STANDARD LEASE
▇▇▇▇▇▇▇ AIRPORT CENTER
ARTICLE 1 BASIC LEASE TERMS
1.01 Premises Leased
1.02 Project
1.03 Term
1.04 Rent
1.05 Operating Expenses
1.06 Security Deposit
1.07 Permitted Use
1.08 Addresses for Payments, Notices and Deliveries
1.09 Broker
1.10 Building Improvements
1.11 Payments Upon Execution
ARTICLE 2 PREMISES
2.01 Leased Premises
2.02 Delivery and Acceptance of Premises
2.03 Building Name and Address
ARTICLE 3 TERM
3.01 General
3.02 Tender of Possession by Lessor
3.03 Delay in Possession
3.04 Early Occupancy
3.05 Option Term(s)
ARTICLE 4 RENT AND OPERATING EXPENSES
4.01 Base Rent
4.02 Operating Expenses
4.03 Cost of Living Increases
4.04 Security Deposit
4.05 Option Rent
ARTICLE 5 USES
5.01 Use
5.02 Hazardous Materials
5.03 Signs and Auctions
5.04 Year 2000 Compliance
ARTICLE 6 COMMON FACILITIES AND VEHICLE PARKING
6.01 Operation and Maintenance of Common Facilities
6.02 Use of Common Facilities
6.03 Parking
6.04 Changes and Additions by Lessor
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 Lessor's Obligations
7.02 Lessee's Obligations
7.03 Alterations and Additions
7.04 Utility Additions
7.05 Entry and Inspection
ARTICLE 8 TAXES AND ASSESSMENTS ON LESSEE'S PROPERTY
8.01 Taxes of ▇▇▇▇▇▇'s Property
ARTICLE 9 UTILITIES
ARTICLE 10 ASSIGNMENT AND SUBLETTING
10.01 Rights of Parties
10.02 Effect of Transfer
ARTICLE 11 INSURANCE AND INDEMNITY
11.01 Liability Insurance - Lessee
11.02 Lessor's Insurance
11.03 Waiver of Subrogation
11.04 Policies
11.05 Lessee's Indemnity
11.06 Lessor's Non-Liability
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ARTICLE 12 DAMAGE OR DESTRUCTION
12.01 Restoration
ARTICLE 13 EMINENT DOMAIN
13.01 Total or Partial Taking
13.02 Temporary Taking
13.03 Taking of Parking Area
ARTICLE 14 SUBORDINATION, ESTOPPEL CERTIFICATE
14.01 Subordination
14.02 Estoppel Certificate
ARTICLE 15 DEFAULTS AND REMEDIES
15.01 Lessee's Defaults
15.02 Lessor's Remedies
15.03 Repayment of "Free" Rent
15.04 Cumulative Remedies
15.05 Late Payments
15.06 Right of Lessor to Perform
15.07 Default by Lessor
15.08 Expenses and Legal Fees
ARTICLE 16 END OF TERM
16.01 Holding Over
16.02 Merger on Termination
16.03 Surrender of Premises; Removal of Property
16.04 Termination; Advance Payments
ARTICLE 17 PAYMENTS AND NOTICES
ARTICLE 18 LIMITATION OF LIABILITY
ARTICLE 19 BROKER'S COMMISSION
ARTICLE 20 TRANSFER OF ▇▇▇▇▇▇'S INTEREST
ARTICLE 21 INTERPRETATION
21.01 Gender and Number
21.02 Headings
21.03 Joint and Several Liability
21.04 Successors
21.05 Time of Essence
21.06 Severability
21.07 Entire Agreement
21.08 Covenants and Conditions
21.09 Counterparts
21.10 Indemnities
21.11 Attachments
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LEASE
(FREESTANDING BUILDING)
This lease is hereby dated for reference purposes only as of
October 7,1998 by and between ▇▇▇▇▇▇▇ AIRPORT CENTER, LLC, a
Delaware limited liability company (herein called "Lessor") and
CASINOVATIONS INCORPORATED, a Washington corporation (herein
called "Lessee").
ARTICLE 1 BASIC LEASE TERMS
Each reference in this Lease to the "Basic Lease Terms"
shall mean and refer to the following collective terms, the
application of which shall be governed by the provisions in the
remaining articles of this Lease.
1.01 Premises Leased:
a. Premises Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. Rental Area: 19,160 approximate square feet
c. Building Designation: "A"
1.02 Project:
a. Project Name: ▇▇▇▇▇▇▇ Airport Center
b. Total Project Rental Area: 114,446 square
feet
1.03 Term:
a. Commencement Date: February 1, 1999
b. Number of Calendar Months (Initial Term): 60
months
c. Option to: One (1) five (5) year option.
1.04 Rent:
a. Base Rent: Initial Term (i) $9,796.00/month
during months one (1) through twelve (12); (ii) $14,370.00/month
during months thirteen (13) through twenty-four (24); (iii)
months twenty-five (25) through sixty (60) will have the first
CPI increases annually subject to annual rent adjustment per
Article 1.04b below. Where reference is made in this Lease to
rent as provided in Section 1.04a, or where such reference is
made to the term "Original Monthly Rent", such rent shall be
deemed to be $14,370.00. In addition, operating expenses are due
and payable throughout the term of the Lease.
b. Rent Adjustments: The base rent shall be
increased annually commencing the twenty-five (25) month of this
Lease in accordance with the Consumer Price Index, as provided in
Section 4.03. Said adjustment will have a cap of 3% per annum.
1.05 Operating Expenses: Lessor estimates Operating Expenses
during the calendar year when the Lease commences to be (i)
$1,568.00/month during months one (1) through twelve (12) (ii)
$2,300.00/month during months thirteen (13) through sixty (60).
Operating Expenses are in addition to the Base Rent set forth in
Section 1.04.
1.06 Security Deposit: $14,459.00. In addition to the cash
security deposit, Lessee shall provide to Lessor a performance
bond in the form of Exhibit C to this Lease, expiring not earlier
than twenty-four (24) months after the Commencement Date, in the
amount of one hundred seventy-five thousand dollars ($175,000.00)
(the "Bond Amount"), issued by a corporate surety (the "Surety")
acceptable to Lessor in its sole discretion. The performance
bond amount guarantees only the payment of monthly rent and
operating expenses for the twenty-four (24) months period
commencing on the Commencement date.
Before demanding payment under the performance bond, Lessor shall
provide written notice to both the Lessee and Surety of a default
due to payments not made under the terms of this lease. If such
default continues for thirty (30) days after written notice by
the Lessor to ▇▇▇▇▇▇ and Surety, the Lessor may demand payment of
the entire Bond Amount under the terms of the performance bond.
Upon receipt of the Bond Amount, Lessor will apply the Bond
Amount to any past due rent and operating expenses, and will hold
any remaining portion of the Bond Amount to pay rent and
operating expenses as they become due and payable. Any unapplied
funds will be returned to the Surety at the end of the lease
agreement. Notice to the Surety shall be provided to the
following address: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
1.07 Permitted Use: Office and manufacturing of gaming products;
lessee may use the premises for any lawful purpose, not otherwise
prohibited by Section 5.01, providing no hazardous or
environmental materials are placed on the premises.
1.08 Addresses for Payments, Notices and Deliveries:
Lessor: ▇▇▇▇▇▇▇ Airport Center
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Lessee: Casinovations Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.9 Brokers: Nevada Brokers, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
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1.10 Building Improvements: The tenant improvement allowance
including plans, permits and fees shall be $244,556.00. Should
Lessee anytime throughout the lease term, desire to perform
additional modifications at ▇▇▇▇▇▇'s cost, bids may be obtained
from ▇▇▇▇▇▇'s contractor or another licensed, bonded contractor
subject to Lessor's approval. If an outside contractor is
chosen, Lessee shall be subject to the following requirements:
Lessee must meet with Lessor to review the selected contractor's
bid in order to ascertain that all construction modifications
meet code requirements, prior to commencement of construction;
Provide Lessor with contractor's license and bond status; Comply
with the attached Tenant Specification Guidelines; Provide Lessor
with the buildout plans and subsequent permits for same prior to
construction; and Provide Lessor with the Building Department
final sign off and Certificate of Occupancy. Lessor will post
Notice of Non-Responsibility during said modification period.
1.11 Payments Upon Execution: The first installment of Base Rent
$9,860.00 the first month's Operating Expenses $1,740.00, and a
Security Deposit of $14,459.00 for a total of $26,059.00, which
shall be delivered to Lessor concurrently with ▇▇▇▇▇▇'s execution
of this Lease.
ARTICLE 2 PREMISES
2.01 Leased Premises: Lessor leases to Lessee and Lessee rents
from Lessor the Premises (herein the "Premises"), containing the
rental area set forth in Section 1.01b of the Basic Lease Terms.
The Premises are located at the building identified in the Basic
Lease Terms (which together with underlying real property is
called herein the "Building"), and is a portion of the project
including other buildings described in Section 1.02a of the Basic
Lease Terms (herein the "Center"). The Premises and the Center
are indicated on a site plan attached hereto as Exhibit "A". If,
upon completion of the space plans for the Premises, ▇▇▇▇▇▇'s
architect or space planner determines that the rentable square
footage of the Premises differs from that set forth in the Basic
Lease Terms, then Lessor shall so notify Lessee, and the Base
Rent (as shown in Section 1.04 of the Basic Lease Terms) shall be
promptly adjusted in proportion to the change in square footage.
Within ten (10) days following ▇▇▇▇▇▇'s request, the parties
shall memorialize the adjustments by executing a certificate to
this Lease prepared by ▇▇▇▇▇▇, provided that the failure or
refusal by either party to execute the certificate shall not
affect its validity. The form of such certificate is Exhibit
"B".
2.02 Delivery and Acceptance of Premises: Lessor shall deliver
the Premises to Lessee clean and free of debris, on the
Commencement Date (unless Lessee is already in possession), and
Lessor further warrants to Lessee that the Common Facilities
referred to in Article 6, plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities and equipment with
the Premises, fixtures, walls (interior and exterior),
foundations, ceilings, roofs, floors, windows, access doors,
loading doors, plate glass and skylights shall be in good
operating condition on the Commencement Date. In the event that
it is determined that this warranty has been violated, then it
shall be the obligation of the Lessor, after receipt of written
notice from Lessee setting forth with specificity the nature of
the violation, to promptly, at Lessor's sole cost, rectify such
violation. Lessee's failure to give such written notice to
Lessor within six (6) months after the Commencement Date shall
cause the conclusive presumption that Lessor has complied with
all of Lessor's obligations hereunder, unless such defect is not
readily ascertainable during that period of time. The warranty
contained in this Section shall be of no force or effect if prior
to the date of this Lease Lessee was the owner or occupant of the
Premises.
