Exhibit 10.40
LEASE AGREEMENT
1. PARTIES. This Lease, dated this 23rd day of January, 2002, is by and
between Xxxx Xxxxxx, as Lessor, and Integrated Information Systems, Inc., as
Lessee.
2. PREMISES. Lessor, in consideration of the rents to be paid by Lessee,
does hereby lease to Lessee, the following demised premises:
0000 X. Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000, containing about 6,000 SF. of
space;
0000 X. Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000, containing about 3,000 SF. of
space;
0000 X. Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000, containing about 3,000 SF. of
space.
3. TERM: This Lease is being signed in connection with a transaction among
Lessee, Goliath Networks, Inc. and others. This Lease will become effective only
if that transaction is completed and will be not be effective until the date
that that transaction is completed (the "Effective Date"). The parties currently
anticipate that the Effective Date will be January 25, 2002. The term of this
lease shall be for a period commencing on the Effective Date and ending November
1, 2002, subject to earlier cancellation by Lessee on sixty (60) days notice.
4. RENT. Lessee agrees to pay Lessor a monthly rental of Seven Thousand
Three Hundred dollars ($7,300.00). If the term of this lease shall commence or
expire on a day other than the first day of a calendar month, the rent for that
partial month shall be prorated and the lease year shall commence with the first
day of the next month. Lessee shall also pay, with its rental payments, all
sales and other taxes or charges assessed by any governmental authority against
such rents. All rental shall be payable to Lessor in advance on the first
business day of each month without notice or demand and without abatement,
deduction or setoff and as an independent covenant.
5. INTENTIONALLY BLANK.
6. USE.
6.1 The lease premises shall be used and occupied only for: sales,
service and manufacture of computers and related products and for no other
purpose without the Lessor's prior written consent.
6.2 Lessee acknowledges Lessor has made no representations as to the
use to which the premises may be legally put. Lessee shall apply for an
occupancy permit at its expense.
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6.3 The Lessee shall comply with all laws and regulations of the
federal, state, county, and municipal authorities applicable to the
business to be conducted by the Lessee in the leased premises. The Lessee
shall not vacate or abandon the leased premises during the term, and shall
use the leased premises and conduct his business in such a manner, both as
regards to noise and other nuisances, as will not interfere with, annoy, or
disturb another tenant in the conduct of its business, or the Lessor in the
management of the building.
6.4 The Lessee shall not keep within the leased property any articles
of dangerous, inflammable, or explosive character which increase the danger
of fire upon the leased property, or which would be deemed "hazardous" or
"extra-hazardous" by any responsible insurance company.
7. DELAY IN COMMENCEMENT. If Lessor, for any reason whatsoever, cannot
deliver possession of the leased premises to Lessee at the commencement of the
term of this lease, this lease shall not be void or voidable, nor shall Lessor
be liable to Lessee for any loss or damage resulting therefrom, but in that
event there shall be an abatement of rent covering the period between the
commencement of the term and the time when Lessor can deliver, provided that
said delay in commencement shall not exceed sixty (60) days.
8. QUIET ENJOYMENT AND COVENANT OF TITLE. Lessor covenants, warrants,
and represents that it has full right and power to execute this lease and to
grant the estate demised herein and that Lessee, upon payment of the rents
herein reserved, and performing the terms, conditions, and covenants herein
contained, shall peacefully and quietly have, hold, and enjoy the leased
premises during the full term of this lease, and any extension hereof.
9. UTILITIES. Lessee agrees to pay and be responsible for, when due,
all utility charges, including, but not limited to, water, gas, sewer, telephone
(including installation), electricity, sprinkler service charge, and other such
services used on or charged against the premises. To the extent that water and
sewer, and exterior electrical bills are submitted to Lessor for the entire
premises, including the leased premises, the Lessee shall pay its prorata share
of such costs as calculated under Paragraph 30 herein, within 30 days from
presentation of invoice therefore and a reasonable computation thereof.
