Exhibit 10.1
[GATEWAY POINTE]
LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into this 9th day of September,
1999 between PROPERTY RESERVE, INC. (hereinafter referred to as "Landlord"),
whose address for purposes hereof is c/o INSIGNIA COMMERCIAL GROUP 9483 Haven
Avenue, Suite 104 Rancho Cucamonga CA 91730 and MicroTel International, INC.,
a Delaware Corporation (hereinafter referred to as "Tenant"), whose address
for purposes hereof is 4290 E. Brickell Street, Ontario, CA 91761
This LEASE AGREEMENT consists of the SPECIFIC LEASE PROVISIONS written here
below, the GENERAL LEASE PROVISIONS attached hereto as Exhibit "A," and all
other EXHIBITS attached hereto. In the event there is a conflict between the
SPECIFIC LEASE PROVISIONS and the GENERAL LEASE PROVISIONS, the SPECIFIC
LEASE PROVISIONS shall prevail.
SPECIFIC LEASE PROVISIONS
1. LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, subject to the terms and conditions of this
Lease Agreement, those certain premises hereinafter described, and referred
to as the "Leased Premises," consisting of approximately 5,404 rentable
square feet (determined with the BOMA definition, American National Standard,
Z65.1-1996) in the building known as Gateway Pointe, ("The Business Park"),
located at 9485 Haven Avenue, Suite 100, Rancho Cucamonga, CA 91730
(hereinafter referred to as the "Leased Premises"), together with the right
in common with others to the use of any and all common entrance ways,
lobbies, restrooms, elevators, drives, parking areas, stairs, and other
similar access and service ways and common areas in or adjacent to and used
in common with the building of which said Leased Premises are a part. The
Leased Premises are described below and reflected on the plan attached hereto
and made a part hereof as Exhibit "B":
2. TERM. Subject to and upon the terms and conditions set forth
herein, this Lease Agreement shall continue in force for a term of 36 months,
beginning on the 1st day of November, 1999, ("Beginning Date") and ending on
the 31st day of October, 2002, ("Expiration Date").
Tenant shall have the right to Early Occupancy upon execution of the Lease
and carpet installation free of charge. Tenant will not occupy until all
improvements have been made. Landlord and Tenant agree that all the terms
and conditions of the above referenced lease are to be in full force and
effect as of the date of Tenant's possession and occupancy. Any delays in
occupancy caused by Tenant's early possession of the space will not be a
cause for forgiveness of any rental amount due. In the event Tenant takes
possession of the Premises prior to completion of any construction, Tenant
agrees to hold Landlord harmless from any and all claims for damages to
goods, equipment and inconvenience.
OPTION TO EXTEND/FUTURE REPAIRS. Tenant shall have the
options to extend the initial Lease Term for up to four (4) additional twelve
(12) month periods, provided Tenant gives Landlord at least three (3) months'
advance written notice prior to the commencement of each option term.
The base monthly rental rate for each option term shall be at the
thirty-sixth month (36th) month rental rate plus four percent (4%).
Thereafter, Tenants rent shall increase by four percent (4%) annually.
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Right to renew will be terminated if Tenant is placed in financial default
during the term of their Lease.
3. RENTAL PAYMENT.
a. Tenant shall pay to Landlord on the first day of each
month during the term of this Lease Agreement in legal tender of the United
States of America, without prior notice or demand and without any offset or
deduction whatsoever, at the office of the Landlord, or at such place or to
such property manager as Landlord may from time to time designate in writing,
rental comprised of both Base Rental ("Base Rental") described below and
Additional Rent ("Additional Rent") as hereinafter described. Tenant shall,
however, be required to pay the first month's rent and security deposit upon
execution of this Lease Agreement. Base Rental and Additional Rent are
sometimes referred to hereafter as Rent ("Rent").
b. Tenant agrees that if any rental payment or other money
due hereunder from Tenant to Landlord remains unpaid five (5) calendar days
after said amount is due, a late charge shall be paid to Landlord by Tenant
in the amount of the greater of five (5%) percent of such payment due or
fifty ($50.00) dollars provided that in no event shall such charge be greater
than that permitted by law. Tenant agrees that such amount is a reasonable
estimate of Landlord's collection and administrative expenses.
c. Tenant hereby agrees to pay a base rental ("Base
Rental") in the amount of $5,404.00 per month for the term of the initial
Lease.
d. Tenants rent shall be abated in the second month of the
initial Lease term.
e. Tenant hereby agrees to pay its proportionate share of
the costs of water, trash removal, for the Business Park as Additional Rent.
This current monthly amount of Additional Rent is $162.12.
4. SECURITY DEPOSIT. Upon execution of this Lease Agreement,
Tenant shall deposit with Landlord the sum of $5,404.00. Such deposit shall
not earn interest for Tenant and shall be used for the purposes set forth in
the General Provisions attached hereto.
5. PROPOSED USE. Tenant represents, covenants, and warrants that
the Leased Premises will be used lawfully for the following purposes and for
no others:
General Office for electronic components and assemblies company.
6. IMPROVEMENTS. Landlord's obligation to construct and install
tenant improvements (sometimes called "Improvement Items" herein) in the
Leased Premises is set forth in Exhibit "C" hereto. The cost for
installation of these improvements, space planning, construction drawings and
permits, and construction management fees is $23,507.40.
7. SERVICE AND REPAIRS.
a. UTILITIES. Tenant shall pay for all gas, electricity,
water, sewer, and telephone service utilized in the operations of Tenant's
business. Landlord further reserves the right to have separate meters
installed for any of these services. If not separately metered, then Tenant
shall
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reimburse Landlord for its proportionate share for all such utilities. If
Tenant requests Landlord install a separate meter, then Tenant shall
reimburse Landlord for such costs of installation.
b. INITIAL LIGHTING. Landlord shall provide initial lamps,
bulbs, starters and ballast's used on the Leased Premises; Tenant agrees, at
his expense, to maintain and replace such lamps, bulbs, starters and
ballast's.
c. HVAC MAINTENANCE. Original paragraph deleted in its
entirety.
Tenant shall reimburse Landlord fifteen ($15.00) dollars per month for HVAC
maintenance.
d. ROUTINE MAINTENANCE. Landlord shall provide only
routine maintenance, included but not limited to roof, walls, floorplates and
painting to the structure, and electric lighting service for all public areas
and special service areas of the Project in the manner and to the extent
deemed by Landlord to be standard.
e. REPAIRS BY TENANT. The Tenant will keep, maintain and
preserve the Leased Premises in the condition in which it was originally
received. When and if needed, at the Tenant's sole cost and expense, the
Tenant will make all interior repairs and replacements including but not
limited to interior walls, doors and windows, floors, floor coverings, light
bulbs, plumbing fixtures, heating/air conditioning systems, hot water
systems, and electrical fixtures. Tenant shall also make all repairs and
replacements to Tenant's overhead garage and exterior pedestrian doors. The
Tenant will also repair and replace at its sole cost and expense any broken
windows and/or damage to the building or Premises caused by the Tenant or its
employees, agents, guests or invitees during the Lease term hereof.
If Tenant fails to make such repairs or replacements promptly,
Landlord may, at its option, make such repairs or replacements, and Tenant
shall repay the cost thereof to the Landlord as Additional Rent on demand.
However, Tenant shall not suffer any repair work costing over $5,000 to be
performed by Tenant or Tenant's agents without Landlord's prior written
consent.
f. ADDITIONAL SERVICES. In the event Tenant desires any of
the aforementioned services in amounts in excess of those deemed by Landlord
to be Project standard, and in the event Landlord elects to provide such
additional services, Tenant shall pay Landlord as Additional Rent hereunder
the cost of providing such additional services.
9. PARKING. Tenant shall be entitled to use stalls in the parking
areas of the Project in common with all other tenants of the Project. Tenant
agrees not to overburden the parking areas and to cooperate with Landlord and
the other tenants in the use of the parking areas. Tenant acknowledges that
its pro rata share of the parking spaces is 22 unassigned parking spaces.
Landlord reserves the right to determine whether the parking areas are
overburdened and, if so, to allocate parking spaces between Tenant and the
other tenants of the Project. Landlord shall reserve the right to designate
handicapped, loading, reserved, and visitor parking stalls.
10. BROKER'S COMMISSION. Tenant represents and warrants to
Landlord that Tenant has not entered into any agreements, nor will Tenant
enter into any agreement in the future whereby Landlord would be obligated to
pay any broker's commission or finder's fee in connection with Tenant's
execution of this Lease Agreement. Tenant agrees to indemnify Landlord
against, and to hold Landlord harmless
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from, all liabilities arising from any such claim. Tenant agrees to pay for
any broker representation it may desire or require during any negotiation for
expansion or contraction of the Leased Premises. Landlord will pay for any
representation it obtains.