Except as otherwise provided in this Lease, ▇▇▇▇▇▇ hereby
accepts the Premises in their condition existing as of the
Commencement Date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises and any
covenants or restrictions of record, and accepts this Lease
subject thereto and to all matters disclosed thereby and by any
exhibits attached hereto. ▇▇▇▇▇▇ acknowledges that neither
Lessor nor ▇▇▇▇▇▇'s agent has made any representation or warranty
as to the present or future suitability of the Premises for the
conduct of ▇▇▇▇▇▇'s business.
2.03 Building Name and Address: Lessee shall not utilize any
name selected by Lessor from time to time for the Building as any
part of ▇▇▇▇▇▇'s corporate or trade name. Lessor shall have the
right to change the name, number or designation of the Building
without notice or liability to Lessee.
ARTICLE 3 TERM
3.01 General: The term shall be for the period shown in Section
1.03b of the Basic Lease Terms. Subject to the provisions of
Section 3.03, the term shall commence on the commencement date
(herein "Commencement Date") on the earliest of (a) the Estimated
Commencement Date as set forth in Section 1.03a of the Basic
Lease Terms, or (b) the date Lessee acquires possession or
commences use of the Premises for any purpose other than
construction. Within ten (10) days after possession of the
Premises is tendered to Lessee, the parties shall execute the
Exhibit "B" Certificate form provided by Lessor, which shall
state the Commencement Date and the expiration date ("Expiration
Date") of the Lease. ▇▇▇▇▇▇'s failure to execute that form shall
not affect the validity of ▇▇▇▇▇▇'s determination of those dates.
3.02 Tender of Possession by Lessor: The Premises shall be
deemed ready for occupancy upon the tendered date, but only if
and when Lessor, to the extent applicable, (a) has provided
reasonable access to the Premises for Lessee so that it may be
used without unnecessary interference, (b) has substantially
completed all the work required to be done by Lessor in this
lease, and (c) has obtained requisite governmental approvals to
Lessee's occupancy.
3.03 Delay in Possession: Notwithstanding the provisions of
Section 3.01, if Lessor, for any reason whatsoever, cannot
deliver possession of the Premises to Lessee on/or before the
Estimated Commencement Date, this Lease shall
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not be void or voidable nor shall Lessor be liable to Lessee for
any resulting loss or damage. However, Lessee shall not be
liable for any rent and the Commencement Date shall not occur
until Lessor delivers possession of the Premises and the Premises
are in fact ready for occupancy in accordance with Section 3.02;
except that if Lessor's failure to so deliver possession on the
Estimated Commencement Date is attributable to any material
action or inaction by Lessee (including any tenant improvement
construction change order requested by Lessee or Lessee's failure
to supply any information required from Lessee or the furnishing
by ▇▇▇▇▇▇ of inaccurate or erroneous estimates, specifications,
data or other information), then the Commencement Date shall not
be advanced to the date on which possession of the Premises is
tendered to Lessee, and Lessor shall be entitled to full
performance by ▇▇▇▇▇▇ (including the payment of rent) from the
Estimated Commencement Date.
3.04 Early Occupancy: If Lessee occupies the Premises prior to
the Estimated Commencement Date, ▇▇▇▇▇▇'s occupancy of the
Premises shall be subject to all of the provisions of this Lease.
Early occupancy of the Premises shall not advance the expiration
date of this Lease. Lessee shall not pay Base Rent, Operating
Expenses and all other charges, including, without limitation,
insurance specified in this Lease for the early occupancy period,
upon ▇▇▇▇▇▇'s demand for same.
3.05 Option Term(s): Lessee is hereby granted the right and
option to extend this Lease for the additional term or terms as
provided in Section 1.03c (herein "Option Term" or "Option
Terms") commencing at the expiration of the Initial Term at a
mutually agreeable increase. Such option is granted upon the
following terms and conditions:
a. The Option Term(s) shall be on the same terms,
covenants, conditions, provisions and agreements as in this Lease
and any amendments thereto except for forgiveness of Base Rent,
if applicable.
b. Lessee duly and regularly pays the rent and all other
amounts required to be paid pursuant to this Lease and performs
each and every covenant, provision and agreement on the part of
the Lessee to be paid, rendered, observed and performed herein.
c. ▇▇▇▇▇▇ gives to Lessor and ▇▇▇▇▇▇ receives from Lessee
written notice of the exercise of each option to extend this
Lease no earlier than nine (9) months and no later than six (6)
months prior to the expiration of the term immediately preceding
the Option Term(s) to be exercised, time being of the essence.
If said notification is not given and received, the option to be
exercised shall automatically expire. Failure to exercise the
first option shall result in automatic expiration of the second
if one so exists.
ARTICLE 4 RENT AND OPERATING EXPENSES
4.01 Base Rent: From and after the Commencement Date, Lessee
shall pay without deduction or offset a Base Rent for the
Premises in the total amount shown (including subsequent
adjustments, if any) in Section 1.04a of the Basic Lease Terms.
The rent shall be due and payable in equal monthly installments
on the first day of each month, in advance, except that if the
Commencement Date occurs on a day other than the first day of the
month, the first installment of Base Rent shall include rent for
both the fractional month, if any, starting with the Commencement
Date and the following calendar month. No demand, notice or
invoice shall be required.
4.02 Operating Expenses:
a. Lessee shall pay to Lessor during the term hereof, in
addition to the Base Rent, ▇▇▇▇▇▇'s share, as hereinafter
defined, of all Operating Expenses, as hereinafter defined,
during each year of the term of this Lease.
b. "Lessee's Share" is defined, for purposes of this
Lease, as the percentage determined by dividing the square
footage of the Premises by the total square footage of the
rentable space contained in the Center. It is understood and
agreed that the square footage figures set forth in the Basic
Lease Terms are approximations which Lessor and Lessee agree are
reasonable and shall not be subject to revision except in
connection with an actual change in the size of the Premises or a
change in the space available for lease in the Center.
c. The term "Operating Expenses" shall include (i) all
expenses attributable to Lessor's obligations for operation,
replacement, repair and maintenance in neat, clean, good order
and condition of the Center, including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, common lighting facilities, fences and gates,
tenant directories and any other services to be provided by
Lessor under this Lease; (ii) property taxes, general or special
assessments, and costs and expenses in contesting the amount or
validity of any property tax by appropriate proceedings; (iii)
parkway water and sewer charges and other publicly mandated
services to the Center; (iv) insurance premiums for liability and
property insurance maintained by Lessor pursuant to Article 11 or
reasonable premium equivalents should Lessor elect to self-insure
any risk that Lessor is authorized to insure hereunder; (v)
license, permit and inspection fees; (vi) air conditioning
maintenance; (vii) supplies, materials, equipment, tools,
amortization of capital investments reasonably intended to
produce a reduction in operating charges or energy conservation,
labor, any expense incurred pursuant to Article 6, 7, 11 and 12,
and (viii) a reasonable overhead/management fee which shall
include, without limitation, allocated wages and salaries, fringe
benefits and payroll taxes for administrative, accounting and
other personnel applicable to the Center. It is understood that
Operating Expenses shall include competitive charges for direct
services provided by any subsidiary or division of Lessor,
including reasonable supervisory or overhead fees. The term
"property taxes" (billed separately) as used herein shall include
the following: (i) all real estate taxes or personal property
taxes (on Lessor's personal property used for the Center), as
such property
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taxes may be reassessed from time to time; (ii) other taxes,
documentary transfer fees, charges and assessments which are
levied with respect to this Lease or to the Premises and/or the
Center, and any improvements, fixtures and equipment and other
property of Lessor located in the Center, except that general net
income and franchise taxes imposed against Lessor which shall be
excluded; and (iii) any tax surcharge or assessment which shall
be levied in addition to or in lieu of real estate or personal
property taxes, other than taxes covered by Article 8. A copy of
▇▇▇▇▇▇'s unaudited statement of expenses shall be made available
to Lessee upon request.
d. The inclusion of the improvements, facilities and
services set forth in the definition of Operating Expenses shall
not be deemed to impose an obligation upon Lessor to either have
said improvements or facilities or to provide those services
unless the Center already has the same, Lessor already provides
the services or Lessor has agreed elsewhere in this Lease to
provide the same or some of them.
e. ▇▇▇▇▇▇'s Share of Operating Expenses shall be payable
by Lessee within ten (10) days after a reasonably detailed
statement of actual expenses is presented to Lessee by ▇▇▇▇▇▇.
At Lessor's option, however, an amount may be estimated by ▇▇▇▇▇▇
from time to time of ▇▇▇▇▇▇'s share of annual Operating Expenses
and the same shall be payable monthly or quarterly, as Lessor
shall designate, during each calendar year of the Term, on the
same day as the Base Rent is due hereunder. In the event that
Lessee pays ▇▇▇▇▇▇'s estimate of the Lessee's Share of Operating
Expenses as aforesaid, Lessor shall deliver to lessee within
sixty (60) days after expiration of each calendar year a
reasonably detailed statement showing ▇▇▇▇▇▇'s share of the
actual Operating Expenses incurred during the preceding year. If
▇▇▇▇▇▇'s payments under this subparagraph during said preceding
calendar year exceed ▇▇▇▇▇▇'s Share as indicated on said
statement, Lessee shall be entitled to credit in the amount of
such overpayment against ▇▇▇▇▇▇'s Share of Operating Expenses
next falling due. If ▇▇▇▇▇▇'s payments under this subparagraph
during said preceding calendar year were less than ▇▇▇▇▇▇'s Share
as indicated on said statement, Lessee shall pay to Lessor the
amount of the deficiency within thirty (30) days after delivery
by Lessor to ▇▇▇▇▇▇ of said statement. Changes in rental amounts
will be made March 1st of each year.
f. If, at any time during any calendar year, any one or
more of the Operating Expenses are increased to a rate(s) or
amount(s) in excess of the rate(s) or amount(s) used in
calculating the estimated Operating Expenses for the year, then
▇▇▇▇▇▇'s estimated amount of Operating Expenses shall be
increased for the month in which the increase becomes effective
and for all succeeding months by an amount equal to ▇▇▇▇▇▇'s
proportionate share of the increase. Lessor shall give Lessee
written notice of the amount or estimated amount of the increase,
the month in which the increase will become effective, ▇▇▇▇▇▇'s
monthly share thereof and the months for which the payments are
due. Lessee shall pay the increase to Lessor as a part of the
Lessee's monthly payments of Estimated Operating Expenses as
provided in subparagraph "b" above, commencing with the month in
which effective.
g. Even though the Lease has terminated and ▇▇▇▇▇▇ has
vacated the Premises, when the final determination is made of
▇▇▇▇▇▇'s Share of Operating Expenses for any prior calendar year
in which the Lease terminates, Lessee shall immediately upon
notice pay the entire increase due over the estimated expenses
paid. Conversely, any overpayment made in the event expenses
decrease shall be immediately rebated by Lessor to Lessee.
