Exhibit 10.13
INDUSTRIAL REAL ESTATE LEASE
between
LAS VEGAS AIRPORT PROPERTIES LLC
AS LANDLORD
and
TRANSACT TECHNOLOGIES INC.
AS TENANT
DATED AS OF DECEMBER 2, 2004
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INDUSTRIAL REAL ESTATE LEASE
TABLE OF CONTENTS
PAGE #
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ARTICLE 1 BASIC TERMS.................................................. 6
SECTION 1.01 DEFINITIONS......................................... 6
SECTION 1.02 BASE RENT........................................... 10
SECTION 1.03 RIDERS.............................................. 10
SECTION 1.04 PARKING............................................. 11
ARTICLE 2 LEASE TERM AND COMMON BUILDING AREAS......................... 11
SECTION 2.01 LEASE OF PROPERTY FOR LEASE TERM.................... 11
SECTION 2.02 DELIVERY OF POSSESSION.............................. 11
SECTION 2.03 HOLDING OVER........................................ 12
SECTION 2.04 COMMON BUILDING AREAS............................... 12
SECTION 2.05 LANDLORD'S RIGHTS IN COMMON BUILDING AREAS.......... 13
ARTICLE 3 BASE RENT.................................................... 13
SECTION 3.01 TIME AND MANNER OF PAYMENT.......................... 13
SECTION 3.02 BASE RENT INCREASES................................. 14
ARTICLE 4 OTHER CHARGES PAYABLE BY TENANT.............................. 14
SECTION 4.01 ADDITIONAL RENT..................................... 14
SECTION 4.02 OPERATING COSTS..................................... 14
SECTION 4.03 PERSONAL PROPERTY TAXES............................. 15
SECTION 4.04 UTILITIES........................................... 16
SECTION 4.05 INSURANCE........................................... 16
SECTION 4.06 WAIVER OF SUBROGATION............................... 18
SECTION 4.07 LATE CHARGES........................................ 18
SECTION 4.08 INTEREST ON PAST DUE OBLIGATIONS.................... 18
SECTION 4.09 RETURN OF CHECK..................................... 18
SECTION 4.10 SECURITY DEPOSIT; INCREASES......................... 19
SECTION 4.11 TERMINATION; ADVANCE PAYMENTS....................... 19
ARTICLE 5 USE OF PROPERTY.............................................. 19
SECTION 5.01 PERMITTED USES...................................... 19
SECTION 5.02 MANNER OF USE....................................... 19
SECTION 5.03 HAZARDOUS SUBSTANCES................................ 20
SECTION 5.04 SIGNS AND AUCTIONS.................................. 23
SECTION 5.05 INDEMNITY........................................... 23
SECTION 5.06 LANDLORD'S ACCESS................................... 24
SECTION 5.07 INTENTIONALLY OMITTED............................... 24
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ARTICLE 6 CONDITION OF PROPERTY; MAINTENANCE,
REPAIRS AND ALTERATIONS................................................ 24
SECTION 6.01 EXISTING CONDITIONS................................. 24
SECTION 6.02 EXEMPTION OF LANDLORD FROM LIABILITY................ 24
SECTION 6.03 LANDLORD'S OBLIGATIONS.............................. 25
SECTION 6.04 TENANT'S OBLIGATIONS................................ 26
SECTION 6.05 ALTERATIONS, ADDITIONS, AND IMPROVEMENTS............ 27
SECTION 6.06 CONDITION UPON TERMINATION.......................... 28
ARTICLE 7 DAMAGE OR DESTRUCTION........................................ 28
SECTION 7.01 PROPERTY DAMAGE..................................... 28
SECTION 7.02 REDUCTION OF RENT................................... 29
SECTION 7.03 WAIVER.............................................. 30
ARTICLE 8 CONDEMNATION................................................. 30
SECTION 8.01 CONDEMNATION........................................ 30
ARTICLE 9 ASSIGNMENT AND SUBLETTING.................................... 30
SECTION 9.01 LANDLORD'S CONSENT REQUIRED......................... 30
SECTION 9.02 LANDLORD'S ELECTION................................. 31
SECTION 9.03 NO RELEASE OF TENANT................................ 32
SECTION 9.04 NO MERGER........................................... 32
ARTICLE 10 DEFAULTS; REMEDIES.......................................... 32
SECTION 10.01 COVENANTS AND CONDITIONS............................ 32
SECTION 10.02 DEFAULTS............................................ 32
SECTION 10.03 REMEDIES............................................ 33
SECTION 10.04 CUMULATIVE REMEDIES................................. 35
ARTICLE 11 PROTECTION OF LENDERS....................................... 35
SECTION 11.01 SUBORDINATION....................................... 35
SECTION 11.02 ATTORNMENT.......................................... 35
SECTION 11.03 SIGNING OF DOCUMENTS................................ 36
SECTION 11.04 ESTOPPEL CERTIFICATES............................... 36
SECTION 11.05 TENANT'S FINANCIAL CONDITION........................ 36
ARTICLE 12 LEGAL COSTS................................................. 37
SECTION 12.01 LEGAL PROCEEDINGS................................... 37
SECTION 12.02 LANDLORD'S CONSENT.................................. 37
ARTICLE 13 MISCELLANEOUS PROVISIONS.................................... 37
SECTION 13.01 NON-DISCRIMINATION.................................. 37
SECTION 13.02 LANDLORD'S LIABILITY................................ 37
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SECTION 13.03 SEVERABILITY........................................ 38
SECTION 13.04 INTERPRETATION...................................... 38
SECTION 13.05 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS.... 38
SECTION 13.06 NOTICES............................................. 38
SECTION 13.07 WAIVERS............................................. 39
SECTION 13.08 NO RECORDATION...................................... 39
SECTION 13.09 BINDING EFFECT; CHOICE OF LAW....................... 39
SECTION 13.10 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY.......... 39
SECTION 13.11 JOINT AND SEVERAL LIABILITY......................... 40
SECTION 13.12 FORCE MAJEURE....................................... 40
SECTION 13.13 EXECUTION OF LEASE.................................. 40
SECTION 13.14 BROKERS AND LEASING AGENTS.......................... 40
SECTION 13.15 RULES AND REGULATIONS............................... 40
SECTION 13.16 INTENTIONALLY OMITTED............................... 41
SECTION 13.17 WAIVER OF JURY TRIAL................................ 41
SECTION 13.18 REAL ESTATE BROKERAGE DISCLOSURES................... 41
SECTION 13.19 MOLD ADDENDUM....................................... 41
SECTION 13.20 LANDLORD REPRESENTATIONS............................ 41
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LIST OF EXHIBITS/RIDERS
Exhibit/Rider Lease Section
Designation Description Reference
- ------------- ----------- -------------
"A" Depiction of Premises.............................. 1.01(p)
"A-1" Depiction of Warehouse Space....................... 2.02(c)
"B" Legal Description of Site.......................... 1.01(b)
"C" Rules and Regulations.............................. 13.15
"D" Estoppel Certificate............................... 11.04
"E" Commencement Memorandum............................ 1.01(c)
"F" Duties Owed by a Nevada Real Estate Licensee....... 13.18
"G" Confirmation Regarding Real Estate Relationship.... 13.18
"H" Mold Addendum...................................... 13.19
Rider No. 1 - Work Letter........................................ 1.03
Rider No. 2 - Option to Renew Lease.............................. 1.03
Rider No. 3 - Intentionally Omitted.............................. 1.03
Rider No. 4 - Right of First Offer to Lease...................... 1.03
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INDUSTRIAL REAL ESTATE LEASE
THIS INDUSTRIAL REAL ESTATE LEASE (this "Lease") is made as of the 2nd day
of December, 2004, by and between LAS VEGAS AIRPORT PROPERTIES LLC, a Delaware
limited liability company ("Landlord") and TRANSACT TECHNOLOGIES INC., a
Delaware corporation ("Tenant").
ARTICLE 1
BASIC TERMS
SECTION 1.01 DEFINITIONS.
For purposes of this Lease, the following terms shall have the following
meanings:
(a) Allowance: Sixty Eight Thousand Three Hundred Ten and 00/100
Dollars ($68,310.00).
(b) Building: That certain parcel of real estate located within the
Hughes Airport Center as described on Exhibit "B" attached hereto and
incorporated herein by this reference and the building and other improvements
located thereon, all of which is commonly known as 6700 Paradise Road, Las
Vegas, Nevada, 89119.
(c) Commencement Date: The earlier of the date (i) the Work (as
defined in Rider No. 1 attached hereto) is substantially completed in accordance
with Section 2.02(b) below, or (ii) January 1, 2005, except as delayed pursuant
to Section 2.02 of this Lease. At such time as the Commencement Date shall have
been established, Landlord and Tenant shall execute Exhibit E attached hereto
and incorporated herein by reference as a confirmation of said date.
(d) Common Building Areas: All areas and facilities outside the
Premises and within the exterior property boundary line of the Building and
interior utility raceways within the Premises that are provided and designated
by the Landlord from time to time for the general non-exclusive use of Landlord,
Tenant and other tenants of the Building and their respective employees,
suppliers, shippers, customers, contractors and invitees, including, without
limitation, trash areas, roadways, sidewalks, walkways, landscaped areas,
irrigation systems, lighting facilities, fences, gates, elevators, roof, common
entrances, common areas within the Building, common pipes, conduits, wires and
appurtenant equipment serving the Premises, exterior signs, Tenant directories,
fire detection systems, sprinkler systems, security systems, and the parking
facilities for the Building. Landlord has the right to change the Common
Building Areas and to take other actions respecting these areas in accordance
with Section 2.05 below.
(e) Declaration: (i) that certain Declaration of Restrictions and
Grant of Easements dated November 1, 1985 and filed for record with the County
Recorder of Clark County, Nevada ("County Recorder") as Document No. 2175093, as
supplemented and amended from time to time, and (ii) that certain Declaration of
Restrictions and Grant of Easements for Hughes Airport Center 6700 Paradise and
1111, 1151 and 1181 Grier Drive Association dated May 18, 2004 and filed for
record with the County Recorder in Book 20040603, Instrument No. 0002453, as
supplemented and amended from time to time. The Declaration is
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filed on the Building and a larger real estate development, of which the
Building is a part, known as Hughes Airport Center.
(f) Initial Security Deposit: Ten Thousand Six Hundred Fifty Six and
36/100 Dollars ($10,656.36).
(g) Laws: All applicable statutes, regulations, requirements,
ordinances and orders promulgated by any federal, state, local or regional
governmental authority whether prior to or following the Commencement Date of
this Lease.
(h) Landlord's Addresses: Mailing Address: LAS VEGAS AIRPORT
PROPERTIES LLC, c/o Stoltz Management of Delaware, Inc., 250 Pilot Road, Suite
220, Las Vegas, Nevada 89119. Office Address: LAS VEGAS AIRPORT PROPERTIES LLC,
c/o Stoltz Management of Delaware, Inc., 725 Conshohocken State Road, Bala
Cynwyd, Pennsylvania 19004.
With a copy to: Lehman Brothers Bank, FSB,
1000 West Street
Suite 200
Wilmington, DE 19801
Attention: General Counsel
(i) Landlord's Broker: Stoltz Realty of Delaware, Inc.
(j) Lease Interest Rate: The lesser of (i) two percentage points (2%)
over that fluctuating rate of interest announced from time to time by the Bank
of America National Trust and Savings Association as its prime or reference
commercial lending rate of interest (or in the event such bank is no longer
announcing such rate, by such other federally regulated banking institution of
comparable stature as Landlord shall determine), or (ii) the maximum interest
rate permitted by law.
(k) Lease Term: Five (5) years beginning on the Commencement Date and
continuing until sixty (60) months after the first day of the first full month
following the Commencement Date, unless extended pursuant to Rider No. 2 -
Option to Renew Lease attached to this Lease and incorporated herein by this
reference.
(l) Leased Premises Address: 6700 Paradise Road, Suite D, Las Vegas,
Nevada 89119.
(m) Mortgagee: The mortgagee under a mortgage or beneficiary under a
deed of trust holding a lien encumbering the Building or any holder of a ground
leasehold interest in the Building or any part thereof. For purposes of this
Lease, Lehman Brothers Bank, FSB shall be referred to as the "First Mortgagee."
(n) Operating Costs: All costs of any kind paid or incurred by
Landlord because of or in connection with the ownership, management,
maintenance, repair, replacement, restoration or operation of the Building
(including all Common Building Areas), including by way of illustration but not
limitation, all of the following: (i) all amounts charged to the Building
pursuant to the Declaration; (ii) Real Property
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Taxes; (iii) all costs, charges and surcharges for utilities, water, sewage,
janitorial, waste disposal and refuse removal and all other utilities and
services provided to the Building which are not separately metered or billed
directly to tenants of the Building; (iv) insurance costs for which Landlord is
responsible under this Lease or which Landlord or any Mortgagee deems necessary
or prudent; (v) any costs levied, assessed or imposed pursuant to any applicable
Laws; (vi) the cost (amortized over such period as Landlord reasonably
determines together with interest at the Lease Interest Rate on the unamortized
balance) of any capital improvements to the Building or equipment replacements
made by Landlord after the Commencement Date that are intended to reduce other
Operating Costs or are required by any Laws or are necessary in order to operate
the Building at the same quality level as prior to such replacement; (vii) costs
and expenses of operation, repair and maintenance of all structural and
mechanical portions and components of the Building including, without
limitation, plumbing, communication, heating, ventilating and air-conditioning
("HVAC"), elevator, and electrical and other common Building systems; (viii)
utilities surcharges or any other costs levied, assessed or imposed by, or at
the direction of, or resulting from statutes or regulations or interpretations
thereof, promulgated by any federal, state, regional, municipal or local
government authority in connection with the use or occupancy of the Building
(including, without limitation, energy conservation charges or surcharges); (ix)
all costs incurred in the management and operation of the Building including,
without limitation, gardening and landscaping, maintenance of all parking areas,
maintenance of signs, resurfacing and repaving, painting, lighting, cleaning,
and provision of Building security; (x) all personal property taxes levied on or
attributable to personal property used in connection with the Building; (xi)
depreciation on personal property owned by Landlord which is utilized in the
operation or maintenance of the Building; (xii) rental or lease payments paid by
Landlord for rented or leased personal property used in the operation or
maintenance of the Building; (xiii) management fees in an amount not to exceed
four percent (4%) of Landlord's gross revenues in respect of the Building,
wages, salaries and other labor costs incurred in the management and operation
of the Building; (xiv) fees for required licenses and permits; (xv) reasonable
legal, accounting and other professional fees which are directly related to the
reasonable administration of the Building; (xvi) reasonable and appropriate
reserves for repair and replacement; (xvii) wages, salaries and other labor
costs incurred in the management and operation of the Building; (xviii) any
other expenses which would reasonably or customarily be included in the cost of
managing, operating, maintaining and repairing buildings similar to the
Building. At Landlord's sole discretion, Landlord shall have the right to
amortize any of the costs of repair or maintenance of the Building over such
period as Landlord reasonably determines together with interest at the Lease
Interest Rate on the unamortized balance, in lieu of including the entire amount
of such costs in Operating Costs in the year such costs are incurred. If the
Building is not fully occupied during any portion of the Lease Term, (a)
Landlord shall make an appropriate adjustment to Operating Costs for such period
employing sound accounting and management principles, to determine the amount of
Operating Costs that would have been incurred had the Building been fully
occupied during such period and (b) such adjusted amount of Operating Costs
shall be the amount utilized for purposes of Section 4.02 below. Except as
otherwise provided in this Lease, Operating Costs shall not include all or any
portion of the following (1) Depreciation of the Building or equipment therein;
(2) Principal, interest, loan fees and penalties relating to land on which the
Building is located and all expenditures relating to any ground lease payment or
obligations; (3) Leasehold improvements including redecorating made for tenants
of the Building; (4) Refinancing costs; (5) Any expenses for repairs or
maintenance which are actually paid by warranties and service contracts; (6) The
cost of any item to the extent that such cost is reimbursed or reimbursable by
an insurance company, a condemnor, a tenant, or any other party; (7) The cost of
any repairs caused by Landlord's negligence, or the negligence of Landlord's
agents, employees or invitees; (8) Legal fees incurred in enforcing leases or in
leasing the Building; (9) Costs incurred by the Landlord in connection with its
lease negotiations with prospective tenants, and all other costs associated with
the Landlord's leases with third-
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party tenants, including all brokerage commissions and advertising expenses;
(10) Expenses incurred by the Landlord in connection with services or equipment
supplied to a third-party tenant for its specific use or to the extent its use
is disproportionate to the other tenants in the Building; (11) Remuneration paid
to third parties in connection with commercial enterprises operated by Landlord
other than the operation and management of the Hughes Airport Center, if any;
(12) The Landlord's everyday corporate overhead; (13) All costs incurred by the
Landlord in connection with any dispute relating to Landlord's title to and
ownership of the Building; (14) All utility costs for which a tenant directly
contracts with local utility companies; (15) Costs of complying with all
environmental laws and regulations in effect as of the date this Lease is
executed, except for costs resulting from Tenant's particular use of the
Premises; (16) Costs incurred by Landlord resulting from the violation of
environmental laws by other tenants in the Building; (17) All penalties and
costs incurred by Landlord due to Landlord's or any third-party tenant's
negligence; (18) Any costs representing an amount paid to an entity related to
Landlord which is in excess of the amount which would have been paid in the
absence of such relationship; or (19) costs incurred by Landlord with respect to
structural repairs and replacements of the Building.
(o) Permitted Uses: General office, warehouse, repair center and other
compatible uses.
(p) Premises: The office/warehouse space in the approximate location
within the Building as indicated on Exhibit "A" attached hereto and incorporated
herein by this reference.
(q) Real Property Taxes: Any form of tax, assessment, license fee,
license tax, business license fee, commercial rental tax, levy, charge, penalty,
tax or similar imposition, imposed by any authority having the direct power to
tax (including any city, county, state or federal government, or any school,
agricultural, lighting, drainage, transportation, air pollution, environmental
or other improvement or special assessment district) as against any legal or
equitable interest of Landlord in the Building and/or the Premises, including,
but not limited to, the following:
(i) any tax on a landlord's "right" to rent or "right" to other
income from the Premises or against Landlord's business of leasing the
Premises;
(ii) any assessment, tax, fee, levy or charge in substitution,
partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of Real Property Taxes (it is the
intention of Tenant and Landlord that all such new and increased
assessments, taxes, fees, levies and charges be included within the
definition of "Real Property Taxes" for the purposes of this Lease);
(iii) any assessment, tax, fee, levy or charge allocable to or
measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any gross income tax or excise tax levied by
the state, county, city or federal government, or any political subdivision
thereof, with respect to the receipt of such rent, or upon or with respect
to the possession, leasing, operating, management and maintenance,
alteration, repair, use or occupancy of the Building, or any portion
thereof;
(iv) any assessment, tax, fee, levy or charge upon this
transaction creating or transferring an interest or an estate in the
Premises;
Page 9
(v) any assessment, tax, fee, levy or charge based upon the
number of people employed, working at, or using the Premises or the
Building, or utilizing public or private transportation to commute to the
Premises or the Building; and
(vi) reasonable legal and other professional fees, costs and
disbursements incurred in connection with proceedings to contest, determine
or reduce Real Property Taxes.
Real Property Taxes shall not include federal or state income, franchise,
inheritance, transfer, gift, gross receipts or estate taxes of Landlord or of
any of the parties which comprise Landlord.
(r) Rentable Square Feet in the Building: Fifty three thousand one
hundred fifteen (53,115) rentable square feet. The Building is stipulated for
all purposes to contain said Rentable Square Feet in the Building.
(s) Tenant's Address: 3960 Howard Hughes Parkway, Suite 500, Las
Vegas, Nevada 89109.
(t) Tenant's Broker: None.
(u) Tenant's Guarantor: None.