11. GRAPHICS. Landlord at Tenant's cost shall provide and install
one sign complying with the sign criteria, of the Landlord and will confirm
graphics with Tenant before installation. Sign to be installed within sixty
days of the signing of this Lease Agreement. All graphics of Tenant, visible
in or from public corridors or the exterior of the Leased Premises, shall
require Landlord's prior written approval and if applicable, a permit from
the city. All of the above shall be in accordance with the Project's
Standards, Rules and Regulations.
12. GUARANTY. Paragraph deleted in its entirety.
13. TENANT'S NOTICE ADDRESS.
4290 E. Brickell Street, Ontario, CA 91761
14, THE FOLLOWING MODIFICATIONS ARE MADE TO THE RULES AND REGULATIONS.
PAGE "2": - SECTION "15"
- RULE #L., IS MODIFIED TO INCLUDE AFTER THE LAST SENTENCE,
"OTHER THAN ADDING FIXTURES INCLUDING BUT NOT LIMITED TO
SHELVES, PAINTINGS, ETC."
- RULE #M., DELETE THE FOLLOWING LANGUAGE FROM THE END OF THE
SENTENCE, "OR BUILDING ENTRANCES."
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15. EXHIBITS. The following exhibits are attached hereto and
pertain to this Lease Agreement:
1. Exhibit A General Lease Provisions
2. Exhibit B A Plan of the Demised Premises
3. Exhibit C Improvement Items
4. Exhibit D Rules and Regulations
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IN WITNESS WHEREOF, the parties have executed this Lease Agreement the day
and year first above written.
AGREED AND ACCEPTED AGREED AND ACCEPTED
LANDLORD: TENANT:
PROPERTY RESERVE, INC. MICROTEL INTERNATIONAL, INC., A
DELAWARE CORPORATION
BY: BY: /s/ JAMES P. BUTLER
-------------------------------- --------------------------------
ITS: ITS: CFO
------------------------------- -------------------------------
DATE: DATE: 9/16/99
------------------------------ ------------------------------
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(Master)
EXHIBIT "A"
GENERAL LEASE PROVISIONS
These following General Lease Provisions shall become effective when
attached to the signed Lease Agreement containing the Specific Lease
Provisions and shall, together with the Exhibits, form the Lease Agreement.
1. ABANDONMENT. Tenant shall not vacate nor abandon the Leased
Premises at any time during the term of this Lease Agreement, nor permit the
Leased Premises to remain unoccupied for a period longer than fifteen (15)
consecutive days during the term of this Lease Agreement. If Tenant shall
abandon, vacate, or surrender the Leased Premises, or be dispossessed by
process of law or otherwise, any personal property belonging to Tenant and
left on the Leased Premises shall, at the option of the Landlord, be deemed
abandoned and title thereto shall vest to Landlord. If Tenant vacates the
Leased Premises but continues to pay all sums due hereunder and otherwise
complies with the terms hereof, it shall not be considered abandonment.
2. ASSIGNMENT OR SUBLEASE. Tenant shall not, either voluntarily or
by operation of law, assign, encumber, pledge, or otherwise transfer or
hypothecate all or any part of Tenant's leasehold estate hereunder, or permit
the Leased Premises to be occupied by anyone other than Tenant or Tenant's
employees, or sublet the Leased Premises or any portion thereof, without
Landlord's prior written consent in every instance. Tenant shall give
Landlord written notice of such desire at least thirty (30) days in advance
of the date on which Tenant desires to make such assignment or sublease,
which notice shall include the name, address, evidence of financial
capability, and other pertinent information regarding the proposed assignee
or subtenant.
a. No assignment or subletting by Tenant shall relieve Tenant
of any obligations under this Lease Agreement. If Tenant is a corporation,
partnership, trust, or other legal fictional entity, the transfer of fifty
percent (50%) or more of the beneficial ownership of Tenant shall be deemed
an assignment of this Lease Agreement. Any attempted transfer by Tenant
without the consent of Landlord shall be null and void and, at the option of
Landlord, shall cause termination of this Lease Agreement. The giving of
consent by Landlord in one instance shall not preclude the need for Tenant,
and its successors and assigns, to obtain Landlord's consent to further
transfers.
b. In the event Tenant shall propose to assign or sublet the
Lease Premises and request the consent of Landlord to any assignment or
subletting, or if Tenant shall request consent of Landlord to any other act
Tenant proposes to do, as herein provided, then Tenant shall pay Landlord's
reasonable attorney's fees incurred in connection therewith. Any assignment or
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subletting shall not relieve Tenant from responsibility under the Lease
Agreement, and Tenant shall therefore remain liable for the faithful
performance of the Lease Agreement in case of breach or default by assignee
or subtenant.
c. If the proposed Base Rental between Tenant and any Subtenant
is greater than Base Rental of this lease, then such excess rental shall be
deemed Additional Rent owed by Tenant to Landlord.
d. Tenant shall not publicly advertise the Rent for which
Tenant is willing to sublet the space; and all public advertisements of the
assignment of the Lease Agreement or sublet of Leased Premises, or any
portion thereof, shall be subject to prior approval in writing by Landlord.
e. In any assignment or transfer, each assignee or transferee,
other than Landlord, shall assume, as provided herein, all obligations of the
Tenant under this Lease Agreement which relate to all or a portion of the
Leased Premises assigned or sublet, as the case may be, and shall be and
remain liable jointly and severally with Tenant for the payment of the Rent
and for due performance of all the terms, covenants, conditions, and
agreements herein contained on Tenant's part to be performed during the term
of this Lease Agreement.
f. No consent by Landlord to any assignment or subletting by
Tenant shall relieve Tenant of any obligation to be performed by the Tenant
under this Lease Agreement, whether accruing before or after such assignment
or subletting, unless granted by Landlord to Tenant in writing. The consent
by Landlord to any assignment or subletting shall not relieve Tenant from the
obligation to obtain Landlord's express written consent to any other
assignment or subletting. Any assignment or subletting which is not in
compliance with this Lease Agreement shall be void, and, at the option of
Landlord, shall constitute a material default by Tenant under this Lease
Agreement.
3. ATTORNEY'S FEES. In the event either party places the enforcement
of this Lease Agreement, or any part thereof, or the collection of any rent
due, or to become due hereunder, or recovery of the possession of the Leased
Premises in the hands of an attorney, or files suit upon the same, the
non-prevailing (or defaulting) party shall pay the other party's reasonable
attorneys' fees and court costs, in any proceeding, whether at trial, or
appeal therefrom, or on any petition for review, or in bankruptcy.
4. BINDING. Each individual executing this Lease Agreement on behalf
of Tenant and Landlord represents and warrants that he/she is duly authorized
to execute and deliver this Lease Agreement on behalf of Tenant and Landlord,
and that this Lease Agreement is binding upon each in accordance with its
terms. This Lease Agreement shall not be considered binding until it has been
fully executed by Landlord and Tenant.
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5. CARE OF LEASED PREMISES. Tenant shall not commit or allow any
waste or damage to be committed on any portion of the Leased Premises. Tenant
shall not permit the Leased Premises to be used for any purpose other than
stated in the Lease Agreement.
a. No later than the last day of the Term, Tenant will remove
all Tenant's personal property and repair all damage done by or in connection
with installation or removal of said property and surrender the Leased Premises
(together with all keys, access cards, or entrance passes to the Leased
Premises and/or the Project) in as good a condition as they were at the
beginning of the Term, reasonable wear and tear, unrepaired casualty not
caused by Tenant, and condemnation excepted. All property of Tenant remaining
in the Leased Premises after expiration of the Term shall be deemed
conclusively abandoned and may be removed by Landlord, and Tenant shall
reimburse Landlord for the cost of removing the same, subject, however, to
Landlord's right to require Tenant to remove any improvements or additions
made to the Leased Premises by Tenant pursuant to this Lease Agreement.
b. In doing any work related to the installation of Tenant's
furnishings, fixtures, or equipment in the Leased Premises, Tenant will use
only contractors or workmen consented to by Landlord in writing prior to the
time such work is commenced. Landlord may condition its consent upon its
receipt of evidence of workers compensation insurance acceptable lien waivers
from such contractors or workmen. Tenant shall promptly remove any lien or
claim of lien for material or labor claimed against the Leased Premises or
Project, or both, by such contractors or workmen, if such claim should arise,
and hereby indemnifies and holds Landlord harmless from and against any and
all loss, cost, damage, expense, or liabilities including, but not limited
to, attorneys' fees incurred by Landlord as a result of or in any way related
to such claims or such liens.
c. Tenant agrees that all personal property brought into the
Leased Premises by Tenant, its employees, licensees, and invitees shall be at
the sole risk of Tenant, and Landlord shall not be liable for theft thereof
or of money deposited therein or for any damages thereto, such theft or
damage being the sole responsibility of Tenant.
d. Upon termination of this Lease Agreement Landlord shall have
the right to reenter and resume possession of the Leased Premises. Landlord's
costs of post termination cleanup required to return the Leased Premises to
as good a condition as existed at time of occupancy by Tenant, with normal
wear and tear excepted, shall be billed to and promptly paid by Tenant.