4.03 Cost of Living Increases: Upon the expiration date of the
month referenced in Section 1.04b of the Basic Lease Terms after
the commencement of the Term, and upon the expiration of each
twelve (12) calendar month period thereafter during the Term
hereof, rent shall be adjusted by multiplying the Base Rent as
referenced in Section 1.04a of the Basic Lease Terms by a
fraction, which fraction shall have as its numerator the Consumer
Price Index For All Urban Consumers using the U.S. City Average
(or alternative thereto as hereinafter provided) (Base Period
1982-84=100), as published by the U.S. Department of Labor,
Bureau of Labor Statistics, for the calendar month which is four
(4) months prior to the expiration of the applicable twelve (12)
month period, and which such fraction shall have as its
denominator said Consumer Price Index, as published for the
calendar month which is four (4) months prior to the commencement
of the Term. If the present base of said Index should hereafter
be changed, then the new base shall be converted to the base now
used. In the event that the Bureau should cease to publish said
Index figure, then any similar Index published by any other
branch or department of the U.S. Government shall be used. In
the event said Bureau shall publish more than one such index, the
index showing the greater proportionate increase shall be used,
and if none is so published, then another index generally
recognized as authoritative shall be substituted by agreement of
the parties hereto, or if no such agreement is reached within a
reasonable time, either party may make application to any court
of competent jurisdiction to designate such other index. In any
event, the base used by any new index shall be reconciled to the
1982-84=100 Base Index. In no event shall the rent to be paid by
Lessee pursuant hereto be less than the Base Rent set forth in
Section 1.04a of the Basic Lease Terms or the Base Rent as
adjusted with respect to the next preceding twelve (12) month
period, whichever is the greater. In the event the numerator of
said fraction is not available at the time of adjustment of the
rent as provided herein, Lessee shall continue to pay the rent
established for the immediately prior twelve (12) month period;
provided, however, Lessee shall promptly pay to Lessor any
deficiency at such time as said rent is adjusted. Said
adjustment will commence with the twenty-fifth (25) month of the
Term with a cap of 3% per annum.
4.04 Security Deposit: Concurrently with the execution of this
Lease, ▇▇▇▇▇▇ shall deposit with ▇▇▇▇▇▇ the sum stated in Section
1.06 of the Basic Lease Terms, to secure the faithful performance
of ▇▇▇▇▇▇'s obligations hereunder. If Lessee fails to pay Rent
or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Lessor may use, apply or
retain all or any portion of said deposit for the payment of any
rent or other charges in default or for the payment of any other
sum to which Lessor may become obligated by reason of ▇▇▇▇▇▇'s
default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. If Lessor so uses or applies all or
any portion of said deposit, Lessee shall, within ten (10) days
after written demand therefor, deposit cash with Lessor in an
amount sufficient to restore said deposit to the full amount
hereinabove stated and ▇▇▇▇▇▇'s failure to do so shall be a
material breach of this Lease. If the Base monthly rent shall,
from time to time, increase during the Term, Lessee
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shall thereupon deposit with Lessor additional security deposit
so that the amount of security deposit held by Lessor shall at
all times bear the same proportion to current rent as the
original security deposit bears to the original Base monthly rent
set forth in this Article. Lessor shall not be required to keep
said deposit separate from its general accounts. If ▇▇▇▇▇▇
performs all of ▇▇▇▇▇▇'s obligations hereunder, said deposit, or
so much thereof as has not theretofore been applied by ▇▇▇▇▇▇,
shall be returned, without payment of interest or other increment
for its use, to Lessee (or, at Lessor's option, to the last
assignee, if any, of ▇▇▇▇▇▇'s interest hereunder) at the
expiration of the Term hereof, and after ▇▇▇▇▇▇ has vacated the
Premises. No trust relationship is created herein between ▇▇▇▇▇▇
and lessee with respect to said security deposit. In no event
may Lessee unilaterally apply or credit its deposit against the
last month's rent. Should Lessor sell its interest in the
Premises during the Term hereof and if Lessor deposits with the
Purchaser thereof, the then unappropriated funds deposited by
Lessee as aforesaid, thereupon Lessor shall be discharged from
any further liability with respect to such deposit.
4.05 Option Rent: If Lessee duly exercises its option to extend
this Lease as provided in Section 3.05 above, the rent payable
during the Option Term each annual CPI adjustment will have a cap
of 5% but no less than 3%.
ARTICLE 5 USES
5.01 Use: Lessee shall use the Premises only for the purposes
stated in Section 1.07 of the Basic Lease Terms. Lessee shall
not do, or permit anything to be done, in or about the Premises
which will in any way interfere with the rights of other
occupants of the Building, or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable
purpose, nor shall Lessee permit any nuisance or commit any waste
in the Premises. Lessee shall not do or permit to be done
anything which will invalidate or increase the cost of any
insurance policy(ies) covering the Building and/or their
contents, and shall comply with all applicable insurance
underwriters' rules and the requirements of the Pacific Fire
Rating Bureau or any other organization performing a similar
function. Lessee shall comply, at its expense, with all present
and future laws, ordinances and requirements of all governmental
authorities that pertain to Lessee or its use of the Premises,
including without limitation, all federal and state occupational
health and safety requirements, whether or not Lessee's
compliance will necessitate expenditures or interfere with its
use and enjoyment of the Premises. Lessee shall promptly upon
demand reimburse Lessor for any additional insurance premium
charged by reason of ▇▇▇▇▇▇'s failure to comply with the
provisions of this Section, and shall indemnify Lessor from any
liability and/or expense resulting from ▇▇▇▇▇▇'s noncompliance.
5.02 Hazardous Materials: Lessee shall not cause, permit or
allow any Hazardous Materials (as defined below) to be brought
upon, kept or used in or about the Premises by Lessee, its
agents, employees, contractors or invitees, without the prior
written consent of Lessor (which consent Lessor shall not
unreasonably withhold as long as Lessee demonstrates to Lessor
reasonable satisfaction that such hazardous materials are
necessary to Lessee's business, and will be used, kept and stored
in a manner that complies with all Hazardous Materials Laws (as
defined below) regulating any such Hazardous materials so brought
upon, used or kept in or about the Premises). If (i) Lessee, its
employees, invitees or agents breach any obligation stated in the
preceding sentence, or (ii) the presence of Hazardous Materials
in the Premises caused or permitted by Lessee results in
contamination of the Premises, the Building, any structure,
system or improvement, any soil or water in, on, under or about
the Premises (collectively, the "Property"), or (iii)
contamination of the Property by Hazardous Materials otherwise
occurs for which Lessee is legally liable to Lessor for damage
resulting therefrom, then Lessee shall indemnify, defend and hold
Lessor and lessor's partners, affiliates, employees, contractors,
representatives, lenders, successors and assigns (collectively,
the "Indemnified Parties") harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities, losses,
actions or causes of action (including, without limitation,
diminution in value of the Building, damages for the loss or
restriction on use of rentable or usable space or of any amenity,
damages arising from any adverse impact on marketing any of the
foregoing, and sums paid in settlement of claims, attorneys' fees
and costs incurred, consultant fees and expert fees) made,
brought or sought against or suffered or incurred by the
Indemnified Parties, or any of them, which arise during or after
the Term of this Lease as a result of such contamination. This
indemnification of Lessor by ▇▇▇▇▇▇ includes, without limitation,
attorneys' fees and expenses and costs incurred in connection
with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any federal,
state or local governmental agency or political subdivision or
required to return the property to the condition existing prior
to the introduction of any such Hazardous Materials for which
lessee is responsible. Lessee's obligations hereunder shall
survive the expiration or earlier termination of the Term of this
Lease. Prior to lease commencement, Lessee will provide Lessor
with toxic management plans for glass and sign manufacturing.
Lessee shall at all times and in all respects comply with
all federal, state and local laws, ordinances and regulations
("Hazardous Materials Laws") relating to industrial hygiene,
environmental protection or the use, analysis, generation,
manufacture, storage, disposal or transportation of any oil or
petrochemical products, PCB, flammable materials, explosives,
asbestos, urea formaldehyde, radioactive materials or waste, or
other hazardous, toxic, contaminated or polluting materials,
substances or wastes, including, without limitation, any
substances defined as or included in the definition of "Hazardous
Materials", "toxic substances" or "chemicals known to the State
to cause cancer or reproductive toxicity" under any such
Hazardous Materials Laws (collectively, "Hazardous Materials").
5.03 Signs and Auctions: Lessee shall not place any signs on the
Premises without ▇▇▇▇▇▇'s prior written consent. Lessee shall
not conduct, nor permit to be conducted, either voluntarily or
involuntarily, any auctions or sheriff's sales from the Premises
without having first obtained ▇▇▇▇▇▇'s prior written consent,
which shall not be unreasonably withheld.
5.04 Year 2000 Compliance: The Lessee shall take reasonable
steps to ensure that all computer controlled facility components
that have been purchased or installed by Lessee, or over which
Lessee has control, are Year 2000
7
compliant prior to January 1, 2000. Compliance shall be verified
by physical testing of the components and/or written confirmation
from the component or systems manufacturer. "Computer controlled
facility components" refers to software driven technology and
embedded microchip technology. This includes, but is not limited
to, programmable thermostats, HVAC controllers, auxiliary
elevator controllers, utility monitoring and control systems,
fire detection and suppression systems, alarms, security systems,
and any other facilities control systems utilizing microcomputer,
minicomputer, or programmable logic controllers. "Year 2000
compliant" means computer controlled facility components that
accurately process date/time data (including, but not limited to,
calculating, comparing, and sequencing) from, into, and between
the twentieth and twenty-first centuries, and the years 1999 and
2000 and leap year calculations.