(v) Tenant's Rentable Square Feet: approximately thirteen thousand six
hundred sixty-two (13,662) rentable square feet, subject to adjustment based
upon the Final Plans (as defined in Rider No. 1). The Premises are stipulated
for all purposes to contain said Tenant's Rentable Square Feet, as adjusted
based on the Final Plans.
(w) Tenant's Share: Twenty-five and seventy-two hundredths percent
(25.72%), subject to adjustment based upon any change in Tenant's Rentable
Square Feet as shown on the Final Plans (as defined in Rider No 1).
SECTION 1.02 BASE RENT.
The "Base Rent" shall be seventy eight cents ($0.78) per month for each
square foot of Tenant's Rentable Square Feet, which is equal to Ten Thousand Six
Hundred Fifty Six and 36/100 Dollars ($10,656.36) per month as adjusted pursuant
to Section 3.02 below. The Base Rent shall be adjusted in accordance with
Tenant's Rentable Square Feet as shown on the Final Plans (as defined in Rider
No. 1).
SECTION 1.03 RIDERS.
The following Riders are attached to and made a part of this Lease: RIDER
NO. 1 - TENANT WORK LETTER; RIDER NO. 2 - OPTION TO RENEW LEASE; RIDER NO. 3 -
INTENTIONALLY OMITTED; RIDER NO. 4 - RIGHT OF FIRST OFFER TO LEASE.
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SECTION 1.04 PARKING.
Tenant shall be entitled to use up to thirty-five (35) unreserved uncovered
parking spaces on the parking area of the Building. Tenant hereby acknowledges
and agrees that the foregoing parking spaces are the total number of parking
spaces available for use by Tenant, Tenant's agents, employees, contractors,
invitees, successors or others using the Premises with Tenant's express or
implied permission.
ARTICLE 2
LEASE TERM AND COMMON BUILDING AREAS
SECTION 2.01 LEASE OF PROPERTY FOR LEASE TERM.
Landlord hereby leases the Premises to Tenant and Tenant leases the
Premises from Landlord for the Lease Term. The Lease Term is for the period
stated in Section 1.01(k) above and shall begin and end on the dates specified
in Section 1.01(k) above. The "Commencement Date" shall be the date specified in
Section 1.01(c) above for the beginning of the Lease Term.
SECTION 2.02 DELIVERY OF POSSESSION.
(a) Landlord will be deemed to have delivered possession of the
Premises to Tenant on the Commencement Date, as it may be adjusted pursuant to
this Section 2.02 or Rider No. 1 of this Lease. Landlord will construct or
install in the Premises the Work (as that term is defined in Rider No. 1) to be
constructed or installed by Landlord according to Rider No. 1. Tenant
acknowledges that neither Landlord nor its agents or employees have made any
representations or warranties as to the suitability or fitness of the Premises
for the conduct of Tenant's business or for any other purpose, nor has Landlord
or its agents or employees agreed to undertake any alterations or construct any
tenant improvements to the Premises except as expressly provided in this Lease
and Rider No. 1. Subject to Rider No. 1 of this Lease, if Landlord fails to
deliver possession of the Premises to Tenant on or before the fixed date
component of the Commencement Date, then as Tenant's sole remedy for the delay
in Tenant's occupancy of the Premises, the fixed date component of the
Commencement Date shall be extended by the length in delay of delivery of the
Premises to Tenant. Notwithstanding the foregoing, in the event Landlord fails
to deliver possession of the Premises on or within sixty (60) days following the
fixed date component of the Commencement Date, Tenant shall thereafter have the
right, upon written notice to Landlord ("Tenant Termination Notice") to
terminate this Lease effective on the date thirty (30) days following receipt by
Landlord of the Tenant Termination Notice. Notwithstanding the foregoing,
Landlord may vitiate such termination if Landlord delivers the Premises to
Tenant within thirty (30) days following its receipt of the Tenant Termination
Notice.
(b) Notwithstanding any provision to the contrary contained in Section
2.02(a), if the Premises are not substantially completed by the fixed date
specified in Section 1.01(c)(ii) due to Force Majeure Delays, then as Tenant's
sole remedy for the delay in Tenant's occupancy of the Premises, the fixed date
component of the definition of the Commencement Date shall be delayed for the
period of delay in substantial completion of the Premises resulting therefrom.
The Premises shall be deemed "substantially completed" when (i) Landlord has
provided reasonable access to the Premises to Tenant, (ii) Landlord has
completed the Work (as defined in Rider No. 1) other than details of
construction which do not unreasonably interfere with Tenant's use of the
Premises, and (iii) Landlord has obtained a permanent or temporary certificate
of occupancy for the Premises (or its equivalent). For purposes of this Section
2.02, "Force
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Majeure Delays" shall mean and refer to a period of delay or delays encountered
by Landlord affecting the Work because of fire, earthquake or other acts of God;
acts of the public enemy; riot; insurrection; public unrest; governmental
regulations of the sales of materials or supplies or the transportation thereof;
strikes or boycotts; shortages of material or labor or any cause beyond the
reasonable control of Landlord, excluding the issuance of governmental permits
or approvals affecting the Work.
(c) Notwithstanding any provision to the contrary contained in Section
1.01(c) or this Section 2.02, in the event the Work (as defined in Rider No. 1)
is not substantially completed by January 1, 2005, and provided Tenant is not
otherwise in default of this Lease, Tenant shall have the right to occupy the
warehouse portion of the Premises as such area is depicted on Exhibit A-1
attached hereto and incorporated herein (the "Warehouse Space"), commencing on
January 1, 2005 and ending on the Commencement Date (the "Early Occupancy
Period"). Tenant's occupancy of the Warehouse Space during the Early Occupancy
Period shall not unreasonably interfere with Landlord's completion of the Work
and such occupancy shall be at Tenant's sole risk and subject to all of the
provisions of this Lease, including, without limitation, all insurance and
indemnity requirements; provided, however, during the Early Occupancy Period,
Tenant shall pay monthly Base Rent of seventy eight cents ($0.78) for each
square foot contained in the Warehouse Space only. During the Early Occupancy
Period, Tenant's Additional Rent obligations shall be equitably adjusted to
reflect the fact that Tenant's occupancy will be limited to the Warehouse Space.
Tenant shall promptly deliver to Landlord, on or before Tenant's early occupancy
of the Warehouse Space, original certificates evidencing the existence and
amounts of such insurance required to be carried by Tenant in Article 4 for the
Warehouse Space. Early occupancy of the Warehouse Space shall not advance the
expiration date of this Lease.
SECTION 2.03 HOLDING OVER.
Tenant shall vacate the Premises upon the expiration or earlier termination
of this Lease. Tenant shall reimburse Landlord for and indemnify and hold
Landlord harmless against all damages, claims, losses, penalties, charges, and
expenses (including reasonable attorney's fees) incurred by Landlord resulting
from any delay by Tenant in vacating the Premises. If Tenant does not vacate the
Premises upon the expiration or earlier termination of this Lease, Tenant's
occupancy of the Premises shall be a tenancy at sufferance, subject to all of
the terms of this Lease applicable to a tenancy at sufferance, except that the
Base Rent then in effect shall be equal to one hundred fifty percent (150%) of
the Base Rent in effect immediately prior to the expiration or earlier
termination of this Lease. Nothing contained in this Section 2.03 shall be
construed as consent by Landlord to any holding over of the Premises by Tenant,
and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord upon the expiration or earlier
termination of this Lease.
SECTION 2.04 COMMON BUILDING AREAS.
Tenant shall have the nonexclusive right to the use in common with other
tenants in the Building, subject to the Rules and Regulations referred to in
Section 13.15 below, the Common Building Areas appurtenant to the Premises, as
they may change from time to time.
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SECTION 2.05 LANDLORD'S RIGHTS IN COMMON BUILDING AREAS.
Landlord hereby reserves the right from time to time to do the following
provided it is done without unreasonable interference with Tenant's use of the
Premises:
(a) To install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls and in the central core areas, and to relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are
located in the Premises or located elsewhere outside the Premises, and to expand
the Building. For any work to be performed in the Premises, Landlord shall
provide commercially reasonable prior notice to Tenant of the same;
(b) To make changes to the Common Building Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
parking spaces, entrances, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas, and walkways and the parking facilities
for the Building;
(c) To close temporarily any of the Common Building Areas for
maintenance purposes or to prevent prescriptive easements so long as access to
the Premises remains available;
(d) To designate other land outside the boundaries of the Building
and/or the Hughes Airport Center to be a part of the Common Building Areas;
(e) To add additional buildings and improvements to the Common
Building Areas, including, without limitation, the construction of buildings,
parking structures or surface parking areas;
(f) To use the Common Building Areas while engaged in making
additional improvements, repairs or alterations to the Building or to the Hughes
Airport Center, or any portion thereof provided, however, that such use of the
Common Building Areas shall be reasonable, including without limitation, the
duration and extent of such use; and
(g) To do and perform such other acts and make such other changes in,
to or with respect to the Common Building Areas and the Building as Landlord
may, in the exercise of sound business judgment, deem to be appropriate.
ARTICLE 3
BASE RENT
SECTION 3.01 TIME AND MANNER OF PAYMENT.
Base Rent is due on or before the first (1st) day of each month without
offset, deduction or prior demand. The Base Rent shall be abated for the first
six (6) full months of the Lease Term. Upon execution of this Lease, Tenant
shall pay Landlord the Base Rent in the amount stated in Section 1.02 above for
the seventh (7th) full month of the Lease Term. The Base Rent for the first
month of the Lease Term shall be prorated on the basis of the actual number of
days in such month, if such month is a fractional month, and the Lease Term
shall nevertheless commence on the Commencement Date and continue until sixty
(60) months
Page 13
after the first day of the first full month following the Commencement Date. If
such month is a fractional month, the Base Rent for such fractional month shall
be due and payable on the Commencement Date. Thereafter, on the first day of the
eighth (8th) month of the Lease Term (or, if the first full month of the Lease
Term is the second month, then the ninth (9th) month of the Lease Term) and each
month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without
offset, deduction or prior demand. The Base Rent shall be payable at such of
Landlord's Addresses as may be designated by Landlord in writing or at such
other place as Landlord may designate in writing. It is understood and agreed by
Tenant that Landlord's acceptance of any payment for sums due under this Lease
which payment represents less than all sums due and owing from Tenant to
Landlord shall, in addition to reserving any and all of Landlord's rights under
this Lease, be credited to Tenant's account in the order and manner deemed
appropriate solely at the discretion of Landlord.
SECTION 3.02 BASE RENT INCREASES.
The Base Rent shall be increased on the first day of the thirteenth (13th)
month of the Lease Term and on each annual anniversary thereof during the Lease
Term (the "Adjustment Month") by an amount equal to three percent (3%) of the
Base Rent in effect immediately prior to a respective Adjustment Month. Landlord
shall notify Tenant of each increase by delivering a written statement setting
forth the new amount of the Base Rent. Tenant shall pay the new Base Rent from
its effective date until the next periodic increase.
ARTICLE 4
OTHER CHARGES PAYABLE BY TENANT
SECTION 4.01 ADDITIONAL RENT.
All charges payable by Tenant hereunder other than Base Rent are called
"Additional Rent." Unless this Lease provides otherwise, all Additional Rent
shall be paid with the next monthly installment of Base Rent and under the same
terms and conditions as the Base Rent. Notwithstanding that the Base Rent shall
be abated for the first six (6) full months of the Lease Term, there shall be no
abatement of Additional Rent whatsoever. The term "Rent" shall mean Base Rent
and Additional Rent. Tenant shall pay Landlord all Rent without offset,
deduction or prior demand.
SECTION 4.02 OPERATING COSTS.
(a) During the Lease Term, Tenant shall pay as Additional Rent
Tenant's Share of the Operating Costs. The inclusion of the improvements,
facilities and services described in the definition of Operating Costs set forth
in Section 1.01(n) above, shall not be deemed to impose an obligation upon
Landlord to make available said improvements or facilities or to provide any of
said services unless Landlord has agreed elsewhere in this Lease to provide the
specific improvement, facility or service.
(b) Tenant shall pay Tenant's Share of Operating Costs, in advance, in
monthly installments with the Base Rent based on Landlord's good faith estimate
of the Operating Costs. Landlord may adjust such estimates from time to time as
Landlord determines, which adjustment will be effective as of the next payment
date for Base Rent after notice of such adjustment to Tenant. After the end of
each calendar year, Landlord shall deliver to Tenant a statement, in reasonable
detail, of the Operating Costs as finally determined by Landlord for the
preceding calendar year and Tenant's Share of such Operating Costs. Upon
Page 14
Tenant's receipt of such statement, there shall be an adjustment between
Landlord and Tenant, with payment to Landlord within thirty (30) days of
Tenant's receipt of such statement or credit given to Tenant, as the case may
be, to reflect the finally determined Operating Costs. Landlord's failure to
provide such statement(s) shall in no way excuse Tenant from its obligation to
pay Additional Rent and shall not constitute a waiver of Landlord's right to
bill and collect such Additional Rent from Tenant in accordance with the terms
of the Lease.
(c) Landlord shall have the right, from time to time, to equitably
allocate some or all of the Operating Costs for the Building among different
portions or occupants of the Building (the "Cost Pools"), in Landlord's
discretion. Such Cost Pools may include, but shall not be limited to, the office
space tenants of the Building as a whole, and the industrial space tenants of
the Building as a whole. The Operating Costs within each such Cost Pool shall be
allocated and charged to the tenants within such Cost Pool in an equitable
manner.
(d) In the event of any dispute as to the amount of Tenant's Share of
Operating Costs as set forth in the Operating Costs statement, Tenant shall have
the right, once, and only once, a year after no less than thirty (30) days prior
written notice and at reasonable times, to inspect and photocopy Landlord's
Operating Costs records for the previous calendar year only at Landlord's Office
Address specified in Section 1.01(h). If, after such inspection and photocopy,
Tenant continues to dispute the amount of Tenant's Share of Operating Costs as
set forth in the Operating Costs statement, Tenant shall be entitled to retain
an independent, certified public accountant to audit Landlord's Operating Costs
records for the previous calendar year only to determine the proper amount of
Tenant's Share of Operating Costs. Landlord shall be entitled to review the
results of such audit promptly after completion of same. If such audit proves
that Landlord has overcharged Tenant, then within fifteen (15) days after the
results of the audit are made available to Landlord, Landlord shall credit
Tenant the amount of such overcharge toward the payments of Base Rent and
Additional Rent next coming due under this Lease. If such audit proves that
Landlord has undercharged Tenant, then within fifteen (15) days after the
results of the audit are made available to Tenant, Tenant shall pay to Landlord
the amount of any such undercharge. Tenant agrees to pay the cost of such audit,
provided that Landlord shall reimburse Tenant the amount of such cost if the
audit proves that Landlord's determination of Tenant's Share of Operating Costs
(as set forth in the Operating Costs statement) was in error by more than six
percent (6%). Landlord shall be required to maintain records of all Operating
Costs for three (3) years following the issuance of the Operating Costs
statement for such Operating Costs. The payment by Tenant of any amounts
pursuant to this Section shall not preclude Tenant from questioning the
correctness of any Operating Costs statement.
SECTION 4.03 PERSONAL PROPERTY TAXES.
(a) Tenant shall pay all taxes charged against trade fixtures, utility
installations, furnishings, equipment or any other personal property belonging
to Tenant. Tenant shall use its best efforts to have its personal property taxed
separately from the Premises.
(b) If any of Tenant's personal property is taxed with the Premises,
Tenant shall pay Landlord the taxes for the personal property within fifteen
(15) days after Tenant receives a written statement from Landlord for such
personal property taxes.
Page 15
SECTION 4.04 UTILITIES.
(a) The parties acknowledge that this Lease is intended to be a fully
net lease and that, except as expressly provided in this Lease, Tenant shall be
responsible for all non-capital repairs required to the Premises and for the
provision of all utilities at the Premises, including but not limited to water,
sewage, trash removal, waste disposal, janitorial, electricity, telephone,
security, and cleaning of the Premises, together with any taxes thereon. The
costs of installing or otherwise bringing any meters or utilities to the
Premises shall constitute a cost of Work pursuant to Rider No. 1, or if no Rider
No. 1 is attached to this Lease, then such costs shall be paid directly by
Tenant. Tenant shall contract with and pay, directly to the appropriate
supplier, the cost of all utilities and services supplied to the Premises. All
such contracts and suppliers will be subject to Landlord's prior, reasonable
approval. If any such utilities or services are not able to be separately
metered or separately billed to the Premises, Tenant shall pay to Landlord a
reasonable proportion to be determined by Landlord of all such charges jointly
metered or billed with other premises in the Building to Landlord, together with
a reasonable administrative fee not to exceed ten percent (10%) of such jointly
metered or billed charges, immediately upon receipt of Landlord's bill therefor.
Notwithstanding the foregoing, Landlord may elect from time to time and at any
time during the term of this Lease to contract directly with any supplier of
utilities or services to the Premises and to bill Tenant for such costs, which
bill may include a reasonable administrative fee to Landlord not to exceed ten
percent (10%) of such costs.
(b) Landlord has advised Tenant that presently Nevada Power Company
(the "Electric Service Provider") is the utility company selected by Landlord to
provide electric service for the Building. Notwithstanding the foregoing, if
permitted by law, Landlord shall have the right at any time and from time to
time during the term of the Lease to either contract for service from a
different company or companies providing electric service (each such company
shall hereafter be referred to as "Alternate Service Provider") or to continue
to contract for service from the Electric Service Provider. Tenant shall
cooperate with Landlord, the Electric Service Provider, and any Alternate
Service Provider at all times and, as reasonably necessary, shall allow
Landlord, the Electric Service Provider, and any Alternate Service Provider
reasonable access to the electric feeder lines, risers, wiring and any other
machinery within the Premises.
Should Landlord elect to supply the electricity used or consumed in the
Premises, Tenant agrees to purchase and pay for the same as Additional Rent at
the applicable rates filed by Landlord with the proper regulatory authority.
Landlord shall in no way be liable or responsible for any loss, damage, or
expense that Tenant may sustain or incur by reason of any change, failure,
interference, disruption, or defect in the supply or character of the electric
energy furnished to the Premises or if the quantity or character of the electric
energy supplied by the Electric Service Provider or any Alternative Service
Provider is no longer available or suitable for Tenant's requirements unless due
to the gross negligence or intentional acts of Landlord, its servants, agents or
employees. Notwithstanding any provision to the contrary contained herein, in
any event, no such change, failure, defect, unavailability, or unsuitability
shall constitute eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of Rent, or relieve Tenant from any of its obligations
under this Lease.
SECTION 4.05 INSURANCE.
(a) Landlord shall maintain property insurance on the Building Shell
and appurtenant structures in an amount equal to one hundred percent (100%) of
the full value thereof. The cost of such insurance shall be included within the
definition of Operating Costs hereunder. Payments for losses
Page 16
thereunder shall be made solely to Landlord or the Mortgagees as their
respective interests shall appear. In addition, Tenant shall obtain and keep in
force at all times during the Lease Term, a policy or policies of insurance
covering loss or damage to all of the improvements, betterments, personal
property, utility installations, trade fixtures, furnishings, income and
business contents located within the Premises other than the Building Shell
(including all Work constructed in accordance with Rider No. 1) in the amount of
one hundred percent (100%) of the full replacement value thereof as reasonably
ascertained by the Tenant's insurance carrier against risks of direct physical
loss or damage, normally covered in an "all risk" policy (including the perils
of flood and surface waters), as such term is used in the insurance industry;
provided, however, that Tenant shall have no obligation to insure against
earthquake. As used in this Lease, the term "Building Shell" means the Building
completed with the following improvements: (a) roof, foundation and exterior
walls and interior load bearing walls (not including drywall); (b) unfinished
floors throughout the Premises, broom clean; (c) building standard power and
lighting power provided to the Building at a point to be determined by Landlord
in its sole discretion; (d) core walls to the extent called for in Landlord's
final plans and specifications for the construction of the Building; and (e)
mechanical, plumbing, life safety, and HVAC systems provided to the Building at
a point to be determined by Landlord in its sole discretion. The proceeds of
such insurance shall be used for the repair or replacement of the property so
insured. Upon termination of this Lease following a casualty as set forth
herein, if the Premises have also been damaged, and if Landlord terminates this
Lease, Tenant will promptly pay to Landlord all of its insurance proceeds, if
any, relating to any and all Work constructed pursuant to Rider No. 1 to this
Lease and any alterations made thereto (but not to Tenant's trade fixtures,
equipment, furniture or other personal property of Tenant) in the Premises.
