Exhibit 10.2
TRIPLE NET LEASE AGREEMENT
(2333 SOUTH DECATUR BOULEVARD)
BY AND BETWEEN
JRJ PROPERTIES,
A NEVADA GENERAL PARTNERSHIP
AND
JRJ INVESTMENTS, INC.
A NEVADA CORPORATION
DATED: NOVEMBER 1, 1997
TABLE OF CONTENTS
1. LEASE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 LIMITATION ON USES. . . . . . . . . . . . . . . . . . . . . . 1
2.3 COMPLIANCE WITH PERMITS . . . . . . . . . . . . . . . . . . . 1
3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3.1 COMMENCEMENT DATE . . . . . . . . . . . . . . . . . . . . . . 1
3.2 RENEWAL OPTIONS . . . . . . . . . . . . . . . . . . . . . . . 1
3.3 EXERCISE OF OPTIONS . . . . . . . . . . . . . . . . . . . . . 2
3.4 ACCEPTANCE OF PREMISES. . . . . . . . . . . . . . . . . . . . 2
4. BASE RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4.1 INITIAL BASE RENT . . . . . . . . . . . . . . . . . . . . . . 2
4.2 RENT ESCALATIONS. . . . . . . . . . . . . . . . . . . . . . . 3
4.3 OPTION RENT . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 PARTIAL MONTHS. . . . . . . . . . . . . . . . . . . . . . . . 4
4.5 NO OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . 5
7. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.1 RESTRICTION ON ALTERATIONS. . . . . . . . . . . . . . . . . . 5
7.2 REMOVAL AND SURRENDER OF FIXTURES AND TENANT ALTERATIONS. . . 6
8. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.1 PERSONAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . 7
8.2 REAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . 7
9. INSURANCE; WAIVER OF SUBROGATION. . . . . . . . . . . . . . . . . . 7
9.1 LIABILITY INSURANCE . . . . . . . . . . . . . . . . . . . . . 7
9.2 PROPERTY INSURANCE. . . . . . . . . . . . . . . . . . . . . . 7
9.3 POLICY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . 8
9.4 WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . 8
10. FIRE OR CASUALTY. . . . . . . . . . . . . . . . . . . . . . . . . . 8
11. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
i
11.1 TAKING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
11.2 TEMPORARY TAKING. . . . . . . . . . . . . . . . . . . . . . . 9
12. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . 9
12.1 PROHIBITION . . . . . . . . . . . . . . . . . . . . . . . . . 9
12.2 NO NOVATION . . . . . . . . . . . . . . . . . . . . . . . . . 10
12.3 JOINT AND SEVERAL OBLIGATIONS . . . . . . . . . . . . . . . . 10
13. LANDLORD'S RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . 10
14. INDEMNIFICATION AND LIMITATION ON LIABILITY . . . . . . . . . . . . 10
14.1 INDEMNITY BY TENANT . . . . . . . . . . . . . . . . . . . . . 10
14.2 LIMITATION ON LANDLORD'S LIABILITY. . . . . . . . . . . . . . 10
14.3 INDEMNITY BY LANDLORD . . . . . . . . . . . . . . . . . . . . 11
15. TRANSFER BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . . . 11
16. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
16.1 SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . 11
16.2 ATTORNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 11
16.3 NOTICE FROM TENANT. . . . . . . . . . . . . . . . . . . . . . 11
17. ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . 12
18. SURRENDER OF PREMISES AND REMOVAL OF PROPERTY . . . . . . . . . . . 12
18.1 NO MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . 12
18.2 SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . 12
18.3 DISPOSAL OF PROPERTY. . . . . . . . . . . . . . . . . . . . . 12
19. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 13
20.1 DEFAULTS BY TENANT. . . . . . . . . . . . . . . . . . . . . . 13
20.2 LANDLORD'S REMEDIES . . . . . . . . . . . . . . . . . . . . . 14
20.3 RE-ENTRY NOT TERMINATION. . . . . . . . . . . . . . . . . . . 15
20.4 DEFINITION OF TENANT. . . . . . . . . . . . . . . . . . . . . 15
21. INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGES. . . . . . . . . . . 15
21.1 INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
21.2 LATE CHARGE . . . . . . . . . . . . . . . . . . . . . . . . . 15
22. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ii
23. SIGNAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
24. TENANT'S RECOURSE . . . . . . . . . . . . . . . . . . . . . . . . . 16
25. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 16
25.1 NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . 16
25.2 LANDLORD'S RIGHT TO PERFORM . . . . . . . . . . . . . . . . . 16
25.3 TERMS; HEADINGS . . . . . . . . . . . . . . . . . . . . . . . 17
25.4 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 17
25.5 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . 17
25.6 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
25.7 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 18
25.8 TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . . . . . 18
25.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 18
25.10 ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . . 18
iii
LEASE SUMMARY
This lease summary is attached to the within lease for convenience of
reference only and shall in no way be considered a part of said lease or used in
the interpretation of any of the provisions contained therein.
DATE: November 1, 1997
LANDLORD: JRJ PROPERTIES
TENANT: JRJ INVESTMENTS, INC.
PREMISES: 2333 South Decatur Boulevard, Las Vegas, Nevada
TERM: Beginning on the Commencement Date and continuing for an
initial Lease Term of ten (10) years.
RENEWAL OPTIONS: Two (2) five (5)-year options.
COMMENCEMENT DATE: The date first set forth above.
BASE RENT (NET): Five Hundred Forty Thousand Dollars ($540,000) per annum.
RENT ESCALATIONS: CPI adjustments every two (2) years, with a maximum
adjustment of eight percent (8%) (i.e., four percent (4%)
per annum). On the first day of the first Option Term, Base
Rent is adjusted to the greater of (i) ten percent (10%) of
the fair market value of the Premises or (ii) the rent for
the last year of the initial Lease Term, increased by the
CPI adjustment.
LANDLORD'S ADDRESS: JRJ Properties
c/o Conway, Stuart & Woodbury
4021 Meadows Lane
Las Vegas, Nevada 89107
TENANT'S ADDRESS: 2333 South Decatur Boulevard
Las Vegas, Nevada 89102
Attn: President
iv
TRIPLE NET LEASE AGREEMENT
THIS LEASE is made and entered into as of this 1st day of November, 1997,
by and between JRJ PROPERTIES, a Nevada general partnership (the "LANDLORD") and
JRJ INVESTMENTS, INC., a Nevada corporation (the "TENANT").
1. LEASE OF PREMISES.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
that certain parcel of real property, consisting of approximately four and
83/100 (4.83) acres, located at 2333 South Decatur Boulevard, Las Vegas, Nevada
and specifically described in Exhibit "A" attached hereto and incorporated
herein by this reference, together with all improvements thereon and
appurtenances thereto (the "PREMISES"). The Premises do not include the signs
currently attached to or built on any part of the real property because such
signs have been purchased by, and remain the property of, Tenant.
2. PURPOSE.
2.1 USE. The use of the Premises shall be limited to the
operation of one or more motor vehicle dealerships with related amenities.