6. CHOICE OF LAW. All rights and remedies of Landlord and Tenant
under this Lease Agreement shall be cumulative and none shall exclude any
other rights or remedies allowed by law. All of the terms hereof shall be
construed and enforced according to the laws of the State in which the Leased
Premises are located.
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7. COMMON AREAS--UTILITY ACCESS. The Leased Premises shall include
the appurtenant right to use, in common with others, the lobbies, entrances,
stairs, elevators, restrooms, and other public portions of the Project.
Landlord retains the right to make changes in the common areas as it solely
deems to be in the best interest of the Project. All of the outside walls and
windows of the Leased Premises, and any space in the Leased Premises used for
shafts, stacks, pipes, conduits, ducts, and electric or other utilities,
custodial sinks or other Project facilities, are part of the rentable area of
the Leased Premises; however, the right to the use thereof and access thereto
through the Leased Premises for the purposes of operation, maintenance, and
repair, are reserved to Landlord.
8. CONDITION OF PREMISES. Tenant's taking possession of the Leased
Premises shall be deemed conclusive evidence that, as of the date of taking
possession, the Leased Premises are in good order and satisfactory condition.
No promise of landlord to alter or remodel, repair, or improve the Lease
Premises or the Project, and no representation, express or implied,
respecting any matter or thing relating to the Leased Premises, the Project
or this Lease Agreement, including, without limitation, the condition of the
Leased Premises, has been made to Tenant by Landlord other than as may be
contained herein or in a separate Exhibit or Addendum attached to this Lease
Agreement and incorporated herein or separately signed by Landlord and Tenant.
9. DAMAGE TO LEASED PREMISES. If all or a portion of the Leased
Premises are rendered untenantable by damage from any casualty insured
against under a standard fire and extended coverage insurance policy, the
damage shall be repaired forthwith by and at the expense of Landlord,
provided such repairs can be, in Landlord's opinion, completed within one
hundred twenty (120) days after notice to Landlord of the occurrence of such
damage, without the payment of overtime or other premiums. Except as set
forth herein below, until such repairs are completed, the rent shall be
abated in proportion to the part of the Leased Premises which is unusable by
Tenant in the conduct of its business. Should the damage be caused by a
casualty not insured against under a standard fire and extended coverage
insurance policy, Landlord shall have no obligation to repair or rebuild.
Should Landlord elect not to repair or rebuild, this lease may be terminated
by thirty (30) days' notice to tenant. There shall be no abatement of rent by
reason of any portion of the Leased Premises being unusable for a period of
less than two days. Landlord's opinion as to completion date of any repair
shall be given to Tenant in writing within thirty (30) days of the occurrence
of the damage.
10. DAMAGE OR DESTRUCTION--Tenant's Election to Terminate. In case of
any significant damage or destruction mentioned herein, which Landlord is
required or undertakes to repair as provided herein, Tenant may terminate
this Lease Agreement by written notice to Landlord any time prior to
completion of the required repairs if Landlord has not restored and rebuilt
the Leased Premises (exclusive of any property of Tenant or improvements
installed by Tenant located therein) to substantially the same condition as
existed immediately prior to such damage or destruction within one hundred
twenty (120) days after notice to Landlord of the occurrence of such damage
or destruction, or such longer period as Landlord has estimated, plus such
additional period thereafter (not exceeding six months) as shall equal the
aggregate period
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Landlord may have been delayed in doing so by acts of God, adjustment of
insurance, labor trouble, governmental controls, unavailability of materials,
or any other cause beyond Landlord's reasonable control.
11. DAMAGE NEAR END OF TERM. Notwithstanding anything to the contrary
contained in this Lease Agreement, Landlord shall not have any obligation
whatsoever to repair, reconstruct, or restore the Leased Premises or the
Project when such damage occurs during the last twelve (12) months of the
Lease term or any extension thereof, and when the cost of repair exceeds
twenty percent (20%) of the value of the Leased Premises or the Project.
12. EVENTS OF DEFAULT-BY TENANT. The following shall constitute
events of default by Tenant: (a) If Tenant shall fail to make any payment due
under this Lease Agreement, and such failure shall continue for ten (10)
business days after written notice by Landlord; (b) if a default exists in
the performance of any of the other covenants or conditions which Tenant is
required to observe and to perform, and such default shall continue for
twenty (20) days after written notice by Landlord; (c) if the interest of
Tenant under this Lease Agreement is levied upon, or is under execution or
other legal process, or if any petition shall be filed by or against Tenant
to declare Tenant as bankrupt or to delay, reduce, or modify Tenant's debts
or obligations; (d) if any petition shall be filed or other action taken to
reorganize or modify Tenant's capital structure if Tenant be a corporation or
other entity; unless approved in writing by Landlord which shall not be
unreasonably withheld; (e) if Tenant is declared insolvent, or if any
assignment of Tenant's property is made for the benefit of creditors or if a
receiver or trustee is appointed for in Tenant or its property; (f) if Tenant
vacates or abandons the Leased Premises during the term of this Lease
Agreement or any extensions thereof; or (g) if Tenant makes any transfer of
any interest in the Leased Premises not in accordance with the requirements
of this Lease Agreement, then Landlord may treat the occurrence of any one or
more of the foregoing events as a breach of this Lease Agreement and
thereupon, at Landlord's option, Landlord shall have one or more of the
following described remedies in addition to all other rights and remedies
provided at law or in equity:
a. Landlord may terminate this Lease Agreement and forthwith,
in accordance with applicable law, repossess the Leased Premises and remove
all persons or property therefrom, and be entitled to recover as damages a
sum of money equal to the total of (i) the cost of recovering the Leased
Premises (ii) the unpaid rent owed thereon from due date plus interest
thereon at the rate of 18% per annum or the maximum rate permitted by
applicable law, whichever is lower, (iii) the present value of the balance of
the rent for the remainder of the term, discounted to the present at 8% per
annum, and (iv) any other sum of money and damages owed by Tenant to Landlord;
b. Landlord shall also be entitled to terminate Tenant's right
of possession in accordance with applicable law and to repossess the Leased
Premises, without demand or notice of any kind to Tenant, by summary
proceedings, any other applicable action or proceeding, or otherwise, all
without terminating this Lease Agreement, in which event Landlord may, but
shall be under no obligation to, relet the same for the account of Tenant for
such rent and upon such
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terms as shall be satisfactory to Landlord. None of these actions will be
deemed an acceptance of surrender of the Leased Premises. For the purpose of
such reletting Landlord is authorized to decorate or to make any reasonable
repairs, changes, alterations, or additions in or to the Leased Premises that
may be necessary or convenient, and (i) if Landlord shall fail or refuse to
relet the Leased Premises, or (ii) if the same is relet and a sufficient sum
shall not be realized from such reletting, after paying the unpaid Base
Rental due hereunder earned or unpaid at the time of reletting, plus interest
thereon at the rate set forth herein, the cost of recovering possession, and
all of the reasonable costs and expenses of such decoration, repairs,
changes, alterations, and additions, and the reasonable expense of such
reletting, and of the reasonable collection of the rent accruing therefrom to
satisfy the payment of the rent provided for in this Lease Agreement, then
Tenant shall pay to Landlord as damages a sum equal to the amount of the
rental reserved in this Lease Agreement for such period or periods, or if the
Leased Premises have been relet, Tenant shall satisfy and pay any such
deficiency upon demand therefor from time to time; and Tenant agrees that
Landlord may file suit to recover any sums falling due under the terms of
this Lease Agreement from time to time on one or more occasions without
Landlord being obligated to wait until expiration of the term of this Lease
Agreement and without barring or affecting in any manner Landlord's right to
bring a later action or actions for further damages; nor shall such reletting
be construed as an election on the part of Landlord to terminate this Lease
Agreement unless a written notice of such intention be given to Tenant by
Landlord. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect to terminate this Lease Agreement for such
previous breach.
c. Without prejudice to any other remedy for default, Landlord
may perform any obligation or make any payment required to cure a default by
Tenant. The cost of performance, including attorneys' fees and all
disbursements, shall immediately be paid by Tenant to Landlord upon demand as
Additional Rent.