(b) Tenant shall, at Tenant's expense, maintain a policy of Commercial
General Liability insurance insuring Tenant and as additional insureds, Landlord
and any Mortgagees, against liability arising out of the ownership, use,
occupancy or maintenance of the Premises. Such insurance shall be on an
occurrence basis providing single-limit coverage in an amount not less than Two
Million Dollars ($2,000,000) per occurrence. The initial amount of such
insurance shall be subject to periodic increase upon reasonable demand by
Landlord based upon inflation, increased liability awards, recommendation of
professional insurance advisers, and other relevant factors. However, the limits
of such insurance shall not limit Tenant's liability nor relieve Tenant of any
obligation hereunder. Such policy shall contain the following provision: "Such
insurance as afforded by this policy for the benefit of Landlord shall be
primary as respects any claims, losses or liabilities arising out of the use of
the Premises by the Tenant or by Tenant's operation and any insurance carried by
the Landlord shall be excess and noncontributing." The policy shall insure
Tenant's performance of the indemnity provisions of Section 5.05.
(c) Tenant shall, from time to time, at Tenant's sole expense, obtain
and maintain other types of insurance as Mortgagees of Landlord may reasonably
require in form, in amounts and for insurance risks against which a prudent
tenant would protect itself.
(d) Insurance required to be maintained by Tenant hereunder shall be
in companies holding a "General Policyholders' Rating" of "A" or better and a
"financial rating" of 10 or better, as set forth in the most current issue of
"Best's Insurance Guide," or such comparable ratings as Landlord shall approve,
in its sole discretion. Tenant shall promptly deliver to Landlord, on or before
the Commencement Date, original certificates evidencing the existence and
amounts of such insurance required to be carried by Tenant in this Article 4. No
such policy shall be cancelable or subject to reduction of coverage except after
thirty (30) days prior written notice to Landlord. Tenant shall, within thirty
(30) days prior to the expiration,
Page 17
cancellation or reduction of such policies, furnish Landlord with renewals or
"binders" thereof. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies required under this Lease.
SECTION 4.06 WAIVER OF SUBROGATION.
Tenant and/or Landlord shall obtain from the issuers of the "all risk"
insurance policies referred to in this Article Four a mutual waiver of
subrogation provision in said policies and Tenant and Landlord each hereby
release and relieve the other, and waive any and all rights of recovery against
the other, or against the employees, officers, agents and representatives of the
other, for loss or damage arising out of or incident to the perils required to
be insured against under this Article 4 which perils occur in, on or about the
Premises, whether due to the negligence of Landlord or Tenant or their agents,
employees, contractors or invitees.
SECTION 4.07 LATE CHARGES.
Tenant acknowledges that Tenant's failure to pay Base Rent or Additional
Rent promptly may cause Landlord to incur unanticipated costs. The exact amount
of such costs are impractical or extremely difficult to ascertain. Such costs
may include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by any ground lease, mortgage or trust
deed encumbering the Premises. Therefore, if Landlord does not receive any Rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord a
late charge equal to ten percent (10%) of the overdue amount. The parties agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment. In the event that a late
charge is payable hereunder, whether or not collected, for three (3) consecutive
installments of Rent, the Rent shall automatically become due and payable
quarterly in advance, rather than monthly, notwithstanding Section 3.01 above.
SECTION 4.08 INTEREST ON PAST DUE OBLIGATIONS.
Any amount owed by Tenant to Landlord which is not paid when due shall bear
interest at the rate of (i) fifteen percent (15%) per annum, or (ii) the Prime
Rate plus five (5) percentage points per annum, whichever is greater, from the
due date of such amount. However, interest shall not be payable on late charges
to be paid by Tenant under this Lease. The payment of interest on such amounts
shall not excuse or cure any default by Tenant under this Lease. If the interest
rate specified in this Lease is higher than the rate permitted by law, the
interest rate is hereby decreased to the maximum legal interest rate permitted
by law.
SECTION 4.09 RETURN OF CHECK.
If Base Rent or Additional Rent is paid by check and the check is returned
to Landlord for any reason whatsoever without payment, Tenant shall be assessed
a late charge and interest on past due amount pursuant to Sections 4.07 and 4.08
as well as a Twenty-Five Dollar ($25) fee. If payment is returned for
insufficient funds, Landlord has the right to demand that such payment be in the
form of a cashiers or certified check. If Tenant has two (2) or more
insufficient funds payments in a twelve (12) month period, Tenant shall, at
Landlord's option, make all subsequent payments in the form of a cashiers or
certified check.
Page 18
SECTION 4.10 SECURITY DEPOSIT; INCREASES.
Upon the execution of this Lease, Tenant shall deposit with Landlord a cash
security deposit (the "Security Deposit") in the amount of the Initial Security
Deposit set forth in Section 1.01(f) above. In no event may Tenant apply the
Security Deposit to pay any Rent due under this Lease. Landlord may apply all or
part of the Security Deposit to any unpaid Rent or other charges due from Tenant
or to cure any other defaults of Tenant. If Landlord uses any part of the
Security Deposit, Tenant shall restore the Security Deposit to its full amount
within ten (10) business days after Landlord's written request. Tenant's failure
to do so shall be a material default under this Lease. If Tenant is in default
under the Lease more than two (2) times in any twelve (12) month period,
irrespective of whether or not such default is cured, without limiting
Landlord's other rights and remedies provided for in the Lease or at law or in
equity, the Security Deposit shall automatically be increased by an amount equal
to the greater of: (i) three (3) times the Security Deposit (adjusted as
provided in this Section); or (ii) three (3) months of the then current Base
Rent, which shall be paid to Landlord forthwith on demand. The increase in the
Security Deposit shall be paid to Landlord forthwith on demand. Tenant's failure
to do so shall be a material default under this Lease. No interest shall be paid
on the Security Deposit. Landlord shall not be required to keep the Security
Deposit separate from its other accounts and no trust relationship is created
with respect to the Security Deposit. Each time the Base Rent is increased,
Tenant shall if requested by Landlord, on or before the date that the first
increased Base Rent payment is due, deposit additional funds with Landlord
sufficient to increase the Security Deposit to an amount which bears the same
relationship to the adjusted Base Rent as the Initial Security Deposit bore to
the initial Base Rent. Notwithstanding anything in the Lease to the contrary, no
purchaser of Landlord's interest in the Building or holder of any mortgage, deed
of trust, ground lease or other lien on the Building shall be liable for the
return of any Security Deposit unless and until such Security Deposit is
actually transferred by Landlord to such party.
SECTION 4.11 TERMINATION; ADVANCE PAYMENTS.
Upon expiration of this Lease or other termination of this Lease, and after
Tenant has vacated the Premises in the manner required by this Lease, an
equitable adjustment shall be made concerning advance rent and other advance
payments made by Tenant to Landlord, and Landlord shall, within sixty (60) days,
refund any unused portion of the Security Deposit to Tenant, or, at Landlord's
option, to Tenant's assignee or sublessee.
ARTICLE 5
USE OF PROPERTY
SECTION 5.01 PERMITTED USES.
Tenant may use the Premises only for the Permitted Uses set forth in
Section 1.01(o) above.
SECTION 5.02 MANNER OF USE
Tenant shall not cause or permit the Premises to be used in any way (i)
which constitutes (or would constitute) a violation of any Laws, occupancy
certificate, the requirements of any board of fire underwriters or similar body,
as any of the same now or in the future may exist, or (ii) which annoys or
interferes with the rights of tenants or users of the Building, or (iii) which
constitutes a nuisance or waste, or (iv) which is
Page 19
prohibited by the Declaration. Tenant, at its sole cost and expense, shall
comply with all Laws now in force or which may hereafter be in force regulating
the use, occupancy or alterations by Tenant of the Premises. Landlord makes no
representation or warranty as to the suitability of the Premises for Tenant's
intended use or whether such use complies with all such Laws.
SECTION 5.03 HAZARDOUS SUBSTANCES.
(A) REPORTABLE USES REQUIRE CONSENT.
The term "Hazardous Substance" as used in this Lease shall mean any
product, substance, chemical, material or waste whose presence, nature, quantity
and/or intensity of existence, use, manufacture, disposal, transportation,
spill, release or effect, either by itself or in combination with other
materials expected to be on the Premises, is either: (i) potentially injurious
to the public health, safety or welfare, the environment, or the Premises; (ii)
regulated or monitored by any governmental authority; or (iii) a basis for
potential liability of Landlord to any governmental agency or third party under
any applicable statute or common law theory. Hazardous Substance shall include,
but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any
products or by-products thereof. Tenant shall not engage in any activity in or
about the Premises which constitutes a Reportable Use (as hereinafter defined)
of Hazardous Substances without the express prior written consent of Landlord
and compliance in a timely manner (at Tenant's sole cost and expense) with all
Applicable Requirements (as defined in Section 5.03(d)). "Reportable Use" shall
mean (i) the installation or use of any above or below ground storage tank, (ii)
the generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on or about the Premises of a
Hazardous Substance with respect to which any Applicable Requirements require
that a notice be given to persons entering or occupying the Premises or
neighboring properties. In addition, Landlord may (but without any obligation to
do so) condition its consent to any Reportable Use of any Hazardous Substance by
Tenant upon Tenant's giving Landlord such additional assurances as Landlord, in
its reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at
Landlord's option, removal on or before Lease expiration or earlier termination)
of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit.
(B) DUTY TO INFORM LANDLORD.
Tenant shall obtain Landlord's written consent, which consent shall be
granted or withheld in Landlord's sole discretion, to the manufacturing,
processing, distribution, using, producing, treating, storing (above or below
ground level), disposing of, or allowing to be present, of any other Hazardous
Substance in or about the Premises except for those previously approved in
writing by Landlord. In connection with each such consent requested by Tenant,
Tenant shall submit to Landlord a description, including the composition,
quantity and all other information requested by Landlord concerning the proposed
presence of any Hazardous Substance. Landlord's consent to the presence of any
Hazardous Substance may be deemed given only by inclusion of a description of
the composition and quantity of the proposed Hazardous Substance on Landlord's
written consent to the request. Landlord's consent to the presence of any
Hazardous Substance at any time during the Lease Term or renewal thereof shall
not waive the requirement of obtaining Landlord's consent to the subsequent
presence of any other, or increased quantities of, any Hazardous Substance in or
Page 20
about the Premises. If Tenant knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Premises
or the Building, other than as previously consented to by Landlord, Tenant shall
immediately give Landlord written notice thereof, together with a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action, or proceeding given to, or received from, any
governmental authority or private party concerning the presence, spill, release,
discharge of, or exposure to, such Hazardous Substance including but not limited
to all such documents as may be involved in any Reportable Use involving the
Premises. Tenant shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under or about the Premises (including, without limitation,
through the plumbing or sanitary sewer system).
If any Hazardous Substance is present in or about the Premises, Landlord
shall have the right upon reasonable notice to Tenant to engage a consultant to
inspect the Premises and to review Tenant's use of Hazardous Substances and all
of Tenant's practices with respect to such Hazardous Substances. Tenant shall
cooperate in all respects with such inspections and reviews. All costs of such
consultants shall be reimbursed to Landlord within fifteen (15) days of written
demand by Landlord.
(C) INDEMNIFICATION.
Tenant shall indemnify, protect, defend and hold Landlord, its agents,
employees, lenders and ground lessor, if any, and the Premises, harmless from
and against any and all damages, liabilities, judgments, costs, claims, liens,
expenses, penalties, loss of permits and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Tenant or by anyone under Tenant's control. Tenant's obligations under
this Section 5.03 (c) shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by Tenant, and the cost of investigation (including consultants' and
attorneys' fees and testing), removal, remediation, restoration and/or abatement
thereof, or of any contamination therein involved, and shall survive the
expiration or earlier termination of this Lease. No termination, cancellation or
release agreement entered into by Landlord and Tenant shall release Tenant from
its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Landlord in writing at the time of such agreement.
Tenant's indemnity obligations provided in this Section 5.03(c) shall include,
without in any way limiting the foregoing:
(i) All costs, expenses and attorneys' fees incurred or sustained by any
party in making any investigation on account of any claim, demand, loss,
liability, cost, charge, suit, order, judgment or adjudication, in
prosecuting or defending any action brought in connection therewith, in
obtaining or seeking to obtain a release therefrom and in enforcing any of
the agreements herein contained;
(ii) Liability for clean-up costs, fines, damages or penalties incurred
pursuant to the provisions of any Applicable Requirements;
(iii) Liability for costs and expenses of abatement, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any Applicable Requirements; and
(iv) Liability for personal injury or Premises damage arising under any
statutory or common-law tort theory, including, without limitation, damages
assessed for the maintenance of a public or private nuisance, or for the
carrying on of an abnormally dangerous activity, and response costs.
Page 21
(D) TENANT'S COMPLIANCE WITH REQUIREMENTS.
Tenant shall, at Tenant's sole cost and expense, fully, diligently and
in a timely manner, comply with all "Applicable Requirements," which term is
used in this Lease to mean all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Landlord's engineers and/or consultants, relating in any
manner to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill, or release of any Hazardous Substance), now in
effect or which may hereafter come into effect. Tenant shall, within ten (10)
business days after receipt of Landlord's written request, provide Landlord with
copies of all documents and information, including but not limited to permits,
registrations, manifests, applications, reports and certificates, evidencing
Tenant's compliance with any Applicable Requirements specified by Landlord, and
shall within one (1) business day following receipt, notify Landlord in writing
(with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving
failure by Tenant or the Premises to comply with any Applicable Requirements.
Upon written request by Landlord, and within twenty (20) business days of
receipt of such request, Tenant shall provide Landlord annually on each
anniversary date of the Commencement Date a written certification, certifying
that:
(i) Tenant's business has been conducted in full compliance with the
Applicable Requirements;
(ii) All Hazardous Substances (if any) related to Tenant's business have
been disclosed to Landlord or in said certificate;
(iii) The method and frequency of off-site disposal of Hazardous Substances
from the Premises, as described in the certificate, comply with the
Applicable Requirements.
(E) INSPECTION; COMPLIANCE WITH LAW.
Landlord, Landlord's agents, employees, contractors and designated
representatives, and any Mortgagees, shall have the right to enter the Premises
at any time in the case of an emergency, and otherwise, with prior notice to
Tenant, at reasonable times, for the purpose of inspecting the condition of the
Premises and for verifying compliance by Tenant with this Lease and all
Applicable Requirements, and Landlord shall be entitled to employ experts and/or
consultants in connection therewith to advise Landlord with respect to Tenant's
activities, including but not limited to Tenant's installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Substance on or from the
Premises. The costs and expenses of any such inspections shall be paid by the
party requesting same, unless a default of this Lease by Tenant or a violation
of Applicable Requirements or a contamination, caused or contributed to by
Tenant, is found to exist or to be imminent, or unless the inspection is
requested or ordered by a governmental authority as the result of any such
existing or imminent violation or contamination. In such case, Tenant shall upon
request reimburse Landlord or Landlord's Mortgagee, as the case may be, for the
costs and expenses of such inspections.
Page 22
SECTION 5.04 SIGNS AND AUCTIONS.
Tenant shall not place any signs on the Premises without Landlord's prior
written consent. At Tenant's sole cost, Tenant shall have the right to signage
on Tenant's suite entrance door and on the Building above Tenant's entrance door
subject to Landlord's prior written approval of such signage which may be
withheld in Landlord's sole discretion. Tenant shall not conduct or permit any
auctions or sheriff's sales at the Premises.
SECTION 5.05 INDEMNITY.
Tenant shall indemnify and hold harmless Landlord and all agents, servants
and employees of Landlord from and against all claims, losses, damages,
liabilities, expenses (including reasonable attorneys' fees), penalties and
charges (collectively, "Claims") arising from or in connection with (i) Tenant's
use of the Premises during the Lease Term, or (ii) the conduct of Tenant's
business, or (iii) any activity, work or things done, permitted or suffered by
Tenant in or about the Premises during the Lease Term. Tenant shall further
indemnify and hold harmless Landlord from and against any and all claims, loss,
damage, liability, expense (including reasonable attorneys' fees), penalty or
charge arising from any default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease, or arising from any
negligence of Tenant, or any of Tenant's agents, contractors, or employees, and
from and against all costs, attorneys' fees, expenses and liabilities incurred
in the defense of any such claim or any action or proceeding brought thereon. If
any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense by legal counsel reasonably satisfactory to Landlord. Tenant, as a
material part of its consideration to Landlord, hereby assumes all risk of
damage to property or injury to persons in or upon the Premises arising from any
cause and Tenant hereby waives all claims in respect thereof against Landlord.
Notwithstanding the foregoing, Tenant shall not be required to assume the risk
with respect to or defend, save harmless or indemnify Landlord from any Claims
resulting from the gross negligence or willful misconduct of Landlord or its
agents, contractors or employees, and Landlord hereby so defends, indemnifies
and holds Tenant harmless from any such Claims. In addition, because Landlord is
required to maintain insurance on the Building Shell and Tenant compensates
Landlord for such insurance as part of Operating Costs and because of the
existence of waivers of subrogation set forth in Section 4.06 of this Lease,
Landlord hereby indemnifies and holds Tenant harmless from any Claims to any
property or injury to persons outside of the Premises to the extent such Claim
is, or if Landlord has failed to properly maintain such insurance, should have
been, covered by such insurance, even if resulting from the negligent acts or
omissions of Tenant or those of its agents, contractors or employees.
Notwithstanding the foregoing, Landlord shall not be required to defend, save
harmless or indemnify Tenant from any liability for injury, loss, accident or
damage to any person or property resulting from Tenant's gross negligence or
willful misconduct, or those of Tenant's officers, agents, contractors or
employees. Similarly, since Tenant must carry insurance pursuant to Section
4.05(a) to cover its personal property and any tenant improvements within the
Premises, Tenant hereby indemnifies and holds Landlord harmless from any Claim
to any property within the Premises to the extent such Claim is, or if Tenant
has failed to properly maintain such insurance, should have been, covered by
such insurance, even if resulting from the negligent acts or omissions (but, not
the gross negligence or willful misconduct) of Landlord or those of its agents,
contractors or employees. The provisions of this Section 5.05 shall survive the
expiration or sooner termination of this Lease with respect to any Claims
occurring prior to such expiration or termination. The foregoing indemnity
requirements are not intended to nor shall they relieve any insurance carrier of
Page 23
its obligations under policies required to be carried pursuant to the provisions
of this Lease to the extent that such policies cover the results of negligent
acts or omissions of Landlord or Tenant or their officers, agents, contractors
or employees, or the failure of either party to perform any of its obligations
under this Lease.
SECTION 5.06 LANDLORD'S ACCESS.