10. REAL ESTATE TAXES. Lessee agrees, as additional rental for the
Leased premises, that it will each year during the term of this lease, or any
renewals or extensions thereof, pay Lessor its prorata share of all increase as
calculated under Paragraph 30 herein in real estate taxes, charges, fees, and
assessments levied or assessed against the property of which the demised
premises are part thereof that are in excess of the real estate taxes, fee
charges, and assessments charged or assessed upon or against the said property
for the base year 1996. In the last calendar year, Lessee shall only be liable
for its prorata share of such increases based on the actual number of days of
occupancy by Lessee. Such payment shall be made by Lessee within 30 days after
receiving an invoice showing the amount due and a reasonable computation
thereof.
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11. USE OF PARKING FACILITIES. The Lessee and his employees and customers
shall have the nonexclusive right, in common with the Lessor and other tenants
of said building(s), to park automobiles in the parking areas provided by
Lessor, subject to such reasonable rules and regulations as the Lessor may from
time to time impose, including the designation of specific areas in which
automobiles of the Lessee and his employees must be parked.
12. REPAIRS AND MAINTENANCE.
12.1 Lessee shall, at its own expense, be responsible for, maintain, and
keep the interior of the leased premises in good order and repair during the
term of the lease, including, but not limited to the heating, plumbing,
sprinkler, electrical , and air conditioning systems, overhead and/or walk
doors, windows, and interior walls, pest control, (including damages by third
parties such as vandalism or breaking & entering) and any other maintenance and
repairs not specifically undertaken by Lessor in Section 12.2. Lessee further
agrees to keep his portion of the sidewalks, paved areas, and landscaped areas
immediately adjacent to the leased premises free of all rubbish and debris, and
shall be responsible for any repairs resulting from Lessee's use of such areas.
Unless Lessor provides a common refuse collection and removal service, Lessee
shall be responsible for its own trash collection and shall use only metal
containers (with metal tops) which must be kept painted. Lessee shall not store
any trash, merchandise, crates, pallets, or materials of any kind outside the
leased premises. Lessee shall maintain snow removal for the space immediately
adjacent to the lease premises, including all sidewalks and entranceways. Lessor
shall in the first instance maintain and keep in good repair the other common
areas, and Lessee shall pay Lessor for Lessee's prorata share of Lessor's lawn
care and snow plowing, striping and maintenance of bituminous surfaces and
related common area maintenance costs, including parking lot lighting, sprinkler
inspection costs (but not repair), fire alarm monitoring, common refuse
collection and removal service (if provided by Lessor), within 30 days of
billing.
12.2 Lessor, at its own expense, shall be responsible for making structural
repairs to building of which the leased premises form a part, (unless
necessitated by Lessee or its agents, customers, or employees) including repairs
and maintenance to the roof, exterior walls, foundations, sidewalks, and any
repair occasioned by or attributable to defective materials or workmanship in
the construction of the building, of which the lease premises form a part. In
the event that any structural repair is needed that effects the lease premises,
Lessee shall immediately notify Lessor, and Lessor shall proceed promptly with
said repairs. Lessor's liability hereunder shall be limited to the cost of such
repairs or corrections, except that Lessee shall be entitled to a proportionate
abatement of rent while said repairs or corrections are being made.
13. ALTERATIONS AND IMPROVEMENTS. Lessee shall not, without the prior
written consent of the Lessor, make any alterations, improvement, or addition in
or about the leased premises, except for non-structural alterations that cost
$1,000 or less. Any alteration, addition, or improvement made by Lessee after
such consent shall have been given and any fixtures installed as part thereof
shall at the Lessor's option become the property of the Lessor
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upon the expiration or sooner termination of this lease; provided, however, the
Lessor shall have the right to require the Lessee to remove such fixtures at the
Lessee's cost upon such termination of this lease and restore the building to
its original condition before such installation, ordinary wear and tear
expected.
14. INSURANCE.
14.1 LIABILITY INSURANCE. During the term of this lease and
any renewals or extensions thereof, Lessee shall keep, maintain, and pay for
liability insurance naming the Lessor as additional insured, coverage in amounts
not less than $500,000 for any one person, $1,000,000 for any one accident, and
$250,000 for property damage. Lessee shall furnish a certificate of insurance
indicating above coverage. Such certificate shall state the policy will not be
canceled or altered without at least ten days prior written notice to Lessor.
14.2 PROPERTY INSURANCE. Lessor shall obtain and keep in force
during the term of the lease a policy of insurance covering loss or damage to
the premises, in the amount of full replacement value, providing protection
against all perils within the classification of fire and extended coverage.
