LEASE AGREEMENT
Xxxxxx Xxxx Xxxxxxx, hereinafter "Landlord", agrees to lease to Red Rock
Collection Incorporated, an Arizona corporation, hereafter "Tenant", and Tenant
agrees to lease from Landlord, the real property situated in Maricopa County,
Arizona, more particularly described in Exhibit "A" attached hereto located at
0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, hereafter "the premises", upon the
following terms and conditions:
1. TERM: The term of this Lease shall commence on the 29th day of December,
1995 and shall terminate on the 31st day of December, 1996. Tenant shall
have four options to extend the term, each for a successive additional one
calendar year period, by giving written notice thereof to Landlord at least
thirty (30) days in advance of the commencement of such extended term.
2. POSSESSION: Tenant shall take possession of the premises on December 29,
1995. Tenant shall be bound by all provisions of this Lese, including the
payment of rent, at all times Tenant is in possession of the premises.
3. RENT: Tenant agrees to pay Landlord as base rent FOUR THOUSAND DOLLARS
($4,000) per month for each month of the Lease. Rent is due on or before the
last day of each month and is payable at Landlord's offices or at such other
place as Landlord may designate in writing. Rent shall be prorated on the
basis of a thirty (30) day month for each partial month during the term of
this Lease or during which Tenant is in possession of the premises. All
other monetary obligations of Tenant under this Lease shall constitute
additional rent and shall be due as specified in each instance.
4. TAXES AND ASSESSMENTS: Tenant agrees to pay as additional rent during each
lese year or partial lease year of the term of this Lease, all real estate
and assessments levied and assessed for any such year upon the premises and
the underlying realty. For any partial lease year of the term hereof such
amount shall be pro rated on a daily basis. The amount to be paid by Tenant
shall be paid to Landlord at least five (5) days before the due date
thereof.
Tenant shall pay to Landlord, in addition to and along with the rental
otherwise payable hereunder, any excise, transaction, sales or privilege tax
not or hereafter imposed by any government or agency upon Landlord and
attributed to or measured by rent or prorations payable by Tenant.
5. OPERATING EXPENSES: The operating expenses of the premises shall be paid by
Tenant. The operating expenses of the Project include without limitations:
property taxes, special assessments, utilities, maintenance, supplies,
management fees, janitorial services, trash removal, fire and liability
insurance premiums, repairs and all other costs which can properly be
considered expenses of operating and maintaining the building and
surrounding property of which the premises are a part, including necessary
capital expenditures. Without limiting the generality of the foregoing,
Tenant shall at its own
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good and safe condition, including plate glass, heating and air conditioning
units, of, exterior walls, electrical wiring, plumbing and any other systems
or equipment upon the premises. Tenant will promptly pay when due all
electric, water, gas and other similar charges directly attributable to the
premises.
6. USE OF PREMISES: Tenant shall use the premises for the sole purpose of
office/warehouse use and shall not us or allow the premises to be used for
any illegal or objectionable purpose. Tenant shall at its own cost and
expense obtain all licenses and permits necessary for such use. Tenant shall
use its best efforts to comply with all governmental laws, ordinances and
regulations applicable to the use of the demised remises, and shall use its
beset efforts to promptly comply with all governmental orders and directives
for the correction, prevention and abatement of nuisances in or upon, or
connected with, the use of the demised premises all at Tenant's sole
expense. Tenant shall not operate its business in such manner so as to
constitute an annoyance to other tenants and shall endeavor to control its
customers so as to maintain an orderly premises. Tenant shall not do or
permit anything to be done which would increase the cost of any fire,
extended coverage or any other insurance covering the premises.
7. REPAIR: Tenant shall at its own expense keep the premises in good condition
and repair.
8. ASSIGNMENT: Tenant shall not assign or hypothecate this Lease, or enter into
a sublease relating to all or any portion of the premises, without
Landlord's prior written consent, which consent may be withheld in
Landlord's sole discretion. Any such assignment or subletting without
consent shall be void. Landlord's approval of any such assignment or
sublease shall not release Tenant from its obligations under this Lese or
constitute assent to any subsequent assignment or sublease.
9. RETURN OF PREMISES: Upon the termination of this Lease, Tenant shall return
the premises to Landlord in its original condition, ordinary wear and tear
and alterations or improvements not designated to be removed excepted.
10. INSURANCE: Tenant, during the term hereof, at its own expense, will provide
and keep in force for the benefit of Landlord and Tenant, as their
respective interests may appear, fire, comprehensive, plate glass and
general and public liability insurance protection with respect to the
premises and for claims for personal injury or death or property damage in
and about the premises with limits not less than $1,000,000 in the event of
bodily injury or death of any number of persons in any one accident and
limits of not less than $1,000,000 for damage to property, and shall provide
Landlord with a copy of the policy upon Landlord's written request. Tenant
shall name Landlord as an additional insured under the policy and provide
Landlord a certificate of insurance. The insurance shall be primary
insurance and shall provide that any right of subrogation against Landlord
is waived. The policy shall further provide that non act or omission by
Tenant shall impair the rights of the insured to receive the proceeds of the
policy and that the policy shall not be cancelled except upon thirty (30)
days prior written notice to each named insured.
