EXHIBIT 10.4
LEASE AGREEMENT
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LEASE
(OFFICE SUITE)
This lease is hereby dated for reference purposes only as of February 24,
2004 by and between AIRPORT PLAZA ASSOCIATES, LLC, a Nevada limited liability
company (herein called "Lessor") and GAMING & ENTERTAINMENT GROUP, INC., a Utah
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, Xxx Xxxxx, XX 00000
b. Suite Number: Not applicable
c. Rental Area: 7,076 approximate square feet
d. Building Designation: "D"
e. Parking Allocation: 28 spaces.
1.02 Project:
a. Project Name: Xxxxxxx Airport Plaza-Phase III
b. Total Project Rental Area: 89,192 approximate square feet
1.03 Term:
a. Estimated Commencement Date: Sixty (60) days after execution of
Lease contingent on approval of final plans by Xxxxx County Building
Department.
b. Number of Calendar Months (Initial Term): 65
c. Option to Renew: One (1) five (5) year option period.
1.04 Rent:
a. Base Rent: (i) Months one (1) through five (5) will be free of base
rent; (ii) $9,553.00/month during months six (6) through sixty-five (65) subject
to annual rent adjustment 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 $9,553.00.
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 thirteenth (13th) month of this Lease in accordance with the Consumer Price
Index, as provided in Section 4.03
1.05 Operating Expenses: Lessor estimates Operating Expenses during the calendar
year when the Lease commences to be $856.20 per month. Operating Expenses are in
addition to the Base Rent set forth in Section 1.04.
1.06 Security Deposit: $9,553.00
1.07 Permitted Use: Office use as related to gaming equipment; lessee may use
the premises for any lawful purpose not otherwise prohibited by Section 5.01,
providing not hazardous or environmental materials are placed on the premises.
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1.08 Addresses for Payments, Notices and Deliveries:
Lessor: AIRPORT PLAZA ASSOCIATES, LLC
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Lessee: GAMING & ENTERTAINMENT GROUP, INC.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
1.09 Brokers: Nevada Brokers, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
1.10 Shell Building Improvements: Lessor will provide the base building
improvements including but not limited to, exterior walls; foundations; windows;
doors; concrete slab floors; roof structure and roof membrane; roof drains and
downspouts; depressed loading dock; grade level loading entry with roll-up door;
separate utility connections including, but not limited to, water, gas, electric
power, sanitary sewer, telephone and cable communications; standard code
required fire sprinkler system including risers, lines, drops, heads, controls
and alarm; insulation under roof deck. Lessor shall provide driveways, parking
and landscaping as depicted on the attached Exhibit A.
1.11 Tenant Improvements: Lessor will provide a tenant improvement allowance of
$238,000.00. Lessor will install tenant improvements based on such plans and
specifications as shall be agreed upon by Lessor and Lessee. If the cost of such
tenant improvements exceeds the allowances referred herein, Lessee shall pay
Lessor the amount of such excess (including by application of all or any portion
of the move-in allowance). If the cost of such tenant improvements is less than
the allowance, the amount of the difference shall be applied to Lessee's next
accruing rent obligations under this Lease, which may result in additional
periods of free rent to Lessee. Should Lessee anytime throughout the lease term,
desire to perform additional modifications at Lessee's cost, bids may be
obtained from Lessor'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.
1.12 Payments Upon Execution: The first installment of Base Rent $9,553.00, the
first month's Operating Expenses $856.20 and a Security Deposit of $9,553.00 for
a total of $19,962.20, which shall be delivered to Lessor concurrently with
Lessee's execution of this Lease.
ARTICLE 2 PREMISES
2.01 Leased Premises: Lessor leases to Lessee and Lessee rents from Lessor the
Premises identified by the Suite number set forth in Section 1.01b of the Basic
Lease Terms (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 (the "Building"), and is a portion of the
project which may include 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, Lessor'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
Lessor's request, the parties shall memorialize the adjustments by executing a
certificate to this Lease prepared by Lessor, 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".
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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.
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, Lessee 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. Lessee
acknowledges that neither Lessor nor Lessor's agent has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Lessee'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 Lessee'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.