Lessee shall pay all excess insurance premiums required to be paid by Lessor by
reason of Lessee's use or occupancy thereof. Excess premiums shall mean those
premiums in excess of the usual premium for a non-hazardous risk. Any such
increase shall be due and payable within ten days upon presentation of statement
by Lessor. If Lessor's fire and extended coverage premium for policy years
coming after the commencement of the lease increases over the previous premium,
then Lessee shall pay its prorata share of the increase, as calculated in
Paragraph 30 herein.
14.3 WAIVER OF SUBROGATION. Lessee and Lessor each hereby
waives any and all rights of recovery against each other and the officers,
employees, agents, and representatives of the other, for loss of or damage to
such waiving party or its property of others under its control, where such loss
or damage is insured against under any insurance policy in force at the time of
such loss or damage. Lessee and Lessor shall, upon obtaining the policies of
insurance required hereunder, give notice to the insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this lease.
15. INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and
against any and all claims arising from Lessee's use of the premises, or from
the conduct of Lessee's business or from any activity, work, or things done,
permitted or suffered by Lessee in or about the premises or elsewhere and shall
further indemnify and hold harmless Lessor from and against any and all claims
arising from any breach or default in the performance of any obligation on
Lessee's part to be performed under the terms of this lease, or arising from any
negligence of the Lessee, or any of Lessee's agents, contractors, or employees,
and from and against all costs, attorney's fees, expenses, and liabilities
incurred in the defense of any such claim or any action or proceeding brought
hereon, and in case any action or proceeding be brought against Lessor by reason
of any such claim, Lessee upon notice from Lessor shall defend the same at
Lessee's
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expense by counsel satisfactory to the Lessor. Lessor shall also indemnify
Lessee for all claims arising from Lessors breach of this lease.
16. SUBLEASING AND ASSIGNMENT. Lessee may not assign whether voluntary
or by operation of law, its rights under this lease or sublet the whole or any
part of the leased premises, without the prior written consent of the Lessor,
such consent shall not to be unreasonably withheld. No consent shall be deemed a
consent to any subsequent assignment or sublease. Regardless of Lessor's
consent, no subletting or assignment shall release Lessee or Lessee's obligation
or alter the primary liability of Lessee to pay the rent and to perform all
other obligations to be performed by Lessee hereunder.
17. INSPECTION OF PREMISES. The Lessor or Lessor's agents shall have
free access at reasonable times to the premises for the purpose of inspection
and for the maintenance and making of repairs provided that Lessor gives Lessee
24 hours prior notice. Lessor shall have the right to place "For Lease" signs in
a conspicuous place on the premises for one hundred twenty (120) days prior to
the expiration of the term of this lease.
18. SIGNS. Lessee shall not place or erect any signs or identifying
marks, trademarks, insignia, or advertising on or about the leased premises, or
the property of which the leased premises are a part, without first receiving
written consent from Lessor, which consent shall not be unreasonably withheld.
19. DESTRUCTION OF PREMISES.
19.1 In the event of a partial destruction of the said leased
premises or otherwise to the building in which the leased premises are contained
such that the use and occupancy by Lessee is adversely affected during the term
of this lease, from any cause, Lessor shall forthwith repair the same and
restore the same to the condition as of the date of this lease and complete such
repairs within 90 days from the date of such destruction, under the laws and
regulations of state, federal, county, or municipal authorities, but such
partial destruction shall in no way annul or void this lease, except that Lessee
shall be entitled to a proportionate abatement of rent while such repairs shall
interfere with the business carried on by Lessee in the said premises. If such
repairs and restoration cannot be made within such 90 days, Lessor shall give
prompt written notice thereof (not to exceed 30 days from the date of
destruction) to the Lessee and to advise the Lessee of the time period necessary
to repair and restore same. If the Lessor and Lessee can then agree on a
reasonable time for such repairs and restoration to be completed, the Lessor
shall forthwith make such repairs and restoration within the time period agreed
upon. In the event that Lessor does not so elect to make such repairs or if the
Lessor and Lessee cannot agree as to reasonable period of time for such repair
and restoration, this lease may be terminated at the option of either Lessor and
Lessee at any time by written notice sent to the other.
