Exhibit 10.5
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MILITARY RESALE GROUP, INC.
COMMERCIAL NET/NET/NET WAREHOUSE LEASE
STATE OF COLORADO
COUNTY OF EL PASO
1. LEASED PREMISES AND TERM: This Lease Agreement, made and entered into by and
between MRS Connection, a Colorado general partnership hereinafter referred to
as "Landlord", does hereby demise and lease unto Military Resale Group, Inc. a
Maryland Corporation hereinafter referred to as "Tenant, thirty two thousand
seven hundred forty eight (32,748) rentable square feet of the building located
at 2180 Executive Circle, Colorado Springs, Colorado 80906 for the term of five
(5) years (the "Primary Lease Term") beginning on the first day of September,
2001, and ending on the thirty first day of August, 2006, unless the Primary
Lease Term hereof shall be sooner terminated as hereinafter provided.
2. RENT AND SECURITY DEPOSIT:
(a) In consideration of said Lease, the Tenant, without prior notice or
demand, agrees to pay to the Landlord as the base rent for said premises; (1)
for the first year of the term of this Lease, monthly payments in the amount of
Fifteen Thousand Nine Dollars and fifty Cents ($15,009.50); (2) for the second
year of the term of this Lease, monthly payments in the amount of Fifteen
Thousand Six Hundred Ninety-One Dollars and Seventy-Five Cents ($15,691.75); (3)
for the third year of the term of this Lease, monthly payments in the amount of
Sixteen Thousand Three Hundred Seventy-Four Dollars ($16,374.00); (4) for the
fourth year of the term of this Lease, monthly payments in the amount of
Seventeen Thousand Fifty-Six Dollars and Twenty-Five Cents ($17,056.25); (5) for
the fifth year of the term of this Lease, monthly payments in the amount of
Seventeen Thousand Seven Hundred Thirty-Eight Dollars and Fifty Cents
($17,738.50); which said payments shall be due and payable in advance on the
first day of each and every calendar month thereafter during the Primary Lease
Term at the office of the Landlord, or such other place as the Landlord from
time to time, in writing, may designate, With the execution of this Lease,
Tenant has deposited with the Landlord the sum of Nineteen Thousand Dollars
($19,000.00) which shall be held by Landlord in a segregated interest bearing
account as Security for the full and faithful performance of every provision of
this Lease to be performed by Tenant. If Tenant defaults with respect to any
provision of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, Landlord may use, apply, or retain all or any part of
this Security Deposit for the payment of any Rent and any other sum in default,
or for the payment of any other amount which Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of such deposit is to be used or applied, Tenant shall,
within five (5) days after written demand therefore, deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to its, original amount,
and Tenant's failure to do so shall be a material breach of this Lease. If
Tenant shall fully and faithfully perform every provision of this Lease to be
performed by it, the Security Deposit or
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any balance thereof shall be returned to Tenant, together with accrued interest
within fifteen (15) days after the expiration of this Lease Term and upon
Tenant's vacation of the Premises.
(b) Tenant acknowledges that Landlord has the right to transfer its
interest in the Property and this Lease, and Tenant agrees that in the event of
any such transfer, Landlord shall have the right to transfer such Security
Deposit to the transferee. Upon Landlord's delivery to Tenant of such
transferee's written acknowledgment of it receipt of such Security Deposit,
Landlord shall thereby be released by Tenant from all liability or obligation
for the return of such deposit, and Tenant agrees to look solely to such
transferee for the return of the Security Deposit.
(c) No dispute between Landlord and Tenant as to Landlord or Tenant
obligations under this Lease shall excuse the payment of rent or the faithful
performance of the other conditions of said Lease by either party.
3. POSSESSION:
(a) If Landlord, for any reason whatsoever, cannot deliver possession
of the said premises to the Tenant at the commencement of the term hereof, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, but in that event the term of the Lease
shall be amended to commence on the date when Landlord can deliver possession,
which date shall be no later than thirty (30) days after the scheduled
commencement date, the expiration date shall be extended accordingly. If
permission is given to Tenant to occupy the premises prior to the commencement
date, such occupancy shall be subject to all provisions of this Lease and, if
the term hereof commences on a date later than the commencement date pursuant to
the provisions set forth above, the Parties hereto agree to execute and
acknowledge a written statement setting forth the actual date of commencement of
this Lease and the termination date. This Lease shall be in full force and
effect even though either Party may fail or refuse to execute such statement.
(b) The taking of possession of said premises by the Tenant shall be
conclusive evidence as against the Tenant that said premises were in good and
satisfactory condition when possession of same was taken.
4. LATE CHARGE: Tenant acknowledges that late payment of Tenant to Landlord for
rent or other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which would be extremely
difficult and impractical to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges that may be imposed on
Landlord by the terms of any mortgage or trust deed covering the premises.
