1
EXHIBIT 10.219
GUARANTY OF LEASE
THIS GUARANTY OF LEASE (this "Guaranty") is given this 9th day of November,
2000, by MEGO FINANCIAL CORP., a New York corporation, having an office address
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ("Guarantor"), to JOZAC BUSINESS
CENTER, LLC, a California limited liability company ("Landlord").
I. RECITALS
A. A certain lease of even date herewith has been, or will be, executed
by and between Landlord, and Preferred Equities Corporation, a Nevada
corporation, ("Tenant"), for certain premises in the County of ▇▇▇▇▇, State of
Nevada ("Lease").
B. Landlord requires as a condition to its execution of the Lease that
the undersigned guarantee the full performance of the obligations of Tenant
thereunder.
C. Guarantor is desirous that Landlord enter into the Lease with Tenant.
NOW, THEREFORE, in consideration of the execution of the Lease by Landlord,
Guarantor hereby unconditionally guarantees the full performance of each and all
of the terms, covenants and conditions of the Lease to be kept and performed by
Tenant, as hereinafter provided.
II. TERMS
A. GUARANTOR'S OBLIGATIONS:
1. GUARANTY OF TENANT'S PERFORMANCE. Guarantor unconditionally
guarantees to Landlord the full and complete performance of each and all of the
terms, covenants and conditions of the Lease and any amendments thereto required
to be performed by Tenant including, but not limited to, the payment of all
Monthly Minimum Rent and Additional Rent (as each term is defined in the Lease),
and any and all other charges or sums
2
or any portion thereof to accrue or become due from Tenant to Landlord pursuant
to the terms of the Lease ("Monetary Sums").
2. TENANT'S FAILURE TO PERFORM. In the event of a "default" as
defined in the Lease of payment of any of the Monetary Sums when due under the
Lease, then, upon demand by Landlord, Guarantor, by certified or cashier's check
or by wire transfer, shall pay to Landlord or Landlord's designated agent all
Monetary Sums due and owing from Tenant to Landlord under the Lease.
3. OTHER PROVISIONS. In the event of a "default" as defined in the
Lease in the performance of any covenants, terms or conditions of the Lease as
required to be performed, other than as provided for in Part II, Section A.2 of
this Guarantee, then, upon demand by Landlord, Guarantor shall commence and
complete performance of the conditions, covenants and terms within five (5) days
after the date of Landlord's demand; provided, in the event the performance by
Guarantor cannot be completed within five (5) days, Guarantor shall commence
performance within that time and diligently pursue same to completion within a
reasonable period of time. Notwithstanding the foregoing, nothing contained in
this Guarantee shall obligate or require Landlord to give Guarantor notice of
any default or failure to perform on the part of Tenant, and Landlord's failure
to give such notice shall have no effect on Guarantor's liability hereunder.
4. ADDITIONAL DAMAGES AND INTEREST. In addition to the payment of the
Monetary Sums and the performance of any and all other provisions, conditions
and terms of the Lease which may be required of Guarantor by reason of Tenant's
failure to perform, Guarantor agrees to pay to Landlord any and all costs and
expenses incurred by Landlord resulting from Tenant's failure to perform,
including all costs and expenses and
2
3
attorney's fees incurred in the enforcement of this Guarantee, whether or not
litigation is commenced to enforce such rights. This provision shall also
specifically include any and all attorneys' fees incurred by Landlord in
connection with any bankruptcy filing by Tenant, Guarantor or any other party to
the Lease or this Guaranty. Guarantor further agrees to pay to Landlord interest
on any and all sums due and owing Landlord by reason of Tenant's failure to pay
same at the rate of fifteen percent (15%) per annum until paid in full.
B. LANDLORD'S RIGHTS:
1. ENFORCEMENT. Notwithstanding the provisions of Section A above,
Landlord reserves the right, in the event of any failure of Tenant to pay the
Monetary Sums, to proceed against Tenant or Guarantor, or both, and to enforce
against Guarantor or Tenant, or both, any and all rights that Landlord may have
to the Monetary Sums. Guarantor understands and agrees that its liability under
this Guarantee shall be primary and that, in any right of action which may
accrue to Landlord under the Lease or this Guarantee, Landlord, at its option,
may proceed against Guarantor without having taken any action or obtained any
judgment against Tenant.
2. DELAY IN ENFORCEMENT. Guarantor understands and agrees that any
failure or delay of Landlord to enforce any of its rights under the Lease or
this Guarantee shall in no way affect Guarantor's obligations under this
Guarantee.
C. GUARANTOR'S WAIVERS:
Guarantor hereby waives:
1. Any and all notices, presentments and notices of nonpayment or
nonperformance;
3
4
2. All defenses based upon any disability of Tenant, release of
Tenant's liability for any reason or any statute of limitations controlling
obligations accruing under the Lease or this Guarantee;
3. Any and all rights it may have now or in the future to require or
demand that Landlord pursue any right or remedy Landlord may have against Tenant
or any third party,
4. Any and all rights it may have to enforce any remedies available
to Landlord against Tenant now or in the future;
5. Any and all right to participate in any security deposit held by
Landlord under the Lease now or in the future;
6. The right to require Landlord to proceed against Tenant, exhaust
any security which Landlord now holds or may hold in the future from Tenant or
pursue any other right or remedy available to Landlord;
7. All benefits and defenses under Nevada law that Guarantor's
liability may be larger in amount and more burdensome than the liability of
Tenant, and that Guarantor is liable even if Tenant had no liability at the time
of the execution of the Lease or ceases for any reason to be liable;
8. All rights and benefits under Nevada law that Guarantor's
liability shall continue even if Landlord alters the obligations of Tenant under
the Lease; and
9. All benefits and defenses under Nevada law, including the right to
require Landlord to proceed against Tenant, any other guarantor, or any security
Landlord may hold, before enforcing this Guaranty against Guarantor, and the
right to require Landlord to pursue any other right or remedy for the benefit of
Guarantor, and Guarantor agrees that Landlord may
4
5
proceed against Guarantor without proceeding against or exhausting any security
that Landlord holds.
D. CHANGES DO NOT AFFECT LIABILITY:
Guarantor understands and agrees that its obligations under this
Guaranty shall not be affected in any way by any extension of time or other
indulgence granted to Tenant, any amendment, modification, renewal or extension
of the Lease, or any assignment or subletting of the Lease, and in no way shall
any such occurrence release or discharge Guarantor from its obligations under
this Guaranty. Guarantor agrees that its obligations under this Guaranty shall
not be affected by Landlord's failure to notify Guarantor of any default or
failure to perform on the part of Tenant.
E. TENANT'S INSOLVENCY:
1. ASSUMPTION OF LIABILITY. Guarantor understands and agrees that, if
Tenant becomes insolvent or is adjudicated bankrupt, whether by voluntary or
involuntary petition, or if any bankruptcy action involving Tenant is commenced
or filed, or if a petition for reorganization, arrangement or similar relief is
filed against Tenant, or if a receiver of any part of Tenant's property or
assets is appointed by any court, Guarantor will pay to Landlord the amount of
all accrued, unpaid and accruing Monetary Sums to the date when the trustee or
administrator accepts or assumes the Lease and commences paying same; provided,
however, at such time as the trustee or administrator rejects the Lease,
Guarantor shall pay to Landlord all accrued, unpaid and accruing Monetary Sums
under the Lease for the remainder of the Term.
2. LANDLORD'S OPTION. Pursuant to the provisions of Part II, Section
E.1 above, at the option of Landlord as to the amounts owing for the unexpired
term of the Lease if the Lease is rejected, Guarantor shall either:
5
6
a. Pay to Landlord an amount equal to the Monetary Sums which
would have been payable for the unexpired term of the Lease reduced to its
present day value; or
b. Execute and deliver to Landlord a new lease for the balance of
the Term with the same terms and conditions as the Lease and with Guarantor as
tenant thereunder.
3. EFFECT OF OPERATION OF LAW. Any operation of any present or future
debtor's relief act or similar act or law or decision of any court shall in no
way affect the obligations of Guarantor or Tenant to perform any of the terms,
covenants or conditions of the Lease or of this Guaranty.
III. MISCELLANEOUS:
A. EXTENT OF OBLIGATIONS. Notwithstanding anything to the contrary in
this Guaranty, it is understood and agreed that this Guaranty shall extend to
any and all obligations of Tenant to Landlord under the Lease and any amendments
to the Lease.
B. SUBROGATION. Guarantor understands and agrees that it shall have no
right of subrogation against Tenant until such time as all of Tenant's
obligations to Landlord have been fully paid and discharged.
C. ASSIGNABILITY. This Guaranty may be assigned in whole or in part by
Landlord upon written notice to Guarantor.
D. SUCCESSORS AND ASSIGNS. The terms and provisions of this Guaranty
shall be binding upon and inure to the benefit of the successors and assigns of
the parties hereto.
E. MODIFICATION OF GUARANTY. This Guaranty constitutes the full and
complete agreement between the parties hereto and it is understood and agreed
that the provisions hereof may only be modified by a writing executed by the
parties hereto.
6
7
F. NUMBER AND GENDER. As used herein, the singular shall include the
plural and, as used herein, the masculine shall include the feminine and neuter
genders.
G. CAPTIONS/HEADINGS. Any captions or headings used in this Guaranty are
for reference purposes only and are in no way to be construed as part of this
Guaranty.
H. INVALIDITY. If any term, provision, covenant or condition of this
Guaranty is held to be void, invalid or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
I. JURISDICTION. The validity of this Guaranty and of any of its terms
or provisions, and the rights and duties of the parties hereunder, shall be
interpreted and construed in accordance with the laws of the State of Nevada.
J. ATTORNEYS' FEES. In the event that either Landlord or Guarantor shall
institute or otherwise become involved in any action or proceeding, including,
but not limited to, any bankruptcy case commenced by Tenant, Guarantor or any
other party, the party not prevailing in such action or proceeding shall
reimburse the prevailing party for its actual attorneys' fees, and all fees,
costs and expenses incurred in connection with such action or proceeding,
including, without limitation, any postjudgment fees, costs or expenses incurred
on any appeal or in collection of any judgment.
K. GUARANTY OF PAYMENT AND PERFORMANCE. It is understood and agreed that
this Guaranty is unconditional and continuing and is a guarantee of payment and
performance and not of collection.
L. JOINT AND SEVERAL OBLIGATION. If Guarantor is more than one (1)
person, the obligations of the persons comprising Guarantor shall be joint and
several and the unenforceability of this Guaranty or Landlord's election not to
enforce this Guaranty against one
7
8
(1) or more of the persons comprising Guarantor shall not affect the obligations
of the remaining persons comprising Guarantor or the enforceability of this
Guaranty against such remaining persons.
M. CORPORATE AUTHORITY. If Guarantor is a corporation, each individual
signing this Guaranty on behalf of Guarantor represents and warrants that he or
she is duly authorized to execute and deliver this Guaranty on behalf of the
corporation, and that this Guaranty is binding on Guarantor in accordance with
its terms. Guarantor shall, prior to execution or within three (3) days
thereafter, deliver to Landlord a certified copy of a resolution of its board of
directors authorizing such execution.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty and made
it effective on the date first written above.