The Premises shall be used for no other purpose without the prior written
consent of Landlord, which consent shall not be unreasonably withheld.
2.2 LIMITATION ON USES. Tenant shall not use or occupy the
Premises, or permit the use or occupancy of the Premises, in any manner or
for any purpose which: (a) would violate any law or regulation of any
governmental authority, or the provisions of any applicable governmental
permit; or (b) would constitute waste or otherwise materially and adversely
affect the value of the Premises.
2.3 COMPLIANCE WITH PERMITS. Tenant shall procure and maintain
any license or permit required for the lawful conduct of its business or
other activity on the Premises, submit such license or permit for inspection
by Landlord, if so requested, and comply at all times with all terms and
conditions thereof. The lease of the Premises shall be subject to all
statutes, laws, ordinances and regulations applicable from time to time to
the use, occupancy or possession of the Premises.
3. TERM.
3.1 COMMENCEMENT DATE. The term of this Lease shall commence on
the date first set forth above (the "COMMENCEMENT DATE") and shall end on the
last day of the calendar month preceding the month in which the tenth annual
anniversary of the Commencement Date occurs, subject to the exercise of
Tenant's Renewal Options, unless sooner terminated pursuant hereto (the
"LEASE TERM").
3.2 RENEWAL OPTIONS. Landlord hereby grants the Tenant two (2)
separate options (collectively "RENEWAL OPTIONS") to extend the Lease Term
for periods of five (5) years each (the "OPTION TERMS"), which options shall
be exercisable only by written notice delivered by Tenant to Landlord,
provided that as of the date of delivery of such notice and as of the last
day of the initial Lease Term (or first Option Term, as applicable), no
uncured Event of Default exists. In no event shall Tenant be entitled to
exercise the second Renewal Option unless Tenant has properly and timely
exercised the first Renewal Option and in no event shall Tenant be entitled
to extend the Lease Term beyond the second Option Term.
3.3 EXERCISE OF OPTIONS.
3.3.1 The first Renewal Option shall be exercised by
Tenant, if at all, only in the following manner: (i) Tenant may deliver
written notice ("INTEREST NOTICE") to Landlord not less than eight (8) months
prior to the expiration of the initial Lease Term stating that Tenant is
interested in exercising its option; (ii) Landlord, after receipt of the
Interest Notice (if such notice is given), shall deliver notice (the "FAIR
MARKET VALUE NOTICE") to Tenant on or before seven (7) months prior to the
expiration of the initial Lease Term, which Fair Market Value Notice shall
set forth Landlord's opinion of the Fair Market Value of the Premises, and
(iii) if Tenant wishes to exercise the first Renewal Option, Tenant shall, on
or before the date occurring six (6) months prior to the expiration of the
initial Lease Term, exercise the option by delivering written notice thereof
to Landlord, and upon, and concurrent with, such exercise, Tenant may, at its
option, object to the Fair Market Value contained in Landlord's Fair Market
Value Notice, in which case the parties shall follow the procedure, and the
Fair Market Value shall be determined, as set forth in Sections 4.3.1 and
4.3.2 below. If Tenant fails to provide the Interest Notice pursuant to (i)
above, Tenant shall not lose its rights pursuant to (iii) above and Landlord
shall not have to provide the Fair Market Value Notice pursuant to (ii)
above, and instead the Fair Market Value shall be determined pursuant to
Sections 4.3.1 and 4.3.2 below. If Tenant provides the Interest Notice and
Landlord responds with the Fair Market Value Notice and Tenant exercises the
Renewal Option but does not object to the Fair Market Value contained in
Landlord's Fair Market Value Notice as provided in Subsection 3.3.1(iii)
above, the Fair Market Value shall be as set forth in Landlord's Fair Market
Value Notice.
3.3.2 Tenant's second Renewal Option shall be exercised,
if at all, by written notice to Landlord not less than eight (8) months prior
to the expiration of the initial Option Term.
3.4 ACCEPTANCE OF PREMISES. By entering into possession of the
Premises or any part thereof, Tenant shall be presumptively deemed to have
accepted the Premises and to have agreed that the Premises are in
satisfactory condition and in full compliance with the requirements of this
Lease as of the date of such possession. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty
with respect to the Premises, including without limitation, any
representation or warranty with respect to the suitability or fitness of the
Premises for the conduct of Tenant's business.
2
4. BASE RENT.
The basic annual rent payable to Landlord ("BASE RENT") shall be as
set forth in this Article 4.
4.1 INITIAL BASE RENT. Tenant shall pay Landlord Base Rent for
the Premises in the amount of Five Hundred Forty Thousand Dollars ($540,000)
per annum. Such initial Base Rent shall be payable in twelve (12) equal
monthly installments of Forty-Five Thousand Dollars ($45,000), each
installment being payable in advance on the first day of each calendar month
beginning on the Commencement Date and continuing throughout the term of this
Lease.
4.2 RENT ESCALATIONS. Beginning upon the first day of the
calendar month in which the second annual anniversary of the Commencement
Date occurs, and on the same date of every second year thereafter during the
Lease Term (subject to Section 4.3 below) (each such date being referred to
herein as an "ADJUSTMENT DATE"), the Base Rent shall be increased, but not
decreased, to reflect increases in the Consumer Price Index for All Urban
Consumers, all items, (1982-84=100), issued by the United States Department
of Labor for Los Angeles-Anaheim-Riverside, California, or any renamed local
index covering generally the same metropolitan area or any successor or
substitute index appropriately adjusted (hereinafter, the "INDEX"). Each
such increase pursuant to this Section 4.2 shall be calculated by multiplying
the initial Base Rent set forth in Section 4.1 above by a fraction, the
denominator of which shall be the Index for the month preceding the
Commencement Date (the "BASE INDEX") and the numerator of which shall be the
Index for the month preceding the Adjustment Date (the "ADJUSTMENT INDEX").
In no event shall Base Rent be increased pursuant to this Section 4.2 by more
than four percent (4%) per annum. Each adjustment hereunder shall be made as
soon as reasonably possible after the Adjustment Index becomes available
(provided that no delay in making any adjustment shall constitute a waiver of
Landlord's right to require that Tenant pay the adjusted Base Rent), and
Tenant shall begin paying the adjusted Base Rent upon the first regularly
scheduled rent payment date which is at least fifteen (15) days after notice
of the adjustment is given by Landlord. Tenant's first payment of the
adjusted Base Rent hereunder shall include any amounts which are necessary
to retroactively adjust Base Rent from the Adjustment Date through such first
date of payment.
4.3 OPTION RENT. The Base Rent payable by Tenant shall be
adjusted upon the commencement of the first Option Term to the greater of (i)
ten percent (10%) per annum of the then "FAIR MARKET VALUE" for the Premises
as of the commencement date of the first Option Term; or (ii) the Base Rent
which would otherwise be payable as a result of the adjustment required by
Section 4.2 above, with the commencement of the first Option Term being the
Adjustment Date for purposes of the computation of such adjustment. The term
"FAIR MARKET VALUE" for the purposes of this Lease shall mean the amount that
a willing seller would accept and a willing, unrelated buyer would pay for
the Premises, without taking into account the need for any repair or
restoration which is the obligation of Tenant pursuant to this Lease.
