NEVADA REAL ESTATE GROUP, LLC
DEVELOPERS OF THE PALMS BUSINESS CENTERS
September 7, 1999
Xx. Xxxxxx Xxxx
Casinovations Incorporated
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
RE: Xxxxxxx Airport Center - Phase III
Buildings "A-1, A-2, B-1, B-2, C1 and C2"(6830 Xxxxxxx)
Dear Xxxxx:
As further inducement of the execution of the lease dated August 19,
1999 between Xxxxxxx Airport Center Phase III, LLC, a Delaware limited
liability company (herein called "Lessor") and Casinovations
Incorporated, a Nevada corporation, formerly a Washington corporation
(herein called "Lessee").
Lessee will have two (2) months forgiveness of base rent only after
the Building Department Signs Off on the building for occupancy.
Lessor will invoice lessee during this two (2) month forgiveness of
base rent for operating expenses only. This two (2) month and the
lease of eighty-four (84) months total eighty-six (86) months and all
terms and conditions will be in effect for the entire term.
Sincerely,
AGREED AND ACCEPTED THIS
9 DAY OF 9 1999.
/S/ Xxx X. Xxxxxx /S/ Xxxxxx X. Xxxx
------------------------- -------------------------------
Xxx X. Xxxxxx President & CEO
LWP/jrt
0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, XX. 89119 o (000) 000-0000 o FAX (000) 000-0000
NEVADA REAL ESTATE GROUP, LLC
Developers of the Business Business Centers
September 7, 1999
Xx. Xxxxxx Xxxx
Casinovations Incorporated
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
RE: Xxxxxxx Airport Center - Phase III
Buildings "A-1, A-2, B-1, B-2, Cl and C2" (6830 Xxxxxxx)
Dear Xxxxx:
We are pleased to provide you with four (4) execution copies of the Lease
agreement, Rider to Lease and exhibits for the premises at 0000 Xxxxxxx Xxxxxx.
The enclosed lease provides for a eighty-four (84) month term to commence
approximately *November 15, 1999. The monthly rental information and other terms
are located on page three of the attached lease.
ADDITIONAL LEASE PROVISIONS:
----------------------------
1) Please note the attached new Rider to Lease, everything else in this
lease is the same as your existing lease.
2) *We are projecting a November 15, 1999 occupancy date providing we
obtain the "INTERIOR TENANT IMPROVEMENT" permit by September 14, 1999.
I do not want to give you a date we cannot live with baring any acts
of God beyond our control. We plan on completing the building sooner,
so it is important that we all execute the final interior tenant
improvement plans. Once everything is signed we will give you a more
definitive completion date.
3) Per article 1.10 Building Improvements - This lease has a total
buildout allowance of $745,000.00 per the attached plans. IT IS
FURTHER AGREED, IF CASINOVATIONS' OR ANY GOVERNMENT AGENCY DOES NOT
MODIFY THE ABOVE-MENTIONED PLANS, ANY ADDITIONAL COSTS, WILL BE BORE
BY XXXXXX. After your new building is completed we will have a Lessee
Certificate prepared modifying the proposed start date to the actual
start date of your new lease. LESSOR WILL MARK ALL PARKING STALLS
DESIGNATED FOR CASINOVATIONS' AT LESSOR'S EXPENSE.
4) As we did in your previous lease, attached for convenience is our
requirements for liability insurance. Please forward this information
to your carrier so that we are provided the proper insurance coverage
prior to obtaining the key for said premises.
0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, XX. 89119 o (000) 000-0000 o FAX (000) 000-0000
Xxxxxx Xxxx
September 7, 1999
Page 2
5) Also included is a Utility Information Form to assist in making
arrangements for the necessary utilities in this new unit. This will
need to be done approximately one (1) month prior to the completion.
6) The following is the same as your existing lease. Lessee shall bear
all expense for interior maintenance, telephone, electricity, personal
alarm systems, gas if needed and trash removal. Providing Lessee, its
employees, invitees or agents do not modify or cause damage to the
heating, ventilation and air conditioning unit (HVAC), plumbing or
mechanical, then Lessor shall warrant same for the initial lease year
at which time Lessee shall then be made responsible for all
repairs/replacement to same. The operating expenses include Lessor
each quarter to replace filters for HVAC.
7) Since we restructured your free rent period, we will accept $42,968.00
currently and one half rent/operating expenses when the Building
Department Signs Off and one half rent/operating expenses 30 days
after. Following Xxxxxx's receipt of the executed Leases and a deposit
check in the amount of $92,983.00 which represents one month's
security deposit of $42,968.00 plus first month's rent and operating
expenses of $50,015.00. Lessor will proceed accordingly with the
processing of plans, building permits, obtaining final bids, etc
This Lease, when executed by both parties, will contain their full agreement. If
said Xxxxx is not mutually executed by both parties, then the parties to this
lease proposal will have no further obligation to each other.
Sincerely,
/S/ Xxx x. Xxxxxx AGREED AND ACCEPTED THIS
--------------------------- 9 DAY OF 9 1999.
Xxx X. Xxxxxx
LWP/jrt /S/ Xxxxxx X. Xxxx
-------------------------------
Enc. President & CEO
cc: Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxx Xxxxx
0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, XX. 89119 o (000) 000-0000 o FAX (000) 000-0000
9/8/99
X.X. XXXXXX CONTRACTORS
PROJECT:CASINOVATIONS
CLIENT;
BUILDING SIZE; 59,038 S.F. OFFICE; 20,815 S.F.
DATE BUDGET
DATE OF PLANS: 8/15/99
CODE DESCRIPTION BUILDING
02080 SAWCUT & DEMO. @ WINDOWS $ -
02080 SAWOUT & DEMO. @ FLOOR $ 1,600.00
03300 BUILDING CONCRETE $ 2,200.00
05120 STRUCTURAL & MISC. STEEL $ -
03300 FRONT MONUMENT $ -
06410 CABINETWORK (ALLOWANCE) $ 3,200.00
07210 INSULATION $ 17,200.00 *
07510 BUILT-UP ROOFING $ 6,900.00
07600 FLASHING & SHEET METAL IN HVAC
08100 H.M. DOOR & FRAME $ 41,575.00
08800 STOREFRONT, GLASS & GLAZING $ 6,500.00
09250 DRYWALL & METAL STUD FRAMING $ 131,800.00 *
09510 ACOUSTICAL CEILING $ 29,900.00 *
09650 VCT ( FLOORING ALLOWANCE) $ 1,200.00
09680 CARPET ( FLOORING ALLOWANCE) $ 31,480.00
09920 PAINTING $ 17,975.00 *
09971 FRP $ 3,005.00 *
10160 TOILET PARTITIONS $ 2,900.00 *
10520 FIRE EXTINGUISHER $ 1,200.00
10800 BATHROOM ACCESSORIES $ 2,950.00 *
15400 PLUMBING $ 35,380.00 *
15501 FIRE SPRINKLER SYSTEM $ 28,835.00 *
15801 HVAC $ 118,400.00 *
16001 ELECTRICAL $ 141,800.00 *
SUBTOTAL $ 626,000.00
$ 31,300.00
98001 GENERAL CONDITIONS $ 32,865.00
99001 CONTRACTORS FEE $ 6,901.65
01650 GENERAL LIABILITY INSURANCE $ 71,066.65
PLANS CHECK FEE $ 2,055.00
BUILDING PERMIT $ 3,180.00
SEWER FIXTURE FEE $ 17,760.00
TRANSPORTATION FEE $ -
DESIGN FEE/PRINTS $ 26,825.00
TOTAL $ 49,820.00
GRAND TOTAL $ 746,886.65
STANDARD LEASE
XXXXXXX AIRPORT CENTER
ARTICLE 1 BASIC LEASE TERMS
1.01 Premises Leased
1.02 Project
1.03 Term
1.04 Rent
1.05 Operating Expenses
1.06 Security Deposit
1.07 Permitted Use
1.08 Addresses for Payments, Notices and Deliveries
1.09 Broker
1.10 Building Improvements
1.11 Payments Upon Execution
ARTICLE 2 PREMISES
2.01 Leased Premises
2.02 Delivery and Acceptance of Premises
2.03 Building Name and Address
ARTICLE 3 TERM
3.01 General
3.02 Tender of Possession by Lessor
3.03 Delay in Possession
3.04 Early Occupancy
3.05 Option Term(s)
ARTICLE 4 RENT AND OPERATING EXPENSES
4.01 Base Rent
4.02 Operating Expenses
4.03 Cost of Living Increases
4.04 Security Deposit
4.05 Option Rent
ARTICLE 5 USES
5.01 Use
5.02 Hazardous Materials
5.03 Signs and Auctions
5.04 Year 2000 Compliance
5.05 Illegal Drug/Use Abuse
ARTICLE 6 COMMON FACILITIES AND VEHICLE PARKING
6.01 Operation and Maintenance of Common Facilities
6.02 Use of Common Facilities
6.03 Parking
6.04 Changes and Additions by Lessor
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 Lessor's Obligations
7.02 Lessee's Obligations
7.03 Alterations and Additions
7.04 Utility Additions
7.05 Entry and Inspection
ARTICLE 8 TAXES AND ASSESSMENTS ON LESSEE'S PROPERTY
8.01 Taxes on Xxxxxx's Property
1
ARTICLE 9 UTILITIES
ARTICLE 10 ASSIGNMENT AND SUBLETTING
10.01 Rights of Parties
10.02 Effect of Transfer
ARTICLE 11 INSURANCE AND INDEMNITY
11.01 Liability Insurance - Lessee
11.02 Lessor's Insurance
11.03 Waiver of Subrogation
11.04 Policies
11.05 Lessee's Indemnity
11.06 Lessor's Non-Liability
ARTICLE 12 DAMAGE OR DESTRUCTION
12.01 Restoration
ARTICLE 13 EMINENT DOMAIN
13.01 Total or Partial Taking
13.02 Temporary Taking
13.03 Taking of Parking Area
ARTICLE 14 SUBORDINATION, ESTOPPEL CERTIFICATE
14.01 Subordination
14.02 Estoppel Certificate
ARTICLE 15 DEFAULTS AND REMEDIES
15.01 Lessee's Defaults
15.02 Lessor's Remedies
15.03 Repayment of "Free" Rent
15.04 Cumulative Remedies
15.05 Late Payments
15.06 Right of Lessor to Perform
15.07 Default by Lessor
15.08 Expenses and Legal Fees
ARTICLE 16 END OF TERM
16.01 Holding Over
16.02 Merger on Termination
16.03 Surrender of Premises; Removal of Property
16.04 Termination; Advance Payments
ARTICLE 17 PAYMENTS AND NOTICES
ARTICLE 18 LIMITATION OF LIABILITY
ARTICLE 19 BROKER'S COMMISSION
ARTICLE 20 TRANSFER OF XXXXXX'S INTEREST
ARTICLE 21 INTERPRETATION
21.01 Gender and Number
21.02 Headings
21.03 Joint and Several Liability
21.04 Successors
21.05 Time of Essence
21.06 Severability
21.07 Entire Agreement
21.08 Covenants and Conditions
21.09 Counterparts
21.10 Indemnities
21.11 Attachments
2
LEASE
(FREESTANDING BUILDING)
This lease is hereby dated for reference purposes only as of August 19,
1999 by and between XXXXXXX AIRPORT CENTER PHASE III, LLC, a Delaware limited
liability company (herein called "Lessor") and CASINOVATIONS INCORPORATED, a
Nevada corporation, formerly a Washington corporation (herein called "Lessee").