Landlord or its agents, employees or contractors may enter the
Premises during regular business hours after twenty-four (24) hours prior
written notice to Tenant (except , in the case of emergency no such notice will
be required) to examine the Premises, to show the Premises to potential buyers,
investors, tenants or other parties, for the purpose of making tests,
inspections, repairs, alterations, improvements or additions as Landlord deems
desirable or for any other purpose Landlord deems necessary. The above shall not
obligate Landlord to make any repairs except as otherwise expressly provided in
this Lease. Landlord may place customary "For Sale" or "For Lease" signs on the
Premises. The exterior walls and roof of, the floor above, and the area beneath
the Premises are not demised under this Lease and Landlord reserves the right to
use the same. Landlord may install, maintain and use pipes, utility lines,
ducts, conducts, flues, lines, wires, drains, sprinkler main and valves, access
panels and structural elements serving the Premises or other parts of the Hughes
Airport Center within or through the Premises. Landlord shall use reasonable
efforts to locate new facilities and elements above the finished ceiling, within
walls, below the floor, in Tenant's storage area and in other locations that
will minimize to the extent practicable the disruption of Tenant's business.
Landlord may change, add to or subtract from the Common Areas or any building in
the Hughes Airport Center, construct other buildings and improvements, use
portions of the Common Areas for promotions, exhibits, shows, the placement of
carts and kiosks or such other uses as Landlord deems appropriate, and do such
other acts to the Common Building Areas as Landlord believes reasonably
necessary. In exercising the rights reserved in this Section, Landlord shall use
reasonable efforts to minimize disruption of Tenant's business.
SECTION 5.07 INTENTIONALLY OMITTED.
ARTICLE 6
CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 6.01 EXISTING CONDITIONS.
Except as may be set forth in Rider No. 1, Tenant accepts the Premises in
its condition "AS IS" as of the date of execution of this Lease, subject to all
recorded matters and Laws. Tenant acknowledges that neither Landlord nor any
employee or agent of Landlord has made any representation as to the condition of
the Premises or the suitability of the Premises for Tenant's intended use.
SECTION 6.02 EXEMPTION OF LANDLORD FROM LIABILITY.
Landlord, its officers, managers, directors, shareholders, members, agents,
servants and employees shall not be liable for and Tenant shall indemnify and
hold Landlord and its officers, managers, directors, shareholders, members,
agents, servants and employees harmless from and against all claims, losses,
damages, expenses, penalties and charges arising from or in connection with any
damage or injury to the person, business (or any loss of income therefrom),
goods, wares, merchandise or other property of Tenant,
Page 24
Tenant's employees, invitees, customers, or any other person in or about the
Premises, or any other person claiming under Tenant whether such damage or
injury is caused by or results from: (a) fire, steam, electricity, water, gas or
rain; (b) the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause; (c) the failure, delay or diminution in the quality or
quantity of any utilities or services supplied to the Premises or the Building,
(d) inconvenience or annoyance arising from the necessity of repairing any
portion of the Building or the Premises; (e) the interruption for any reason in
the use of the Premises; (f) the termination of this Lease by reason of the
destruction of the Premises; or (g) any conditions arising in or about the
Premises, or from other sources or places, nor shall any of the same be
construed as an eviction of Tenant, nor, unless otherwise permitted under this
Lease, work an abatement of Rent, nor relieve Tenant from any obligation under
this Lease. Without limiting the foregoing, Landlord, its officers, managers,
directors, shareholders, members, agents, servants and employees shall not be
liable for and Tenant shall indemnify and hold Landlord and its officers,
managers, directors, shareholders, members, agents, servants and employees
harmless from and against all claims, losses, damages, expenses, penalties and
charges arising from or in connection with the following: (i) any defect or
shortcoming in or failure of plumbing, heating or air conditioning or
ventilation systems, elevators, electric wiring or installation thereof, water
pipes, stairs, railings or walks; (ii) any equipment or appurtenances becoming
out of repair; (iii) the bursting, leaking or running of any tubing, radiant
panel, fire sprinkler system, electric fixture, valve, fitting, tank, washstand,
water closet, waste pipe, drain or other pipe or tank or any other water and/or
moisture related release and/or condition and all consequences and/or conditions
relating from same, upon or about the Premises or the Building; (iv) the backing
up of any sewer pipe or downspout; (v) the escape of steam, hot or cold water;
(vi) water, snow or ice being upon or coming through the roof of the Building or
any other place upon or near the Premises; (vii) the failing of any fixture,
brick, plaster or stucco; (viii) broken glass; (ix) any act or omission of
cotenants or other occupants of the Building; (x) the exercise of any rights by
Landlord under this Lease; or (xi) any act or omission of parties other than
Landlord, its employees, agents, officers, directors, managers, shareholders,
members and servants nor shall any of the forgoing be construed as an eviction
of Tenant, nor, unless otherwise permitted under this Lease, work an abatement
of Rent, nor relieve Tenant from any obligation under this Lease. Landlord shall
not be liable for any such damage or injury even though the cause of or the
means of repairing such damage or injury are not accessible to Tenant. The
provisions of this Section 6.02 shall not, however, exempt Landlord from
liability for Landlord's gross negligence or willful misconduct. In addition to
any limitation of Landlord's liability contained in the Lease, Tenant hereby
agrees that any claim for damages against Landlord shall be subject and
subordinate to the interest of any Mortgagee in the Building. Tenant shall have
no rights whatsoever to offset or deduct against any Rent or any other sums due
Landlord under the Lease for any reason whatsoever, including Landlord's
default, nor shall Tenant have any rights at any time to cure any defaults of
the Landlord under this Lease.
SECTION 6.03 LANDLORD'S OBLIGATIONS.
Landlord shall keep the following in good order, condition and repair: the
foundations, exterior structural walls, interior load bearing walls and
structural roof of the Building and the Common Building Areas. Landlord shall
not be obligated to maintain or repair windows, doors, plate glass or the
interior surfaces of exterior walls. Landlord shall have no obligation to make
repairs under this Section 6.03 until a reasonable time after Landlord receives
written notice from Tenant of the need of such repairs. Tenant expressly waives
the benefit of any law, including case law, statute, rule or regulation in
effect now or in the future which might give Tenant the right to make repairs at
Landlord's expense or to terminate this Lease due to Landlord's failure to keep
the Premises in good order, condition and repair. Tenant shall have no rights
Page 25
whatsoever to offset or deduct against any Rent or any other sums due Landlord
under this Lease for any reason whatsoever, including Landlord's default.
SECTION 6.04 TENANT'S OBLIGATIONS.
(a) Tenant shall, at Tenant's sole cost and expense, keep all portions
of the Premises in good order, condition and repair, including, without
limitation, all components of the electrical, mechanical, plumbing, heating, air
conditioning and ventilation systems which serve the Premises and all other
items not expressly set forth as the responsibility of Landlord in Section 6.03
above. If any portion of the Premises or any system or equipment in the Premises
which Tenant is obligated to repair cannot be fully repaired, Tenant shall
promptly replace such portion of or system or equipment in the Premises,
regardless of whether the benefit of such replacement extends beyond the Lease
Term.
(b) Either Landlord or Tenant, at Landlord's option and, in either
case, at Tenant's sole expense, shall enter into a preventative maintenance
contract ("Maintenance Contract") with a licensed heating and air conditioning
contractor providing for the regular inspection and maintenance of the heating,
air conditioning and ventilation system utilized solely for the Premises at
commercially reasonable rates for the community in which the Premises are
located. In the event Landlord requests Tenant to obtain the Maintenance
Contract, Tenant shall provide Landlord with a copy of such Maintenance Contract
within fifteen (15) days of such request. Landlord shall have the right to
approve the contractor and the Maintenance Contract prior to Tenant's execution
thereof, which approval shall not be unreasonably withheld, conditioned or
delayed. Such Maintenance Contract cannot be canceled without providing Landlord
with thirty (30) days prior written notice. In the event either Landlord elects
to obtain the Maintenance Contract or if Tenant fails to provide Landlord with a
copy of the Maintenance Contract within fifteen (15) days of Landlord's request
to Tenant to procure such Maintenance Contract, Landlord shall obtain the
Maintenance Contract for Tenant's benefit and Tenant shall be obligated to pay
Landlord, as Additional Rent, monthly, without demand, one-twelfth (1/12th) of
the annual cost of the Maintenance Contract. Regardless if Landlord or Tenant
obtains the Maintenance Contract, Landlord shall have the right, at reasonable
times and with prior notice, to enter Tenant's Premises to inspect the air
conditioning, heating and ventilation system utilized for Tenant's Premises.
Tenant shall comply with all laws and government regulations relating to the
maintenance of records of Tenant's use and handling of freon in the heating, air
conditioning and ventilation system utilized for the Premises. Within fifteen
(15) days of Landlord's request, Tenant shall provide copies of all such records
to Landlord.
(c) Tenant, at Tenant's sole expense, shall enter into a sewer and
trash removal contract ("Trash Removal Contract") with a contractor providing
for regular sewer and trash removal services for the Premises. Landlord shall
have the right to approve the contractor and the Trash Removal Contract prior to
Tenant's execution thereof, which approval shall not be unreasonably withheld,
conditioned or delayed. Tenant shall provide Landlord with a copy of such Trash
Removal Contract at least ten (10) days prior to the Commencement Date and such
Trash Removal Contract cannot be canceled by Tenant without providing Landlord
with thirty (30) days prior written notice. If Tenant fails to obtain a Trash
Removal Contract or if Tenant fails to provide Landlord with a copy of the Trash
Removal Contract ten (10) days prior to the Commencement Date, Landlord shall
obtain the Trash Removal Contract for Tenant's benefit, at commercially
reasonable rates for the community in which the Premises are located, and Tenant
shall be obligated to pay Landlord, as Additional Rent, monthly, without demand,
one-twelfth (1/12th) of the annual cost of the Trash Removal Contract.
Regardless if Landlord or Tenant obtains the Trash Removal Contract,
Page 26
Landlord shall have the right to enter Tenant's Premises at reasonable times,
with prior notice, to inspect the services provided thereunder.
(d) If Tenant fails to maintain or repair the Premises as required by
this Section 6.04, Landlord may, upon ten (10) days prior notice to Tenant
(except that no notice shall be required in the case of an emergency), enter the
Premises and perform such maintenance or repair on behalf of Tenant. In such
case, Tenant shall reimburse Landlord for all actual costs incurred in
performing such maintenance or repair, including ten percent (10%) of such costs
for Landlord's supervision, immediately upon demand.
SECTION 6.05 ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or improvements
to the Premises without Landlord's prior written consent, which may be withheld
in Landlord's sole discretion, including, without limitation, any alterations,
additions, or improvements to the exterior of the Premises or the Building
(including signage). Tenant shall deliver to Landlord, for Landlord's approval
prior to any construction, a complete set of plans and specifications for the
proposed alterations, additions or improvements, copies of contracts with
general contractors, evidence of contractor's insurance and bonds, and all
necessary permits for such construction. Landlord may require Tenant to provide
demolition and/or lien and completion bonds in form and amount satisfactory to
Landlord. Tenant shall promptly remove any alterations, additions, or
improvements constructed in violation of this Section 6.05(a) upon Landlord's
written request. All alterations, additions, and improvements will be
accomplished in a good and workmanlike manner, in conformity with all applicable
Laws, and by a contractor approved by Landlord. Landlord's approval of the
plans, specifications and working drawings for Tenant's alterations shall create
no responsibility or liability on the part of Landlord for their completeness,
design, sufficiency, or compliance with all laws, rules and regulations of
governmental agencies or authorities. Upon completion of any such work, Tenant
shall provide Landlord with "as built" plans, copies of all construction
contracts, and proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Premises. Tenant shall give Landlord at least ten (10) days
prior written notice of the commencement of any work on the Premises. Landlord
may elect to record and post notices of non-responsibility on the Premises.
Tenant will not permit to be created or to remain undischarged any lien,
encumbrance or other charge (arising out of any work done or materials or
supplies furnished by any contractor, subcontractor, mechanic, laborer or
materialman or any mortgage, conditional sale, security agreement or chattel
mortgage, or otherwise by or for Tenant) which might be or become a lien or
encumbrance or other charge (collectively a "Charge") against or upon the
Premises, the Building or any part thereof. If any claim or lien or notice of
claim or lien on account of an alleged debt of Tenant or any notice of contract
or Charge by a person engaged by Tenant or Tenant's contractor to work on the
Premises shall be filed against or upon the Premises, the Building or any part
thereof, Tenant shall within twenty (20) business days after demand from
Landlord cause the same to be discharged of record by payment, deposit, bond,
order of a court of competent jurisdiction or otherwise. If Tenant shall fail to
cause such claim or lien or notice of claim or lien or other Charge to be
discharged within the period aforesaid, then, in addition to any other right or
remedy it may have, Landlord may, but shall not be obligated to, discharge the
same by payment, deposit or by bonding proceedings, and in any such event
Landlord shall be entitled, if Landlord so elects, to compel the prosecution of
an action for the foreclosure of the same by the claimant and to pay the amount
of any judgment in favor of the claimant with interest, costs and allowances.
Any amount so paid by Landlord and all interest, costs and expenses, including
reasonable
Page 27
attorneys' fees, incurred by Landlord in connection therewith shall constitute
additional rent payable by Tenant under the Lease and shall be paid by Tenant to
Landlord on demand. No work which Landlord permits Tenant to do shall be deemed
to be for the immediate use and benefit of Landlord and no mechanics' or other
claim, lien or other Charge shall be allowed against the estate, rights, title
or interests of Landlord by reason of any consent given by Landlord to Tenant to
do work in or about the Premises or provide materials therefor. Prior to
commencement of any work or the delivery of any material to the Premises by any
contractor, subcontractor or materialman (herein collectively called
"Contractor"), Tenant shall deliver to the Landlord a signed and acknowledged
waiver (or release) of liens from each such Contractor in a form approved by
Landlord, and, to the extent permitted by law, Tenant shall at Tenant's expense
cause a duly executed and notarized counterpart of any such waiver or release to
be recorded in the Office of the Clark County Recorder.
SECTION 6.06 CONDITION UPON TERMINATION.
Upon the termination of this Lease, Tenant shall surrender the Premises to
Landlord, broom clean and in the same condition as received except for ordinary
wear and tear which Tenant was not otherwise obligated to remedy under any
provision of this Lease. In addition, (i) Landlord may require Tenant to remove
any telecom and data cabling, or similar installations, (whether or not made
with Landlord's consent) by written notice to Tenant within ten (10) business
days after the termination of this Lease, and (ii) if at the time Landlord
approves any alterations, additions or improvements Landlord notifies Tenant of
its obligation to remove such alterations, additions or improvements upon the
termination of the Lease Term then Tenant shall remove such alterations,
additions or improvements (whether or not made with Landlord's consent) within
thirty (30) days after the termination of this Lease and to restore the Premises
to its prior condition, all at Tenant's expense. All alterations, additions and
improvements which Landlord has not required Tenant to remove shall become
Landlord's property and shall be surrendered to Landlord upon the termination of
the Lease, except that Tenant may remove any of Tenant's machinery or equipment
which can be removed without material damage to the Premises. Tenant shall
repair, at Tenant's expense, any damage to the Premises caused by the removal of
any such machinery or equipment. In no event, however, shall Tenant remove any
of the following materials or equipment without Landlord's prior written
consent: any power wiring or power panels; lighting or lighting fixtures; wall
coverings; drapes, blinds or other window coverings; carpets or other floor
coverings; heaters, air conditioners or any other heating or air conditioning
equipment; fencing or security gates; or other similar building operating
equipment and decorations.
ARTICLE 7
DAMAGE OR DESTRUCTION
SECTION 7.01 PROPERTY DAMAGE.
(a) If the Premises or any part thereof shall be damaged by fire or
other peril, Tenant shall give prompt written notice thereof to Landlord. In
case the Building shall be so damaged that substantial alteration, repair or
reconstruction of any portion of the Building shall, in Landlord's sole opinion,
be required (whether or not the Premises shall have been damaged by such peril)
or in the event any Mortgagee shall require that the insurance proceeds payable
as a result of a peril be applied to the payment of the mortgage debt or in the
event of any material uninsured loss to the Building, Landlord may, at its
option, terminate this Lease by notifying Tenant in writing of such termination
within ninety (90) days after the date of such casualty. If Landlord does not
thus elect to terminate this Lease, Landlord shall, as Landlord's sole
Page 28
obligation, commence and proceed with reasonable diligence to restore the
Building Shell to substantially the same condition in which it was immediately
prior to the occurrence of the peril to the extent of the insurance proceeds
available to Landlord. When the Building Shell has been restored by Landlord,
Landlord shall complete the restoration of the Premises, including the
reconstruction of all improvements in order to complete the Premises and restore
the Premises to the same condition and build-out as prior to the casualty,
including all improvements constructed pursuant to Rider No. 1. However, in no
event shall Landlord's costs to complete the restoration exceed the insurance
proceeds. If Tenant is responsible for such restoration of the Premises, any
plans and specifications for such restoration and reconstruction and the
contractor retained by Tenant for such restoration and reconstruction shall be
subject to the approval of Landlord. Any shortfall between the amount of
insurance proceeds and the actual costs of such reconstruction shall be
deposited by Tenant prior to the commencement of such reconstruction and, if
additional costs occur, immediately upon demand therefor. All insurance proceeds
payable pursuant to policies maintained by Tenant pursuant to Section 4.05 shall
be applied by Tenant to such reconstruction. Landlord shall not be liable for
any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from such damage or the repair thereof, except as set forth
in Section 7.02 below. Notwithstanding anything in the Lease to the contrary,
Tenant's rights to any insurance proceeds as described in this Section 7.01
shall be subject and subordinate to the rights of First Mortgagee.
(b) Notwithstanding any provision to the contrary contained in this
Section 7.01, if the Building shall be so damaged that substantial alteration,
repair or reconstruction of any portion of the Building shall, in Landlord's
sole opinion, be required during the last twelve (12) months of the Lease Term
and Tenant has not elected to extend the Lease pursuant to Rider No. 2-Option to
Renew Lease, Landlord or Tenant may elect to terminate this Lease as of the date
the damage occurred, regardless of the availability of the insurance proceeds.
In such event, Landlord shall not be obligated to repair or restore the Building
Shell, Tenant shall have no right to continue this Lease and all insurance
proceeds payable pursuant to policies maintained by Tenant pursuant to Section
4.05 shall be assigned to Landlord (or such other party as may be designated by
Landlord), except to the extent such proceeds are attributable to Tenant's
income and business contents, trade fixtures, furniture, equipment and personal
property. Landlord or Tenant shall notify the other of its election within sixty
(60) days after receipt of notice of the occurrence of the damage.
SECTION 7.02 REDUCTION OF RENT.
If the Premises is destroyed or damaged and Landlord or Tenant repairs or
restores the Premises pursuant to the provisions of this Article Seven, any Rent
payable during the period commencing as of the date of the casualty and
continuing for the period of time, as determined by Landlord, required for
Tenant and Landlord to complete the repairs described in this Article Seven, due
to such damage, repair and/or restoration shall be reduced according to the
degree, if any, to which Tenant's use of the Premises is impaired as of the date
of the casualty as reasonably determined by Landlord. If any casualty is the
result of the fault or negligence of Tenant or any of Tenant's agents, employees
or invitees, the Rent hereunder shall not be diminished during the repair of
such damage. Except for such possible reduction in Rent, Tenant shall not be
entitled to any abatement, compensation, reduction, or reimbursement from
Landlord as a result of any damage, destruction, repair, or restoration of or to
the Premises. In the event this Lease is terminated pursuant to this Article
Seven, such termination shall be effective as of the date of the casualty.
Page 29
SECTION 7.03 WAIVER.
Tenant waives the protection of any statute, code or judicial decision
which grants a tenant the right to terminate a lease in the event of the
substantial destruction of the leased property. Tenant agrees that the
provisions of this Article Seven above shall govern the rights and obligations
of Landlord and Tenant in the event of any casualty to the Premises.
ARTICLE 8
CONDEMNATION
SECTION 8.01 CONDEMNATION.