Beginning upon the second annual anniversary of the commencement of the first
Option Term, and every two (2) years thereafter throughout the first Option
Term and the second Option Term, if any, the Base Rent payable by Tenant
shall be
3
adjusted in the manner described in Section 4.2 above.
4.3.1 DETERMINATION OF FAIR MARKET VALUE. In the event
Tenant timely and appropriately objects to the Fair Market Value Notice, or in
the event Tenant timely exercises its first Renewal Option without first
delivering an Interest Notice to Landlord, Landlord and Tenant shall attempt to
agree upon the Fair Market Value. If Landlord and Tenant fail to reach
agreement within thirty (30) days following Tenant's objection to the Fair
Market Value Notice or within thirty (30) days following Tenant's exercise of
the Renewal Option in the event Tenant does not deliver an Interest Notice (the
"OUTSIDE AGREEMENT DATE"), then each party shall place in a separate sealed
envelope their final proposal as to Fair Market Value and such determination
shall be submitted to arbitration in accordance with Section 4.3.2 below,
provided that Landlord's determination of Fair Market Value shall not be less
favorable to Tenant than that specified in Landlord's Fair Market Value Notice
(if applicable).
4.3.2 ARBITRATION.
(a) Landlord and Tenant shall meet with each other
within five (5) business days of the Outside Agreement Date and exchange the
sealed envelopes and then open such envelopes in each other's presence. If
Landlord and Tenant do not mutually agree upon the Fair Market Value within
five (5) business days of the exchange and opening of envelopes, then, within
ten (10) business days of such exchange Landlord and Tenant shall agree upon
and jointly appoint a single arbitrator who shall be an M.A.I. real estate
appraiser who shall have been active over the five year period ending on the
date of such appointment in the appraisal of commercial projects in the Las
Vegas Valley. Neither Landlord nor Tenant shall consult with such appraiser
as to his or her opinion as to Fair Market Value prior to the appointment.
The determination of the arbitrator shall be limited solely to the issue of
whether Landlord's or Tenant's submitted Fair Market Value for the Premises
is the closest to the actual Fair Market Value for the Premises as determined
by the arbitrator, taking into account the requirements of this Section 4.3
regarding the same. The arbitrator may hold such hearings and require such
briefs as the arbitrator, in his or her sole discretion, determines to be
necessary. In addition, Landlord or Tenant may submit to the arbitrator,
with a copy to the other party, within five (5) business days after the
appointment of the arbitrator, any market data and additional information
that such party deems relevant to the determination of the Fair Market Value
("FMV DATA") and the other party may submit a reply in writing within five
(5) business days after receipt of such FMV Data.
(b) The arbitrator shall, within thirty (30) days
of his or her appointment, reach a decision as to whether the parties shall
use Landlord's or Tenant's submitted Fair Market Value, and shall notify
Landlord and Tenant thereof.
(c) The decision of the arbitrator shall be binding
upon Landlord and Tenant.
(d) If Landlord and Tenant fail to agree upon and
appoint an
4
arbitrator, then the appointment of the arbitrator shall be made by the
Presiding Judge of the District Court of Clark County, Nevada, or, if he or
she refuses to act, by any judge having jurisdiction over the parties.
(e) The cost of arbitration shall be paid by
Landlord and Tenant equally.
4.4 PARTIAL MONTHS. If the Term begins on a day other than the
first day of a calendar month, or ends on a day other than the last day of a
calendar month, Base Rent for such beginning or ending month shall be
prorated based upon the number of days in such month.
4.5 NO OFFSET. Base Rent, together with all other sums due
hereunder (herein called "ADDITIONAL RENT"), shall be paid to the Landlord
without deduction or offset of any kind, and in advance and without demand
(except as otherwise herein expressly provided) in lawful money of the United
States in care of Conway, Stuart & Woodbury, 4021 Meadows Lane, Las Vegas,
Nevada 89107 or such other location or to such other person as Landlord may
from time to time designate in writing. The Base Rent and Additional Rent
may sometimes be referred to herein collectively as the "RENT." Except as
specifically set forth in this Lease, (i) the rent shall be absolutely net to
Landlord, and (ii) under no circumstances or conditions shall Landlord be
expected or required to make any payment of any kind whatsoever or be under
any other obligation or liability hereunder.
5. UTILITIES.
Tenant shall be solely responsible for and promptly pay all charges
for telephone, electric, gas, sewer, water and all other services and utilities
used or consumed on the Premises. If any such charges are billed to the
Landlord, then Tenant shall make payment in the full amount billed to Landlord
within fifteen (15) days after written demand from Landlord.
6. MAINTENANCE AND REPAIRS.
Tenant shall, at Tenant's sole expense, keep the Premises and every
part thereof (including, without limitation, the roof and structural elements
of the Premises, plate glass, all electrical, plumbing, water, sewer and life
safety systems of the Premises, and the parking areas, driveways and
landscaping areas of the Premises) clean and in good condition and repair and
in compliance with all applicable laws and regulations, at all times during
the Lease Term. Except as specifically provided herein, Landlord shall have
no obligation to modify, alter, remodel, improve or repair the Premises or
any part thereof. Notwithstanding the foregoing, (i) Tenant's obligation with
respect to the roof, structural elements and parking areas of the Premises
shall be limited to maintenance and repair work, and, except as provided in
Article 10 (Fire or Casualty), Tenant shall have no obligation to replace
such items (such replacement, subject to Article 10, being the responsibility
of Landlord if and to the extent required); and (ii) Tenant shall be required
to alter the Premises to comply with applicable laws and regulations only to
the extent that the required
5
alteration is not generally applicable to all similar structures within the
applicable jurisdiction but is instead made necessary by either (A) some
other alteration proposed by Tenant; or (B) Tenant's specific use of the
Premises. Any other alterations which are required by applicable law or
regulation shall be performed by Landlord, provided that the cost of such
work shall be amortized over the useful life of the alteration and that
portion of such amortized cost which is allocable to the Lease Term shall be
passed through to and paid by Tenant monthly as Additional Rent.
7. ALTERATIONS.
7.1 RESTRICTION ON ALTERATIONS. Tenant may make no alteration,
repairs, additions or improvements in, to or about the Premises
(collectively, "TENANT ALTERATIONS") without the prior written consent of
Landlord, and Landlord may impose as a condition to such consent such
reasonable requirements as Landlord may deem necessary or desirable (provided
that Landlord's consent shall not be required with respect to nonstructural
alterations costing less than Twenty-Five Thousand Dollars ($25,000)).
