EXHIBIT 10.2
INDUSTRIAL LEASE AGREEMENT
THIS LEASE is made and entered into as of September 25, 1998, by and between
Biltmore Peoria LLC (hereinafter "Landlord"), and Titan Motorcycle Company of
America, a Nevada corporation (hereinafter"Tenant"). For and in consideration of
the rental and of the covenants and agreements hereinafter set forth to be kept
and performed by the Tenant, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the Premises herein described for the term, at the rental
and subject to and upon all of the terms, covenants and agreements hereinafter
set forth.
1. Premises
1.1 Description. Landlord hereby leases to Tenant and Tenant hereby
rents from Landlord those certain Premises, crosshatched on Exhibit A, located
in the building known as 0000 X. Xxxxxx, located in the City of Peoria and
County of Maricopa, Arizona. The entire Premises consists of a building of
approximately 60,720 square feet, approximately 5,400 square feet of land to the
west of the building on the Premises, and approximately 93,000 square feet of
land on the east side of the building on the Premises. On the Commencement Date,
Landlord leases to Tenant all of the Premises except the area of approximately
30,360 square feet designated on Exhibit A as the Phase 2 Area. Until the date
Tenant leases the Phase 2 Area, the term "Premises" as used herein does not
include the Phase 2 Area. If Tenant is not in default hereunder on the Phase 2
Commencement Date (as defined in Section 3.2), then on the Phase 2 Commencement
Date, Landlord will lease to Tenant all of the Premises, including the Phase 2
Area.
1.2 Work of Improvement. The obligations of Landlord and Tenant to
perform the work and supply material and labor to prepare the Premises for
occupancy are set forth in detail in Exhibit B. Landlord and Tenant shall expend
all funds and do all acts required of them in Exhibit B and shall have all the
work performed promptly and diligently in a first-class workmanlike manner.
2. Term
2.1 Term. The term of this Lease shall begin on the Commencement Date
and extend until March 30, 2004, unless sooner terminated pursuant to this
lease. The Lease will commence (the "Commencement Date") three (3) days after
the later of the: (i) substantial completion of all Tenant Improvements,
including the Tenant Improvements for the Phase 2 Area, or (ii) issuance of a
Certificate of Occupancy by the proper governmental agency with respect to all
the Premises, including the Phase 2 Area, or, if no Certificate of Occupancy be
issued by any governmental agency, then after certification by Landlord's
architect or contractor that the Landlord's construction work has been
completed; provided, however, the Commencement Date may not be earlier than
November 1, 1998, without Tenant's written consent. Landlord will substantially
complete the Tenant Improvements and obtain a certificate of occupancy for the
entire Premises not later than January 1, 1999. Landlord and Tenant shall
execute a written acknowledgment of the Commencement Date as soon as practicable
after the Commencement Date.
2.2 Delay in Commencement. Tenant agrees that in the event of the
inability of Landlord for any reason to deliver possession of the Premises to
Tenant on the Commencement Date as extended by the period of any Tenant Delays
(as defined in Exhibit B), Landlord shall not be liable for any damage thereby
except as expressly stated else where in this Lease, nor shall such inability
affect the validity of this Lease or the obligations of Tenant hereunder, but in
such case Tenant shall not be obligated to pay rent or other monetary sums until
possession of the Premises is tendered to Tenant; provided that if the delay in
delivery of possession exceeds thirty (30) days; then the expiration date of the
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term of the lease shall be extended by the period of time computed from the
scheduled Commencement Date to the date possession is tendered by Landlord. In
the event Landlord shall not have delivered possession of the Premises by
February 1, 1999, as extended by the period of any Tenant Delays (the
"Deadline"), then Tenant at its option to be exercised within sixty (60) days
after the Deadline may terminate this Lease and upon Landlord's return of any
monies previously deposited by Tenant, the parties shall have no further rights
or liabilities toward each other. If Tenant occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions hereof,
such occupancy shall not advance the termination date, and Tenant shall pay rent
for such period at the initial monthly rates as set forth below.
3. Rent
Tenant shall pay to Landlord as rent for the Premises in advance on the
first day of each calendar month of the term of this Lease without deduction,
offset, prior notice or demand, in lawful money of the United States, the
following amounts:
3.1 Beginning on the sixty-first (61st) day after the Commencement
Date, the sum of Sixteen Thousand Six Hundred and Ninety-Eight Dollars
($16,698.00) per month for the Premises, excluding the Xxxxx 0 Xxxx;
and
3.2 Beginning on the earlier of the date Tenant possesses any portion
of the Phase 2 Area or one year from the Commencement Date (the "Phase
2 Commencement Date"), additional rent in the sum of Sixteen Thousand
Six Hundred and Ninety-Eight Dollars ($16,698.00) per month for the
Phase 2 Area.
If the Commencement Date is not the first day of a month, or if the
Lease termination date is not the last day of a month, a prorated monthly
installment shall be paid at the then current rate for the fractional month
during which the Lease commences and/or terminates. Concurrently with Tenant's
execution of this Lease, Tenant shall pay to Landlord the sum of Sixteen
Thousand Six Hundred Ninety-Eight dollars ($16,698.00) as rent for the first
month for which rent is payable.
4. Security Deposit
Within three days after the issuance of the Certificate of Occupancy
for the Premises, Tenant shall deposit with Landlord the sum of Sixty-six
Thousand Seven Hundred Ninety-two Dollars ($66,792.00). On the second
anniversary of the Commencement Date, the amount of the security deposit will be
reduced by one half and Landlord will refund to Tenant Thirty-three Thousand
Three Hundred Ninety-six Dollars ($33,396.00) if Tenant has never been in
default under the terms of this Lease. Said sums shall be held by Landlord as a
security deposit for the faithful performance by Tenant of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the term hereof. If Tenant defaults with respect to any provisions of
this Lease, including but not limited to the provisions relating to the payment
of rent and any of the monetary sums due herewith, Landlord may (but shall not
be required to) use, apply or retain all or any part of this security deposit
for the payment of any other amount which Landlord may spend or become obligated
to spend by reason of Tenant's default or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount; Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep this security deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit. If Tenant shall fully
and faithfully perform every provision of this Lease to be performed by it, the
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security deposit or any balance thereof shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interests hereunder) at the
expiration of the Lease term and after Tenant has vacated the Premises. In the
event of termination of Landlord's interest in this Lease, Landlord shall
transfer said deposit to Landlord's successor in interest, whereupon Tenant
agrees to release Landlord from all liability for the return of such deposit or
the accounting therefor.