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11. INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord harmless
from all actions, claims, demands, penalties or liabilities arising out of
events occurring in or about the premises or caused in whole or in part by
Tenant or Tenant's agents, servants, employees or invites, except for
matters attributable to Landlord's willful misconduct or gross negligence.
This indemnification shall include all costs and expenses and reasonable
attorney's fees which Landlord may expend in connection with any of the
foregoing.
12. LIMITATION OF LIABILITY: Landlord shall not be liable to Tenant for damages
nor shall Tenant be entitled to a reduction in rent by reason of any of the
following: (i) the Landlord's failure to provide utilities or services when
such failure is caused by accident, repairs, strikes, disturbances or any
other cause beyond the reasonable control of Landlord (ii) disruption to
Tenant's business caused by Landlords' repairs or improvements to the
project (iii) damages to the premises or Tenant's property unless caused by
Landlord's gross negligence or wilful misconduct.
13. NOTICE: All notices or demands under this Lease or required to be given by
law are to be made in writing by registered or certified mail, return
receipt requested, and are deemed given when deposited in the United States
mail postage prepaid and addressed to Landlord or Tenant at the addresses
set forth on the signature page of this Lease. Each party shall have the
right, from time to time, to designate a different address to which notices
and demands are to be sent by giving notice in the manner provided for above
except that Landlord may in any event use the premises as Tenant's address
for notice purposes.
14. ENTRY BY LANDLORD: Landlord shall have the right to enter the premises at
all reasonable times for the purposes of inspecting, repairing or
maintaining the premises, determining whether the terms of the Lease are
being complied with, posting such notices as Landlord deems advisable for
its protection, and showing the premises to prospective tenants, purchaser
or lenders. Landlord may at any time within ninety (90) days prior to the
expiration of this lease place upon the premises any customary "For Lease"
signs, and reasonably permit persons desiring to lease the same to inspect
the premises.
15. DEFAULT & REMEDIES:
(a) The occurrence of one or more of the following events shall constitute a
default of this Lease by Tenant:
(1) The abandonment of the premises by Tenant or absence of Tenant from
premises for thirty (30) days or longer while failing to comply with
any provision of this lease.
(2) The failure by Tenant to make any payment of rent or other payment
required to be made by Tenant under this Lease when due.
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(3) The failure by Tenant to observe or perform any provision of this
Lease other than the payment of money where such failure continues
for a period of thirty (30) days after written notice thereof from
Landlord to Tenant. This notice shall be in lieu of, and not in
addition to, any notice required under Arizona law.
(4) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition
under the United States Bankruptcy Code unless dismissed within
thirty (30) days; (iii) the appointment of a receiver or trustee to
take possession of substantially all of Tenant's assets located at
the premises or of this Lease where possession is not restored to
Tenant within thirty (30) days; (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets
located on the premises where such seizure is not discharged within
thirty (30) days.
(b) In the event of any default by Tenant as defined above, Landlord may
exercise one or more of the following remedies in addition to any remedy
provided for at law or equity:
(1) With or without notice or process of law and using such force as
Landlord may deem reasonably necessary under the circumstances, and
without terminating this Lease or relieving Tenant of any obligation
hereunder, Landlord may re-enter and take possession of the premises
and of all property located therein. Under no circumstances shall
Landlord be liable in damages or otherwise by reason of the exercise
by Landlord of any such re-entry or eviction, or by reason of the
exercise by Landlord of any other remedy provided in this
subparagraph (b).
(2) In the event that Landlord recovers possession of the premises
without termination of this Lease, Tenant shall pay to Landlord all
sums due under this Leas on the dates due as if Tenant remained in
possession of the premises.
(3) Landlord may recover from Tenant, and Tenant shall pay upon demand,
all expenses incurred in recovering possession of the premises,
repairing and altering the premises for reletting, and attempting to
relet the premises, including commissions and attorneys fees.
(c) The remedies described in subparagraph (b) are cumulative and in
addition to any remedy at law or in equity. The filing of an action by
Landlord against Tenant requesting under one or more remedies shall not
be deemed an election of that remedy or remedies to the exclusion of all
others.
(d) Landlord shall be under no obligation to observe or perform any duty
imposed by this Lease which accrues after the date of any default by
Tenant.
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(e) The failure or delay of Landlord in exercising any right or remedy shall
not be construed as a waiver of any such right or remedy or of any
default by Tenant.
