontaining only the minimum statutory requirements, which memorandum of thisLease may then be recorded in the office of the County Recorder of FranklinCounty, Ohio.

 

23.           END OF TERM

 

Upon the expiration or other termination ofthe term of this Lease, including any renewal term, Tenant shall quit andsurrender to Landlord the Premises together with all alterations,installations; additions and. improvements, whether installed by Landlord orTenant, broom. clean, and in as good condition and repair as. the same were in at the commencementof the term or were thereafter put by Landlord or Tenant, subject only toordinary wear and tear, and damage or destruction by fire or other casualtycovered by standard fire and extended coverage insurance, failing whichLandlord may restore said Premises to such condition and Tenant shall pay thecost thereof, and Tenant shall remove all of its property from the Premises. IfTenant fails to remove Tenant’s carpeting and personal property and tradefixtures which it has a right to remove from the Premises within fifteen (15)days after written notice from Landlord, Tenant shall be conclusively presumedto have abandoned the same, andownership thereof shall forthwith vest in Landlord without payment orcredit to Tenant.

 

24            HOLDING OVER

 

Should Tenant remain in possession of thePremises after the date of the expiration of the term of this Lease without the consent of Landlord then,unless a new agreement in writing shall have been entered into between theparties hereto, Landlord shall have the option to treat Tenant as a trespasseror to hold Tenant as a Tenant from month-to-month at a monthly rental equal to125% of the amount of the last monthly rent payable hereunder and otherwisesubject to all of the terms and conditionsof this Lease.

 

25.           SECURITY DEPOSIT

 

Not Applicable.

 

26.           LIMITATION OF LANDLORD’S LIABILITY

 

If Landlord shall fail to perform anycovenant, term or condition of this Lease upon Landlord’s part to be performedand, as a consequence of such default,Tenant shall recover a. money judgment against Landlord, suchjudgment shall be satisfied only out of the proceeds of sale of received uponexecution of such judgment and levy thereon against the right, title andinterest of Landlord in the Premises,and Landlord and any individual signing this Lease on behalf of Landlordshall not be liable for any deficiency. It is understood that in no event shallTenant have any right to levy execution against property of Landlord other thanits interest in the Premises as hereinbefore expressly provided.

 

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27.           MISCELLANEOUS

 

(a)           Applicable Law. The Laws of the State of Ohio shall govern the validity,performance and enforcement of this Lease. The invalidity or unenforceability ofany provision of this Lease shall not affect or impair any other provision.

 

(b)           Headings. The headings of articles and paragraphs are inserted only as amatter of convenience and for referent and in no way define, limit or describethe scope or intent of this Lease, nor in any way affect this Lease;

 

(c)           Assigns. The terms, covenants and conditions containedin the Lease shall bind and inure to the benefit of Landlord and Tenant theirrespective heirs, legal representatives, successors and assigns, subject, however, to the provision hereof requiring the consent of Landlord to any assignmentor subletting of this Lease.

 

(d)           Entire Agreement. ThisLease contains the entire agreement between the parties hereto, and shallnot be modified in anymanner except by an instrumentin writing executed by both of said parties or their respective successors in interest.

 

28.           QUIETENJOYMENT

 

Landlord covenants and agrees with Tenantthat upon Tenant paying the rent and other charges hereunder and observing andperforming all the covenants, agreements and conditions on Tenant’s part to beobserved and performed, Tenant may peaceably and quietly enjoy the Premises hereby demised without hindrance ofLandlord or any person lawfully claiming under Landlord, subject, nevertheless,to the terms and conditions ofthis Lease, any mortgage of Landlord, and any restrictions, conditions,reservations and agreements ofrecord.

