EXHIBIT 99.1
ProCon, Inc.
LEASE AGREEMENT
PARTIES
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LESSOR: The Lessor of the demised Premises is PROCON, INC., an Arkansas
Corporation.
LESSEE: The Lessee of the demised Premises is Genius Products, Inc.
Corporation [X] LLC [_] Partnership [_] Sole Proprietor [_]
This Agreement is entered into as of AUGUST 25, 2004, by and between
the aforementioned Lessor and Lessee, and in consideration of the mutual
covenants described herein:
WITNESSETH:
1. DESCRIPTION OF DEMISED PREMISES. Lessor does hereby let, and demise
unto Lessee, and Lessee does hereby lease from Lessor the following described
Premises in the City of Bentonville, Benton County, Arkansas: approximately
1,670 square feet of a 6,600 square foot building located at 106 SE EXECUTIVE
DRIVE, SUITE #4, BENTONVILLE, ARKANSAS 72712, together with the right to use
such hallways, walkways, parking areas (including the exclusive right to use the
upper and lower parking lots) and other common amenities located thereon.
2. TERM. The initial term of this Lease shall be for FIVE (5) YEARS,
commencing on the later of OCTOBER 15, 2004, or the date the Premises is
substantially completed per 16.B herein, and ending on the date expiring five
(5) years thereafter. The Lessee shall have the right, with not less than six
(6) months' prior written notice, to extend the term of the Lease Agreement for
additional term (s) of FIVE (5) YEARS at a rental rate equal to the monthly
rental rate for buildings at South Walton Plaza of similar age and character and
with similar concessions and lease terms. If Lessee remains in possession of the
Premises after the expiration of the original term or any extended term of this
Lease Agreement, Lessee shall become a tenant from month-to-month at a rental
equal to one hundred and twenty-five percent (125%) of the monthly rental being
paid at the time of the expiration of said original or extended term, but
otherwise subject to all of the same terms and provisions of this Lease
Agreement. Lessor may thereafter terminate this Lease Agreement upon a thirty
(30) day written notice to Lessee dating from a lease payment date at the end of
which time Lessee shall surrender possession of the Premises without further
demand. Should Lessee fail to do so, Lessee shall be responsible, in addition to
damages generally recoverable by Lessor by reason of any breach by Lessee, for
all damages Lessor may sustain, including, but not limited to, claims made by a
succeeding tenant against Lessor which are founded upon delay or failure in
delivering possession of the Premises to such succeeding tenant. Other than the
thirty (30) day notice stated above, Lessee waives any and all notice to which
Lessee may otherwise be entitled under the laws of the State of Arkansas as a
prerequisite to a suit filed against Lessee for the unlawful detention of the
Premises. The Lessee may terminate the Lease during such hold over periods by
providing a thirty (30) day written notice of intent to terminate to the Lessor.
3. RENT. During the initial term of this Lease, Lessee agrees to pay to
the Lessor a total annual "gross rent" in the amount of $22,545, payable in
monthly installments of $1,878.25, each being due on the first day of each month
during the term of this Lease, beginning upon occupancy. The foregoing "gross
rent" shall be inclusive of all taxes, common area and maintenance expenses,
except Lessee may be responsible for separately metered utilities and related
deposits, janitorial services, waste management and "day-to-day" expenses.
Day-to-day expenses shall include light bulbs, toilet paper, filters and other
personal property replacement items similar to the foregoing. On each annual
anniversary, the Lessor may increase the rent due hereunder annually by the
agreed upon flat rate of three percent (3%) or the increased percentage of the
Consumer Price Index as reported by the U.S. Department of Labor, whichever is
the greater. In the event the Lessee fails, neglects or refuses to pay any
rental installment due hereunder within ten (10) days after notice from
Landlord, there shall be added to such rental installment a late charge of five
percent (5%) of the installment. Said charge shall not in any way be construed
as express or implied consent to any extension of the date upon which rent is
due hereunder, and shall not constitute a waiver thereof, and shall be in
addition to interest at the rate of ten percent (10%) per annum on each late
installment and all other charges and damages or default for herein provided.