16. ATTORNEYS FEES: In the event any action or proceeding is brought by either
party against the other under this Lease, prevailing party shall be entitled
to recover from the other party its reasonable costs, expenses and
attorneys' fees.
17. WAIVER: The waiver by Landlord of Tenant's breach by any provision of this
Lease shall not constitute a continuing waiver of any subsequent breach by
Tenant of the same or other provision.
18. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails
to perform is obligations under this Lease within thirty (30) days after
written notice by Tenant to Landlord specifying the obligations which the
Landlord has failed to perform. If an obligation is such that it cannot
reasonably be completed within such thirty (30) day period, Landlord shall
not be in default if Landlord commences performance within thirty (30) days
and thereafter diligently prosecutes the same to completion.
19. SURRENDER OF PREMISES: The surrender of this lease by Tenant to Landlord
shall not work a merger and shall, at the option of Landlord, operate as an
assignment to it of any subleases affecting the premises.
20. ESTOPPEL CERTIFICATE:
(a) Tenant shall upon not less than five (5) days prior written notice from
Landlord execute, acknowledge and deliver to Landlord a statement in
writing (i) certifying that this Lease is unmodified and in full force
and effect and if modified, stating the nature of such modification and
certifying that this L ease as modified is in full force and effect,
(ii) specifying the dates to which rental and other charges are paid in
advance, and (iii) acknowledging that there are no uncured defaults on
the part of Landlord or specifying such defaults if any are claimed. Any
such settlement may be relied upon by any prospective purchaser or
encumbrances of the real property of which the premises are a part.
(b) Tenant's failure to deliver such a statement within the time specified
above shall be conclusive upon Tenant (i) that this Lease is in full
force and effect and without modification except as may be represented
by Landlord, and (ii) that there are no uncured defaults by Landlord.
21. CONDITION OF PREMISES: Tenant acknowledges that neither the Landlord nor any
of the Landlord's agents has made any representation or warranty with
respect to the premises or building or with respect to the suitability of
either for the conduct of Tenant's business. Taking possession of the
premises by Tenant shall conclusively establish that the premises and
building were in good, sanitary order, condition and repair at such time.
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22. DESTRUCTION OF PREMISES: In the event that the premises or the building of
which the premises are a part are destroyed in whole or in part by fire or
other casualty, Landlord may terminate this Lease at its option. If Landlord
does not terminate this Lease and elects to repair the damage, this Lease
shall remain in full force and effect.
23. CONDEMNATION: If all or a portion of the leased premises are appropriated by
a public or quasi-public authority under the power or eminent domain or are
transferred by Landlord in lieu thereof, Landlord may terminate this Lease
without liability to Tenant for any unexpired term of this Lease. If this
Lease is not terminated as a result of such a appropriation or transfer,
base rent shall be equitably reduced. In either event, Landlord shall
entitled to the entire condemnation award or settlement except that Tenant
shall be entitled to any award made by such authority specifically to Tenant
for moving expenses or damages for disruption to Tenant's business.
24. LATE CHARGES: All sums due under this Lease not paid by Tenant within ten
(10) days from the date such payment is due shall be subject to a late
charge of the greater of Twenty Dollars ($20.00) or Five Percent (5%) of the
amount due and shall bear interest at a rate of Eighteen Percent (18%) per
annum until paid.
25 SALE BY LANDLORD: In the event of a sale or conveyance by Landlord of the
premises, the same shall operate to release Landlord from any future
liability upon any of the covenants or conditions, express or implied,
herein contained in favor of Tenant (so long as the purchaser expressly
assumes such liability), and in such event Tenant agrees to look solely to
the responsibility of the successor in interest of Landlord in and to this
Lease. This Lease shall not be affected by any such sale, and Tenant agrees
to attorn to the purchaser or assignee.
26. LANDLORD'S CONSENT: Except as otherwise provided herein, where Landlord's
consent is required under this Lease, such consent shall not be unreasonably
withheld.
27. APPLICABLE LAW: This lease shall be governed by the laws of the State of
Arizona.
28. 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.
INTENDING TO BE LEGALLY BOUND, the parties have executed this Lease agreement
effective as of the 19th day of December, 1995.
LANDLORD: TENANT:
/s/ Xxxxxx Xxxx Xxxxxxx Red Rock Collection Incorporated
-------------------------------
Xxxxxx Xxxx Xxxxxxx
0000 X. Xxxxxxxxx Xxxx By: /s/ Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000 -------------------------------
Its: President
------------------------------
0000 X. Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
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EXHIBIT "A"
LEGAL DESCRIPTION OF PREMISES
The North 106 feet of Lots 4 and 5, of DUNDEE SUBDIVISION, according to the
plat of record in the office of the County Recorder of Maricopa County,
Arizona, recorded in Book 10 of Maps, Page 5.
EXCEPT the East 7 feet of the North 106 feet of Lot 5.
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