ARTICLE 1 BASIC LEASE TERMS
Each reference in this Lease to the "Basic Lease Terms" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining articles of this Lease.
1.01 Premises Leased:
a. Premises Address: 0000 Xxxxxxx Xxxxxx
x. Rental Area: 58,725 approximate square feet
c. Building Designation: "A-1, A-2, B-1, B-2, C-1 and
C-2"
1.02 Project:
a. Project Name: Xxxxxxx Airport Center - Phase III
b. Total Project Rental Area: 87,067 square feet
1.03 Term:
a. Commencement Date: January 15, 2000 contingent upon
Building Department sign off stipulating the Building
is ready for occupancy by Xxxxxx.
b. Number of Calendar Months (Initial Term): 84
(eighty-four) months
c. Option to: One (1) five (5) year option.
1.04 Rent:
a. Base Rent: Initial Term (i) Months one (1) through five (5)
will be free of base rent only for fixturization; (ii) $42,968.000/month during
months six (6) through twenty-four (24); (iii) $42,968.00/during months
twenty-five through eighty-four (84) plus annual CPI increase capped at three
percent (3%) per annum per Article 1.04b below. Where reference is made in this
Lease to rent as provided in Section 1.04a, or where such reference is made to
the term "Original Monthly Rent", such rent shall be deemed to be $42,968.00. In
addition, operating expenses are due and payable throughout the term of the
Lease.
b. Rent Adjustments: The base rent shall be increased annually
commencing the twenty-five (25) month of this Lease in accordance with the
Consumer Price Index, as provided in Section 4.03. Said adjustment will have a
cap of 3% per annum.
1.05 Operating Expenses: Lessor estimates Operating Expenses during the calendar
year when the Lease commences to be (i) $7,047.00 per month. Operating Expenses
are in addition to the Base Rent set forth in Section 1.04.
1.06 Security Deposit: $42,968.00
1.07 Permitted Use: Office and manufacturing of gaming products; lessee may use
the premises for any lawful purpose, not otherwise prohibited by Section 5.01,
providing no hazardous or environmental materials are placed on the premises.
1.08 Addresses for Payments, Notices and Deliveries:
Lessor: Xxxxxxx Airport Center Phase III, LLC
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Lessee: Casinovations Incorporated
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
1.9 Brokers: Nevada Brokers, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 0000
1.10 Building Improvements: The tenant improvement allowance including plans,
permits swamp coolers, warehouse strip lighting, new exterior design (Exhibit C
attached) and fees shall be $745,000.00 is contingent upon final improvements
plans being signed by Xxxxxx and Lessor which will incorporate final
construction costs . Should Lessee anytime throughout the lease term, desire to
perform additional modifications at Xxxxxx's cost, bids may be obtained from
Xxxxxx's contractor or another licensed, bonded contractor subject to Lessor's
approval. If an outside contractor is chosen, Lessee shall be subject to the
following requirements: Lessee must meet with Lessor to review the selected
contractor's bid in order to ascertain that all construction modifications meet
code requirements, prior to commencement of construction; Provide Lessor with
contractor's license and bond status; Comply with the attached Tenant
Specification Guidelines; Provide Lessor with the buildout plans and subsequent
permits for same prior to construction; and Provide Lessor with the Building
Department final sign off and Certificate of Occupancy. Lessor will post Notice
of Non-Responsibility during said modification period.
3
1.11 Payments Upon Execution: The first installment of Base Rent $42,968.00 the
first month's Operating Expenses $7,047.00, and a Security Deposit of $42,968.00
for a total of $92,983.00, which shall be delivered to Lessor concurrently with
Xxxxxx's execution of this Lease.
ARTICLE 2 PREMISES
2.01 Leased Premises: Lessor leases to Lessee and Lessee rents from Lessor the
Premises (herein the "Premises"), containing the rental area set forth in
Section 1.01b of the Basic Lease Terms. The Premises are located at the building
identified in the Basic Lease Terms (which together with underlying real
property is called herein the "Building"), and is a portion of the project
including other buildings described in Section 1.02a of the Basic Lease Terms
(herein the "Center"). The Premises and the Center are indicated on a site plan
attached hereto as Exhibit "A". If, upon completion of the space plans for the
Premises, Xxxxxx's architect or space planner determines that the rentable
square footage of the Premises differs from that set forth in the Basic Lease
Terms, then Lessor shall so notify Lessee, and the Base Rent (as shown in
Section 1.04 of the Basic Lease Terms) shall be promptly adjusted in proportion
to the change in square footage. Within ten (10) days following Xxxxxx's
request, the parties shall memorialize the adjustments by executing a
certificate to this Lease prepared by Xxxxxx, provided that the failure or
refusal by either party to execute the certificate shall not affect its
validity. The form of such certificate is Exhibit "B".
2.02 Delivery and Acceptance of Premises: Lessor shall deliver the Premises to
Lessee clean and free of debris, on the Commencement Date (unless Lessee is
already in possession), and Lessor further warrants to Lessee that the Common
Facilities referred to in Article 6, plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities and equipment with the Premises,
fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors,
windows, access doors, loading doors, plate glass and skylights shall be in good
operating condition on the Commencement Date. In the event that it is determined
that this warranty has been violated, then it shall be the obligation of the
Lessor, after receipt of written notice from Lessee setting forth with
specificity the nature of the violation, to promptly, at Lessor's sole cost,
rectify such violation. Lessee's failure to give such written notice to Lessor
within six (6) months after the Commencement Date shall cause the conclusive
presumption that Lessor has complied with all of Lessor's obligations hereunder,
unless such defect is not readily ascertainable during that period of time. The
warranty contained in this Section shall be of no force or effect if prior to
the date of this Lease Lessee was the owner or occupant of the Premises.
Except as otherwise provided in this Lease, Xxxxxx hereby accepts the
Premises in their condition existing as of the Commencement Date or the date
that Lessee takes possession of the Premises, whichever is earlier, subject to
all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises and any covenants
or restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. Xxxxxx
acknowledges that neither Lessor nor Xxxxxx's agent has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Xxxxxx's business.
2.03 Building Name and Address: Lessee shall not utilize any name selected by
Lessor from time to time for the Building as any part of Xxxxxx's corporate or
trade name. Lessor shall have the right to change the name, number or
designation of the Building without notice or liability to Lessee.
ARTICLE 3 TERM
3.01 General: The term shall be for the period shown in Section 1.03b of the
Basic Lease Terms. Subject to the provisions of Section 3.03, the term shall
commence on the commencement date (herein "Commencement Date") on the earliest
of (a) the Estimated Commencement Date as set forth in Section 1.03a of the
Basic Lease Terms, or (b) the date Lessee acquires possession or commences use
of the Premises for any purpose other than construction. Within ten (10) days
after possession of the Premises is tendered to Lessee, the parties shall
execute the Exhibit "B" Certificate form provided by Lessor, which shall state
the Commencement Date and the expiration date ("Expiration Date") of the Lease.
Xxxxxx's failure to execute that form shall not affect the validity of Xxxxxx's
determination of those dates.
3.02 Tender of Possession by Lessor: The Premises shall be deemed ready for
occupancy upon the tendered date, but only if and when Lessor, to the extent
applicable, (a) has provided reasonable access to the Premises for Lessee so
that it may be used without unnecessary interference, (b) has substantially
completed all the work required to be done by Lessor in this Lease, and (c) has
obtained requisite governmental approvals to Xxxxxx's occupancy.
3.03 Delay in Possession: Notwithstanding the provisions of Section 3.01, if
Lessor, for any reason whatsoever, cannot deliver possession of the Premises to
Lessee on/or before the Estimated Commencement Date, this Lease shall not be
void or voidable nor shall Lessor be liable to Lessee for any resulting loss or
damage. However, Lessee shall not be liable for any rent and the Commencement
Date shall not occur until Lessor delivers possession of the Premises and the
Premises are in fact ready for occupancy in accordance with Section 3.02; except
that if Lessor's failure to so deliver possession on the Estimated Commencement
Date is attributable to any material action or inaction by Lessee (including any
tenant improvement construction change orders requested by Lessee or Lessee's
failure to supply any information required from Lessee or the furnishing by
Xxxxxx of inaccurate or erroneous estimates, specifications, data or other
information), then the Commencement Date shall not be advanced to the date on
which possession of the Premises is tendered to Lessee, and Lessor shall be
entitled to full performance by Xxxxxx (including the payment of rent) from the
Estimated Commencement Date.
3.04 Early Occupancy: If Lessee occupies the Premises prior to the Estimated
Commencement Date, Xxxxxx's occupancy of the Premises shall be subject to all of
the provisions of this Lease. Early occupancy of the Premises shall not advance
the expiration date of this Lease. Lessee shall not pay Base Rent, Operating
Expenses and all other charges, including, without limitation, insurance
specified in this Lease for the early occupancy period, upon Xxxxxx's demand for
same.
4
3.05 Option Term(s): Lessee is hereby granted the right and option to extend
this Lease for the additional term or terms as provided in Section 1.03c (herein
"Option Term" or "Option Terms") commencing at the expiration of the Initial
Term at a mutually agreeable increase. Such option is granted upon the following
terms and conditions:
a. The Option Term(s) shall be on the same terms, covenants,
conditions, provisions and agreements as in this Lease and any amendments
thereto except for forgiveness of Base Rent, if applicable.
b. Lessee duly and regularly pays the rent and all other amounts
required to be paid pursuant to this Lease and performs each and every covenant,
provision and agreement on the part of the Lessee to be paid, rendered, observed
and performed herein.
c. Xxxxxx gives to Lessor and Xxxxxx receives from Lessee written
notice of the exercise of each option to extend this Lease no earlier than nine
(9) months and no later than six (6) months prior to the expiration of the term
immediately preceding the Option Term(s) to be exercised, time being of the
essence. If said notification is not given and received, the option to be
exercised shall automatically expire. Failure to exercise the first option shall
result in automatic expiration of the second if one so exists.
ARTICLE 4 RENT AND OPERATING EXPENSES
4.01 Base Rent: From and after the Commencement Date, Lessee shall pay without
deduction or offset a Base Rent for the Premises in the total amount shown
(including subsequent adjustments, if any) in Section 1.04a of the Basic Lease
Terms. The rent shall be due and payable in equal monthly installments on the
first day of each month, in advance, except that if the Commencement Date occurs
on a day other than the first day of the month, the first installment of Base
Rent shall include rent for both the fractional month, if any, starting with the
Commencement Date and the following calendar month. No demand, notice or invoice
shall be required.