If the whole or substantially the whole of the Building or the Premises
shall be taken for any public or quasi-public use, by right of eminent domain or
otherwise or shall be sold in lieu of condemnation, then this Lease shall
terminate as of the date when physical possession of the Building or the
Premises is taken by the condemning authority. If less than the whole or
substantially the whole of the Building or the Premises is thus taken or sold,
Landlord (whether or not the Premises are affected thereby) may terminate this
Lease by giving written notice thereof to Tenant; in which event this Lease
shall terminate as of the date when physical possession of such portion of the
Building or Premises is taken by the condemning authority. If the Lease is not
so terminated upon any such taking or sale, the Rent payable hereunder shall be
diminished by an equitable amount, and Landlord shall, to the extent Landlord
reasonably deems feasible, restore the Building and the Premises to
substantially their former condition, but such work shall not exceed the scope
of the work done by Landlord in originally constructing the Building and
installing improvements in the Premises, nor shall Landlord in any event be
required to spend for such work an amount in excess of the amount received by
Landlord as compensation for such taking. All amounts awarded upon a taking of
any part or all of the Building or the Premises shall belong to Landlord, and
Tenant shall not be entitled to and expressly waives all claims to any such
compensation. Tenant reserves the right to claim and receive any relocation
benefits from the condemning authority provided such benefits shall not reduce
nor diminish any amounts awarded to Landlord.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
SECTION 9.01 LANDLORD'S CONSENT REQUIRED.
No portion of the Premises or of Tenant's interest in this Lease may be
acquired by any other person or entity, whether by assignment, mortgage,
sublease, license, transfer, operation of law, or act of Tenant, without
Landlord's prior written consent. Any attempted transfer without consent shall
be void and shall constitute a non-curable breach of this Lease. If Tenant is a
partnership or limited liability company, any cumulative transfer of more than
twenty percent (20%) of the partnership interests or membership interest shall
require Landlord's consent. If Tenant is a corporation, any change in a
controlling interest of the voting stock of the corporation shall require
Landlord's consent. Notwithstanding anything to the contrary contained in this
Section 9, an assignment or subletting of all or a portion of the Premises to an
"Affiliate" of Tenant shall not be deemed a transfer under this Article 9,
provided that (a) Tenant notifies Landlord of any such assignment or sublease
within fifteen (15) days after its effective date and promptly supplies Landlord
with any documents or information reasonably requested by Landlord regarding
such assignment or sublease
Page 30
or such "Affiliate," and (b) such assignment or sublease is not a subterfuge by
Tenant to avoid its obligations under this Lease. The term "Affiliate" shall
mean an entity which is controlled by, controls, or is under common control with
Tenant. The term "control" or "controlled" as used in this Article 9 shall mean
the ownership, directly or indirectly, of more than fifty percent (50%) of the
voting securities of, or more than fifty percent (50%) of the voting interest
in, any entity. In no event shall a transfer, assignment or subletting of all or
a portion of the Premises to an Affiliate release Tenant from the payment and
performance of its obligations in the Lease, but rather Tenant and its assignee
shall be jointly and severally primarily liable for such payment and
performance.
SECTION 9.02 LANDLORD'S ELECTION.
(a) Tenant's request for consent to any transfer described in Section
9.01 above shall be accompanied by a written statement setting forth the details
of the proposed transfer, including the name, business and financial condition
of the prospective transferee, financial details of the proposed transfer (e.g.,
the term of and rent and security deposit payable under any assignment or
sublease), and any other information Landlord deems relevant. Landlord shall
have the right in Landlord's sole discretion (a) to withhold consent; (b) to
grant consent; or (c) to exercise its rights pursuant to Section 9.02 (b). If
Landlord consents to any assignment or sublease and Tenant receives rent or
other consideration, either initially or over the term of the assignment or
sublease, in excess of the Rent called for hereunder, or, in case of the
sublease of a portion of the Premises, in excess of such Rent fairly allocable
to such portion ("Profits"), then Tenant shall pay Landlord, as Additional Rent
hereunder, promptly after its receipt, one hundred percent (100%) of such
Profits. Notwithstanding anything contained to the contrary in the provisions of
the Lease relating to an assignment or subletting by Tenant, neither Tenant nor
any other person having an interest in the possession, use, occupancy or
utilization of the Premises shall enter into any lease, sublease, license,
concession or other agreement for use, occupancy or utilization of space in the
Premises which provides for rental or other payment for such use, occupancy or
utilization based, in whole or in part, on the net income or profits derived by
any person from the portion of the Premises leased, used, occupied, or utilized
(other than an amount based on a fixed percentage or percentages of receipts or
sales), and any such purported lease, sublease, license, concession or other
agreement shall be absolutely void and ineffective as a conveyance of any right
or interest in the possession, use, occupancy or utilization of any part of the
Premises.
(b) In the event that Tenant requests (the "Request Notice") that
Landlord consent to any transfer described in Section 9.01 of all or any part of
the Premises, in lieu of approving or disapproving such transfer, Landlord shall
have the right and option (the "Recapture Option"), exercisable by Landlord
giving Tenant written notice within thirty (30) days after Landlord's receipt of
the Request Notice, of terminating the Lease with respect to the Premises, or
any part thereof, which is the subject of the Request Notice. If Landlord elects
to exercise such Recapture Option as to the entire Premises, the Lease shall
terminate effective on the thirtieth (30th) day after the date of Landlord's
written notice of Landlord's exercise thereof, whereupon the Rent shall be
adjusted as of the date of such termination and the parties shall be released
thereby without further obligation to the other party coincident with the
surrender of possession of the Premises to the Landlord, except for items which
have theretofore accrued and are then unpaid and except for obligations of
Tenant which survive the expiration or termination of this Lease. If Landlord
elects to exercise such Recapture Option as to only part of the Premises, the
Lease shall terminate only as to such portion effective on the thirtieth (30th)
day after the date of Landlord's written notice of Landlord's exercise thereof,
whereupon the Rent payable under the Lease shall be reduced in the proportion
that the Tenant's Rentable Square Feet of the released portion of the Premises
bears to the total Tenant's Rentable Square Feet
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of the Premises immediately prior to the exercise of the Recapture Option. As a
result of the exercise of the Recapture Option as to only part of the Premises,
Landlord, its successors and assigns, shall also be granted by Tenant, without
charge, such rights of access to the remainder of the Premises as were to be
given to the proposed transferee and as is reasonable and necessary to permit
occupancy of the recaptured portion of the Premises. The Recapture Option shall
not be exhausted by any one exercise thereof by Landlord but shall be
exercisable from time to time and as often as there is any transfer described in
Section 9.01. The Recapture Option may be exercised by any assignee of
Landlord's right, title and interest in the Lease or any other person which at
the time of the Request Notice is Landlord under the Lease. If after receipt of
the Request Notice, Landlord requests additional or further information which
Landlord reasonably requires to consider any transfer described in Section 9.01,
Tenant shall deliver such information to Landlord upon Landlord's request
therefor and the period for Landlord to exercise the Recapture Option shall be
extended by the number of days between Landlord's request for and Landlord's
receipt of such additional or further information.
SECTION 9.03 NO RELEASE OF TENANT.
No transfer consented to by Landlord, shall release Tenant or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Upon the occurrence of any default under this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
any remedies against any subtenant or assignee. Upon termination of this Lease,
any permitted subtenant shall, at Landlord's option, attorn to Landlord and
shall pay all Rent directly to Landlord. Landlord's acceptance of Rent from any
other person shall not constitute a waiver of any provision of this Article
Nine. Consent to one transfer shall not constitute a consent to any subsequent
transfer. Landlord may consent to subsequent assignments or modifications of
this Lease by Tenant's transferee, without notifying Tenant or obtaining its
consent. Such action shall not relieve Tenant of its liability under this Lease.
SECTION 9.04 NO MERGER.
No merger shall result from Tenant's sublease of the Premises under this
Article Nine, Tenant's surrender of this Lease or the termination of this Lease
in any other manner. In any such event, Landlord may terminate any or all
subtenancies or succeed to the interest of Tenant as sublandlord thereunder.
ARTICLE 10
DEFAULTS; REMEDIES
SECTION 10.01 COVENANTS AND CONDITIONS.
Tenant's performance of each of Tenant's obligations under this Lease is a
condition as well as a covenant. Tenant's right to continue in possession of the
Premises is conditioned upon such performance. Time is of the essence in the
performance of all covenants and conditions.
SECTION 10.02 DEFAULTS.
Landlord and Tenant agree that, unless applicable Laws otherwise provide,
the terms of this Lease shall govern any default of Tenant hereunder and any
landlord - tenant Laws shall not apply unless and until
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applicable Laws should subject this Lease to such landlord - tenant Laws. Tenant
shall be in material default under this Lease:
(a) If Tenant abandons, vacates or fails to operate the Premises for
thirty (30) consecutive days;
(b) If Tenant fails to pay Rent or any other charge required to be
paid by Tenant, as and when due;
(c) If Tenant fails to perform any of Tenant's nonmonetary obligations
under this Lease for a period of ten (10) days after written notice from
Landlord; provided that if more than ten (10) days are required to complete such
performance, Tenant shall not be in default if Tenant commences such performance
within such ten (10) day period and thereafter diligently pursues its
completion;
(d) (i) If Tenant makes a general assignment or general arrangement
for the benefit of creditors; (ii) if a petition for adjudication of bankruptcy
or for reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease and possession is not restored to
Tenant within thirty (30) days; or (iv) if substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
thirty (30) days. If a court of competent jurisdiction determines that any of
the acts described in this Section (d) is not a default under this Lease, and a
trustee is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest hereunder,
then Landlord shall receive, as Additional Rent, the difference between the rent
(or any other consideration) paid in connection with such assignment or sublease
and the rent payable by Tenant hereunder;
(e) Any representation or warranty made by Tenant or by a subtenant or
assignee in connection with this Lease shall have been materially false or
misleading as of the date such representation or warranty was made; or
(f) If Tenant fails to take substantial occupancy of the Premises
within a reasonable time after the Commencement Date.
In the event Tenant is in default of the Lease beyond any applicable notice
and cure periods, Tenant hereby waives any and all defenses which Tenant may
have at law or in equity, it being understood and agreed by Tenant that any such
default beyond any applicable notice and cure periods shall preclude Tenant's
right to assert such defenses, such defenses therefore being waived.
SECTION 10.03 REMEDIES.
On the occurrence of any default by Tenant, Landlord may, at any time
thereafter, with or without notice or demand and without limiting Landlord in
the exercise of any right or remedy which Landlord may have:
Page 33
(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord, or, if permitted
by applicable Law, Landlord shall have the right to effect a lock out of Tenant
from the Premises, in which event Tenant hereby releases Landlord from any and
all damages including but not limited to damages related to interruption of
Tenant's business. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default, including
without limitation (i) the worth at the time of the award of the unpaid Base
Rent, Additional Rent and other charges which had been earned at the time of the
termination; (ii) the worth at the time of the award of the amount by which the
unpaid Base Rent, Additional Rent and other charges which would have been earned
after termination until the time of the award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; (iii) the worth at
the time of the award of the amount by which the unpaid Base Rent, Additional
Rent and other charges which would have been paid for the balance of the Lease
Term after the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under the Lease or which in the ordinary
course of things would be likely to result therefrom, including, but not limited
to, any costs or expenses incurred by Landlord in maintaining or preserving the
Premises after such default, the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation or alteration of the
Premises, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commission paid or payable. As used in subparts
(i) and (ii) above, the "worth at the time of the award" is computed by allowing
interest on unpaid amounts at the rate of fifteen percent, or such lesser amount
as may then be the maximum lawful rate, accruing the date such payments are due
until paid. As used in subpart (iii) above, the "worth at the time of the award"
is computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus one percent (1%);
(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover Rent as it
becomes due hereunder. Landlord's election to maintain Tenant's right to
possession shall not prejudice Landlord's right, at any time thereafter to
terminate Tenant's right to possession and proceed in accordance with Section
10.03(a) above;
(c) Intentionally omitted; or
(d) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the State of Nevada.
(e) THE PARTIES AGREE THAT IN THE EVENT OF A DEFAULT OF THIS LEASE BY
TENANT, DAMAGES INCURRED BY LANDLORD WOULD BE SUBSTANTIAL AND DIFFICULT TO
ASCERTAIN AND THAT LANDLORD MAY ELECT AS ITS SOLE REMEDY THE RECEIPT OF MONIES
IN THE AMOUNT EQUAL TO THE REMAINING OUTSTANDING BALANCE OF THE LEASE TERM AND
ATTORNEYS' FEES AND RELATED COSTS AND EXPENSES TO BE PAID BY TENANT.
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SECTION 10.04 CUMULATIVE REMEDIES.
Landlord's exercise of any right or remedy shall not prevent it from
exercising any other right or remedy.
ARTICLE 11
PROTECTION OF LENDERS
SECTION 11.01 SUBORDINATION.
Landlord shall have the right to subordinate this Lease to any ground
lease, deed of trust or mortgage encumbering the Premises, any advances made on
the security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded. However, Tenant's
right to quiet possession of the Premises during the Lease Term shall not be
disturbed if Tenant pays the rent and performs all of Tenant's obligations under
this Lease and is not otherwise in default. If any Mortgagee elects to have this
Lease prior to the lien of its ground lease, deed of trust or mortgage and gives
written notice thereof to Tenant, this Lease shall be deemed prior to such
ground lease, deed of trust or mortgage whether this Lease is dated prior or
subsequent to the date of said ground lease, deed of trust or mortgage or the
date of recording thereof. If in connection with obtaining construction, interim
or permanent financing for the Building, the lender shall request modifications
to this Lease as a condition to such financing, Tenant will not withhold or
delay its consent thereto, provided that such modifications do not increase the
obligations of Tenant hereunder and do not otherwise materially adversely affect
Tenant's rights hereunder. In the event that Tenant should fail to execute any
instrument described in this Article Eleven promptly as requested, Tenant hereby
irrevocably constitutes Landlord as its attorney-in-fact to execute such
instrument in Tenant's name, place and stead, it being agreed that such power is
one coupled with an interest. Notwithstanding anything in the Lease to the
contrary, the prior written consent of the First Mortgagee shall be required as
a condition precedent to the subordination of the Lease to any junior/secondary
mortgage or deed of trust. If requested by Tenant, Landlord shall use
commercially reasonable efforts to obtain a subordination, non-disturbance and
attornment agreement from Mortgagee in such form as approved by Mortgagee. If a
monetary fee is a precondition of any Mortgagee for the review of any changes to
or to obtain any Mortgagee approved subordination, non-disturbance and
attornment agreement, Tenant shall pay this fee to Landlord prior to such
Mortgagee undertaking the review of the said document and in no event later than
fifteen (15) days after the request by the Tenant for such subordination,
non-disturbance and attornment agreement, such fees are payable to Landlord
regardless of whether such changes are approved by the Mortgagee. If the
required fees are not paid in full by the Tenant, Landlord has no obligation to
proceed to obtain the subordination, non-disturbance and attornment agreement.
SECTION 11.02 ATTORNMENT.
If Landlord's interest in the Premises is acquired by any ground lessor,
beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure
sale, Tenant shall attorn to the transferee of or successor to Landlord's
interest in the Premises and recognize such transferee or successor as Landlord
under this Lease. Tenant waives the protection of any statute or rule of law
which gives or purports to give Tenant any right to terminate this Lease or
surrender possession of the Premises upon the transfer of Landlord's interest.
Page 35
SECTION 11.03 SIGNING OF DOCUMENTS.
Tenant shall sign and deliver any instruments or documents necessary or
appropriate to evidence any such attornment or subordination or agreement to do
so. Such subordination and attornment documents may contain such provisions as
are customarily required by any ground lessor, beneficiary under a deed of trust
or mortgagee. If Tenant fails to do so within ten (10) days after written
request, Tenant hereby makes, constitutes and irrevocably appoints Landlord, or
any transferee or successor of Landlord, the attorney-in-fact of Tenant to
execute and deliver any such instrument or document.
SECTION 11.04 ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge
and deliver to Landlord a written statement substantially in the form attached
hereto as Exhibit "D" certifying: (i) that none of the terms or provisions of
this Lease have been changed (or if they have been changed, stating how they
have been changed); (ii) that this Lease has not been canceled or terminated;
(iii) the last date of payment of the Base Rent and other charges and the time
period covered by such payment; (iv) that Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating why); (v) that the
Work (as defined in Rider No. 1) has been substantially completed by Landlord,
if Landlord was responsible for the construction of the Work, or stating any
items of such Work which are not substantially completed; (vi) that Tenant has
occupied the Premises; and (vii) such other matters as may be reasonably
required by Landlord or the holder of a mortgage, deed of trust or lien to which
the Premises is or becomes subject. Tenant shall deliver such statement to
Landlord within ten (10) business days after Landlord's request. Any such
statement by Tenant may be given by Landlord to any prospective purchaser or
encumbrancer of the Premises. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within such
ten (10) business day period, Landlord, and any prospective purchaser or
encumbrancer, may conclusively presume and rely upon the following facts: (i)
that the terms and provisions of this Lease have not been changed except as
otherwise represented by Landlord; (ii) that this Lease has not been canceled or
terminated except as otherwise represented by Landlord; (iii) that not more than
one month's Base Rent or other charges have been paid in advance; and (iv) that
Landlord is not in default under the Lease. In such event, Tenant shall be
estopped from denying the truth of such facts. The failure of Tenant to provide
such written statement shall constitute a material default under this Lease and
Tenant shall be liable for all of Landlord's actual and consequential damages
resulting from such failure.
SECTION 11.05 TENANT'S FINANCIAL CONDITION.
Within ten (10) business days after written request from Landlord, but no
more frequently than annually, Tenant shall deliver to Landlord such financial
statements as are required by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall deliver
to any lender designated by Landlord any financial statements required by such
lender to facilitate the financing or refinancing of the Premises. Tenant
represents and warrants to Landlord that each such financial statement is a true
and accurate statement as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes set
forth herein.
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ARTICLE 12
LEGAL COSTS
SECTION 12.01 LEGAL PROCEEDINGS.
Tenant shall reimburse Landlord, upon demand, for any costs or expenses
incurred by Landlord in connection with any breach or default of Tenant under
this Lease, whether or not suit is commenced or judgment entered. Such costs
shall include reasonable legal fees and costs incurred for the negotiation of a
settlement, enforcement of rights or otherwise. Furthermore, if any action for
breach of or to enforce the provisions of this Lease is commenced, the court in
such action shall award to the party in whose favor a judgment is entered, a
reasonable sum as attorneys' fees and costs. Such attorneys' fees and costs
shall be paid by the losing party in such action and Tenant shall also indemnify
Landlord against and hold Landlord harmless from all costs, expenses, demands
and liability incurred by Landlord if Landlord becomes or is made a party to any
claim or action (a) instituted by Tenant, or by any third party against Tenant,
or by or against any person holding any interest under or using the Premises by
license of or agreement with Tenant; (b) for foreclosure of any lien for labor
or material furnished to or for Tenant or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Tenant or such other
person; or (d) necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of the United States
Code, as amended. Tenant shall defend Landlord against any such claim or action
at Tenant's expense with counsel reasonably acceptable to Landlord or, at
Landlord's election, Tenant shall reimburse Landlord for any legal fees or costs
incurred by Landlord in any such claim or action.
SECTION 12.02 LANDLORD'S CONSENT.
Tenant shall pay Landlord a fee of One Thousand and 00/100 Dollars
($1,000.00) in connection with Tenant's request for Landlord's consent under
Article Nine (Assignment and Subletting), or in connection with any other act
which Tenant proposes to do and which requires Landlord's consent or waiver. In
the event any such request requires costs or fees in excess of such amount,
Tenant shall reimburse Landlord for Landlord's costs in excess of One Thousand
and 00/100 Dollars ($1,000.00).
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01 NON-DISCRIMINATION.