 

29.           ENVIRONMENTALPROTECTION AND UTILITY REGULATION

 

(a)           Tenantshall not cause or permit any Hazardous Substance to be used, stored, generatedor disposed of on or in the Building Premises and/or Premises by Tenant, Tenant’sagents, employees, contractors or invitees without first obtaining Landlord’swritten consent. If Hazardous Substances are used, stored, generated, ordisposed of on or in Premises (regardless of whether Tenant obtained Landlord’s consent as required above), or if the BuildingPremises and/or Premises becomecontaminated in any manner for which Tenantis legally liable, Tenant shall unify and hold harmless Landlord from any andall claims, damages, fines, judgments, penalties, costs, liabilities or losses(including without limitation, a decrease in value of the Building Premisesand/or Premises, damages caused by loss or restriction or rentable or useablespace, or any damages caused by adverse impact on marketing of the space, andany and all sums paid for settlement of claims, attorney’s fees, consultant andexpert fees) arising during or after the term of the Lease, or at any time priorto the term of this Lease during which Tenant occupied the Premises, andarising as a result of such contamination. This indemnification includes,without limitation, any and all costs incurred because of any investigation ofthe site or any cleanup, removal or restoration mandated by a federal, state orlocal agency or political subdivision. Without limitation of the foregoing, ifTenant causes or permits the presence of any Hazardous Substance on the Building Premises and/or Premises(regardless of whether Tenant obtained Landlord’s consent as required above)and that results in contamination, Tenant shall promptly, at sole expense, takeany and all necessary actions to return the Building Premises 

 

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and/or Premises to the conditionexisting prior to the presence of such Hazardous Substance. Tenantshall first obtain Landlord’s approval forany such remedial action. As used herein, “Hazardous Substance” includesany and all material or substances that are defined as “hazardous waste”, “extremely hazardous waste,” or a “hazardoussubstance” pursuant to state, federal or local governmental law, and for thepurposes of this Lease, includes, but is not restricted to asbestos,polychlorinated biphenyl (“PCBs”), petroleum products and petroleum wastes.

 

(b)           Theparties hereto acknowledge that energy shortages in the region in which theBuilding Premises is located may, from time to time, necessitate reduced orcurtailed operation of the Building Premises and the business conducted by theTenant in the Premises. Tenant agrees to and shall comply with such rules andregulations as may be promulgated from time to time by Landlord with respect toenergy consumption, and during such periods of time when, in the opinion ofLandlord, energy shortages so dictate, Tenant: shall reduce or curtail businessoperations in the Premises as shall be directed by Landlord. Compliance withsuch rules and regulations and such reduction or curtailment of businessoperations shall not constitute a breach. of Landlord’s covenant of quietenjoyment nor shall the same constitute an actual or constructive eviction ofTenant, or otherwise invalidate or affect this Lease Agreement, and Tenantshall not be entitled to anydiminution, reduction or abatement of rent during periods of reduction orcurtailment of its operations. Failure to keep and observe said rules andregulations and/or to reduce or curtail business operations as herein provided shall constitute anevent of default hereunder.

 

(c)           Landlord willindemnify, defend and save Tenant harmless from any and all actions,proceedings, claims, costs, including attorneys’fees, expenses and losses of any kind arising (i) in connection with anyfailure by Landlord, any prior Tenant, any existing sub-Lessees as of the datehereof, or any other occupant to comply with any law, statute, ordinance orregulation governing the use, handling, storage, transportation, generation,release or disposal of Hazardous Substances, relating to or affecting thecondition, use or occupancy of the Premises , (ii) in the event that the foregoing representation is incorrect,(iii) in connection with claims from the actions of any third party not underTenant’s control (items (i) through (iii), collectively, a “Hazardous SubstanceEvent”).

 

(d)           In the event that there is any HazardousSubstance Event on the Premises which requires remediation and Landlord fails to commenceperformance of such remediation within thirty (30) days of Landlord’s receipt of notice thereof and to diligently and ingood faith pursue the remediation tocompletion, Tenant may performsuch remediation, and any and all reasonable costs and expenses incurred byTenant in the performance of any of Landlord’s obligations under this Articleshall be due and payable by Landlord to Tenant, within thirty (30) daysfollowing presentation to Landlord of an invoice therefore. In the event suchinvoice is not paid by Landlord within said thirty (30) day period, Tenant may reduce any and all payments of Rent,by offsetting such costs against Rent reserved hereunder until such amountspaid by Tenant, plus interest at the Default fate from the expiration of thethirty (30) day period are fully repaid and reimbursed to Tenant. The partieshereby agree that if Tenant shall exercise any of its set-off rights under this Article, in no event shall the same bedeemed a Default under any term of this Lease or otherwise.