4.02 Operating Expenses:
a. Lessee shall pay to Lessor during the term hereof, in addition to
the Base Rent, Xxxxxx's share, as hereinafter defined, of all Operating
Expenses, as hereinafter defined, during each year of the term of this Lease.
b. "Lessee's Share" is defined, for purposes of this Lease, as the
percentage determined by dividing the square footage of the Premises by the
total square footage of the rentable space contained in the Center. It is
understood and agreed that the square footage figures set forth in the Basic
Lease Terms are approximations which Lessor and Lessee agree are reasonable and
shall not be subject to revision except in connection with an actual change in
the size of the Premises or a change in the space available for lease in the
Center.
c. The term "Operating Expenses" shall include (i) all expenses
attributable to Lessor's obligations for operation, replacement, repair and
maintenance in neat, clean, good order and condition of the Center, including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, common lighting facilities, fences and gates, tenant directories and
any other services to be provided by Lessor under this Lease; (ii) property
taxes , general or special assessments, and costs and expenses in contesting the
amount or validity of any property tax by appropriate proceedings; (iii) parkway
water and sewer charges and other publicly mandated services to the Center; (iv)
insurance premiums for liability and property insurance maintained by Lessor
pursuant to Article 11 or reasonable premium equivalents should Lessor elect to
self-insure any risk that Lessor is authorized to insure hereunder; (v) license,
permit and inspection fees; (vi) air conditioning maintenance; (vii) supplies,
materials, equipment, tools, amortization of capital investments reasonably
intended to produce a reduction in operating charges or energy conservation ,
labor, any expense incurred pursuant to Article 6, 7, 11 and 12, and (viii) a
reasonable overhead/management fee which shall include, without limitation,
allocated wages and salaries, fringe benefits and payroll taxes for
administrative, accounting and other personnel applicable to the Center. It is
understood that Operating Expenses shall include competitive charges for direct
services provided by any subsidiary or division of Lessor, including reasonable
supervisory or overhead fees. The term "property taxes" (billed separately) as
used herein shall include the following: (i) all real estate taxes or personal
property taxes (on Lessor's personal property used for the Center), as such
property taxes may be reassessed from time to time; (ii) other taxes,
documentary transfer fees, charges and assessments which are levied with respect
to this Lease or to the Premises and/or the Center, and any improvements,
fixtures and equipment and other property of Lessor located in the Center,
except that general net income and franchise taxes imposed against Lessor which
shall be excluded; and (iii) any tax surcharge or assessment which shall be
levied in addition to or in lieu of real estate or personal property taxes,
other than taxes covered by Article 8. A copy of Xxxxxx's unaudited statement of
expenses shall be made available to Lessee upon request.
d. The inclusion of the improvements, facilities and services set forth
in the definition of Operating Expenses shall not be deemed to impose an
obligation upon Lessor to either have said improvements or facilities or to
provide those services unless the Center already has the same, Lessor already
provides the services or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
e. Xxxxxx's Share of Operating Expenses shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Lessee by Xxxxxx. At Lessor's option, however, an amount may be
estimated by Xxxxxx from time to time of Xxxxxx's share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each calendar year of the Term, on the same day as the Base
Rent is due hereunder. In the event that Lessee pays Lessor's estimate of the
Lessee's Share of Operating Expenses as aforesaid, Lessor shall deliver to
5
Lessee within sixty (60) days after expiration of each calendar year a
reasonably detailed statement showing Xxxxxx's share of the actual Operating
Expenses incurred during the preceding year. If Xxxxxx's payments under this
subparagraph during said preceding calendar year exceed Xxxxxx's Share as
indicated on said statement, Lessee shall be entitled to credit in the amount of
such overpayment against Xxxxxx's Share of Operating Expenses next falling due.
If Xxxxxx's payments under this subparagraph during said preceding calendar year
were less than Xxxxxx's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within thirty (30) days after delivery by
Lessor to Xxxxxx of said statement. Changes in rental amounts will be made March
1st of each year.
f. If, at any time during any calendar year, any one or more of the
Operating Expenses are increased to a rate(s) or amount(s) in excess of the
rate(s) or amount(s) used in calculating the estimated Operating Expenses for
the year, then Xxxxxx's estimated amount of Operating Expenses shall be
increased for the month in which the increase becomes effective and for all
succeeding months by an amount equal to Xxxxxx's proportionate share of the
increase. Lessor shall give Lessee written notice of the amount or estimated
amount of the increase, the month in which the increase will become effective,
Xxxxxx's monthly share thereof and the months for which the payments are due.
Lessee shall pay the increase to Lessor as a part of the Lessee's monthly
payments of Estimated Operating Expenses as provided in subparagraph "b" above,
commencing with the month in which effective.
g. Even though the Lease has terminated and Xxxxxx has vacated the
Premises, when the final determination is made of Xxxxxx's Share of Operating
Expenses for any prior calendar year in which the Lease terminates, Lessee shall
immediately upon notice pay the entire increase due over the estimated expenses
paid. Conversely, any overpayment made in the event expenses decrease shall be
immediately rebated by Lessor to Lessee.
4.03 Cost of Living Increases: Upon the expiration date of the month referenced
in Section 1.04b of the Basic Lease Terms after the commencement of the Term,
and upon the expiration of each twelve (12) calendar month period thereafter
during the Term hereof, rent shall be adjusted by multiplying the Base Rent as
referenced in Section 1.04a of the Basic Lease Terms by a fraction, which
fraction shall have as its numerator the Consumer Price Index For All Urban
Consumers using the U.S. City Average (or alternative thereto as hereinafter
provided) (Base Period 1982-84=100), as published by the U.S. Department of
Labor, Bureau of Labor Statistics, for the calendar month which is four (4)
months prior to the expiration of the applicable twelve (12) month period, and
which such fraction shall have as its denominator said Consumer Price Index, as
published for the calendar month which is four (4) months prior to the
commencement of the Term. If the present base of said Index should hereafter be
changed, then the new base shall be converted to the base now used. In the event
that the Bureau should cease to publish said Index figure, then any similar
Index published by any other branch or department of the U.S. Government shall
be used. In the event said Bureau shall publish more than one such index, the
index showing the greater proportionate increase shall be used, and if none is
so published, then another index generally recognized as authoritative shall be
substituted by agreement of the parties hereto, or if no such agreement is
reached within a reasonable time, either party may make application to any court
of competent jurisdiction to designate such other index. In any event, the base
used by any new index shall be reconciled to the 1982-84=100 Base Index. In no
event shall the rent to be paid by Lessee pursuant hereto be less than the Base
Rent set forth in Section 1.04a of the Basic Lease Terms or the Base Rent as
adjusted with respect to the next preceding twelve (12) month period, whichever
is the greater. In the event the numerator of said fraction is not available at
the time of adjustment of the rent as provided herein, Lessee shall continue to
pay the rent established for the immediately prior twelve (12) month period;
provided, however, Lessee shall promptly pay to Lessor any deficiency at such
time as said rent is adjusted. Said adjustment will commence with the
twenty-fifth (25) month of the Term with a cap of 3% per annum.
4.04 Security Deposit: Concurrently with the execution of this Lease, Xxxxxx
shall deposit with Xxxxxx the sum stated in Section 1.06 of the Basic Lease
Terms, to secure the faithful performance of Xxxxxx's obligations hereunder. If
Lessee fails to pay Rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent or other charges in
default or for the payment of any other sum to which Lessor may become obligated
by reason of Xxxxxx's default, or to compensate Lessor for any loss or damage
which Lessor may suffer thereby. If Lessor so uses or applies all or any portion
of said deposit, Lessee shall, within ten (10) days after written demand
therefor, deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount hereinabove stated and Xxxxxx's failure to do so
shall be a material breach of this Lease. If the Base monthly rent shall, from
time to time, increase during the Term, Lessee shall thereupon deposit with
Lessor additional security deposit so that the amount of security deposit held
by Lessor shall at all times bear the same proportion to current rent as the
original security deposit bears to the original Base monthly rent set forth in
this Article. Lessor shall not be required to keep said deposit separate from
its general accounts. If Xxxxxx performs all of Xxxxxx's obligations hereunder,
said deposit, or so much thereof as has not theretofore been applied by Xxxxxx,
shall be returned, without payment of interest or other increment for its use,
to Lessee (or, at Lessor's option, to the last assignee, if any, of Xxxxxx's
interest hereunder) at the expiration of the Term hereof, and after Xxxxxx has
vacated the Premises. No trust relationship is created herein between Xxxxxx and
Xxxxxx with respect to said security deposit. In no event may Lessee
unilaterally apply or credit its deposit against the last month's rent. Should
Lessor sell its interest in the Premises during the Term hereof and if Lessor
deposits with the Purchaser thereof, the then unappropriated funds deposited by
Lessee as aforesaid, thereupon Lessor shall be discharged from any further
liability with respect to such deposit.
4.05 Option Rent: If Lessee duly exercises its option to extend this Lease as
provided in Section 3.05 above, the rent payable during the Option Term, each
annual CPI adjustment will have a cap of 5% but no less than 3%.
6
ARTICLE 5 USES
5.01 Use: Lessee shall use the Premises only for the purposes stated in Section
1.07 of the Basic Lease Terms. Lessee shall not do, or permit anything to be
done, in or about the Premises which will in any way interfere with the rights
of other occupants of the Building, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose, nor shall Lessee
permit any nuisance or commit any waste in the Premises. Lessee shall not do or
permit to be done anything which will invalidate or increase the cost of any
insurance policy(ies) covering the Building and/or their contents, and shall
comply with all applicable insurance underwriters' rules and the requirements of
the Pacific Fire Rating Bureau or any other organization performing a similar
function. Lessee shall comply, at its expense, with all present and future laws,
ordinances and requirements of all governmental authorities that pertain to
Lessee or its use of the Premises, including without limitation, all federal and
state occupational health and safety requirements, whether or not Lessee's
compliance will necessitate expenditures or interfere with its use and enjoyment
of the Premises. Lessee shall promptly upon demand reimburse Lessor for any
additional insurance premium charged by reason of Xxxxxx's failure to comply
with the provisions of this Section, and shall indemnify Lessor from any
liability and/or expense resulting from Xxxxxx's noncompliance.
5.02 Hazardous Materials: Lessee shall not cause, permit or allow any Hazardous
Materials (as defined below) to be brought upon, kept or used in or about the
Premises by Lessee, its agents, employees, contractors or invitees, without the
prior written consent of Lessor (which consent Lessor shall not unreasonably
withhold as long as Lessee demonstrates to Lessor reasonable satisfaction that
such Hazardous Materials are necessary to Lessee's business, and will be used,
kept and stored in a manner that complies with all Hazardous Materials Laws (as
defined below) regulating any such Hazardous Materials so brought upon, used or
kept in or about the Premises). If (i) Lessee, its employees, invitees or agents
breach any obligation stated in the preceding sentence, or (ii) the presence of
Hazardous Materials in the Premises caused or permitted by Lessee results in
contamination of the Premises, the Building, any structure, system or
improvement, any soil or water in, on, under or about the Premises
(collectively, the "Property"), or (iii) contamination of the Property by
Hazardous Materials otherwise occurs for which Lessee is legally liable to
Lessor for damage resulting therefrom, then Lessee shall indemnify, defend and
hold Lessor and lessor's partners, affiliates, employees, contractors,
representatives, lenders, successors and assigns (collectively, the "Indemnified
Parties") harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities, losses, actions or causes of action (including,
without limitation, diminution in value of the Building, damages for the loss or
restriction on use of rentable or usable space or of any amenity, damages
arising from any adverse impact on marketing any of the foregoing, and sums paid
in settlement of claims, attorneys' fees and costs incurred, consultant fees and
expert fees) made, brought or sought against or suffered or incurred by the
Indemnified Parties, or any of them, which arise during or after the Term of
this Lease as a result of such contamination. This indemnification of Lessor by
Xxxxxx includes, without limitation, attorneys' fees and expenses and costs
incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision or required to return the property
to the condition existing prior to the introduction of any such Hazardous
Materials for which Lessee is responsible. Lessee's obligations hereunder shall
survive the expiration or earlier termination of the Term of this Lease. Prior
to lease commencement, Lessee will provide Lessor with toxic management plans
for glass and sign manufacturing.