Lessee's failure to execute that form shall not affect the validity of Lessor'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 Lessee'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 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 Lessee 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 Lessee (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, Lessee'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 pay Base Rent, Operating
Expenses and all other charges, including, without limitation, insurance
specified in this Lease for the early occupancy period, upon Lessor's demand for
same.
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. Lessee gives to Lessor and Lessor 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, Lessee'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,
elevators, interior corridors, heating and air-conditioning, common area
restrooms, other common areas, 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, common area
utilities, 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" 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 Lessor'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. Lessee'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 Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee'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
Lessee within sixty (60) days after expiration of each calendar year a
reasonably detailed statement showing Lessee's share of the actual Operating
Expenses incurred during the preceding year. If Lessee's payments under this
subparagraph during said preceding calendar year exceed Lessee's Share as
indicated on said statement, Lessee shall be entitled to credit in the amount of
such overpayment against Lessee's Share of Operating Expenses next falling due.
If Lessee's payments under this subparagraph during said preceding calendar year
were less than Lessee's Share as indicated on said statement, Lessee shall pay
to Lessor the amount of the deficiency within ten (10) days after delivery by
Lessor to Lessee 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 Lessee'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 Lessee'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,
Lessee'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 Lessee has vacated the
Premises, when the final determination is made of Lessee'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.
4.04 Security Deposit: Concurrently with the execution of this Lease, Lessee
shall deposit with Lessor the sum stated in Section 1.06 of the Basic Lease
Terms, to secure the faithful performance of Lessee'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 Lessee'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
therefore, deposit cash with Lessor in an amount sufficient to restore said
deposit to the full amount hereinabove stated and Lessee'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 Lessee performs all of Lessee's obligations hereunder,
said deposit, or so much thereof as has not theretofore been applied by Lessor,
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 Lessee's
interest hereunder) at the expiration of the Term hereof, and after Lessee has
vacated the Premises. No trust relationship is created herein between Lessor and
Lessee 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.
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 Lessee's failure to comply
with the provisions of this Section, and shall indemnify Lessor from any
liability and/or expense resulting from Lessee'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
Lessee 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").
5.03 Signs: Lessee and Lessor shall agree on the sign program for the Premises.
Lessee will provide Lessor with a sign contract with a licensed contractor and
permit for Lessor's approval and it is the Lessee's responsibility to provide
Lessor a copy of the final sign off card from the Xxxxx County Building
Department.
5.04 Auctions: 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 Lessor's prior written consent, which shall not be
unreasonably withheld.
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 covered parking if applicable, driveways, sidewalks, landscaped and
planted areas, common entrances not located within the Premises of any tenant,
elevators, interior corridors, and common area restrooms. 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 Lessor'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.
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 in Section 1.01e and 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, covered parking if
applicable, 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 in the Parking Area by any user of the Parking
Area or his or her agents or employees is permitted for the term of the lease.
No other servicing is allowed. 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. Lessee may park
vehicles overnight so long as they are in good condition and repair and are the
property of Lessee or its employees. Lessee and its employees do so at their own
risk.
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 Lessor, provided
that the change does not deprive Lessee of reasonable access to or use of the
Premises.
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 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 Lessee of the need for such repairs. Lessor shall not be liable for
damages or loss of any kind or nature by reason of Lessor'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.
x. Xxxxxx shall warrant Lessee's heating-ventilation-air-conditioning
(HVAC), plumbing and electrical throughout the first lease year of the Initial
Term only. However, Lessor shall not be responsible for any other item
pertaining to the plumbing or electrical following said warranty, 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 Lessor's one year
HVAC warranty, Lessor reserves the right to continue changing HVAC filters on a
quarterly 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, after warranty), 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.
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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 Lessee'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 Lessee's next Base Rent installment.
7.03 Alterations and Additions:
a. Lessee shall not, without Lessor'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 Lessor'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 Lessee'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
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 Lessor'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,
Lessee'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.