Failure to timely pay the monthly rental installments after written notice and
any additions thereto, if applicable, shall constitute a default of this Lease
and shall be subject to the remedies provided for herein.
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4. SECURITY DEPOSIT. Upon the execution of this Lease, the Lessee shall
pay to the Lessor a security deposit in an amount equal to one (1) months rent,
which shall be held as a security for the Lessee's complete performance of this
Lease, and which shall be credited to the last month's payment and/or clean-up
and restoration of the demised Premises if necessary.
5. TAXES. Lessor shall pay all ad valorem taxes and assessments due to
improvement districts or governmental bodies which may be levied, assessed or
charged against the Premises by reason of the real property and Premises leased
hereunder. Lessee shall be responsible for all taxes attributable to the
personal property of Lessee on the Premises and for all license, privilege and
occupation taxes levied, assessed or charged against Lessee on account of the
operation of the business from these Premises; provided, however, Lessor
represents there are currently no such license, privilege or occupation taxes
authorized under current law.
6. UTILITIES. Lessor acknowledges and agrees that it shall pay for the
cost of all utilities in and for the demised Premises.
7. JANITORIAL SERVICES. Lessee shall provide for its own janitorial
services within the demised Premises exclusive of any common area (if
applicable).
8. CONDUCT OF BUSINESS AND USES. The demised Premises is leased to
Lessee for the purpose of carrying on the business of AN OFFICE/SHOWROOM and
related uses, and Lessee covenants and agrees with and unto Lessor that the
Premises will be used for those purposes and those related to them and no other,
except with the prior written consent of Lessor. Lessee covenants and agrees
that Lessee will not do or permit to be done anything in, upon, or about the
leased Premises that increases the hazard of fire beyond that which exists by
reason of the uses and occupancy of the Premises for the purposes mentioned.
Lessee will not do or permit to be done anything within Lessee's control that
would make the demised Premises, or the improvements thereon, uninsurable in
whole or in part. Provided, however, that Lessor agrees that Lessee's current
proposed use does not affect Lessor's insurance in such manner. Lessee agrees
that Lessee will not commit waste nor permit waste to be committed or done upon
the leased Premises. Lessee shall not permit any activity to occur on the
Premises, which is in violation of any state, local or federal law. Lessee shall
not permit pets of any type except certified handicap assistance pets, on any
part of the leased Premises. Smoking shall not be permitted inside or on the
Premises.
9. MAINTENANCE OF DEMISED PREMISES. Lessee shall take good care of the
interior of the Premises and appurtenances thereto and keep them in good repair,
free from filth, overloading, danger of fire, explosion or any nuisance, and
return the same to Lessor, at the expiration of this Lease, in as good condition
as when received by Lessee, usual wear and use, damage by fire, explosion,
providential means or any other casualty excepted. Lessor, at its sole expense,
will maintain and repair, or replace when and if necessary, the building
systems, the roof and the foundations of the building, all exterior walls, all
plate glass windows (whether apart of the Premises or not), all interior walls,
which provide structural support for the building, all exterior doors and
doorways, all underground sewer, water and other utility service pipes and lines
which serve the Premises and which are located outside the interior surface of
the exterior walls of the building, and all exterior lighting, sprinkler
systems, driveways, sidewalks, common areas, parking and other paved areas.
Except for the maintenance, repair and replacement obligations of
Lessor which are set forth above in the Lease, Lessee will maintain and repair
any alterations made by Lessee to the Premises and any fixtures or trade
fixtures installed in the building by Lessee, so that all of the foregoing shall
at all times be in substantially as good as condition as existing on the
commencement date, normal wear and tear, damage or destruction by casualty,
condemnation and the act (s), or omission (s) of Lessor, its employees, agents,
contractors, invitees and guests excepted. Additionally, Lessee shall pay for
its own janitorial service and trash removal.
10. ALTERATIONS, SIGNS AND ADDITIONS. The Lessee shall make no
structural alterations or additions to the demised Premises except those
approved in writing by the Lessor, which consent shall not be unreasonably
withheld or delayed. The foregoing notwithstanding, Lessee shall have the right
to make non-structural changes or alterations of a minor nature to the interior
of the Premises, so long as the costs for such are no more than $10,000 in any
given calendar year, without seeking and receiving Lessor's consent. No sign,
picture, advertisement or notice except on the glass of the doors shall be
displayed on any part of the outside of said building or on or about the
Premises hereby demised without the previous consent in writing of the Lessor.