Lessee shall at all times and in all respects comply with all federal,
state and local laws, ordinances and regulations ("Hazardous Materials Laws")
relating to industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, disposal or transportation of any oil or
petrochemical products, PCB, flammable materials, explosives, asbestos, urea
formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without
limitation, any substances defined as or included in the definition of
"Hazardous Materials", "toxic substances" or "chemicals known to the State to
cause cancer or reproductive toxicity" under any such Hazardous Materials Laws
(collectively, "Hazardous Materials").
7
5.03 Signs and Auctions: Lessee shall not place any signs on the Premises
without Xxxxxx's prior written consent. Lessee shall not conduct, nor permit to
be conducted, either voluntarily or involuntarily, any auctions or sheriff's
sales from the Premises without having first obtained Xxxxxx's prior written
consent, which shall not be unreasonably withheld.
5.04 Year 2000 Compliance: The Lessee shall take reasonable steps to ensure that
all computer controlled facility components that have been purchased or
installed by Lessee, or over which Lessee has control, are Year 2000 compliant
prior to January 1, 2000. Compliance shall be verified by physical testing of
the components and/or written confirmation from the component or systems
manufacturer. "Computer controlled facility components" refers to software
driven technology and embedded microchip technology. This includes, but is not
limited to, programmable thermostats, HVAC controllers, auxiliary elevator
controllers, utility monitoring and control systems, fire detection and
suppression systems, alarms, security systems, and any other facilities control
systems utilizing microcomputer, minicomputer, or programmable logic
controllers. "Year 2000 compliant" means computer controlled facility components
that accurately process date/time data (including, but not limited to,
calculating, comparing, and sequencing) from, into, and between the twentieth
and twenty-first centuries, and the years 1999 and 2000 and leap year
calculations.
5.05 Illegal Drug Use/Abuse. In consideration of the execution or renewal of the
lease of the premises identified in this lease, Lessor and Xxxxxx agree as
follows:
a. Lessee, any employee of the lessee's, or a guest under the lessee's
control shall not engage in criminal activity, including drug-related criminal
activity, on or near the project premises. "Drug-related criminal activity"
means the illegal manufacture, sale, distribution, use or possession with intent
to manufacture, sell, distribute, or use, of a controlled substance (as defined
in section 102 of the Controlled Substance Act 21 U.S.C. 802).
b. Lessee, any employee of the lessee's, or guest under the lessee's
control shall not engage in any act intended to facilitate criminal activity
including drug-related criminal activity on or near the premises.
c. Lessee or any employee of the lessee's will not permit the premises
to be used for, or to facilitate criminal activity, including drug-related
criminal activity, regardless of whether the individual engaging in such
activity is AN employee or a guest.
d. Lessee, NOR ANY employee of the lessee's WILL ENGAGE in the
manufacture, sale or distribution or illegal drugs at any location, WHETHER on
or near subject premises or otherwise.
e. Lessee, any employee of the lessee's, or a guest or other person
under the lessee's control shall not engage in acts of violence or threats of
violence, including, but not limited to, the unlawful discharge of firearms, on
or near subject premises.
ARTICLE 6 COMMON FACILITIES AND VEHICLE PARKING
6.01 Operation and Maintenance of Common Facilities: During the Term, Lessor
shall operate all Common Facilities within the Center. The term "Common
Facilities" shall mean all areas within the exterior boundaries of the Building
and other buildings in the Center which are not held for exclusive use by
persons entitled to occupy space, and all other appurtenant areas and
improvements provided by Lessor for the common use of Lessor and tenants and
their respective employees and invitees, including, without limitation, parking
areas and structures, driveways, sidewalks, landscaped and planted areas and
common entrances not located within the Premises of any tenant.
6.02 Use of Common Facilities: The occupancy by Lessee of the Premises shall
include the use of the Common Facilities in common with Lessor and with others
for whose convenience and use the Common Facilities may be provided by Lessor,
subject, however, to compliance with all rules and regulations as are prescribed
from time to time by Lessor. Lessor shall operate and maintain the Common
Facilities in the manner Lessor may determine to be appropriate. Lessor shall at
all times during the Term have exclusive control of the Common Facilities, and
may restrain any use or occupancy, except as authorized by Lessor's rules and
regulations. Lessee shall keep the Common Facilities clear of any obstruction or
unauthorized use related to Lessee's operations. Nothing in this Lease shall be
deemed to impose liability upon Lessor for any damage to or loss of the property
of, or for any injury to , Lessee, its invitees or employees. Lessor may
temporarily close any portion of the Common Facilities for repairs or
alterations, to prevent a public dedication or the accrual of prescriptive
rights, or for any other reason deemed sufficient by Lessor. Under no
circumstances shall the right herein granted to use the Common Facilities be
deemed to include the right to store any property, temporarily or permanently,
in the Common Facilities. Any such storage shall be permitted only by the prior
written consent of Lessor or Xxxxxx's designated agent, which consent may be
revoked at any time. In the event that any unauthorized storage shall occur,
then Lessor shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove the property and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.
8
6.03 Parking: Subject to Lessor's right to adopt reasonable, nondiscriminatory
modifications and additions to the regulations by written notice to Lessee,
Lessee shall have the parking rights set forth as follows:
a. Lessor agrees to maintain, or cause to be maintained, an automobile
parking area ("Parking Area") for the benefit and use of the visitors and
patrons and employees of Lessee, and other tenants and occupants of the Center.
The Parking Area shall include the automobile parking stalls, driveways,
entrances, exits, sidewalks and attendant pedestrian passageways and other areas
designated for parking. Lessor shall have the right and privilege of determining
the nature and extent of the Parking Area, and of making such changes to the
Parking Area from time to time which in its opinion are desirable and for the
best interests of all persons using the Parking Area. Lessor shall keep the
Parking Area in a neat, clean and orderly condition, properly lighted and
landscaped, and shall repair any damage to its facilities. Nothing contained in
this Lease shall be deemed to create liability upon Lessor for any damage to
motor vehicles of visitors or employees, unless ultimately determined to be
caused by the sole negligence or willful misconduct of Lessor, its agents,
servants and employees. Unless otherwise instructed by Lessor, every user of the
Parking Area shall park and lock his or her own motor vehicle. Lessor shall also
have the right to establish, and from time to time amend, and to enforce against
all users of the Parking Area all reasonable rules and regulations as Lessor may
deem necessary and advisable for the proper and efficient operation and
maintenance of the Parking Area.
b. Persons using the Parking Area shall observe all directional signs
and arrows and any posted speed limits. All vehicles shall be parked entirely
within painted stalls, and no vehicles shall be parked in areas which are posted
or marked as "no parking" or on, or in ramps, driveways and aisles. Only one (1)
vehicle may be parked in a parking space. In no event shall Lessee interfere
with the use and enjoyment of the Parking Area by other tenants of the Building
or buildings within the Center or their employees or invitees.
c. Parking areas shall be used only for parking vehicles. Washing,
waxing, cleaning or servicing of vehicles, or the storage of vehicles for
twenty-four (24) hour periods, in the Parking Area (other than emergency
services) by any user of the Parking Area or his or her agents or employees is
prohibited unless otherwise authorized by Lessor. Lessee shall have no right to
install any fixtures, equipment or personal property (other than vehicles) in
the Parking Area, nor shall Lessee make any alteration to the Parking Area.
6.04 Changes and Additions by Lessor: Lessor reserves the right to make
alterations or additions to the Building(s) or the Center, or to the attendant
fixtures, equipment and Common Facilities. Lessor may at any time relocate or
remove any of the various buildings, parking areas and other common facilities,
and may add buildings and areas to the Center from time to time. No change shall
entitle Lessee to any abatement of rent or other claim against Xxxxxx, provided
that the change does not deprive Lessee of reasonable access to or use of the
Premises.
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.1 Lessor's Obligations:
a. Subject to the provisions of Section 4.02 (Operating Expenses),
Article 5 (Uses), Article 6 (Building Parking), Section 7.02 (Lessee's
Obligations) and Article 12 (Damage or Destruction), and except for damage
caused by any negligent or intentional act or omission of Lessee, Lessee's
employees, suppliers, shippers, customers or invitees, in which event Lessee
shall, at its sole cost and expense, repair the damage further utilizing a
contractor of Lessor's choice. Lessor at Lessor's expense, subject to
reimbursement pursuant to Section 4.02, shall keep in good condition and repair
the foundations, exterior walls, structural condition of interior bearing walls,
and roof of the Premises, and utility installations of the Building and all
parts thereof, as well as providing the services for which there is an Operating
Expense pursuant to Section 4.02. Lessor shall not, however, be obligated to
paint the interior walls, nor shall Lessor be required to maintain, repair or
replace windows, doors or plate glass of the Premises. Lessor shall have no
obligation to make repairs under this Section 7.01 until a reasonable time after
receipt of written notice from Xxxxxx of the need for such repairs. Lessor shall
not be liable for damages or loss of any kind or nature by reason of Xxxxxx's
failure to furnish any such services when such failure is caused by accident,
breakage, repairs, strikes, lockout or any other labor disturbances or disputes
of any character, or by any other cause beyond the reasonable control of Lessor.
10
x. Xxxxxx shall warrant Lessee's heating-ventilation-air conditioning
(HVAC), plumbing and electrical throughout the first lease year of the Initial
Term only. In addition, Lessor will successively perform quarterly air filter
changes and annual evaporative cooler winterizing, if applicable; however,
Lessor shall not be responsible for any other item pertaining to the HVAC,
plumbing or electrical following said warranty during the Initial Term,
including without limitation, repair or replacement. Lessor's one year warranty
shall immediately expire if Lessee, its employees, invitees or agents modify or
cause damage to same and Lessee shall then assume all responsibility for same,
including without limitation, repair/replacement, etc. After Xxxxxx's one year
HVAC warranty, Lessor reserves the right to continue changing the HVAC filters
on a quarterly basis and further winterize the warehouse evaporative coolers on
an annual basis.
7.02 Lessee's Obligations:
a. Subject to the provisions of Article 5 (Use), Section 7.01 (Lessor's
Obligations) and Article 12 (Damage or Destruction), Lessee, at Lessee's
expense, shall keep in good order, condition and repair the Premises and every
part thereof (whether or not the damaged portion of the Premises or the means of
repairing same are reasonably or readily accessible to Lessee) including,
without limiting the generality of the foregoing, all plumbing, heating,
ventilating and air conditioning systems, electrical and lighting facilities and
equipment within the Premises, fixtures, interior walls and interior surfaces of
exterior walls, ceilings, windows (including glass and casings), doors
(including casings), plate glass and skylights located within the Premises.
b. If Lessee fails to perform Lessee's obligations under this Section
7.02 or under any other paragraph of this Lease, Lessor may enter upon the
Premises after ten (10) days' prior written notice to Lessee (except in the case
of emergency, in which event, no notice shall be required), perform such
obligations on Xxxxxx's behalf and put the Premises in good order, condition and
repair, and the cost thereof together with interest thereon at fifteen percent
(15%) per annum shall be due and payable as additional rent to Lessor together
with Xxxxxx's next Base Rent installment.