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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
Lessee'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 Lessee 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 Lessee. 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 Lessee 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 Lessee's
personal property are levied against Lessor or Lessor's property is increased by
the inclusion of a value placed upon the personal property of Lessee, 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 xxxx which is assessed against Lessor separately, or Lessor and Lessee
jointly, is attributable to Lessee'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
10.01 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. 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 Lessee's Affiliate shall assume
in writing all of Lessee's obligations under this Lease. Lessee shall in no
event increase Lessee's Affiliate's rent from the rate currently being charged
Lessee under this Lease.
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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 in the corporation, association or partnership which
results in a change in the voting control of Lessee or Lessee's Guarantor, if
any, 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
Lessor, 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
Lessee'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 Lessee 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 Lessee 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: 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
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.
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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 Lessee 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 Lessee'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 Lessor'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
Lessee; 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 Lessee. If this Lease is not so terminated by Lessee within thirty (30) days
after this taking, there shall be no abatement of rent and this Lease shall
continue in effect.
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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
thereof; provided, that so long as Lessee is not in default under this Lease,
this Lease shall not be terminated or Lessee'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 attorn to the
successor-in-interest to Lessor upon the same terms and conditions as are
contained in this Lease, and shall execute any instrument reasonably required by
Lessor'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 Lessor'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 Lessee'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. Lessee's
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the Building.
b. Lessee'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 Lessee'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 Lessee. 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 Lessee, 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.
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c. Assignment, sublease, encumbrance or other transfer of the Lease by
Lessee, 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 Lessor.
d. The discovery by Lessor that any financial statement provided by
Lessee, or by any affiliate, successor or guarantor of Lessee was materially
false or misleading.
e. The failure or inability by Lessee to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Lessee, 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.
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 Lessee'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 Lessee'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 Lessee, 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 Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee 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
Lessee'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 Lessee'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.
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b. Maintain Lessee'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 Lessor'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 Lessee has fully, faithfully and punctually performed all of
Lessee'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 Lessee'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.
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, Lessee
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 Lessee'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 Lessee's sole cost and expense
and without any abatement of rent or right of set off. If Lessee 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 Lessee's part. Lessor's election to make the payment or
perform the act on Lessee'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 Lessor, reimburse Lessor for
all sums paid by Lessor and all necessary incidental costs, together with
interest at the maximum rate permitted by law from the date of the payment by
Lessor. Lessor shall have the same rights and remedies if Lessee fails to pay
those amounts as Lessor would have in the event of a default by Lessee 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.
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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 Lessee, 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 Lessor'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 Lessee's expense with counsel reasonably
acceptable to lessor or, at Lessee's election, Lessee shall reimburse Lessor for
any legal fees or costs incurred by Lessor 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
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 Lessee fails to surrender the Premises upon the expiration of
this Lease despite demand to do so by Lessor, Lessee 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, Lessor'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
Lessee, 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 Lessor, Lessee shall execute, acknowledge
and deliver to Lessor an instrument in writing releasing and quitclaiming to
Lessor, all right, title and interest of Lessee 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 Lessee'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 Lessee's successor.
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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 Lessee 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, Lessee 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 company); (iii) no service of
process shall be made against any member of Lessor (except as may be necessary
to secure jurisdiction of the company); (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 Lessor
and also by any member of Lessor. Lessee 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.
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 Lessee 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 Lessee 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 LESSOR'S INTEREST
In the event of any transfer of Lessor'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 Lessee 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.
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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 Lessor and Lessee 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 Lessor and Lessee 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.
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 Survival: All indemnities set forth in this Lease shall survive the
expiration or earlier termination of this Lease.
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21.11 Waivers: The waiver by Lessor of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term,
covenant, or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to be a waiver of any preceding breach
by Lessee of any term, covenant, or condition of this lease, other than the
failure of Lessee to pay the particular rent so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such rent
21.12 Representations by Lessor or its Principal: Lessee acknowledges that its
is aware that Xxx X. Xxxxxx is a real estate broker licensed in the State of
Nevada and that said licensee does not represent the Lessee in this transaction.
No representation or recommendation has been made by said licensee as to the
legal sufficiency, effect or tax consequences of this Lease or the transaction
relating hereto.
21.13 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.