5. Taxation
5.1 Payment of Real Property Taxes. Tenant shall pay to Landlord an
amount equal to all real property taxes applicable to the Premises during the
term of this Lease, after giving due consideration that Tenant will not lease
the Phase 2 Area until after the Phase 2 Commencement Date. Notwithstanding
anything herein to the contrary, Landlord rather than Tenant will be liable for
and will pay one half of all real property taxes attributable to the real
property on which the Premises is located until the Phase 2 Commencement Date.
Along with each monthly payment of rent, Tenant shall pay Landlord one twelfth
of the real property taxes assessed against the Premises for the current year of
the Lease. Landlord will deliver to Tenant a copy of the annual real property
tax assessment for the Premises not later than ten (10) days after the
assessment is issued by the Maricopa County Assessor. To the extent Tenant
overpays Landlord for real property taxes for any period, Landlord will credit
the overpayment against the next monthly rent amount due hereunder. Without in
any way relieving Tenant's obligation to pay all the tax payments to Landlord
when due and payable, Tenant may appeal or contest any property tax assessment
and Landlord shall cooperate with Tenant in such instance; provided, however,
that Landlord shall not be required to incur any cost or expense in connection
therewith. In the event of any such cost or expense, Tenant agrees to pay and/or
reimburse Landlord for the cost or expense.
5.2 Proration; Joint Assessment. In the event any such real property
taxes paid by Tenant cover any period of time prior to commencement or after the
expiration of the term of this Lease, Tenant's share of such taxes shall be
equitably prorated to cover only the period of time within the fiscal tax year
during which this Lease is in effect, and Landlord shall reimburse Tenant to the
extent required. With respect to any assessments which may be levied against or
upon the Premises, or which under the laws then in force may be evidenced by
improvement or other bonds or may be paid in annual installments, only the
amount of such annual installment (with appropriate proration for any partial
year) and interest due thereon shall be included within the computation of the
annual taxes and assessments levied against the Premises. In the event the
Premises are not separately assessed, Tenant's liability shall be an equitable
proportion of the real property taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be determined by
Landlord from the respective valuations assigned to the Assessor's worksheets or
such other information as may be reasonably available to Landlord, with
Landlord's reasonable determination thereof in good faith to be conclusive.
5.3 Definition of "Real Property Tax". As used in this Lease, the term
"real property tax" shall include any form of assessment, levy, penalty or tax
(other than inheritance, estate, net income or franchise taxes), imposed by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government or any school, agricultural, lighting,
drainage or other improvement district thereof, whether such tax is (a) upon,
allocable to or measured by the area of the Premises or the rental payable
hereunder, including without limitation any gross income tax or excise tax
levied by the State, any political subdivision thereof, city or Federal
government with respect to the receipt of such rental; or (b) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion
thereof, or (c) upon or measured by the value of Tenant's personal property,
equipment or fixtures located in the Premises; or (d) upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises; or (e) whether or not now customary or within the
contemplation of the parties.
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5.4 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or
elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of the Landlord.
6. Use
6.1 Use. The Premises shall be used and occupied by Tenant for only the
following purposes and for no other purpose whatsoever without obtaining the
prior written consent of Landlord: The manufacture, storage, and repair of
motorcycles and motorcycle components and uses ancillary to those purposes.
6.2 Suitability. If the Premises are completed as of the date of
execution hereof, then Tenant, by execution of this Lease, shall be deemed to
have accepted the Premises in the condition existing as of the date of
execution, subject to any defects specified in a written instrument dated as of
the date of this Lease and delivered to Landlord on or before the date hereof.
In any event this Lease shall be subject to all applicable zoning ordinances and
to any municipal, county and state laws and regulations governing and regulating
the use of the Premises. Tenant acknowledges that neither Landlord nor
Landlord's agent has made any representation or warranty as to the suitability
of the Premises for the conduct of Tenant's business.
6.3 Uses Prohibited.
(a) Tenant shall not do or permit anything to be done in or
about the Premises which will increase the existing rate of
insurance upon the Premises (unless Tenant shall pay any
increased premium as a result of such use or acts) or cause
the cancellation of any insurance policy covering said
Premises or any building of which the Premises may be a part,
nor shall Tenant sell or permit to be kept, used or sold in or
about said Premises any articles which may be prohibited by a
standard form policy of fire insurance.
(b) Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere
with the rights of other tenants or occupants of any building
of which the Premises may be a part or injure them or use or
allow the Premises to be used for any unlawful purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or
about the Premises. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises.
(c) Tenant shall not use the Premises or permit anything to be
done in or about the Premises which will in any way conflict
with any law, statute, zoning restriction, ordinance or
governmental rule or regulation or requirements of duly
constituted public authorities now in force or which may
hereafter be enacted or promulgated. Tenant shall at its sole
cost and expense promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements
now in force or which may hereafter be in force and with the
requirements of any board of fire underwrites or other similar
body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises. The judgment of
any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement,
shall be conclusive of that fact as between Landlord and
Tenant.
7. Utilities
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Tenant shall pay prior to delinquency for all water, gas, heat, light,
power, telephone, sewage, air conditioning and ventilating, scavenger,
janitorial, landscaping and all other materials and utilities supplied to the
Premises. If any such services are not separately metered to Tenant, Tenant
shall pay a reasonable proportion of all charges which are jointly metered, the
determination to be made by Landlord in its reasonable discretion, and payment
to be made by Tenant within ten (10) days of receipt of a statement for such
charges.
8. Maintenance and Repairs, Alterations and Additions
8.1 Landlord's Obligations. On or before the Commencement Date,
Landlord, at Landlord's expense, will cause to be installed on the Premises,
including the Phase 2 Area, a new high quality heating, ventilation,
air-conditioning and cooling system (collectively the "HVAC System") on the
Premises and the Phase 2 Area that is sufficient to meet the reasonable needs of
Tenant during the term of this Lease. The HVAC System will comply with all
applicable laws and regulations. Subject to the provisions of Section 13 and
except for damages caused by any negligent or intentional act or omission of
Tenant and Tenant's agents, employees or invitees, Landlord, at Landlord's
expense, shall keep in good order, condition and repair the foundations,
exterior walls and the exterior roof of the Premises. On or before the
Commencement Date, Landlord will obtain a prepaid service contract with a
qualified roofing contractor that provides for the maintenance of the exterior
roof of the Premises for one year after the Commencement Date. Landlord shall
not, however, be obligated to paint such exterior, nor shall Landlord be
required to maintain the interior surface of exterior walls, windows, doors or
plate glass. Landlord shall have no obligation to make repairs under this
Paragraph 8.1 until a reasonable time after receipt of written notice of the
need for such repairs. Tenant expressly waives the benefits of any statute now
or hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord's expense or to terminate this lease because of Landlord's
failure to keep the Premises in good order, condition and repair.