Lessee will remove any sign, advertisement or notices painted on or affixed to
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the Premises, and restore the place it occupied to the condition that existed as
of the date this Lease takes effect. Lessor may place a "for rent" sign or signs
on the Premises during the last thirty (30) days this Lease is in force. Lessor
may, at its option, erect a sign on the Premises displaying space for tenant
information that Lessee may, at its expense, put logo, name, etc.
11. FIXTURES. All buildings, repairs, alterations, additions,
improvements, installations, equipment and fixtures (excluding Lessee's trade
fixtures), by whomsoever installed or erected (except such business trade
signage and/or identified items herein belonging to Lessee as can be removed
without damage to or leaving incomplete the Premises or building), shall belong
to Lessor and remain on and be surrendered with the Premises as a part thereof,
at the expiration of this Lease.
12. ASSIGNMENT AND SUBLETTING. The Lessee shall not assign this Lease,
nor sublet the Premises or any part thereof, without the prior written consent
of the Lessor, which shall not be unreasonably withheld. Lessee may assign or
sublease this Lease without Lessor's consent so long as Lessee remains liable
under this Lease if: (i) the assignee or sublessee is an affiliate company of
Lessee ("affiliate company" shall mean a parent company, subsidiary, subsidiary
company, or `sister' company of Lessee"); or (ii) Lessor is unable to provide a
"replacement building" set forth in Paragraph 34 but only if the assignee or
sublessee is financially sound and is a commercially reputable entity. The
consent by the Lessor to a particular assignment or subletting shall not be
construed to relieve the Lessee from the obligation to obtain the consent in
writing of the Lessor on any other or future assignments or sublets.
Notwithstanding such consent, the Lessee shall remain liable to the Lessor for
the payment of all rent in full performance of the terms of this Agreement.
13. INDEMNIFICATION. Lessee agrees to hold Lessor harmless from and to
indemnify Lessor against any and all claims, liabilities and damages, penalties,
costs or expense, including reasonable attorney's fees, arising out of or in
connection with (i) enforcing any obligation of Lessee hereunder" (ii) damage to
persons and property resulting from or in connection with the condition of the
leased Premises or suffered or incurred in or about the leased Premises; or
(iii) as a result of any breach by Lessee, its agents, contractors, employees,
invitees or licensees, of any covenant or conditions of this Lease; (iv) or the
carelessness, negligence or improper or illegal conduct of Lessee, its agents,
contractors, employees, invitees or licensees.
Lessor agrees to hold Lessee harmless from and to indemnify Lessee
against any and all claims, liabilities and damages, penalties, costs or
expense, including reasonable attorney's fees, arising out of or in connection
with (i) enforcing any obligation of Lessor hereunder; (ii) damage to persons
and property resulting from or in connection with the condition of the common
areas (to include hallways, walkways, parking areas and other common amenities
located thereon); or (iii) suffered or incurred in or about the same or as a
result of any breach by Lessor, its agents, contractors, employees, invitees or
licensees, of any covenant or conditions of this Lease, or (iv) the negligence
or improper or illegal conduct of Lessor, its agents, contractors, employees,
invitees or licensees.
14. TENANTS LIABILITY INSURANCE. Lessee further covenants and agrees to
maintain at all times during the term of this Lease comprehensive public
liability insurance from a responsible insurance company, licensed to do
business in the state in which the Premises is located and reasonably
satisfactory to Lessor, naming Lessor as an additional insured in an amount of
not less than $1 million combined single limit policy for bodily injury and
property damage. Lessee shall furnish Lessor with a certificate or certificates
of insurance, covering such insurance so maintained by Lessee.