Addresses for notices: GUARANTOR:
▇▇▇ ▇▇▇▇▇▇, Vice President MEGO FINANCIAL CORP., a New York
-------------------------------- corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, V.P
Its Authorized Representative
8
9
MASTER LEASE AGREEMENT
Landlord: JOZAC Business Center, LLC
Tenant: Preferred Equities Corporation
Guarantor: MEGO Financial Corporation
TABLE OF CONTENTS
PAGE
SECTION 1 PREMISES..................................................................1
SECTION 2 EFFECTIVENESS - SALE/LEASE BACK - CONDITION OF PREMISES...................2
SECTION 3 TERM/OPTION TO EXTEND.....................................................2
SECTION 4 RENT......................................................................5
SECTION 5 GAMING...................................................................11
SECTION 6 SECURITY DEPOSIT.........................................................12
SECTION 7 POSSESSION AND SURRENDER.................................................13
SECTION 8 USE OF PREMISES/REPAIRS/COMPLIANCE.......................................14
SECTION 9 IMPROVEMENTS AND CONSTRUCTION............................................18
SECTION 10 LANDLORD'S REPAIRS......................................................20
SECTION 11 TAXES...................................................................21
SECTION 12 UTILITIES...............................................................25
SECTION 13 INSURANCE...............................................................26
SECTION 14 LIENS...................................................................30
SECTION 15 INDEMNIFICATION.........................................................31
SECTION 16 SUBORDINATION...........................................................32
SECTION 17 EXISTING LEASES/ASSIGNMENT -- SUBLETTING................................33
SECTION 18 SUBLEASES/COLLATERAL ASSIGNMENT/NON-DISTURBANCE AND ATTORNMENT..........36
SECTION 19 INSOLVENCY AND DEATH....................................................38
SECTION 20 CONDEMNATION............................................................38
i
10
SECTION 21 DAMAGE OR DESTRUCTION...................................................40
SECTION 22 RIGHT OF ACCESS.........................................................41
SECTION 23 EXPENDITURES BY LANDLORD................................................42
SECTION 24 ESTOPPEL CERTIFICATE....................................................43
SECTION 25 TENANT'S DEFAULT; LANDLORD'S REMEDIES...................................43
SECTION 26 QUIET POSSESSION........................................................49
SECTION 27 CONVEYANCE BY LANDLORD..................................................49
SECTION 28 DEFAULT BY LANDLORD.....................................................50
SECTION 29 NOTICES.................................................................50
SECTION 30 REMEDIES CUMULATIVE.....................................................51
SECTION 31 SUCCESSORS AND ASSIGNS..................................................52
SECTION 32 PARTIAL INVALIDITY......................................................52
SECTION 33 TIME OF THE ESSENCE.....................................................52
SECTION 34 ENTIRE AGREEMENT........................................................52
SECTION 35 NO PARTNERSHIP..........................................................52
SECTION 36 BROKERS.................................................................53
SECTION 37 ATTORNEYS' FEES.........................................................53
SECTION 38 GENERAL PROVISIONS......................................................54
ii
11
M A S T E R L E A S E
4310 PARADISE ROAD
LAS VEGAS, NEVADA
THIS LEASE ("LEASE") is made and entered into this 9th day of November,
2000, by and between JOZAC BUSINESS CENTER, LLC, a California limited liability
company (herein referred to as "LANDLORD"), and PREFERRED EQUITIES CORPORATION,
a Nevada corporation (herein referred to as "TENANT").
SECTION 1
PREMISES
1.1 Upon the conditions, limitations, covenants and agreements herein
set forth, Landlord hereby agrees to lease to Tenant, and Tenant hereby accepts,
hires and leases from Landlord certain real property improved with three (3)
one-story and one (1) two-story office buildings containing a total of
approximately thirty thousand nine hundred nineteen (30,919) gross square feet,
bearing a street address of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ as more
particularly set out on Exhibits "A" and "A-1" attached hereto and incorporated
herein by reference (herein referred to as the "Premises"). The Premises shall
include the buildings located thereon, parking areas, landscaping, walkways,
driveways, service areas and any other common areas and improvements now
existing or hereafter erected thereon.
1.2 This Lease shall be subject to all existing and future covenants,
conditions, restrictions, reservations and easements now or hereafter recorded
against the Property; provided however that no future covenant, condition,
restriction, reservation or easement shall materially and adversely affect
Tenant's or any subtenant's use of the Premises, including its quiet possession
thereof.
Page 1
12
SECTION 2
EFFECTIVENESS - SALE/LEASE BACK - CONDITION OF PREMISES
2.1 The effectiveness of this Lease shall be expressly subject to the
Closing of the real estate purchase transaction between Tenant, as seller, and
Landlord, as buyer, for the Premises pursuant to that certain Real Estate
Purchase Agreement and Receipts for Deposit dated as of September 8, 2000
("Purchase Agreement"). It is the intent of the parties hereto that the Lease
will commence on the Date of Closing of the foregoing transaction.
The effectiveness of this Lease shall also be expressly subject to
the execution and delivery to Landlord of a Guaranty of Lease by MEGO FINANCIAL
CORP. in favor of Landlord in the form attached hereto as Exhibit "B".
Tenant has been the owner of the Premises prior to the commencement
of this Lease and is familiar with the condition of the Premises, the status of
title, the building, all improvements located thereon, all tenancies and all
contracts affecting the Premises. Tenant represents that it has examined the
Premises, is satisfied with the physical condition thereof and agrees to accept
the same "as is". Tenant further acknowledges that Landlord has not made any
representation as to such physical condition, the rents, leases, expenses of
operation or any other matter or thing affecting or relating to the Premises.
SECTION 3
TERM/OPTION TO EXTEND
3.1 The term of this Lease shall be five and one-half (5 1/2) years
commencing on the "Commencement Date", which shall be the Date of Closing of the
real estate transaction referred to in Section 2.1 hereof and terminating on the
last day of the Sixty Sixth (66th) full calendar month thereafter ("Initial
Term"), unless sooner terminated or extended as hereinafter provided.
Page 2
13
3.2 Tenant shall have an option to extend the Initial Term for an
additional period of four and one-half (4 1/2) years ("Option Period") on the
terms and conditions set forth herein; provided that said option may be
exercised only in the event Tenant is not in default either at the time said
option is exercised or at the time the Option Period is to commence. Further,
said option may not be severed from the Lease or separately sold, assigned or
otherwise transferred. The words "Lease Term" or "Term" as used in this Lease,
shall mean the term of this Lease, as the same may be extended by Tenant
pursuant to this section.
3.3 To exercise the option set forth herein, Tenant shall notify
Landlord in writing no later than One Hundred Eighty (180) calendar days and no
earlier than Three Hundred Sixty Five (365) calendar days prior to the
expiration of the Initial Term.
3.4 In the event Tenant properly exercises its option as provided
herein, all of the terms and conditions of this Lease shall apply during the
Option Period, except as to the option right then exercised and subject to the
security deposit and rent adjustments set forth hereinbelow.
The Minimum Monthly Rent for the Option Period shall be increased to
initially reflect the Fair Market Rental Value (as defined below) of the
Premises as of the commencement of the Option Period, which Minimum Monthly Rent
shall in no event be less than the Minimum Monthly Rent for the last Lease Year
of the Initial Term, and which shall be increased annually during the Option
Period in accordance with the CPI adjustment formula set forth in Section 4.3
hereof.
Additionally, the Security Deposit required by Section 6 hereof
shall be increased as of the commencement of the Option Period to an amount
identical to the Minimum Monthly Rent for the first month of such Option Period.
Page 3
14
3.4.1 The term Fair Market Rental Value shall mean the price, as of
the date in question, which a landlord, willing but not obligated to lease,
would accept for the Premises, and which a tenant, willing but not obligated to
lease, would pay therefor in an arms length lease transaction. For purposes of
determining Fair Market Rental Value only, the use of the Premises shall be
restricted to the permissible uses set forth in this Lease. Fair Market Rental
Value shall be determined by the parties or, if the parties are unable to agree
thereon, by the following procedure:
When the parties are unable to agree as to the Fair Market
Rental Value of the Premises within thirty (30) after Tenant exercises
the renewal option, either party may give written notice of such
disagreement to the other party and in such notice shall designate the
"First Appraiser". Within thirty (30) days after the service of such
notice, the other party shall give written notice to the party giving
the first notice, which notice shall designate the "Second Appraiser".
If the Second Appraiser is not so designated within said notice or by
the time above specified, then the First Appraiser shall designate the
Second Appraiser. The First and Second Appraisers so designated or
appointed shall meet within twenty (20) days after the Second Appraiser
is appointed and shall appoint a "Third Appraiser". If the First and
Second Appraisers are unable to agree upon a Third Appraiser within
twenty (20) days after the Second Appraiser is appointed, then either
party, on behalf of both, may request that such appointment be made by
the presiding judge of the United States District Court for the district
in which the Premises is located, or any successor Federal Court of
original jurisdiction, or by the Chief Judge of the ▇▇▇▇▇ County
District Court (the "Presiding Judge"). In the event of a failure,
refusal or inability of any appraiser to act, a new appraiser shall be
appointed in his stead, which appointment shall be made by the
Page 4
15
Presiding Judge. Each party shall pay the fees and expenses of the
appraiser appointed by such party, or in whose stead, as provided above,
such appraiser was appointed, and the fees and expenses of the Third
Appraiser, and all other expenses, if any, shall be born equally by both
parties. Any appraiser designated to serve as above provided, shall be
disinterested, shall be a member of the American Institute of Real
Estate Appraisers (or any successor association or body of comparable
standing if such institute is not then in existence), and shall be
familiar with property values in Southern Nevada. The appraisers shall
determine the Fair Market Rental Value of the Premises. A decision
joined in by two of the three appraisers shall be the decision of all
the appraisers. After reaching a decision, the appraisers shall give
written notice thereof to Landlord and Tenant, which notice shall state
the Fair Market Rental Value so determined, and the Fair Market Rental
Value so stated shall be considered the Fair Market Rental Value for
purposes of this Lease and shall be binding upon Landlord and Tenant. If
the appraisers shall fail to reach a decision as provided above within
thirty (30) days after the appointment of the Third Appraiser, the Fair
Market Rental Value shall be the average of the two closest appraisals.
Subject to the provisions of this Lease, the appraisers shall make their
appraisal in the same manner as other real estate appraisals and no
hearings shall be held in connection therewith.
SECTION 4
RENT
4.1 The following definitions shall pertain hereto:
Page 5
16
4.1.1 "RENTAL YEAR" shall mean a twelve (12) calendar month year
beginning on the first day of the calendar month following the Commencement Date
and ending twelve (12) full calendar months thereafter and each full twelve (12)
calendar months respectively thereafter.
4.1.2 "LEASE YEAR" shall mean a twelve (12) month calendar year,
except that in the event the Commencement Date occurs on a date other than
January 1, the first Lease Year hereunder shall be that fractional part of the
calendar year from the Commencement Date to December 31 of the same year and the
final Lease Year shall be that fractional part of the calendar year from January
1 to the expiration date.
4.1.3 "BASE YEAR" shall mean the calendar year in which this Lease
is executed.
4.1.4 "MINIMUM MONTHLY RENT" shall mean the base monthly rent
payable in accordance with Section 4.2 below.
4.1.5 "ADDITIONAL RENT" shall mean all rent and other payments due
Landlord hereunder, other than the Minimum Monthly Rent.
4.1.6 "AGGREGATE MONTHLY RENT" shall mean all monthly rent,
including the Minimum Monthly Rent and all Additional Rent.
4.2 Tenant covenants and agrees to pay Landlord, promptly when due,
without notice or demand and without deduction or setoff of any amount for any
reason whatsoever, as Minimum Monthly Rent for the Premises the sum of $360,000
per rental year in equal monthly installments of $30,000 each, in advance, on
the first day of each and every calendar month during the Initial Term. Minimum
Monthly Rent for any period between the Commencement Date, as defined in Section
3.1 hereof, and the first day of the first "Rental Year", as defined in Section
4.1.1 hereof shall be computed on a per diem basis and paid along with the first
monthly installment to be paid hereunder.
Page 6
17
All amounts payable as Aggregate Monthly Rent or otherwise under
this Lease, shall be paid to Landlord at the address set forth herein or at such
other place as Landlord shall from time to time designate by notice to Tenant,
in lawful money of the United States, which shall be legal tender and payment of
all debts and dues, public and private, at the time of payment.
4.3 The Minimum Monthly Rent, as defined above, shall be subject to
being increased by the percentage of increase, if any, in the Consumer Price
Index for Urban Wage Earners and Clerical Workers, Los Angeles-Anaheim-Riverside
Average "All Items", (1982-84=100), published by the United States Department of
Labor's Bureau of Labor Statistics. The initial base period month for the
purposes of such adjustment shall be the month of December of the calendar year
in which this Lease is executed and the adjustment for the initial year of this
Lease shall be the increase in the Index from the Commencement Date month to
such December. Each December subsequent to the base period month, as aforesaid,
shall then be used for comparison purposes and the increase in such Index for
the then-current December over the immediately preceding December shall cause an
equal adjustment in Minimum Monthly Rent which adjustment shall be effective as
of the next-following January 1, and be retroactive, if necessary. The actual
computation and determination will be made as soon as the current December Index
is published. In no event shall the Minimum Monthly Rent be less than the amount
of such Minimum Monthly Rent payable hereunder for the previous Lease Year.
Should the aforementioned Index be discontinued, the parties shall
select another similar index which reflects consumer prices and if the parties
cannot agree on another index, such replacement index or measuring criteria
shall be selected by Landlord in the exercise of its reasonable judgment.
Page 7
18
4.3.1 Landlord shall, within a reasonable time after obtaining the
appropriate data necessary for computing such increase, give Tenant written
notice of any adjusted Minimum Monthly Rent so determined, and Landlord's
computation thereof shall be conclusive and binding, but shall not preclude any
adjustment which may be required in the event of a published amendment of the
Index figures upon which the computation was based, unless Tenant shall, within
thirty (30) days after the giving of such notice, notify Landlord in writing of
any claimed error therein. Landlord will promptly investigate the claimed error,
determine in good faith whether it is valid and, if necessary, adjust the rental
within thirty (30) days of such determination. The upward adjusted Minimum
Monthly Rent shall be due and payable for each month commencing with January 1
of the next Lease Year.