8.2 Tenant's Obligations.
(a) Subject to the provisions of Sections 13 and 8.1, Tenant,
at Tenant's expense, shall keep in good order, condition and
repair the Premises and every part thereof, regardless of
whether the damaged portion of the Premises or the means of
repairing the same are accessible to Tenant, including without
limitation thereto, all plumbing, heating, air conditioning,
ventilating, electrical and lighting facilities and
equipmentwithin the Premises and all sidewalks, landscaping,
driveways, parking lots, fences and signs located in the areas
which are adjacent to and included with the Premises.
(b) Upon the expiration or earlier termination of this Lease,
Tenant shall surrender the Premises in the same condition as
received, broom clean, ordinary wear and tear and damage by
fire, earthquake, act of God or the elements alone excepted.
Tenant, at it sole cost and expense, agrees to repair any
damage to the Premises caused by or in connection with the
removal of any articles of personal property, business or
trade fixtures, machinery, equipment, cabinetwork, furniture,
movable partition, or permanent improvements or addition,
including without limitation thereto, repairing the floor and
patching and painting the walls where required by Landlord to
Landlord's reasonable satisfaction. Tenant shall indemnify the
Landlord against any loss or liability resulting from delay by
Tenant in so surrendering the Premises, including without
limitation, any claims made by any succeeding tenant founded
on such delay.
8.3 Landlord's Rights. In the event Tenant fails to perform Tenant's
obligations under this Section 8, Landlord shall give Tenant notice to do such
acts as are reasonably required to so maintain the Premises. If Tenant fails to
do the work and diligently prosecute it to completion, then Landlord shall have
the right (but not the obligation) to do such acts and expend such Funds at the
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expense of Tenant as are reasonably required to perform such work. Any amount so
expended by Landlord shall be paid by Tenant promptly after demand with interest
at ten percent (10%) per annum, from the date of such work. Landlord shall have
no liability to Tenant for any inconvenience or interference with the use of the
Premises by Tenant as a result of performing any such work.
8.4 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written
consent, make any alterations, improvements or utility
installations in, on or about the Premises, except for
non-structural alterations not exceeding $10,000.00 in cost.
As used in this Section 8.4, the term "utility installations"
shall include ducting, power panels, fluorescent fixtures,
space heaters, conduit and wiring. As a condition to giving
such consent, Landlord may require that Tenant agree to remove
any such alterations, additions, improvements or utility
installations at the expiration of the term and to restore the
Premises to their prior condition. As a further condition to
giving such consent, Landlord may require Tenant to provide
Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times
the estimated cost of such improvements, to insure Landlord
against any liability for mechanics' and materialmen's liens
and to insure completion of the work.
(b) Unless Landlord requires their removal, as set fordi in
Paragraph 8.4(a), all alterations, additions, improvements and
utility installations (whether or not such utility
installations constitute trade fixtures of Tenant), which may
be made on the Premises, shall at the expiration or earlier
termination of the Lease become the property of Landlord and
remain upon and be surrendered with the Premises.
Notwithstanding the provisions of this paragraph 8.4(b),
personal property, business and trade fixtures, cabinetwork,
furniture, movable partitions, machinery and equipment, other
than that which is affixed to the Premises so that it cannot
be removed without material damage to the Premises, shall
remain the property of Tenant and may be removed by Tenant
subject to the provisions of Paragraph 8.2 at any time during
the term of this Lease when Tenant is not in default.
9. Entry by Landlord
Landlord and Landlord's agents shall have the right at reasonable times
to enter the Premises to inspect the same or to maintain or repair, make
alterations or additions to the Premises or any portion thereof or to show the
Premises to prospective purchasers, tenants or lenders. Landlord may, at any
time, place on or abut the Premises any ordinary "for sale" signs; Landlord may
at any time during the last one hundred eighty (180) days of the term of the
Lease place on or about the Premises any ordinary "for lease" signs. Tenant
hereby waives any claim for abatement of rent or for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss arising out of Landlord's
exercise of its rights in this paragraph.
10. Liens
Tenant shall keep the Premises and any building of which the Premises
are a part free from any liens arising out of work performed, materials
furnished or obligations incurred by Tenant and shall indemnify, hold harmless
and defend Landlord form any liens and encumbrances arising out of any work
performed or materials furnished by or at the direction of Tenant. In the event
that Tenant shall not, within twenty (20) days following the imposition of any
such lien, cause such lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to such lien. All such sums paid by Landlord and all expenses
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incurred by it in connection therewith including attorney's fees and costs shall
be payable to Landlord by Tenant on demand with interest at the rate of ten
percent (10%) per annum. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord and the Premises, and
any other party having an interest therein, from mechanics' and materialme's
liens, and Tenant shall give to Landlord at least ten (10) business days prior
written notice of the expected date of commencement of any work relating to
alterations or additions to the Premises.
11. Indemnity
11.1 Indemnity. Tenant shall indemnify and hold Landlord harmless from
and against any and all claims of liability for any injury or damage to any
person or property arising from Tenant's use of the Premises, or from the
conduct of Tenant's business, or from any activity, work or thing done,
permitted or suffered by Tenant in or about the Premises or elsewhere. Tenant
shall further indemnify and hold Landlord harmless from and against any and all
claims arising from any breach or default in the performance of any obligation
on Tenant's part to be performed under this Lease, or arising form any
negligence of Tenant or Tenant's agents, contractors or employees, and from and
against all costs, attorneys' fees, expenses and liabilities incurred in the
defense of nay such claim or any action or proceeding brought thereon. In the
event any action or proceeding is brought against Landlord by reason of any such
claim, Tenant upon notice from Landlord shall defend same at Tenant's expense by
counsel satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property, or
injury to persons in, upon or about the Premises arising from any cause and
Tenant hereby waives all claims in respect thereof against Landlord, except for
claims arising from the negligence or intentional acts of Landlord and its
employees, agents and contractors. The indemnification contained in this
subsection will survive the termination of this Lease.
11.2 Exemption of Landlord From Liability. Landlord shall not be liable
for injury to Tenant's business or loss of income therefrom or for damage which
may be sustained by the person, goods, wares, merchandise or property of Tenant,
its employees, invitees, customers, agents or contractors or any other person in
or about the Premises, caused by or resulting from fire, steam, electricity,
gas, water or rain, which may leak or flow from or into any part of the
Premises, or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures of the same, whether the said damage or injury results from conditions
arising upon the Premises or upon other portions of the building of which the
Premises are a part, or from other sources or places and regardless of whether
the cause of such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord shall not be liable for any damages arising
from any act or neglect of any other tenant, if any, of the building in which
the Premises are located.