ARTICLE 6 COMMON FACILITIES AND VEHICLE PARKING
6.01 Operation and Maintenance of Common Facilities: During the
Term, Lessor shall operate all Common Facilities within the
Center. The term "Common Facilities" shall mean all areas within
the exterior boundaries of the Building and other buildings in
the Center which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and
improvements provided by Lessor for the common use of Lessor and
tenants and their respective employees and invitees, including,
without limitation, parking areas and structures, driveways,
sidewalks, landscaped and planted areas and common entrances not
located within the Premises of any tenant.
6.02 Use of Common Facilities: The occupancy by Lessee of the
Premises shall include the use of the Common Facilities in common
with Lessor and with others for whose convenience and use the
Common Facilities may be provided by Lessor, subject, however, to
compliance with all rules and regulations as are prescribed from
time to time by Lessor. Lessor shall operate and maintain the
Common Facilities in the manner Lessor may determine to be
appropriate. Lessor shall at all times during the Term have
exclusive control of the Common Facilities, and may restrain any
use or occupancy, except as authorized by lessor's rules and
regulations. Lessee shall keep the Common Facilities clear of
any obstruction or unauthorized use related to Lessee's
operations. Nothing in this Leas shall be deemed to impose
liability upon Lessor for any damage to or loss of the property
of, or for any injury to, Lessee, its invitees or employees.
Lessor may temporarily close any portion of the Common Facilities
for repairs or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed
sufficient by Lessor. Under no circumstances shall the right
herein granted to use the Common Facilities be deemed to include
the right to store any property, temporarily or permanently, in
the Common Facilities. Any such storage shall be permitted only
by the prior written consent of Lessor or ▇▇▇▇▇▇'s designated
agent, which consent may be revoked at any time. In the event
that any unauthorized storage shall occur, then Lessor shall have
the right, without notice, in addition to such other rights and
remedies that it may have, to remove the property and charge the
cost to Lessee, which cost shall be immediately payable upon
demand by Lessor.
6.03 Parking: Subject to Lessor's right to adopt reasonable,
nondiscriminatory modifications and additions to the regulations
by written notice to Lessee, Lessee shall have the parking rights
set forth as follows:
a. Lessor agrees to maintain, or cause to be maintained,
an automobile parking area ("Parking Area") for the benefit and
use of the visitors and patrons and employees of Lessee, and
other tenants and occupants of the Center. The Parking Area
shall include the automobile parking stalls, driveways,
entrances, exits, sidewalks and attendant pedestrian passageways
and other areas designated for parking. Lessor shall have the
right and privilege of determining the nature and extent of the
Parking Area, and of making such changes to the Parking Area from
time to time which in its opinion are desirable and for the best
interests of all persons using the Parking Area. Lessor shall
keep the Parking Area in a neat, clean and orderly condition,
properly lighted and landscaped, and shall repair any damage to
its facilities. Nothing contained in this Lease shall be deemed
to create liability upon Lessor for any damage to motor vehicles
of visitors or employees, unless ultimately determined to be
caused by the sole negligence or willful misconduct of Lessor,
its agents, servants and employees. Unless otherwise instructed
by lessor, every user of the Parking Area shall park and lock his
or her own motor vehicle. Lessor shall also have the right to
establish, and from time to time amend, and to enforce against
all users of the Parking Area all reasonable rules and
regulations as Lessor may deem necessary and advisable for the
proper and efficient operation and maintenance of the Parking
Area.
b. Persons using the Parking Area shall observe all
directional signs and arrows and any posted speed limits. All
vehicles shall be parked entirely within painted stalls, and no
vehicles shall be parked in areas which are posted or marked as
"no parking" or on, or in ramps, driveways and aisles. Only one
(1) vehicle may be parked in a parking space. In no event shall
Lessee interfere with the use and enjoyment of the Parking Area
by other tenants of the Building or buildings within the Center
or their employees or invitees.
c. Parking areas shall be used only for parking vehicles.
Washing, waxing, cleaning or servicing of vehicles, or the
storage of vehicles for twenty-four (24) hour periods, in the
Parking Area (other than emergency services) by any user of the
Parking Area or his or her agents or employees is prohibited
unless otherwise authorized by Lessor. Lessee shall have no
right to install any fixtures, equipment or personal property
(other than vehicles) in the Parking Area, nor shall Lessee make
any alteration to the Parking Area.
6.04 Changes and Additions by Lessor: Lessor reserves the right
to make alterations or additions to the Building(s) or the
Center, or to the attendant fixtures, equipment and Common
Facilities. Lessor may at any time relocate or remove any of the
various buildings, parking areas and other common facilities, and
may add buildings and areas to the Center from time to time. No
change shall entitle Lessee to any abatement of rent or other
claim against ▇▇▇▇▇▇, provided that the change does not deprive
Lessee of reasonable access to or use of the Premises.
8
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.1 Lessor's Obligations:
a. Subject to the provisions of Section 4.02 (Operating
Expenses), Article 5 (Uses), Article 6 (Building Parking),
Section 7.02 (Lessee's Obligations) and Article 12 (Damage or
Destruction), and except for damage caused by any negligent or
intentional act or omission of Lessee, Lessee's employees,
suppliers, shippers, customers or invitees, in which event Lessee
shall, at its sole cost and expense, repair the damage further
utilizing a contractor of Lessor's choice. Lessor at Lessor's
expense, subject to reimbursement pursuant to Section 4.02, shall
keep in good condition and repair the foundations, exterior
walls, structural condition of interior bearing walls, and roof
of the Premises, and utility installations of the Building and
all parts thereof, as well as providing the services for which
there is an Operating Expense pursuant to Section 4.02. Lessor
shall not, however, be obligated to paint the interior walls, nor
shall Lessor be required to maintain, repair or replace windows,
doors or plate glass of the Premises. Lessor shall have no
obligation to make repairs under this Section 7.01 until a
reasonable time after receipt of written notice from ▇▇▇▇▇▇ of
the need for such repairs. Lessor shall not be liable for
damages or loss of any kind or nature by reason of ▇▇▇▇▇▇'s
failure to furnish any such services when such failure is caused
by accident, breakage, repairs, strikes, lockout or any other
labor disturbances or disputes of any character, or by any other
cause beyond the reasonable control of Lessor.
▇. ▇▇▇▇▇▇ shall warrant Lessee's heating-ventilation-air
conditioning (HVAC), plumbing and electrical throughout the first
lease year of the Initial Term only. In addition, Lessor will
successively perform quarterly air filter changes and annual
evaporative cooler winterizing, if applicable; however, Lessor
shall not be responsible for any other item pertaining to the
HVAC, plumbing or electrical following said warranty during the
Initial Term, including without limitation, repair or
replacement. Lessor's one year warranty shall immediately expire
if Lessee, its employees, invitees or agents modify or cause
damage to same and Lessee shall then assume all responsibility
for same, including without limitation, repair/replacement, etc.
After ▇▇▇▇▇▇'s one year HVAC warranty, Lessor reserves the right
to continue changing the HVAC filters on a quarterly basis and
further winterize the warehouse evaporative coolers on an annual
basis.
7.02 Lessee's Obligations:
a. Subject to the provisions of Article 5 (Use), Section
7.05 (Lessor's Obligations) and Article 12 (Damage or
Destruction), Lessee, at Lessee's expense, shall keep in good
order, condition and repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or the means
of repairing same are reasonably or readily accessible to Lessee)
including, without limiting the generality of the foregoing, all
plumbing, heating, ventilating and air conditioning systems,
electrical and lighting facilities and equipment within the
Premises, fixtures, interior walls and interior surfaces of
exterior walls, ceilings, windows (including glass and casings),
doors (including casings), plate glass and skylights located
within the Premises.
b. If Lessee fails to perform Lessee's obligations under
this Section 7.02 or under any other paragraph of this Lease,
Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of emergency, in
which event, no notice shall be required), perform such
obligations on ▇▇▇▇▇▇'s behalf and put the Premises in good
order, condition and repair, and the cost thereof together with
interest thereon at fifteen percent (15%) per annum shall be due
and payable as additional rent to Lessor together with ▇▇▇▇▇▇'s
next Base Rent installment.
7.03 Alterations and Additions:
a. Lessee shall not, without ▇▇▇▇▇▇'s prior written
consent which shall not be unreasonably withheld, make any
alterations, improvements, additions or Utility Installments in,
on or about the Premises, except for nonstructural alterations to
the Premises not exceeding $5,000 in cumulative costs during the
Initial Term. In any event, whether or not in excess of $5,000
in cumulative cost, Lessee shall make no change or alteration to
the exterior of the Premises, without ▇▇▇▇▇▇'s prior written
consent. As used in this Lease, the term "Utility Installations"
shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing. Lessor may
require that Lessee remove any and all of said alterations,
improvements, additions or Utility Installations at the
expiration of the Initial Term, as it may have been extended, and
restore the Premises to its prior condition. Lessor may require
Lessee to provide Lessor, at ▇▇▇▇▇▇'s sole cost and expense, a
lien and completion bond in an amount equal to one and one-half
times the estimated cost of such improvements, to insure Lessor
against any liability for mechanic's and materialman's liens and
to insure completion of the work. Should Lessee make any
alterations, improvements, additions or Utility Installations
without the prior approval of Lessor, Lessor may, at any time
during the term of this Lease, require that Lessee remove any or
all of same.
b. Any alterations, improvements, additions or Utility
Installations in or about the Premises that Lessee shall desire
to make and which requires the consent of Lessor, shall be
presented to Lessor in written form with proposed detailed plans.
If Lessor shall give its consent, the consent shall be deemed
conditioned upon Lessee acquiring a permit to perform the work
from appropriate governmental agencies, the furnishing of a copy
thereof to Lessor prior to the commencement of the work and the
compliance by Lessee of all conditions of said permit in a prompt
and expeditious manner.
c. Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for
Lessee at or for use in the Premises, which claims are, or may be
secured by, any mechanic's or
9
materialman's lien against the Premises, or any interest therein.
Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises, and Lessor
shall have the right to post notices of non-responsibility in or
on the Premises or the Building as provided by law. If Lessee
shall in good faith contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense, defend itself
and Lessor against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon, before the
enforcement thereof, against Lessor or the Premises upon the
condition that if Lessor shall require, Lessee shall furnish to
Lessor a surety bond satisfactory to Lessor in an amount equal to
such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises free from the
effect of such lien or claim. In addition, Lessor may require
Lessee to pay ▇▇▇▇▇▇'s attorneys fees and costs in participating
in such action if Lessor shall decide it is to Lessor's best
interest to do so.
d. All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations
constitute trade fixtures of Lessee), which may be on the
Premises, shall be the property of Lessor and shall remain upon
and be surrendered with the Premises at the expiration of the
Initial Term, as it may have been extended, unless Lessor
requires their removal pursuant to subparagraph "a" above.
Notwithstanding the provisions of this paragraph, ▇▇▇▇▇▇'s
machinery and equipment, other than that which is affixed to the
Premises, and other than Utility Installations, shall remain the
property of Lessee and may be removed by Lessee subject to the
provisions of Section 7.02.
7.04 Utility Additions: Lessor reserves the right to install new
or additional utility facilities throughout the Building for the
benefit of Lessor or Lessee, including, but not limited to, such
utilities as plumbing, electrical systems, security systems,
communication systems and fire protection and detection systems,
so long as such installations do not unreasonably interfere with
▇▇▇▇▇▇'s use of the Premises.
7.05 Entry and Inspection: Lessor shall at reasonable times have
the right to enter the Premises to inspect them, to supply
services in accordance with this Lease, to protect the interests
of Lessor in the Premises, to submit the Premises to prospective
or actual purchasers or encumbrance holders (or, during the last
one hundred and eighty (180) days of the Term, or when an uncured
tenant default exists, to prospective tenants), to alter, improve
or repair the Premises, or as otherwise permitted in this Lease,
all without being deemed to have caused an eviction of ▇▇▇▇▇▇ and
without abatement of rent except as provided elsewhere in this
Lease. If Lessee vacates the Premises, Lessor may enter the
Premises and alter them without abatement of rent and without
liability to ▇▇▇▇▇▇. Lessor shall have the right to use any and
all means which Lessor may deem proper to open the doors in an
emergency in order to obtain entry to the Premises, and any entry
to the Premises obtained by Lessor shall not under any
circumstances be deemed to be a forcible or unlawful entry into,
or a detainer of the Premises, or any eviction of Lessee from the
Premises.
ARTICLE 8 TAXES AND ASSESSMENTS ON LESSEE'S PROPERTY
8.01 Taxes of Lessee's Property: Lessee shall be liable for and
shall pay, at least ten (10) days before delinquency, all taxes
and assessments levied against all personal property of ▇▇▇▇▇▇
located in the Premises. When possible, Lessee shall cause its
personal property to be assessed and billed separately from the
real property of which the Premises form a part. If any taxes on
▇▇▇▇▇▇'s personal property are levied against Lessor or ▇▇▇▇▇▇'s
property is increased by the inclusion of a value placed upon the
personal property of ▇▇▇▇▇▇, and if Lessor pays the taxes based
upon the increased assessment, Lessee shall pay to Lessor the
taxes so levied against Lessor or the proportion of the taxes
resulting from the increase in the assessment. In calculating
what portion of any tax bill which is assessed against Lessor
separately, or Lessor and ▇▇▇▇▇▇ jointly, is attributable to
▇▇▇▇▇▇'s fixtures and personal property, Lessor's reasonable
determination shall be conclusive.
ARTICLE 9 UTILITIES
Lessee shall fully and promptly pay for all gas and electric
(where applicable), water, telephone and trash removal for the
building and other utilities of every kind furnished to the
leased Premises, together with any personal property taxes
thereon, and all other costs and expenses of every kind
whatsoever, of, or in connection with the use, operation and
maintenance of the leased Premises and all activities conducted
thereon, and Lessor shall have no responsibility of any kind for
any thereof. Lessee shall put all such utilities in its own name
and not that of Lessor.
ARTICLE 10 ASSIGNMENT AND SUBLETTING
10.01 Rights of Parties:
a. No assignment (whether voluntary, involuntary or by
operation of law), and no subletting shall be valid or effective
without Lessor's prior written consent; such consent will not be
unreasonably withheld. Further, no assignment of subletting
shall relieve Lessee from its primary and ultimate obligations,
responsibilities or duties under the Lease.
b. Lessee may assign this Lease or sublet the Premises to
an assignee or subtenant which controls, is controlled by or is
under common control with Lessee or to any corporation resulting
from the merger of or consolidation with Lessee ("Lessee's
Affiliate"). In such case, any ▇▇▇▇▇▇'s Affiliate shall assume
in writing all of ▇▇▇▇▇▇'s obligations under this Lease. Lessee
shall in no event increase ▇▇▇▇▇▇'s Affiliate's rent from the
rate currently being charged Lessee under this Lease.
c. If Lessee, or any guarantor of Lessee ("Lessee's
Guarantor") is a corporation, or is an unincorporated association
or partnership, the transfer of any stock or interest
10
which in one or more transfer, in the aggregate, constitutes a
transfer of more than 51% of the voting stock of the Lessee or
▇▇▇▇▇▇'s Guarantor shall be deemed an assignment within the
meaning and provisions of this Article. In addition, any change
in the status of the entity, such as, but not limited to, the
withdrawal of a general partner, shall be deemed an assignment
within the meaning of this Article.
d. Lessee shall reimburse Lessor for Lessor's reasonable
costs and attorney's fees incurred in connection with the
processing and documentation of any requested transfer. In
addition, Lessee shall pay a transfer fee of $500.00 in the event
the transfer is approved.
10.02 Effect of Transfer: No subletting or assignment, even
with the consent of ▇▇▇▇▇▇, shall relieve Lessee of its
obligation to pay rent and to perform all its other obligations
under this Lease. Moreover, Lessee shall indemnify and hold
Lessor harmless, as provided in Section 11.03, for any acts or
omission by ▇▇▇▇▇▇'s Affiliate. Each transferee, other than
Lessor, shall assume all obligations of Lessee under this Lease
and shall be liable jointly and severally with Lessee for the
payment of all rent, and for the due performance of all of
Lessee's obligations under this Lease. No transfer shall be
binding upon Lessor unless any document memorializing the
transfer is delivered to Lessor and, if the transfer is an
assignment or sublease, both the assignee/subtenant and Lessee
deliver to Lessor an executed document which contains (i) a
covenant of assumption by the assignee/subtenant, and (ii) an
indemnification agreement by Lessee, both satisfactory in
substance and form to Lessor and consistent with the requirements
of this Article; provided that the failure of the
assignee/subtenant or ▇▇▇▇▇▇ to execute the instrument of
assumption shall not release either from any obligation under
this Lease. The acceptance by Lessor of any payment due under
this Lease from any other person shall not be deemed to be a
waiver by Lessor of any provision of this Lease or to be a
consent to any transfer. Consent by Lessor to one or more
transfers shall not operate as a waiver or estoppel to the future
enforcement by Lessor of its rights under this Lease.
ARTICLE 11 INSURANCE AND INDEMNITY
11.01 Liability Insurance - Lessee: Lessee shall, at
Lessee's expense, obtain and keep in force during the term of
this Lease, a policy of Combined Single Limit Bodily Injury and
Property Damage insurance insuring Lessee and Lessor against any
liability arising out of the use, occupancy or maintenance of the
Premises. Such insurance shall be in an amount not less than
$1,000,000.00 per occurrence. The policy shall insure
performance by ▇▇▇▇▇▇ of the indemnity provisions of this
Article. The limits of said insurance shall not, however, limit
the liability of Lessee hereunder.
11.02 Lessor's Insurance: (Building insurance to be billed
separately by Lessor to Lessee). Lessor may, at its election,
provide any or all of the following types of insurance, with or
without deductible and in amounts and coverages as may be
determined by Lessor in its discretion: "all risk" property
insurance, subject to standard exclusions, covering the Premises,
and such other risks as Lessor or its mortgagees may from time to
time deem appropriate, and comprehensive public liability
coverage. Lessor shall not be required to carry insurance of any
kind on Lessee's property, including leasehold improvements,
trade fixtures, furnishings, equipment, plate glass, signs and
all other items of personal property, and shall not be obligated
to repair or replace the property should damage occur. All
proceeds of insurance maintained by Lessor upon the Premises
shall be the property of Lessor, whether or not Lessor is
obligated to, or elects, to make any repairs. In the event there
is a deductible clause in any standard form policy insuring the
Premises against fire, extended coverage and other property
insurance losses, then the amount deducted form the coverage
pursuant to such deductible clause shall be borne by Lessee. Any
insurance containing a deductible clause of $3,000 (per
occurrence) for fire, extended coverage and other property
losses, shall not, by virtue of such deductible clause, be
regarded as unsatisfactory. In the event Lessor assumes
supervision and control of the repair or restoration activity for
the improvements damaged or destroyed by reason of occurrences
embraced by the aforesaid standard form insurance policy, Lessor
shall provide Lessee with written notice of the actual cost of
repair and restoration, up to the full deductible amount, and
Lessee shall pay to Lessor such sum within thirty (30) days
thereafter. Failure to pay such sum shall constitute a breach of
the Lease and subject Lessee to any rights or remedies of Lessor
as provided in the Lease.
11.03 Waiver of Subrogation: Lessor and Lessee hereby waive
any rights each may have against the other on account of any loss
or damage occasioned to Lessor or Lessee, as the case may be, or
to the Premises or its contents, and which may arise out of or
incident to the perils insured against under Section 11.02, which
perils occur in, on or about the Premises, whether due to the
negligence of Lessor or Lessee or their agents, contractors
and/or invitees. The parties shall obtain from their respective
insurance companies insuring the property a waiver of any right
of subrogation which said insurance companies may have against
Lessor or Lessee as the case may be.
11.04 Policies: All insurance to be maintained by Lessee
under this Lease shall be procured from an insurance company or
companies rated "A" or better in "Best's Insurance Guide" and
authorized to do business in the State of Nevada, and ▇▇▇▇▇▇
shall deliver to Lessor, prior to taking occupancy of the
Premises, copies of insurance binders required to be maintained
by Lessee hereunder, together with evidence of the payment of the
premiums thereof. Insurance binders shall name Lessor and all
members thereof as "Additional Insured." The binders evidencing
such insurance shall provide that they shall not be canceled or
modified except after thirty (30) days prior written notice of
intention to modify or cancel has been given to Lessor and any
encumbrancer named as beneficiary thereunder. At lease ninety
(90) days prior to the expiration date of any policy to be
maintained by Lessee hereunder, Lessee shall deliver to Lessor a
renewal policy or "binder" therefor.