 

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30.           IMPROVEMENT

 

(a)           Landlord shall furnish Tenant an allowance (the “Tenant Allowance”), ofup to One Hundred Thousand and No/100 Dollars ($100,000.00) upon Tenant’swritten demand at anytime during the Term. It is understood that Tenant may usethe Tenant Allowance for all of Tenant’s costs incurred in connection with thisLease, the costs of designing and constructing Tenant improvements, includingall so-called hard and soft costs which is not limited to but will includearchitectural and engineering fees, any costs incurred for furniture, furnituresystems, telecommunication systems, management information systems and thelike, all moving and. relocation costs and any other costs associated with theestablishment of Tenant in the Premise, cost associated with Licensing, Tenant’slegal expenses in connection with this Lease and any licenses, permits, orregulatory approvals arising in connection with the establishment andaccreditation of Tenant at the Premises. The Tenant Allowance shall be used for improvements which, inTenant’s reasonable judgment, be beneficial to future Tenants at the Property. Inthe event Tenant does not use all or any portion of the Tenant Allowance forthe payment of the foregoing costs, Tenant may elect to apply such unusedportion, or all, of the Tenant Allowance against Rent as such becomes due.

 

(b)           Landlord shall pay the TenantAllowance to Tenant in monthly installments and in the amount requestedby Tenant in writing (“Request forAllowance”) within twenty (20) days of Tenant’s Request for Allowance if all of the applicablefollowing conditions are met:

 

(i)            Costs incurred by Tenant for architects,engineers or other professional services, Tenant shall only be required tosubmit to Landlord for payment a statement for such services from such personand the requirement set forth in clause 2 through 7 shall not be applicable;

 

(ii)           For construction payments, Tenant hasobtained building permits for all of the work with executed sign offs andfurnished copies thereon to Landlord;

 

(iii)          Tenant has substantially performed the workdescribed in the Request for Allowance;

 

(iv)          Tenant has furnished Landlord (i) an affidavit from Tenant listing allcontactors and suppliers whom Tenant has contracted with in connection with thework, together with the cost of each contract, and the dollar amount ofwork each contractor and supplier has performed in connection with theRequest for Allowance, and (ii) an affidavit from Tenant’s general contractorlisting all subcontractors and suppliers whom the general contractor hascontracted with in connection with the work, together with the cost of eachcontract and the dollar amount of work each subcontractor and supplier hasperformed) in connection with the Request for Allowance;

 

(v)           Tenant has performed all work theretofore completed, which amount shall consist of at least the amount ofthe installment being requested;

 

(vi)          Tenant has furnished Landlord mechanic’s lien releases from the generalcontractor in connection with the list for Request for Allowance; and

 

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(vii)         Tenant is not in Default under this Lease.

 

(c)           Landlord shall pay Tenant the final installment of the Allowance withintwenty (20) days after Tenant’s final Request for Allowance provided thefollowing conditions are met:

 

(i)            Costs incurred byTenant for architects; engineers orother professional services, Tenant shall only be required to submit toLandlord for paymenta statement for such servicesfrom such person and the requirement set forth in clause 2 through 7 shallnot be applicable.

 

(ii)           Tenant has performed all of the work (including punch list items) inaccordance with all applicable provisions of this Lease;

 

(iii)          Tenant has furnishedLandlord (i) an affidavit from Tenant listing all contractors and suppliers whomTenant has contracted with in connectionwith the work, together with the cost of each contract, and (ii) an affidavit from Tenant’s generalcontractor listing all subcontractors andsuppliers whom the general contractorhas contracted with in connection with the work, together with the cost of each contract;

 

(iv)          Tenant has fully paid for all of the work and has furnished to Landlord a certificate from an officer of Tenant statingthat all the work has been paid for and setting forth the totalcost of the work ;

 

(v)           Tenant has furnishedLandlord valid, full and final mechanic’s lien releases from the generalcontractor and all other contractors and suppliers who have performed work orhave furnished supplies inexcess of $10,000.00 for or in connectionwith Tenant’s work at the Premises (including all parties listed in the affidavits referenced in [2] above) and such otherevidence as Landlord may reasonably requestto evidence that no liens canarise from the work. In the event Tenant does not deliver final lien waiversfrom its general contractor andeach supplier and contractor, inlieu of such lien waiversLandlord agrees that Tenant mayprovide to Landlord an endorsementto the title insurance policy issued by Landlord’s Title insurance company insuring Landlord againstany possible mechanic’s liens whichmight arise as a result of Tenant’s Work. The form and content of the fide endorsement shall besatisfactory to Landlord;

 

(vi)          Tenant has obtained a certificate of occupancy with respect to thePremises;

 

(vii)         Tenant is not in Default under this Lease.