Therefore, in the event Tenant should fail to pay any installment of rent or any
sum due hereunder after such amount is due, Tenant shall, upon being billed, pay
to Landlord as additional rent, a late charge equal to 5% of each such
installment. Said late charge shall be assessed on the 5th day of each month. A
$10.00 charge will be paid by the Tenant to the Landlord for each returned
check.
5. CHARACTER OF OCCUPANCY: The demised premises shall be used only for an office
and warehouse and for such other lawful purposes as may be incidental thereto.
Tenant shall at
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its own cost and expense obtain any and all licenses and permits necessary for
such use. Tenant shall comply with all governmental laws, ordinances and
regulations applicable to the use of the demised premises. Tenant shall promptly
comply with all Landlord or government orders and directives for the correction,
prevention, and abatement of nuisances in or upon, or connected with the demised
premises, all at Tenant's sole expense. Tenant shall not permit the leased
premises to be used in any way which would, in the opinion of the Landlord, be
extra hazardous or which would in any way increase or render void the fire
insurance on the leased premises.
6. ADDITIONAL RENT - TRIPLE NET EXPENSES: As additional rent, Tenant shall pay
to Landlord along with the monthly base rent, fixed common area maintenance
("CAM") costs for the first three years of the Primary Lease Term of $1.25 per
square foot per year in monthly payments, (along with the base rent) of Three
Thousand Four Hundred Eleven and Twenty-Five Cents ($3,411.25). In the fourth
and fifth year the CAM costs shall be the Landlords actual costs but such costs
shall not exceed a five per-cent increase of the tenants CAM cost from the
preceding year. The CAM costs shall include the Tenant's prorata share of the
real property taxes, insurance premiums, repairs and maintenance and such other
CAM costs that are appropriate and are agreed upon by the Landlord and Tenant.
As used in this paragraph, "real property tax" shall mean any form of
assessment (both general and special), levy, penalty or tax (other than estate
or inheritance tax) imposed by any authority having direct or indirect power to
tax any legal or equitable interest of Landlord in the leased premises,
including any tax on rent (other than income tax) in lieu of or in addition to
normal real property taxes or assessments. Tenant may, at its sole cost and
expense (in its name or in the name of Landlord, or in the name of both as it
may deem appropriate) dispute and contest the real property tax, and in such
case, said disputed tax must be paid prior to being contested. Tenant
acknowledges the right to contest solely for a refund. Should the real property
tax contested be held valid, Tenant shall pay all items, court costs, attorney's
fees, interest and penalties relating thereto.
7. PRORATION: Whenever the term "pro rate" shall appear in this Lease, it shall
refer to the Tenant's gross square footage (32,748), as that figure compares to
the total gross square footage (54,061) included in any billing for taxes,
insurance or other services being provided for the leased premises.
8. REPAIRS AND MAINTENANCE: Tenant shall, at its sole expense keep the leased
premises in good repair and tenantable condition during the term of this lease.
If Tenant fails to perform any duty described above, Landlord may give notice of
such failure. If the duty is not performed by the Tenant within thirty days (or
such longer period of time if necessitated by the nature of the repairs), after
written notice (or within a reasonable shorter period in the case of emergency),
the Landlord may perform the repair or maintenance work and charge the Tenant
for any expense incurred. The Tenant shall pay the expense incurred within
thirty (30) days. Landlord and Landlord's, agents and representatives shall have
the right to enter and inspect the demised premises at any time during
reasonable business hours, upon reasonable advanced notice to Tenant, (provided
the same will not interrupt Tenant's normal business operations) for the purpose
of ascertaining the condition of the demised premises or in order to make such
repairs, additions or alterations as may be required to be made by Tenant under
the terms of this
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Lease. At the termination of this Lease, Tenant shall deliver up the leased
premises with all improvements located thereon, except as provided in Paragraph
9 hereof, in good repair and condition, and will deliver all keys thereto at the
office of the Landlord.
9. ALTERATIONS: Tenant shall not make any major alterations, additions, or
improvements to the demised premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant may without
the consent of Landlord, but at its own cost and expense and in a good
workmanlike manner, make such minor alterations, additions, or improvements, or
erect, remove, or alter such partitions, or erect such shelves, bins, machinery,
and trade fixtures as it may deem advisable, (including, but not limited to
installation of freezers and refrigeration units) without altering the basic
character of the building or improvements, and in each case complying with all
applicable governmental laws, ordinances, regulations, and other requirements.
Tenant shall promptly pay the costs of all work performed and shall indemnify
and hold harmless the Landlord against liens, costs, damages and expenses
incurred in connection therewith; including any attorneys' fees incurred by
Landlord, if Landlord shall be joined in any action or proceeding involving such
work. Under no circumstances shall Tenant commence any such work until Landlord
has been provided with certificates evidencing that all contractors and
subcontractors performing the work have in full force and effect adequate
workmen's compensation insurance as required by the Laws of the State, as well
as public liability and builders risk insurance in such amounts, and according
to terms satisfactory to Landlord. At the termination of this Lease, Tenant
shall, if Landlord so elects, remove all alterations, additions, improvements,
and partitions erected by Tenant and restore the premises to their original
conditions, otherwise such improvements shall be delivered up to Landlord with
the premises. All shelves, bins, machinery, and trade fixtures installed by
Tenant may be removed if required by Landlord. All such removals and
restorations; shall be accomplished in a good workmanlike manner so as not to
damage the primary structure or structural qualities of the building and other
improvements situated on the demised premises.