15. FIRE, CASUALTY AND CONDEMNATION. In the event all or any part of
the demised Premises should be subjected to eminent domain proceedings or should
be substantially damaged by fire or other casualty, and if pursuant thereto an
amount of the leased Premises shall be condemned so as to render the residue
inadequate for Lessee's purposes as herein set forth, Lessee shall have the
option to terminate and cancel this Lease by giving sixty (60) days written
notice of such intention to Lessor, but only if 1) Lessor fails to give sixty
(60) days written notice of intent to fully restore the demised Premises to its
original configuration and dimensions; or 2) the Lessor fails to restore the
Premises to a condition substantially suitable for the use intended herein in
Lessee's reasonable determination, within one hundred twenty (120) days of the
taking, fire or other casualty. During said period of restoration, Lessee shall
not be liable for rental payments until property is approved for occupancy. If
any such taking shall not render the residue of the leased Premises wholly
inadequate for Lessee's purposes as herein set forth, Lessee's rentals hereunder
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shall be reduced in the proportion which the value of the property taken bears
to the whole value of the leased Premises with improvements. In any such
condemnation proceedings, all damages allocable to full fee simple ownership of
the leased Premises shall be payable to Lessor, and any damages for loss of hold
interest, including the un-amortized portion of the value involved in such
condemnation of any non-removable fixture placed on the leased Premises by
Lessee with Lessor's approval shall be payable to Lessee.
16. TENANT IMPROVEMENTS. The building and other improvements that are a
part of the Premises shall be constructed in accordance with the following:
A. APPROVAL OF PLANS: Lessor agrees to and shall have constructed
on the Premises the improvements substantially in accordance with the partitions
sketch, attached hereto as Exhibit A.
B. CONSTRUCTION: Lessor agrees to proceed with due diligence and
complete in a good workmanlike manner to the reasonable satisfaction of Lessee
all of the construction, alterations, improvements, modifications, and
finishings of, to, and in said above-described leased Premises, all
substantially in accordance with the plans and specifications approved and
initialed by the parties hereto, copies being attached as Exhibit A and by
reference incorporated herein and made a part hereof and as otherwise may be
required to prepare the Premises for Lessee's use for occupancy on or before
commencement date, except for delays due to governmental regulations, unusual
scarcity of or inability to obtain labor or materials, or causes beyond Lessor's
reasonable control. Lessor covenants that all of said work shall be performed in
compliance with all applicable ordinances, regulations, and laws, including all
building codes, and shall be covered by such permits and approvals as may be
required by applicable law. The possession, which acceptance shall be given by
Lessee when the construction has been finished, except for items of work and/or
mechanical adjustment of equipment and fixtures which, because of the nature of
the item, are not practical to do at the time, provided none of the items are
necessary to make the leased Premises tenantable for Lessee's use. Lessee's
rents shall begin upon commencement date ("commencement date" is herein defined
as the date that Lessee accepts possession of the leased Premises). Lessor shall
give Lessee at least thirty (30) days prior notice of the date when the leased
Premises is expected to be ready for occupancy, and as soon as conditions
practicably permit, Lessor shall finish the items of work and adjustment not
finished should Lessee, with Lessor's approval, elect to take possession before
the construction has been finished.
Lessee's representative and engineers shall at all times have the
right to inspect the construction work and further to give notice of observed
defects, in which event Lessor shall cause any such defects to be cured or
corrected, as the case may be. In addition, Lessor will advise Lessee
periodically during the construction process of the then current status and
Lessee shall have the right to comment and Lessor agrees to give reasonable
consideration to such comments. It is understood, however, that final decisions
with respect to design and construction are entirely within Lessor's control.
Lessor shall remedy promptly any work not so performed or done of which notice
is received by Lessor from Lessee within thirty (30) days of the date on which
term begins, and shall use due diligence to enforce all warranties and
guarantees to Lessor of work or materials called for by the specifications and
enforceable by Lessor, provided Lessee shall give Lessor notice of any breach of
such warranties and guarantees.
