SUBLEASE AGREEMENT
Exhibit 99.2
This Sublease Agreement (this “Agreement”) is made
and entered into this 5th day
of March, 2010, by and between CIRTRAN CORPORATION (“Sublessor”) and
Katana Electronics, LLC, a Utah limited liability company (“Sublessee”).
R E C I T
A L S
A.
Sublessor is leasing from Xxx X. Xxxxxxx certain real
property and improvements located at 0000 Xxxxx 0000 Xxxx, Xxxx Xxxxxx, Xxxx
00000, as more particularly described in that certain Lease dated as of May 4,
2007 (the “ Prime
Lease”).
B.
Sublessee desires to sublease a portion of the premises
described in the Prime Lease upon the terms and conditions set forth in this
Agreement. Any references in this Agreement to “lease” shall mean the
sublease of the Premises (as hereinafter defined) by Sublessor to Sublessee
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the
mutual covenants contained herein, Sublessor and Sublessee incorporate the above
Recitals herein and agree as follows:
1.
Premises. Sublessor
hereby leases to Sublessee, and Sublessee hereby leases from Sublessor, that
portion of the premises under the Prime Lease consisting of the certain
warehouse, electronics product manufacturing and assembly area, and office space
used as of the close of business on March 4, 2010 for the legacy electronics
manufacturing business of the Sublessor (the “Premises”).
2.
Term. The
term of this Agreement, and Sublessee’s leasehold interest in and to the
Premises, shall be for a period commencing on March 5, 2010 and ending on April
30, 2010 (the “Initial
Term”). Upon termination of the Initial Period, this Agreement
shall automatically renew on a month-to-month basis (the “Renewal Terms”)
unless terminated by either party by delivering written notice to the other
party at least twenty (20) days prior to the end of the then existing
term. The Renewal Terms, if any, together with the Initial Term are
collectively referred to hereinafter as the “Term”. Notwithstanding
anything in this Agreement to the contrary, this Agreement and the term of the
lease granted herein shall automatically terminate simultaneously with the
termination of the Prime Lease.
3.
Base
Rent.
(a) Base
Rent. Sublessee shall pay Sublessor a base rent of Eight
Thousand Five Hundred Dollars ($8,500) per month during the Term, payable in
arrears on the last day of each calendar month. The base rent
includes Five Thousand Dollars ($5,000) for use and occupancy of not less than
19,000 square feet of warehouse (provided that Sublessor may still use such
warehouse space for storage so long as such use does not impede Sublessee’s
ability to conduct its business), electronics product manufacturing and assembly
area, and office space in the Premises, and Three Thousand Five Hundred Dollars
($3,500) as a fixed fee for all utilities, taxes, maintenance, and other costs
and expenses of operating and maintaining the Premises occupied by
Sublessee.
(b) Payment of Base
Rent. Sublessee agrees to pay the base rent to Sublessor at
such place as Sublessor may designate, without prior demand therefor and without
any deduction or setoff whatsoever (all of which are hereby waived by
Sublessee).
4.
Use;
Construction of Improvements. Sublessee shall use and occupy
the Premises solely for uses consistent with its ordinary business operations
related to conducting the business of manufacturing and distributing electronic
products. Sublessee shall not use or permit the Premises to be used
for any other purpose or purposes without the prior written consent of
Sublessor, nor shall Sublessee suffer or permit the Premises or any part thereof
to be used in any manner, or anything to be done therein, or suffer or permit
anything to be brought into or kept on the Premises which would in any way (i)
violate any law or requirement of public authorities; (ii) unreasonably
interfere with the normal operations of Sublessor with respect to the remaining
portion of the premises being leased by Sublessor under the Prime Lease; (iii)
constitute a public or private nuisance; or (iv) be prohibited by the Prime
Lease.
5.
Insurance. Sublessee
shall keep in force, at its sole cost, such insurance with respect to the
Premises subleased by Sublessee as it deems necessary and as is consistent with
a prudent sublessee, including, without limitation, adequate insurance for
Sublessee’s personal property located at the Premises.
6.
Assignment
and Sublease. Sublessee may not assign, transfer, mortgage,
hypothecate, or sublease, in whole or in part, its interest in this Agreement or
the leasehold estate, or permit the Premises to be used or occupied by any other
person, firm, or corporation, without having first received the written consent
of Sublessor to do so in each instance, which may be withheld in Sublessor’s
sole discretion.
7.
Holding
Over. If Sublessee is in possession of the Premises after the
expiration of this Agreement, or any extension thereof, such holding over shall
not be deemed to extend the term or renew this Agreement but such tenancy shall
continue on a month-to-month basis and upon all of the applicable terms and
conditions of the Lease Agreement until terminated by either party giving the
other thirty (30) days’ written notice designating the date of termination;
provided, however, base rent
after the expiration of this Agreement shall increase to 110% of the base rent
in effect immediately prior to the termination.
8.