10. MECHANICS LIENS: Tenant agrees that it will promptly pay for any work done
in or about the demised premises, and will not permit or suffer any mechanics
liens to attach to the demised premises, and shall promptly cause any claim for
such lien to be released, or bonded against, or provide security to the
Landlord's satisfaction, in the event Tenant desires to contest any such claim.
11. SIGNS: No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part of the outside of the
demised premises or the buildings of which they form a part, without the prior
written consent of Landlord. No awning or other projections shall be attached to
the outside walls of the demised premises without the prior written consent of
the Landlord. Landlord consents to the Tenant moving it's sign it has on it's
current space to the Premises; however, the Tenant shall obtain the Landlord's
consent to the location of the sign and the method of installation.
Tenant shall remove all such signs, advertisements, notices or
lettering at the termination of this Lease. Such installation and removals shall
be made in such manner as to avoid injury, defacement, or overloading of the
building and other improvements. Drawings for all Tenant identifying signs shall
be approved by Landlord before manufacture and installation.
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12. UTILITIES: Tenant's utilities shall be separately metered and placed in
Tenant's name, including the Tenant's electricity, gas, and water. - Tenant
shall also obtain it's own dumpster and make arrangements for the removal is
it's Trash. Tenant shall pay all charges incurred for any utility services
metered in its name to his demised premises.
13. LEASE ASSIGNMENT OR SUBLETTING: Tenant shall not have the right to assign
this Lease or to sublet the whole or any part of the demised premises without
first obtaining prior written consent of Landlord. The Tenant shall not change
the ownership of the business in order to avoid this provision, and will, at the
request of the Landlord, provide whatever documentation is necessary to
establish that the Tenant is in compliance with this provision. If the Landlord,
upon the request of the Tenant allows Tenant to assign or sublet the premises,
then, in the "event of default" as herein defined, Landlord, in addition to any
other remedies herein provided or provide by law, may at its option, collect
directly from such assignee or subtenant all rents becoming due to Tenant under
such assignment, or sublease and apply such rent against any sums due to it by
Tenant hereunder, and no such collection shall be construed to constitute a
novation or a release of Tenant from the further performance of its obligations
hereunder. Assignor or Sublessor may not collect rent in excess of the existing
Lease rates and any such sums received by Assignor or Sublessor must be
immediately paid to the Landlord. The Landlord shall also have the right to
assign any of its rights under this Lease.
14. INSURANCE, LIABILITY AND INDEMNITY:
(a) Tenant shall throughout the demised term, at its sole cost and
expense, provide and keep in force with responsible insurance companies
satisfactory to Landlord and to any mortgagee under a mortgage constituting a
lien upon the demised premises, public liability and property damage insurance.
The liability limits of all said insurance shall be a minimum of $1,000,000
Bodily Injury, $1,000,000 Property Damage or a combined single limit of
$1,000,000, protecting Landlord and any such mortgagee, as well as Tenant
against liability to any employees or servants of Tenant or to any other person
whomsoever arising out of or in connection with Tenant's use of the leased
premises of the condition or of the leased premises. Tenant is to furnish
Landlord with a Certificate of Insurance within 30 days after commencement of
this Lease, or Landlord may provide same and charge Tenant on its normal monthly
billing.
(b) Landlord shall procure and maintain at all times during the term of
this Lease a policy or policies of insurance covering loss or damage to the
premises (exclusive of Tenant's trade fixtures, equipment, and personal
property), providing protection against all perils included within the
classification of "All Risk".
(c) Tenant shall indemnify and hold harmless Landlord from all loss,
damage, liability or expense, including attorneys fees, resulting from any
injury to any person or any loss of or damage to any property caused by or
resulting from any act, omission or negligence of Tenant or any officer,
employee, agent, contractor, invitee or visitor of Tenant in or about the
premises or the building.
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The foregoing provision shall not be construed to make Tenant
responsible for loss, damage, liability or expense resulting from injuries to
third parties caused by any act, omission or negligence of Landlord or of any
officer, employee, agent, contractor, invitee or visitor of Landlord. Landlord
shall not be liable for any loss or damage to person or property sustained by
Tenant, or other persons, which may be caused by the building or the premises,
or any appurtenances thereto, being out of repair; or by the bursting or leakage
of any water, gas, sewer or steam pipe, or by theft of by any act of neglect of
any Tenant or occupant of the building, or of any other person, or by any other
cause whatsoever, unless caused by any act, omission or negligence of the
Landlord.