- 16 -
LESSOR: AIRPORT PLAZA ASSOCIATES, LLC,
a Nevada limited liability company
By: /s/ Xxx X. Xxxxxx 2/24/04
--------------------------------------- ------------------------------
Xxx X. Xxxxxx, Managing Member Date
By: /s/ Xxxx Xxxxxxxx 2/24/04
--------------------------------------- ------------------------------
Xxxx Xxxxxxxx, Member Date
LESSEE: GAMING & ENTERTAINMENT GROUP, INC.,
a Utah corporation
By: /s/ Xxxxxxx X.. Xxxxxx 2/24/04
---------------------------------------- ------------------------------
Xxxxxxx X. Xxxxxx, President Date
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 Bylaws or a
Resolution of the Board of Directors shall otherwise provide, in which event,
the Bylaws, or a certified copy of the Resolution, as the case may be, must be
furnished. Also, the appropriate corporate seal must be affixed.
- 17 -
TABLE OF CONTENTS
OFFICE SUITE LEASE
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
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 Lessee's Property
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 LESSOR'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 Survival
21.11 Waivers
21.12 Representations by Lessor or its Principal
21.13 Attachments
Exhibit A Site Plan
Exhibit B Certificate of Commencement
LEASE
By and Between
AIRPORT PLAZA ASSOCIATES, LLC,
a Nevada limited liability company
as Lessor
AND
GAMING & ENTERTAINMENT GROUP, INC.
a Utah corporation
as Lessee
Dated: February 24, 2004
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FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "Amendment") dated March 10, 2004, by and
between AIRPORT PLAZA ASSOCIATES, LLC, a Nevada limited liability company; and
GAMING & ENTERTAINMENT GROUP, INC. a Utah corporation.
R E C I T A L S
Lessor and Lessee entered into a written Lease Agreement dated February
24, 2004 for the lease of approximately 7,076 square feet of that certain
building commonly known as 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx, XX 00000 within that
project known as the Spencer Airport Plaza-Phase III in Las Vegas, Nevada.
T E R M S
In consideration of the mutual agreements of said Lease herein contained,
the parties hereby agree to the modifications of said Lease so illustrated in
this First Amendment to Lease.
1. Estimated Commencement Date: Sixty (60) days after execution of Lease
contingent on no changes by Lessee. The commencement date shall be the date that
Xxxxx County Building Department signs off the Xxxxx County Inspection Report
for the premises.
2. Base Rent: (i) Five months of free base rent is hereby deleted for the
purposes of applying said credit to Lessee's requested tenant upgrades for a
total value of $47,765.00; (ii) $9,553.00/month during month one (1) through
sixty-five (65) subject to annual rent adjustment beginning with the thirteenth
(13) month per Article 1.04b of the original Lease.
3. Tenant Improvements: Lessee's requested tenant upgrades totaling $49,593.00
per the attached executed X.X. Xxxxxx Contractors, Inc. bid proposal dated March
8, 2004 and Lessor has granted a credit to Lessee of $47,765.00 against said
upgrades; Lessee is to hereby issue a check in the amount of $1,828.000 made
payable to AIRPORT PLAZA ASSOCIATES, LLC which shall be delivered to Lessor
concurrently with Lessee's execution of this First Amendment to Lease. It is
further understood, that Lessor is absorbing the difference between the tenant
improvement allowance of $238,000.00 as stipulated in Section 1.11 and the bid
proposal of $245,106.00 in addition to the $3,028.00.
3. Ratification: Except as herein modified, the Lease shall remain in full force
and effect.
IN WITNESS WHEREOF, this Amendment has been executed by the parties as of the
date first written above.
LESSOR: AIRPORT PLAZA ASSOCIATES, LLC,
a Nevada limited liability company
By: /s/ Xxx X. Xxxxxx 3/10/04
---------------------------------------- ------------------
Xxx X. Xxxxxx, Managing Member Date
By: /s/ Xxxx Xxxxxxxx 3/10/04
---------------------------------------- ------------------
Xxxx Xxxxxxxx, Member Date
LESSEE: GAMING & ENTERTAINMENT GROUP, LLC,
a Utah corporation
By: /s/ Xxxxxxx X. Xxxxxx 3/10/04
---------------------------------------- ------------------
Xxxxxxx X. Xxxxxx, President Date
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