11.05 Lessee's Indemnity: To the fullest extent permitted by
law, Lessee shall defend, indemnify and hold harmless Lessor, its
agents and any and all affiliates of Lessor, including, without
limitation, its members, co-venturers, corporations or other
entities controlling, controlled by or under common control with
Lessor, from and against any
11
and all claims or liabilities arising either before or after the
Commencement Date from Lessee's use or occupancy of the Premises,
the Building, or from the conduct of its business, or from any
activity, work or thing done, permitted or suffered by Lessee or
its agents, employees, invitees or licensees in or about the
Premises, the Building, or from any default in the performance of
any obligation on Lessee's part to be performed under this Lease,
or from any act or negligence of Lessee or its agents, employees,
visitors, patrons, guests, invitees or licensees. In case
Lessor, its agent or affiliates are made a party to any
litigation commenced by or against Lessee (relating to ▇▇▇▇▇▇'s
use and occupancy of Premises), then Lessee shall protect and
hold Lessor harmless and shall pay all costs, expenses and
attorneys' fees incurred or paid by Lessor in connection with the
litigation. Lessor may, at its option, require Lessee to assume
▇▇▇▇▇▇'s defense in any action covered by this Section through
counsel satisfactory to Lessor.
11.06 Lessor's Non-Liability: Lessor shall not be liable to
Lessee, its employees, agents and invitees, and Lessee hereby
waives all claims against Lessor for loss of or damage to any
property, or any injury to any person, or loss or interruption of
business or income, resulting from, but not limited to, fire,
explosion, falling plaster, steam, gas, electricity, water or
rain which may leak or flow from or into any part of the Premises
or from the breakage, leakage, obstruction or other defects of
the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, electrical works or other fixtures in the Building,
whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building, unless Lessor,
its agents, invitees and/or employees cause such loss, damage or
injury through their own negligence or willful misconduct.
Neither Lessor nor its agents shall be liable for interference
with light or other similar intangible interests. Lessee shall
immediately notify Lessor in case of fire or accident in the
Premises, the Building and of defects in any improvements or
equipment.
ARTICLE 12 DAMAGE OR DESTRUCTION
12.01 Restoration:
a. If the Building of which the Premises are a part is
damaged, Lessor shall repair that damage as soon as reasonably
possible, at its expense, unless: (i) Lessor reasonably
determines that the cost of repair would exceed ten percent (10%)
of the full replacement cost of the Building ("Replacement Cost")
and the damage is not covered by Lessor's fire and extended
coverage insurance (or by normal extended coverage policy should
Lessor fail to carry that insurance); or (ii) Lessor reasonably
determines that the cost of repair would exceed twenty-five
percent (25%) of the Replacement Cost; or (iii) Lessor reasonably
determines that the cost of repair would exceed ten percent (10%)
of the Replacement Cost and the damage occurs during the final
twelve (12) months of the Initial Term, as it may have been
extended. Should Lessor elect not to repair the damage for one
of the preceding reasons, Lessor shall so notify Lessee in
writing within sixty (60) days after the damage occurs and this
Lease shall terminate as of the date of that notice.
b. Unless Lessor elects to terminate this Lease in
accordance with subsection "a" above, this Lease shall continue
in effect for the remainder of the Initial Term, as it may have
been extended; provided that if the damage is so extensive as to
reasonably prevent Lessee's substantial use and enjoyment of the
Premises for more than six (6) months, then Lessee may elect to
terminate this Lease by written notice to Lessor within the sixty
(60) day period stated in subsection "a".
c. Commencing on the date of any damage to the Building,
and ending on the date the damage is repaired or this Lease is
terminated, whichever occurs first, the rental to be paid under
this Lease shall be abated in the same proportion that the floor
area of the Premises that is rendered unusable by the damage from
time to time bears to the total floor area of the Premises.
d. Notwithstanding the provisions of subsections "a", "b"
and "c" of this Section, the cost of any repairs shall be borne
by Lessee, and Lessee shall not be entitled to rental abatement
or termination rights if the damage is due to the fault or
neglect of Lessee or its employees, subtenants, invitees or
representatives. In addition, the provisions of this Section
shall not be deemed to require Lessor to repair any improvements
or fixtures that Lessee is obligated to repair or insure pursuant
to any other provisions of this Lease. Lessee will have
liability for repairs unless Lessor, its agents, invitees and/or
employees cause such damage through their own negligence or
willful misconduct or by such act of God.
ARTICLE 13 EMINENT DOMAIN
13.01 Total or Partial Taking: If all or a material portion
of the Premises is taken by any lawful authority by exercise of
the right of eminent domain, or sold to prevent a taking, either
Lessee or Lessor may terminate this Lease effective as of the
date possession is required to be surrendered to the authority.
In the event title to a portion of the Building, other than the
Premises, is taken or sold in lieu of taking, and if Lessor
elects to restore the Building in such a way as to alter the
Premises materially, Lessor may terminate this Lease, by written
notice to Lessee, effective on the date of vesting of title. In
the event neither party has elected to terminate this Leas as
provided above, then Lessor shall promptly, after receipt of a
sufficient condemnation award, proceed to restore the Premises to
substantially their condition prior to the taking, and a
proportionate allowance shall be made to Lessee for the rent
corresponding to the time during which, and to the part of the
Premises of which, Lessee is deprived on account of the taking
and restoration. In the event of a taking, Lessor shall be
entitled to the entire amount of the condemnation award without
deduction for any estate or interest of ▇▇▇▇▇▇; provided that
nothing in this Section shall be deemed to give Lessor any
interest in, or prevent Lessee from seeking any award against the
taking authority for, the taking of personal property and
fixtures belonging to Lessee or for relocation recoverable from
the taking authority.
13.02 Temporary Taking: No temporary taking of the Premises
shall terminate this Lease or give Lessee any right to abatement
of rent, and any award specifically attributable to a temporary
taking of the Premises shall belong entirely
12
to Lessee. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period not to exceed
ninety (90) days.
13.03 Taking of Parking Area: In the event there shall be a
taking of the Parking Area such that Lessor can no longer provide
sufficient parking to comply with this lease, Lessor may
substitute reasonably equivalent parking in a location reasonably
close to the Building; provided that if Lessor fails to make that
substitution within ninety (90) days following the taking and if
the taking materially impairs Lessee's use and enjoyment of the
Premise, Lessee may, at its option, terminate this Lease by
written notice to Lessor, and such termination shall be effective
thirty (30) days after written notice of termination is given by
▇▇▇▇▇▇. If this Lease is not so terminated by ▇▇▇▇▇▇ within
thirty (30) days after this taking, there shall be no abatement
of rent and this Lease shall continue in effect.
ARTICLE 14 SUBORDINATION; ESTOPPEL CERTIFICATE
14.01 Suborination:
a. This Lease shall be subordinate to all ground or
underlying leases, mortgages, deeds of trust and conditions,
covenants and restrictions, reciprocal easements and rights of
way, if any, which may hereafter affect the Premises, and to all
renewals, modifications, consolidations, replacements and
extensions thereof; provided, that so long as Lessee is not in
default under this Lease, this Lease shall not be terminated or
Lessee's quite enjoyment of the Premises disturbed in the event
of termination of any such ground or underlying lease, or the
foreclosure of any such mortgage or deed of trust, to which
▇▇▇▇▇▇ has subordinated this Lease pursuant to this Section. In
the event of a termination or foreclosure, Lessee shall become a
tenant of and attorney to the successor-in-interest to ▇▇▇▇▇▇
upon the same terms and conditions as are contained in this
Lease, and shall execute any instrument reasonably required by
▇▇▇▇▇▇'s successor for that purpose. Lessee shall also, upon
written request of Lessor, execute and deliver all instruments as
may be required from time to time to subordinate the rights of
Lessee under this Lease to any ground or underlying lease or to
the lien of any mortgage or deed of trust, or if requested by
Lessor, to subordinate, in whole or in part, any ground or
underlying lease or the lien of any mortgage or deed of trust to
this Lease.
b. Failure of Lessee to execute any statements or
instruments necessary or desirable to effectuate the provisions
of this Article within ten (10) days after written request by
Lessor, shall constitute a default under this Lease. In the
event, Lessor, in addition to any other rights or remedies it
might have, shall have the right, by written notice to ▇▇▇▇▇▇, to
terminate this Lease as of a date not less than twenty (20) days
after the date of ▇▇▇▇▇▇'s notice. Lessor's election to
terminate shall not relieve Lessee of any liability for its
default.
14.02 Estoppel Certificate:
a. Lessee shall, at any time upon not less than twenty
(20) days' prior written notice from Lessor, execute, acknowledge
and deliver to Lessor, in any form that Lessor may reasonably
require, a statement, in writing (i) certifying that this Lease
is unmodified and in full force and effect (or, if modified,
stating the nature of the modification and certifying that this
Lease is unmodified and in full force and effect) and the dates
to which the rental, additional rent and other charges have been
paid in advance, if any, and (ii) acknowledging that, to ▇▇▇▇▇▇'s
knowledge, there are no uncured defaults on the part of Lessor,
or specifying each default if any are claimed, and (iii) setting
forth all further information that Lessor may reasonably require.
▇▇▇▇▇▇'s statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the Building.
b. ▇▇▇▇▇▇'s failure to deliver any estoppel statement
within the provided time shall be conclusive upon Lessee that (i)
this Lease is in full force and effect without modification
except as may be represented by Lessor, (ii) there are no uncured
defaults in Lessor's performance, and (iii) not more than one
month's rental has been paid in advance.