4.4 In addition to the Minimum Monthly Rent, and as a part of the
Aggregate Monthly Rent, beginning on the Commencement Date, Tenant shall pay
Landlord, at the time and in the manner herein set forth, the following
"Additional Rent":
4.4.1 It is the intent of the parties that Tenant shall be directly
responsible for any and all Property Operating Cost, defined below. Accordingly,
Tenant will use its best efforts to arrange to pay for all Property Operating
Costs directly, and will provide Landlord with written proof of timely payment
for each such cost. Further, Tenant shall pay as Additional Rent, any Property
Operating Cost paid by Landlord pursuant to Section 23.1, whether or not
Landlord is required to pay the same under this Lease.
(a) The term "Property Operating Cost" shall mean the total
cost and expense incurred in managing, operating, equipping, lighting,
repairing, replacing and maintaining the Premises, including janitorial,
cleaning, refuse and trash disposal, lightbulb replacement and other services
and repairs listed in this Lease, as well as any other costs and expenses
necessary to
Page 8
19
maintain the Premises as a first-class office building complex. Such operating
and maintenance costs shall include all costs and expenses of operating and
maintaining the Premises, including, without limitation, all Impositions (as
that term is defined below); providing private police protection, security
patrol, or night watchmen (including, but not limited to uniforms); fire
protection and security alarm systems and equipment; preventative maintenance,
replacement and repair for heating and air conditioning; workers compensation
insurance; payroll taxes; materials, supplies, and all other costs of operating
and repairing the Premises, including structures, sidewalks and parking areas,
including but not limited to, lighting, cleaning, sweeping, painting, striping,
sealing of the parking lot, roof repairs, structure repairs, removing of rubbish
or debris, policing and inspecting; depreciation on or rentals of machinery and
equipment; all utility expenses; costs and expenses for the rental of music
program services and loudspeaker systems, including, but not limited to,
furnishing electricity therefor; insurance, including fire and extended
coverage, liability, property damage, rent loss, boiler insurance, vandalism,
malicious mischief, earthquake, insurance against liability for defamation and
claims of false arrest, and such other insurance in such amounts and covering
hazards deemed appropriate by Tenant or required under this Lease; fidelity
bonds; and all costs of repairs, maintenance, or replacement of paving, curbs,
walkways, remarking, directional or other signs, landscaping, drainage, lighting
facilities, repair and maintenance of the Premises including parking areas;
costs and expenses of planting, replanting and replacing flowers, shrubbery and
other landscaping, and the cost of servicing and maintaining any sprinkler
system. There shall also be included the cost of leasing and operating any
signs; the cost of personnel to implement any service described above, to direct
traffic and to police the Premises. Costs of capital improvements or additions
to the Premises which will result in overall cost-savings to Tenant hereunder
shall also be included hereunder as a Property Operating Cost.
Page 9
20
4.4.2 In addition to all other rental amounts specified herein, as
further Additional Rent, Tenant shall pay prior to delinquency, all
"Impositions" relative to of the Premises. Accordingly, Tenant will use its best
efforts to arrange to pay all Impositions directly, and will provide Landlord
with written proof of timely payment for each Imposition. For the purpose of
this Lease "Impositions" means:
(i) Any real estate taxes, fees, assessments or other charges
assessed against the Premises or any improvements thereon. Tenant will use its
best efforts to arrange with appropriate ▇▇▇▇▇ County officials to have all real
estate tax bills/invoices sent directly to Tenant, will pay the same prior to
the due dates thereof, and will provide Landlord with proof of payment on or
before applicable due dates.
(ii) All personal property taxes on personal property used in
connection with the Premises other than taxes payable by Tenant under Section 11
hereof.
(iii) Any and all environmental levies or charges now in force
affecting the Premises or any portion thereof, or which may hereafter become
effective, including, but not limited to parking taxes, levies, or charges,
employer parking regulations, and any other parking or vehicular regulations,
levies, or charges imposed by any municipal, state or federal agency or
authority.
(iv) Any other taxes levied or assessed in addition to, as a
replacement, alternative or substitute for, or in lieu of such real or personal
property taxes.
(v) Any expenses incurred in connection with any requirement
subsequent to the date hereof for changes at the Premises so as to comply with
then-existing laws, ordinances or codes imposed by federal, state or local
governmental authorities.
Page 10
21
Impositions do not include Landlord's general income taxes, inheritance,
estate or gift taxes.
4.5 All rents and other monies required to be paid by Tenant hereunder
to Landlord shall be paid to Landlord without deduction or offset, prior notice
or demand, in legal tender of the United States of America, at ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as Landlord may, from
time to time, designate in writing. Tenant agrees that all monies required to be
paid by Tenant pursuant to this Lease, except for the Minimum Monthly Rent are
hereby conclusively deemed to be "Additional Rent."
4.5.1 If Tenant shall fail, within five (5) days after the same is
due and payable, to pay to Landlord or reimburse Landlord for, as applicable,
any Aggregate Monthly Rent, Additional Rent or any other amount or charge to be
paid as Additional Rent by Tenant hereunder, such unpaid amount shall be subject
to a late charge equal to five percent (5%) of such unpaid amount. In addition,
any such unpaid amount shall bear interest from the thirtieth (30th) day after
the due date thereof to the date of payment at the rate of fifteen percent (15%)
per annum. The foregoing are not exclusive of Landlord's rights due to Tenant's
default under this Lease and the remedies therefor.
SECTION 5
GAMING
5.1 No slot machine, gambling device or other "gaming" of any type as
defined by Nevada law or requiring a gaming license issued by the State of
Nevada shall be permitted in or on the Premises without the prior written
consent of Landlord, which consent is strictly within Landlord's discretion.
Page 11
22
SECTION 6
SECURITY DEPOSIT
6.1 Tenant shall on the Date of Closing through escrow deposit with
Landlord the sum of $30,000.00, receipt of which is hereby acknowledged by
Landlord ("Deposit"). Said Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all the terms, covenants and conditions of
this Lease by Tenant to be kept and performed during the Term hereof, including
the vacating of the Premises by Tenant; provided that Tenant shall not be
excused from the payment of any rent herein reserved or any other charge herein
provided. If Tenant defaults with respect to any provision of this Lease,
Landlord may, but shall not be required to, use or retain all or any part of the
Deposit for the payment of any rent or other monies due Landlord, to repair
damages to the Premises, to clean the Premises or to compensate Landlord for any
other loss or damage which Landlord may suffer by reason of Tenant's default. If
any portion of the Deposit is so used or applied, Tenant shall, within five (5)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Deposit to its original amount; otherwise such failure
shall be a default under this Lease.
6.1.1 Landlord shall not be required to keep the Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Deposit. Should Tenant comply with all of the terms, covenants and conditions of
this Lease and promptly pay all the rent herein provided for and all other sums
payable by Tenant to Landlord hereunder as the same fall due, then the Deposit
shall be returned to Tenant thirty (30) days after the end of the Term, or after
the last payment due from Tenant to Landlord, whichever last occurs. In the
event of sale or transfer of the Premises, if Landlord transfers the Deposit to
the vendee or transferee for the benefit of Tenant, or if such vendee or
transferee assumes all liability with respect to the Deposit, then Landlord
shall be
Page 12
23
considered released by Tenant from all liability for the return of the Deposit,
and Tenant agrees to look solely to the new landlord for the return of the
Deposit, and it is agreed that this Section 6.1.1 shall apply to every transfer
or assignment to a new landlord. No mortgagee or beneficiary holding a lien on
the Premises or any portion thereof shall be liable to Tenant for any Deposit,
unless said Deposit has actually been delivered to such mortgagee or
beneficiary.
6.1.2 Tenant shall have no right or privilege to mortgage, encumber,
transfer or assign the Deposit without the prior written consent of Landlord.
6.2 Tenant may not deduct the Deposit or any portion thereof from its
Aggregate Monthly Rent, Minimum Monthly Rent, Additional Rent, or from other
payments to Landlord under this Lease; and Landlord's right to possession of the
Premises or to take appropriate action for nonpayment of any rent or for any
other reason shall not be affected by the fact that Landlord holds the Deposit
and does not use, apply or retain same as set forth herein.
SECTION 7
POSSESSION AND SURRENDER
7.1 Tenant shall by entering upon and occupying the Premises, be deemed
to have accepted the Premises "as is".
7.2 Upon the expiration or termination of the Term of this Lease,
if Tenant has fully and faithfully performed all of the terms, conditions and
covenants of this Lease to be performed by Tenant, Tenant shall, at its sole
cost and expense, remove all personal property and trade fixtures which Tenant
has installed or placed in or on the Premises (all of which are hereinafter
referred to as "Tenant's Property") from the Premises and repair all damage
thereto resulting from such removal; and Tenant shall thereupon surrender the
Premises in the same condition as on the date when the Premises was ready for
occupancy, reasonable wear and tear excepted. If Tenant has not fully and
Page 13
24
faithfully performed all of the terms, conditions and covenants of this Lease to
be performed by Tenant, Tenant shall nevertheless remove Tenant's Property from
the Premises in the manner aforesaid within five (5) days after receipt of
written direction to do so from Landlord. In the event Tenant shall fail to
remove any of Tenant's Property as provided herein, Landlord may, but is not
obligated to, at Tenant's expense, remove all of such Tenant's Property not so
removed and repair all damage to the Premises resulting from such removal, and
Landlord shall have no responsibility to Tenant for any loss or damage to
Tenant's Property caused by or resulting from such removal or otherwise. If the
Premises is not surrendered at the end of the Term, Tenant shall indemnify
Landlord against all loss or liability resulting from delay by Tenant in so
surrendering the Premises including, without limitation, any claims made by any
succeeding tenant due to such delay.
SECTION 8
USE OF PREMISES/REPAIRS/COMPLIANCE
8.1 The Premises is leased to Tenant solely for office building
purposes. Tenant shall not use or suffer the Premises, or any portion thereof,
to be used for any other purpose or purposes whatsoever, without Landlord's
prior written consent. Tenant shall conduct business under the trade name(s)
normally utilized by Tenant in its business operations.
8.2 Tenant shall not use or permit the use of the Premises or any
portion thereof as living quarters, sleeping quarters or lodging rooms.
8.3 Tenant shall refrain from keeping or permitting the keeping of any
animals of any kind in, about or upon the Premises without Landlord's prior
written approval.
8.4 Tenant shall at its own cost and expense keep and maintain, in good
order, condition and repair the Premises and every part thereof and any and all
appurtenances thereto wherever located, including, but without limitation, the
roofs, foundations, structural portions, HVAC and all
Page 14
25
other systems of the buildings located on the Premises, all exterior and
interior portions of all doors, door checks, windows, plate glass, signage, all
plumbing and sewage facilities within or serving the Premises, including free
flow up to the main sewer line, fixtures, sprinkler systems, walls, floors and
ceilings, it being understood that any and all repair, replacement and
maintenance responsibilities shall be the Tenant's. Tenant shall establish a
program of preventive maintenance for all systems servicing the buildings on the
Premises and for all other responsibilities of Tenant under this Lease,
including, without limitation, landscaping, parking facilities, landscaping,
roofs, HVAC and other responsibilities hereunder.
8.5 Tenant shall store all trash and garbage in containers so as not to
be visible or create a nuisance to customers and business invitees to the
Premises, and so as not to create or permit any health or fire hazard, and shall
arrange for the regular removal thereof.
8.5.1 In the event Tenant's business activity at the Premises shall
entail potentially hazardous or dangerous waste material or debris, then Tenant
shall be responsible for installing, maintaining and properly utilizing
appropriate waste and disposal containers and providing for the safe storage,
removal and disposal of same.
8.6 Tenant hereby covenants and agrees that it, its agents, employees,
servants, contractors, subtenants and licensees shall abide by such commercially
reasonable rules and regulations, which shall be hereafter reasonably adopted by
Tenant for the Premises, and amendments and modifications of any of the
foregoing, for the safety, care and cleanliness of the Premises or for the
preservation of good order thereon and therein.
8.7 INTENTIONALLY OMITTED.
8.8 Tenant will not commit or permit any nuisance on the Premises or
commit or suffer any immoral or illegal act to be committed thereon.
