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