13. DEFECTS. Tenant agrees to report in writing to Landlord any
defective condition in or about the Leased Premises known to Tenant, and
further agrees to attempt to contact Landlord by telephone immediately in
such instance.
14. EMINENT DOMAIN
a. In the event the Leased Premises are taken pursuant to
powers of eminent domain, all awards for the taking other than awards for
interruption of Tenant's business shall belong solely to Landlord, and Tenant
shall make no claim therefor.
b. In the event of a partial taking, which does not result in a
termination of this Lease Agreement, rent shall be abated in proportion to
the part of the Leased Premises so made unusable by said partial taking, and
any award for the taking shall belong solely to Landlord.
c. No temporary taking of the Leased Premises and/or of
Tenant's rights therein or under this Lease Agreement shall terminate this
Lease Agreement or give Tenant any
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right to any abatement of rent hereunder; and any award made to Tenant by
reason of any such temporary taking shall belong entirely to Tenant, and
Landlord shall not be entitled to share therein. The Tenant and Landlord will
work together to cause the governmental agency responsible for the taking to
restore the Leased Premises and Project, after the taking, to their original
condition prior to the taking.
d. If the whole of the Leased Premises, or so much thereof as
to render the balance unusable by Tenant, shall be taken by any governmental
authority under power of Eminent Domain, this Lease Agreement shall
automatically terminate as of the date of such condemnation, or as of the
date possession is taken by the condemning authority, whichever is earlier.
No award for any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof, provided, however, that
nothing contained herein shall be deemed to give Landlord any interest in or
to require Tenant to assign to Landlord any award made to Tenant for the
taking of personal property, equipment, and fixtures belonging to Tenant
and/or for the interruption of or damage to Tenant's business or for Tenant's
unamortized cost of improvements installed by Tenant and/or the cost of
moving and/or the lost value of Tenant's unexpired Lease Agreement term.
15. ENTIRE AGREEMENT. This instrument, along with any exhibits and
attachments or other documents affixed hereto or referred to herein,
constitute the entire and exclusive agreement between Landlord and Tenant
relative to the Leased Premises herein described, and this Agreement and said
exhibits and attachments and other documents may be altered and/or revoked
only by an instrument in writing signed by both Landlord and Tenant. Landlord
and Tenant hereby agree that all prior written and oral agreements,
understandings and/or practices relative to the leasing of the Leased
Premises are merged in or revoked by this Lease Agreement.
16. ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to
time, upon not business less than ten (10) business days prior written notice
from Landlord, execute, acknowledge and deliver to Landlord or to other
parties as Landlord may direct, a statement in writing, (a) certifying that
this Lease Agreement is unmodified and in full force and effect, (or, if
modified, stating the nature of such modification and certifying that this
Lease Agreement as so modified is in full force and effect), the date to
which the rental and other charges are paid in advance, and the amount of the
Base Rental, Estimated Operating Expense Adjustment, and the commencement and
termination dates of the Lease Agreement, and (b) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed. Any such statement
may be relied upon by any prospective purchaser or encumbrancer of all or
any portion of the real property of which the Leased Premises are a part.
Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant that: (i) this Lease Agreement is in full force and
effect, without modification except as may be represented by Landlord, (ii)
there are no uncured defaults in Landlord's performance, and (iii) not more
than one month's Base Rental, or Estimated Operating Expense Adjustment
installment, has been paid in advance. If Landlord desires to finance or
refinance the Project, or any part thereof, Tenant
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agrees to deliver to any lender designated by Landlord such financial
statements of Tenant as may be reasonably required by such financial
institution. All such financial statements shall be received by Landlord in
confidence and shall be used only for the purpose herein set forth.
17. FORCE MAJEURE. Any prevention, delay, or stoppage of work to be
performed by Landlord or Tenant which is due to strikes, labor disputes,
inability to obtain labor, materials, equipment, or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls,
judicial orders, enemy or hostile government actions, civil commotion, fire
or other casualties, or other causes beyond the reasonable control of the
party obligated to perform hereunder, shall excuse performance of the work by
that party for a period equal to the duration of that prevention, delay, or
stoppage. Nothing herein shall excuse or delay Tenant's obligation to pay
rent or other charges under this Lease Agreement, except as otherwise
provided in this Lease Agreement.
18. NO HAZARDOUS SUBSTANCES ALLOWED. Tenant shall not cause or permit
any "Hazardous Substances," as defined below; except in amounts as permitted
by law, to be brought upon or kept or used in or about the Premises or the
Project by Tenant, its agents, employees, contractors, or invitees.
a. Tenant shall at all times and in all respects comply with
all local, state, and federal laws, ordinances, regulations and orders
(collectively, "Hazardous Substances Laws") relating to industrial hygiene,
environmental protection, or the use, analysis, generation, manufacture,
storage, disposal, or transportation of any Hazardous Substances.
b. As used in this Agreement, the term "Hazardous Substances"
means any hazardous or toxic substances, materials or wastes, including, but
not limited to, those substances, materials, and wastes listed in the United
States Department of Transportation Hazardous Materials Table (49 CFR 172.
101) or by the Environmental Protection Agency as hazardous substances (40
CFR Part 302) and amendments thereto, or such substances, materials and
wastes which are or become regulated under any applicable local, state or
federal law including, without limitation, any material, waste or substance
which is (i) petroleum or any fraction thereof, (ii) asbestos, (iii)
polychlorinated biphenyls, (iv) defined as a "hazardous waste" under relevant
state statutes or any rule promulgated thereunder, (v) designated as a
"hazardous substance" pursuant to Section 3 1 1 of the Clean Water Act, 33
U.S.C. Section 1251, ET SEQ. (33 U.S.C. Section 1321) or listed pursuant to
Section 307 of the Clean Water Act (33 U.S.C. Section 1317), (vi) defined as
a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, ET SEQ., (42 U.S.C. Section 6903) or
(vii) defined as "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601, ET SEQ. (42 U.S.C. Section 9601).
c. Tenant shall indemnify, defend (by counsel acceptable to
Landlord), protect, and hold harmless Landlord, and each of Landlord's
partners, directors, officers, employees, agents, attorneys, successors, and
assigns, from and against any and all claims,
8
liabilities, penalties, fines, judgements, forfeitures, losses (including,
without limitation), diminution in the value of the Premises or the Building,
damages for the loss or restriction on use of rentable or usable space or of
any amenity of the Premises or the Building, costs or expenses (including
attorneys' fees, consultant fees, and expert fees) for the death of or injury
to any person or damage to any property whatsoever, arising from or caused in
whole or in part, directly or indirectly, (a) by the presence in, on, under,
or about the Premises, or any discharge or release in or from the Premises of
any Hazardous Substances, or Tenant's use, analysis, storage, transportation,
disposal, release, threatened release, discharge, or generation of Hazardous
Substances to, in, on, under, about, or from the Premises or the Building, or
(b) Tenant's failure to comply with any Hazardous Substances Law. Tenant's
obligations under this Section shall include, without limitation, and
whether foreseeable or unforeseeable, any and all costs incurred in
connection with any investigation of site conditions, and any and all costs
of any required or necessary repair, cleanup, detoxification, or
decontamination of the Premises or the Building, and the preparation and
implementation of any closure, remedial action, or other required plans in
connection therewith. Tenant's obligations under this Section shall survive
the expiration or earlier termination of the term of the Lease. For purposes
of the release and indemnity provisions hereof, any acts or omissions of
Tenant, or by employees, agents, assignees, contractors, or subcontractors of
Tenant or others acting for or on behalf of Tenant (whether or not they are
negligent, intentional, willful, or unlawful), shall be strictly attributable
to Tenant.
d. Tenant acknowledges and agrees that it shall not be
unreasonable for Landlord to withhold its consent to any proposed assignment,
subletting, or transfer of Tenant's interest in this Lease if (a) the
anticipated use of the Premise by the proposed assignee, subtenant, or
transferee (collectively, a "Transferee") involves the generation, storage,
use treatment, or disposal of Hazardous Substances; (b) the proposed
Transferee has been required by any prior Landlord, lender, or governmental
authority to make remedial action in connection with Hazardous Substances
contaminating a property, if the contamination resulted from such
Transferee's actions or use of the property in question; or (c) the proposed
Transferee is subject to an enforcement order issued by any governmental
authority in connection with the use, disposal, or storage of a Hazardous
Substance.
e. Landlord does hereby represent to Tenant that, to the best
of Landlord's knowledge, no toxic or hazardous substances have been deposited
in or located on the Leased Premises on the commencement date of the lease
except in the amounts as permitted by law.