Page 15
26
8.9 The use of the Premises by Tenant, its employees, agents, customers,
subtenants, licensees, invitees and contractors, shall at all times be in
compliance with all covenants, conditions and restrictions; easements;
reciprocal easement agreements; and all matters presently of public record; or
which may hereafter be placed of public record, which do not materially and
adversely affect Tenant's or any subtenant's use of the Premises or any part
thereof, or the quiet enjoyment of same.
8.10 Tenant shall, at its sole cost and expense, comply with all
federal, state, city and municipal statutes, ordinances, rules and regulations
(including compliance with the Americans With Disabilities Act) as from time to
time in effect and the orders and regulations of any ISO (Insurance Services
Office) or any other body or entity exercising similar functions in force during
the Term and affecting the Premises or Tenant's use thereof. Further, Tenant
shall not use the Premises so as to create waste or constitute a nuisance.
8.10.1 Tenant shall not use the Premises for the generation,
storage, manufacture, production, releasing, discharge, or disposal or any
hazardous substance (defined below) or allow or suffer any other entity or
person to do so. "Hazardous substance" shall mean any flammable or related
material and any other substance or material defined or designated as a
hazardous or toxic substance, material or waste by a governmental law, order,
regulation or ordinance presently in effect or as amended or promulgated in the
future and shall include, without limitation:
(i) Those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances" or "solid
waste" in CERCLA, RCRA, the Hazardous Materials Transportation Act, 40 U.S.C.
Sections 1801 et seq., the Clean Water Act, 33 U.S.C. 1251 et seq., the Clean
Air Act, 42 U.S.C. 7401 et seq. the Toxic Substance
Page 16
27
Control Act, 15 U.S.C. 2601 et seq., and the Safe Drinking Water Act, 42 U.S. C.
300f through 300j, and in the regulations promulgated pursuant to said laws;
(ii) Those substances listed in the United States Department
of Transportation Table (49 CFR 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto);
(iii) Such other substances, materials and wastes which are or
become regulated as hazardous or dangerous under applicable local, state or
federal law, or the United States government, or which are classified as
hazardous or toxic under federal, state or local laws or regulations; and
(iv) Any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyls or (D) designated as a "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Sections
1251 et seq. (33 U.S.C. 1321) or listed pursuant to Section 307 of the Clean
Water Act (33 U.S.C. 1317).
The foregoing notwithstanding, Tenant shall be entitled to use and maintain such
limited quantities of materials that may otherwise be defined as hazardous
substances, as used in the ordinary course of Tenant's or any subtenant's
business; provided, that such hazardous substances are properly maintained,
stored, and disposed of, Tenant complies with all laws, ordinances, rules and
regulations applicable thereto and Tenant bears all responsibility and liability
therefor.
8.10.2 Tenant shall protect, indemnify and hold harmless Landlord,
its partners, directors, members, officers, employees, agents, successors and
assigns, and the Premises from and against any and all claims, losses, damages,
costs, expenses, liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action requirements, and
Page 17
28
enforcement actions of any kind (including, without limitation, attorney's fees
and costs at trial and on appeal) directly or indirectly arising out of or
attributable to, in whole or in part, the breach by Tenant of any of the
covenants, representations and warranties of this Section 8.10 et seq., or the
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal, or presence of a hazardous substance on, under, from or
about the Premises. The foregoing indemnity shall further apply to any residual
contamination on, under, from or about the Premises, or affecting any natural
resources arising in connection with the use, generation, manufacturing,
production, handling, storage, transport, discharge or disposal of any such
hazardous substance, and irrespective of whether any of such activities were or
will be undertaken in accordance with environmental laws or other applicable
laws, regulations, codes and ordinances.
SECTION 9
IMPROVEMENTS/SIGNAGE AND CONSTRUCTION
9.1 It is acknowledged that Tenant has been the owner of the Premises
prior to the commencement of this Lease and is familiar with the Premises, the
buildings located thereon, and all improvements, tenancies and contracts that
are a part of or affect the Premises. Tenant represents that it has examined the
Premises, and is satisfied with the physical condition thereof and agrees to
accept the same "as is". Tenant further acknowledges that Landlord has not made
any representation as to the physical condition, the rents, leases, expenses of
operation or any other matter or thing affecting or relating to the Premises.
Tenant shall be completely responsible for the cost of erection;
maintenance; replacement and, upon termination of this Lease, removal of all
signage on the Premises; provided however, that signage related to any subtenant
occupying a part of the Premises pursuant to a sublease, the term of which
extends beyond the termination of this Lease, shall not be subject to
Page 18
29
removal in accordance with the terms hereof. All signage must be maintained in
good condition and be in conformance with all governmental laws, ordinances and
regulations.
9.2 Tenant shall not make any "material" additions, alterations,
improvements or changes ("Improvements") in or to the Premises (i.e., any single
Improvement costing more than $50,000) without the prior written approval of
Landlord which approval shall not be unreasonably withheld, conditioned or
delayed. Any Improvements shall be at the sole cost and expense of Tenant, and
shall be made promptly and in good and workmanlike manner and in compliance with
all insurance requirements and with all applicable permits, authorizations,
building regulations, zoning laws, environmental regulations, laws regarding the
physically disabled and all other governmental rules, regulations, ordinances,
statutes and laws, now or hereafter in effect pertaining to the Premises or
Tenant's use thereof. Any Improvements made by Tenant shall at Landlord's option
become the property of Landlord upon the expiration or sooner termination of
this Lease. However, Landlord shall have the right to require Tenant to remove
such Improvements at Tenant's sole cost and expense upon such termination of
this Lease and to surrender the Premises in the same condition as it was prior
to the making of any or all such Improvements, ordinary wear and tear excepted.
Notwithstanding the foregoing sentence, Tenant shall not be required to remove
Improvements that are "embedded" within the Premises, such as electrical and
wiring systems.
9.3 Tenant shall indemnify and hold Landlord and the Premises free of
and harmless from any and all liabilities, losses, claims, damages or otherwise
based upon or in any manner growing out of any alterations or construction
respectively undertaken by Tenant whether specifically under the terms of this
Lease or otherwise, including all costs, damages, expenses, court costs and
attorneys' fees incurred in or resulting from claims made by any person or
persons, by other tenants in the Premises, or any of Tenant's subtenants,
agents, employees, customers and invitees.
Page 19
30
9.3.1 Before undertaking any alterations or construction, Tenant
shall obtain and pay for a commercial liability insurance policy insuring
Landlord and Tenant against any liability which may arise on account of such
proposed alterations or construction work in limits of not less than
$1,000,000.00 combined single limit coverage. A copy of such policy shall be
delivered to Landlord prior to the commencement of any such proposed work.
Tenant shall also maintain at all times fire insurance with extended coverage in
the name of Landlord and Tenant as their interests may appear in the amount
adequate to cover the cost of replacement of all Tenant improvements,
alterations, decorations, additions, including any plate glass, doors and
windows, in and to the Premises and all trade fixtures therein, in the event of
fire or extended coverage loss. Tenant shall deliver to Landlord copies of such
fire insurance policies which shall contain a clause requiring the insurer to
give Landlord not less than thirty (30) days' prior written notice of
cancellation of such policies.
9.4 Tenant will not create or permit to be created or to remain, and
will discharge, any lien, encumbrance or charge upon fixtures, equipment, or
personal property located within the Premises.
SECTION 10
LANDLORD'S REPAIRS
10.1 It is understood that any and all repair, replacement, maintenance
and other responsibilities and costs relating to the Premises shall be Tenant's,
and that Landlord shall have no monetary or other responsibilities relative
thereto.
Page 20
31
SECTION 11
TAXES
11.1 Tenant agrees that it will pay and discharge, or cause to be paid
and discharged, punctually as and when the same shall become due and payable
without penalty, all real estate taxes, personal property taxes, privilege
taxes, excise taxes, business and occupation taxes, gross sales taxes,
occupational license taxes, water charges, sewer charges, assessments
(including, but not limited to, assessments for public improvements or benefits)
and all other governmental impositions and charges of every kind and nature
whatsoever, whether or not now customary or within the contemplation of the
parties hereto and regardless of whether the same shall be extraordinary or
ordinary, general or special, unforeseen or foreseen, or similar or dissimilar
to any of the foregoing (all of such taxes, water charges, sewer charges,
assessments and other governmental impositions and charges which Tenant is
obligated to pay hereunder being; hereinafter collectively called "Tax" or
"Taxes") which, at any time during the Initial or any extended Term hereof,
shall be or become due and payable and which:
(a) shall be levied, assessed or imposed upon or against the
Premises or any buildings or improvements on or above the Premises or any
portion thereof, or any interest of Landlord or Tenant therein or under this
Lease; or
(b) shall be or become liens upon or against said Premises or any
buildings or improvements on or above the Premises. or any portion thereof, or
any such interest of Landlord or Tenant therein, or under this Lease; or
(c) shall be levied, assessed or imposed upon or against Landlord by
reason of any actual or asserted engagement by Landlord or Tenant, directly or
indirectly, in any business, occupation or other activity in connection with the
Premises or any portion thereof; or
Page 21
32
(d) shall be levied, assessed or imposed upon or in connection with
the ownership, leasing, operation, management, maintenance, repair, rebuilding,
use or occupancy of the Premises or the buildings and improvements on or above
the Premises or any portion thereof;
under or by virtue of any present or future law, statutes, ordinance, regulation
or other requirement of any governmental authority whatsoever, whether federal,
state, county, city, municipal, or otherwise, it being the intention of the
parties hereto that, insofar as the same may lawfully be done, Landlord shall be
free from all such expenses and all such real estate taxes, personal property
taxes, privilege taxes, excise taxes, business and occupation taxes, gross sales
taxes, occupational license taxes, water charges, sewer charges, assessments and
all other governmental impositions and charges of every kind and nature
whatsoever.
Taxes shall not include Landlord's general income taxes,
inheritance, estate or gift taxes.
11.2 If by law any Tax is payable, or may at the option of the taxpayer
be paid, in installments, Tenant may, whether or not interest shall accrue on
the unpaid balance thereof, pay the same, and any accrued interest on any unpaid
balance thereof, in installments as each installment becomes due and payable,
but in any event before any fine, penalty, additional interest or cost may be
added thereto for non-payment of any installment or interest.
11.3 Any Tax relating to a fiscal period of the taxing authority, a part
of which is within the Term and a part of which is subsequent to the Term,
shall, whether or not such Tax shall be assessed, levied, imposed or become a
lien upon the Premises or the buildings and improvements on or above the
Premises, or shall become payable, during the Term, be apportioned and adjusted
between Landlord and Tenant as of the stated date of expiration of the Term, so
that Landlord shall pay that proportion of such Tax which that part of such
fiscal period included in the period of time
Page 22
33
after the expiration of the Term bears to such fiscal period, and Tenant shall
pay the remainder thereof. With respect to any Tax for public improvements or
benefits which by law is payable, or at the option of the taxpayer may be paid,
in installments, Landlord shall pay the installments thereof which become due
and payable subsequent to the expiration of the Term, and Tenant shall pay all
such installments which become due and payable at any time during the Term even
though payment is postponed beyond the end of the Term by Tenant.
11.4 Tenant covenants to furnish to Landlord, within ten (10) days after
the last date when any Tax must be paid by Tenant as provided in this Section,
official receipts, if such receipts are then available to Tenant, of the
appropriate taxing authority, or other proof satisfactory to Landlord,
evidencing the payment thereof.
11.5 Tenant shall have the right to contest or review the amount or
validity of any such Tax by appropriate legal proceedings (but which is not to
be deemed or construed in any way as relieving, modifying or extending Tenant's
covenants to pay any such Tax at the time and in the manner as in this Section
provided), on condition, however, that if such contested Tax is not paid
beforehand and if such legal proceedings shall not operate to prevent the
enforcement of the collection of the Tax so contested and shall not prevent the
sale of the Premises or the buildings and improvements on or above the Premises
or any part thereof to satisfy the same, then before instituting any such
proceedings Tenant shall furnish to Landlord and to any lender of Landlord a
surety company bond, cash deposit or other security reasonably satisfactory to
Landlord and any such lender, as security for the payment of such Tax in an
amount sufficient to pay such Tax, together with all interest and penalties in
connection therewith and all charges that may or might be assessed against or be
charges on the Premises or the buildings on or above the Premises or any part
thereof in said legal proceedings. Upon termination of such legal proceedings or
at any time when the
Page 23
34
Landlord or such lender shall deem the security to be insufficient for the
purpose, Tenant shall forthwith, upon demand, deliver to Landlord or such lender
additional security as is sufficient and necessary for the purpose, and upon
failure of the Tenant so to do, the security originally deposited shall be
applied to the payment, removal and discharge of said Tax and the interest and
penalties in connection therewith and the charges and costs accruing in such
legal proceedings and the balance, if any, shall be paid to Tenant provided the
Tenant is not in default under this Lease. In the event that such security shall
be insufficient for this purpose, Tenant shall forthwith pay over to Landlord or
to such lender an amount sufficient, together with the security originally
deposited hereunder, to pay the same. In the event of any default by Tenant
under this Lease, Landlord and/or such lender are authorized to use the security
deposited under this Section to apply on account of such default or to pay the
said Tax. The Tenant shall not be entitled to interest on any moneys deposited
pursuant to this Section.