(d) All personal property of any kind or description whatsoever in the
demised premises shall be at the Tenant's sole risk, and the Landlord shall not
be held liable for any damage done to or loss of such personal property or to
the business of the Tenant.
15. DAMAGE OR DESTRUCTION:
(a) In the event improvements on the premises are damaged and rendered
uninhabitable in whole or in part by any casualty which is covered under an
insurance policy required to be maintained pursuant to Paragraph 14 or
otherwise, the Landlord may, at Landlord's option, either (1) repair such damage
as soon as reasonably possible, but no later than thirty (30) days after the
damage occurs, at Landlord's expense, in which event this Lease shall continue
in full force and effect, or (2) give written notice to Tenant within seven (7)
days after the date of occurrence of such damage of Landlord's inability to
correct the damages within thirty (30) days, stating the length of time
estimated for Landlord to make such repairs and therefore its intention to
cancel and terminate this lease, as of the date of the occurrence of the damage.
In the event Landlord elects to terminate this Lease, because of its inability
to correct the problem within thirty (30) days, as aforesaid, Tenant shall have
the right within ten (10) days after receipt of the required notice, to notify
Landlord in writing of either (1) Tenant's intention to repair such damage at
Tenant's expense, without reimbursement from Landlord, in which event this Lease
shall continue in full and effect, and Tenant shall proceed to make such repairs
as soon as reasonably possible; or (2) Tenant's election to allow Landlord the
time estimated by Landlord to correct the problem, whereby this Lease shall
continue in full force and effect and Landlord shall proceed to make such
repairs as soon as reasonably possible. If Tenant does not give such notice
within the ten ( I 0) day period this Lease shall be canceled and terminated as
of the date of the occurrence of such damage. If the premises are totally
destroyed during the term of this lease from any cause whether or not covered by
the insurance required under Paragraph 14 (including any destruction by any
authorized public authority), this Lease may automatically terminate as of the
date of such total destruction, at the option of the Landlord or Tenant.
(b) If the premises are totally or partially destroyed or damaged and
Landlord or Tenant make repairs pursuant to this Lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated in proportion to the extent which Tenant's use of the premises is
impaired. Except for abatement of rent, if any, Tenant shall have no claim
against Landlord for any damage suffered by reason of such damage, destruction,
repair or restoration.
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16. EMINENT DOMAIN: If the leased premises shall be taken by right of eminent
domain, in whole or substantially in part, for public purposes, then this Lease,
at the option of the Landlord, shall forthwith cease and terminate, and the
current rent shall be properly apportioned to the date of such taking and in
such event Landlord shall receive the entire award for the lands and
improvements so taken, and Tenant shall make no claim against Landlord for
compensation in connection with the taking referred to above; however, nothing
shall prevent the Tenant's ability to file its own claim against the condemning
authority.
17. SUBORDINATION: The Lease and all of the rights of Tenant hereunder are and
shall be subject and subordinate to any sales and/or lien of any mortgage now or
hereafter placed on the demised premises or any part thereof, and to any and all
renewals, modifications, consolidations, replacements, extensions or
substitutions of said sale and/or mortgage. Such subordination shall not
interfere with the Tenant's right of quiet enjoyment as herein provided.
Tenant agrees to execute any documents required to effectuate such
subordination or to make this Lease subordinate to the lien of any mortgage,
deed of trust or ground lease, as the case may be.
18. ATTORNMENT: If the Landlord under the sale or the holder of the mortgage
shall succeed to the rights of the Landlord under this Lease, whether through
possession or foreclosure action or delivery of a new lease or deed, Tenant,
upon the request of such successor Landlord, shall attorn to and recognize such
successor Landlord as Tenant's Landlord under this Lease, and shall promptly
execute and deliver any instrument that such successor Landlord may request to
further evidence such attornment. Tenant hereby irrevocably appoints Landlord or
the successor Landlord the attorney-in-fact of Tenant to execute and deliver
such instrument on behalf of Tenant, should Tenant refuse or fail to do so
promptly after request. Upon such attornment this Lease shall continue in full
force and effect as, or as if it were, a direct lease between the successor
Landlord and Tenant upon all of the terms conditions and covenants as are set
forth in the Lease.
19. HOLDING OVER: Should Tenant, or any of its successors in interest, hold over
the leased premises, or any part thereof, after the expiration of the term of
this Lease, unless otherwise agreed in writing, such holding over shall
constitute and be construed as tenancy from month to month only, at a rental
equal to double the monthly base rental paid the last month of the term of this
Lease.
20. TENANT DEFAULT:
(a) The following events shall be deemed to be events of default by
Tenant under this Lease:
(1) Tenant shall fail to pay any installment of the rent or other
charges hereby reserved and such failure shall continue a period of
ten (10) days.
(2) Tenant shall fail to comply with any term, provision or
covenant of the Lease, other than the payment of rent or other charges
and shall not cure such failure within thirty (30) days after written
notice thereof to Tenant, or as otherwise prescribed in this Lease.