19.2 In the event of a total destruction from any cause, such
that the leased premises or the building in which the leased premises are
contained are substantially destroyed,
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as distinguished from a partial destruction as above defined in Section 19.1,
then either Lessor or Lessee shall have the right and option to terminate this
lease by written notice sent of the other within 90 days after the date of such
destruction.
20. CONDEMNATION. If the premises or any portion thereof are taken
under the power of eminent domain, or sold under the threat of the exercise of
said power (all of which are herein called "condemnation"), this lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs. If more than 25% of the floor area
of the improvements on the premises, or more than 25% of the land area of the
premises which is not occupied by any improvements, is taken by condemnation,
Lessee may, at Lessee's option, to be exercised in writing only within ten days
after Lessor shall have given Lessee written notice of such taking (or, in the
absence of such notice, within ten days after the condemning authority shall
have taken possession) terminate this lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this lease in
accordance with the foregoing, this lease shall remain in full force and effect
as to the portion of the premises remaining, except that the rent shall be
reduced in proportion to the floor area taken. Any award for the taking of all
or any part of the premises under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss of or damage to
Lessee's trade fixtures and removable personal property. In the event that this
lease is not terminated by reason of such condemnation, Lessor shall, to the
extent of severance damages received by Lessor in connection except with such
condemnation, repair any damage to the premises caused by such condemnation to
the extent that Lessee has been reimbursed therefore by the condemning
authority.
21. HOLDING OVER. Lessee shall surrender the premises upon the
expiration or termination of the lease. Any hold over not consented to by the
Lessor shall not result in a new tenancy or interest and, in such case, Lessor
shall treat Lessee as a trespasser. If the Lessee remains in possession of the
premises or any part thereof after the expiration of the term of this lease
without the express written consent of Lessor, Lessee shall pay a monthly rent
equal to 150% of the monthly rent amount set out in Paragraph 4.
22. SURRENDER OF PREMISES. Lessee will surrender the leased premises,
at the expiration or sooner termination of the lease term, broom-cleaned, with
all rubbish removed, free of subtenancies, and in good condition and repair,
reasonable wear and tear excepted. Lessee will deliver all keys to Lessor or
Lessor's agent.
23. SUBORDINATION TO EXISTING AND FUTURE MORTGAGES. This lease shall be
subject and subordinate at all times to the lien of existing mortgages and which
hereafter may be made a lien on the leased property. Lessee agrees to execute
and deliver any documents or instruments required to effectuate such
subordination or to make this lease prior to any lien of any mortgage, deed of
trust, or ground lease, as the case may be. The Lessee hereby
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appoints the Lessor his attorney-in-fact to execute and deliver any such
instruments for the Lessor.
24. DEFAULT.
24.1 If the Lessee fails to pay any installment of rent within
ten days after written demand has been made therefore, or if the Lessee fails to
maintain in full force and effect any insurance required by the terms hereof, or
the Lessee fails to observe and perform any other provision, covenant, or
condition of this lease required to be observed and performed by the Lessee,
within ten days after the Lessor shall have given written notice to the Lessee
of the failure of the Lessee to observe and perform the same, or if the Lessee
abandons or vacates the premises during the term of this lease, and in any such
event, immediately or at any time thereafter, at the option of the Lessor,
Lessor shall have the right to immediately re-enter and take possession of the
premises and declare Lessee's right of possession under this lease to be
terminated, in which event this lease, all rights of the Lessee, and all duties
of the Lessor shall immediately cease and terminate, and the Lessor may possess
and enjoy the premises as though this lease had never been made, without
prejudice, however, to any and all rights of action against the Lessee the
Lessor may have for rent, damages, and breach of covenants, in respect to which
the Lessee shall remain and continue liable notwithstanding such termination,
including Lessor's cost of obtaining such possession, and of any repair or
alterations necessary to prepare the premises for reletting, plus the costs and
fees incurred in reletting, including any rental brokerage fees to licensed
realtors whether independent or associated with Lessor.