12. Insurance
12.1 Liability Insurance. Tenant shall, at Tenant's expense, procure
and maintain at all times during the term of this Lease a policy of
comprehensive public liability insurance insuring Landlord and Tenant against
any liability arising out of the ownership, use, occupancy, or maintenance of
the Premises and appurtenant areas. Such insurance shall at all times be in an
amount of not less than $500,000.00 for injury to or death of any one person in
any one accident or occurrence and in an amount of not less than $1,000,000.00
for injury to or death of more than one person in any one accident or
occurrence, and in an amount of not less than$50,000.00 for liability for
property damage. The limits of such insurance shall not limit the liability of
Tenant. If the Premises are part of a larger property, said insurance shall have
a landlord's protective liability endorsement attached thereto. All insurance
required hereunder shall be with companies rated AAA or better in"Best's
Insurance Guide." Tenant shall deliver to Landlord certificates of insurance
evidencing the existence and amounts of such insurance with loss payable clauses
satisfactory to Landlord, provided that in the event Tenant fails to procure and
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maintain such insurance, Landlord may (but shall not be required to) procure
same at Tenant's expense after ten (10) days prior written notice to Tenant. All
such policies shall be written as primary policies, not contributing with and
not in excess of coverage which the Landlord may carry. Tenant shall, within
twenty (20) days prior to the expiration of such policies, furnish Landlord with
renewals or binders or Landlord may order such insurance and charge the cost to
Tenant, which amount shall be payable by Tenant upon demand. Tenant shall have
the right to provide such insurance coverage pursuant to blanket policies
obtained by Tenant provided such blanket policies expressly afford coverage to
the Premises and to Tenant as required by this Lease.
12.2 Property Insurance. Landlord shall, at Tenant's expense, procure
and maintain at all times during the terms of this Lease a policy or policies of
insurance covering loss or damage to the Premises in the amount of the full
replacement value thereof (exclusive of Tenant's trade fixtures and equipment)
providing protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, special extended perils
(all risk) and sprinkler leakage. Tenant shall pay such annual insurance
premiums to Landlord within fifteen (15) days after receipt by Tenant of a copy
of the premium statement or other reasonably satisfactory evidence of the amount
due, which shall include the method of calculation of Tenant's share thereof
based on rentable square footage if the insurance covers other improvements than
the Premises. Such insurance shall provide for payment of loss thereunder to
Landlord or the holder of a first mortgage or deed of trust on the Premises.
Landlord shall, on Tenant's demand, deliver appropriate proof of required
insurance coverage to Tenant.
12.3 Waiver of Subrogation. Landlord and Tenant each hereby waive any
and all rights of recovery against the officers, employees, agents and
representatives of the other, on account of loss or damage occasioned to such
waiving party of its property or the property of others under its control caused
by fire or any of the extended coverage risks described above to the extent that
such loss or damage is insured against under any insurance policy in force at
the time of such loss or damage. The insuring party shall, upon obtaining the
policies of insurance required under this Lease, give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is contained
in this Lease.
13. Damage or Destruction
13.1 Partial Damage - Insured. In the event improvements on the
Premises are damaged by any casualty which is covered under an insurance policy
required to be maintained pursuant to Section 12.2, then Landlord shall repair
such damage as soon as reasonably possible and this Lease shall continue in full
force and effect.
13.2 Partial Damage - Uninsured. In the event more than one third of
the Premises are materially damaged, except by a negligent or willful act or
omission of Tenant, by any casualty not covered under an insurance policy
required to be maintained pursuant to Section 12.2, then Landlord may, at
Landlord's option, either (a) repair such damage as soon as reasonably possible
at Landlord's expense, in which event this Lease shall continue in full force
and effect, or (b) give written notice to Tenant within thirty (30) days after
the date of occurrence of such damage of Landlord's intention to cancel and
terminate this Lease as of the date of the occurrence of the damage. In the
event Landlord elects to terminate this Lease pursuant to this Section
13.2,Tenant shall have the right within ten (10) days after receipt of die
required notice to notify Landlord in writing of Tenant's intention to repair
such damage at Tenant's expense, without reimbursement from Landlord, in which
event this Lease shall continue in full force and effect, and Tenant shall
proceed to make such repairs as soon as reasonably possible. If Tenant does not
give such notice within the ten (10) day period, this Lease shall be canceled
and terminated as of the date of the occurrence of such damage.
13.3 Total Destruction. If the Premises are totally destroyed during
the term of this Lease from any cause whether or not covered by the insurance
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required under Section 12.2 (including any destruction required by any
authorized public authority), this Lease shall automatically terminate as of the
date of such total destruction. Total destruction is defined as 50% or greater
destruction of the Premises.
13.4 Damage Near End of The Term. If the Premises are partially
destroyed or damaged during the last six (6) months of the term of this Lease,
Landlord may at Landlord's option cancel and terminate this Lease as of the date
of occurrence of such damage by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the date of occurrence of such
damage.
13.5 Landlord's Obligations. The Landlord shall not be required to
repair any injury or damage by fire or other cause, or to make any restoration
or replacement of any panelings, decorations, office fixtures, partitions,
railings, ceilings, floor covering, equipment, machinery or fixtures or any
other improvements or property installed in the Premises by Tenant or at the
direct or indirect expense of Tenant. Tenant shall be required to restore or
replace same in the event of damage.
13.6 Abatement of Rent; Tenant's Remedies.
(a) If the Premises are partially destroyed or damaged and
Landlord or Tenant repairs them pursuant to this Lease, the
rent payable hereunder for the period during which such damage
and repair continues shall be abated in proportion to the
extent to which Tenant's use of the Premises is impaired.
Except for abatement of rent, if any, Tenant shall have no
claim against Landlord for any damage suffered by reason of
any such damages, destruction, repair or restoration unless
the damage is caused by the intentional acts or gross
negligence of Landlord or its agents, employees or
contractors.
(b) If Landlord shall be obligated to repair or restore the
Premises under this Section 13and shall not commence such
repair or restoration within ninety (90) days after such
obligation shall accrue, Tenant at Tenant's option may cancel
and terminate this Lease by written notice to Landlord at any
time prior to the commencement of such repair or restoration.
In such event this Lease shall terminate as of the date of
such notice.
13.7 Termination - Advance Payments. Upon termination of this Lease
pursuant to Section 13, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Tenant to Landlord. Landlord shall, in
addition, return to Tenant so much of Tenant's security deposit as has not
theretofore been applied by Landlord.