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(3) Tenant shall become insolvent, or shall make transfer in
fraud of creditors, or shall make an assignment for the benefit of
creditors.
(4) Tenant shall file a petition under any section or chapter of
the National Bankruptcy Act, as amended, or under any similar law or
statute of the United States of any State thereof; or Tenant shall be
adjudged bankrupt or insolvent in proceedings filed against Tenant
thereunder.
(5) A receiver or trustee shall be appointed for all or
substantially all of the assets of Tenant.
(6) Tenant shall supply false or misleading information to the
Landlord or its agents or representatives in the form of personal or
business data so as to obtain Landlord's consent to lease or other
unfair preference.
(7) Tenant shall fail to take occupancy, desert or vacate any
substantial portion of the premises.
(8) Tenant's failure to comply with the provisions or reporting
requirements of either the Subordination Clause or the Attornment
Clause contained within this Lease and such failure to comply
continues for a period of ten (10) days after written notice of such
failure.
(b) Upon the occurrence of any of such events of default, Landlord
shall have, in addition to the normal remedies provided by law, the option to
pursue any one or more of the following remedies without any notice or demand
whatsoever;
(1) Terminate this Lease, in which event Tenant shall
immediately surrender the premises to Landlord, and if Tenant fails to
do so, Landlord may, without prejudice to any other remedy which it may
have for possession or arrearages in rent, enter upon and take
possession of the leased premises, with or without process of law, and
expel or remove Tenant and any other person who may be occupying said
premises or any part thereof, by force if necessary, without being
liable for prosecution or any claim of damages therefore; and Tenant
agrees to pay to Landlord on demand the amount of all loss and damage
which Landlord may suffer by reason of such termination, whether
through inability to relet the premises on satisfactory terms or
otherwise, including any damages Landlord may -incur because of special
sums expended for fixing up premises for Tenant. Such damages shall not
exceed the rent due hereunder.
(2) Enter upon and take possession of the leased premises and
expel or remove Tenant and any other person who may be occupying said
premises or any part thereof, by force if necessary, without being
liable for prosecution or any claim for damages therefore, and relet
the premises and receive the rent therefore; and Tenant agrees to pay
to Landlord on demand any deficiency that may arise by reason of such
reletting as pertains to the unexpired portion of this Lease.
(3) Enter upon the leased premises, by force, if necessary,
without being liable for prosecution or any claim for damages therefore
and do whatever Tenant is obligated to do under the terms of this
Lease; and Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord may incur in thus effecting compliance with
Tenant's obligations under this Lease, and tenant further agrees that
Landlord shall not be liable for any damages resulting to the Tenant
from such action, unless caused by the negligence or willful misconduct
of Landlord.
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(4) It is agreed that, in case the demised premises are left
vacant and the rent be in default then Landlord may, without being
obligated to do so, and without terminating this Lease, retake
possession of the demised premises and rent the same for such teams as
Landlord may deem best, making such changes and repairs as may be
required, all on behalf of and for the account of Tenant, giving credit
for the amount of rent so received, less all expense of such changes
and repairs, including lease commissions, and said Tenant shall, at
Landlord's option, be liable for the balance of the rent herein
reserved until the expiration of the term of this Lease.
(c) Pursuit of any of the foregoing remedies shall not preclude pursuit
of any of the other remedies herein provided or any other remedies provided by
law, nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants herein contained. No waiver by Landlord of any violation or breach of
any of the terms, provision and covenants herein contained, shall be deemed or
construed to constitute a waiver of any other violation or breach of any of the
terms, provisions and covenants herein contained. Forbearance by Landlord to
enforce one or more of the remedies herein provided upon an event of default
shall not be deemed or construed to constitute a waiver of such default. .
(d) The Tenant acknowledges and agrees that should it become necessary
for the Landlord to serve a "Demand for Payment of Rents or Possession" Notice,
in accordance with State statutes, that said demand, when unpaid, shall not
automatically terminate Tenant's obligations to pay future rents and this Lease
may continue in full force and effect, at the option of the Landlord.
(e) The laws of the State in which the property is located shall govern
this Lease and any interpretations or constructions thereof. Further, the place
of performance and transaction of business shall be deemed to be in the County
of El Paso, State of Colorado, and in the event of litigation, the exclusive
venue and place of jurisdiction shall be as heretofore prescribed.
21. ESTOPPEL CERTIFICATES: Upon the request of either party, at any time, and
from time to time, Landlord and Tenant agree to execute and deliver to the
other, within ten (10) days after such request, a written instrument, duly
executed
(a) Certifying that this Lease has not been modified and is in full force
and effect or if there has been a modification of the Lease, that this Lease is
in full force and effect as modified, stating such modifications
(b) specifying the dates to which the rent and other payments due under
this Lease have been paid
(c) stating whether or not, to the knowledge of the party executing such
instrument, the other party is in default and, if such party is in default,
stating the nature of the default
(d) stating the commencement date and the expiration date of the terms of
this Lease and
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(e) stating which options to renew the term have been exercised, if
any.