19. HOLD HARMLESS:
a. BY TENANT: Tenant hereby agrees to indemnify and hold
Landlord harmless from and against any injury, expense, damage, liability, or
claim imposed on Landlord by any person or entity, whether due to damage to
the Leased Premises or the Project, claims for injuries to the person or
property of any other tenant of the Project or of any other person in or
about the Project for any purpose whatsoever, or due to administrative or
criminal action by a governmental authority, whether such injury, expense,
damage, liability, or claim results either
9
directly or indirectly from the act, omission, negligence, misconduct, or
breach of any provisions of this Lease Agreement by Tenant, the agents,
servants, or employees of Tenant, or any other person entering upon the
Leased Premises under express or implied invitation or consent of Tenant.
Tenant further agrees to reimburse Landlord for any costs or expenses,
including, but not limited to, court costs and reasonable attorney's fees
which Landlord may incur in investigating, handling, or litigating any such
claim or any action by a governmental authority.
b. BY LANDLORD: Landlord hereby agrees to indemnify and hold
Tenant harmless from and against any injury, expense, damage, liability, or
claim imposed on Tenant by any person or entity, whether due to damage to the
Leased Premises or the Project, claims for injuries to the person or property
of any other tenant of the Project or of any other person in or about the
Project for any purpose whatsoever, or due to administrative or criminal
action by a governmental authority, whether such injury, expense, damage,
liability, or claim results either directly or indirectly from the act,
omission, gross negligence, misconduct, or breach of any provisions of this
Lease Agreement by Landlord, the agents, servants, or employees of Landlord,
or any other person entering upon the Leased Premises under express or
implied invitation or consent of Landlord. Landlord further agrees to
reimburse Tenant for any costs or expenses, including, but not limited to,
court costs and reasonable attorney's fees, which Tenant may incur in
investigating, handling, or litigating any such claim or any action by a
governmental authority.
20. HOLDING OVER. In the event of holding over by Tenant, after
expiration or termination of this Lease Agreement without the written consent
of Landlord, Tenant shall pay to Landlord one hundred and twenty-five and
percent (25%) of the total of Base Rental which Tenant was obligated to pay
for the month Immediately preceding the end of the term of this Lease
Agreement, for each month or any part thereof of any such holdover period,
together with any Additional Rent. No holding over by Tenant after the
termination of this Lease Agreement shall operate to extend the Lease
Agreement term. In the event of any unauthorized holding over, Tenant shall
indemnify Landlord against all claims for damages by any other tenant against
Landlord to whom Landlord may have leased all or any part of the Leased
Premises covered hereby effective upon the termination of this Lease
Agreement. Any holding over with the written consent of Landlord shall
thereafter constitute this Lease Agreement a lease from month to month, and
Landlord or Tenant may terminate it upon not less than thirty (30) days prior
written notice.
21. IMPROVEMENT DELAYS CAUSED BY TENANT. If Tenant shall cause any of
the following delays in the completion of Landlord's Work, then the beginning
date of the Lease Agreement shall be altered: (i) delay caused because
Tenant's requirements for materials or installations are different from
Landlord's "Project Standard Improvements" (the basic improvement package
Landlord offers to tenants of the Project), (ii) delay in the payment of any
sum due from Tenant pertaining to Landlord's Work, (iii) delay in performance
or completion by a party employed by Tenant, (iv) delay by reason of
compliance with applicable laws arising from Tenant's design of Tenant's
Improvements, (v) delay by reason of changes in the work ordered by Tenant or
by reason of any Change Order, (vi) delay by reason of the malfunctioning of
any item or aspect of Tenant's Improvements which was designed by Tenant.
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In the event of any such delay mentioned above then, notwithstanding the
provisions of the Lease Agreement, the Beginning Date of the Lease Agreement
shall be the earlier of (i) the date Landlord would have completed Landlord's
Work had it not been for Tenant's delay, or (ii) the earliest Beginning Date
as provided in this Lease Agreement. Any and all cost related to either the
illegality or malfunctioning of any item or aspect of Tenant's Improvements,
which arises from Tenant's design, plans, specifications, or working
drawings, shall be borne solely by Tenant, notwithstanding Landlord's
approval or installation of the same.
22. IMPROVEMENTS, ALTERATIONS, AND ADDITIONS. Tenant shall not make
or allow to be made any alterations or physical additions in or to the Leased
Premises which affect the structure or any other improvements in excess of
the amount stated in the Specific Lease Provisions without first obtaining
the written consent of Landlord. All work shall be done by contractors
approved by Landlord. Landlord's approval or consent shall not be
unreasonably withheld or delayed. Any and all such alterations, physical
additions, or improvements, when made to the Leased Premises by Tenant, shall
at once become the property of Landlord and shall be surrendered to Landlord
upon the termination of this Lease Agreement by lapse of time or otherwise;
provided, however, this clause shall not apply to movable equipment or
furniture owned by Tenant. Tenant shall comply with all government, local
building code and permitting requirements and provide Landlord with evidence
of compliance. Tenant shall give Landlord written notice five (5) days prior
to employing any laborer or contractor to perform work on the Leased Premises
so that Landlord may post a notice of nonresponsibility if allowed by law.
Landlord reserves the right to require Tenant, at Tenant's expense, to remove
such alterations, physical additions, or improvements upon termination of
this Lease Agreement and to repair any damage caused by such removal.
23. IMPROVEMENTS OBLIGATIONS OF TENANT. Should Tenant fail to perform
its obligations regarding the construction of improvements as set forth in the
attached exhibit, Tenant shall pay to Landlord as Additional Rent (for the
purpose of reimbursing Landlord for additional expenses which will be
incurred by Landlord because of its inability to proceed), one (1) day's Base
Rental on the Leased Premises for each day that Landlord is delayed because
of Tenant's failure to perform its obligations. Such Additional Rent shall be
paid by Tenant to Landlord within thirty (30) days after receipt by Tenant of
Landlord's invoice therefor.
24. INCONVENIENCE DAMAGE. No damages, compensation, or claim shall be
payable by Landlord for inconvenience, loss of business, or annoyance arising
from any repair or restoration of any portion of the Leased Premises or other
portion of the Project. Landlord shall use commercially reasonable efforts to
effect such repair or restoration promptly and in such manner as to not
unreasonably interfere with Tenant's use and occupancy.
25. INSURANCE BY LANDLORD. Landlord shall maintain during the term of
this Lease Agreement an all-risk commercial property policy insuring the
project, common areas, and personal property owned by Landlord, in amounts
equal to replacement value. Landlord shall not be obligated to insure any
furniture, equipment, machinery, goods, or supplies owned by
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Tenant or which Tenant may bring or obtain upon the Leased Premises, or any
additional improvements which Tenant may construct thereon. If the annual
premiums charged Landlord for such insurance exceed the standard premium
rates because of the nature of Tenant's operations, then Tenant shall, upon
receipt of appropriate premium invoices, reimburse Landlord for such
increases in premium. Landlord may, should it choose to do so, self insure
all or part of the above referenced risks. Should Landlord choose to self
insure any insurance risks, the cost demonstrated by a bid from a reputable
insurance company shall be included in the cost of insurance for expense
reimbursement purposes.
26. INSURANCE BY TENANT. Tenant shall, at all times during the term
of this Lease Agreement, insure Tenant's personal property including any
additional improvements made by Tenant, while in or upon the Leased Premises,
with an all-risk policy. In addition, Tenant shall maintain a policy or
policies of Commercial General Liability Insurance with the premiums thereon
fully paid on or before due date, issued by an insurance company having at
least an A.M. Best rating of A or better and licensed to do business within
the state the Project is located. The limits afforded by said liability
policy shall not be less than One Million Dollars ($1,000,000) combined
single occurrence limit for personal injury and property damage and
$2,000,000 annual aggregate. Landlord shall be added as an additional insured
thereto, and said policy shall not be canceled or substantially modified
without first giving Landlord thirty (30) days written notice thereof. In
addition, Tenant shall maintain Workers Compensation insurance as required by
statute. Tenant shall furnish, within thirty (30) days of Landlord's request
and approval, a certificate of insurance, acceptable to Landlord, evidencing
the Commercial General Liability and Workers Compensation coverages referred
to herein and naming Landlord and Property Manager as additional insured as to
the General Liability Insurance.