14. Condemnation
14.1 If the Premises or any portion thereof are taken under the power
of eminent domain, or sold by Landlord under the threat of the exercise of said
power (all of which is herein referred to as "condemnation"),this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever occurs first. If more than ten percent (10%) of
the floor area of any buildings on the Premises, or more than twenty-five
percent (25%) of the land area of the Premises not covered with buildings, is
taken by condemnation, either Landlord or Tenant may terminate this Lease, as of
the date the condemning authority takes possession, by notice in writing of such
election within twenty (20) days after Landlord shall have notified Tenant of
the taking, or in the absence of such notice then within twenty (20) days after
the condemnation authority shall have taken possession.
14.2 If this Lease is not terminated by either Landlord or Tenant then
it shall remain in full force and effect as to the portion of the Premises
remaining, provided the rent shall be reduced in the proportion that the floor
area of the buildings taken within the Premises bears to the total floor area of
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all buildings located on the Premises. In the event this Lease is not so
terminated then Landlord agrees, at Landlord's sole cost, to restore the
Premises to a complete unit with like quality and character as existed prior to
the condemnation as soon as reasonably possible. All awards for the taking of
any part of the Premises or any payment made under the threat of the exercise of
power of eminent domain shall be the property of Landlord, whether made as
compensation for diminution of value of a leasehold or for the taking of the fee
or as severance damages; provided, however, that Tenant shall be entitled to any
award for loss of or damage to Tenant's trade fixtures and removable personal
property. In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall, to the extent of severance damages received by
Landlord in connection with such condemnation, repair any damage to the Premises
caused by such condemnation except to the extent that Tenant has been reimbursed
therefor by the condemning authority. Tenant shall pay any amount in excess of
such severance damages required to complete such repair.
15. Assignment & Subletting
15.1 Landlord's Consent Required. Tenant shall not assign, transfer
mortgage, pledge, hypothecate or encumber this Lease or any interest therein,
and shall not sublet the Premises or any part thereof, without the prior written
consent of Landlord and any attempt to do so without such consent being first
had and obtained shall be wholly void and shall constitute a breach of this
Lease.
15.2 Reasonable Consent. If Tenant complies with the following
conditions, and Landlord is reasonably satisfied with the information, Landlord
shall not unreasonably withhold its consent to the assigning or subletting of
the Premises or any portion thereof. Tenant shall submit in writing to Landlord;
(a) the name and legal composition of the proposed subtenant or assignee; (b)
the nature of the proposed subtenant's or assignee's business to be carried on
in the Premises; (c) the terms and provisions of the proposed sublease or
assignment; (d) such reasonable financial information as Landlord may request
concerning the proposed subtenant or assignee.
15.3 No Release of Tenant. No consent by Landlord to any assignment or
subletting by Tenant shall release Tenant from any obligation to be performed by
the Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting. The consent by Landlord to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other assignment or subletting. The acceptance of
rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any assignment,
subletting or other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any subsequent assignment,
subletting or other transfer.
15.4 Attorney's Fees. In the event Landlord shall consent to a sublease
or assignment under this Section 15, Tenant shall pay Landlord's reasonable
attorney's fees not to exceed $500.00 incurred in connection with giving such
consent.
16. Subordination
16.1 Subordination. This Lease at Landlord's option shall be subject
and subordinate to the lien of any mortgages or deeds of trust in any amount or
amounts whatsoever now or hereafter placed on or against the land or
improvements or either thereof, of which the Premises are a part, or on or
against Landlord's interest or estate therein, or on or against any ground or
underlying lease, without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such subordination. If
any mortgagee, trustee or ground lessor shall elect to have this Lease prior to
the lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this Lease shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trustor ground lease or the date of the
recording thereof.
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16.2 Subordination Agreement. Tenant covenants and agrees to execute
and deliver upon demand without charge therefore, such further instruments
evidencing such subordination of this Lease to such ground or underlying leases
and to the lien of any such mortgages or deeds of trust as may be required by
Landlord. If Tenant does not sign such agreements, instruments, releases or
other documents within ten business days of demand, Tenant hereby appoints
Landlord as Tenant's attorney in fact, irrevocably, to execute and deliver any
such agreements, instruments, releases or other documents.
16.3 Quiet Enjoyment. Landlord covenants and agrees with Tenant that
upon Tenant paying rent and other monetary sums due under the Lease and
performing its covenants and conditions, Tenant shall and may peaceably and
quietly have, hold and enjoy the Premises for the term, subject however to the
terms of the Lease and of any of the aforesaid ground leases, mortgages or deeds
of trust described above.
16.4 Attornment. In the event any proceedings are brought for default
under any ground or underlying lease or in the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by the
Landlord covering the Premises, the Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease; provided such purchaser expressly agrees in writing to be bound by
the terms of the Lease.
16.5 Condition Precedent. Notwithstanding anything herein to the
contrary, paragraphs 16.1,16.2 and 16.4 shall not be binding on Tenant unless
the holder (the "Holder") of the interest to which Tenant is to subordinate its
interest under this Lease has delivered to Tenant a binding written recordable
instrument(subject to Tenant's reasonable approval) pursuant to which Holder
covenants that Holder will not disturb Tenant's interest to the Premises as
provided in this Lease so long as Tenant does not default hereunder. Also
notwithstanding anything herein to the contrary, Tenant shall have an option to
terminate this Lease at any time until such time as Landlord delivers to Tenant
a recordable subordination, nondisturbance and attornment agreement (subject to
Tenant's reasonable approval) enforceable against all persons and entities that
have any hen or encumbrance on the Premises, which agreement contains a binding
covenant from the lienholder(s) that the lienholder(s) will not disturb Tenant's
interest to the Premises as provided in this Lease so long as Tenant does not
default hereunder.
17. Default; Remedies
17.1 Default. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:
(a) Any failure by Tenant to pay the rent or any other
monetary sums required to be paid hereunder (where such
failure continues for three (3) days after written notice
thereof by Landlord to Tenant);
(b) The abandonment or vacation of the Premises by Tenant;
(c) A failure by Tenant to observe and perform any other
provision of this Lease to be observed or performed by Tenant,
where such failure continues for twenty-five (25) days after
written notice thereof by Landlord to Tenant; provided,
however, that if the nature of such default is such that the
same cannot reasonably be cured within such twenty-five (25)
day period, Tenant shall not be deemed to be in default if
Tenant shall within such period commence such cure and
thereafter diligently prosecute the same to completion.
(d) The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; the filing by or
against Tenant of a petition to have Tenant adjudged a
bankrupt or of a petition for reorganization or arrangement
44
under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within
sixty (60) days); the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30)
days; or the attachment, execution or other judicial seizure
of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such
seizure is not discharged within thirty (30) days.