22. LANDLORD'S LIEN AND UNIFORM COMMERCIAL CODE: As security for Tenant's
payment of rent, damages and all other payments required to be made by this
Lease, Tenant hereby grants to Landlord a lien upon all goods, wares, equipment,
fixtures, furniture owned by the Tenant now or subsequently which is located
upon the leased premises. If Tenant abandons or vacates any substantial portion
of the leased premises or is in default of the payment of any rentals, damage or
other payments required to be made by this Lease, Landlord may enter upon the
leased premises, by force if necessary, and take possession of all or part of
the aforesaid items, and may sell all or any part of the same at a public or
private sale, in one or successive sales, with or without notice, to the highest
bidder for cash and on behalf of Tenant, sell and convey all or part to the
bidder, delivering to the bidder all of the Tenant's title and interest in the
items sold to him. The proceeds of the sale shall be applied by the Landlord
toward the cost of the sale and then toward the payment of all sums then due by
Tenant to Landlord under the terms of this Lease. The statutory lien for rent is
not hereby waived, the express contractual lien herein granted being in addition
and supplementary thereto. To the extent, if any, this Lease grants Landlord, or
recognized in Landlord, any lien or lien rights greater than provided by the
laws of the state in which the leased premises are located pertaining to
Landlord's liens. This Lease is intended as, and constitutes a security
agreement within the meaning of the Uniform Commercial Code and, Landlord, in
addition to the rights prescribed in this Lease, shall have all of the rights,
titles, liens and interest in and to Tenant's property now or hereafter located
upon the leased premises which are granted a secured party, as that term is
defined, under the Uniform Commercial Code to secure the payment to Landlord of
the various amounts provided in this Lease and in compliance with same.
23. COST AND ATTORNEY'S FEES: If by reason of any default on the part of the
Landlord or the Tenant it becomes necessary for the Landlord or Tenant to employ
an attorney or in case Landlord shall bring suit to recover any rent due
hereunder, or if the Landlord or Tenant shall breach any provision of this Lease
or if the Landlord must employ an attorney to recover possession of the leased
premises, or if Tenant shall bring any action, then and in any such events the
prevailing party shall pay a reasonable attorney's fee and all costs and
expenses expended or incurred by the prevailing party in connection with such
default or action.
24. QUIET ENJOYMENT: Landlord warrants that it has full right to execute and to
perform this Lease and to grant the estate leases, and, that Tenant, upon
payment of the required rents and performing the terms, conditions, covenants
and agreements contained in this Lease, shall peaceably and quietly have, hold
and enjoy the leased premises during the full term of this Lease as well as any
extension or renewal. However, Tenant accepts this Lease subject and subordinate
to any underlying Lease, mortgage, deed of trust or other lien presently
existing upon the leased premises; provided however, Tenant's right of quiet
enjoyment shall not be affected absent the Tenant's default. Landlord hereby is
irrevocably vested with full power and authority to subordinate Tenant's
interest under this agreement to any underlying lease, mortgage, deed of trust
or other lien hereafter placed on the leased premises, and Tenant agrees upon
demand to execute additional instruments subordinating this Lease as Landlord
may require. If the interest of Landlord under this Lease shall be transferred
by reason of foreclosure or other proceedings for enforcement of any lien, deed
of trust or mortgage on the leased premises, Tenant shall be
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bound to the transferee (sometimes called the "purchaser") under the terms
covenants and conditions of this Lease for the balance of the term remaining,
and any extensions or renewals, with the same force and effect as if the
Purchaser were the landlord under this Lease. Tenant agrees to attorn to the
Purchaser, as its Landlord, the attornment to be effective and self-operative
without the execution of any further instruments upon the Purchaser succeeding
to the interest of the Landlord under this Lease. The respective rights and
obligations of Tenant and the Purchaser upon the attornment, to the extent of
the then remaining balance of the term of this Lease, and any extensions and
renewals, shall be and are the same as those set forth in this Lease.
25. BUILDING RULES AND REGULATIONS:
(a) Tenant shall not bring or keep within the building any animal or
motorcycle.
(b) Canvassing, soliciting and peddling in the building are
prohibited, and Tenant shall cooperate to prevent such activities.
(c) No Tenant shall install any radio or television antenna,
loudspeaker or other device on the roof or exterior walls of the building
without the written consent of Landlord. No television or radio or recorder
shall be played in such a manner as to cause a nuisance to any other
Tenant.
26. FINANCIAL STATEMENT: Tenant shall furnish Landlord, upon request, a current
financial statement.
27. SEVERABILITY CLAUSE: If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laves effective during the
term of this Lease, then and in that event, it is the intention of the Parties
hereto that the remainder of this Lease shall not be affected thereby. The
caption of each paragraph hereof is added as a matter of convenience only and
shall be considered to be of no effect in the construction of any provision or
provisions of this Lease.