17. FAILURE TO COMPLETE CONSTRUCTION. Lessor agrees that at its own
cost and expense, it will make the improvements to the Premises to prepare the
same for Lessee's occupancy, as may be contained and described in Exhibit A
attached hereto, and thereby made a part hereof. In the event that Lessor is
prevented from completing the improvements described in said Exhibit A on or
before the commencement date of the term hereof due to strikes, lockout,
non-availability of materials or labor, labor controversies, accidents, weather
or other causes beyond the reasonable control of Lessor, Lessor shall not be
liable to Lessee for damages by reason thereof, nor shall Lessee be relieved
from any obligation under this Lease. However, if the leased Premises does not
have a certificate of occupancy by the city within sixty (60) days of the
projected completion date of OCTOBER 15, 2004, this Lease will become null and
void unless other arrangements can be made suitable to both parties and attached
hereto by addendum (s).
18. PARKING. The Lessor shall provide all the parking spaces in the
upper and lower parking lots within the common parking lot at no charge.
19. WARRANTIES OF TITLE. Lessor hereby warrants and covenants with and
unto Lessee that it has an absolute and indefeasible title to the demised
Premises, and that Lessor will, during the term hereof and the full performance
by Lessee of Lessee's obligations and covenants hereunder, defend the same and
hold harmless the Lessee against the lawful claims of any and all persons
whomsoever.
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20. DEFAULT. Lessee shall be in default under the provisions of this
Agreement upon the happening of any of the following events or conditions:
(1) Failure to pay the rental payment and any supplements
thereto, or any other payments provided by this Lease at the times, in the
amounts and in the manner set forth or within ten (10) days after the date
Lessor provides written notice of the same being overdue;
(2) Failure to keep or perform any of the covenants on the
part of the Lessee herein to be kept or performed, or failure to correct any
non-conformance within thirty (30) days of written demand by Lessor; or
(3) Should the Lessee become insolvent, or become bankrupt,
either voluntary or involuntary, or make any assignment for the benefit of
creditors, or if a receiver be appointed for the benefit of Lessee's creditors,
or if a receiver be appointed for Lessee to take charge of and manage Lessee's
affairs, or if any levee of execution against the Lessee remains unsatisfied for
a period of thirty (30) days from and after the levy of the same.
21. REMEDIES IN THE EVENT OF DEFAULT. In the event of a default by
Lessee, during the term hereof, Lessor may, at Lessor's option, declare this
Lease thereupon terminated after notice has been given by registered mail ten
(10) days prior, and Lessor shall have the right to enter upon and take
possession of the leased Premises and to evict and expel Lessee and any or all
of Lessee's property, belongings, and effects there from, without legal process
and without thereby being guilty of any manner of trespass either at law or in
equity which remedy is in addition to any other remedies of Lessor either at law
or in equity, including, without limitation, the collection of delinquent rents,
possession of the leased Premises and contents, damages for breach of this
Agreement by Lessee, or otherwise. No delay in or failure to exercise any of the
options herein granted to Lessor by reason of a default shall be a waiver
thereof, and the waiver on one occasion of a default shall not be deemed a
waiver of Lessor's right to exercise its remedies by reason of the same or a
similar default at any later occasion. Notwithstanding anything to the contrary
contained herein, Lessor shall not be absolved of its obligation to attempt in
good faith to mitigate its damages with respect to any such default of Lessee.
22. WAIVER OF SUBROGATION. Lessor and Lessee and all parties claiming
under them hereby mutually release and discharge each other from all claims and
liabilities arising from or caused by any hazard covered by insurance on the
leased Premises, or covered by insurance in connection with the property or
activities conducted on the leased Premises, regardless of the cause of the
damage or loss, to the extent such claims and liabilities are covered by
insurance, and to the extent such policies shall provide for an permit such
waiver of subrogation.
23. LIABILITY UPON EARLY TERMINATION. In the event that Lessee should
terminate this Lease for any reason, it agrees to pay to Lessor the entire sum
of rent remaining under the Lease for the term then in effect. Said sum shall be
payable no later than thirty (30) days after the date of termination. Should
Lessee or Lessor have the ability to sublet during the term of this Lease, see
Paragraph 12 of this Agreement.