7.03 Alterations and Additions:
a. Lessee shall not, without Xxxxxx's prior written consent which shall
not be unreasonably withheld, make any alterations, improvements, additions or
Utility Installments in, on or about the Premises, except for nonstructural
alterations to the Premises not exceeding $5,000 in cumulative costs during the
Initial Term. In any event, whether or not in excess of $5,000 in cumulative
cost, Lessee shall make no change or alteration to the exterior of the Premises,
without Xxxxxx's prior written consent. As used in this Lease, the term "Utility
Installations" shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space heaters, air
conditioning, plumbing and fencing. Lessor may require that Lessee remove any
and all of said alterations, improvements, additions or Utility Installations at
the expiration of the Initial Term, as it may have been extended, and restore
the Premises to its prior condition. Lessor may require Lessee to provide
Lessor, at Xxxxxx'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 Lessor against any liability for mechanic's and materialman's liens
and to insure completion of the work. Should Lessee make any alterations,
improvements, additions or Utility Installations without the prior approval of
Lessor, Lessor may, at any time during the term of this Lease, require that
Lessee remove any or all of same.
b. Any alterations, improvements, additions or Utility Installations in
or about the Premises that Lessee shall desire to make and which requires the
consent of Lessor, shall be presented to Lessor in written form with proposed
detailed plans. If Lessor shall give its consent, the consent shall be deemed
conditioned upon Lessee acquiring a permit to perform the work from appropriate
governmental agencies, the furnishing of a copy thereof to Lessor prior to the
commencement of the work and the compliance by Lessee of all conditions of said
permit in a prompt and expeditious manner.
c. Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are, or may be secured by, any mechanic's or
materialman's lien against the Premises, or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in the Premises, and Lessor shall have the right to post notices of
9
non-responsibility in or on the Premises or the Building as provided by law. If
Lessee shall in good faith contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense, defend itself and Lessor against
the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon, before the enforcement thereof, against Lessor or the Premises
upon the condition that if Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to such contested lien
claim or demand indemnifying Lessor against liability for the same and holding
the Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Xxxxxx's attorneys fees and costs in participating in such
action if Lessor shall decide it is to Lessor's best interest to do so.
d. All alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may be on the Premises, shall be the property of Lessor and shall remain
upon and be surrendered with the Premises at the expiration of the Initial Term,
as it may have been extended, unless Lessor requires their removal pursuant to
subparagraph "a" above. Notwithstanding the provisions of this paragraph,
Xxxxxx's machinery and equipment, other than that which is affixed to the
Premises, and other than Utility Installations, shall remain the property of
Lessee and may be removed by Lessee subject to the provisions of Section 7.02.
7.04 Utility Additions: Lessor reserves the right to install new or additional
utility facilities throughout the Building for the benefit of Lessor or Lessee,
including, but not limited to, such utilities as plumbing, electrical systems,
security systems, communication systems and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Xxxxxx's use of the Premises.
7.05 Entry and Inspection: Lessor shall at reasonable times have the right to
enter the Premises to inspect them, to supply services in accordance with this
Lease, to protect the interests of Lessor in the Premises, to submit the
Premises to prospective or actual purchasers or encumbrance holders (or, during
the last one hundred and eighty (180) days of the Term, or when an uncured
tenant default exists, to prospective tenants), to alter, improve or repair the
Premises, or as otherwise permitted in this Lease, all without being deemed to
have caused an eviction of Xxxxxx and without abatement of rent except as
provided elsewhere in this Lease. If Lessee vacates the Premises, Lessor may
enter the Premises and alter them without abatement of rent and without
liability to Xxxxxx. Lessor shall have the right to use any and all means which
Lessor may deem proper to open the doors in an emergency in order to obtain
entry to the Premises, and any entry to the Premises obtained by Lessor shall
not under any circumstances be deemed to be a forcible or unlawful entry into,
or a detainer of the Premises, or any eviction of Lessee from the Premises.
ARTICLE 8 TAXES AND ASSESSMENTS ON LESSEE'S PROPERTY
8.01 Taxes on Lessee's Property: Lessee shall be liable for and shall pay, at
least ten (10) days before delinquency, all taxes and assessments levied against
all personal property of Xxxxxx located in the Premises. When possible, Lessee
shall cause its personal property to be assessed and billed separately from the
real property of which the Premises form a part. If any taxes on Xxxxxx's
personal property are levied against Lessor or Xxxxxx's property is increased by
the inclusion of a value placed upon the personal property of Xxxxxx, and if
Lessor pays the taxes based upon the increased assessment, Lessee shall pay to
Lessor the taxes so levied against Lessor or the proportion of the taxes
resulting from the increase in the assessment. In calculating what portion of
any tax bill which is assessed against Lessor separately, or Lessor and Xxxxxx
jointly, is attributable to Xxxxxx's fixtures and personal property, Lessor's
reasonable determination shall be conclusive.
ARTICLE 9 UTILITIES
Lessee shall fully and promptly pay for all gas and electric (where
applicable), water, telephone and trash removal for the building and other
utilities of every kind furnished to the leased Premises, together with any
personal property taxes thereon, and all other costs and expenses of every kind
whatsoever, of, or in connection with the use, operation and maintenance of the
leased Premises and all activities conducted thereon, and Lessor shall have no
responsibility of any kind for any thereof. Lessee shall put all such utilities
in its own name and not that of Lessor.
ARTICLE 10 ASSIGNMENT AND SUBLETTING
10
10.01 Rights of Parties:
a. No assignment (whether voluntary, involuntary or by operation of
law), and no subletting shall be valid or effective without Lessor's prior
written consent; such consent will not be unreasonably withheld. Further, no
assignment or subletting shall relieve Lessee from its primary and ultimate
obligations, responsibilities or duties under the Lease.
b. Lessee may assign this Lease or sublet the Premises to an assignee
or subtenant which controls, is controlled by or is under common control with
Lessee or to any corporation resulting from the merger of or consolidation with
Lessee ("Lessee's Affiliate"). In such case, any Xxxxxx's Affiliate shall assume
in writing all of Xxxxxx's obligations under this Lease. Lessee shall in no
event increase Xxxxxx's Affiliate's rent from the rate currently being charged
Lessee under this Lease.
c. If Lessee, or any guarantor of Lessee ("Lessee's Guarantor") is a
corporation, or is an unincorporated association or partnership, the transfer of
any stock or interest which in one of more transfer, in the aggregate,
constitutes a transfer of more than 51% of the voting stock of the of Lessee or
Lessee's Guarantor, shall be deemed an assignment within the meaning and
provisions of this Article. In addition, any change in the status of the entity,
such as, but not limited to, the withdrawal of a general partner, shall be
deemed an assignment within the meaning of this Article.
d. Lessee shall reimburse Lessor for Lessor's reasonable costs and
attorney's fees incurred in connection with the processing and documentation of
any requested transfer. In addition, Lessee shall pay a transfer fee of $500.00
in the event the transfer is approved.
10.02 Effect of Transfer: No subletting or assignment, even with the consent of
Xxxxxx, shall relieve Lessee of its obligation to pay rent and to perform all
its other obligations under this Lease. Moreover, Lessee shall indemnify and
hold Lessor harmless, as provided in Section 11.03, for any acts or omission by
Xxxxxx's Affiliate. Each transferee, other than Lessor, shall assume all
obligations of Lessee under this Lease and shall be liable jointly and severally
with Lessee for the payment of all rent, and for the due performance of all of
Lessee's obligations under this Lease. No transfer shall be binding upon Lessor
unless any document memorializing the transfer is delivered to Lessor and, if
the transfer is an assignment or sublease, both the assignee/subtenant and
Lessee deliver to Lessor an executed document which contains (i) a covenant of
assumption by the assignee/subtenant, and (ii) an indemnification agreement by
Lessee, both satisfactory in substance and form to Lessor and consistent with
the requirements of this Article; provided that the failure of the
assignee/subtenant or Xxxxxx to execute the instrument of assumption shall not
release either from any obligation under this Lease. The acceptance by Lessor of
any payment due under this Lease from any other person shall not be deemed to be
a waiver by Lessor of any provision of this Lease or to be a consent to any
transfer. Consent by Lessor to one or more transfers shall not operate as a
waiver or estoppel to the future enforcement by Lessor of its rights under this
Lease.
ARTICLE 11 INSURANCE AND INDEMNITY
11.01 Liability Insurance - Lessee: Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease, a policy of Combined Single
Limit Bodily Injury and Property Damage insurance insuring Lessee and Lessor
against any liability arising out of the use, occupancy or maintenance of the
Premises. Such insurance shall be in an amount not less than $1,000,000.00 per
occurrence. The policy shall insure performance by Xxxxxx of the indemnity
provisions of this Article. The limits of said insurance shall not, however,
limit the liability of Lessee hereunder.
11.02 Lessor's Insurance: (Building insurance to be billed separately by Lessor
to Lessee). Lessor may, at its election, provide any or all of the following
types of insurance, with or without deductible and in amounts and coverages as
may be determined by Lessor in its discretion: "all risk" property insurance,
subject to standard exclusions, covering the Premises, and such other risks as
Lessor or its mortgagees may from time to time deem appropriate, and
comprehensive public liability coverage. Lessor shall not be required to carry
insurance of any kind on Lessee's property, including leasehold improvements,
trade fixtures, furnishings, equipment, plate glass, signs and all other items
of personal property, and shall not be obligated to repair or replace the
property should damage occur. All proceeds of insurance maintained by Lessor
upon the Premises shall be the property of Lessor, whether or not Lessor is
obligated to, or elects, to make any repairs. In the event there is a deductible
clause in any standard form policy insuring the Premises against fire, extended
coverage and other property insurance losses, then the amount deducted from the
coverage pursuant to such deductible clause shall be borne by Lessee. Any
insurance containing a deductible clause of $3,000 (per occurrence) for fire,
extended coverage and other property losses, shall not, by virtue of such
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deductible clause, be regarded as unsatisfactory. In the event Lessor assumes
supervision and control of the repair or restoration activity for the
improvements damaged or destroyed by reason of occurrences embraced by the
aforesaid standard form insurance policy, Lessor shall provide Lessee with
written notice of the actual cost of repair and restoration, up to the full
deductible amount, and Lessee shall pay to Lessor such sum within thirty (30)
days thereafter. Failure to pay such sum shall constitute a breach of the Lease
and subject Lessee to any rights or remedies of Lessor as provided in the Lease.
11.03 Waiver of Subrogation: Lessor and Lessee hereby waive any rights each may
have against the other on account of any loss or damage occasioned to Lessor or
Lessee, as the case may be, or to the Premises or its contents, and which may
arise out of or incident to the perils insured against under Section 11.02,
which perils occur in, on or about the Premises, whether due to the negligence
of Lessor or Lessee or their agents, contractors and/or invitees. The parties
shall obtain from their respective insurance companies insuring the property a
waiver of any right of subrogation which said insurance companies may have
against Lessor or Lessee as the case may be.