28. SURRENDER OF POSSESSION: The Tenant agrees to deliver up and surrender to
the Landlord possession of said premises along with all keys thereto, at the
expiration or termination of this Lease, by lapse of time or otherwise, in as
good repair as when the Tenant obtained the same at the commencement of said
term, except reasonable wear and tear and except damage by the elements
(occurring without the fault of the Tenant or other persons permitted by the
Tenant to occupy or enter the demised premises or any part thereof or) by act of
God, or by insurrection, riot, invasion, or commotion, or of military or usurped
power.
29. REMOVAL OF TENANT'S PROPERTY: If the Tenant shall fail to remove all effects
from said premises upon the abandonment thereof or upon the termination of this
Lease for any cause whatsoever, the Landlord, at its option, may remove the same
in any manner that it shall choose, and store the said effects without liability
to the Tenant for loss thereof, and the Tenant agrees to pay the Landlord on
demand any and all expenses incurred in such removal, including court costs and
attorney's fees and storage charges on such effects; or, sell any of the same,
at
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private sale and without legal process, for such prices as the Landlord may
obtain, and apply the proceeds of such sale upon any amounts due under this
Lease from the Tenant to the Landlord and upon the expense incident to the
removal and sale of said effects, rendering the surplus, if any, to the Tenant.
30. CONSENT NOT UNREASONABLY WITHHELD: Unless otherwise specifically provided,
whenever consent or approval of Landlord or Tenant is required under the terms
of this Lease, such consent shall not be unreasonably withheld or delayed.
Landlord's or Tenant's sole remedy, if Landlord or Tenant unreasonably withholds
or delays consent or approval, shall be an action for specific performance and
Landlord or Tenant (as the case may be) shall not be liable for damages.
31. IMPLIED SURRENDER:
(a) No act or thing done by Landlord or Landlord's agents during the
term hereof or any extension thereof, shall be deemed an acceptance of a
surrender of the demised premises, and no agreement to accept such surrender
shall be valid unless in writing signed by the Landlord or his designated
representative. No employee of Landlord or of Landlord's agents shall have any
power to accept the keys of the demised premises prior to the termination of
this Lease.
(b) The delivery of keys to any employee of the Landlord, or of
Landlord's agents, shall not operate as a termination of this Lease or a
surrender of the demised premises. No payment by Tenant, or receipt by Landlord,
of a lesser amount than the minimum monthly rent herein stipulated, shall be
deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check,
or payment as rent, be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such rent or pursue any other remedy available to Landlord.
32. FORCE MAJEURE: In the event that either Party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lockouts, labor troubles, inability to procure materials,
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of alike nature not the fault of the Party
delayed in performing work or doing acts required under the terms of this Lease,
then performance of any such act shall be excused for the period of the delay
and the period for the performance of any such act shall be extended for a
period equivalent to the period of such delay. The provisions of this section
shall not operate to excuse Tenant from prompt payment of the base rental or any
other payments required by the terms of this Lease.
33. NOTICE ADDRESS:
(a) Each provision of this instrument or of any applicable governmental
laws, ordinances, regulations and other requirements with reference to the
sending, mailing or delivery of any notice or the making of any payment by
Landlord to Tenant or with reference to the
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sending, mailing, or delivery of any notice or the making of any payment by
Tenant to Landlord shall be deemed to be complied with when and if the following
steps are taken:
(1) All rent and other payments required to be made by Tenant
to Landlord hereunder shall be payable to Landlord in El Paso County,
Colorado, at the address herein below set forth or at such other
address as Landlord may specify from time to time by written notice
delivered in accordance herewith.
(2) All payments required to be made by Landlord to Tenant
hereunder shall be payable to Tenant at the address herein below set
forth, or at such other address within the continental United States as
Tenant may specify from time to time by written notice delivered in
accordance herewith.
(3) Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered whether actually
received or not when deposited in the United States Mail, postage
prepaid, Certified Mail, Return Receipt Requested, addressed to the
Parties hereto at the respective addresses set out opposite their names
below, or at such other addresses as they have theretofore specified by
written notice delivered in accordance herewith. Landlord's notice to
Tenant advising same of breach or default will further have been
accomplished when personal delivery is made by Landlord or its agent
and/or representative to Tenant or Tenant's chief official.
Landlord: MRS Connection, Tenant: Military Resale Group, Inc
c/o Charles Murphy 2180 Executive Circle
2245 Broadway Street Colorado Springs, CO 80906
Colorado Springs, Co 80904 Attention: Ethan Hokit and
Edward Whelan
(b) If and when, including within the term "Landlord" as used in this
instrument, there is more than one person, firm, or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address in El Paso County, Colorado,
or any other locations, for the receipt of notices and payments to Landlord; it
and when; included within the term "Tenant" as used in this instrument, there is
more than one person, firm, or corporation, all shall jointly arrange among
themselves for their joint execution of such a notice specifying some individual
at some specific address within the continental United States for receipt of
notices and payments to Tenant. All Parties included within the terms "Landlord"
and "Tenant", respectively, shall be bound by notices given in accordance with
the provisions of this paragraph to the same effect as if each had received such
notice.