Tenant promises, and it is a condition to the continuance of this Lease,
that there will be no discrimination against, or segregation of, any person or
group of persons on the basis of race, color, sex, creed, national origin or
ancestry in the leasing, subleasing, transferring, occupancy, tenure or use of
the Premises or any portion thereof.
SECTION 13.02 LANDLORD'S LIABILITY.
As used in this Lease, the term "Landlord" means only the current owner or
owners of the fee title to the Premises or the leasehold estate under a ground
lease of the Premises at the time in question. Each Landlord is obligated to
perform the obligations of Landlord under this Lease only during the time such
Landlord owns such interest or title. Any Landlord who transfers its title or
interest is relieved of all liability
Page 37
with respect to the obligations of Landlord under this Lease to be performed on
or after the date of transfer. However, each Landlord shall deliver to its
transferee all funds previously paid by Tenant if such funds have not yet been
applied under the terms of this Lease. Notwithstanding anything to the contrary
contained in the Lease, Tenant agrees that it shall look solely to the estate
and the property of Landlord in the land and Building of which the Premises are
a part (subject to the prior rights of any Mortgagee in the building) for the
collection of any judgment (or other judicial process) requiring the payment of
money by Landlord or its officers, directors, managers, shareholders, members,
employees, contractors, servants and/or agents in the event of any default or
breach by Landlord or its officers, directors, managers, shareholders, members,
employees, contractors, servants and/or agents with respect to any of the terms,
covenants, and conditions of this Lease to be observed or performed by Landlord
or any other liability of Landlord or its officers, directors, managers,
shareholders, members, employees, contractors, servants and/or agents in
connection, directly or indirectly, with this Lease, and no other assets of
Landlord or its officers, directors, managers, shareholders, members, employees,
contractors, servants and/or agents shall be subject to levy, execution or other
procedures for the satisfaction of Tenant's remedies. Notwithstanding any
provision to the contrary contained in this Lease, Tenant's exclusive remedies
to enforce Landlord's obligations shall be by consent of Landlord or by order of
competent jurisdiction and shall not include self-help measures.
SECTION 13.03 SEVERABILITY.
A determination by a court of competent jurisdiction that any provision of
this Lease or any part thereof is illegal or unenforceable shall not cancel or
invalidate the remainder of such provision or this Lease, which shall remain in
full force and effect.
SECTION 13.04 INTERPRETATION.
The captions of the Articles and Sections of this Lease are to assist the
parties in reading this Lease and are not a part of the terms or provisions of
this Lease. Whenever required by the context of this Lease, the singular shall
include the plural and the plural shall include the singular. The masculine,
feminine and neuter genders shall each include the other. In any provision
relating to the conduct, acts or omissions of Tenant, the term "Tenant" shall
include Tenant's agents, employees, contractors, invitees, successors or others
using the Premises with Tenant's expressed or implied permission.
SECTION 13.05 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS.
This Lease is the only agreement between the parties pertaining to the
lease of the Premises and no other agreements are effective. All amendments to
this Lease shall be in writing and signed by all parties. Any other attempted
amendment shall be void.
SECTION 13.06 NOTICES.
All notices required or permitted under this Lease shall be in writing and
shall be personally delivered or sent by certified mail, return receipt
requested, postage prepaid. Notices to Tenant shall be delivered to Tenant's
Address specified in Section 1.01(s) above, except that upon Tenant's taking
possession of the Premises, the Premises shall be Tenant's address for notice
purposes. Notices to Landlord shall be delivered to Landlord's Mailing Address
specified in Section 1.01(h) above. Notices deposited in the mail in the manner
hereinabove described shall be effective from and after the expiration of three
(3) calendar days
Page 38
after it is so deposited. All other notices shall be effective upon delivery or
attempted delivery in accordance with this Section 13.06. Either party may
change its notice address upon written notice to the other party.
SECTION 13.07 WAIVERS.
All waivers must be in writing and signed by the waiving party. Landlord's
failure to enforce any provision of this Lease or its acceptance of rent shall
not be a waiver and shall not prevent Landlord from enforcing that provision or
any other provision of this Lease in the future. No statement on a payment check
from Tenant or in a letter accompanying a payment check shall be binding on
Landlord, and Landlord may, with or without notice to Tenant, negotiate such
check without being bound to the conditions of such statement.
SECTION 13.08 NO RECORDATION.
Tenant shall not record this Lease without prior written consent from
Landlord. However, either Landlord or Tenant may require that a "short form"
memorandum of this Lease executed by both parties be recorded; provided that, in
such event, Tenant hereby covenants and agrees that, upon the expiration or
earlier termination of the Lease Term, Tenant will execute and deliver a
quitclaim deed to Landlord in form reasonably satisfactory to Landlord, in favor
of Landlord, or Landlord's successor in interest releasing and conveying any and
all right, title, or interest of Tenant in the Premises, the Building, and the
Hughes Airport Center.
SECTION 13.09 BINDING EFFECT; CHOICE OF LAW.
This Lease binds any party who legally acquires any rights or interest in
this Lease from Landlord or Tenant. However, Landlord shall have no obligation
to Tenant's successor unless the rights or interests of Tenant's successor are
acquired in accordance with the terms of this Lease. This Lease shall be
governed by and construed in accordance with the laws of the State of Nevada.
SECTION 13.10 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY.
If Tenant is a corporation, each person signing this Lease on behalf of
Tenant represents and warrants that he has full authority to do so and that this
Lease binds the corporation. Within thirty (30) days after this Lease is signed,
Tenant shall deliver to Landlord a certified copy of a resolution of Tenant's
Board of Directors authorizing the execution of this Lease or other evidence of
such authority reasonably acceptable to Landlord. If Tenant is a partnership or
limited liability company, each person signing this Lease for Tenant represents
and warrants that he is a general or limited partner of the partnership or
member or manager of the limited liability company, that he has full authority
to sign for the partnership or limited liability company and that this Lease
binds the partnership or limited liability company and, in the case of a
partnership, all general partners or limited partners of the partnership, and in
the case of any limited liability company, all members of the limited liability
company. Tenant shall give written notice to Landlord of any general partner's
or member's withdrawal or addition. Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a copy of Tenant's recorded statement
of partnership, certificate of limited partnership or articles of organization.
In the event Tenant is other than an individual, concurrently with Tenant's
execution of this Lease, Tenant shall provide to Landlord a certificate of good
standing or its equivalent that confirms that Tenant is duly qualified to do
business in the state in which the Premises is located.
Page 39
SECTION 13.11 JOINT AND SEVERAL LIABILITY.
All parties signing this Lease as Tenant shall be jointly and severally
liable for all obligations of Tenant.
SECTION 13.12 FORCE MAJEURE.
If Landlord cannot perform any of its obligations due to events beyond
Landlord's control, the time provided for performing such obligations shall be
extended by a period of time equal to the duration of such events. Events beyond
Landlord's control include, but are not limited to, acts of God, war, civil
commotion, labor disputes, strikes, fire, flood or other casualty, shortages of
labor or material, governmental regulation or restriction and weather
conditions.
SECTION 13.13 EXECUTION OF LEASE.
This Lease may be executed in counterparts, and, when all counterpart
documents are executed, the counterparts shall constitute a single binding
instrument. The delivery of this Lease by Landlord to Tenant shall not be deemed
to be an offer and shall not be binding upon either party until executed and
delivered by both parties.
SECTION 13.14 BROKERS AND LEASING AGENTS.
Landlord represents and warrants to Tenant, and Tenant represents and
warrants to Landlord, that no broker, leasing agent or finder has been engaged
by it other than Landlord's Broker (if any) specified in Section 1.01(i) and
Tenant's Broker (if any) specified in Section 1.01(t) in connection with any of
the transactions contemplated by this Lease, or to its knowledge is in any way
connected with any of such transactions. Subject to the terms and conditions of
a written commission agreement ("Commission Agreement") entered into between
Landlord and Tenant's Broker (if any), Landlord shall be responsible for the
payment of a commission to Tenant's Broker in accordance with the Commission
Agreement. In the event of any claims for brokers' or finders' fees or
commissions in connection with the negotiation, execution or consummation of
this Lease other than by Landlord's Broker (if any) or Tenant's Broker (if any),
Tenant shall indemnify, save harmless and defend Landlord from and against such
claims if they shall be based upon any statement or representation or agreement
made by Tenant, and Landlord shall indemnify, save harmless and defend Tenant if
such claims shall be based upon any statement, representation or agreement made
by Landlord.
SECTION 13.15 RULES AND REGULATIONS.
Tenant shall faithfully observe and comply with the "Rules and
Regulations," a copy of which is Exhibit "C" attached hereto and incorporated
herein by this reference and all reasonable modifications thereof and additions
thereto from time to time put into effect by Landlord. Landlord shall not be
responsible to Tenant for the violation or non-performance by any other tenant
or occupant of the Building of any of said Rules and Regulations. Tenant shall
be responsible for the observance of all the foregoing rules by Tenant's
employees, agents, clients, customers, invitees and guests.
Page 40
SECTION 13.16 INTENTIONALLY OMITTED.
SECTION 13.17 WAIVER OF JURY TRIAL.
To the extent such waiver is permitted by law, the parties hereto waive
trial by jury in any action or proceeding brought in connection with this Lease.
SECTION 13.18 REAL ESTATE BROKERAGE DISCLOSURES.
Concurrently with the execution of this Lease, Landlord and Tenant shall
execute the Duties Owned by a Nevada Real Estate Licensee form attached hereto
as Exhibit "F," and the Confirmation Regarding Real Estate Relationship form
attached hereto as Exhibit "G," and, if applicable, Landlord shall cause
Landlord's Broker, and Tenant shall cause Tenant's Broker to execute the
Confirmation Regarding Real Estate Relationship from attached hereto as Exhibit
"G."
SECTION 13.19 MOLD ADDENDUM.
Concurrently with the execution of this Lease, Tenant shall execute the
Acknowledgement of Mold Addendum attached hereto as Exhibit "H."
SECTION 13.20 LANDLORD REPRESENTATIONS.
Landlord represents and warrants that at the time of execution of this
Lease:
1. Landlord has fee simple title to the Building and the Common Building
Areas.
2. The Premises are served by gas, electric, water and sewage.
3. Landlord has full authority to enter into the Lease, and no other
person, firm or corporation need join in the execution of the Lease to
make the Landlord's execution complete or appropriate.
4. As of the Commencement Date, the Premises and the improvements thereon
will be in compliance with all laws, ordinances and regulations,
including all applicable building codes and Title III of the Americans
with Disabilities Act of 1990, as amended.
5. To the best of Landlord's actual knowledge, without the duty to
investigate, there are no Hazardous Substances the quantity or quality
or use of which would constitute a Reportable Use relating to the
Building.
(SIGNATURES ON THE FOLLOWING PAGE)
Page 41
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease in the
State of Nevada on the day and year first above written and have initialed or
signed all Riders which are attached to or incorporated by reference in this
Lease.
LANDLORD: TENANT:
- --------- -------
LAS VEGAS AIRPORT PROPERTIES LLC, TRANSACT TECHNOLOGIES INC., a Delaware
a Delaware limited liability company corporation
By: STOLTZ MANAGEMENT OF DELAWARE,
INC., its Agent
By: /s/ Stephen Lewis By: /s/ Steven A. DeMartino
-------------------------------- -------------------------------------
Stephen Lewis, Vice President Print Name: Steven A. DeMartino
Print Title: Executive VP and CFO
Page 42
EXHIBIT "A"
[Depiction of Premises]
Page 43
EXHIBIT "A-1"
[Depiction of Warehouse Space]
Page 44
EXHIBIT "B"
[Legal Description of Site]
Being a portion of HUGHES AIRPORT CENTER UNIT NO. 2, as shown on plat thereof of
file in the Clark County Recorder's Office, Clark County, Nevada, as Page 68 of
Book 35 of Plats, lying within the North Half (N 1/2) of Section 3, Township 22
South, Range 61 East, M.D.M. described as follows:
COMMENCING at the Northeast corner of said Section 3; thence South
00(Degree)24'14" East along the East line thereof, 2,010.32 feet to the
Southeast corner of said Unit No. 2, said point being on the Northerly line of
the Union Pacific Railroad right-of-way (100.00 feet in width); thence North
73(Degree)29'08" West along said right-of-way line, 1,035.18 feet to the TRUE
POINT OF BEGINNING; thence continuing North 73(Degree)29'08" West along said
line, 318.72 feet to a point on the East line of Paradise Road (80.00 feet in
width); thence North 00(Degree)07'28" West along said line, 416.97 feet to a
point on a tangent curve, concave to the Southeast, having a radius of 30.00
feet; thence along said curve to the right through a central angle of
90(Degree)00'00" an arc distance of 47.12 feet; thence North 89(Degree)52'32"
East, 264.90 feet to a point on a tangent curve, concave to the South, having a
radius of 270.00 feet; thence along said curve to the right, through a central
angle of 10(Degree)46'30", an arc distance of 50.78 feet; thence South
00(Degree)27'28" East, 116.61 feet; thence South 89(Degree)52'32" West, 40.00
feet; thence South 00(Degree)27'28" East, 416.86 feet to the TRUE POINT OF
BEGINNING.
Continuing 3.5586 acres, more or less.
The above described parcel is subject to a railroad drill line easement over and
across the Southerly 20.00 feet.
Page 45
EXHIBIT "C"
RULES AND REGULATIONS
I. EXTERIOR
(a) Signage
(i) Approval: No sign, placard, picture, advertisement, name, or notice
shall be installed or displayed and visible from any part of the
outside of the Building without the prior written consent of Landlord.
Landlord shall have the right to remove, at Tenant's expense and
without notice, any sign installed or displayed in violation of this
rule. All approved signs or lettering on doors, windows, and walls
shall be printed, painted, affixed, or inscribed at the expense of the
Tenant, using materials, style and a format approved by Landlord.
(ii) Common Areas: Tenant shall not do any painting or marking on the
exterior of the Building or the Building Common Areas, including
without limitation, marking of parking spaces.
(iii) Limitations: All signs must be consistent with the signage and
graphics program adopted by the Architectural Control Committee. No
sign or other contrivance shall be permitted which rotates, gyrates,
blinks, or moves in any fashion. No sign shall extend above the top of
a building or be placed on the roof of any building. Signs attached to
a building shall be flushed mounted. No signs shall be painted on a
building. A sign is deemed to be the use of any words, numerals,
figures, devices, designs, trademarks, or other symbol in order to
communicate.
(b) Window Coverings: Window coverings must be approved by Landlord, whose
approval shall not be unreasonably withheld. No awning shall be permitted
on any part of the Premises. Tenant shall not place anything against or
near glass partitions, doors, or windows that may be visible from outside
the Premises.
(c) Roof Access: No tenant, employee, invitee, contractor, or agent of any
tenant, or any other person, shall go upon the roof of the Building,
without the approval of Landlord.
(d) Common Areas
(i) Obstruction: Tenant shall not obstruct any sidewalks, hallways,
passages, exits, entrances, elevators, escalators, or stairways of the
Building.
(ii) Access: The halls, passages, exits, entrances, elevators, and/or
escalators are not for the general public, and Landlord shall in all
cases retain the right to control and prevent access thereto of all
persons whose presence in the judgment of the Landlord would be
prejudicial to the safety, character, reputation, and interests of the
Building and its tenants; provided that nothing herein contained shall
be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities.
Page 46
(e) Exterior Communication Equipment: Unless approved by Landlord, Tenant shall
not install any radio or television antenna, microwave dish, loudspeaker,
or other device on the roof or exterior walls of the Building. Tenant shall
not interfere with radio or television broadcasting or reception from or in
the Building or elsewhere.
(f) Trash Areas
(i) Storage: Tenant shall store all its trash and garbage within its trash
box, within its designated trash area. Tenant shall not place in any
trash box or receptacle any material that cannot be disposed of in
ordinary and customary manner of trash and garbage disposal. All
garbage and refuse disposal shall be made in accordance with
directions issued from time to time by Landlord.
(ii) Containment: Tenant shall dispose of refuse in a manner that prevents
littering and dispersing of refuse by wind.
(iii) Timely Disposal: All refuse shall be disposed of in a timely manner.
(iv) Latching: Tenant shall latch all trash area doors at all times.
(v) Visibility and Sanitation: Tenant shall keep trash, garbage, or other
waste in sanitary containers. Tenant shall keep all equipment for the
storage or disposal of such materials in a clean and sanitary
condition and shall ensure that such equipment is enclosed so as not
to be visible from any public street or from any other part of the
office/ industrial center in which the Premises are located (the
"Center"). Tenant shall arrange for the regular removal of all such
waste at such Tenant's sole cost and expense.
(g) Outside Storage: Tenant shall maintain exterior loading docks and bay areas
in a neat and clean manner. Permanent outside storage of pallets, packing
crates, barrels, etc. is prohibited. Tenant shall dispose of refuse in a
manner that prevents littering and dispersing of refuse by wind.
(h) Outside Activity
(i) Vehicles: Washing, waxing, cleaning, or servicing of any vehicle by
anyone is prohibited.
(ii) Operations: Except for loading, unloading and parking, all operations
and business activities shall be carried on within fully enclosed
buildings and no outside operations shall be permitted. No equipment,
machinery, material, junk, debris, or similar matter shall by placed,
stored, or kept outside of any building in the Center.
II. INTERIOR
(a) Communications: If Tenant requires telegraphic, telephonic, or similar
services, it shall first obtain, and comply with, Landlord's instructions
in their installation.
Page 47
(b) Physical Security: Tenant assumes any and all responsibility for protecting
its Premises from theft, robbery, and pilferage, which includes keeping
doors locked during non-business hours or as required by law, and other
means of entry to the Premises closed.
(c) Temperature Control: Without the consent of Landlord, Tenant shall not use
any method of heating, including but not limited to space heaters, or
air-conditioning other than that supplied by Landlord.
(d) Utility Conservation: Tenant shall not waste electricity, water, or
air-conditioning and agrees to cooperate fully with Landlord to assure the
most effective operation of the Building's heating and air-conditioning and
to comply with any governmental energy-saving rules, laws, or regulations
of which Tenant has actual notice, and shall refrain form attempting to
adjust controls other than room thermostats installed for Tenant's use.
(e) Plumbing Fixtures: The toilet rooms, toilet urinals, wash bowls, and other
apparatus shall not be used for any purpose other than that for which they
were constructed and no foreign substance of any kind whatsoever shall be
thrown therein.
(f) Alterations: Tenant shall not cut or bore holes for wires without
Landlord's approval. Tenant shall not affix any floor coverings to the
floor of the Premises in any manner except as approved by Landlord.
(g) Hazardous Materials: Tenant shall comply with all applicable regulations,
laws, and standards, including, but not limited, to OSHA rules and
regulations, if the Premises contain any flammable or combustible fluid or
material other than those limited quantities necessary for the operation or
maintenance of office equipment.
(h) Use of Space: The Premises shall not be used for the storage of merchandise
held for sale to the general public except to the extent incidental to
Tenant's use of the Premises, or for lodging, nor shall the Premises be
used for any improper, immoral, or objectionable purpose.
III. PARKING
(a) Traffic Rules and Speed Limit: All directional signs and arrows must be
observed. The speed limit shall be 5 miles per hour.
(b) Parking: Parking is prohibited: (a) in areas not striped for parking, (b)
in aisles, (c) where "no parking" signs are posted, (d) on ramps, (e) in
cross hatched areas, and (f) in such other areas as may be designated by
Landlord as reserved for the exclusive use of others. Tenant shall acquaint
all persons to whom Tenant assigns parking spaces of these Rules and
Regulations.
(c) Enforcement: Landlord reserves the right to modify and/or adopt such other
reasonable and nondiscriminatory rules and regulations for the parking
areas as it deems necessary for the operation of the parking areas.
Landlord may refuse to permit any person who violates the within rules to
park in the parking areas, and any violation of the rules shall subject the
car to removal without notice.