Tenant shall pay to Landlord, Landlord's reasonable charges for reviewing and
inspecting all Tenant Alterations to assure full compliance with all of
Landlord's requirements. Landlord does not expressly or implicitly covenant
or warrant that any plans or specifications submitted by Tenant are safe or
that the same comply with any applicable laws, ordinances, codes, rules or
regulations. Further, Tenant shall indemnify, protect, defend and hold
Landlord harmless from any loss, cost or expense, including attorneys' fees
and costs, incurred by Landlord as a result of any defects in design,
materials or workmanship resulting from Tenant Alterations. Tenant shall
promptly pay all costs incurred in connection with all Tenant Alterations and
shall not permit the filing of any mechanic's lien or other lien in
connection with any Tenant Alterations. If a mechanic's lien or other lien
is filed against the Premises, Tenant shall discharge or cause to be
discharged (by bond or otherwise) such lien within thirty (30) days after
Tenant receives notice of the filing thereof and shall not allow any such
lien to be foreclosed upon. Tenant shall have the right to contest any
mechanics' lien so long as Tenant posts the bond required to remove the lien
from the Premises within the aforementioned thirty (30) day period. If a
mechanic's lien or other lien is filed against the Premises and Tenant fails
to timely discharge (by bond or otherwise) such lien, Landlord may, without
waiving its rights and remedies based on such breach of Tenant and without
releasing Tenant from any of its obligations, cause such lien to be released
by any means it shall deem proper, including payment in satisfaction of the
claim giving rise to such lien. Tenant shall pay to Landlord within thirty
(30) days following notice by Landlord, any sum paid by Landlord to remove
such liens, together with interest at the Reference Rate, as defined in
Section 20.2 below, plus two percent (2%) per annum, from the date of such
payment by Landlord. Any increase in any tax, assessment or charge levied or
assessed as a result of any Tenant Alterations shall be payable by Tenant.
7.2 REMOVAL AND SURRENDER OF FIXTURES AND TENANT ALTERATIONS.
All Tenant Alterations and other work or improvements installed in the
Premises which are attached to, or built into the Premises so that the same
may not be removed without substantial damage to the Premises, including,
without limitation, floor coverings, wall coverings, paneling, molding, doors
(including garage doors), vaults, plumbing systems, electrical systems,
mechanical systems, lighting systems,
6
built-in communication systems and cabling and outlets for the systems
mentioned above and for all telephone, radio, computer and television
purposes, and any special flooring or ceiling installations, shall become the
property of Landlord and shall be surrendered with the Premises, as a part
thereof, at the end of the Lease Term; provided that Landlord may, as a
condition to approving any proposed alteration, require that such alteration
be removed by Tenant upon the end of the Lease Term. Any articles of
personal property including business and trade fixtures not attached to, or
built into, the Premises, machinery and equipment, free-standing cabinet
work, and movable partitions, which were installed by Tenant in the Premises
at Tenant's sole expense and which were not installed in connection with a
credit or allowance granted by Landlord or in replacement for an item which
Tenant would not have been entitled to remove, shall be and remain the
property of Tenant and may be removed by Tenant at any time during the Lease
Term as long as Tenant is not in default hereunder and provided that Tenant
repairs any material damage to the Premises caused by such removal. For
purposes of the insurance requirements of Section 9.2, Tenant shall be deemed
to have an insurable interest in all Tenant Alterations in the Premises, as
between Landlord and Tenant, but the same shall be surrendered with the
Premises on termination of this Lease, as set forth above.
8. TAXES.
8.1 PERSONAL PROPERTY TAXES. At least ten (10) days prior to
delinquency, Tenant shall pay all taxes levied or assessed upon Tenant's
equipment, furniture, fixtures and other personal property located in or
about the Premises. If the assessed value of Landlord's property is
increased by the inclusion therein of a value placed upon Tenant's equipment,
furniture, fixtures or other personal property, Tenant shall pay Landlord,
upon written demand, the taxes so levied against Landlord, or the proportion
thereof resulting from said increase in assessment.
8.2 REAL PROPERTY TAXES. Tenant shall pay all real estate
taxes, assessments (special or otherwise) and charges levied upon or with
respect to the Premises; provided that any assessments shall be prorated so
that only that portion of the assessment that is properly allocable to the
Lease Term shall be payable by Tenant. Landlord, at Landlord's option, may
pay such taxes to the taxing authority, in which event Tenant shall reimburse
Landlord for all such payments within ten (10) days after written demand
therefor from Landlord, or Landlord may provide Tenant with the billing from
the taxing authority, in which event Tenant shall pay the taxes directly and
provided proof of such payment to Landlord not later than ten (10) days prior
to delinquency.
9. INSURANCE; WAIVER OF SUBROGATION.
9.1 LIABILITY INSURANCE. Tenant shall at all times during the
Lease Term and at its own cost and expense procure and continue workers'
compensation insurance and bodily injury liability and property damage
liability insurance adequate to protect Landlord against liability for injury
to or death of any person or damage to property in connection with the use,
operation or condition of the Premises. The limits of liability under the
workers' compensation insurance policy shall be at least equal to the
statutory requirements therefor and the limits of liability under the
7
Employer's Liability Insurance policy carried by Tenant shall be at least One
Million Dollars ($1,000,000). The general liability insurance for
non-employees and for damage to property at all times shall be in an amount
of not less than Five Million Dollars ($5,000,000), Combined Single Limit,
for injuries to persons and property damage. Not more frequently than once
each two (2) years, if, in the opinion of Landlord or Landlord's lender(s),
the amount of public liability and property damage insurance coverage at that
time is not adequate, Tenant shall increase the insurance coverage as
reasonably required by either Landlord or Landlord's lender(s).
9.2 PROPERTY INSURANCE. Tenant, at its sole cost and expense,
shall at all times during the Lease Term maintain in effect policies of
insurance covering (i) the Premises and all improvements and fixtures thereto
(including plate glass), (ii) all leasehold improvements (including any
Tenant Alterations), and (iii) all trade fixtures, merchandise and other
personal property from time to time in, on or upon the Premises, all in an
amount not less than one hundred percent (100%) of their actual replacement
cost from time to time during the term of this Lease, providing protection
against any peril included within the classification "Fire and Extended
Coverage," together with insurance against sprinkler damage (if applicable),
vandalism and malicious mischief and water damage caused by plumbing leakage
or failure. Subject to the requirements of Landlord's lender(s), the
proceeds of such insurance, so long as this Lease remains in effect, shall be
used for the repair or replacement of the property so insured. The full
replacement cost of the items to be insured under this Section 9.2 shall be
determined by the company issuing the insurance policy at the time the policy
is initially obtained, and shall be increased as reasonably requested by
Landlord or Landlord's lender(s) from time to time.