11.04 Policies: All insurance to be maintained by Lessee under this Lease shall
be procured from an insurance company or companies rated "A" or better in
"Best's Insurance Guide" and authorized to do business in the State of Nevada,
and Xxxxxx shall deliver to Lessor, prior to taking occupancy of the Premises,
copies of insurance binders required to be maintained by Lessee hereunder,
together with evidence of the payment of the premiums thereof. Insurance binders
shall name Lessor and all members thereof as "Additional Insured." The binders
evidencing such insurance shall provide that they shall not be canceled or
modified except after thirty (30) days prior written notice of intention to
modify or cancel has been given to Lessor and any encumbrancer named as
beneficiary thereunder. At lease ninety (90) days prior to the expiration date
of any policy to be maintained by Lessee hereunder, Lessee shall deliver to
Lessor a renewal policy or "binder" therefor.
11.05 Lessee's Indemnity: To the fullest extent permitted by law, Lessee shall
defend, indemnify and hold harmless Lessor, its agents and any and all
affiliates of Lessor, including, without limitation, its members, co-venturers,
corporations or other entities controlling, controlled by or under common
control with Lessor, from and against any and all claims or liabilities arising
either before or after the Commencement Date from Lessee's use or occupancy of
the Premises, the Building, or from the conduct of its business, or from any
activity, work or thing done, permitted or suffered by Lessee or its agents,
employees, invitees or licensees in or about the Premises, the Building, or from
any default in the performance of any obligation on Lessee's part to be
performed under this Lease, or from any act or negligence of Lessee or its
agents, employees, visitors, patrons, guests, invitees or licensees. In case
Lessor, its agent or affiliates are made a party to any litigation commenced by
or against Lessee (relating to Xxxxxx's use and occupancy of the Premises), then
Lessee shall protect and hold Lessor harmless and shall pay all costs, expenses
and attorneys' fees incurred or paid by Lessor in connection with the
litigation. Lessor may, at its option, require Lessee to assume Xxxxxx's defense
in any action covered by this Section through counsel satisfactory to Lessor.
11.06 Lessor's Non-Liability: Lessor shall not be liable to Lessee, its
employees, agents and invitees, and Lessee hereby waives all claims against
Lessor for loss of or damage to any property, or any injury to any person, or
loss or interruption of business or income, resulting from, but not limited to,
fire, explosion, falling plaster, steam, gas, electricity, 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, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building, unless Lessor, its agents,
invitees and/or employees cause such loss, damage or injury through their own
negligence or willful misconduct. Neither Lessor nor its agents shall be liable
for interference with light or other similar intangible interests. Lessee shall
immediately notify Lessor in case of fire or accident in the Premises, the
Building and of defects in any improvements or equipment.
ARTICLE 12 DAMAGE OR DESTRUCTION
12.01 Restoration:
a. If the Building of which the Premises are a part is damaged, Lessor
shall repair that damage as soon as reasonably possible, at its expense, unless:
(i) Lessor reasonably determines that the cost of repair would exceed ten
percent (10%) of the full replacement cost of the Building ("Replacement Cost")
and the damage is not covered by Lessor's fire and extended coverage insurance
(or by normal extended coverage policy should Lessor fail to carry that
insurance); or (ii) Lessor reasonably determines that the cost of repair would
exceed twenty-five percent (25%) of the Replacement Cost; or (iii) Lessor
reasonably determines that the cost of repair would exceed ten percent (10%) of
the Replacement Cost and the damage occurs during the final twelve (12) months
of the Initial Term, as it may have been extended. Should Lessor elect not to
repair the damage for one of the preceding reasons, Lessor shall so notify
Lessee in writing within sixty (60) days after the damage occurs and this Lease
shall terminate as of the date of that notice.
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b. Unless Lessor elects to terminate this Lease in accordance with
subsection "a" above, this Lease shall continue in effect for the remainder of
the Initial Term, as it may have been extended; provided that if the damage is
so extensive as to reasonably prevent Lessee's substantial use and enjoyment of
the Premises for more than six (6) months, then Lessee may elect to terminate
this Lease by written notice to Lessor within the sixty (60) day period stated
in subsection "a".
c. Commencing on the date of any damage to the Building, and ending on
the date the damage is repaired or this Lease is terminated, whichever occurs
first, the rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to the total floor area of the Premises.
d. Notwithstanding the provisions of subsections "a", "b" and "c" of
this Section, the cost of any repairs shall be borne by Lessee, and Lessee shall
not be entitled to rental abatement or termination rights if the damage is due
to the fault or neglect of Lessee or its employees, subtenants, invitees or
representatives. In addition, the provisions of this Section shall not be deemed
to require Lessor to repair any improvements or fixtures that Lessee is
obligated to repair or insure pursuant to any other provisions of this Lease.
Lessee will have liability for repairs unless Lessor, its agents, invitees
and/or employees cause such damage through their own negligence or willful
misconduct or by such act of God.
ARTICLE 13 EMINENT DOMAIN
13.01 Total or Partial Taking: If all or a material portion of the Premises is
taken by any lawful authority by exercise of the right of eminent domain, or
sold to prevent a taking, either Lessee or Lessor may terminate this Lease
effective as of the date possession is required to be surrendered to the
authority. In the event title to a portion of the Building, other than the
Premises, is taken or sold in lieu of taking, and if Lessor elects to restore
the Building in such a way as to alter the Premises materially, Lessor may
terminate this Lease, by written notice to Lessee, effective on the date of
vesting of title. In the event neither party has elected to terminate this Lease
as provided above, then Lessor shall promptly, after receipt of a sufficient
condemnation award, proceed to restore the Premises to substantially their
condition prior to the taking, and a proportionate allowance shall be made to
Lessee for the rent corresponding to the time during which, and to the part of
the Premises of which, Lessee is deprived on account of the taking and
restoration. In the event of a taking, Lessor shall be entitled to the entire
amount of the condemnation award without deduction for any estate or interest of
Xxxxxx; provided that nothing in this Section shall be deemed to give Lessor any
interest in, or prevent Lessee from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to Lessee
or for relocation recoverable from the taking authority.
13.02 Temporary Taking: No temporary taking of the Premises shall terminate this
Lease or give Lessee any right to abatement of rent, and any award specifically
attributable to a temporary taking of the Premises shall belong entirely to
Lessee. A temporary taking shall be deemed to be a taking of the use or
occupancy of the Premises for a period not to exceed ninety (90) days.
13.03 Taking of Parking Area: In the event there shall be a taking of the
Parking Area such that Lessor can no longer provide sufficient parking to comply
with this lease, Lessor may substitute reasonably equivalent parking in a
location reasonably close to the Building; provided that if Lessor fails to make
that substitution within ninety (90) days following the taking and if the taking
materially impairs Lessee's use and enjoyment of the Premise, Lessee may, at its
option, terminate this Lease by written notice to Lessor, and such termination
shall be effective thirty (30) days after written notice of termination is given
by Xxxxxx. If this Lease is not so terminated by Xxxxxx within thirty (30) days
after this taking, there shall be no abatement of rent and this Lease shall
continue in effect.
ARTICLE 14 SUBORDINATION; ESTOPPEL CERTIFICATE
14.01 Subordination:
a. This Lease shall be subordinate to all ground or underlying leases,
mortgages, deeds of trust and conditions, covenants and restrictions, reciprocal
easements and rights of way, if any, which may hereafter affect the Premises,
and to all renewals, modifications, consolidations, replacements and extensions
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thereof; provided, that so long as Lessee is not in default under this Lease,
this Lease shall not be terminated or Xxxxxx's quiet enjoyment of the Premises
disturbed in the event of termination of any such ground or underlying lease, or
the foreclosure of any such mortgage or deed of trust, to which Lessee has
subordinated this Lease pursuant to this Section. In the event of a termination
or foreclosure, Lessee shall become a tenant of and attorney to the
successor-in-interest to Xxxxxx upon the same terms and conditions as are
contained in this Lease, and shall execute any instrument reasonably required by
Xxxxxx's successor for that purpose. Lessee shall also, upon written request of
Lessor, execute and deliver all instruments as may be required from time to time
to subordinate the rights of Lessee under this Lease to any ground or underlying
lease or to the lien of any mortgage or deed of trust, or if requested by
Lessor, to subordinate, in whole or in part, any ground or underlying lease or
the lien of any mortgage or deed of trust to this Lease.
b. Failure of Lessee to execute any statements or instruments necessary
or desirable to effectuate the provisions of this Article within ten (10) days
after written request by Lessor, shall constitute a default under this Lease. In
that event, Lessor, in addition to any other rights or remedies it might have,
shall have the right, by written notice to Lessee, to terminate this Lease as of
a date not less than twenty (20) days after the date of Xxxxxx's notice.
Lessor's election to terminate shall not relieve Lessee of any liability for its
default.
14.02 Estoppel Certificate:
a. Lessee shall, at any time upon not less than twenty (20) days' prior
written notice from Lessor, execute, acknowledge and deliver to Lessor, in any
form that Lessor may reasonably require, a statement, in writing (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of the modification and certifying that this Lease is
unmodified and in full force and effect) and the dates to which the rental,
additional rent and other charges have been paid in advance, if any, and (ii)
acknowledging that, to Xxxxxx's knowledge, there are no uncured defaults on the
part of Lessor, or specifying each default if any are claimed, and (iii) setting
forth all further information that Lessor may reasonably require. Xxxxxx's
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the Building.
b. Xxxxxx's failure to deliver any estoppel statement within the
provided time shall be conclusive upon Lessee that (i) this Lease is in full
force and effect without modification except as may be represented by Lessor,
(ii) there are no uncured defaults in Lessor's performance, and (iii) not more
than one month's rental has been paid in advance.
ARTICLE 15 DEFAULTS AND REMEDIES
15.01 Xxxxxx's Defaults: In addition to any other event of default set forth in
this Lease, the occurrence of any one or more of the following events shall
constitute a default by Lessee:
a. The abandonment of the Premises by Xxxxxx. Abandonment is defined to
include, but not limited to, any absence by Lessee from the Premises for ten
(10) days or longer.
b. The failure by Lessee to make any payment of rent or additional rent
required to be made by Xxxxxx, as and when due, where the failure continues for
a period of ten (10) days after the date such payment was due. For purposes of
these default and remedies provisions, the term "additional rent" shall be
deemed to include all amounts of any type whatsoever, other than Base Rent, to
be paid by Lessee pursuant to the terms of this Lease.
c. Assignment, sublease, encumbrance or other transfer of the Lease by
Xxxxxx, either voluntarily or by operation of law, whether by judgment,
execution transfer by intestacy or testacy, or other means, without the prior
written consent of Xxxxxx.
d. The discovery by Lessor that any financial statement provided by
Xxxxxx, or by any affiliate, successor or guarantor of Lessee was materially
false or misleading.
e. The failure or inability by Xxxxxx to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Xxxxxx, other than as specified in any other subsection of this
Section, where the failure continues for a period of thirty (30) days after
written notice from Lessor to Lessee. However, if the nature of the failure is
such that more than thirty (30) days are reasonably required for its cure, then
Lessee shall not be deemed to be in default if Lessee commences the cure within
thirty (30) days and thereafter diligently pursues the cure to completion in a
time period not to exceed thirty (30) days.