24. SURRENDER OF POSSESSION. At the end of the term of this Lease, or
upon earlier termination by Lessor in accordance with the options herein
reserved, Lessee agrees to surrender possession of the leased Premises without
demand. Should Lessee fail so to do, Lessee shall be responsible in addition to
the damages generally recoverable by Lessor by reason of any breach by Lessee,
for all damages Lessor may sustain, including claims made by any succeeding
tenant against Lessor that are founded upon delay or failure in delivering
possession of the leased Premises to such succeeding tenants. Lessee hereby
waives any and all notice to which Lessee may otherwise be entitled under the
laws of the State of Arkansas as a prerequisite to a suit against Lessee for the
unlawful detention of the leased Premises.
25. BINDING EFFECT. This agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors, legal
representatives, heirs and assigns, except as expressly limited otherwise
herein.
26. TIME OF ESSENCE. The time of the making of the payments and of the
keeping of the covenants herein is of the essence of this Agreement and the
parties hereto so agree.
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27. NOTICES. Any notice called for or permitted under the terms hereof
shall be given in writing and sent by ordinary mail to the last address of the
party to whom the notice is to be given as designated by such party in writing.
Lessor designates its address as 105 SE 22ND STREET, SUITE #1, BENTONVILLE, AR
72712. Lessee hereby designates its address as 740 LOMAS SANTA FE, SUITE 210,
SOLANA BEACH, CA 92075. Any notice so given shall be deemed given three (3) days
after the same has been posted. Designations of address may be changed by
written notice given by ordinary mail from either party to the other.
28. QUIET ENJOYMENT. Upon paying the rent as herein provided, and upon the
performance of the covenants recited herein for it to perform, the Lessee shall,
at all times during the term herein described peacefully and quietly have, hold
and enjoy the demised Premises.
29. DISPUTE RESOLUTION. Lessor and Lessee recognize that litigation is
an expensive, resource-consuming process for resolving business disputes.
Therefore, both parties agree that if any controversy or dispute arises out of
or relating to this Lease, or any breach of the Lease, they will attempt in good
faith to settle the dispute expeditiously within thirty (30) days of written
notice of the dispute. If the dispute is not settled, then the matter shall be
submitted to arbitration and the party against whom enforcement is sought, by
virtue of the Lease, consents to entry of judgment for such enforcement. The
parties will attempt in good faith to mutually agree as to the provider or
neutral services and to the specific neutral location for the arbitration. Rules
of the American Arbitration Association for arbitration shall govern any such
arbitration proceedings. The attorneys' fees and costs of this arbitration shall
be paid by the losing party. If there is no losing party, the parties all pay
their own attorney's fees and the costs of arbitration shall be shared equally.
30. CONFIDENTIALITY. Not applicable.
31. SEVERABILITY. In the event that any of the provisions of this Lease
are deemed to be illegal or unenforceable, such term (s) shall be severed from
this Lease and the remaining terms shall remain in full force and effect.
32. MERGER. This Agreement and any attachments or addendums hereto,
represent the complete and final agreement of the parties, and no other prior
agreement, whether oral or in writing, shall have any force and effect to modify
this Lease, and any modifications of this Lease after its execution shall be in
writing.
33. COMMISSION INDEMNIFICATION. Lessor and Lessee agree that B.R.E.I.
d/b/a Burckart Property Leasing is the exclusive agent and that no other brokers
or agents are entitled to a commission. Lessor shall be responsible, at its sole
cost and expense, to pay the brokerage fee in connection with this Lease.