11.6 Any contest as to the validity or amount of any Tax, or assessed
valuation upon which such Tax was computed or based, whether before or after
payment, may be made by Tenant in the name of Landlord or of Tenant, or both, as
Tenant shall determine, and Landlord agrees that it will, at Tenant's expense,
cooperate with Tenant in any such contest to such extent as Tenant may
reasonably request; it being understood, however, that Landlord shall not be
subject to any liability for the payment of any costs or expenses in connection
with any proceeding brought by Tenant, and Tenant covenants to indemnify and
save harmless Landlord from any such costs or expenses. Tenant shall be entitled
to any refund of any such Tax and penalties or interest thereon which have been
paid by Tenant or by Landlord and reimbursed to Landlord by Tenant.
11.7 The certificate, advice or ▇▇▇▇ of the appropriate official
(designated by law to make or issue the same or to receive payment of any such
Tax) of the non-payment of any such Tax, shall
Page 24
35
be prima facie evidence that such Tax was due and unpaid at the time of the
making or issuance of such certificate, advice or ▇▇▇▇.
11.8 If at any time during the Term, under the laws of the United
States, Nevada or any political subdivision thereof, a tax or excise on rents or
other tax (except income tax), however described, is levied or assessed by the
United States, Nevada or said political subdivision against Landlord on account
of any rent reserved under this Lease, all such tax or excise on rents or other
taxes shall be paid by Tenant. Whenever Landlord shall receive any statement or
▇▇▇▇ for any such tax or shall otherwise be required to make any payment on
account thereof, Tenant shall pay, as Additional Rent, the amount due hereunder
within ten (10) days after demand therefor accompanied by delivery to Tenant of
a copy of such tax statement, if any.
SECTION 12
UTILITIES AND SERVICES
12.1 Tenant shall be responsible for and pay as Additional Rent all
charges for all utilities, and all other installations, metering, services or
utilities used in, upon or about the Premises by Tenant; any of its assignees,
subtenants, licensees or concessionaires or any other occupant thereof.
12.2 Tenant shall also at its sole cost and expense, procure or cause to
be procured any and all necessary permits, licenses or other authorizations
required for the lawful and proper use, occupation, operation and management of
the Premises and of such buildings and improvements above the Premises, and for
the lawful and proper installation and maintenance thereon and therein of wires,
pipes, conduits, tubes and other equipment and appliances for use in supplying
any such service thereto.
Page 25
36
12.3 Tenant shall provide to Landlord proof of the on-going existence of
service contracts for the maintenance of all equipment located in the Premises,
which Tenant is required to maintain under this Lease.
SECTION 13
INSURANCE
13.1 At all times during the Term, at its own cost and expense and as
Additional Rent hereunder, Tenant shall keep or cause to be kept all buildings
and improvements now existing or hereafter erected upon or above the Premises
and all equipment, fixtures, motors, machinery, furnishings and furniture
installed and owned by Tenant and used in connection with the Premises or with
the buildings and improvements upon or above the Premises, including all
alterations, rebuildings, replacements and additions thereto, insured against
loss or damage by earthquake and by fire, vandalism, malicious mischief,
sprinkler leakage (if sprinklered) and such other hazards, casualties, risks and
contingencies now covered by or that may hereafter be considered, as included
within the standard form extended coverage endorsement, in an amount at least
equal to one hundred percent (100%) of the Full Insurable Value thereof, but in
any event in an amount not less than that required to avoid the operation and
effect of any co-insurance provisions in said policies. If an insurer, or any
governmental agency or authority, shall at any time require that the
foundation(s) be insured in order to relieve the insured from the responsibility
as a co-insurer or for any other purpose, the obligations of Tenant with respect
to the insurance shall thenceforth be increased to the extent so required.
13.2 The term "Full Insurable Value" shall mean actual replacement cost
exclusive of cost of excavation, foundations and footings. Such "Full Insurable
Value" shall be determined from time to time [but not more frequently than once
in any twenty four (24) calendar months] at the request
Page 26
37
of Landlord but at the expense of Tenant by the fire insurance company carrying
the highest amount of fire insurance on the Premises or its agent, or by an
appraiser selected by Tenant and approved in writing by Landlord. The failure of
the Landlord to request such appraisal shall not release Tenant of its
obligations hereunder. At all times during the Term, at its own cost and expense
and as Additional Rent, Tenant shall provide and keep in force comprehensive
general liability insurance policies, in standard form, protecting Tenant, and
the Landlord as an additional insured, against any and all liability in the
amount of not less than Five Million ($5,000,000.00) Dollars in respect to any
one occurrence, in the amount of not less than Two Million ($2,000,000.00)
Dollars in respect to injuries to or death of any one person, and in the amount
of not less than One Million ($1,000,000.00) Dollars in respect to destruction
or damage to property of others. All such policies shall cover the entire
Premises and all buildings and improvements on or above the Premises, including
elevators and escalators, as well as parking, common areas, means of access and
roadways therein, and streets and sidewalks adjacent thereto.
13.3 At all times during the Term, at its own cost and expense and as
Additional Rent, Tenant shall provide and keep in force boiler and machinery
insurance on all steam boilers and high pressure boilers, if any, or such other
apparatus as Landlord may deem necessary to be covered by such insurance,
installed within any building on or above the Premises, in such amounts and in
such forms of policies as may from time to time be reasonably required by
Landlord.
13.4 Intentionally Omitted.
13.5 At all times during the Term, at its own cost and expense and as
Additional Rent, Tenant shall provide and keep in force such other insurance and
in such amounts as may from time to time be reasonably required by Landlord
against other insurable hazards which, at the time, are normally insured against
in the case of similar premises and improvements, similarly situated, due
Page 27
38
regard being given to the height and type of buildings and improvements on and
above the Premises, their construction, use and occupancy.
13.6 All such insurance to be provided by Tenant under this Section
shall name the Tenant and Landlord as insureds and, at the option of Landlord
any other parties permitted by Landlord as additional insureds, all as their
respective interests may appear.
13.7 All of the policies of insurance provided for in this Lease shall
be issued by insurance carriers in good financial standing, authorized to
transact business in Nevada and pre-approved in writing by Landlord.
13.8 In the event that Tenant fails to obtain and maintain insurance as
in this Lease provided and such failure shall continue for a period of ten (10)
days after notice by Landlord, Landlord may, but shall not be obligated to,
effect and maintain any such insurance coverage and pay premiums therefor. All
premiums so paid by Landlord, together with interest thereon at the rate of
fifteen percent (15%) per annum from the date of such payment by Landlord, shall
be deemed Additional Rent hereunder, and payable by Tenant to Landlord as such
in accordance with the provisions of this Lease but not later than the first day
of the month following the month in which payment therefor is made by Landlord.
In addition thereto, Landlord may recover from Tenant, and Tenant covenants and
agrees to pay as Additional Rent to Landlord, any and all damages which Landlord
may have sustained by reason of the failure of Tenant to obtain and maintain
such insurance, it being expressly declared that the damages of Landlord shall
not be limited to the amount of premiums thereon. Tenant shall make payment to
Landlord on the first day of the month following the month in which any payments
were made by Landlord or in which the amount of such damage was determined. The
payment by Landlord shall not be a waiver or release of Tenant with
Page 28
39
respect thereto or the right of Landlord to pursue any other remedy permitted
hereunder or by law as in the case of any other default hereunder or of default
in the payment of Aggregate Rent.
13.9 A certificate issued by the insurance carrier for each policy of
insurance required to be maintained by Tenant hereunder shall be delivered to
Landlord and all other named insureds on or before the Commencement Date hereof
and thereafter, as to policy renewals, within thirty (30) days prior to the
expiration of the term of each such policy. Each certificate of insurance
required to be maintained by Tenant hereunder shall be in form and substance
satisfactory to Landlord and shall expressly evidence insurance coverage as
required by this Lease and shall contain an endorsement or provision requiring
not less than thirty (30) days' prior written notice to Landlord of such
cancellation. As to any proposed diminution in the perils insured against, or
reduction of the amount of coverage of the particular policy in question,
initiated (i) by the insurer shall require not less than thirty (30) days prior
written notice to Landlord, and (ii) by Tenant shall require not less than
thirty (30) days prior written notice to Landlord.
13.10 Provided it does not violate any laws or regulations or jeopardize
Tenant's or Landlord's insurance coverage(s), each policy of property insurance
(and to the extent obtainable with respect to public liability insurance)
provided for in this Section 13 shall contain an express waiver of any and all
rights of subrogation thereunder whatsoever against both Landlord and Tenant,
their respective shareholders, directors, members, officers, partners, agents
and employees. Except for the negligent or willful acts or omissions of
Landlord, all such policies carried by Tenant shall be written as primary
policies and not contributing with or in excess of the coverage, if any, which
Landlord may carry. Any other provision contained in this Section or elsewhere
in this Lease notwithstanding, the amounts of all insurance required hereunder
to be paid by Landlord or Tenant
Page 29
40
shall be not less than an amount sufficient to prevent the applicable party from
becoming a co-insurer.
13.11 Tenant agrees that it will not keep, use, sell, offer for sale or
allow in or upon the Premises any article or permit any activity which may be
prohibited by any standard form of insurance policy.
13.12 Tenant shall not use or occupy the Premises or any part thereof,
or suffer or permit the same to be used or occupied for any business or purpose
deemed extra hazardous and thus affect the Premises.
13.13 During the Term of this Lease, Tenant shall indemnify and save
harmless Landlord and the Premises, from and against any and all claims and
demands whether for injuries to persons or loss of life, or damage to property,
occurring within the Premises, and immediately adjoining areas and arising out
of the use and occupancy of the Premises by Tenant, or occasioned wholly or in
part by any act or omission of Tenant, its subtenants, agents, contractors,
employees, servants, licensees or concessionaires, excepting, however, such
claims and demands, whether for injuries to persons or loss of life, or damage
to property caused by an indemnified party. In case Landlord shall be made a
party to any litigation, then Tenant shall protect and hold Landlord harmless
and shall pay all costs, expenses and reasonable attorneys' fees that may be
incurred or paid by Landlord in connection therewith.
SECTION 14
LIENS
14.1 Tenant shall at all times indemnify, save and hold Landlord, the
Premises and the leasehold created by this Lease free of and harmless from any
claims, liens, demands, charges, encumbrances, litigation and judgments arising
directly or indirectly out of any use, occupancy or
Page 30
41
activity of Tenant, or Tenant's subtenants, licensees or concessionaires, or out
of any work performed, material furnished, or obligations incurred by Tenant or
Tenant's subtenants, licensees or concessionaires, in, upon or otherwise in
connection with the Premises. Tenant shall give Landlord written notice at least
twenty (20) business days prior to the commencement of any such work on the
Premises. Tenant shall, at its sole cost and expense, within fifteen (15) days
after filing of any lien of record, obtain the discharge and release thereof.
Nothing contained herein shall prevent Landlord, at the cost and for the account
of Tenant, from obtaining said discharge and release in the event Tenant fails
or refuses to do the same within said fifteen (15) day period. Any amounts paid
by Landlord hereunder shall be deemed Additional Rent.
SECTION 15
INDEMNIFICATION
15.1 Tenant hereby indemnifies, saves and holds Landlord, the Premises
and the leasehold estate free of and harmless from any and all liabilities,
losses, costs, expenses, including reasonable attorneys' fees (at trial and on
appeal), causes of action, suits, judgments, claims, liens and demands of any
kind whatsoever in connection with, arising out of, or by reason of any act,
omission or negligence of Tenant, its agents, employees, servants, contractors,
subtenants, licensees, concessionaires, customers or business invitees while in,
upon, about or in any way connected with the Premises, or arising from any
accident, injury or damage, howsoever caused, to any person or property
whatsoever, occurring in, upon, about or in any way connected with the Premises,
or arising from any accident, injury or damage, howsoever and by whomsoever
caused, to any person or property whatsoever, occurring in, upon, about or in
any way connected with the Premises or any portion thereof, unless the same is
caused by the negligent act or omission of Landlord or Landlord's agents.