34. SUCCESSORS: The terms, provisions and covenants and conditions contained in
this Lease shall apply to, inure to the benefit of, and be binding upon the
parties hereto and upon their respective successors in interest and legal
representatives except as otherwise herein expressly provided.
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35. GENDER: Words of any gender used in this Lease shall be held and construed
to include any other gender, and word in the singular number shall be held to
include the plural, unless the context otherwise requires.
36. BROKERAGE COMMISSIONS: Landlord and Tenant warrant that neither has had any
dealings with any broker or agent in connection with the negotiation or
execution of this Lease other than Highland Commercial Group, LLC, and Landlord
and Tenant each agree to indemnify and hold the other harmless from any and all
costs, expenses or liability for commissions or other compensation or charges
claimed by or awarded to any broker or agent with respect to this Lease. The
Landlord shall pay the brokerage commission of Highland Commercial Group, LLC.
37. CORPORATE AUTHORITY: If Tenant is a corporation, Tenant warrants that it has
legal authority to operate and is authorized to do business in the state in
which the premises are situated. Tenant also warrants that the person or persons
executing this Lease on behalf of Tenant has authority to do so and fully
obligate Tenant to all terms and provisions of this Lease. Tenant shall, upon
request from Landlord, furnish Landlord with a certified copy of resolutions of
the Board of Directors authorizing this Lease and granting authority to execute
it to the person or persons who have executed it on Tenant's behalf.
38. AMENDMENT, ADDENDUM, MODIFICATION: Any Amendments, Addendum's,
Modifications, and/or other Supplements, if any be hereto attached, are made a
part hereof, and shall be binding upon the Parties hereto, and if any provision
of said Amendments, Addendum's, Modifications, or Supplements shall conflict in
any manner with any other provision of this Lease, the provision of the
Amendment, Addendum, Modification or Supplement shall prevail.
39. MISCELLANEOUS:
(a) Notwithstanding anything in this Lease to the contrary, the
Landlord agrees to give the Tenant a credit of Seven Thousand Dollars
($7,000.00) toward the payment of the first installment of Tenants base rent to
assist the Tenant in the payment of it's rent under it's existing Lease.
(b) Landlord shall provide the Tenant with twenty (20) parking spaces
reserved for the Tenant use. In addition, the rear of the building shall remain
accessible to all tenants of the building, without hindering each others use
thereof and the loading and unloading of trucks by the loading docks
(c) Provided the Tenant is not in default, the Tenant shall have the
right to renew this lease for two (2) additional five-year terms.
The first renewal term shall be at a rental rate of $6.75 per
square foot for the first year thereof, increasing by $0.25 per
square foot per year thereafter. The CAM costs shall be the
actual fixed common area maintenance costs. The second renewal
term shall be at the fair market rental value, as agreed by the
Landlord and the Tenant, or absent such agreement, by appraisal.
The CAM costs for the second renewal term shall also be the
Landlord's actual CAM costs. Tenant shall provide the Landlord
with six months written notice prior to the end of the then
existing lease term if the Tenant
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]
wishes to exercise the renewal of the Lease. Tenant's written
notice as to the second renewal term may be subject to the
agreement of the parties as to the fair rental value.
(d) Landlord agrees that after execution of this Lease, the Tenant
may have access to the Premises prior to commencement of the term
of the Lease (September l, 2001) in order to start it's
installation of it's coolers, refrigeration and other equipment.
(e) If any contiguous space become available to the space occupied by
the Tenant at any time or times after the first year of the
Lease, Tenant shall have the right to add the space available to
it's current Lease under the same terms of it's Lease. Landlord
shall notify the Tenant, in writing, of the availability of such
space and the Tenant shall within ten days notify the Landlord of
it's desire to exercise it's right of first refusal.
(f) Landlord agrees the Tenant shall have the right to terminate this
Lease at the end of the third year of the Lease upon giving the
Landlord one hundred and twenty (120) days written notice prior
to the end of the third year of the Lease. If the Tenant
exercises it's right to terminate the Lease, the Tenant agrees to
pay a "termination fee" equal to forty percent (40%) of the costs
paid by the Landlord to Tenant finish of the Premises and forty
percent (40%) to the leasing commissions related to the Lease
with the Tenant, plus nine percent (9%) simple interest. The
Landlord and the Tenant agree that such costs are as follows:
a. Tenant finish. $20,000.00
b. Leasing commissions. $48,772.00
(g) Landlord agrees, at it's cost, to perform the tenant finish as
shown on the attached letterhead of Murphy & Co. dated July 30,
2001, marked Exhibit A, in accordance with the attached drawing
marked Exhibit B
IN WITNESS WHEREOF, the Landlord and Tenant have entered into this Lease
Agreement this _____ day of August 2001.
MILITARY RESALE GROUP, INC.
By:
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President
MRS CONNECTION a Colorado general partnership
By:
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Partner
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