24.2 If a petition in bankruptcy shall be filed by Lessee, or
if the Lessee shall be adjudicated a bankrupt, or make an assignment for the
benefit of creditors, or if the interests of the Lessee shall be sold under
execution or other legal process, the Lessor may enter into said premises and
again have and repossess the same, as if this lease had not been made, and shall
thereupon have the right to terminate Lessee's right of occupancy and other
rights under this lease, without prejudice, however, to the right of the Lessor
to recover all unpaid rent for the period up to the time of entry, and any use
and occupancy charges thereafter, should Lessee remain in possession, which
possessory rights are not in such case granted by this lease. In case of any
such entry, the Lessor shall relet the demised premises from time to time during
the remainder of the term of this lease for the highest rent obtainable, and may
recover from the Lessee any deficiency between such amount and the rent herein
reserved.
24.3 Should any attorney be employed by Lessor to collect past
due rents or to enforce any other provision, covenant, or condition of this
lease, Lessee agrees to pay reasonable attorney's fees for said services.
25. LATE CHARGES. There shall be a late charge of 3% of such amounts of
rentals and other sums payable under this lease for each 30 days or portion
thereof, that the rentals and or other sums remain unpaid more than ten days
after the due date.
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26. ESTOPPEL CERTIFICATE. Lessee shall at any time, upon not less than
ten days after receiving written notice from Lessor, execute, acknowledge and
deliver to Lessor or such person designated by Lessor, 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, (ii) acknowledging that
there are not, to Lessee's knowledge, any uncured defaults on the part of the
Lessor hereunder, nor any offsets, counterclaims, or defenses to the lease on
the part of the Lessee, as of the date thereof, or specifying such defaults and
other matters if any are claimed, (iii) certifying that the Lessee has inspected
and/or accepted the premises in the condition as of the date thereof, in the
condition then existing, subject to such further or continuing obligations which
Lessor may be required to perform under the lease, and (iv) certifying as to any
other matters which may be reasonably requested by Lessor. Such statement shall
be conclusively relied upon by any prospective purchaser or encumbrancer of the
premises. If Lessee fails to deliver such certificate within such time, then
Lessee appoints Lessor as Lessee's attorney-in-fact to execute same, or Lessor
may exercise all remedies applicable to Lessee's default.
27. ATTORNMENT OF LESSEE. Lessee shall in the event of the sale,
assignment or other transfer of Lessor's interest in the premises or in this
lease, or in the event of any proceedings brought for the foreclosure of, or in
the event of exercise of the power of sale under any mortgage made by Lessor
covering the premises, attorn to the transferee and recognize the transferee as
Lessor under this lease.
28. NOTICES. Any notice under this lease must be in writing and must be
sent by certified or registered mail to the last address of the party to whom
the notice is to be given, as designated by such party in writing. The Lessor
hereby designates its address as 0000 Xxxxx Xxxx, Xxxxxxx, XX 00000. The Lessee
hereby designates its address as 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attention: Secretary. Any notice sent as provided herein shall be deemed
sufficiently served or given for all purposes hereunder at such time said notice
shall be deposited in any post office or branch post office regularly maintained
by the United States Government.
29. WAIVER. The waiver by either party of any breach of any terms or
provisions herein contained shall not be deemed a waiver of any subsequent
breach of the same or any other term or provision hereof.
30. LESSEE'S PRORATA SHARE. Whenever in this lease a provision is made
for the Lessee to pay or reimburse Lessor for Lessee's prorata share of a cost,
xxxx, increase, amount, or the like, then Lessee's prorata share shall be a
fraction of such cost, xxxx, increase, amount, or the like, the numerator of
which shall be the number of square feet of floor space in the leased premises,
and the denominator of which shall be the total number of square feet of floor
space in the building or buildings, as the case may be, except that Lessor's
estimate shall be used to adjust
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additional water charges among heavy users thereof, and except that allocation
of excess insurance premiums shall be made as provided in Paragraph 14.2.
31. CAPTIONS. Article and paragraph captions are not a part hereof.
32. INTENTIONALLY BLANK.
33. INTENTIONALLY BLANK.
Except as otherwise herein provided, this lease shall be binding upon and inure
to the benefit of the parties hereto and their heirs, personal representatives,
successors, and assigns.
IN WITNESS WHEREOF, this lease has been duly executed by the parties
hereto as of the day and year first above written.
LESSEE LESSOR
INTEGRATED INFORMATION SYSTEMS, INC. XXXX XXXXXX
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxx
Name: Xxxxxxx X. Xxxxx
Title: EVP and CFO