Page 31
42
SECTION 16
SUBORDINATION
16.1 Tenant agrees upon request of Landlord to subordinate this Lease
and its rights hereunder to the lien of any mortgage, deed of trust or other
encumbrance, together with any renewals, extensions or replacements thereof, now
or hereafter placed, charged or enforced against the Premises, or any portion
thereof, and to execute and deliver at any time, and from time to time, upon ten
(10) days demand by Landlord, such documents as may be reasonably required and
mandatory to effectuate such subordination, and in the event that Tenant shall
fail, neglect or refuse to execute and deliver any such documents to be executed
by it within ten (10) days after request by Landlord, Tenant hereby appoints
Landlord, its successors and assigns, the attorney-in-fact of Tenant irrevocably
to execute and deliver any and all such documents for and on behalf of Tenant;
provided, however, the Tenant shall not be required to effectuate such
subordination, unless the mortgagee or beneficiary named in such mortgage, deed
of trust, or other encumbrance shall first agree in writing, for the benefit of
Tenant, that so long as Tenant is not in default under any of the provisions,
covenants or conditions of this Lease on the part of Tenant to be kept and
performed, that neither this Lease nor any of the rights to Tenant hereunder
shall be terminated or modified or be subject to termination or modification.
Tenant acknowledges that the power of attorney granted hereby is coupled with an
interest.
16.2 In the event that the mortgagee or beneficiary of any such mortgage
or deed of trust elects to have this Lease a prior lien to its mortgage or deed
of trust, then and in such event, upon such mortgagee's or beneficiary's giving
written notice to Tenant to that effect, this Lease shall be deemed a prior lien
to such mortgage or deed of trust, whether this Lease is dated prior to or
subsequent to the date of recordation of such mortgage or deed of trust.
Page 32
43
16.2.1 Tenant shall, in the event of the exercise of any power of
sale under any deed of trust or, if any proceedings are brought for the
foreclosure of a lien affecting property in which the Premises are situated,
attorn to the purchaser upon any such foreclosure or sale and recognize such
purchaser as the Landlord under this Lease.
16.3 Upon Landlord's request, and within twenty (20) days thereof,
Tenant agrees to modify this lease to meet the reasonable requirements of a
lender selected by Landlord who demands such modification as a condition
precedent to granting a loan and placing a deed of trust or other mortgage
encumbrance upon the Premises; provided, such modifications do not alter the
basic business terms of this Lease or otherwise materially diminish any rights
or materially increase the obligations of Tenant.
SECTION 17
EXISTING LEASES/ASSIGNMENT -- SUBLETTING
17.1 All right, title and interest of Landlord in and to each of the
leases identified .in Exhibit C, attached hereto, are hereby assigned to Tenant
together with full right and power to collect and retain all rents and other
payments due and to become due thereunder. Tenant does hereby accept such
assignment and in consideration therefor does hereby unconditionally and
irrevocably assume each and every obligation and liability of the Landlord as
landlord under such leases heretofore accrued or which may hereafter accrue
under and in connection therewith, and will indemnify and hold Landlord harmless
from any and all claims, actions, judgments, liabilities, losses, penalties,
fines, damages, costs and expenses, including attorneys' fees, of any kind and
nature whatsoever with respect thereto. It is understood that the Lease between
Tenant and for a sign on the Premises (Sign Sublease) dated , 199__,
is not listed on Exhibit C and that said Sublease shall be assigned to Landlord
effective as of the Date of Closing.
Page 33
44
17.2 Tenant shall not without the prior written consent of Landlord
first had and obtained in each case, sell, assign or in any manner transfer this
Lease or any interest therein or the estate of the Tenant hereunder, or sublease
or underlet the Premises, except as otherwise set forth herein.
Notwithstanding anything to the contrary contained in this Section
17, an assignment or subletting of all or a portion of the Premises to an
"Affiliate" of Tenant shall not be deemed a violation of this section, provided
that (a) Tenant notifies Landlord of any such assignment or sublease within five
(5) days after its effective date, and promptly supplies Landlord with any
documents or information reasonably requested by Landlord regarding such
assignment or sublease or such "Affiliate" and (b) such assignment or sublease
is not a subterfuge by Tenant to avoid its obligations under this Lease. The
term "Affiliate" of Tenant shall mean any other entity which is controlled by,
controls, or is under common control with Tenant, or an entity that results from
a reorganization, merger, or the sale of substantially all the assets, interest
or stock of Tenant. The term "control" or "controlled," as used in this Section
17.2, shall mean the ownership, directly or indirectly, of more than fifty
percent (50%) of the voting securities of, or more than fifty percent (50%) of
the voting interest in, any entity. In no event shall a transfer, assignment, or
subletting of all or a portion of the Premises to an Affiliate release Tenant
from the payment and performance of its obligations in the Lease, but rather
Tenant and its assignee will be jointly and severally primarily liable for such
payment and performance.
17.3 Tenant, shall have the right to sublet portions of the Premises
and/or of the buildings and improvements thereon at any time and from time to
time, provided it is not in default hereunder. For a sublease to be entitled to
the benefits of Section 18.3, it must be approved in advance by Landlord or be
in the form attached hereto as Exhibit D, the sub-rental must reflect fair
market rental for the sub-premises, and the terms and provisions set forth
hereinbelow must be complied with.
Page 34
45
Tenant covenants and agrees that each sublease of any portion of the Premises
and/or of said buildings and improvements shall be in writing; and, among other
things, shall provide (a) that the said sublease is subject and subordinate to
this Master Lease, and to any extensions, modifications or amendments hereof,
and (b) that in the case of a sublease entitled to the benefit of Section 18.3,
in the event of cancellation or termination of the this Master Lease in
accordance with its terms or by the surrender thereof, whether voluntarily,
involuntarily or by operation of law, such sublease shall not thereby be
cancelled or terminated but the subtenant under each such sublease shall make
full and complete attornment to the Landlord for the balance of the term of such
sublease with the same force and effect as though said sublease were originally
made directly from the Landlord hereunder to the subtenant under such sublease.
17.4 If the Premises or any part thereof be sublet or occupied by
anybody other than Tenant in violation hereof, Landlord may, but shall not be
required to after default by Tenant, (i) collect rent from any purchaser,
assignee, subtenant or occupant and apply the net amount collected to the rent
herein reserved (but no such subletting, sale, assignment, occupancy or
collection shall be deemed a waiver of any covenant contained in this Section
17), (ii) accept any such purchaser, assignee, subtenant or occupant as tenant,
and/or (iii) release Tenant from violation of or the further performance by
Tenant of any or all terms, covenants and conditions of this Lease on the part
of Tenant to be performed.
17.5 Tenant may not at any time during the Term of this Lease, without
the prior written consent of Landlord, pledge, mortgage or hypothecate the
leasehold estate hereby created.
Page 35
46
SECTION 18
SUBLEASES/COLLATERAL ASSIGNMENT/NON-DISTURBANCE
AND ATTORNMENT
18.1 Tenant does hereby reassign, transfer and set over unto Landlord
all of its rights, title and interest in and to each of the leases identified on
Exhibit C attached hereto, and does hereby also assign, transfer and set over
unto Landlord all of its rights, title and interest in and to each and every
sublease now or hereafter executed affecting the Premises or any part thereof
(which now or hereafter existing leases and subleases are hereinafter
collectively called "subleases"), as well as all of the rents or other sums of
money now or hereafter due and payable thereunder (hereinafter called
"sub-rents") and all security now held by or hereafter paid to Tenant which has
been or may hereafter be deposited for the payment of sub-rents or the
performance of any of the terms of such sublease, upon condition, however, that
such assignment shall become operative and effective only as to such subleases
as Landlord shall so designate by notice at such time and only in the event the
within Lease and the term thereof shall be terminated or cancelled pursuant to
the terms and conditions hereof, or in the event of the issuance and execution
of a dispossess warrant or of any other re-entry or re-possession by Landlord
under the provisions hereof, or in the event Tenant is in uncured default of any
of the terms and conditions thereof.
18.2 Tenant does hereby covenant and agree, in respect to each and every
sublease now or hereafter executed affecting the Premises or any part thereof
(with the exception of the Sign Sublease which shall be assigned to Landlord at
Closing in accordance with ss.17.1 hereof), that it shall not, without the prior
written consent of Landlord first had and obtained, which shall not be
unreasonably withheld, conditioned or delayed, (i) receive or collect any
sub-rents (payable under any such sublease from any present or future subtenant
of the said Premises or any part thereof) for a period of more than one (1)
month in advance; (ii) pledge, transfer, mortgage, encumber or assign
Page 36
47
future payments of such sub-rental; (iii) in the case of subleases entitled to
the benefit of Section 18.3, waive, excuse, condone, discount, set-off,
compromise or in any manner release or discharge any subtenants thereof, of and
from any obligations, covenants and conditions by said subtenants to be paid,
observed and performed under the said subleases after termination of this Lease;
(iv) in the case of subleases entitled to the benefit of Section 18.3, cancel,
terminate or consent to any surrender of any such sublease; (v) in the case of
subleases entitled to the benefit of Section 18.3, modify or in any way alter
the terms thereof so as to reduce the sub-rent or anywise affect, to any
material extent, the rights of the landlord thereunder.
18.3 In the event of the cancellation or termination of the within Lease
in accordance WITH the terms hereof or by the surrender hereof, whether
voluntary, involuntary or by operation of law, prior to the expiration date of
any sublease hereafter executed affecting a portion of the Premises (including
extensions and renewals thereunder), which sublease (i) has been previously
approved in writing by the Landlord or pursuant to Section 17.3 does not require
such approval in order to be entitled to the benefits of this Section, and (ii)
contains the provisions required under Sections 17 and 18 hereof, Landlord for
itself, successors and assigns, as well as for any subsequent owner of the
Premises, does hereby covenant and warrant for the benefit of the subtenant
under any such sublease, subject to the observance and performance by the
subtenant under such sublease of all of the terms, covenants and conditions
thereunder, as follows:
(a) The quiet and peaceful possession of subtenant under the said
sublease;
(b) That the sublease shall continue in full force and effect and
Landlord shall recognize the sublease and the subtenant's rights
thereunder and will thereby establish direct privity of estate
and contract as between Landlord and the subtenant under said
sublease with the same force and effect as though the
Page 37
48
sublease were originally made from Landlord in favor of the
subtenant thereunder;
(c) That it will assume such obligations on the part of the landlord
under such sublease which are deemed to run with the land for so
long as Landlord shall be the owner in fee of the Premises
provided, however, Landlord shall not be liable in any way to
subtenant for any act or omission, neglect or default on the
part of Tenant, as sub-landlord under said sublease, or be
responsible for any moneys owing by or on deposit with Tenant to
the credit of subtenant and subtenant shall not have the right
to set-off or assert against Landlord any such claim or any
damages arising therefrom.
SECTION 19
INSOLVENCY AND DEATH
19.1 It is understood and agreed that neither this Lease nor any
interest herein or hereunder, nor any estate hereby created in favor of Tenant,
shall pass by operation of law under any state or federal insolvency, bankruptcy
or inheritance act, or any similar law now or hereafter in effect, to any
trustee, receiver, assignee for the benefit of creditors, heir, legatee,
devisee, or any other person whomsoever without the express prior written
consent of Landlord.
SECTION 20
CONDEMNATION
20.1 In the event of any taking of or damage to all or any part of the
Premises (or any interest therein) prior to the expiration or earlier
termination of this Lease by reason of any exercise of the power of eminent
domain (whether by condemnation proceedings or otherwise) or by reason of any
transfer of all or any part of the Premises (or any interest therein) made in
avoidance of such
Page 38
49
an exercise, the rights and obligations of Landlord and Tenant with respect
thereto shall be as set forth in this Section. Such taking, damage and/or
transfer are all referred to as "appropriation".
20.2 If the entire Premises be appropriated, this Lease shall terminate
and expire as of the date of such appropriation, and Landlord and Tenant shall
be released from further liability hereunder.
20.3 If the appropriation shall be greater than one-third (1/3) of the
Premises and the remainder will not be reasonably adequate for the operation of
Tenant's business after Tenant completes such repairs or alterations as Tenant
elects to make, either Landlord or Tenant shall have the option to terminate
this Lease by notifying the other party hereto of such election in writing
within thirty (30) days after such appropriation.