27. LAWS, ORDINANCES, REGULATIONS, AND AMERICANS WITH DISABILITIES
ACT. Landlord shall comply, at its sole cost, with all laws, ordinances,
orders, rules and regulations (state, federal, municipal, or promulgated by
other agencies or bodies having any jurisdiction thereof) relating to the use
(based upon the approved use for Tenant hereunder), condition, or occupancy
of the Leased Premises. Tenant shall comply, at its sole cost, with
requirements of the Americans with Disabilities Act which provides for the
removal of architectural barriers that prevent equal access to disabled
persons on the interior of the Leased Premises. To the extent that barrier
removal relates to access on the exterior of the Project, the obligation
shall be that of the Landlord.
28. LEASE MEMORANDUM. Neither this Lease Agreement, nor any notice
nor memorandum regarding the terms hereof, shall be recorded by Tenant
without the prior written consent of the Landlord.
29. LIMITATION OF LANDLORD'S LIABILITY. The obligations of Landlord
under this Lease Agreement do not constitute personal obligations of Landlord
or of the individual partners, directors, officers, employees, or
shareholders of Landlord or its partners, and Tenant shall look solely to the
property that is the Project described in this Lease Agreement and to no
12
other assets of Landlord for satisfaction of any liability in respect of this
Lease Agreement, and Tenant will not seek recourse against any other property
of Landlord or against the individual partners, directors, officers,
employees, or shareholders of landlord or its partners or any of their
personal assets for such satisfaction.
30. NAME OF PROJECT. Tenant shall not use the name of the Project for
any purpose other than as an address of business to be conducted by the
Tenant. Landlord and its agents shall have the right to change the name,
number, or designation of the Project without liability to Tenant upon
fourteen (14) days prior written notice to Tenant.
31. NO JOINT VENTURE. This Lease Agreement shall not be deemed or
construed to create or establish any relationship of partnership or joint
venture or similar relationship or arrangement between Landlord and Tenant
hereunder.
32. NOTICES. All notices, demands, consents, and approvals, which may
or are required to be given by either party to the other hereunder, shall be
in writing and shall be deemed to have been fully given when personally
delivered or delivered by a nationally recognized over night courier, or, if
the notice is deposited in the United States mail, certified or registered,
return receipt requested, postage prepaid, and addressed to the party to be
notified at the address for such party specified in this Lease Agreement
(with copies to Property Reserve, Inc., 10 E. South Temple Street, Suite 400,
Salt Lake City, Utah 84133, and Kirton and McConkie, 60 E. South Temple
Street, Suite 1800, Salt Lake City, UT 84145), then the notice shall be
deemed fully given on earlier of (i) the date of delivery, if delivered
personally or by courier, or (ii) the date set forth on the receipt, or (iii)
three (3) days after the notice is deposited in the mail.
Either party may change its address for notice by at least fifteen (15)
days written notice to the other party. Tenant hereby appoints as its agent
to receive the service of all dispossessory or distraint proceedings and
notices thereunder the person in charge of or occupying the Leased Premises
at the time, and, if no person shall be in charge of or occupying the same,
then, if allowed by law, such service may be made by attaching the same on
the main entrance of the Leased Premises.
33. OCCUPANCY DELAY. In the event that the Leased Premises should not
be ready for occupancy for any reason, this Lease Agreement shall not be void or
voidable, and Landlord shall not be liable or responsible for any claims,
damages, or liabilities in connection therewith or by reason thereof, and the
term of this Lease Agreement shall be for the same term of months as set
forth in the Lease Agreement, but the beginning date shall be effective only
from the time that the Leased Premises are prepared for occupancy in
accordance with the terms and conditions set forth herein. Should the term of
this Lease Agreement begin on a date other than the beginning date, Landlord
and Tenant will, at the request of either, execute a declaration specifying
the revised beginning the term of this Lease Agreement. In such event rental
under this Lease Agreement shall not commence until said revised beginning date,
and the stated term in this
13
Lease Agreement shall thereupon commence and the expiration date shall be
extended so as to give effect to the full stated term. Within five (5) days
after Tenant receives Landlord's notice that the Leased Premises are ready
for occupancy, Tenant shall inspect the Leased Premises, and except for items
specified by Tenant to Landlord within five (5) days of Tenant's inspection,
Tenant shall be deemed to have accepted the Leased Premises in their then
condition, "as is." The existence of "punch list" (as that term is generally
used in the construction industry) items shall not postpone the beginning
date of this Lease Agreement.
34. PEACEFUL ENJOYMENT. Tenant shall occupy and may peacefully have,
hold, and enjoy the Leased Premises, subject to the other provisions hereof,
provided that Tenant pays the rent herein recited and performs all of
Tenant's covenants and agreements herein contained, including the observance
of all reasonable rules and regulations made by Landlord from time to time
pursuant to this Lease Agreement. It is understood and agreed that this
covenant and any and all other covenants of Landlord contained in this Lease
Agreement shall be binding upon Landlord and its successors only with respect
to breaches occurring during its and their respective ownerships of
Landlord's interest hereunder.
35. PERSONAL PROPERTY TAX. Tenant shall be liable for and shall pay,
not later than ten (10) days before delinquency, all taxes levied against any
personal property or trade fixture placed by Tenant, in or about the Leased
Premises. Landlord may, after written notice to Tenant, pay any such levy or
tax, regardless of the validity of such levy, but only under proper protest
if so requested by Tenant in writing. Additionally, if the assessed value of
Landlord's property is increased by the inclusion of the value placed upon
any of the personal property or trade fixture of Tenant, Landlord may, after
written notice to Tenant, pay those taxes which are based upon such increased
assessment, regardless of the validity thereof, but only with proper protest
if so requested by Tenant in writing. In such an event Tenant shall, upon
demand, repay to Landlord taxes so levied and paid by Landlord, or that
portion of such taxes resulting from such increase in the assessment. Tenant
shall have the right, in the name of the Landlord and with Landlord's full
cooperation, at no cost to Landlord, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes so paid under protest.
Any amounts so recovered shall belong to Tenant.
36. PROHIBITED ACTIVITIES. Tenant shall not do or permit anything to
be done in or about the Leased Premises nor bring or keep anything therein
which will in any way increase the existing rate of or affect any fire or
other insurance upon the Project or any of its contents, or cause
cancellation of any insurance policy covering said Project or any part thereof
or any of its contents. Tenant shall not do or permit anything to be done in
or about the Leased Premises which will in any way obstruct or interfere with
the rights of other tenants or occupants of the Project or injure or annoy
them, or use or allow the Leased Premises to be used for any improper,
immoral, unlawful, or objectionable purpose, nor shall Tenant cause,
maintain, or permit any nuisance in, on, or about the Leased Premises. Tenant
shall not violate any of the rules and regulations of the Project.
14
Tenant shall not do or permit to be done on or about the Leased
Premises, and the Landlord shall not do or permit to be done outside the
Leased Premises any of the following: (a) any violation of any federal, state
or local law, ordinance, or any regulation, ordinance, order or directive of
a governmental agency as such statutes, ordinances, regulations, orders, or
directives now exist or may hereafter come into effect and concern the use,
safety, or environment of the Property; (b) any violation of any Certificate
of Occupancy covering or affecting the use of the Property or any part
thereof; (c) commit any public or private nuisance.
37. RELOCATION. Original paragraph deleted in its entirety.
38. REPAIRS AND INSPECTION ENTRY. Tenant shall permit Landlord or its
agents or representatives to enter into and upon any part of the Leased
Premises at all reasonable hours to inspect same, clean, make repairs,
alterations, or additions thereto or for any reasonable purpose as Landlord
may deem necessary or desirable, and Tenant shall not be entitled to any
abatement or reduction sums due under this Lease Agreement by reason thereof.
39. RESERVATIONS BY LANDLORD. Landlord reserves the right to:
a. Make changes, additions, improvements, or deletions to, or
to reduce, partition, or otherwise eliminate the Common Areas, including,
without limitation, changes in the location, size shape and number of
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas, and hallways.
b. Close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Leased Premises remains
available.
c. Designate other land to be part of the Common Area where the
additional Common Area is available for the use and benefit of tenants of the
Project.
d. Expand the Project.
40. RULES AND REGULATIONS. Landlord shall have the right to make and
enforce rules and regulations (the "Rules and Regulations") consistent with
this Lease Agreement for the purposes of regulating access, parking, use of
the common areas in the Leased Premises, and promoting safety, order,
cleanliness, and good service to the Project. Tenant will promptly comply
with all such Rules and Regulations. The parties acknowledge that the Rules
and Regulations attached hereto and are presently the Rules and Regulations
now in effect; however, Landlord, may at its option and at any time,
reasonably amend and modify said Rules and
15
Regulations, and Tenant, upon receipt of written notice of same, shall be
obligated to comply with said Rules and Regulations.