17.2 Remedies. In the event of any such material default or breach by
Tenant, Landlord may at anytime thereafter, with or without notice and demand
and without limiting Landlord in the exercise of any right or remedy at law or
in equity which Landlord may have by reason of such default or breach:
(a) Maintain this Lease in full force and effect and recover
the rent and other monetary charges as they become due,
without terminating Tenant's right to possession, irrespective
of whether Tenant shall have the right to attempt to re-let
the Premises at such rent; and upon such conditions and for
such a term, and to do all acts necessary to maintain or
preserve the Premises as Landlord deems reasonable and
necessary without being deemed to have elected to terminate
the Lease including removal of all persons and Property from
the Premises; such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the
account of Tenant. Notwithstanding that Landlord fails to
elect to terminate the Lease initially, Landlord at any time
during the term of this Lease may elect to terminate this
Lease by virtue of such previous default of Tenant.
(b) Terminate Tenant's right to possession by any lawful
means, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to
Landlord. In the event Landlord shall be entitled to recover
from Tenant all damages incurred by Landlord by reason of
Tenant's default including without limitation thereto, the
following: (i) The worth at the time of award of any unpaid
rent which had been earned at the time of such termination;
plus (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such
rental loss that is proved could have been reasonably avoided;
plus (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the
time of award exceeds the amount of such rental loss that is
proved could be reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course
of things would be likely to result therefrom; plus (v) at
Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by
applicable state law. Upon any such re-entry Landlord, at
Tenant's cost, shall have the right to make any reasonable
repairs, alterations or modifications to the Premises, which
Landlord in its sole discretion deems reasonable and
necessary. As used in subparagraph (ii) and (iii) the "worth
at the time of award" is computed by allowing interest at the
rate of twelve percent (12%) per annum, from the date of
default. As used in subparagraph (i) above, the "worth at the
time of award" is computed by discounting such amount at the
discount rate of the U.S. Federal Reserve Bank at the time of
award plus one percent (1 %). The term "rent", as used in this
Section 17, shall be deemed to be and to mean the rent to be
paid pursuant to Section 3 and all other monetary sums
required to be paid by Tenant pursuant to the terms of this
Lease. A condition to the termination of the Lease under this
Section 17.2(b) is that Landlord notify Tenant in writing that
Landlord elects to terminate the Lease as of a specific date.
17.3 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to
45
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, Tenant shall pay to Landlord a late charge equal to
five percent (5 %) of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
17.4 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have theretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty-day
period and thereafter diligently prosecutes the same to completion.
18. Broker's Fee
Upon execution of this Lease by both parties, Landlord shall pay to Xxx
and Associates, a licensed real estate broker, a commission for brokerage
services heretofore tendered. Tenant agrees to indemnify Landlord against claims
of other brokers claiming to have represented Tenant in this transaction.
Landlord agrees to indemnify Tenant against claims of other brokers claiming to
have represented Landlord in this transaction.
19. Miscellaneous
19.1 Estoppel Certificate.
(a) Tenant shall at any time upon not less than ten (10) days
prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that
this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges
are paid in advance, if any, and (ii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the
part of Landlord hereunder, or specifying such defaults if any
are claimed. Any such statement may be conclusively relied
upon by a prospective purchaser or encumbrancer of the
Premises.
(b) Tenant's failure to deliver such statement within such
time shall be conclusive upon Tenant (i) that this Lease is in
full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured
defaults in Landlord's performance and (iii) that not more
than one month's rent has been paid in advance.
(c) If Landlord desires to finance or refinance said Premises,
or any part thereof, Tenant hereby agrees to deliver to any
lender designated by Landlord such financial statements of
Tenant as may be reasonably required by such lender; provided,
however, that the lender covenants in writing to maintain all
Confidential Information about Tenant confidential and not
disclose it to any other party. Such statements shall include
the past three years' financial statements of Tenant. All
Confidential Financial Information shall be received by
Landlord in confidence and shall be used only for the purposes
herein set forth. The term"Confidential Information" means any
and all information not a matter of public record that Tenant
delivers to Landlord and designates as confidential.
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19.2 Transfer of Landlord's Interest. In the event of a sale or
conveyance by Landlord of Landlord's interest in the Premises other than a
transfer for security purposes only, Landlord shall be relieved from and after
the date specified in such notice of transfer of all obligations and liabilities
accruing thereafter on the part of the Landlord, provided that any funds in the
hands of Landlord at the time of transfer in which Tenant has an interest, shall
be delivered to the successor of Landlord. This Lease shall not be affected by
any such sale and Tenant agrees to attorn to the purchaser or assignee provided
all Landlord's obligations hereunder are assumed in writing by the transferee.
19.3 Captions; Attachments; Defined Terms.
(a) The captions of the paragraphs of this Lease are for
convenience only and shall not be deemed to be relevant in
resolving any question of interpretation or construction of
any section of this Lease.
(b) Exhibits attached hereto, and addenda and schedules
initialed by the pal-ties, are deemed by attachment to
constitute part of this Lease and are incorporated herein.
(c) The words "Landlord" and "Tenant", as used herein, shall
include the plural as well as the singular. Words used in
neuter gender include the masculine and feminine and words in
the masculine or feminine gender include the neuter. If there
be more than one Landlord or Tenant, the obligations hereunder
imposed upon Landlord or Tenant shall be joint and several. If
the Tenants are husband and wife, the obligations shall extend
individually to their sole and separate property as well as to
their community property. The term "Landlord" shall mean only
the owner or owners at the time in question of the fee tide or
a tenant's interest in a ground lease of the Premises. The
obligations contained in this Lease to be performed by
Landlord shall be binding on Landlord's successors and assigns
only during their respective periods of ownership.
19.4 Entire Agreement. This instrument along with any exhibits and
attachments hereto constitutes the entire agreement between Landlord and Tenant
relative to the Premises and this Agreement and the exhibits and attachments may
be altered, amended or revoked only by an instrument in writing signed by both
Tenant relative to the Premises and this Agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing
signed both by Landlord and Tenant. Landlord and Tenant agree hereby that all
prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Premises are merged in
or revoked by this Agreement.
19.5 Severability. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by law.
19.6 Costs of Suit.
(a) If Tenant or Landlord shall bring any action for any
relief against the other, declaratory or otherwise, arising
out of this Lease, including any suit by Landlord for the
recovery of rent or possession of the Premises, the losing
party shall pay the successful party a reasonable sum for
attorneys' fees which shall be deemed to have accrued on the
commencement of such action and shall be paid whether or not
such action is prosecuted to judgment.