20.3.1 If after such appropriation the remaining part thereof is
suitable for the purposes for which Tenant has leased the Premises, this Lease
shall continue in full force and effect, but the Minimum Monthly Rent shall be
reduced in an amount equal to that proportion of the Minimum Monthly Rent which
the floor space of the portion taken bears to the total floor space of the
buildings located on the Premises. In the event a partial appropriation does not
terminate this Lease and if appropriation proceeds are sufficient to cover all
restoration costs and are made available to Tenant, Tenant, using such
appropriation proceeds, shall make repairs and restorations to the remaining
premises and shall also repair or replace its fixtures, furniture, furnishings
and equipment. If Tenant had ceased business operations during such repair and
restoration work, Tenant shall promptly reopen for business upon completion
thereof.
20.4 All awards payable on account of such appropriation shall be
payable to Landlord, and Tenant hereby waives any and all rights thereto and
interest therein; provided, however, that Tenant shall be entitled to a separate
award for any necessary repairs to the Premises and all other
Page 39
50
Improvements as contemplated hereby, the value of its leasehold estate and
relocation costs of Tenant, but Landlord shall have no obligation with respect
thereto.
SECTION 21
DAMAGE OR DESTRUCTION
21.1 In the case of the total or partial destruction of the buildings
located on the Premises, or any portion thereof, whether by fire or other
casualty, this Lease shall not terminate except as otherwise specifically
provided herein. Tenant shall be entitled to a reduction in the Minimum Monthly
Rent in an amount equal to that proportion of the Minimum Monthly Rent which the
number of square feet of floor space in the unusable portion bears to the total
number of rentable square feet of the buildings located on the Premises. Said
reduction shall be prorated so that the Minimum Monthly Rent shall only be
reduced for those days any given area is actually unusable. Further, if a
portion of the Premises is so damaged or destroyed so as to preclude Tenant from
practically operating its business, then there shall be a full abatement of
Minimum Monthly Rent until operations may be resumed. Subject to the
availability of property insurance proceeds as provided hereinabove, Tenant
shall promptly undertake to repair and restore the building or buildings located
on the Premises, and shall, with reasonable diligence, repair and reconstruct
the Premises to a condition at least equal in quality and condition to that
existing immediately prior to the damage or destruction in question. To the
extent insurance proceeds are insufficient therefor, Tenant shall be liable for
any such difference. It is understood that Landlord shall have no repair or
restoration responsibilities whatsoever.
21.2 All insurance proceeds payable under any property insurance policy
procured and maintained by Landlord or Tenant shall be payable solely to
Landlord and/or its mortgagee(s), and Tenant shall have no interest therein.
Notwithstanding the foregoing, however, and subject to the
Page 40
51
rights of any mortgagee, if less than fifty percent (50%) of the Premises is
damaged or destroyed and more than two (2) years remain in the Term or Option
Period, the insurance proceeds shall be made available to Tenant for the repair
and restoration work required hereunder. In the event all insurance proceeds are
not made available to Tenant, Tenant shall be entitled to terminate this Lease
upon written notice to Landlord given within thirty (30) days of Tenant being
advised of the non-availability of insurance proceeds. Tenant shall in no case
be entitled to compensation or damages on account of any annoyance or
inconvenience in making repairs under any provision of this Lease. Except to the
extent provided for in this Section 21, neither the rent payable by Tenant nor
any of Tenant's other obligations under any provision of this Lease shall be
affected by any damage to or destruction of the Premises or any portion thereof
by any cause whatsoever.
SECTION 22
RIGHT OF ACCESS
22.1 Landlord and its authorized agents and representatives shall be
entitled to enter the Premises at any reasonable time for the purpose of
observing, posting or keeping posted thereon notices provided for hereunder, if
any, and such other notices as Landlord may deem necessary or appropriate for
protection of Landlord, its interest or the Premises; for the purpose of
inspecting the Premises or any portion thereof; to inspect the Premises relative
to concerns over use, storage or disposal of hazardous waste and chemicals; and
for the purpose of making repairs to the Premises and performing any work
therein or thereon which Landlord may elect to make hereunder, or which may be
necessary to comply with any laws, ordinances, rules, regulations or
requirements of any public authority or any applicable standards that may, from
time to time, be established by an Insurance Services Office or any similar
body, or which Landlord may deem necessary or appropriate to prevent waste,
loss, damage or deterioration to or in connection with the Premises or for any
other
Page 41
52
lawful purpose. Landlord shall have the right to use any reasonable means which
Landlord may deem proper to open all doors in the Premises in an emergency.
Entry into the Premises obtained by Landlord by any such means shall not be
deemed to be forcible or unlawful entry into, or a detainer of, the Premises, or
an eviction of Tenant from the Premises or any portion thereof. Nothing
contained herein shall impose or be deemed to impose any duty on the part of
Landlord to do any work or repair, maintenance, reconstruction or restoration,
which under any provision of this Lease is required to be done by Tenant, but
the cost thereof shall be deemed Additional Rents. The performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to do the
same.
22.2 Landlord, its authorized agents and representatives, shall be
entitled to enter the Premises at all reasonable times for the purpose of
exhibiting the same to prospective purchasers and, during the final year of the
Term of this Lease, Landlord shall be entitled to exhibit the Premises for lease
and post signs therein announcing same.
SECTION 23
EXPENDITURES BY LANDLORD
23.1 Whenever under any provision of this Lease, Tenant shall be
obligated to make any payment or expenditure, or to do any act or thing, or to
incur any liability whatsoever, and Tenant fails, refuses or neglects to perform
as herein required, and, except in the case of an emergency, continues not to
perform for five (5) days after notice, Landlord shall be entitled, but shall
not be obligated, to make any such payment or to do any such act or thing, or to
incur any such liability, all on behalf of and at the cost and for the account
of Tenant. In exercising this right, Landlord shall be permitted to charge
Tenant the cost thereof plus interest thereon at the per annum rate of the
greater of (i) fifteen percent (15%), or (ii) Bank of America NT & SA "Reference
Rate" plus 500
Page 42
53
basis points (5%) which shall constitute and be collectible by Landlord as
Additional Rent on demand.
SECTION 24
ESTOPPEL CERTIFICATE
24.1 Tenant agrees that within ten (10) days of any demand therefor by
Landlord, Tenant will execute and deliver to Landlord and/or Landlord's designee
a recordable certificate stating that this Lease is in full force and effect,
such defenses or offsets as are claimed by Tenant, if any, the date to which all
rentals have been paid, and such other information as reasonably and customarily
contained in a commercial estoppel certificate concerning the Lease, the
Premises and Tenant as Landlord or said designee may request. In the event that
Tenant fails to execute and/or deliver any such certificate or offset statement
to Landlord within said ten (10) days, Tenant shall be deemed in violation of
this Lease and Landlord shall have the rights and remedies for default under
Section 25 below.
SECTION 25
TENANT'S DEFAULT; LANDLORD'S REMEDIES
25.1 Tenant's compliance with each and every covenant and obligation
hereof on its part to be performed hereunder is a condition precedent to each
and every covenant and obligation of Landlord hereunder. Any one or more of the
following shall be a "default" under this Lease:
25.1.1 Tenant shall default in the payment of any sum of money
required to be paid hereunder and such default continues for five (5) days after
written notice thereof from Landlord to Tenant; or
25.1.2 Tenant shall default in the performance of any other term,
covenant or condition of this Lease on the part of Tenant to be kept and
performed and such default continues
Page 43
54
for thirty (30) days after written notice thereof from Landlord to Tenant;
provided, however, that if the default complained of in such notice is of such a
nature that the same can be rectified or cured, but cannot with reasonable
diligence be done within said thirty (30) day period, then such default shall be
deemed to be rectified or cured if Tenant shall, within said thirty (30) day
period, commence to rectify and cure the same and shall thereafter complete such
rectification and cure with all due diligence; or
25.1.3 Tenant should vacate or abandon the Premises during the Term
and not otherwise be current in its rental and other obligations under this
Lease; or
25.1.4 There is filed any petition in bankruptcy or Tenant is
adjudicated as a bankrupt or insolvent, or there is appointed a receiver or
trustee to take possession of Tenant or of all or substantially all of the
assets of Tenant, or there is a general assignment by Tenant for the benefit of
creditors, or any action is taken by or against Tenant under any state or
federal insolvency or bankruptcy act, or any similar law now or hereafter in
effect, including, without limitation, the filing of execution or attachment
against Tenant and such levy continues in effect for a period of sixty (60)
days. The provisions hereof shall also apply to any guarantor of this Lease; or
25.1.5 Tenant does, or permits to be done, any act which creates a
mechanic's lien or claim thereof against the Premises or the Property and fails
to timely discharge same; or
25.1.6 Tenant fails to furnish Landlord with a copy of any
insurance policy required to be furnished by Tenant to Landlord when due, and
such default shall continue for fifteen (15) days after written notice from
Landlord; or
25.1.7 Tenant's causing, permitting or suffering to be done any act
(i) required by this Lease to have the prior written consent of Landlord, unless
such consent is so obtained, or (ii) prohibited by this Lease unless cured as
provided in Section 25.1.2; or
Page 44
55
25.1.8 In addition to the events constituting a default and breach
of the Lease by Tenant as stated above, if within any twelve (12) month period
during the term of the Lease, Tenant shall have failed to perform any monetary
obligation required of Tenant hereunder more than two (2) times, or has been in
breach for any other provision of this Lease more than three (3) times, and
Landlord, because of any such failure and/or breach, shall have served upon
Tenant within said twelve (12) month period two (2) (for monetary obligations)
or three (3) (for non-monetary obligations) or more notices of any such failure
or breach, then any subsequent failure or breach shall be deemed a noncurable
default, without requirement of notice or opportunity to cure, and Landlord
shall be immediately entitled to exercise any and all rights, remedies and/or
elections specified below otherwise available at law or in equity.
25.2 In the event of a default as designated in this Section or
elsewhere herein, in addition to any other rights or remedies provided for
herein or available at law or in equity, Landlord, at its sole option, shall
have the following rights:
25.2.1 The right to declare the Term of this Lease ended and to
re-enter the Premises and take possession thereof, and to terminate all of the
rights of Tenant in and to the Premises; or
25.2.2 The right, without declaring the Term of this Lease ended,
to re-enter the Premises and to occupy the same, or any portion thereof, for and
on account of Tenant as hereinafter provided, applying any moneys received first
to the payment of such expenses as Landlord may have paid, assumed or incurred
in recovering possession of the Premises, including costs, expenses, attorneys'
fees, and expenditures placing the same in good order and condition, or
preparing or altering the same for reletting, and all other expenses,
commissions and charges paid, assumed or incurred by Landlord in or in
connection with reletting the Premises and then to the fulfillment of the
covenants of Tenant. Any such reletting as provided for herein may be for the
remainder of the
Page 45
56
Term of this Lease or for a longer or shorter period. Such reletting shall be
for such rent and on such other terms and conditions as Landlord, in its sole
reasonable discretion, deems appropriate. Landlord may execute any lease made
pursuant to the terms hereof either in Landlord's own name or in the name of
Tenant, or subject to the provisions of Section 18 hereof, assume Tenant's
interest in and to any existing subleases to any tenant of the Premises, as
Landlord may see fit, and Tenant shall have no right or authority whatsoever to
collect any rent from such tenants, subtenants, licensees or concessionaires on
the Premises. In any case, and whether or not the Premises or any part thereof
be relet, Tenant, until the end of what would have been the term of this Lease
in the absence of such default and whether or not the Premises or any part
thereof shall have been relet, shall be liable to Landlord and shall pay to
Landlord monthly an amount equal to the amount due as Aggregate Monthly Rent,
less the net proceeds for said month, if any, of any reletting effected for the
account of Tenant pursuant to the provisions of this subsection, after deducting
all of Landlord's expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, legal expenses, court
costs, attorneys' fees, expenses of employees, alteration costs, and expenses of
preparation for such reletting (all said costs are cumulative and shall be
applied against proceeds of reletting until paid in full). Landlord reserves the
right to bring such actions for the recovery of any deficits remaining unpaid by
Tenant to Landlord hereunder as Landlord may deem advisable from time to time
without being obligated to await the end of the Term for a final determination
of Tenant's account and the commencement or maintenance of one or more actions
by Landlord in this connection shall not bar Landlord from bringing any
subsequent actions for further accruals pursuant to the provisions of this
Section; or
25.2.3 The right, even though it may have relet all or any portion
of the Premises in accordance with the provisions above, to thereafter at any
time elect to terminate this Lease for such
Page 46
57
previous default on the part of Tenant, and to terminate all of the rights of
Tenant in and to the Premises.