 

(d)           Inthe event Tenant has satisfied each and, every requirement for the disbursement of any installment of the TenantAllowance and Landlord fails to pay the Tenant Allowance within twenty (20) days after such conditionsare met, then, unless Landlord pays the TenantAllowance to Tenant within an additional ten (10) days after receipt byLandlord of notice from Tenant advising Landlord that the Tenant Allowance hasnot been paid, Tenant shall have the right to set off the unpaid amount of the Tenant Allowance, togetherwith interest at the Default Rate accruing from the expiration of the initialthirty (30) day period within which 

 

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Landlord is required to pay the TenantAllowance through the date eitherLandlord pays the Tenant Allowance or Tenant sets off the unpaid amount of the Tenant Allowance from the Rentthat is otherwise payable pursuant to the tern of this Lease. Tenant shall advise Landlord in writing the amountof the Tenant Allowance which is being set off against each installment of Rentas such portion of the Tenant Allowance is so set off. The notice requiredpursuant to the terms of this paragraph shall be given to Landlord at the addressfor notices provided in this Lease.

 

31.           COUNTERPARTS

 

This Lease Agreement may be executed inmultiple counterparts which, when taken together, shall constitute one (1)instrument.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused duplicatecounterparts of this Lease Agreement to be executed as of the day, month andyear first written above.

 
| Signed and Acknowledged in |   | LANDLORD:                      |
|----------------------------|--------|--------------------------------|
| The presence of:           |   |                           |   |
|                       |   | SARCOM PROPERTIES, INC.        |
|                       |   |                           |
| /s/ J Clarke               |   |                           |   |
|                       | By:    | /s/ Randy Wilcox               |
|                       |   |                           |
| /s/ Teresa Cooke           |   | By:                            |   |
|                       |   |                           |
|                       |   | TENANT:                        |   |
|                       |   |                           |   |
|                       |   | SARCOM DESKTOP SOLUTIONS, INC. |
|                       |   |                           |   |
|                       |   |                           |   |
|                       |   | /s/ Richard C. Mills           |
|                       |   |                           |   |
|                       |   | Richard C. Mills               |
|                            |        |                                |  |  |  |

 

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**FIRST AMENDMENT TO**

**LEASE AGREEMENT**

 

THISFIRST AMENDMENT TO LEASE AGREEMENT (this “First Amendment”) is entered into asof the 1st day of December 2002, by and between SARCOM PROPERTIES,INC. (“Lessor”), and SARCOM DESKTOP SOLUTIONS, INC. (“Lessee”).

 

**RECITALS:**

 

WHEREAS,Lessor and Lessee entered into that certain Lease Agreement dated December 15,2001 attached hereto as Exhibit A (hereinafter referred to as the “Lease”),pursuant to which Lessee leased approximately 144,000 rentable square feet ofspace in a certain facility, together with the real estate upon which it islocated, and all improvements located therein, located at 8337 Green MeadowsDrive, in the City of Lewis Center, State of Ohio (the “Leased Premises”);

 

WHEREAS,Lessor and Lessee have been affiliates and as of the date hereof continue to beaffiliates; and

 

WHEREAS,Lessor and Lessee each desire to amend the Lease pursuant to the provisions ofthis First Amendment.

 

NOWTHEREFORE, for and in consideration of the recitals herein above set forth andfor other good and valuable consideration the receipt of which are herebyacknowledged, Lessor and Lessee hereby agree as follows:

 

1.             Incorporation of Recitals and Terms:  Theforegoing recitals are hereby incorporated in and made a part of this FirstAmendment. Unless otherwise defined in the First Amendment to the contrary, allcapitalized terms used herein shall have the respective meanings as areascribed to them in the Lease.