34. RELOCATE AND EXPAND. Lessee will have the unilateral right to
relocate and expand under the following terms and conditions:
A. OPTION TO RELOCATE AND EXPAND. Provided that (i) Lessee has not
been in Default beyond any applicable cure periods at any time during the
Original Term, (ii) the creditworthiness of Lessee is materially the same as or
better than on the Commencement Date, (iii) Lessee named herein remains in
possession of and has been continuously operating in substantially the entire
Leased Premises throughout the Original Term and (iv) the current use of the
Leased Premises is consistent with the Permitted Use hereunder, and subject to
the availability of space, Lessee shall have the option to expand the Leased
Premises effective any time during the term of this Lease ("Expansion Option"),
to the "Expansion Space", located in another building to be built within the
Park or general area which is owned or controlled by Lessor at the time Lessee
exercises this Expansion Option. In the event Lessee elects to exercise its
Expansion Option, Lessor and Lessee hereby agree that (i) Lessee shall provide
Lessor with twelve (12) months written notice of its desire to expand; (ii)
Lessee shall sign a Lease for such building prior to construction and
construction financing; and (iii) if said Expansion Space is available for lease
to Lessee, the term for the Expansion Space shall be five (5) years from
Lessor's delivery of occupancy. The Expansion Space shall be offered to Lessee
at the rental rate and upon such other terms and conditions as are then being
quoted by Lessor to prospective tenants for the Expansion Space; provided,
however, that in no event shall the rental rate be less than the highest Minimum
Annual Rent payable during the Lease Term for the original Leased Premises. In
addition, the Expansion Space shall be improved by Lessor, at Lessor's expense,
with improvements similar in quality to those in the Leased Premises. Lessee
shall be responsible for all expenses incurred by it in connection with its
relocation to the Expansion Space. If Lessee properly exercises its option to
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expand, Lessor and Lessee shall execute an amendment to the Lease reflecting the
terms and conditions of the expansion term twelve (12) months prior to the
commencement of the expansion term. In the event Lessor notifies Lessee that the
Expansion Space is not available for lease to Lessee, in Lessee's sole
discretion, this Expansion Option shall thereafter be null and void and this
Lease shall terminate at the end of its Term, or any extension option applicable
per Paragraph 2.
35. AMERICANS WITH DISABILITIES ACT. Lessor shall, at its sole cost and
expense, be responsible to modify the Premises to ensure that the Premises are
in full compliance with all applicable ADA and any other current and/or future
governmental requirements, including but not limited to, any and all state or
local codes promulgated in response to the ADA, provided ADA compliance is not
caused by the Lessee's actions, upgrades, occupancy or renovations.
36. ENVIRONMENTAL INDEMNITY OF LESSEE. Lessor represents and warrants
to Lessee that on the Commencement Date of this Lease, there are no
environmental conditions existing on the Premises which could give rise to any
environmental liability on the part of the Lessee; that all federal, state and
local requirements concerning environmental protection have been performed and
complied with by the Lessor; that there are no pending actions against the
Lessor under any environmental law; that the Lessor has not received notice of
any such action or possible action; and that there are no current or past
releases of hazardous waste or materials on the Premises which have not been
appropriately remedied.
Based on the foregoing representations and warranties, the Lessor
agrees to indemnify, defend and hold harmless the Lessee, its successors,
assigns, parent company, subsidiaries, officers, agents and employees from and
against any losses, claims, costs, causes of action, liabilities, damages or
expenses (including reasonable legal fees) relating to claims by governmental
agencies or third parties arising out of or relating to the use, storage,
disposal, discharge or emission (hereinafter "Occurrence") of contaminants or
hazardous, toxic, noxious or harmful substances arising from or resulting from
any environmental conditions which existed on the Premises prior to the
commencement date of this Lease or which shall occur thereafter (except as to
such an Occurrence which results as a consequence of the acts or omissions of
Lessee, its employees, agents or contractors) regardless of whether such
activities resulted from the conduct of the Lessor.
The parties acknowledge and agree that where the subject matter of
environmental compliance, liability, payment and indemnity may become a question
or issue under this Lease, it shall be the overriding intent of the parties that
the Lessee's liability shall be limited to those circumstances under which
Lessee has caused or created such environmental condition after the commencement
date of the Lessee's possession of the Premises."
WITNESS OUR HANDS AND SEALS ON THIS _________ DAY OF
_____________________, _______.
LESSOR: LESSEE:
PROCON, INC. GENIUS PRODUCTS, INC.
BURCKART PROPERTY LEASING
By: /S/ JOHN R. BURCKART By: / S/ KLAUS MOELLER
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Name: John R. Burckart Name: KLAUS MOELLER
Title: PROPERTY MANAGER Title: CEO
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EXHIBIT "A"
[Floorplan]
NO LONGER IS THIS A MIRROR IMAGE. SPACE LOCATION IS AS DRAWN.
For duration of lease terms, South Walton Plaza Communications
agrees to provide all digital phone equipment necessary.
/s/ JB
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