ARTICLE 15 DEFAULTS AND REMEDIES
15.01 ▇▇▇▇▇▇'s Defaults: In addition to any other event of
default set forth in this Lease, the occurrence of any one or
more of the following events shall constitute a default by
Lessee:
a. The abandonment of the Premises by ▇▇▇▇▇▇. Abandonment
is defined to include, but not limited to, any absence by Lessee
from the Premises for ten (10) days or longer.
b. The failure by Lessee to make any payment of rent or
additional rent required to be made by ▇▇▇▇▇▇, as and when due,
where the failure continues for a period of ten (10) days after
the date such payment was due. For purposes of these default and
remedies provisions, the term "additional rent" shall be deemed
to include all amounts of any type whatsoever, other than Base
Rent, to be paid by Lessee pursuant to the terms of this Lease.
c. Assignment, sublease, encumbrance or other transfer of
the Lease by ▇▇▇▇▇▇, either voluntarily or by operation of law,
whether by judgment, execution transfer by intestacy or testacy,
or other means, without the prior written consent of ▇▇▇▇▇▇.
d. The discovery by Lessor that any financial statement
provided by ▇▇▇▇▇▇, or by any affiliate, successor or guarantor
of Lessee was materially false or misleading.
e. The failure or inability by ▇▇▇▇▇▇ to observe or
perform any of the express or implied covenants or provisions of
this Lease to be observed or performed by Lessee, other than as
specified in any other subsection of this
13
Section, where the failure continues for a period of thirty (30)
days after written notice from Lessor to Lessee. However, if the
nature of the failure is such that more than thirty (30) days are
reasonably required for its cure, then Lessee shall not be deemed
to be in default if Lessee commences the cure within thirty (30)
days and thereafter diligently pursues the cure to completion in
a time period not to exceed thirty (30) days.
f. (i) The making by Lessee of any general assignment for
the benefit of creditors; (ii) the filing by or against Lessee of
a petition to have Lessee adjudged a Chapter 7 debtor under the
Bankruptcy Code or to have debts discharged or a petition for
reorganization or arrangement under any law relating to
bankruptcy (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of
substantially all of ▇▇▇▇▇▇'s assets located at the Premises or
of Lessee's interest in this Lease, if possession is not restored
to Lessee within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease
where the seizure is not discharged within thirty (30) days; or
(v) Lessee's convening of a meeting of its creditors for the
purpose of effecting a moratorium upon or composition of its
debts. Lessor shall not be deemed to have knowledge of any event
described in this subsection unless notification in writing is
received by Lessor, nor shall there be any presumption
attributable to Lessor of ▇▇▇▇▇▇'s insolvency. In the event that
any provision of this subsection is contrary to applicable law,
the provision shall be of no force or effect.
15.02 Lessor's Remedies: On the occurrence of any default by
▇▇▇▇▇▇, Lessor may, at any time thereafter, with or without
notice or demand and without limiting Lessor in the exercise of
any right or remedy which Lessor may have:
a. Terminate ▇▇▇▇▇▇'s right to possession of the Premises
by any lawful means, in which case this Lease shall terminate and
▇▇▇▇▇▇ shall immediately surrender possession of the Premises to
Lessor. In such event, Lessor shall be entitled to recover from
Lessee all damages incurred by Lessor by reason of ▇▇▇▇▇▇'s
default, including (i) the worth at the time of the award of the
unpaid Base Rent, additional rent and other charges which had
been earned at the time of the termination; (ii) the worth at the
time of the award of the amount by which the unpaid Base Rent,
additional rent and other charges which would have been earned
after termination until the time of the award exceeds the amount
of such rental loss that Lessor proves could not have been
reasonably avoided; (iii) the worth at the time of the award of
the amount by which the unpaid Base Rent, additional rent and
other charges which would have been paid for by the balance of
the term after the time of award exceeds the amount of such
rental loss that Lessor proves could not have been reasonably
avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by ▇▇▇▇▇▇'s failure to
perform its obligations under the Lease or which in the ordinary
course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses incurred by Lessor in
maintaining or preserving the Premises after such default, the
cost of recovering possession of the Premises, expenses of
reletting, including necessary renovation or alteration of the
Premises, Lessor's reasonable attorneys' fees incurred in
connection therewith, and any real estate commission paid or
payable. As used in subparts "(i)" and "(ii)" above, the "worth
at the time of the award" is computed by allowing interest on
unpaid amounts at the rate of fifteen percent (15%) per annum, or
such lesser amount as may be then the maximum lawful rate. As
used in subpart "(iii)" above, the "worth at the time of the
award" is computing by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of
the award, plus one percent (1%). If Lessee shall have abandoned
the Premises, Lessor shall have the option of (i) retaking
possession of the Premises and recovering from Lessee the amount
specified in this Section 15.02a, or (ii) proceeding under
Section 15.02b.
b. Maintain ▇▇▇▇▇▇'s right to possession, in which case
this Lease shall continue in effect whether or not Lessee shall
have abandoned the Premises. In such event, Lessor shall be
entitled to enforce all of ▇▇▇▇▇▇'s rights and remedies under
this Lease, including the right to recover the rent as it becomes
due hereunder.
c. Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state in which
the Property is located.
15.03 Repayment of "Free" Rent: If this Lease provides for a
postponement of any monthly rental payments, a period of "free"
rent, or other rent concession, such postponed rent or "free"
rent is called the "Abated Rent". Lessee shall be credited with
having paid all of the Abated Rent on the expiration of the Lease
Term only if ▇▇▇▇▇▇ has fully, faithfully and punctually
performed all of ▇▇▇▇▇▇'s obligations hereunder, including the
payment of all rent (other than Abated Rent) and all other
monetary obligations and the surrender of the property in the
physical condition required by this Lease. Lessee acknowledges
that its right to receive credit for the Abated Rent is
absolutely conditioned upon ▇▇▇▇▇▇'s full, faithful and punctual
performance of its obligations under this Lease. If Lessee
defaults and does not cure within any applicable grace period,
the ▇▇▇▇▇ Rent shall immediately become due and payable in full
and this Lease shall be enforced as if there were no such rent
abatement or other rent concession. In such case, Abated Rent
shall be calculated based on the full initial rent payable under
this Lease.
15.04 Cumulative Remedies: Lessor's exercise of any right or
remedy shall not prevent it from exercising any other right or
remedy.
15.05 Late Payments: Any rent due under this Lease that is
not paid to Lessor within ten (10) days of the date when due
shall bear interest fifteen percent (15%) per annum from the date
due until fully paid. The payment of interest shall not cure any
default by Lessee under this Lease. In addition, ▇▇▇▇▇▇
acknowledges that the late payment by Lessee to Lessor, of rent,
will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult and
impractical to ascertain. Those costs may include, but are not
limited to, administrative, processing and accounting charges,
and late charges which may be imposed on Lessor by the terms of
any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any rent due from Lessee shall not
14
be received by Lessor or Lessor's designee within ten (10) days
after the date due, then Lessee shall pay to Lessor, in addition
to the interest provided above, a late charge in the amount of
ten percent (10%) of each delinquent payment. Acceptance of a
late charge by Lessor shall not constitute a waiver of ▇▇▇▇▇▇'s
default with respect to the overdue amount, nor shall it prevent
Lessor from exercising any of its other rights and remedies.
15.06 Right of Lessor to Perform: All covenants and
agreements to be performed by Lessee under this Lease shall be
performed at ▇▇▇▇▇▇'s sole cost and expense and without any
abatement of rent or right of set off. If ▇▇▇▇▇▇ fails to pay
any sum of money, other than rent, or fails to perform any other
act on its part to be performed under this Lease, and the failure
continues beyond any applicable grace period set forth in Section
15.01, then in addition to any other available remedies, Lessor
may, at its election, make the payment or perform the other act
on ▇▇▇▇▇▇'s part. ▇▇▇▇▇▇'s election to make the payment or
perform the act on ▇▇▇▇▇▇'s part shall not give rise to any
responsibility of Lessor to continue making the same or similar
payments or performing the same or similar acts. Lessee shall,
promptly upon demand by ▇▇▇▇▇▇, reimburse Lessor for all sums
paid by ▇▇▇▇▇▇ and all necessary incidental costs, together with
interest at the maximum rate permitted by law from the date of
the payment by ▇▇▇▇▇▇. Lessor shall have the same rights and
remedies if ▇▇▇▇▇▇ fails to pay those amounts as Lessor would
have in the event of a default by ▇▇▇▇▇▇ in the payment of rent.
15.07 Default by Lessor: Lessor shall not be deemed to be in
default in the performance of any obligation under this Lease
unless, and until, it has failed to perform the obligation within
thirty (30) days after written notice by Lessee to Lessor
specifying in reasonable detail the nature and extent of the
failure; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days are required
for its performance, then Lessor shall not be deemed to be in
default if it commences performance within the thirty (30) day
period and thereafter diligently pursues the cure to completion.
15.08 Expenses and Legal Fees: Lessee shall reimburse Lessor
upon demand, for any costs or expenses incurred by Lessor in
connection with any breach or default of Lessee under this Lease,
whether or not suit is commenced or judgment entered. Such costs
shall include legal fees and costs incurred for the negotiation
of a settlement, enforcement of rights or otherwise.
Furthermore, if any action for breach of, or to enforce, the
provisions of this Lease is commenced, the court in such action
shall award to the party in whose favor a judgment is entered, a
reasonable sum as attorneys' fees and costs. Such attorneys'
fees and costs shall be paid by the losing party in such action.
Lessee shall also indemnify Lessor against and hold lessor
harmless from all costs, expenses, demands and liability incurred
by Lessor if Lessor becomes or is made a party to any claim or
action (a) instituted by ▇▇▇▇▇▇, or by any third party if due to
negligence by Lessee, or by or against any person holding any
interest under or using the Premises by license of or agreement
with Lessee; (b) for foreclosure for any lien for labor or
material furnished to or for Lessee or such other person; (c)
otherwise arising out of or resulting from any negligent act by
Lessee or such other person; or (d) necessary to protect ▇▇▇▇▇▇'s
interest under this Lease in a bankruptcy proceeding, or other
proceeding under Title 11 of the United States Code, as amended.
Lessee shall defend Lessor against any such claim or action at
▇▇▇▇▇▇'s expense with counsel reasonably acceptable to lessor or,
at ▇▇▇▇▇▇'s election, ▇▇▇▇▇▇ shall reimburse Lessor for any legal
fees or costs incurred by ▇▇▇▇▇▇ in any such claim or action.