 

2.             Amendment. Section 2 of the Lease is hereby amended in its entirety to statethat “The term of this Lease shall commence on July 1, 2001 and shall terminateon December 31, 2009, unless sooner terminated as provided herein. Notwithstandingthe foregoing, Tenant shall have the option to terminate this Lease at any timeafter December 31, 2004 upon the consummation of a Change in Control (asdefined below) of Tenant, in exchange for a termination payment equal to:

 
| **Date of Termination of Lease:**        | ** ** | **Termination Payment** |
|------------------------------------------|------------|-------------------------|
|                                     |       |                    |
| January 1, 2005-December 31, 2005        |       | $500,000                |
| January 1, 2006-December 31, 2006        |       | $400,000                |
| January 1, 2007-December 31, 2007        |       | $300,00                 |
| January 1, 2008 – December 31, 2008 |       | $200,000                |
| January 1, 2009-December 31, 2009        |       | $100,000                |

 

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Forpurposes of this Lease, a “Change in Control” shall occur if:

 

(i)            any individual, partnership, firm,corporation, association, trust, unincorporated organization or other entity,or any syndicate or group deemed to be a person under Section 14(d)(2) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomesthe “beneficial owner” (as defined in Rule 13d-3 of the General Rules andRegulations under the Exchange Act), directly or indirectly, of securities ofTenant representing 50% or more of the combined voting power of Tenant’s thenoutstanding securities entitled to vote in the election of directors of Tenant,except that the conversion of debt to equity of the Tenant by the existing bankgroup shall not constitute a “Change of Control”; or

 

(ii)           all or substantially all of the assets of Tenant are liquidated ordistributed.

 

3.             Continuing Effect. Except as specifically amended hereby, theLease shall remain in full force and effect and unmodified.

 

4.             Counterparts. This First Amendment may be executed inmultiple counterparts which, when taken together, shall constitute one (1)instrument.

 

**[SIGNATURE PAGE TO FOLLOW]**

 

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INWITNESS WHEREOF, Lessor and Lessee have caused this First Amendment to LeaseAgreement to be executed as of the date first above written.

 
| Lessor:                  | Lessee:                         |
|--------------------------|---------------------------------|
|                     |                            |
| SARCOM  PROPERTIES, INC. | SARCOM  DESKTOP SOLUTIONS, INC. |
|                     |                            |
|                     | By:                             |  /s/  Charles E. Sweet |   |   | By:  | /s/  Charles E. Sweet |   |
|                     |                            |
| Name:                    |  Charles  E. Sweet         |   | Name:    | Charles  E. Sweet |   |
|                     |                            |
|                     | Title:                          | President |   |   | Its:  | President |   |
|                          |                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**SECOND AMENDMENT TO**

**LEASE AGREEMENT**

 

This SecondAmendment to Lease Agreement (“Second Amendment”) is entered into as of the22nd day of March, 2004 by and between **SARCOMPROPERTIES, INC.** (“Lessor”) and **SARCOM  DESKTOP SOLUTIONS, INC.**(“Lessee”)*.*

 

**BackgroundInformation**

 

Lessor andLessee entered into a certain Lease Agreement dated July 1, 2001 and a FirstAmendment to Lease Agreement dated December 1, 2002 (hereinafter referred to as“Lease”) pursuant to which Lessee leased approximately 144,000 rentable squarefeet of space at a certain facilitytogether with the real estate upon which**itis located and all improvements located therein at 8337 Greenmeadows Drive, in the City of Lewis Center, State of Ohio(“Premises”).

 

Lessor andLessee are desirous of modifying the terms and. conditions of said Lease in the****following manner:

 

Therefore, for**andin consideration of the recitals herein set forth and for other good. and valuableconsideration, the receipt of which is hereby acknowledged, Lessor and Lesseehereby agree to****thefollowing:

 

**Statement of Agreement**

 

Section 1 - Demised Premises. Lessorand.Lessee .hereby agree to reduce thePremises as follows:

 

(a)           Lessee to vacate an approximately 6,000square foot area on the northwest corner  of the first floor of thePremises, said area being that which formerly housed the tech service area. Saidsquare footage to be vacated and returned to Lessor on or before February 29,2004.