41. SALES TAX. In addition to the rental payments hereunder, all
state, county, and municipal transaction privilege (sales) taxes or similar
excise taxes imposed by any state, county, municipality, or other
governmental entity relative to the rental activity under this Lease
Agreement, if required, shall be reimbursed to the Landlord by the Tenant as
Additional Rent.
42. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord,
without payment of interest to Tenant, as security for Tenant's full and
faithful performance of every provision of this Lease Agreement. Landlord may
commingle the deposit with other funds of Landlord and may apply the deposit
to the cost of performing any obligation which Tenant fails to perform within
the time required by this Lease Agreement but such application shall not be
Landlord's exclusive remedy for Tenant's default. If any portion of said
deposit is applied by Landlord, Tenant shall pay the sum necessary to
replenish the deposit to its original amount upon demand by Landlord. Should
Landlord sell its interest in the Project during the Term hereof, and if
Landlord deposits with the purchaser thereof the then unappropriated funds
deposited by and when Tenant as aforesaid, Landlord shall thereupon be
discharged from any further liability with respect to the Security Deposit,
as and when purchaser assumes Landlords obligations under this Lease or any
extension thereof. Notwithstanding the foregoing, Landlord shall comply with
any laws or regulations in effect and related to the handling of Security
Deposits in commercial rental agreements. The Security Deposit shall increase
pro rata for any expansion space added to the Leased Premises.
43. SEVERABILITY. If any term or provision of this Lease Agreement,
or the application thereof to any person or circumstances, shall to any
extent be invalid or unenforceable, the remainder of this Lease Agreement, or
the application of such provision to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected
thereby, and each provision of this Lease Agreement shall be valid and shall
be enforceable to the extent permitted by law.
44. SERVICES INTERRUPTION. It is understood that Landlord does not
warrant that any of the services referred to above, or any other services
which Landlord may supply, will be free from interruption. Tenant
acknowledges that any one or more such services may be suspended or reduced
by reason of accident or repairs, alterations, or improvements necessary to
be made, by strikes or accident or by any cause beyond the reasonable control
of Landlord, or by orders or regulations of any federal, state, county, or
municipal authority.
Any such interruption or suspension of services shall never be deemed an
eviction of or disturbance to Tenant's use and possession of the Leased
Premises or any part thereof, or render Landlord liable to Tenant for
damages by abatement of rent, or otherwise relieve Tenant of performance of
Tenant's obligation under this Lease Agreement. Landlord will use
commercially reasonable efforts to restore service to full operations, and in
the event of a strike to secure parties not involved in the labor dispute to
provide minimum services.
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45. SUBORDINATION TO MORTGAGES. This Lease Agreement shall
automatically be subject and subordinate to the lien of any mortgage or deed
of trust given by Landlord which does now or may hereafter encumber the
Project of which the Leased Premises form a part, and to all renewals,
modifications, consolidations, replacements, and extensions thereof. Landlord
shall also have the right to assign its interest in this Lease Agreement for
security purposes to any mortgagee or trust deed beneficiary. Tenant agrees
that it will execute, within five (5) business days of Landlord's request,
any appropriate instrument or certificate that Landlord or any mortgagee or
trust deed beneficiary may require to further document this subordination,
provided that such mortgagee or trust deed beneficiary shall agree with
Tenant not to disturb Tenant's right to possess the Leased Premises so long
as Tenant complies with all of the terms and conditions of this Lease
Agreement. Tenant further agrees that it will provide any such mortgagee or
trust deed beneficiary with any evidence required to show the authority of
Tenant to execute any such subordination instrument or certificate and will,
if so requested by any such mortgagee or trust deed beneficiary, provide to
that person or entity a copy of any notice Tenant gives or is required to
give Landlord under this Lease Agreement. In the event of the enforcement by
the mortgagee or the beneficiary under such mortgage or deed of trust of the
remedies provided for by law or by such mortgage or deed of trust, or in the
event Landlord gives a deed-in-lieu-of-foreclosure to such mortgagee or trust
deed beneficiary, Tenant will, upon request of any person or party succeeding
to the interest of Landlord as a result of such enforcement or termination,
automatically become the Tenant of such successor in interest without change
in the terms or other provisions of this Lease Agreement, provided, however,
that such successor in interest shall not be bound by (i) any payment of rent
or additional rent for more than one month in advance, (ii) any amendment or
modification of this Lease Agreement made without the written consent of such
mortgagee or such beneficiary or their successor in interest, or (iii) any
defaults of Landlord under this Lease Agreement which remain uncured at the
time such successor in interest obtains title to the Project. Tenant shall
execute and deliver any instrument or instruments confirming the attornment
herein provided for.
In the event of any act or omission by Landlord by reason of which
Tenant may claim the right to terminate this Lease Agreement or claim a
defense or offset against the Base Rental due hereunder, Tenant agrees not to
exercise any such right until: (i) Tenant has notified the mortgagee or trust
deed beneficiary in writing of such act or omission by Landlord, and (ii)
Tenant has given the mortgagee or trust deed beneficiary a reasonable
opportunity to cure such act or omission, including the time as shall be
reasonably required to obtain possession of the property and to commence and
carry to completion the foreclosure of its mortgage or deed of trust.
46. SUCCESSORS AND ASSIGNS. This Lease Agreement shall be binding
upon and inure to the benefit of Landlord, its successors and assigns, and
shall be binding upon and inure to the benefit of Tenant, its successors,
and, to the extent assignment may be approved by Landlord hereunder, Tenant's
permitted assigns.
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47. TENANT TO KEEP THE LEASED PREMISES LIEN FREE. Tenant shall keep
the Leased Premises and Project free from any mechanic's liens arising
from any work performed, material furnished, or obligations incurred by
Tenant, and shall obtain from its contractor lien releases if required by
Landlord. Tenant shall keep Landlord informed of the status of any contest
and shall defend, indemnify, and hold harmless Landlord from and against any
such lien or claim or action thereon, together with costs of suit and
reasonable attorneys' fees incurred by Landlord in connection with any such
claim or action.
48. TENANT'S PROPERTY. Landlord shall not be required to carry
insurance of any kind on Tenant's personal property, and shall not be
obligated to repair any damage thereto or replace the same for any reason,
except Landlord or its employees, and agents' intentional acts or gross
negligence.
49. TENANTS REQUESTS. Tenant shall pay all the out of pocket legal
expenses incurred by Landlord not to exceed five hundred dollars ($500.00)
per occurrence as a result of requests from Tenant to exercise its rights
granted under this Lease Agreement, except for litigation in which the Tenant
is the prevailing party.
50. TENANT'S RIGHT TO AUDIT. In the event Tenant's Proportionate
Share of Operating Expenses increases, excluding property taxes and
insurance, by more than five percent (5%) in any Calendar Year, Tenant may
audit Landlord common area operating costs in order to verify the accuracy of
operating expense charges, provided that:
a. Tenant specifically designates the calendar year(s) that
Tenant intends to audit, which shall be a year within two (2) years of date
of the audit, but must be within the Term of this Lease Agreement.
b. Such audit will be conducted only by a licensed firm,
unaffiliated with Tenant, with prior Landlord approval, and during regular
business hours at the office where Landlord maintains Operating Expense
records, and only after Tenant gives Landlord fourteen (14) days' notice.
c. Tenant shall pay for all costs associated with audit.
d. If audit yields a result that Tenant has underpaid the
Tenant will reimburse Landlord upon receipt of invoice.
e. Tenant agrees not to divulge the results of the audit to any
other party.
f. Tenant shall deliver to Landlord a copy of the results of
such audit within fifteen (15) days of its receipt by Tenant. No such audit
shall be conducted if any other tenant has conducted an audit for the time
period Tenant intends to audit and Landlord furnishes to Tenant a copy of the
results of such audit. No audit shall be conducted at any time that Tenant is
in default of any of the terms of the Lease Agreement. No subtenant shall
have any right to conduct an audit and no assignee shall conduct an audit for
any period during which such
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EXHIBIT "B"
A Plan of the Demised Premises
The property is a suite of offices in a single story office park. The
occupied suite of offices consists of approximately 5,404 square feet. There
are six (6) enclosed offices or rooms adjacent to the north and south sides
of the building. There are two (2) restrooms and the majority of the
remaining area is open for partitioned office or other use. All external
sides, except for one section do have glass facades.