(b) Should Landlord, without fault on Landlord's part, be made
a party to any litigation instituted by Tenant or by any third
party against Tenant, or by or against any person holding
47
under or using the Premises by license of Tenant, or for the
foreclosure of any lien for labor or material furnished to or
for Tenant or any such other person or otherwise arising out
of or resulting from any act or transaction of Tenant or of
any such other person, Tenant covenants to save and hold
Landlord harmless from any judgment rendered against Landlord
or the Premises or any part thereof, and all costs and
expenses, including reasonable attorneys' fees, incurred by
Landlord in or in connection with such litigation.
19.7 Time; Joint and Several Liability. Time is of the essence of this
Lease and each and every provision hereof, except as to the conditions relating
to the delivery of possession of the Premises to Tenant. All the terms,
covenants and conditions contained in this Lease to be performed by either
party, if such party shall consist of more than one person or organization,
shall be deemed to be joint and several, and all rights and remedies of the
parties shall be cumulative and non-exclusive of any other remedy at law or in
equity.
19.8 Binding Effect; Choice of Law. The parties hereto agree that all
the provisions hereof are to be construed as both covenants and conditions as
though the words importing such covenants and conditions were used in each
separate paragraph hereof, subject to any provisions hereof restricting
assignment or subletting by Tenant and subject to Section 19.2, all of the
provisions hereof shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns. This
Lease shall be governed by the laws of the State of Arizona.
19.9 Waiver. No covenant, term or condition or the breach thereof shall
be deemed waived, except by written consent of the party against whom the waiver
is claimed, and any waiver or the breach of any covenant, term or condition
shall not be deemed to be a waiver of any preceding or succeeding breach of the
same or any other covenant, term or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant, term
or condition unless otherwise expressly agreed to by Landlord in writing.
19.10 Surrender of Premises. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.
19.11 Holding Over. If Tenant remains in possession of all or any part
of the Premises after the expiration of the term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month to
month only, and not a renewal hereof or an extension for any further term, and
in such case, monthly rent shall be 150% of the rent in the last month of the
Lease term this and other monetary sums due hereunder shall be payable at the
time specified in this Lease and such month to month tenancy shall be subject to
every other term, covenant and agreement contained herein.
19.12 Signs and Auctions. Tenant shall not place any sign upon the
Premises or conduct any auction thereon without Landlord's prior written
consent.
19.13 Reasonable Consent. Except as limited elsewhere in this Lease,
wherever in this Lease Landlord or Tenant is required to give its consent or
approval to any action on the part of the other, such consent or approval shall
not be unreasonably withheld. In the event of failure to give any such consent,
the other party shall be entitled to specific performance at law and shall have
such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
consent unless said failure is withheld maliciously or in bad faith.
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19.14 Interest on Past Due Obligations. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
twelve percent (12%) per annum from the due date. Payment of such interest shall
not excuse or cure any default by Tenant under this Lease.
19.15 Recording. Tenant shall not record this Lease without Landlord's
prior written consent, and such recordation shall, at the option of Landlord
constitute a non-curable default of Tenant hereunder. Either party shall upon
request of the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this Lease for recording purposes.
19.16 Notices. All notices or demands of any kind required or desired
to be given by Landlord or Tenant hereunder shall be in writing and shall be
deemed delivered forty-eight (48) hours after depositing the notice or demand in
the United States mail certified or registered, postage prepaid, addressed to
the Landlord or Tenant respectively at the addresses set forth after their
signatures at the end of this Lease.
19.17 Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Tenant is a corporation Tenant shall, within thirty (30) days
after execution of this Lease, deliver to Landlord a certified copy of a
resolution of the Board of Directors of said corporation authorizing or
ratifying the execution of this Lease.
19.18 Option to Renew.
(a) Tenant will have two (2) successive rights to renew this
Lease for two (2) five-year terms (die "Renewal Terms") by
giving notice of exercise of the Renewal Option to Landlord at
least six (6)months before the end of the lease term and the
first Renewal Term, as the case may be; provided, however,
Tenant may not renew this Lease if Tenant is in default
hereunder on the last day of the then expiring term of this
Lease. If Tenant fails to deliver timely written notice of
exercise of a Renewal Option to Landlord, the Renewal Options
shall lapse and Tenant will have no further privilege to
extend the lease term.
(b) Each Renewal Term shall be on the same terms and
conditions of this Lease (unless by their very nature
inapplicable), except that the monthly rent payable by Tenant
to Landlord during each renewal term shall be based on the
prevailing "market rental rate" for comparable space in
competing buildings of similar size, type, quality and
location. Determination of the "market rental rate" will give
appropriate consideration to rental rates for renewals, rental
escalations, tenant improvement allowances and other terms
that would affect the economics in a similar lease renewal at
comparable property.
(c) In the event Landlord and Tenant are unable to mutually
agree on the "market rental rate" to be applied to the
Premises, Landlord and Tenant shall mutually select an MAI
commercial real estate appraiser, and the opinion of such
appraiser shall be binding upon both Landlord and Tenant. If
Landlord and Tenant fail to mutually select such an MAI
appraiser, the president of the Arizona Chapter of the
Appraisal Institute shall select the appraiser who shall have
at least ten years recent experience valuing commercial real
property in Maricopa County, Arizona. Or Landlord and Tenant
may select another highly qualified real estate professional
with many years of experience in the relevant market to
determine the "market rental rate."
19.19 Landlord's & Tenant's Representations & Warranties.
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(a) For purposes of this section 19.19, the term "Hazardous
Material" means any flammable items, explosives, radioactive
materials, hazardous, noxious, disease-causing, or toxic
substances, materials or wastes or related materials,
including any substances defined as or included in the
definition of"hazardous substances," "hazardous wastes,"
"infectious wastes," "hazardous materials" or "toxic
substances"now or subsequently regulated under any applicable
federal, state or local laws or regulations or ordinances,
including, without limitation, oil, petroleum-based products,
paints, solvents, lead, mercury, cyanide, DDT, printing inks,
acids, pesticides, ammonia compounds and other chemical
products, asbestos, radon, PCBs and similar compounds, and
including all products and materials which may have adverse
effects on the environment or the health and safety of
persons. "Environmental Laws" shall mean any federal, state or
local environmental, health and/or safety-related law, and any
related decision of the courts, ordinance, rule, regulation,
code, order, directive, guideline, permit or permit condition.
(b) Landlord hereby represents and warrants the following to
Tenant as of the Commencement Date:
1. Based on Landlord's actual knowledge without
inquiry and except as disclosed on Exhibit C, the
Premises has not been used for the disposal of refuse
or waste, or for the generation, processing,
manufacture, storage, handling, treatment, release,
discharge or disposal of any Hazardous Materials.
2. Based on Landlord's actual knowledge without
inquiry, the Premises is in compliance with all
Environmental Laws.