 

(b)           Lessee to**vacate an**area of approximately 5,159 squarefeet on the second floor. Same to beinclusive of the large conference room and two (2) small  conference rooms. Said space shall be vacated and returned to Lessor on or beforeFebruary 29, 2004;

 

(c)           Lessee to vacate approximately 17,355 squarefeet on the southwest corner of the first floor on or before March****31,2004. Same to be inclusive of the****spacethat contains tthe****executive briefing****room**and****the**security room*.*

 

Lessee covenants to return the space in reasonably clean condition andin good condition and repair, normal wear and tear excepted. Lessor and Lesseewill review the space to be vacated and agree upon any maintenance orrenovation required to be performed by Lessee as a result of Lessee’s failureto maintain the vacated space in the manner required by the Lease.

 

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As additional consideration for Lessorreleasing said square footage from the Lease, Lessee agrees that it****will exercise a buy-out option associated with****a certainLease Agreement for the furniture located in the aforesaid vacated space (“VacatedFurniture”). The Vacated Furniture is set forth on a fixed asset list beattached****hereto to this Second**Amendmentas****Exhibit A and should**include all furniture currently located inthe****space to be vacated. Lessee agrees to transfertitle****to the Vacated Furniture****free and****clear of any liensand****encumbrances and to execute aBill of Sale setting forth same to Lessor. In consideration of said sale Lessorwill grant to the Lessee a rent credit in the amount of Twenty Thousand Dollars($20,000.00)****(the****“Rent Credit”).

 

Lessee shall retain a 572 square foot area oflab space on the first floor and Lessor agrees to install a.door from the labspace into the space currently occupied by Lessee’s security group, which doorwill serve to demise the space retained by Lessee on the first floor from the space to**bevacated by Lessee. Same to**be completed as soon as practical.

 

Section 3 - Rent. The partieshereby agree that effective as of December *1,*2004 the monthly Fixed Rental (asdefined in the Lease) shall be reduced to Forty Five Thousand Dollars($45,000.00) per month. Lessor and Lessee acknowledge that Lessee is presentlyin default in the payment of Fixed Rental under the Lease and is currentlyobligated to pay Twenty-Five Thousand Dollars ($25,000.00) of rent for December2003 (because $20,000 has already been paid) (“December 2003 Rent”), $45,000 ofrent for January 2004 (“January 2004 Rent”), $45,000 for February 2004 (“February2004 Rent”), and $45,000 for March 2004 (“March 2004 Rent”). Lessee agrees that such past due**amountswill be paid as follows:

 
| **Payment**            | ** ** | **Date Payable** | ** ** | **Amount**                                 |
|------------------------|------------|------------------|------------|--------------------------------------------|
| March 2003 Rent        |       | March 22, 2004   |       | $45,000                                    |
| December 2003 Rent     |       | March 22, 2004   |       | $5,000(i.e. $25,000  Less the Rent Credit) |
| January 2004 Rent      |       | April 15, 2004   |       | $45,000                                    |
| February 2004.  Rent . |       | May 14, 2004     |       | $45,000                                    |

 

Lessor further covenants that commencingon April 1, 2004****to  paythe  new monthly Fixed Rental amountwithin five (5) business days of the beginning of each month during the leaseterm in accordance with the terms andconditions of the Leese.

 

Section 6 - Maintcnance Obligations. Lessor and Lessee further agree totake all reasonable steps to minimize utility costs inthe square footage beingvacated by Lessee, by example: lights will be turned off, doors closed****andthermostats turned down or off. However, notwithstanding same, Lessee shallcontinue to pay all utility costs and all costs for the maintenance and upkeepof the entire building as if it is occupying the original Leased Premises andshall continue paying same until the earlier of December 31, 2004 or the datein which any other tenant occupies the vacated space following which its numeratorshall be reduced to the actual square footage leased by Lessee divided by thetotal square footage of the space leased by lessee and the total square footageof the space occupied by a new tenant. Each time a new tenant occupies space the**percentage****willbe recalculated.****The aforesaid shall not modifyLessee’s obligation to turn over the Premises in the condition as set forth hereinabove. Lessor 

 