Page 48
(d) Designated Areas: Tenant shall not park its vehicles in any parking areas
designated for parking by visitors to the Building. Tenant shall not park
any vehicles in the Building parking areas other than automobiles,
motorcycles, motor driven or non-motor driven bicycles, or four-wheeled
trucks. Landlord may, in its sole discretion, designate separate areas for
bicycles and motorcycles.
(e) Tenant and Tenant's invitees and guests shall not use more than the parking
spaces allocated to Tenant pursuant to Section 1.04 of this Lease. In the
event Tenant uses more than the number of spaces allocated to Tenant,
Landlord shall have the right to charge Tenant as Additional Rent the sum
of twenty-five dollars ($25) per day for each additional space utilized by
Tenant or Tenant's guests and invitees. Such amount shall be paid to
Landlord immediately upon written demand by Landlord.
IV. LOCKS & KEYS
(a) General: Landlord will furnish Tenant, free of charge, with two keys to
each door lock in the Premises provided, however, that Landlord shall not
be entitled to possess keys to any safes, files, vaults, safe deposit
boxes, or keys to the Premises. Without Landlord's consent, Tenant shall
not make or have made additional keys not furnished by Landlord. Unless
Landlord otherwise agrees, Tenant shall not alter any lock or install a new
additional lock or bolt on any door in its Premises.
(b) Return of Keys: Tenant, upon the termination of its tenancy, shall deliver
to Landlord the keys of all doors to Premises, and in the event of loss of
any keys shall pay Landlord therefor.
V. GENERAL
(a) Nuisance
(i) General: Tenant shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the Premises to
be occupied or used in a manner offensive or objectionable to Landlord
or other occupants of the Building by reason of noise, odors or
vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.
(ii) Intoxication: Landlord reserves the right to exclude or expel from the
Center any person who, in Landlord's judgment, is intoxicated or under
the influence of liquor or drugs or who is in violation of any of the
Rules and Regulations of the Center.
(b) Solicitation
(i) General: Canvassing, soliciting, and peddling in the Center are
prohibited. Unless otherwise approved by Landlord, Tenant shall not
sell, or permit the sale of newspapers, magazines, periodicals,
theater tickets, or any other goods or merchandise to the general
public in or on the Premises. Tenants shall not make any room-to-room
solicitation of business from other tenants in the Building or in the
Center. Tenant shall not use the Premises for any business or activity
other than that specifically provided for in Tenant's lease.
Page 49
(ii) Flyers: No distribution, leafletting, broadcasting, posting, or other
dissemination of handbills, streamers, circulars, flyers, or other
promotional or advertising materials whatsoever shall be permitted at
any time in the Development.
(c) Food Preparation
(i) General Prohibition: No cooking shall be done or permitted by any
tenant (except as permitted in these Rules and Regulations).
(ii) Coffee and Microwave: Use by Tenant of equipment for brewing coffee,
tea, hot chocolate, and similar beverages shall be permitted, and the
use of a microwave shall be permitted, provided that such equipment
and use is in accordance with all applicable federal, state, county
and city laws, codes, ordinances, and regulations.
(d) Use of Center Name: Without the written consent of Landlord, Tenant shall
not use the name of the Building or Center in connection with or in
promoting or advertising the business of Tenant except as Tenant's address.
(e) Fire: Tenant shall comply with all safety, fire protection, and evacuation
procedures and regulations established by Landlord or any governmental
agency. Landlord has the right to evacuate the Center in the event Landlord
determines that a potential or actual emergency or other potentially
dangerous condition exits.
(f) Tenant Security: Tenant assumes any and all responsibility for protecting
its Premises from theft, robbery, and pilferage, which includes keeping
doors locked during non-business hours or as required by law, and other
means of entry to the Premises closed.
(g) Reporting of Repair Needs: Tenant shall comply with the system reasonably
established by Landlord from time to time for Tenant to report cleaning,
maintenance, and repair, or other work that is required under the Lease.
(h) Address: Landlord reserves the right, exercisable without liability to
Tenant, to change the name and street address of the Building.
(i) Tenant/Landlord Rights
(i) Waive/Reinstate: Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but no such
waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent
Landlord from thereafter enforcing any such Rules and Regulations
against any or all of the tenants of the Building.
Page 50
(ii) New Rules: Landlord reserves the right to make such other and
reasonable Rules and Regulations as, in its judgment may from time to
time be needed for safety and security, for care and cleanliness of
the Building and for the preservation of good order therein. Tenant
agrees to abide by all such Rules and Regulations hereinabove stated
and any additional Rules and Regulations that are adopted.
(iii) Observance of Rules: Tenant shall be responsible for the observance
of all of the foregoing rules by Tenant's employees and agents.
(j) Tenant's employees: Tenant shall provide to Landlord on each anniversary of
the Commencement Date or at any time within fifteen (15) days of Landlord's
written request an accurate list of all of Tenant's employees working at
the Premises.
Page 51
EXHIBIT "D"
ESTOPPEL CERTIFICATE
STATEMENT OF TENANT IN RE: LEASE
Date:_________________
________________________
________________________
________________________
________________________
Re: 6700 Paradise Road
Suite #D
Las Vegas, NV 89119
Gentlemen:
It is our understanding that you have committed to place a mortgage upon
the subject premises and as a condition precedent thereof have required this
certification of the undersigned.
The undersigned, as Tenant, under that certain lease dated
__________________, made with LAS VEGAS AIRPORT PROPERTIES LLC, as Landlord,
hereby ratifies the said lease and certifies that:
1. the undersigned has entered into occupancy of the premises described in
said lease on _________________; and
2. the undersigned is presently open and conducting business with the public
in the premises; and
3. the operation and use of the premises do not involve the generation,
treatment, storage, disposal or release of a hazardous substance or a solid
waste into the environment and that the premises are being operated in
accordance with all Applicable Requirements, zoning ordinances and building
codes; and
4. the minimum rental in the monthly amount of $ __________________ was
payable from the date of occupancy; and
5. that said lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way except by _________________,
and neither party thereto is in default thereunder; and
Page 52
6. that the same represents the entire agreement between the parties as to
this leasing; and
7. that the term of said lease expires on ________________; and
8. that all conditions under said lease to be performed by the Landlord have
been satisfied, including, but without limitation, all co-tenancy
requirements thereunder; and
9. all required contributions by Landlord to Tenant on account of Tenant's
improvements have been received; and
10. on this date there are no existing defenses or offsets which the
undersigned has against the enforcement of said lease by the Landlord; and
11. that no rental has been paid in advance and a security in the amount of
$_____________ (or no security) has been deposited with Landlord; and
12. that Tenant's floor area is ________________ square feet; and
13. that Tenant is in financial condition that will enable Tenant to comply
with the Lease; and
14. that rental for ________________, 200_ has been paid.
Any capitalized but undefined terms contained herein shall have the same meaning
as set forth in the lease.
Very truly yours,
----------------------------------------
Transact Technologies Inc.
By:
------------------------------------
Its:
-----------------------------------
Page 53
EXHIBIT "E"
COMMENCEMENT MEMORANDUM
TRANSACT TECHNOLOGIES INC.
6700 Paradise Road
Suite D
Las Vegas, Nevada 89119
Re: 6700 Paradise Road
Suite D
Las Vegas, Nevada 89119
Dear ___________________:
With reference to that certain lease (the "Lease"), dated _____________,
2004, between LAS VEGAS AIRPORT PROPERTIES LLC, a Delaware limited liability
company ("Landlord"), and TRANSACT TECHNOLOGIES INC., a Delaware corporation
("Tenant"), you are hereby notified of the following. All capitalized terms not
otherwise defined herein shall have the same meaning as set forth in the Lease.
1. The Commencement Date of the Lease was __________________________, and the
Lease will expire at midnight _____________, 200_, if not extended or renewed or
terminated earlier pursuant to the Lease.
2. The Premises consist of _______________ (______) square feet of Rentable
Square Feet.
3. The prorated amount of Base Rent and Additional Rent for Operating Costs for
the partial month of ______________ is $_______________ and $ ______________,
respectively.
4. The amount of Base Rent and Additional Rent for Operating Costs for the first
full month is $_______________ and $ _____________, respectively.
5. Pursuant to Paragraph/Article/Section/Subsection/Exhibit ____________________
of the Lease, you have the right to renew the term of the Lease for one (1)
additional term of ______________ (___) years. The Second Lease Term shall
commence on __________________, 200_, provided Tenant gives Landlord written
notice on or before ______________, 200_ in accordance with the terms of the
Lease.
Page 54
Very truly yours,
By: STOLTZ MANAGEMENT OF
Acknowledged and agreed to by DELAWARE, INC., its Agent
By: By:
--------------------------------- ------------------------------------
Print Name:
-------------------------
Print Title:
------------------------
Page 55
EXHIBIT "F"
DUTIES OWED BY A NEVADA REAL ESTATE LICENSEE
This form does not constitute a contract for services.
In Nevada, a real estate licensee can (1) act for only one party to a real
estate transaction, (2) act for more than one party to a real estate transaction
with written consent of each party, or (3) if licensed as a broker, assign
different licensees affiliated with the broker's company to separate parties to
a real estate transaction. A licensee, acting as an agent, must act in one of
these capacities in every real estate transaction. IF THIS FORM IS USED FOR A
LEASE, THE TERM SELLER SHALL MEAN LANDLORD/LESSOR AND THE TERM BUYER SHALL MEAN
TENANT/LESSEE.
LICENSEE: The licensee in the real estate transaction is KIRT H.
KLAHOLZ ("Licensee") whose license number is 45856. The licensee is
acting for the Landlord/Lessor.
BROKER: The broker in the real estate transaction is PHILA M. BRESNAHAN
("Broker"), and the company is STOLTZ REALTY OF DELAWARE INC.,
("Company").
A NEVADA REAL ESTATE LICENSEE IN A REAL ESTATE TRANSACTION SHALL:
1. Disclose to each party to the real estate transaction as soon as is
practicable:
a) Any material and relevant facts, data or information which Licensee
knows, or which by the exercise of reasonable care and diligence
licensee should have known, relating to the property which is the
subject of the real estate transaction.
b) Each source from which Licensee will receive compensation as a result
of the transaction.
c) That Licensee is a principal to the transaction or has an interest in
a principal to the transaction.
d) Any changes in Licensee's relationship to a party to the real estate
transaction.
Disclose, if applicable, that Licensee is acting for more than one
party to the transaction. Upon making such a disclosure the Licensee
must obtain the written consent of each party to the transaction for
whom Licensee is acting before Licensee may continue to act in
Licensee's capacity as an agent. Exercise reasonable skill and care
with respect to all parties to the real estate transaction. Provide
this form to each party to the real estate transaction.
2. Not disclose, except to the Broker, confidential information relating to a
client.
3. Exercise reasonable skill and care to carry out the terms of the brokerage
agreement and to carry out Licensee's duties pursuant to the terms of the
brokerage agreement.
4. Not disclose confidential information relating to a client for 1 year after
the revocation or termination of the brokerage agreement, unless Licensee
is required to do so by order of the court. Confidential information
includes, but is not limited to the client's motivation to purchase, sell
or trade and other information of a personal nature.
5. Promote the interest of his client by:
Page 56
a) Seeking a sale, lease or property at the price and terms stated in the
brokerage agreement or at a price acceptable to the client.
b) Presenting all offers made to or by the client as soon as is
practicable.
c) Disclosing material facts of which the licensee has knowledge
concerning the transaction.
d) Advising the client to obtain advice from an expert relating to
matters which are beyond the expertise of the licensee.
e) Accounting for all money and property Licensee receives (in which the
client may have an interest) as soon as is practicable.
6. Not deal with any party to a real estate transaction in a manner which is
deceitful, fraudulent or dishonest.
7. Abide by all duties, responsibilities and obligations required of Licensee
in chapters 119, 119A,119B,645, 645A. and 645C of the NRS.
I/WE ACKNOWLEDGE RECEIPT OF COPY OF THIS LIST OF LICENSEE DUTIES, AND HAVE READ
AND UNDERSTAND THIS DISCLOSURE.
Landlord: Tenant:
- --------- -------
LAS VEGAS AIRPORT PROPERTIES LLC, TRANSACT TECHNOLOGIES INC., a
a Delaware limited liability company Delaware corporation
By Stoltz Management of Delaware, Inc.,
its Agent By:
-----------------------------------
By: Its:
----------------------------------- ----------------------------------
Stephen Lewis, Vice President
Print Name:
---------------------------
Date: Date:
--------------------------------- ---------------------------------
Page 57
EXHIBIT "G"
CONFIRMATION REGARDING REAL ESTATE AGENT RELATIONSHIP
This form does not constitute a contract for services
PROPERTY ADDRESS: 6700 PARADISE ROAD, SUITE D, LAS VEGAS, NEVADA 89119
In the event any party to the real estate transaction is also represented by
another licensee who is affiliated with the same Company, the Broker may assign
a licensee to act for each party, respectively. As set forth within the Duties
Owed form, no confidential information will be disclosed. This is NOT such a
transaction.
I/WE CONFIRM THE DUTIES OF A REAL ESTATE LICENSEE OF WHICH HAS BEEN PRESENTED
AND EXPLAINED TO ME/US.
MY/OUR REPRESENTATIVE'S RELATIONSHIP IS:
STOLTZ REALTY OF DELAWARE INC., IS THE AGENT OF THE LANDLORD/LESSOR -
EXCLUSIVELY, and
KIRT H. KLAHOLZ is the AGENT OF THE LANDLORD/LESSOR EXCLUSIVELY.
1) IF LICENSEE IS ACTING FOR MORE THAN ONE PARTY IN THIS TRANSACTION, you
will be provided a Consent to Act form for your review, consideration
and approval or rejection. A licensee can legally represent both the
Landlord/Lessor and Tenant/Lessee in a transaction, but ONLY with the
knowledge and written consent of BOTH the Landlord/Lessor and
Tenant/Lessee.
2) A licensee who is acting for the Landlord/Lessor exclusively, is not
representing the Tenant/Lessee and has no duty to advocate or
negotiate for the Tenant/Lessee.
3) A licensee who is acting for the Tenant/Lessee exclusively, is not
representing the Landlord/Lessor and has no duty to advocate or
negotiate for the Landlord/Lessor.
Page 58
Stoltz Realty of Delaware, Inc.
Landlord's Agent Company
By: KIRT H. KLAHOLZ
-----------------------------------
Licensed Real Estate Agent
- ------------- -------------
Date Time
Landlord: Tenant:
- --------- -------
LAS VEGAS AIRPORT PROPERTIES LLC, TRANSACT TECHNOLOGIES INC., a
a Delaware limited liability company Delaware corporation
By Stoltz Management of Delaware, Inc.,
its Agent By:
----------------------------------
By: Its:
----------------------------------- ---------------------------------
Stephen Lewis, Vice President
Print Name:
--------------------------
Date: Date:
--------------------------------- --------------------------------
Page 59
EXHBIT "H"
MOLD AND MILDEW ADDENDUM
This Mold and Mildew Addendum ("Addendum") date this ______ day of
________, 2004, is hereby incorporated by reference into the Industrial Real
Estate Lease of even date herewith (the "Lease") by and between LAS VEGAS
AIRPORT PROPERTIES LLC, a Delaware limited liability company ("Landlord") and
TRANSACT TECHNOLOGIES INC., a Delaware corporation ("Tenant") for space at 6700
Paradise Road, Suite D, Las Vegas, Nevada 89119 (the "Premises") and is made a
part thereof as is fully set forth therein.
PURPOSE OF ADDENDUM
It is the goal of this Addendum to provide sufficient information and
instructions to enable the parties to protect the quality of the environment of
the Premises from the affect of mildew in its various forms. It is also the goal
of this Addendum to clearly set forth the responsibilities of each of the
parties to the Lease.
INFORMATION ON MOLD
Mold is found everywhere in the environment, both indoors and outdoors. In
fact, mold is a significant portion of the earth's bio-mass. Without mold, dead
organic material would rapidly accumulate in the environment. If that were to
occur, life as we know it would be impossible to sustain. Therefore, mold is
both natural and an essential part of the earth's biology.
Mold is especially effective in digesting cellulose materials such as wood,
leaves, grass, drywall, paper and dust. Part of what mold does is to break these
complex materials down to simpler substances that can be easily recycled back
into the eco-system.
Once mold has completed the process of eating by breaking down the complex
materials into digestible substances, its next purpose is to reproduce. As part
of the reproductive cycle, mold produces tiny airborne reproductives that are
called "spores". Mold spores are literally everywhere in our environment. The
are found in the air throughout the year. The number of spores in the
environment swell in the warm, humid months of summer. It is physically
impossible to remove mold spores from the air without special filtration
equipment.
Experts are not in agreement as to the cause, but it appears that more
people are now developing sensitivities to airborne pollens, mold spores, dust
and animal dander than has been historically been seen. Some people are affected
by mold spores in relatively benign ways such as watery eyes or a runny nose.
Other people can become seriously ill from exposure to mold, its spores and/or
toxins. Mold is unlike other environmentally dangerous substances such as leaf
that can be objectively measured to determine dangerous levels. Molds' impact
varies tremendously from person to person. If you listen to the daily weather
reports, mold and pollens are often noted, as measured by so many parts per
volume of air. The higher the number of mold spores, the greater the number of
people that may be affected.
Why is mold such a complex health issue when it is a naturally occurring
life form which is found almost everywhere? Mold produces not only spores but
also produces a by-product which are generically
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described as "toxins". Each form of mold competes for food and survival with
other life forms such as bacteria and other molds. In an effort to defend itself
from its enemies, mold produces toxins that kill bacteria and other forms of
mold. We are all familiar with penicillin, a mold toxin, and its ability to kill
bacteria. Unfortunately, mold toxins can cause medical problems, even death for
those people sensitive to mold by-products.
Mold must eat to survive. We now know that various forms of mold can digest
drywall, paper, hair, dust and soap scum. Just about anything organic in your
Premises can be directed by mold. Two critical must be present for mold to grow.
The most important factor other than food to the growth of mold is water.
Without water, either in the form of liquid or humidity in the air, most cannot
live and grow. Mold growth rate when food and water are abundant increases when
the ambient temperature rises. Hot and humid weather is ideal for mold growth.
We now know something about "molds" life processes and its function in the
environment. We also know that mold must have food, water and warm temperatures
to survive. With this knowledge we can take the necessary steps to keep mold
where it belongs; outside your premises.
EFFECTIVELY PREVENTING MOLD
The most effective way to prevent mold is to focus on what it needs to
survive and thrive. Water is the most important factor for mold growth inside
buildings. If you can effectively remove sources of water then mold growth will
be prevented. As a Tenant, you must be especially alert and on guard whenever
there is a water leak. Plumbing leaks, roof leaks, foundation leaks or any other
source of water that penetrates into the Premises MUST be reported, IN WRITING,
to the Landlord. You are obligated to report, in writing, as soon as possible,
any defective condition in the Premises that comes to your attention and that
you believe is the duty of the Landlord to repair. Failure to make such a report
in writing is a break of the Lease and this Addendum. A prompt report in writing
will give the Landlord the opportunity to repair the water penetration promptly
and thereby prevent the growth of mold.
Humidity is another source of water. Mold will like off the humidity in the
air when it condenses on any cold surface. When the humidity level in the air
reaches 60% and temperatures are above 80 degrees Fahrenheit, mold activity will
increase. At relative humidity of 90% and temperatures about 90 degrees
Fahrenheit mold growth and resulting reproduction will dramatically increase.
When relative humidity is 60% or higher and temperatures are 80 degrees
Fahrenheit or higher, Tenant is required by the terms of this Addendum and the
Lease to use its air conditioner to remove excessive humidity and thereby thwart
mold growth, whenever the outside temperature is 90 degrees Fahrenheit and the
outside relative humidity is 80% or higher. Ideally, you should keep humidity
levels within the Premises at less than 60%. In the event there is a bathroom(s)
within the Premises, regular mopping and/or vacuuming is required as well as
removing any standing water on the Premises.