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f. (i) The making by Lessee of any general assignment for the benefit
of creditors; (ii) the filing by or against Lessee of a petition to have Lessee
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Lessee,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Xxxxxx's assets
located at the Premises or of Lessee's interest in this Lease, if possession is
not restored to Lessee within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease where the seizure is not
discharged within thirty (30) days; or (v) Lessee's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Lessor shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Lessor, nor
shall there be any presumption attributable to Lessor of Xxxxxx's insolvency. In
the event that any provision of this subsection is contrary to applicable law,
the provision shall be of no force or effect.
15.02 Lessor's Remedies: On the occurrence of any default by Xxxxxx, Lessor may,
at any time thereafter, with or without notice or demand and without limiting
Lessor in the exercise of any right or remedy which Lessor may have:
a. Terminate Xxxxxx's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Xxxxxx shall immediately
surrender possession of the Premises to Lessor. In such event, Lessor shall be
entitled to recover from Lessee all damages incurred by Lessor by reason of
Xxxxxx's default, including (i) the worth at the time of the award of the unpaid
Base Rent, additional rent and other charges which had been earned at the time
of the termination; (ii) the worth at the time of the award of the amount by
which the unpaid Base Rent, additional rent and other charges which would have
been earned after termination until the time of the award exceeds the amount of
such rental loss that Lessor proves could not have been reasonably avoided;
(iii) the worth at the time of the award of the amount by which the unpaid Base
Rent, additional rent and other charges which would have been paid for by the
balance of the term after the time of award exceeds the amount of such rental
loss that Lessor proves could not have been reasonably avoided; and (iv) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by Xxxxxx's failure to perform its obligations under the Lease or which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses incurred by Lessor in maintaining or
preserving the Premises after such default, the cost of recovering possession of
the Premises, expenses of reletting, including necessary renovation or
alteration of the Premises, Lessor's reasonable attorneys' fees incurred in
connection therewith, and any real estate commission paid or payable. As used in
subparts "(i)" and "(ii)" above, the "worth at the time of the award" is
computed by allowing interest on unpaid amounts at the rate of fifteen percent
(15%) per annum, or such lesser amount as may be then the maximum lawful rate.
As used in subpart "(iii)" above, the "worth at the time of the award" is
computing by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award, plus one percent (1%). If Lessee
shall have abandoned the Premises, Lessor shall have the option of (i) retaking
possession of the Premises and recovering from Lessee the amount specified in
this Section 15.02a, or (ii) proceeding under Section 15.02b.
b. Maintain Xxxxxx's right to possession, in which case this Lease
shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event, Lessor shall be entitled to enforce all of Xxxxxx's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
c. Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state in which the Property is located.
15.03 Repayment of "Free" Rent: If this Lease provides for a postponement of any
monthly rental payments, a period of "free" rent, or other rent concession, such
postponed rent or "free" rent is called the "Abated Rent". Lessee shall be
credited with having paid all of the Abated Rent on the expiration of the Lease
Term only if Xxxxxx has fully, faithfully and punctually performed all of
Xxxxxx's obligations hereunder, including the payment of all rent (other than
Abated Rent) and all other monetary obligations and the surrender of the
property in the physical condition required by this Lease. Lessee acknowledges
that its right to receive credit for the Abated Rent is absolutely conditioned
upon Xxxxxx's full, faithful and punctual performance of its obligations under
this Lease. If Lessee defaults and does not cure within any applicable grace
period, the Abated Rent shall immediately become due and payable in full and
this Lease shall be enforced as if there were no such rent abatement or other
rent concession. In such case, Abated Rent shall be calculated based on the full
initial rent payable under this Lease.
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15.04 Cumulative Remedies: Lessor's exercise of any right or remedy shall not
prevent it from exercising any other right or remedy.
15.05 Late Payments: Any rent due under this Lease that is not paid to Lessor
within ten (10) days of the date when due shall bear interest fifteen percent
(15%) per annum from the date due until fully paid. The payment of interest
shall not cure any default by Lessee under this Lease. In addition, Xxxxxx
acknowledges that the late payment by Lessee to Lessor, of rent, will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult and impractical to ascertain. Those costs may
include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Lessor by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any
rent due from Lessee shall not be received by Lessor or Lessor's designee within
ten (10) days after the date due, then Lessee shall pay to Lessor, in addition
to the interest provided above, a late charge in the amount of ten percent (10%)
of each delinquent payment. Acceptance of a late charge by Lessor shall not
constitute a waiver of Xxxxxx's default with respect to the overdue amount, nor
shall it prevent Lessor from exercising any of its other rights and remedies.
15.06 Right of Lessor to Perform: All covenants and agreements to be performed
by Lessee under this Lease shall be performed at Xxxxxx's sole cost and expense
and without any abatement of rent or right of set off. If Xxxxxx fails to pay
any sum of money, other than rent, or fails to perform any other act on its part
to be performed under this Lease, and the failure continues beyond any
applicable grace period set forth in Section 15.01, then in addition to any
other available remedies, Lessor may, at its election, make the payment or
perform the other act on Xxxxxx's part. Xxxxxx's election to make the payment or
perform the act on Xxxxxx's part shall not give rise to any responsibility of
Lessor to continue making the same or similar payments or performing the same or
similar acts. Lessee shall, promptly upon demand by Xxxxxx, reimburse Lessor for
all sums paid by Xxxxxx and all necessary incidental costs, together with
interest at the maximum rate permitted by law from the date of the payment by
Xxxxxx. Lessor shall have the same rights and remedies if Xxxxxx fails to pay
those amounts as Lessor would have in the event of a default by Xxxxxx in the
payment of rent.
15.07 Default by Lessor: Lessor shall not be deemed to be in default in the
performance of any obligation under this Lease unless, and until, it has failed
to perform the obligation within thirty (30) days after written notice by Lessee
to Lessor specifying in reasonable detail the nature and extent of the failure;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for its performance, then Lessor shall not be
deemed to be in default if it commences performance within the thirty (30) day
period and thereafter diligently pursues the cure to completion.
15.08 Expenses and Legal Fees: Lessee shall reimburse Lessor upon demand, for
any costs or expenses incurred by Lessor in connection with any breach or
default of Lessee under this Lease, whether or not suit is commenced or judgment
entered. Such costs shall include legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise. Furthermore, if
any action for breach of, or to enforce, the provisions of this Lease is
commenced, the court in such action shall award to the party in whose favor a
judgment is entered, a reasonable sum as attorneys' fees and costs. Such
attorneys' fees and costs shall be paid by the losing party in such action.
Lessee shall also indemnify Lessor against and hold lessor harmless from all
costs, expenses, demands and liability incurred by Lessor if Lessor becomes or
is made a party to any claim or action (a) instituted by Xxxxxx, or by any third
party if due to negligence by Lessee, or by or against any person holding any
interest under or using the Premises by license of or agreement with Lessee; (b)
for foreclosure for any lien for labor or material furnished to or for Lessee or
such other person; (c) otherwise arising out of or resulting from any negligent
act by Lessee or such other person; or (d) necessary to protect Xxxxxx's
interest under this Lease in a bankruptcy proceeding, or other proceeding under
Title 11 of the United States Code, as amended. Lessee shall defend Lessor
against any such claim or action at Xxxxxx's expense with counsel reasonably
acceptable to lessor or, at Xxxxxx's election, Xxxxxx shall reimburse Lessor for
any legal fees or costs incurred by Xxxxxx in any such claim or action.
ARTICLE 16 END OF TERM
16.01 Holding Over: This Lease shall terminate without further notice upon the
expiration of the Term (herein "Expiration Date"), and any holding over by
Lessee after the Expiration Date shall not constitute a renewal or extension of
this Lease, or give Lessee any rights under this Lease, except when in writing,
signed by both parties. If Lessee holds over for any period after the Expiration
(or earlier termination) of the Term, Lessor may, at its option, treat Lessee as
a tenant at sufferance only, commencing on the first (1st) day following the
termination of this Lease and subject to all of the terms of this Lease, except
that the monthly rental shall be one hundred fifty percent (150%) of the greater
16
of (a) the total monthly rental for the month immediately preceding the date of
termination, or (b) the then currently scheduled rent for comparable space in
the Building. If Xxxxxx fails to surrender the Premises upon the expiration of
this Lease despite demand to do so by Xxxxxx, Xxxxxx shall indemnify and hold
Lessor harmless from all loss or liability, including, without limitation, any
claims made by any succeeding tenant relating to such failure to surrender.
Acceptance by Lessor of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to, and do not affect, Xxxxxx's right
of re-entry or any other rights of Lessor under this Lease or at law.
16.02 Merger on Termination: The voluntary or other surrender of this Lease by
Xxxxxx, or mutual termination of this Lease, shall terminate any or all existing
subleases unless Lessor, at its option, elects in writing to treat the surrender
or termination as an assignment to it of any or all subleases affecting the
Premises.
16.03 Surrender of Premises: Removal of Property: Upon the Expiration Date, or
upon any earlier termination of this Lease, Lessee shall quit and surrender
possession of the Premises to Lessor in as good order, condition and repair as
when received or as hereafter may be improved by Lessor or Lessee, reasonable
wear and tear and repairs, which are Lessor's obligation excepted, and shall
without expense to Lessor, remove or cause to be removed from the Premises all
personal property and debris, except for any items that Lessor may by written
authorization allow to remain. Lessee shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching and filling
of holes and repair of structural damage, provided that Lessor may instead elect
to repair any structural damage at Lessee's expense. If Lessee shall fail to
comply with the provisions of this Section, Lessor may effect the removal and/or
make any repairs, and the cost to Lessor shall be additional rent payable by
Lessee upon demand. If requested by Xxxxxx, Xxxxxx shall execute, acknowledge
and deliver to Lessor an instrument in writing releasing and quitclaiming to
Lessor, all right, title and interest of Xxxxxx in the Premises.
16.04 Termination; Advance Payments: Upon termination of this Lease under
Article 12 (Damage or Destruction), Article 13 (Eminent Domain) or any other
termination not resulting from Xxxxxx's default, and after Lessee has vacated
the Premises in the manner required by this Lease, and equitable adjustment
shall be made concerning advance rent, and any other advance payments made by
Lessee or Lessor, and Lessor shall refund the unused portion of the security
deposit to Lessee or Xxxxxx's successor.
ARTICLE 17 PAYMENTS AND NOTICES
All sums payable by Lessee to Lessor shall be paid, without deduction
or offset, in lawful money of the United States to Lessor at its address set
forth in Section 1.08 of the Basic Lease Terms, or at any other place as Lessor
may designate in writing. Unless this Lease expressly provides otherwise, as for
example in the payment of rent pursuant to Section 4.01, all payments shall be
due and payable within five (5) days after demand. All payments requiring
proration shall be prorated on the basis of a thirty (30) day month and a three
hundred sixty (360) day year. Any notice, election, demand, consent, approval or
other communication to be given, or other document to be delivered by either
party to the other, may be delivered in person to an officer or duly authorized
representative of the other party, or may be deposited in the United States
mail, duly registered or certified, postage prepaid, return receipt requested,
and addressed to the other party at the address set forth in Section 1.08 of the
Basic Lease Terms, or if to Lessee, at that address, or from and after the
Commencement Date, at the Premises (whether or not Xxxxxx has departed from,
abandoned or vacated the Premises). Either party may, by written notice to the
other, served in the manner provided in this Article, designate a different
address. If any notice or other document is sent by mail, it shall be deemed
served or delivered upon actual receipt or refusal thereof. If more than one
Lessee is named under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them.