9.3 POLICY REQUIREMENTS. All insurance required to be carried
by Tenant hereunder shall be issued by responsible insurance companies,
qualified to do business in the State of Nevada and reasonably acceptable to
Landlord. Insurance companies rated A-9 or better by Best's Insurance Reports
shall be deemed acceptable. Each policy shall have a deductible or
deductibles, if any, which are no greater than those maintained by similarly
situated tenants. Each liability policy shall name Landlord as additional
insured and each property insurance policy shall name Landlord and Landlord's
lender(s) as loss payee with respect to the Premises and all Tenant
Alterations and copies of all policies, together with certificates evidencing
the existence and amounts of such insurance, shall be delivered to Landlord
by Tenant at least five (5) days prior to Tenant's occupancy of any portion
of the Premises. No such policy shall be cancelable except after thirty (30)
days written notice to Landlord. Tenant shall, at least thirty (30) days
prior to the expiration of any such policy, furnish Landlord with renewals or
"binders" thereof, or Landlord may order such insurance and charge the cost
thereof to Tenant, which amount shall be paid by Tenant upon demand. Any
policy may be carried under so-called "blanket coverage" form of insurance
policies, provided any such blanket policy specifically provides that the
amount of insurance coverage required hereunder shall in no way be prejudiced
by other losses covered by the policy. Neither the issuance of any such
insurance policy nor the minimum limits specified in this Article 9 shall be
deemed to limit or restrict in any way Tenant's liability arising under or
out of this Lease.
9.4 WAIVER OF SUBROGATION. Landlord and Tenant waive their
respective right
8
of recovery against the other for any direct or consequential damage to the
property of the other, including, without limitation, its interest in the
Premises, by fire or other casualty to the extent such damage is insured
against under a policy or policies of insurance. Each such insurance policy
carried by either Landlord or Tenant shall include such a waiver of the
insurer's rights of subrogation. Such waiver shall in no way be construed or
interpreted to limit or restrict any indemnity or other waiver made by Tenant
or Landlord under the terms of this Lease with respect to any uninsured loss.
10. FIRE OR CASUALTY.
(a) If any portion of the Premises is damaged by fire or other
casualty, and the insurance proceeds paid with respect to such fire or
casualty are made available to fund the cost of the restoration, Tenant shall
repair such damage with reasonable diligence and in a manner consistent with
the provisions of any Underlying Mortgage, as hereinafter defined. All such
insurance proceeds shall be held in a construction control account which is
acceptable to Landlord and to the holder of any Underlying Mortgage and shall
be disbursed to pay the costs of such repair.
(b) If the whole of the Premises, or such part thereof as shall
prevent Tenant's continuation of the operation of its business therein, shall
be damaged by fire or other casualty, and PROVIDED: (i) Tenant is not in
default beyond any cure period in any of its obligations hereunder, (ii) the
insurance proceeds paid with respect to such fire and casualty are not made
available to Tenant to fund the cost of the restoration, and (iii) Tenant
does not have "business interruption" or "business continuation" insurance,
Base Rent shall be abated until such time as Landlord completes the
restoration of the improvements to their condition immediately prior to the
fire or other casualty.
11. EMINENT DOMAIN.
11.1 TAKING. In case the whole of the Premises, or such part
thereof as shall substantially interfere with Tenant's use and occupancy
thereof, shall be taken by any lawful power or authority by exercise of the
right of eminent domain, or sold to prevent such taking, within sixty (60)
days of receipt of notice of such taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to said authority. Tenant shall not because of such taking
assert any claim against Landlord for any compensation because of such
taking, and Landlord shall be entitled to receive the entire amount of any
award without deduction for any estate or interest of Tenant, provided,
however, that Tenant shall be entitled to seek a separate award from the
condemning authority to compensate Tenant for Tenant's moving expenses,
business dislocation damages, Tenant's personal property and fixtures and any
other award that would not reduce the award payable to Landlord.
11.2 TEMPORARY TAKING. If all or any portion of the Premises are
condemned or otherwise taken for public or quasi-public use for a limited
period of time of not more than six (6) months, this Lease shall remain in
full force and effect and Tenant shall continue to perform all of the terms,
conditions and covenants of this Lease, except that the Base Rent shall be
abated in proportion to the area of the Premises which is unusable by Tenant
during such temporary taking.
9
Tenant shall be entitled to receive the entire award made in connection with
any temporary condemnation or other taking attributable to any period within
the Lease Term. Landlord shall be entitled to the entire award for any such
temporary condemnation or other taking which relates to a period after the
expiration of the Lease Term. If any such temporary condemnation or other
taking terminates prior to the expiration of the Lease Term, Tenant shall
restore the Premises as nearly as possible to the condition prior to the
condemnation or other taking, at Tenant's sole cost and expense; provided
that Tenant shall receive the portion of the award attributable to such
restoration.
12. ASSIGNMENT AND SUBLETTING.
12.1 PROHIBITION. Tenant acknowledges that the economic
concessions and rental rates set forth in this Lease were negotiated by
Landlord and Tenant in consideration of, and would not have been granted by
Landlord but for, the specific nature of the leasehold interest granted to
Tenant hereunder, as such interest is limited and defined by various
provisions throughout this Lease, including, but not limited to, the
provisions of this Article 12 which define and limit the transferability of
such leasehold interest. Tenant further acknowledges and agrees that the
leasehold estate granted to Tenant hereunder is not a transferable interest
in property, and Landlord hereby reserves the right to receive any increased
rental value of the Premises during the Lease Term as the same may be
realized by any transfer of said estate. Tenant shall not directly or
indirectly, voluntarily or involuntarily assign, mortgage or otherwise
encumber all or any portion of its interest in this Lease or in the Premises
(collectively, "ASSIGNMENT") or permit the Premises to be occupied by anyone
other than Tenant or Tenant's employees or sublet the Premises (collectively,
"SUBLEASE") or any portion thereof without obtaining the prior written
consent of Landlord, which consent shall not be unreasonably withheld, and
any such attempted assignment, subletting, mortgage or other encumbrance
without such consent shall be null and void and of no effect. The acceptance
of rent by Landlord from any other person shall not be deemed to be a waiver
by Landlord of any provision of this Lease or to be a consent to any
Assignment or Sublease. If Tenant is a corporation, an unincorporated
association, a limited liability company or a partnership, any transfer,
assignment or hypothecation of any stock or interest in such corporation,
association, limited liability company or partnership which results in a
change in the effective control of such entity (such as a change of the
general partner or a change in the ownership of the general partner of a
limited partnership), shall be deemed an Assignment of this Lease.
12.2 NO NOVATION. No Assignment or Sublease shall relieve Tenant
of its obligation to pay the rent and to perform all of the other obligations
to be performed by Tenant hereunder.
12.3. JOINT AND SEVERAL OBLIGATIONS. Each assignee shall assume
all obligations of Tenant under this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of the rent, and for the
performance of all of the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed for the Lease Term, including any
Option Terms. No Assignment shall be binding on Landlord unless the assignee
or Tenant shall deliver to Landlord a counterpart of the Assignment which
contains a covenant of assumption by the
10
assignee reasonably satisfactory in substance and form to Landlord consistent
with the requirements of this Article 12, but the failure of refusal of the
assignee to execute such instrument of assumption shall not release or
discharge the assignee from its liability as set forth above.
13. LANDLORD'S RIGHT OF ENTRY.
Landlord and its agents and representatives shall have the right,
at all reasonable times, but in such manner as to cause as little disturbance
to Tenant as reasonably practicable, to enter the Premises for purposes of
inspection, to post notices of non-responsibility and to otherwise protect
the interests of Landlord in the Premises.