It is also important that you keep your Premises clean to deny mold
potential food sources. It is you responsibility to remove standing water
whenever you see it standing on the windowsills, frames or walls. You must
remove the water and make sure that you let things properly dry out.
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If you become aware of any excessive mold growth, especially on walls and
ceilings, you must immediately notify the Landlord in writing so that it can
examine the growth, determine the cause of the growth and effect proper repairs.
Again, Tenant is required by this Addendum and the Lease to give Landlord this
notice as soon as it is possible.
ACKNOWLEDGEMENT
The Tenant acknowledges by signing this Addendum that they have read and
understand this Addendum. The Tenant acknowledges that it is necessary to make
use of appropriate climate controls to keep humidity below 60%. Tenant further
acknowledges that they have a duty to keep the Premises clean and take measures
to retard and prevent mold from accumulating in the Premises. Tenant agrees to
remove visible moisture accumulations on windows , walls and other surfaces.
Tenant agrees not to block or cover any heating ventilation or air conditioning
ducts in the Premises and to take measures to retard and prevent mold from
accumulating in and on the surfaces of moisture in the Premises. Tenant also
agrees to immediately report to Landlord (i) any evidence of a water leak or
excessive moisture in the Premises; (ii) any evidence of mold or mildew-like
growth that cannot be removed by simply applying a common household cleaner and
wiping the area; (iii) any failure or malfunction in the heating, ventilation or
air-conditioning system in the Premises; and (iv) any inoperable doors or
windows. Tenant further agrees that Tenant shall be responsible for damage to
the Premises as well as injury to employees and occupants resulting from
Tenant's failure to comply with the terms of this Addendum.
A default under the terms of this Addendum shall be deemed a material
default under the terms of the Lease, and Landlord shall be entitled to exercise
all rights and remedies at law. Except as specifically stated herein, all other
terms and conditions of the Lease shall remain unchanged. In the event of any
conflict between the terms of this Addendum and the terms of the Lease, the
terms of the Addendum shall control. Any term that is capitalized but not
defined in this Addendum that is capitalized and defined in the Lease shall have
the same meaning for purposes of this Addendum as it has for the purpose of the
Lease.
TENANT:
TRANSACT TECHNOLOGIES INC., a
Delaware corporation
By:
-------------------------
Its:
------------------------
Print Name:
-----------------
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RIDER NO. 1 - WORK LETTER
THIS RIDER NO. 1 is attached to and made part of that certain lease
dated _________________________, 2004 between LAS VEGAS AIRPORT PROPERTIES LLC,
a Delaware limited liability company, as Landlord, and TRANSACT TECHNOLOGIES
INC., a Delaware corporation, as Tenant (the "Lease"). The terms used in this
Rider shall have the same definitions as set forth in the Lease. The provisions
of this Rider shall prevail over any inconsistent or conflicting provision of
the Lease.
R-1. Description of Improvements. Subject to Paragraph R-6 of this
Work Letter, Landlord shall, at Landlord's expense, construct certain
improvements on or about the Premises (the "Work") in accordance with those
plans and specifications attached hereto as Schedule 1 and incorporated herein
by this reference. Tenant hereby approves the plans and specifications attached
as Schedule 1.
R-2. Preliminary Plans. If the plans and specifications referenced in
Schedule 1 are final plans and specifications, such final plans and
specifications are hereinafter referred to as the "Final Plans," and the
remainder of this Paragraph shall be inoperative. If the plans and
specifications referenced in Schedule 1 are preliminary plans, Landlord shall
prepare final working drawings and outlined specifications for the Work and
submit such plans and specifications to Tenant for its approval as soon as
reasonably possible after execution of the Lease. Tenant shall approve or
disapprove such drawings and specifications within ten (10) business days after
receipt from Landlord. Tenant shall have the right to disapprove such drawings
and specifications only if they materially differ from the plans and
specifications attached hereto. If Tenant disapproves such drawings and
specifications, Landlord and Tenant shall promptly meet in an attempt to resolve
any dispute regarding such drawings and specifications. If the parties are
unable to agree upon the final working drawings and specifications for the Work
within ten (10) business days, Landlord may terminate this Lease upon ten (10)
days prior written notice to Tenant, in which case neither Landlord nor Tenant
shall have further liability to the other. Final working drawings and
specifications prepared in accordance with this Paragraph R-2 and approved by
Landlord and Tenant are hereinafter referred to as the "Final Plans."
R-3. Completion of Work and Commencement Date. Landlord and Tenant
agree that the Commencement Date shall be the earlier of the dates set forth in
Section 1.01(c) of the Lease, subject to Section 2.02 of the Lease. The Work
shall be deemed "substantially completed" in accordance with the definition set
forth in Section 2.02(b) of the Lease.
R-4. Changes. Landlord's obligation to prepare the Premises for
Tenant's occupancy is limited to the completion of the Work set forth in the
plans and specifications attached hereto as Schedule 1 or in the Final Plans.
Landlord shall not be required to furnish, construct or install any items not
shown thereon. If Tenant, however, requests in writing any change, addition or
alteration ("Changes") in such plans and specifications or in the construction
of the Work, and, if Landlord approves the proposed Changes, Landlord shall
notify Tenant of the cost to perform the Changes and Tenant shall pay to
Landlord such cost to perform such Changes plus an amount equal to twenty
percent (20%) of such cost before Landlord shall perform the Changes. Any delay
caused by Tenant's request for any Changes or from the construction of any
Changes shall not, in any event, delay the Commencement Date, which shall occur
on the date it would have occurred but for such Changes. The Work shall be the
property of Landlord and shall remain upon and be surrendered with the Property
upon the expiration of the Lease Term.
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R-5. Cost of Work. As used herein, cost of the Work shall mean all the
costs and charges incurred by Landlord to construct the Work, including, without
limitation, (i) the actual contractor costs and charges for material and labor,
contractor's profit, overhead and general conditions incurred by Landlord in
having the Work constructed in accordance with the Final Plans, (ii)
Governmental agency plan check, permit and other fees (including, without
limitation, Title 24 fees) and sales and use taxes, (iii) testing and inspection
costs, (iv) any paint touch-up or repair work necessary due to Tenant's move
into the Premises, (v) architectural and engineering fees, (vi) costs of
supervising the Work and (vii) all other costs expended or to be expended by
Landlord in the construction of the Work including those reasonable costs
incurred by Landlord for construction of elements of the Work in the Premises,
which construction was performed by Landlord prior to the execution of this
Lease by Landlord and Tenant and which construction has been performed for the
benefit of tenants and is customarily performed by Landlord prior to the
execution of leases for such space in the Building for reasons of economics.
Examples of such construction would include the extension of mechanical
(including heating, ventilating and air conditioning systems) and electrical
distribution systems outside of the core area of the Building, wall
construction, column enclosures, and painting outside of the core of the
Building, ceiling hangar wires and window treatment.
R-6. Allowance for Cost of Work. In the event the cost of the Work
being constructed pursuant to the Final Plans exceeds Sixty Eight Thousand Three
Hundred Ten and 00/100 Dollars ($68,310.00) ("Allowance"), Tenant shall pay to
Landlord the cost of the Work in excess of the Allowance (the "Excess Cost") as
provided herein. The Excess Cost shall be paid to Landlord in cash prior to the
commencement of construction of the Work unless otherwise agreed by the parties.
In the event the total cost of the Work is less than the Allowance, such
remaining balance of the Allowance shall revert to Landlord and Tenant shall
have no right to (i) receive the remaining balance of the Allowance, or (ii)
receive a reduction of rent or rent credit in any manner or form, or (iii) use
the remaining balance of the Allowance for additional tenant improvements. Any
delay caused by Tenant's failure to timely pay an Excess Cost or any cost Tenant
is responsible for paying resulting from Changes shall not, in any event, delay
the Commencement Date, which shall occur on the date it would have occurred but
for such delay.
R-7. Tenant's Representative. Tenant has designated Jon Berkley as its
sole representative with respect to the matters set forth in this Rider, who,
until further notice to Landlord, shall have full authority and responsibility
to act on behalf of the Tenant as required in this Rider.
R-8. Landlord's Representative. Landlord has designated Kirt Klaholz
as its sole representative with respect to the matters set forth in this Rider,
who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Rider.
R-9. Other Delays. Any delay in the construction of the Work caused by
(i) Tenant's request for materials, finishes or installations other than the
standard materials, finishes, or installations provided by Landlord from time to
time in its sole discretion, or (ii) any other delay requested or caused by
Tenant shall not, in any event, delay the Commencement Date, which shall occur
on the date it would have occurred but for the matters set forth in (i) and (ii)
above.
Landlord's initials ____________ Tenant's initials __________
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SCHEDULE I
TO
WORK LETTER
PRELIMINARY PLANS
The Preliminary Plans are those preliminary space plans prepared by
____________________________, dated ______________ 2004, and approved by Tenant
on _____________________, 2004.
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RIDER NO. 2 - OPTION TO RENEW LEASE
THIS RIDER NO. 2 is attached to and made a part of that certain lease
dated _______________________, 2004, between LAS VEGAS AIRPORT PROPERTIES LLC, a
Delaware limited liability company, as Landlord, and TRANSACT TECHNOLOGIES INC.,
a Delaware corporation, as Tenant (the "Lease"). The terms used in this Rider
shall have the same definitions as set forth in the Lease. The provisions of
this Rider shall prevail over any inconsistent or conflicting provisions of the
Lease.
R-1. Option. Provided that Tenant is not in default of this Lease at
the time of the exercise of the Option to Renew Lease (as defined below) or at
the expiration of the initial term of this Lease, and further provided that
Tenant has not assigned the Lease or sublet greater than twenty-five percent
(25%) of the Premises, the Tenant shall have one and only one option to renew
and extend this Lease (the "Option to Renew Lease") for one term of five (5)
years (the "Renewal Term"), upon written notice to the Landlord delivered not
less than nine (9) months before the expiration of the initial Lease Term. Upon
the delivery of such notice by Tenant and subject to the conditions set forth in
the preceding sentence, this Lease shall be extended without the necessity of
the execution of any further instrument or document; provided, however, that
each party agrees to execute and deliver such further instruments or documents
as the other party may reasonably request to memorialize or acknowledge the
exercise of the Option to Renew Lease. The Renewal Term shall commence upon the
expiration of the initial term of this Lease, shall expire upon the anniversary
of such date five (5) years thereafter, and be upon the same terms, covenants
and conditions as provided in this Lease for the initial Lease Term, except that
the Base Rent shall be ninety-five percent (95%) of the then prevailing fair
market rental rate as of the commencement of the Renewal Term, with increases
during the Renewal Term as provided in Section 3.02 of the Lease. Tenant shall
only be able to exercise the Option to Renew Lease as to all of the Premises.
R-2. Intentionally Omitted.
R-3. Rent. The prevailing fair market rental rate shall be the then
going rate for comparable space at Hughes Airport Center. Landlord shall notify
Tenant of Landlord's good faith determination of prevailing fair market rental
no later than ten (10) business days after Tenant's exercise of the Option to
Renew Lease. No later than ten (10) business days after Landlord notifies Tenant
of the prevailing fair market rental, Tenant shall notify Landlord whether
Tenant accepts Landlord's determination. If Tenant does not agree, Tenant may,
within ten (10) business days of Landlord's notice, rescind its exercise of the
Option to Renew and the Lease shall terminate on expiration of the initial Lease
Term. If the Tenant does not so notify Landlord, Tenant and Landlord shall
proceed pursuant to paragraph R-4 hereof.
R-4. Objection to Landlord's Determination. In the event Tenant timely
objects to the fair market rental rate submitted by Landlord, Landlord and
Tenant shall attempt in good faith to agree upon such fair market rental rate
using their best good faith efforts. If Landlord and Tenant fail to reach
agreement on such fair market rental rate within fifteen (15) days following
Tenant's notice that Tenant does not accept Landlord's determination of the
prevailing fair market rental rate, then each party shall submit a new
determination of prevailing fair market rental rate to appraisal in accordance
with Paragraph R-5 below.
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R-5. Appraisal. Landlord and Tenant shall each appoint one (1)
independent appraiser who shall by profession be a real estate broker who shall
have been active over the five (5) year period ending on the date of such
appointment in the leasing of commercial properties in the Las Vegas area. The
determination of the appraisers shall be limited to solely the issue of whether
Landlord's or Tenant's submitted fair market rental rate for the Premises is the
closest to the actual fair market rental rate for the Premises as determined by
the appraisers, taking into account the requirements of Paragraph R-3 above and
this Paragraph R-5 regarding the same. Such decision shall be based upon the
projected prevailing fair market rental rate as of the commencement date of the
Renewal Term. Each such appraiser shall be appointed within the fifteen (15) day
period after Tenant's notice that Tenant does not accept Landlord's
determination.
(i) The two (2) appraisers so appointed shall within fifteen (15)
days of the date of appointment of the last appointed appraiser agree upon
and appoint a third appraiser who shall be qualified under the same
criteria set forth hereinabove for qualifications of the initial two (2)
appraisers.
(ii) The three (3) appraisers shall within thirty (30) days of
the appointment of the third appraiser reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted fair market rental rate,
and shall notify Landlord and Tenant thereof.
(iii) The decision of the majority of the three (3) appraisers
shall be binding upon Landlord and Tenant. If either Landlord or Tenant
fails to appoint an appraiser within the time period specified in Paragraph
R-5 hereinabove, the appraiser appointed by one of them shall reach a
decision based upon the same procedures as set forth above (i.e., by
selecting either Landlord's or Tenant's submitted fair market rental rate),
and shall notify Landlord and Tenant thereof, and such appraiser's decision
shall be binding upon Landlord and Tenant.
(iv) If the two (2) appraisers fail to agree upon and appoint a
third appraiser, both appraisers shall be dismissed and the matter to be
decided shall be forthwith submitted to arbitration under the provisions of
the American Arbitration Association, but based up on the same procedures
as set forth above (i.e., by selecting either Landlord's or Tenant's
submitted fair market rental rate).
(v) The cost of the appraisal (or arbitration if required
pursuant to Paragraph R-5(iv) shall be paid by the party whose submitted
fair market rental rate is not accepted.
R-6. Notwithstanding the fair market rental rate for the Premises, in
no event shall the Base Rent as of the commencement of the Renewal Term be less
than the Base Rent payable by Tenant during the last month of the initial Term
of the Lease. The Base Rent shall be increased during the Renewal Term as
provided in Section 3.02 of the Lease.
Landlord's initials _________ Tenant's initials __________
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RIDER NO. 3 - INTENTIONALLY OMITTED
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RIDER NO. 4 - RIGHT OF FIRST OFFER TO LEASE
THIS RIDER NO. 4 is attached to and made a part of that certain lease
dated ________________, 2004, by and between LAS VEGAS AIRPORT PROPERTIES LLC, a
Delaware limited liability company, as Landlord, and TRANSACT TECHNOLOGIES INC.,
a Delaware corporation, as Tenant (the "Lease"). The terms used in this Rider
shall have the same definitions as set forth in the Lease. The provisions of
this Rider shall prevail over any inconsistent or conflicting provisions of the
Lease.
R-1. Right of First Offer to Lease. During the initial Lease Term,
Tenant shall have a right of first offer to Lease for contiguous rentable space
adjacent to the Premises and located on same floor as the Premises (the "First
Offer Space"). Notwithstanding the foregoing (i) such first offer right of
Tenant shall commence only following the expiration or earlier termination of
any existing lease pertaining to each such particular First Offer Space, and the
first lease pertaining to each such First Offer Space entered into by Landlord
after the date of this Lease (collectively, the "Superior Leases"), including
any renewal of such existing or future lease, whether or not such renewal is
pursuant to an express written provision in such lease, and regardless of
whether any such renewal is consummated pursuant to a lease amendment or a new
lease, and (ii) such first offer right shall be subordinate and secondary to all
rights of expansion, first refusal, first offer or similar rights granted to the
tenants of the Superior Leases (the rights described in items (i) and (ii),
above to be known collectively as "Superior Rights"). Tenant's right of first
offer shall be on the terms and conditions set forth in this Rider No. 4.
Tenant's right of first offer shall only be in effect during the initial Lease
Term. Tenant shall have no Right of First Offer to Lease during any Renewal
Term.
R-2. Procedure. Landlord shall notify Tenant from time to time when
Landlord determines that Landlord shall commence the marketing of any First
Offer Space because such space shall become available for lease to third
parties, where no holder of a Superior Right desires to lease such space.
Landlord shall notify Tenant of the availability of and offer to lease to Tenant
First Offer Space by delivery to Tenant of a notice (the "First Offer Space
Option Notice"), which shall (i) describe the specific First Offer Space, (ii)
an initial determination of the amount of the Rent proposed by Landlord for such
First Offer Space, (iii) disclose the then existing state of improvements and
condition of such space, (iv) set forth the approximate date Tenant would be
entitled to take possession of such space. Tenant shall have thirty (30) days
from receipt of the First Offer Space Option Notice to accept or reject the
offer for all of such First Offer Space on, and only on, the terms contained in
the First Offer Space Option Notice. Tenant may exercise its right only as to
all of any First Offer Space offered to Tenant. Any attempt to exercise its
offer to less than all of any First Offer Space offered to Tenant shall be null
and void. If Tenant accepts the offer, such space shall become part of the
Premises and Tenant shall be bound with respect to such space by the terms and
conditions of this Lease. If Tenant does not notify Landlord within such thirty
(30) days of Tenant's acceptance of the offer for all of such space, then
Landlord shall thereafter have the right to lease such space not taken by Tenant
to other persons on such terms and conditions as Landlord may elect.
R-3. Delivery of Possession. If Tenant timely exercises Tenant's right
to lease the First Offer Space as set forth herein, Landlord and Tenant shall
execute an amendment adding such First Offer Space to this Lease upon the same
non-economic terms and conditions as applicable to the initial Premises, and the
economic terms and conditions as provided in this Rider No. 4. Thereafter, the
total Base Rent payable under this Lease shall be the sum of the Base Rent for
all First Offer Space added to the Premises plus the Base Rent already payable
under the Lease. Tenant shall commence payment of Base Rent for the
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First Offer Space and the Lease Term of the First Offer Space shall commence
upon the date of delivery of such space to Tenant. The Lease Term for the First
Offer Space shall expire coterminously with Tenant's lease of the initial
Premises.
R-4. Tenant shall have the right, upon notice to Landlord, to meet
from time to time with representatives of Landlord who are knowledgeable as to
the status of the leasing of First Offer Space to discuss the status of the
leasing of First Offer Space.
R-5. Tenant shall accept all First Offer Space in its then "as-is"
condition as disclosed in the First Offer Space Option Notice and Landlord shall
not be required to perform any work or furnish any materials in order to prepare
such First Offer Space for Tenant's occupancy. Tenant shall be entitled to
construct improvements in the First Offer Space in accordance with the
provisions of Section 6.05 of the Lease.
R-6. Termination of Right of First Offer to Lease. The rights set
forth in this Rider No. 4, and Landlord's obligations with respect thereto,
shall be personal to the original Tenant and any assignee to which the original
Tenant's entire interest in this Lease has been assigned pursuant to the Lease
and may only be exercised by the original Tenant or such assignee (but not any
subtenant or other person or entity). The right of first offer granted herein
shall terminate as to a particular First Offer Space upon the failure by Tenant
to exercise its right of first offer with respect to such First Offer Space as
offered by Landlord. Tenant shall not have the right to lease First Offer Space
if, as of the date of the attempted exercise of any right of first offer by
Tenant, or, at Landlord's option, as of the scheduled date of delivery of such
First Offer Space to Tenant, Tenant is in default under this Lease after any
applicable notice and cure periods.
Landlord's initials ____________ Tenant's initials __________
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