ARTICLE 18 LIMITATION OF LIABILITY
In consideration of the benefits accruing hereunder, Xxxxxx agrees that
in the event of any actual or alleged failure, breach or default of this Lease
by Lessor: (i) the sole and exclusive remedy shall be against Lessor and its
assets - Lessor's liability shall be limited to its interest in the Center; (ii)
no member of Lessor shall be sued or named as a party in any suit or action
(except as may be necessary to secure jurisdiction of the partnership); (iii) no
service of process shall be made against any member of Lessor (except as may be
necessary to secure jurisdiction of the partnership; (iv) no member of Lessor
shall be required to answer or otherwise plead to any service of process; (v) no
judgment may be taken against any member of Lessor; (vi) any judgment taken
against any member of Lessor may be vacated and set aside at any time without
hearing; (vii) no writ of execution will ever be levied against the assets of
any member of Lessor; and (viii) these covenants and agreements are enforceable
both by Xxxxxx and also by any member of Lessor. Xxxxxx agrees that each of the
foregoing provisions shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by statute or at common law.
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ARTICLE 19 BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease, the
firm(s), if any, whose name(s) is (are) stated Section 1.09 of the Basic Lease
Terms, and agree that the party designated in Section 1.09 shall be solely
responsible for the payment of brokerage commissions to those broker(s), and
that the other party shall have no responsibility for the commissions unless
otherwise provided in this Lease. Lessee warrants that it has had no dealings
with any other real estate broker or agent in connection with the negotiation of
this Lease, and Xxxxxx agrees to indemnify and hold Lessor harmless from any
cost, expense or liability (including reasonable attorneys' fees) for any
compensation, commissions or charges claimed by any other real estate broker or
agent employed or claiming to represent or to have been employed by Lessee in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the Expiration or earlier termination of this Lease. If Xxxxxx fails to
take possession of the Premises or if this Lease otherwise terminates prior to
the Expiration Date, Lessor shall be entitled to recover the unamortized portion
of any brokerage commission funded by Lessor in addition to any other damages to
which Lessor may be entitled.
ARTICLE 20 TRANSFER OF XXXXXX'S INTEREST
In the event of any transfer of Xxxxxx's interest in the Premises,
including a so-called sale-leaseback, the transferor shall be automatically
relieved of all obligations on the part of Lessor accruing under this Lease from
and after the date of the transfer, provided that any funds held by the
transferor, in which Lessee has an interest, shall be turned over, subject to
that interest, to the transferee, and Xxxxxx is notified of the transfer as
required by law. No holder of a mortgage and/or deed of trust to which this
Lease is, or may be, subordinate, and no landlord under a so-called
sale-leaseback shall be responsible in connection with the security deposit,
unless the mortgagee or holder of the deed of trust or the landlord actually
receives the security deposit. It is intended that the covenants and obligations
contained in this Lease on the part of the Lessor shall, subject to the
foregoing, be binding on Lessor, its successors and assigns, only during, and in
respect to, their respective successive periods of ownership.
ARTICLE 21 INTERPRETATION
21.01 Gender and Number: Whenever the context of this Lease requires, the words
"Lessor" and "Lessee" shall include the plural and well as the singular, and
words used in neuter, masculine or feminine genders shall include the others.
21.02 Headings: The captions and headings of the Articles and Sections of this
Lease are for convenience only, and are not a part of this Lease and shall have
no effect upon its construction or interpretation.
21.03 Joint and Several Liability: If there is more than one Lessee, the
obligations imposed upon Lessee shall be joint and several, and the act of, or
notice from, or notice or refund to, or the signature of, any one or more of
them shall be binding on all of them with respect to the tenancy of this Lease,
including, but not limited to, any renewal, extension, termination, or
modification of this Lease.
21.04 Successors: Subject to Articles 10 and 20, all rights and liabilities
given to or imposed upon Xxxxxx and Xxxxxx shall extend to and bind their
respective heirs, executors, administrators, successors and assigns. Nothing
contained in this Section is intended, or shall be construed, to grant to any
person other than Xxxxxx and Xxxxxx and their successors and assigns any rights
or remedies under this Lease.
21.05 Time of Essence: Time is of the essence with respect to the performance of
every provision of this Lease, in which time of performance is a factor.
21.06 Severability: If any term or provision of this Lease, [the deletion of
which would not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely affected],
shall be held invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
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21.07 Entire Agreement: The parties hereto declare and represent that no
promise, inducement or agreement not herein expressed has been made to them,
that this document embodies and sets forth the entire agreement and
understanding between them relating to the subject matter hereof, and that it
merges and supersedes all prior discussions, agreements, understandings,
representations, conditions, warranties and covenants between them on said
subject matter.
21.08 Covenants and Conditions: All of the provisions of this Lease shall be
construed to be conditions as well as covenants as though the words specifically
expressing or imparting covenants and conditions were used in each separate
provision.
21.09 Counterparts: This Lease may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
21.10 All indemnities set forth in this Lease shall survive the expiration or
earlier termination of this Lease.
21.11 Attachments: In addition to all of the exhibits referred to above,
attached are the following documents which also constitute a part of this Lease:
Utilities Information Form and Center Signage Guidelines.
LESSOR: XXXXXXX AIRPORT CENTER PHASE III, LLC
By: Its Members
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By:____________________________
Xxxxxxx Xxxxxx, Second Vice President, Real Estate
NEVADA REAL ESTATE GROUP, LLC, a Nevada limited liability company
By:____________________________
Xxxxxxxx X. Xxxxxx, Manager
By:____________________________
Xxx X. Xxxxxx, Manager
LESSEE: CASINOVATIONS INCORPORATED
By:____________________________________________________
Xxxxxx X. Xxxx, President and Chief Executive Officer
By: ___________________________________________________
Xxxxxx Xxxxx, Secretary
If Lessee shall be a corporation, then authorized officers must sign on behalf
of the corporation. The Lease must be executed by the President or Vice
President and the Secretary or Secretary/Treasurer, unless the By-Laws or a
Resolution of the Board of Directors shall otherwise provide, in which event,
the By-Laws, or a certified copy of the Resolution, as the case may be, must be
furnished. Also, the appropriate corporate seal must be affixed.
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RIDER TO LEASE
This Rider to Lease (this "Rider to Lease") is to be attached to and made a part
of that certain Lease Agreement dated of even date herewith (the "Phase III
Lease") by and between XXXXXXX AIRPORT CENTER PHASE III, LLC, a Delaware limited
liability company ("Xxxxxxx III"), and CASINOVATIONS INCORPORATED, a Nevada
corporation, formerly a Washington corporation ("Lessee").
FACTURAL BACKGROUND
-------------------
A. Lessee is currently the tenant under that certain Lease
(Freestanding Building) dated October 7, 1998 (the "Phase I Lease") with Xxxxxxx
Airport Center, LLC, a Delaware limited company ("Xxxxxxx I") pursuant to which
Lessee is leasing certain premises designated as Building "A" comprising
approximately 19,160 square feet in Phase I of the Xxxxxxx Airport Center (the
"Phase I Premises"). The Phase I Lease provides that Lessee may assign the Lease
with the consent of Xxxxxxx X, which consent will not be unreasonably withheld.
B. Pursuant to the certain Absolute Assignment of Leases and Rents
dated as of August 19, 1999, Xxxxxxx X has assigned the Phase I Lease to Canada
Life Assurance Company, a corporation organized and existing under the laws of
the Dominion of Canada ("Canada Life").
C. Lessee desires to move its operations to a different building owned
by Xxxxxxx XXX Xxxxxx and located in Phase III of the Xxxxxxx Airport Center.
X. Xxxxxx, Xxxxxxx I, and Xxxxxxx XXX desire that the Phase I Lease
remain in full force and effect until the Effective Date (as defined below) of
an Assignment (as defined below) of the Phase I Lease.
AGREEMENT
---------
1. DEFINITIONS. As used herein, "Assignment" means an assignment of
Xxxxxx's rights and obligations under the Phase I Lease to a new tenant, or a
new lease of the Phase I Premises to a new tenant, executed by Xxxxxxx X and
such new tenant, and approved by Canada Life. "Effective Date" means the date
upon which the Assignment becomes effective.
2. OCCUPANCY OF PHASE I. Lessee shall remain in occupancy of the Phase
I Premises until the Effective Date of an Assignment.
3. PHASE I RENT.
(a) Lessee shall pay the rent required to be paid to Xxxxxxx I under
the Phase I Lease until the earlier of: (i) the Effective Date of an Assignment;
or (ii) fifteen (15) months AFTER SEPTEMBER 1, 1999.
(b) Commencing fifteen (15) months AFTER SEPTEMBER 1, 1999, if the
Effective Date of an Assignment shall not have occurred, and no default by
Lessee under the Phase III Lease, or event which with notice or the passage of
time would be a default by Lessee under the Phase III Lease, shall have
occurred, then Xxxxxxx XXX shall pay and perform all obligations of Lessee to
Xxxxxxx I under the Phase I Lease, accruing from and after such date and
continuing until the Effective Date of an Assignment.
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4. OFFSET AGAINST PHASE III RENT. If: (a) Xxxxxxx XXX is required to
pay rent to Xxxxxxx I under Section 3 of this Rider to Lease; and (b) Xxxxxxx
XXX fails to pay such rent to Xxxxxxx I: and (c) Lessee pays such rent to
Xxxxxxx I: and (d) no default by Lessee under the Phase III LEASE, SHALL have
occurred; then Lessee may offset any such rent payable and actually paid to
Xxxxxxx I against the next accruing installments of base rent payable to Xxxxxxx
XXX under the Phase III Lease.
5. DEFAULT: Lessee shall be in default under the Phase III Lease if any
default occurs under the Phase I Lease, unless such default is the result of a
breach by Xxxxxxx XXX of its obligation under this Rider to Lease.
6. BROKER COOPERATION: Lessee has engaged Nevada Brokers, Inc. to
market the Phase I Premises for Assignment. Lessee shall cooperate in the
execution of all documents and performance of any other acts reasonably
requested by Xxxxxxx X or Xxxxxxx XXX, at no expense to Lessee, in connection
with the Phase I Lease and Assignment of the Phase I Lease.
LESSOR: LESSEE:
XXXXXXX AIRPORT CENTER CASINOVATIONS INCORPORATED,
PHASE III, LLC, a Delaware limited A NEVADA CORPORATION, FORMERLY
liability company A Washington corporation
By: Its Members By:___________________________
The Guardian Life Insurance Company Title:________________________
Of America
By:___________________________
Its:___________________________
Nevada Real Estate Group, LLC, a Nevada
Limited liability company
By: __________________________
Xxxxxxxx X. Xxxxxx, Manager
By:__________________________
Xxx X. Xxxxxx, Manager
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