14. INDEMNIFICATION AND LIMITATION ON LIABILITY.
14.1 INDEMNITY BY TENANT. As a material part of the
consideration to the Landlord for entering into this Lease, Tenant hereby
assumes all risk of, and Tenant shall indemnify, protect, defend and hold
harmless Landlord, its trustees, beneficiaries, agents and employees from and
against any and all claims, suits, demands, liability, damages and expenses,
including reasonable attorneys' fees and costs, arising from or in connection
with Tenant's use or alteration of the Premises or the conduct of its
business or from any activity performed or permitted by Tenant in or about
the Premises during the Lease Term or arising from any breach or default in
the performance of any obligation on Tenant's part to be performed under the
terms of this Lease, or from any other act, neglect, fault or omission of
Tenant or any of its officers, agents, directors, contractors, employees,
licensees or invitees.
14.2 LIMITATION ON LANDLORD'S LIABILITY. Except to the extent
caused by the negligent or wrongful acts of Landlord, in no event shall
Landlord be liable to Tenant for any injury to any person in or about the
Premises or damage to the Premises or for any loss, damage or injury to any
property of Tenant therein, including without limitation, any damage, injury
or loss caused by any malfunction of any utility or other equipment,
installation or system, or by the rupture, leakage or overflow of any
plumbing or other pipes, including without limitation, water, steam and
refrigeration lines, sprinklers, tanks, drains or similar cause in, about or
upon the Premises.
14.3 INDEMNITY BY LANDLORD. Landlord shall indemnify, protect,
defend and hold harmless Tenant and its officers, directors, shareholders,
agents and employees from and against any and all claims, suits, demands,
liability, damages and expenses, including attorneys' fees and costs, arising
from (i) Landlord's breach of its obligations under this Lease; or (ii) the
negligent or wrongful acts of Landlord or its agents or employees, whether
occurring during the Lease Term, prior to the Commencement Date, or after
the expiration or earlier termination of this Lease.
15. TRANSFER BY LANDLORD.
Landlord has the absolute right to transfer all or a part of its
interest in this Lease to any successor. In the event of any sale or other
transfer of Landlord's interest in the Premises, other
11
than a transfer for security purposes only, Landlord shall be automatically
relieved of any and all obligations and liabilities on the part of Landlord
accruing from and after the date of such transfer; provided the transferee of
such interest assumes Landlord's obligations under this Lease.
16. SUBORDINATION.
16.1 SUBORDINATION. This Lease is subject and subordinate to all
mortgages, trust deeds and ground leases (the "UNDERLYING MORTGAGES") which
may now or hereafter be executed affecting the Premises and to all renewals,
modifications, consolidations, replacements and extensions of any such
Underlying Mortgages, provided that the subordination of this Lease to
Underlying Mortgages which are executed after the Commencement Date shall be
effective if, but only if, the holder of the Underlying Mortgage enters into
a commercially reasonable non-disturbance agreement in favor of Tenant.
Tenant shall execute promptly any certificate or document that Landlord may
reasonably request to effectuate, evidence or confirm such subordination.
16.2 ATTORNMENT. If Landlord's interest in the Premises is sold
or conveyed upon the exercise of any remedy provided for in any Underlying
Mortgage, or otherwise by operation of law then, subject to the terms of any
applicable non-disturbance agreement: (a) this Lease will not be affected in
any way and Tenant will attorn to and recognize the new owner as Tenant's
Landlord under this Lease, and Tenant will confirm such attornment in writing
within ten (10) days after request (Tenant's failure to do so will constitute
a material breach of this Lease); and (b) the new owner shall not be (i)
liable for damages for any act or omission of Landlord under this Lease
occurring prior to such sale or conveyance, or (ii) subject to any offset,
abatement or reduction of rent because of any default of Landlord under this
Lease occurring prior to such sale or conveyance, unless Tenant has given the
Lender written notice of such offset, abatement or reduction.
16.3 NOTICE FROM TENANT. Tenant shall give written notice to the
holder of any Underlying Mortgage whose name and address have been previously
furnished to Tenant of any act or omission by Landlord which Tenant asserts
as giving Tenant the right to terminate this Lease or to claim a partial or
total eviction or any other right or remedy under this Lease or provided by
law.
17. ESTOPPEL CERTIFICATES.
Landlord and Tenant shall at any time and from time to time upon
not less than fifteen (15) days prior notice by the other party, execute,
acknowledge and deliver to the requesting party a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), the dates to which the Base Rent and
other charges have been paid in advance, if any, stating whether or not to
the best knowledge of the certifying party, the requesting party is in
default in the performance of any covenant, agreement or condition contained
in this Lease and, if so, specifying each such default of which the
certifying party may have knowledge and containing any other information and
certifications which reasonably may be requested by the requesting party
12
or the holder of any Underlying Mortgage. Any such statement delivered by
Tenant pursuant to this Article 17 may be relied upon by any prospective
purchaser of the fee of the Premises or any mortgagee, ground lessor or other
like encumbrancer thereof or any assignee of any such encumbrancer upon the
Premises.
18. SURRENDER OF PREMISES AND REMOVAL OF PROPERTY.
18.1 NO MERGER. The voluntary or other surrender of this Lease
by Tenant, a mutual cancellation or a termination hereof, shall not
constitute a merger, and shall, at the option of Landlord, terminate all or
any existing subleases or shall operate as an assignment to Landlord of any
or all subleases affecting the Premises.
18.2 SURRENDER OF PREMISES. Upon the expiration of the Lease
Term, or upon any earlier termination hereof, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order and condition as the
Premises are now or hereafter may be improved by Landlord or Tenant,
reasonable wear and tear and casualty which is not to be restored by Tenant
pursuant to this Lease excepted, and shall, without expense to Landlord,
remove or cause to be removed from the Premises, all debris and rubbish, all
furniture, equipment, business and trade fixtures, free-standing cabinet
work, movable partitioning and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises, and
all similar articles of any other persons claiming under Tenant unless
Landlord exercises its option to have any subleases or subtenancies assigned
to Landlord, and Tenant shall repair all material damage to the Premises
resulting from such removal.
18.3 DISPOSAL OF PROPERTY. In the event of the expiration of
this Lease or other re-entry of the Premises by Landlord as provided in this
Lease, any property of Tenant not removed by Tenant upon the expiration of
the term of this Lease, or within five (5) days after a termination by reason
of Tenant's default, shall be considered abandoned and Landlord may remove
any or all of such property and dispose of the same in any commercially
reasonable manner or store the same in a public warehouse or elsewhere for
the account of, and at the expense and risk of, Tenant. If Tenant shall fail
to pay the costs of storing any such property after it has been stored for a
period of thirty (30) days or more, Landlord may sell any or all of such
property at public or private sale, in such manner and at such places as
Landlord, in its reasonable discretion, may deem proper, with notice to
Tenant. In the event of such sale, Landlord shall apply the proceeds
thereof, first, to the cost and expense of sale, including reasonable
attorneys' fees; second, to the repayment of the cost of removal and storage;
third, to the repayment of any other sums which may then or thereafter be due
to Landlord from Tenant under any of the terms of this Lease; and fourth, the
balance, if any, to Tenant.