3. Based on Landlord's actual knowledge without
inquiry, no (i) asbestos containing materials, (ii)
machinery, equipment or fixtures containing PCBs,
(iii) storage tanks for gasoline or any other
substance or (iv) urea formaldehyde foam insulation
has been installed, used, stored, handled or located
on the Premises.
4. The Premises contains no asbestos or other
Hazardous Materials, excepting insubstantial amounts
thereof, if any, in quantities not having materially
adverse effects on the environment or upon the health
and safety of persons.
5. Notwithstanding any other provision of this Lease,
Landlord shall and hereby does agree to indemnify,
protect, defend and hold harmless Tenant and its
partners, directors, officers, employees,
shareholders, members, agents, contractors and each
of their respective successors and assigns from and
against any and all claims, judgments, damages,
penalties, fines, taxes, costs, liabilities, losses
and expenses arising at any time during or after the
term of this Lease as a result of or in connection
with Landlord's breach of any representation,
warranty or covenant contained in this paragraph
19.19.
(c) Tenant hereby covenants, represents and warrants the
following to Landlord:
1. Tenant agrees not to introduce any Hazardous
Material in, on or adjacent to the Premises without
(i) obtaining Landlord's prior written approval,
which approval will not be unreasonably withheld or
delayed, (ii) providing Landlord with thirty (30)
days prior written notice of the exact amount,
nature, and manner of intended use of such Hazardous
Materials, and (iii) complying with all applicable
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federal, state and local laws, rules, regulations,
policies and authorities relating to the storage,
use, disposal and clean-up of Hazardous Materials,
including, but not limited to, the obtaining of all
proper permits.
2. Notwithstanding foregoing subsection, Tenant
agrees not to allow the following Hazardous Materials
to be used, stored, or introduced onto or from the
Premises in any manner whatsoever during the term of
this Lease:
(i) 1,1,1,2-Tetrachloroethane;
(ii) Tetrachlorethylene;
(iii) Trichloroethylene; and
(iv) 1, 1,2-Trichloroediane.
(v) 1, 1 - DCE (1, 1 - dichloroethene)
(vi) DCM (dichloromethane)
The prohibition contained in this subsection with
respect to the designated hazardous materials applies
to Tenant, its employees, assigns, contractors,
invitees, and their equipment, including, but not
limited to, personal and business vehicles.
3. Tenant shall immediately notify Landlord if it
becomes aware of any release of Hazardous Material
onto the Premises and of any inquiry, test,
investigation, or enforcement proceeding by, against
or directed at Tenant or the Premises concerning any
Hazardous Material as soon as practicable after
Tenant becomes aware thereof. Tenant acknowledges
that Landlord, as the owner of the Premises, shall
have the right, at its election, in its own name, to
negotiate, defend, approve, and appeal, any action
taken or order issued with regard to any Hazardous
Material alleged to be on or affecting the Premises
by any applicable governmental authority and that if
such Hazardous Material was unlawfully released onto
or from the Premises by Tenant, such costs shall be
at Tenant's expense.
4. If Tenant's storage, use or disposal of any
Hazardous Material in, on or adjacent to the Premises
results in any further contamination of the Premises,
the soil, surface or groundwater thereunder or the
air above and around the Premises requiring
remediation under federal, state or local statutes,
ordinances, regulations or policies, Tenant agrees to
clean-up the contamination immediately, at Tenant's
sole cost and expense. Tenant further agrees to
indemnify, defend and hold Landlord harmless from and
against any claims, suits, causes of action, costs,
damages, loss and fees, including attorneys' fees and
costs, arising out of or in connection with (i) any
clean-up work, inquiry or enforcement proceeding
relating to Hazardous Materials used, stored or
disposed of by Tenant or its agents, employees,
contractors or invitees on or about the Premises, and
(ii) the use, storage, disposal or release by Tenant
or its agents, employees, contractors or invitees of
any Hazardous Materials on or about the Premises.
5. Notwithstanding any other right of entry granted
to Landlord under this Lease, Landlord shall have
reasonable right, without materially disturbing
Tenant's use of the Premises, to enter the Premises
or to have consultants enter the Premises throughout
the Term at reasonable times for the purpose of
determining: (1) whether the Premises are in
conformity with federal, state and local statutes,
regulations, ordinances and policies, including those
pertaining to the environmental condition of the
Premises; (2) whether Tenant has complied with
51
Tenant's obligations under this Section 19.19,and (3)
the preventive measures, if any, required of Tenant
to ensure the safe use, storage and disposal of
Hazardous Materials on the Premises. Tenant agrees to
provide access and reasonable assistance, at no cost
to Tenant, for such inspections. Such inspections
include, but are not limited to, entering the
Premises with machinery for the purpose of obtaining
laboratory samples. Landlord shall not be limited in
the number of such inspections during die term of
this Lease, but the number and extent of inspections
must be reasonable. If, during such inspections, it
is found that Tenant's use of Hazardous Materials
constitutes a violation of this Lease, Tenant shall
reimburse Landlord for the reasonable cost of such
inspections within ten (10) days of receipt of a
written statement and supporting documentation
therefor. If such consultants reasonably determine
that the Premises are in material violation of any
applicable Environmental Law, Tenant shall, in a
timely manner, at its expense, remove such Hazardous
Materials or otherwise comply with the reasonable
recommendations of such consultants to the reasonable
satisfaction of Landlord and any applicable
governmental agencies. If Tenant fails to do so,
Landlord, at its sole discretion, may cause the
violation and/or contamination to be remedied at
Tenant's sole reasonable cost and expense. The right
granted to Landlord herein to inspect the Premises
shall not create a duty on Landlord's part to inspect
the Premises, or liability of Landlord for Tenant's
use, storage or disposal of Hazardous Materials, it
being understood that Tenant shall be solely
responsible for all liability in connection
therewith.
6. Tenant shall surrender the Premises to Landlord
upon the expiration or earlier termination of this
Lease free of Hazardous Materials brought onto or
released in, on, under or from the Premises by Tenant
or its agents, employees, contractors, invitees,
assignees or subtenants and in a condition which
complies with all governmental statutes, ordinances,
regulations and policies.
In Witness Whereof, the Landlord and Tenant have executed this Lease
the date and year first above written.
LANDLORD: TENANT:
BILTMORE PEORIA, LLC TITAN MOTORCYCLE C0MPANY
By: By:
Title: Title:
Address: Address:
0000 X. 00xx Xxxxxx, #000 0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxxxx 00000
(If Tenant is a corporation, the authorized officers must sign on behalf of the
corporation. The Lease must be executed by the President or a Vice President and
the Secretary or Assistant Secretary unless the Bylaws or a Resolution of the
Board of Directors shall otherwise provide, in which event the Bylaws or a
certified copy of the Resolution, as the case may be, must be furnished.)
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