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EXHIBIT "C"
IMPROVEMENT ITEMS
1. INSTALLATION OF ONE (1) SET OF DOUBLE DOORS.
2. REMOVAL OF ONE DOOR TO INCLUDE REPAIR OF WALL.
3. NEW CARPETING, BASE AND VCT THROUGHOUT THE SUITE.
4. REPAIR AND PAINTING OF WALLS THROUGHOUT THE SUITE.
5. HVAC ADDED IN TO ADDITIONAL SPACE AS NEEDED.
6. GENERAL CLEAN UP THROUGHOUT THE SUITE.
7. REMOVAL OF CABINETS IDENTIFIED BY TENANT.
8. REPLACE OR ADD TILE OR VINYL IN MAILROOM AS NECESSARY.
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(GATEWAY POINTE)
EXHIBIT "D"
RULES AND REGULATIONS
1. The doors, sidewalks, passages, exits, and entrances shall be used
for ingress and egress and shall not be obstructed. Tenant shall use
reasonable efforts to keep such areas clean and free from rubbish.
2. Loitering anywhere in the Project shall not be permitted. Landlord
reserves the right to exclude or expel from the Project any person who, in
the judgment of Landlord, is under the influence of liquor or drugs or who
shall in any manner do any act in violation of the Rules and Regulations of
the Project.
3. Alterations in any way to the interior or exterior of the Leased
Premises including attaching pictures, certificates, licenses, and similar
items may be done only in a reasonable manner, subject to review by Landlord.
4. Tenant shall not alter, paint, cover, obstruct, screen, tint,
install curtains, draperies, blinds, or shades, or obscure any window, shall
not affix any signs, advertisements, or notices on or to any window, and
shall not have any window treatment other than building standard as
established by Landlord, without the written consent of Landlord.
5. All Tenant identification in the public areas of the Project must
be installed and approved by Landlord based on the standard signage as
established by Landlord.
6. The location of electrical, telephone, computer or other wiring
and of related outlets must be pre-approved prior to installation in writing
by Landlord. Such items shall be installed by qualified personnel in
accordance with building codes applicable to the Project and the Leased
Premises.
7. No items of unusual size or weight shall be used or placed in the
Project without Landlord's written permission. In no event shall any floor be
overloaded as determined by a competent licensed engineer.
8. The moving of any of Tenant's business or personal furniture,
equipment, inventory, or other items in or out of the Project or Leased
Premises will be at a time and in a manner designated by Landlord.
9. No Tenant shall use or keep any foul or noxious gas or substance
which may in any manner be offensive or objectionable to Landlord or other
occupants of the Project. No noises, vibrations, odors, or activities
bothersome to other Tenants will be allowed in the Leased Premises or on the
grounds of the Project.
10. No animals, fish, birds, etc., are allowed within the Project
without Landlord's written permission.
11. The Tenant is prohibited from storing goods, wares, or merchandise
in the Project or Leased Premises in areas not acceptable to Landlord for
storage. No auction, public or private, will be permitted in the Leased
Premises.
12. All Tenant requests for service or maintenance to the Landlord
will be made by notifying the Landlord or its agents at a designated
location. Landlord's agents or contractors shall not perform any work or do
anything outside of their regular or contracted duties unless under special
written instructions from the Landlord.
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13. All keys shall be obtained from Landlord, and all keys shall be
returned to Landlord upon termination or expiration of Tenant's Lease. No
duplicate keys shall be made without Landlord's approval. Tenant is
responsible to control the keys to the Leased Premises, and Tenant shall pay
for lost keys. Tenant shall not change the locks or install other locks on
the doors without Landlord's written approval. If Landlord gives Tenant
written approval to change locks, then Tenant will provide Landlord with keys.
14. Tenant is responsible to lock and secure all doors to the Leased
premises after regular business hours or after entering or leaving on
nonbusiness days. Landlord is not responsible to respond to after-hours
lock-outs.
15. The following acts shall not be allowed or suffered to be done nor
conditions allowed to exist upon the Premises or any part thereof:
a. Any violation of any federal, state, or municipal statute or
ordinance, or any regulation, order, or directive of a governmental
agency, as such statutes, ordinances, regulations, orders, or
directives now exist or may hereafter provide concerning the use and
safety of the Leased Premises.
b. Any violation of any certificate of occupancy covering or affecting
the use of the Leased Premises or any part hereof.
c. Any public or private nuisance.
d. The display or distribution of drug paraphernalia or sexually
related paraphernalia, except as the same may be legally dispensed
by a physician or surgeon, dentist, or pharmacist, duly licensed to
such profession in the State.
e. The manufacture, distribution, sales, or dispensing in any manner of
illegal drugs, or any type of illegal drug activity or consumption.
f. The sale or dispensing of alcoholic beverages.
g. The showing, displaying, viewing, renting, or selling of movie films
within the Leased Premise would be classified or rated as "X or
R-rated" under present standards or criteria for such class and
rating.
h. Gambling.
i. The establishment or maintenance of a bawdy house, bar, nightclub,
or tavern.
j. Any other act or condition which shall be lewd, obscene, or
licentious.
k. Performance of abortions.
l. Mark, or drive nails, screw or drill into, the partitions, woodwork
or plaster or otherwise deface its premises or any part thereof.
m. Smoking shall not be permitted in or around any offices, interior
common corridors, restrooms areas, elevators, stairwells, or building
entrances.
16. Landlord shall have the right to regulate parking throughout the
Project in a manner beneficial to the entire Project. Landlord shall have the
right to re-stripe parking stalls, lanes, and other areas as Landlord deems
reasonably necessary to control parking and access. Landlord may refuse to
permit any person who violates the rules.
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to park in the parking lot, and any violation of the rules shall subject the
car to removal. No extended period parking for campers, trailers, motor
homes, emergency equipment, or other nonstandard sized vehicles is permitted.
17. Tenant shall not use the Project, Leased Premises, or parking
facilities for housing or sleeping whatsoever.
18. Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Leased Premises of any
person. In the case of invasion, mob riot, public excitement, or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right to prevent access to the Leased Premises during the
continuance of the same by such action as Landlord may deem appropriate,
including closing doors and restricting access to public areas of the Project.
19. Each Tenant shall see that appliances and utilities are shut off as
appropriate before Tenant or Tenant's employees leave the Leased Premises.
Tenant is required to prevent controllable waste or damage in all aspects of
the Leased Premises from any default or carelessness. All Tenants shall keep
the doors to the Project's corridors closed at all times, except for ingress
and egress, unless door is equipped with an approved magnetic door holder.
20. No Tenant shall install any radio or television antenna, or
satellite dish, loudspeaker, or other device on the roof or exterior walls of
the Project without Landlord's written permission.
21. Each Tenant shall store all its refuse or waste within its Leased
Premises and dispose of such refuse or waste only in accordance with Project
rules and all applicable local, state, and federal regulations and laws.
22. Tenant is not allowed to disturb, solicit, or canvass any occupant
of the Project and shall cooperate to prevent same. Canvassing, soliciting,
distributing handbills or any other written material, or peddling in the
Project is prohibited.
23. Tenant agrees to enforce and, as necessary, to acquaint all persons
doing business with Tenant with the Project's Rules and Regulations.
24. The failure of Landlord to enforce any of the Rules and Regulations
against any other Tenant in the Project shall not be deemed a waiver of any
of such Rules and Regulations. Landlord shall not be liable to Tenant for
violation of any of the Rules and Regulations or the breach of any covenant
or condition in any lease by any other Tenant in the Project.
25. Landlord shall control and operate the public portions of the
Project, and the public facilities, and heating and air conditioning, as well
as facilities furnished for the common use of Tenant. Such control and
operation shall be accomplished in a manner consistent with the best
interests of the tenants in general. Tenant shall not obstruct, alter or in
any way impair the effective operation of the hearing and air conditioning,
electrical, fire, safety, or lighting systems, and Tenant shall not tamper
with or change any of the thermostats or temperature control valves in the
Project except those that are in Tenant's space and are provided for Tenant's
use.
26. Tenant shall not use or keep in the Leased Premises or in the
Project any kerosene, gasoline, or other inflammable or combustible fluid or
material, nor use any method or heating or air conditioning not acceptable to
Landlord.
27. All damage done to the Leased Premises or the Project by the
installation or removal of any property of Tenant, or done by Tenant's
property while in the Leased Premises, shall be repaired at the expense of
Tenant.
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28. Plumbing fixtures and appliances shall be used only for their
intended purposes, and Tenant, and shall not deposit any sweepings, rubbish,
rags, or other unsuitable substances therein. Damage resulting from misuse
shall be paid for by Tenant.
29. Landlord shall not be responsible for any loss or theft or damage to
personal property in the Leased Premises or the Project ham any cause
whatsoever, whether or not such loss, theft, or damage occurs when the
Leased Premises or other pardons of the Project are locked against entry.
30. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
31. In the event of any conflict between these Rules and Regulations and
any lease with Tenant, the provisions of the Lease shall be controlling.
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