13
19. HOLDING OVER.
In the event Tenant holds over after the expiration of the Lease
Term, with or without the express or implied consent of Landlord, such
tenancy shall be from month-to-month only, and not a renewal hereof or an
extension for any further term, and such month-to-month tenancy shall be
subject to each and every term, covenant and agreement contained herein;
provided, however, that Tenant shall pay as Base Rent during any holding over
period, an amount equal to one hundred fifty percent (150%) of the Base Rent
payable immediately preceding the expiration of the Lease Term. Nothing in
this Article 19 shall be construed as a consent by Landlord to any holding
over by Tenant and Landlord expressly reserves the right to require Tenant to
surrender possession of the Premises upon the expiration of the Lease Term or
upon the earlier termination hereof and to assert any remedy in law or equity
to evict Tenant and/or collect damages in connection with such holding over.
20. DEFAULTS AND REMEDIES.
20.1 DEFAULTS BY TENANT. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Tenant:
(a) The failure by Tenant to pay the rent hereunder as and
when due where such failure continues for five (5) days after notice thereof
by Landlord to Tenant; provided, however, that such notice shall be in lieu
of and not in addition to any notice required under Nevada law.
(b) The abandonment or vacation of the Premises by Tenant.
(c) The failure by Tenant to provide estoppel certificates
as herein provided.
(d) The failure by Tenant to observe or perform any other
provision of this Lease where such failure continues for thirty (30) days
after notice thereof by Landlord to Tenant; provided, however, that if the
nature of such default is such that the same cannot reasonably be cured
within such thirty (30) day period, Tenant shall not be deemed to be in
default if Tenant shall within such period commence such cure and thereafter
diligently prosecute the same to completion.
(e) Any action taken by or against Tenant pursuant to any
statute pertaining to bankruptcy or insolvency or the reorganization of
Tenant (unless, in the case of a petition filed against Tenant, the same is
dismissed within ninety (90) days); the making by Tenant of any general
assignment for the benefit of creditors; the appointment of a trustee or
receiver to take possession of all or any portion of Tenant's assets located
at the Premises or of Tenant's interest in this Lease, where possession is
not restored to Tenant within ninety (90) days; or the attachment, execution,
or other judicial seizure of all or any portion of Tenant's assets located at
the Premises
14
or of Tenant's interest in this Lease, where such seizure is not discharged
within ninety (90) days.
(f) Tenant's failure to vacate and surrender the Premises
as required by this Lease upon the expiration of the Lease Term or
termination of this Lease.
20.2 LANDLORD'S REMEDIES.
(a) In the event of any such default by Tenant, then, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving Tenant fifteen (15) days written notice
of such election to terminate. In the event Landlord shall elect to so
terminate this Lease, Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid
rent which has been earned at the time of such termination; plus
(ii) the worth at the time of award of any amount by
which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus
(iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of the award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; plus
(iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom; and
(v) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law.
(b) All "rent" (as defined in Section 4.5) shall be
computed on the basis of the monthly amount thereof payable on the date of
Tenant's default, as the same are to be adjusted thereafter as contemplated
by this Lease. As used in paragraphs (i) and (ii) above, the "worth at the
time of award" is computed by allowing interest in the per annum amount equal
to the prime rate of interest or other equivalent reference rate from time to
time announced by the Bank of America National Trust and Savings Association
(the "REFERENCE RATE") plus two percent (2%), but in no event in excess of
the maximum interest rate permitted by law. As used in paragraph (iii)
above, the "worth at the time of award" is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).
(c) In the event of any such default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and
15
property therefrom by summary proceedings or otherwise; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for
the account of Tenant.
(d) In the event of the vacation or abandonment of the
Premises by Tenant, or in the event that Landlord elects to re-enter as
provided in Paragraph (c) above or takes possession of the Premises pursuant
to legal proceeding or pursuant to any notice provided by law, and if
Landlord does not elect to terminate this Lease, then Landlord may from time
to time, without terminating this Lease, either recover all rent as it
becomes due or relet the Premises or any part thereof for such term or terms
and at such rent and upon such other terms and conditions as Landlord, in its
sole discretion, may deem advisable, with the right to make reasonable
alterations and repairs to the Premises. Nothing contained herein shall
affect Landlord's obligation under law to use its reasonable efforts to
mitigate its damages in the event of a default by Tenant.
(e) In the event that Landlord shall elect to so relet as
provided in Paragraph (d) above, then rentals received by Landlord from such
reletting shall be applied: First, to the payment of any indebtedness other
than rent due hereunder from Tenant to Landlord; second, to the payment of
any reasonable cost of such reletting; third, to the payment of the cost of
any alterations and repairs to the Premises; fourth, to the payment of rent
due and unpaid hereunder; and the remainder, if any, shall be held by
Landlord and applied in payment of future rent as the same may become due and
payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied to the payment of rent
hereunder, be less than the rent payable during that month by Tenant
hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any reasonable costs and expenses incurred
by Landlord in such reletting or in making such alterations and repairs not
covered by the rentals received from such reletting.
20.3 RE-ENTRY NOT TERMINATION. No re-entry or taking possession
of the Premises by Landlord pursuant to this Article 20 shall be construed as
an election to terminate this Lease unless a written notice of such intention
be given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default of Tenant, Landlord may at any time after
such reletting elect to terminate this Lease for any such default.
20.4 DEFINITION OF TENANT. As used in this Article 20, the term
"TENANT" shall be deemed to include all persons or entities named as Tenant
under this Lease, or each and every one of them. If this Lease has been
assigned, the term "TENANT," as used in this Article 20, shall be deemed to
include both the assignee and the assignor.
21. INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGES.
21.1 INTEREST. Any amount due from Tenant to Landlord which is
not paid when due shall bear interest at the lesser of two percent (2%) per
annum in excess of the Reference Rate (as defined in Paragraph 20.2(b) above)
or the maximum rate per annum which Landlord is
16
permitted by law to charge, from the date such payment is due until paid, but
the payment of such interest shall not excuse or cure any default by Tenant
under this Lease.
21.2 LATE CHARGE. In the event Tenant is more than ten (10) days
late in paying any installment of rent due under this Lease, Tenant shall pay
Landlord a late charge equal to three percent (3%) of the delinquent
installment of rent. The parties agree that the amount of such late charge
represents a reasonable estimate of the cost and expense that would be
incurred by Landlord in processing each delinquent payment of rent by Tenant
and that such late charge shall be paid to Landlord as liquidated damages for
each delinquent payment, but the payment of such late charge shall not excuse
or cure any default by Tenant under this Lease. The parties further agree
that the payment of late charges and the payment of interest provided for in
Section 21.1 above are distinct and separate from one another in that the
payment of interest is to compensate Landlord for the use of Landlord's money
by Tenant, while the payment of a late charge is to compensate Landlord for
the additional administrative expense incurred by Landlord in handling and
processing delinquent payments.