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acknowledges that Lessee will not have any obligation to clean ormaintain the space vacated from and after the dates such space is vacated. Fromand after the date Lessor enters into alease****with a new tenant**,**Lessorshall be responsible for all repairs, maintenance****and****replacementsto (i) the common areas of the building, (ii) the parking****areas, driveways**and access roadways serving the building and the Premises,(iii) all utility lines and conduits, pipes, catch basins, manholes, sewer,**lighting****fixtures and other facilitiesserving the building****and the Premises; and (iv) the roof and structural members**ofthe building including walls and support**columns.Lessee**shall pay its pro rata**shareof all such expenses*.*

 

Section7 - Real Estate Taxes and Assessments. Lessor and Lesseehereby**agree and acknowledge that Lessee on a “Net Lease”basis is**responsible for all real**estate taxes**for the**144,000  rentable square feet**of thePremises for the calendar year 2003 whichare due and**payable in June 2004. Commencingwith first half 2004 real estate taxes which will be billed and due at**the beginning of 2005, Lessee shall pay a prorated portion ofthe real estate taxes and insurance**based on the**total squarefootage of space leased by Lessee versus the total square footage of leasablespace at 8337 Greenmeadows Drive.

 

Section 8 - Leasing of Vacated Space.****Lesseeagrees to take all reasonable steps****toprovide assistance****to Lessor in releasing****of thevacated space****to a new  tenant. Same to****include but not limited to allowing Lori Emery orother employees designated by Lessee to be a primary contact for the showing ofthe vacated space to perspective tenants and coordinate the activity of brakesselected and retained by Lessor.

 

(a)           To work with Lessor in modifying ordetermining solutions for data and voice cabling, security, parking and signagefor new tenants provided such support does not include Lessee incurring anyadditional out-of-pocket costs.

 

(b)           Lessor and Lessee hereby agree to negotiatein good faith to determine any market rate payments from Lessor to Lessee forservices to be provided by Lessee to Lessor in connection with the vacatedpremises including but not limited to cleaning, telephone. ISP, etc. and todetermine a market .rate rental to be paid, by Lessee to Lessor for Lessee’suse of the conference room on the first floor of the Demised Premises duringsuch period of time in which said conference room is not leased to any othertenant. [Should the executive briefing room also be included here?]

 

(c)           All other terms and conditions of said Leaseshall remain in full force and effect and in the event of a contradiction orinconsistency between the Lease and this Second Amendment, the teams andconditions of this Second Amendment shall prevail.

 

(d)           Lessor and Lessee acknowledge that one ofthe purposes of     this SecondAmendment is to resolve any and all defaults that may currently exist under theLease and that this Second                Amendmentis being entered into in good faith in order to to accomplish a fair settlementof any defaults under the Lease and to resolve all disputes between Lessor andLessee with respect to the Lease.

 

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Section 9 - Multi-Tenant Building.The parties  acknowledge that, except asexpressly provided in this Second Amendment, Lessee shall, from**and  afterthe date******of**this Second Amendment, be responsible only for itspro rata share of common****area****maintenanceand utility expenses,****taxes and insurance incurred in connection****withthe ownership****and operation of the building and the premises. Lesseeshall reimburse Lessor for its pro rata share of all such expenses. Lessee’s pro rata share****will be 80.20% on the date all of the space to be vacated is returned to Lessor.

 

Lessee shall have the right to auditoperating expenses as reported by Lessor, for accuracy and compliance with theLease. Lessor and its agents shall reasonably cooperate with Lessee to performany such audit. If  such  audit determines that Lessor has billedLessee in excess of the actual operating expenses incurred by  Lessor and allowed per the Lease, then Lessorshall reimburse Lessee for the amount of the variance, and if said variance isin excess of *5% of*the totaloperating expenses, Lessor shall reimburse Lessee for the actual cost ofperforming the audit.

 

Witness our hands this 19th day of March,2004.

 

 
|   | **SARCOM PROPERTIES, INC.**        |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By: /s/ James R. Wilcox            |
|   | Print Name:                        |   |   |
|   | Print Title:                       |   |   |
|   |                               |
|   |                               |
|   | **SARCOM DESKTOP SOLUTIONS, INC.** |
|   |                               |
|   |                               |
|   | By: /s/ Charles E. Sweet           |
|   | Print Name: Charles E. Sweet       |
|   | Print Title: Chairman              |
|        |                                    |  |  |  |

 

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