25.3 Pursuant to said rights of re-entry above, Landlord may remove all
persons from the Premises and may, but shall not be obligated to, remove all
property therefrom, and may, but shall not be obligated to, enforce any rights
Landlord may have against said property or store the same in any public or
private warehouse or elsewhere at the cost and for the account of Tenant or the
owner or owners thereof. Tenant agrees to hold Landlord free of and harmless
from any liability whatsoever for the removal and/or storage of any such
property, whether of Tenant or any third party whomsoever. Notwithstanding
anything contained herein to the contrary, Landlord shall not be deemed to have
terminated this Lease or the liability of Tenant to pay any rent or other sum of
money thereafter to accrue hereunder, or Tenant's liability for damages under
any of the provisions hereof, by any such re-entry, or by any action in unlawful
detainer or otherwise to obtain possession of the Premises, unless Landlord
shall have specifically, with reference to this Section, notified Tenant in
writing that it has so elected to terminate this Lease. Tenant covenants and
agrees that the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State of Nevada and the surrender of possession
pursuant to such notice shall not (unless Landlord elects to the contrary at the
time of, or at any time subsequent to, the service of such notice to Tenant) be
deemed to be a termination of this Lease, or the termination of any liability
hereunder of Tenant to Landlord.
25.4 Tenant acknowledges and agrees that, in the event of any failure of
Tenant to pay any Aggregate Monthly Rent, Minimum Monthly Rent, Additional Rent
or other charges or moneys required to be paid by Tenant to Landlord pursuant to
this Lease, Tenant shall immediately be in the status of default such that, at
Landlord's option, the five (5) day written notice required by Section 25.1.1
(i) may be a five-day notice as contemplated by N.R.S. ss. 40.250 or N.R.S. ss.
40.253,
Page 47
58
or (ii) may be given simultaneously or may run concurrently with any five day
notice given by Landlord pursuant to N.R.S. ss. 40.250 or N.R.S. ss. 40.253.
25.5 In any action brought by Landlord or Tenant to enforce any of its
rights under or arising from this Lease, the prevailing party shall be entitled
to receive its court costs and legal expenses, including reasonable attorneys'
fees, at trial and on appeal, whether such action is prosecuted to judgment or
not. The parties shall and do hereby waive trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other on any matters whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the
Premises, and/or any claim of injury or damage. In the event Landlord commences
any proceedings for non-payment of any rent, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceedings. This
shall not, however, be construed as a waiver of the Tenant's right to assert
such claims in any separate action or actions brought by Tenant.
25.6 The waiver by Landlord of any particular default or breach of any
of the terms, covenants or conditions hereof on the part of Tenant to be kept
and performed shall not be a waiver of any preceding or subsequent breach of the
same or any other term, covenant or condition contained herein. Landlord's
failure to insist upon strict performance of any of the terms, conditions or
covenants herein shall not be deemed to be a waiver of any rights or remedies of
Landlord. The subsequent acceptance of rent or any other payment hereunder by
Tenant to Landlord shall not be construed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease other than the
failure of Tenant to pay the particular rental or other payment or portion
thereof so accepted, regardless of Landlord's knowledge of such preceding breach
at the time of acceptance of such rental or other payment. No payment by Tenant
or receipt by Landlord of a lesser
Page 48
59
amount than the rent herein provided shall be deemed to be other than on account
of the earliest rent due and payable hereunder, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept any such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease. The term of this Section
25 may not be waived.
SECTION 26
QUIET POSSESSION
26.1 Tenant, upon paying the Minimum Monthly Rent, Additional Rent and
all other charges and moneys herein required of Tenant, and upon Tenant's
performance of all of the terms, covenants and conditions of this Lease on its
part to be kept and performed, may quietly have, hold and enjoy the Premises
during the Term of this Lease without any disturbance from Landlord or from any
other person claiming through Landlord.
SECTION 27
CONVEYANCE BY LANDLORD
27.1 In the event of any sale, transfer and exchange of the Premises or
other property by Landlord to the extent that such purchaser, transferee or
other party acquires the interest of the Landlord in the Premises, Landlord
shall be and is hereby relieved of all liability under any and all of its
covenants and obligations contained in or derived from this Lease, arising out
of any act, occurrence or omission relating to the Premises occurring after the
consummation of such sale, transfer or exchange. Tenant agrees to attorn to such
purchaser, transferee or grantee.
Page 49
60
SECTION 28
DEFAULT BY LANDLORD
28.1 It is agreed that in the event Landlord fails or refuses to perform
any of the provisions, covenants or conditions of this Lease on Landlord's part
to be kept or performed, that Tenant, prior to exercising any right or remedy
Tenant may have against Landlord on account of such default, shall give written
notice to Landlord of such default, specifying in said notice the default with
which Landlord is charged and Landlord shall not be deemed in default if the
same is cured within thirty (30) days of receipt of said notice. Notwithstanding
any other provision hereof, Tenant agrees that if the default complained of in
the notice provided for by this Section is of such a nature that the same can be
rectified or cured by Landlord, but cannot with reasonable diligence be
rectified or cured by Landlord within said thirty (30) day period, then such
default shall be deemed to be rectified or cured if Landlord within a thirty
(30) day period shall commence the rectification and curing thereof and shall
continue thereafter with all due diligence to cause such rectification and
curing to proceed.
SECTION 29
NOTICES
29.1 Any and all notices and demands by or from Landlord to Tenant, or
by or from Tenant to Landlord, required or desired to be given hereunder shall
be in writing and shall be validly given or made if served either personally, or
delivered by recognized commercial courier (such as Federal Express), or if
deposited in the United States mail, certified or registered, postage prepaid,
return receipt requested. If such notice or demand be served by registered or
certified mail in the manner provided, service shall be conclusively deemed
given two (2) days after mailing or upon receipt, whichever is sooner.
Page 50
61
29.1.1 Any notice or demand to Landlord shall be addressed to
Landlord at:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Chtd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
29.1.2 Any notice or demand to Tenant shall be addressed to Tenant
at:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
With a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
29.2 Any party hereto may change its address for the purpose of
receiving notices or demands as herein provided by a written notice given in the
manner aforesaid to the other party hereto, which notice of change of address
shall not become effective, however, until the actual receipt thereof by the
other party.
SECTION 30
REMEDIES CUMULATIVE
30.1 The various rights, options, elections and remedies of Landlord and
Tenant contained in this Lease shall be cumulative and no one of them shall be
construed as exclusive of any other, or of any right, priority or remedy allowed
or provided for by law and not expressly waived in this Lease.
Page 51
62
SECTION 31
SUCCESSORS AND ASSIGNS
31.1 The terms, provisions, covenants and conditions contained in this
Lease shall apply to, bind and inure to the benefit of the heirs, executors,
administrators, legal representatives, successors and assigns of Landlord and
Tenant (where permitted), respectively.
SECTION 32
PARTIAL INVALIDITY
32.1 If any term, covenant or condition of this Lease, or any
application thereof, should be held by a court of competent jurisdiction to be
invalid, void or unenforceable, all terms, covenants and conditions of this
Lease, and all applications thereof, not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 33
TIME OF THE ESSENCE
33.1 Time is of the essence as to this Lease and all of the terms,
covenants and conditions hereof.
SECTION 34
ENTIRE AGREEMENT
34.1 This Lease contains the entire agreement between the parties and
shall not be amended, changed or terminated orally.
SECTION 35
NO PARTNERSHIP
35.1 Nothing contained in this Lease shall be deemed or construed by the
parties hereto or by any third party to create the relationship of principal and
agent or of partnership or of joint
Page 52
63
venture or of any association between Landlord and Tenant. Neither the method of
computation of rent nor any other provisions contained in this Lease nor any
acts of the parties hereto shall be deemed to create any relationship between
Landlord and Tenant other than the relationship of landlord and tenant.
SECTION 36
BROKERS
36.1 This Lease is an integral part of the real estate purchase
transaction referred to in Section 2.1 hereof, and any and all brokerage
commissions shall be paid at the Closing of that transaction. No separate lease
commissions shall be due and payable. Tenant warrants that it has had no
dealings with any broker or agent in connection with this Lease creating any
liability for which Landlord is obligated to pay, and hereby holds harmless and
indemnifies Landlord from and against any and all cost, expense or liability
including legal fees and costs in defense thereof for any compensation,
commissions and charges claimed to be due by any broker or agent with respect to
this Lease or the negotiation hereof based on any such broker's or agent's
representation of Tenant. The foregoing shall not apply to any internal or
related commission or fee to be paid by Landlord.
SECTION 37
ATTORNEYS' FEES
37.1 In the event any action at law or in equity, or any special
proceeding, be instituted by either of the parties hereof against the other to
enforce this Lease, or any rights arising hereunder, or in connection with the
subject matter hereof, the prevailing party shall be entitled to recover all
costs of suit and reasonable attorneys' fees at trial and on appeal.
Page 53
64
SECTION 38
GENERAL PROVISIONS
38.1 The captions appearing at the commencement of the Sections hereof
are descriptive only and for convenience of reference to this Lease and in no
way whatsoever define, limit or describe the scope or intent of this Lease, nor
in any way affect this Lease.
38.2 Masculine or feminine pronouns shall be substituted for the neuter
form and vice versa, and the plural shall be substituted for the singular form
and vice versa, in any place or places herein in which the context requires such
substitution(s).
38.3 The laws of the State of Nevada shall govern the validity,
construction, performance, enforcement and effect of this Lease. Any legal
action under this Lease or in any way pertaining to this Lease must be
instituted and maintained in ▇▇▇▇▇ County, Nevada.
38.4 Whenever in this Lease any words of obligation or duty are used in
connection with either party, such words shall have the same force and effect as
though framed in the form of express covenants on the part of the party
obligated.
38.5 In the event Tenant now or hereafter shall consist of more than one
person, firm or corporation, then and in such event, all such persons, firms or
corporations shall be jointly and severally liable as Tenant hereunder.
38.6 The submission of this Lease for examination does not constitute a
reservation of or option to lease the Premises; this Lease becomes effective as
a Lease only upon execution by both parties, delivery thereof by Landlord to
Tenant and the Closing of the real estate transaction referred to in Section 2.1
hereof.
Page 54
65
38.7 Should any claim or lien be filed against the Premises, or any
action or proceeding be instituted affecting the title to the Premises, Tenant
shall give Landlord written notice thereof as soon as Tenant obtains actual
knowledge thereof.
38.8 This Lease shall not be construed either for or against Landlord or
Tenant, but this Lease shall be interpreted in accordance with the general tenor
of its language.
38.9 Tenant agrees and acknowledges that Landlord has bargained for
Tenant's full and faithful compliance with the terms of the Lease, and Tenant's
full and faithful payment of all Aggregate Monthly Rent, Minimum Monthly Rent,
Additional Rent and other charges and moneys to be paid by Tenant. Therefore, if
Landlord has granted Tenant any monetary concession or benefits, all such
concessions and/or benefits to Tenant shall be effective only so long as Tenant
is not in default of any term, covenant or provision of this Lease. Thus, should
Tenant default hereunder, in addition to any amounts owing from Tenant to
Landlord as a result of such default, the full amount of any such monetary
concession or benefit not included within Landlord's damage with respect to
Tenant's general obligations for all rent and Additional Rent above shall be
immediately due and payable by Tenant to Landlord upon demand.
38.10 Landlord and Tenant acknowledge the fact that this Lease and the
terms hereof are confidential and are to remain so. Therefore, each party hereto
agrees that it will not disclose the terms hereof to any third party or
unrelated or unaffiliated party except in the event of litigation, regulatory
reporting requirements, financial planning and/or a public offering or sale of
all or virtually all of the assets of the respective party hereto, as otherwise
required in the ordinary course of each party's business.
This Lease shall not be recorded. However, upon the request of
either party, both parties shall for the purposes of recordation, execute a
memorandum or "short form" of this Lease,
Page 55
66
which shall describe only the parties; the Premises; the Lease Term and any
Option Periods and shall incorporate this Lease by reference.
38.11 Tenant understands and agrees that any claims by Tenant against
Landlord with respect to this Lease shall be limited to the assets of the
beneficial owner of the Premises. Tenant expressly waives any and all rights to
proceed against the individual partners or against the officers, directors or
shareholders of any corporate partner of such beneficial owner, except to the
extent of their interests therein.
38.12 If Tenant is a corporation, each individual signing this Lease on
behalf of Tenant represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of the corporation, and that this Lease
is binding on Tenant in accordance with its terms. Tenant shall, prior to or
within three (3) days after execution of this Lease, deliver to Landlord a
certified copy of a resolution of its board of directors authorizing such
execution.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date set forth above.
LANDLORD TENANT
JOZAC BUSINESS CENTER, LLC, PREFERRED EQUITIES CORPORATION,
a California limited liability company a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- --------------------------------
Manager ▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Page 56