22. QUIET ENJOYMENT.
Tenant, upon the paying of all rent hereunder and performing each
of the covenants, agreements and conditions of this Lease required to be
performed by Tenant, shall lawfully and quietly hold, occupy and enjoy the
Premises during the Lease Term without hindrance or molestation of anyone
lawfully claiming by, through or under Landlord, subject, however, to the
provisions set forth in this Lease.
23. SIGNAGE.
Subject to Article 7 above, Tenant, at Tenant's sole cost and
expense, shall have the right to place signage upon the Premises as Tenant
deems to be appropriate.
24. TENANT'S RECOURSE.
Anything in this Lease to the contrary notwithstanding, Tenant
agrees that it shall look solely to the estate and property of Landlord in
the land and buildings comprising the Premises (including any insurance
proceeds and/or condemnation awards paid to Landlord with respect to the
Premises), subject to prior rights of any mortgagee under an Underlying
Mortgage, and no other procedures for the satisfaction of Tenant's remedies.
Neither Landlord, nor any trustee or beneficiary thereof, shall have any
personal liability of any kind or nature, directly or indirectly under or in
connection with this Lease.
25. GENERAL PROVISIONS.
25.1 NO WAIVER. The waiver by Landlord of any breach of any
term, provision, covenant or condition contained in this Lease, or the
failure of Landlord to insist on the strict perfor-
17
mance by Tenant, shall not be deemed to be a waiver of such term, provision,
covenant or condition as to any subsequent breach thereof or of any other
term, covenant or condition contained in this Lease. The acceptance of rents
hereunder by Landlord shall not be deemed to be a waiver of any breach or
default by Tenant of any term, provision, covenant or condition herein,
regardless of Landlord's knowledge of such breach or default at the time of
acceptance of rent.
25.2 LANDLORD'S RIGHT TO PERFORM. All covenants and agreements
to be performed by Tenant under any of the terms of this Lease shall be
performed by Tenant at Tenant's sole expense and without abatement of rent.
If Tenant shall fail to observe and perform any covenant, condition,
provision or agreement contained in this Lease or shall fail to perform any
other act required to be performed by Tenant, Landlord may, upon notice to
Tenant, without obligation, and without waiving or releasing Tenant from any
default or obligations of Tenant, make any such payment or perform any such
obligation on Tenant's part to be performed. All sums so paid by Landlord
and all costs incurred by Landlord, including attorneys' fees, together with
interest thereon in a per annum amount equal to two percent (2%) per annum in
excess of the Reference Rate, but not in excess of the maximum rate permitted
by law, shall be payable to Landlord on demand and Tenant covenants to pay
any such sums, and Landlord shall have (in addition to any other right or
remedy hereunder) the same rights and remedies in the event of the
non-payment thereof by Tenant as in the case of default by Tenant in the
payment of rent.
25.3 TERMS; HEADINGS. The words "Landlord" and "Tenant" as used
herein shall include the plural, as well as the singular. The words used in
neuter gender include the masculine and feminine and words in the masculine
or feminine gender include the neuter. If there is more than one tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. The
headings or titles of this Lease shall have no effect upon the construction
or interpretation of any part hereof.
25.4 ENTIRE AGREEMENT. This instrument along with any exhibits
and attachments or other documents affixed hereto, or referred to herein,
constitutes the entire and exclusive agreement between Landlord and Tenant
with respect to the Premises and the estate and interest leased to Tenant
hereunder. This instrument and said exhibits and attachments and other
documents may be altered, amended, modified or revoked only by an instrument
in writing signed by both Landlord and Tenant. Landlord and Tenant hereby
agree that all prior or contemporaneous oral understandings, agreements or
negotiations relative to the leasing of the Premises are merged into and
revoked by this instrument.
25.5 SUCCESSORS AND ASSIGNS. Subject to the provisions of
Article 12 relating to Assignment and Sublease, this Lease is intended to and
does bind the heirs, executors, administrators, successors and assigns of any
and all of the parties hereto.
25.6 NOTICES. All notices, consents, approvals, requests,
demands and other communications (collectively "NOTICES") which Landlord or
Tenant are required or desire to serve upon, or deliver to, the other shall
be in writing and mailed postage prepaid by certified or registered mail,
return receipt requested, or by personal delivery, or given by a nationally
recognized overnight
18
delivery service (such as Federal Express) with all fees prepaid, to the
appropriate address indicated below, or at such other place or places as
either Landlord or Tenant may, from time to time, designate in a written
notice given to the other. If the term "Tenant" in this Lease refers to more
than one person or entity, Landlord shall be required to make service or
delivery, as aforesaid, to any one of said persons or entities only. Notices
shall be deemed sufficiently served or given at the time of delivery;
provided that refusal to accept delivery of a notice shall constitute
successful and effective delivery thereof. Any notice, request,
communication or demand by Tenant to Landlord shall be addressed to the
Landlord at:
c/o Conway, Stuart & Woodbury
4021 Meadows Lane
Las Vegas, NV 89107
With copies to:
James J. Chaisson, Sr.
40 Innisbrook
Las Vegas, NV 89113
Jack Hunter
8149 Pinnacle Peak Avenue
Las Vegas, NV 89113
Rick Starr
5400 South U.S. 1
Fort Pierce, FL 34982
and if requested in writing by the Landlord, given or served simultaneously
to the Landlord's mortgagee at the address specified in such request. Any
notice, request, communication or demand by Landlord to Tenant shall be
addressed to Tenant at:
2333 Decatur Blvd.
Las Vegas, NV 89102
Attn: President
Rejection or other refusal to accept a notice, request, communication or
demand or the inability to deliver the same because of a changed address of
which no notice was given shall be deemed to be receipt of the notice,
request, communication or demand sent.
25.7 SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material
benefit by either party hereunder, shall be held invalid or unenforceable to
any extent, the remaining terms, conditions and covenants of this Lease shall
not be affected thereby and each of said terms, covenants and conditions
shall be valid and
19
enforceable to the fullest extent permitted by law.
25.8 TIME OF ESSENCE. Time is of the essence of this Lease and
each provision hereof in which time of performance is established.
25.9 GOVERNING LAW. This Lease shall be governed by, interpreted
and construed in accordance with the laws of the State of Nevada.
25.10 ATTORNEYS' FEES. If any action or proceeding is brought by
Landlord or Tenant to enforce its respective rights under this Lease, the
unsuccessful party therein shall pay all costs incurred by the prevailing
party therein, including reasonable attorneys' fees to be fixed by the court.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
date set forth in the first paragraph above.
LANDLORD:
JRJ PROPERTIES,
a Nevada general partnership
By:
---------------------------------------
James J. Chaisson, Sr., Partner
By:
---------------------------------------
Rick Starr, Partner
By:
---------------------------------------
Jack Hunter, Partner
TENANT:
JRJ INVESTMENTS, INC.,
a Nevada corporation
By:
---------------------------------------
Its: President
20
EXHIBIT "A"
PREMISES
A-1