ARTICLE 16 END OF TERM
16.01 Holding Over: This Lease shall terminate without
further notice upon the expiration of the Term (herein
"Expiration Date"), and any holding over by Lessee after the
Expiration Date shall not constitute a renewal or extension of
this Lease, or give Lessee any rights under this Lease, except
when in writing, signed by both parties. If Lessee holds over
for any period after the Expiration (or earlier termination) of
the Term, Lessor may, at its option, treat Lessee as a tenant at
sufferance only, commencing on the first (1st) day following the
termination of this Lease and subject to all of the terms of this
Lease, except that the monthly rental shall be one hundred fifty
percent (150%) of the greater of (a) the total monthly rental for
the month immediately preceding the date of termination, or (b)
the then currently scheduled rent for comparable space in the
Building. If ▇▇▇▇▇▇ fails to surrender the Premises upon the
expiration of this Lease despite demand to do so by ▇▇▇▇▇▇,
▇▇▇▇▇▇ shall indemnify and hold Lessor harmless from all loss or
liability, including, without limitation, any claims made by any
succeeding tenant relating to such failure to surrender.
Acceptance by Lessor of rent after the termination shall not
constitute a consent to a holdover or result in a renewal of this
Lease. The foregoing provisions of this Section are in addition
to, and do not affect, ▇▇▇▇▇▇'s right of re-entry or any other
rights of Lessor under this Lease or at law.
16.02 Merger on Termination: The voluntary or other
surrender of this Lease by ▇▇▇▇▇▇, or mutual termination of this
Lease, shall terminate any or all existing subleases unless
Lessor, at its option, elects in writing to treat the surrender
or termination as an assignment to it of any or all subleases
affecting the Premises.
16.03 Surrender of Premises: Removal of Property: Upon the
Expiration Date, or upon any earlier termination of this Lease,
Lessee shall quit and surrender possession of the Premises to
Lessor in as good order, condition and repair as when received or
as hereafter may be improved by Lessor or Lessee, reasonable wear
and tear and repairs, which are Lessor's obligation excepted, and
shall without expense to Lessor, remove or cause to be removed
from the Premises all personal property and debris, except for
any items that Lessor may by written authorization allow to
remain. Lessee shall repair all damage to the Premises resulting
from the removal, which repair shall include the patching and
filling of holes and repair of structural damage, provided that
Lessor may instead elect to repair any structural damage at
Lessee's expense. If Lessee shall fail to comply with the
provisions of this Section, Lessor may effect the removal and/or
make any repairs, and the cost to Lessor shall be additional rent
payable by Lessee upon demand. If requested by ▇▇▇▇▇▇, ▇▇▇▇▇▇
shall execute, acknowledge and deliver to Lessor an instrument in
writing releasing and quitclaiming to Lessor, all right, title
and interest of ▇▇▇▇▇▇ in the Premises.
15
16.04 Termination; Advance Payments: Upon termination of
this Lease under Article 12 (Damage or Destruction), Article 13
(Eminent Domain) or any other termination not resulting from
▇▇▇▇▇▇'s default, and after Lessee has vacated the Premises in
the manner required by this Lease, and equitable adjustment shall
be made concerning advance rent, and any other advance payments
made by Lessee or Lessor, and Lessor shall refund the unused
portion of the security deposit to Lessee or ▇▇▇▇▇▇'s successor.
ARTICLE 17 PAYMENTS AND NOTICES
All sums payable by Lessee to Lessor shall be paid, without
deduction or offset, in lawful money of the United States to
Lessor at its address set forth in Section 1.08 of the Basic
Lease Terms, or at any other place as Lessor may designate in
writing. Unless this Lease expressly provides otherwise, as for
example in the payment of rent pursuant to Section 4.01, all
payments shall be due and payable within five (5) days after
demand. All payments requiring proration shall be prorated on
the basis of a thirty (30) day month and a three hundred sixty
(360) day year. Any notice, election, demand, consent, approval
or other communication to be given, or other document to be
delivered by either party to the other, may be delivered in
person to an officer or duly authorized representative of the
other party, or may be deposited in the United States mail, duly
registered or certified, postage prepaid, return receipt
requested, and addressed to the other party at the address set
forth in Section 1.08 of the Basic Lease Terms, or if to Lessee,
at that address, or from and after the Commencement Date, at the
Premises (whether or not ▇▇▇▇▇▇ has departed from, abandoned or
vacated the Premises). Either party may, by written notice to
the other, served in the manner provided in this Article,
designate a different address. If any notice or other document
is sent by mail, it shall be deemed served or delivered upon
actual receipt or refusal thereof. If more than one Lessee is
named under this Lease, service of any notice upon any one of
them shall be deemed as service upon all of them.
ARTICLE 18 LIMITATION OF LIABILITY
In consideration of the benefits accruing hereunder, ▇▇▇▇▇▇
agrees that in the event of any actual or alleged failure, breach
or default of this Lease by Lessor: (i) the sole and exclusive
remedy shall be against Lessor and its assets - Lessor's
liability shall be limited to its interest in the Center; (ii) no
member of Lessor shall be sued or named as a party in any suit or
action (except as may be necessary to secure jurisdiction of the
partnership); (iii) no service of process shall be made against
any member of Lessor (except as may be necessary to secure
jurisdiction of the partnership; (iv) no member of Lessor shall
be required to answer or otherwise plead to any service of
process; (v) no judgment may be taken against any member of
Lessor; (vi) any judgment taken against any member of Lessor may
be vacated and set aside at any time without hearing; (vii) no
writ of execution will ever be levied against the assets of any
member of Lessor; and (viii) these covenants and agreements are
enforceable both by ▇▇▇▇▇▇ and also by any member of Lessor.
▇▇▇▇▇▇ agrees that each of the foregoing provisions shall be
applicable to any covenant or agreement either expressly
contained in this Lease or imposed by statute or at common law.
ARTICLE 19 BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this
Lease, the firm(s), if any, whose name(s) is (are) stated Section
1.09 of the Basic Lease Terms, and agree that the party
designated in Section 1.09 shall be solely responsible for the
payment of brokerage commissions to those broker(s), and that the
other party shall have no responsibility for the commissions
unless otherwise provided in this Lease. Lessee warrants that it
has had no dealings with any other real estate broker or agent in
connection with the negotiation of this Lease, and ▇▇▇▇▇▇ agrees
to indemnify and hold Lessor harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any
compensation, commissions or charges claimed by any other real
estate broker or agent employed or claiming to represent or to
have been employed by Lessee in connection with the negotiation
of this Lease. The foregoing agreement shall survive the
Expiration or earlier termination of this Lease. If ▇▇▇▇▇▇ fails
to take possession of the Premises or if this Lease otherwise
terminates prior to the Expiration Date, Lessor shall be entitled
to recover the unamortized portion of any brokerage commission
funded by Lessor in addition to any other damages to which Lessor
may be entitled.
ARTICLE 20 TRANSFER OF ▇▇▇▇▇▇'S INTEREST
In the event of any transfer of Lessor's Interest in the
Premises, including a so-called sale-leaseback, the transferor
shall be automatically relieved of all obligations on the part of
Lessor accruing under this Lease from and after the date of the
transfer, provided that any funds held by the transferor, in
which Lessee has an interest, shall be turned over, subject to
that interest, to the transferee, and ▇▇▇▇▇▇ is notified of the
transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is, or may be, subordinate, and no
landlord under a so-called sale-leaseback shall be responsible in
connection with the security deposit, unless the mortgagee or
holder of the deed of trust or the landlord actually receives the
security deposit. It is intended that the covenants and
obligations contained in this Lease on the part of the Lessor
shall, subject to the foregoing, be binding on Lessor, its
successors and assigns, only during, and in respect to, their
respective successive periods of ownership.
ARTICLE 21 INTERPRETATION
21.01 Gender and Number: Whenever the context of this Lease
requires, the words "Lessor" and "Lessee" shall include the
plural and well as the singular, and words used in neuter,
masculine or feminine genders shall include the others.
21.02 Headings: The captions and headings of the Articles
and Sections of this Lease are for convenience only, and are not
a part of this Lease and shall have no effect upon its
construction or interpretation.
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21.03 Joint and Several Liability: If there is more than one
Lessee, the obligations imposed upon Lessee shall be joint and
several, and the act of, or notice from, or notice or refund to,
or the signature of, any one or more of them shall be binding on
all of them with respect to the tenancy of this Lease, including,
but not limited to, any renewal, extension, termination, or
modification of this Lease.
21.04 Successors: Subject to Articles 10 and 20, all rights
and liabilities given to or imposed upon ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall
extend to and bind their respective heirs, executors,
administrators, successors and assigns. Nothing contained in
this Section is intended, or shall be construed, to grant to any
person other than ▇▇▇▇▇▇ and ▇▇▇▇▇▇ and their successors and
assigns any rights or remedies under this Lease.
21.05 Time of Essence: Time is of the essence with respect
to the performance of every provision of this Lease, in which
time of performance is a factor.
21.06 Severability: If any term or provision of this Lease,
(the deletion of which would not adversely affect the receipt of
any material benefit by either party or the deletion of which is
consented to by the party adversely affected), shall be held
invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected and each term and provision of this
Lease shall be valid and enforceable to the fullest extent
permitted by law.
21.07 Entire Agreement: The parties hereto declare and
represent that no promise, inducement or agreement not herein
expressed has been made to them, that this document embodies and
sets forth the entire agreement and understanding between them
relating to the subject matter hereof, and that it merges and
supersedes all prior discussions, agreements, understandings,
representations, conditions, warranties and covenants between
them on said subject matter.
21.08 Covenants and Conditions: All of the provisions of
this Lease shall be construed to be conditions as well as
covenants as though the words specifically expressing or
imparting covenants and conditions were used in each separate
provision.
21.09 Counterparts: This Lease may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same
instrument.
21.10 All indemnities set forth in this Lease shall survive
the expiration or earlier termination of this Lease.
21.11 Attachments: In addition to all of the exhibits
referred to above, attached are the following documents which
also constitute a part of this Lease: Utilities Information Form
and Center Signage Guidelines.
LESSOR: ▇▇▇▇▇▇▇ AIRPORT CENTER LLC
By: Its Members
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Second Vice President, Real Estate
NEVADA REAL ESTATE GROUP, LLC, a Nevada limited liability company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Manager
LESSEE: CASINOVATIONS INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President and Chief Executive
Officer
By: /s/ ▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇ ▇. ▇▇▇▇, Chief Financial Officer
If Lessee shall be a corporation, then authorized officers must
sign on behalf of the corporation. The Lease must be executed by
the President or Vice President and the Secretary or
Secretary/Treasurer, unless the By-Laws or a Resolution of the
Board of Directors shall otherwise provide, in which event, the
By-Laws, or a certified copy of the Resolution, as the case may
be, must be furnished. Also, the appropriate corporate seal must
be affixed.
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