Termination. Upon
the expiration of the Term, Sublessee agrees to return the Premises to Sublessor
in the same condition as received, except for such changes in condition as may
be caused by normal and ordinary wear and tear.
9.
Default. The
occurrence of any of the following events shall constitute a default
hereunder:
(a) Sublessee
fails to pay any rental or any other sum due hereunder within ten (10) days
after the same shall be due.
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(b) Sublessee
fails to perform any other term, condition, or covenant to be performed by it
pursuant to this Agreement within thirty (30) days after written notice of such
default shall have been given by Sublessor.
(c) Sublessee
or any guarantor of this Agreement becomes bankrupt or insolvent, or files any
bankruptcy or debtor proceedings, or has taken against such party in any court a
petition in bankruptcy, insolvency, reorganization, or similar
proceedings.
Upon the
occurrence of an event of default, Sublessor shall have the right to exercise
all remedies available at law or equity, including immediate termination of this
Agreement.
10. Notices. Any
notice which is required or permitted to be given under the provisions of this
Agreement may be given in person or by depositing the same in the United States
mail, postage prepaid, and certified or registered, addressed to the Sublessor
or Sublessee, as the case may be, at the addresses indicated in the first
paragraph of this Agreement or subsequent addresses, notice of which is given in
writing, and such notice shall be effective as of the time of
mailing.
11. Paragraph
Heading. The paragraph headings are inserted only for
convenience and are in no way to be construed as part of such paragraphs or as a
limitation on the scope of the particular paragraph to which they
refer.
12. Compliance
with Terms of Prime Lease. Sublessor shall maintain and keep
effective the Prime Lease during the Term. Sublessee shall comply
with all terms and conditions imposed on Sublessee under the Prime Lease as they
relate or pertain to Sublessee’s sublease and use of the
Premises. Sublessee shall not do or take any action that constitutes
a default under the Prime Lease. Sublessor may modify, renew, alter,
extend, or otherwise amend the Prime Lease upon such terms and conditions as it
deems reasonable or appropriate, and may do so without the consent of
Sublessee.
13. Indemnity. Sublessee
shall indemnify, defend and hold harmless Sublessor and Sublessor’s employees
and agents from and against all demands, claims, causes of action, judgments,
losses, damages, liabilities, fines, penalties, costs and expenses, including,
without limitation, reasonable attorneys’ fees, arising from the occupancy or
use of the Premises or any common areas used with Sublessor by Sublessee or
Sublessee’s occupants, employees, customers, invitees, or licensees, or arising
from the violation by Sublessee of its covenants, duties, obligations under this
Agreement. Notwithstanding the foregoing, Sublessee shall not be
obligated to indemnify, defend, or hold harmless Sublessor and its employees or
agents from any matter or claim arising from their gross negligence or willful
misconduct. Sublessor shall indemnify, defend and hold harmless Sublessee
and Sublessee’s employees and agents from and against all demands, claims,
causes of action, judgments, losses, damages, liabilities, fines, penalties,
costs and expenses, including, without limitation, reasonable attorneys’ fees
arising from the occupancy or use of the Premises or any common areas used with
Sublessee by Sublessor or Sublessor’s occupants, employees, customers, invitees,
or licensees, or arising from the violation by Sublessor of its covenants,
duties, or obligations under this Agreement. Notwithstanding the
foregoing, Sublessor shall not be obligated to indemnify, defend, or hold
harmless Sublessee and its employees or agents from any matter or claim arising
from their gross negligence or willful misconduct.
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14. Entire
Agreement. This Agreement contains the entire agreement
between the parties and any executory agreement hereafter made between the
parties shall be ineffective to waive, modify, change, release, discharge,
terminate or effect an abandonment of this Agreement, in whole or in part,
unless such executory agreement is in writing, and signed by the party against
whom enforcement of the change, modification, waiver, release, discharge,
termination or the effecting of an abandonment is sought.
17. Governing
Law. This Agreement shall be governed by and construed under
the laws of the State of Utah, without respect to the provisions concerning the
conflict of laws which would otherwise result in the application of the
substantive law of another jurisdiction.
18. Attorneys’
Fees. In the event of any suit, action, or proceeding brought
by any party for a breach of any term hereof, or to enforce any provision
hereof, the prevailing party shall be entitled to reasonable attorneys’ fees in
addition to court costs and other expenses of litigation in said action or
proceeding. For purposes of this Agreement, “prevailing party”
includes, without limitation, a party who agrees to dismiss an action or
proceeding upon the other’s payment of the sums allegedly due or performance of
the covenants allegedly breached, or who obtains substantially the relief
sought.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.
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SUBLESSOR:
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CIRTRAN
CORPORATION
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By: _____________________________________
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Name: Xxxxx
Xxxxxxxx
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Title: President
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SUBLESSEE:
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KATANA
ELECTRONICS, LLC
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a
Utah limited liability company
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By: _____________________________________
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Name: Xxxxxx
Xxxxxxxx
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Title: Manager
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