Revision 2 - March 2004 EXHIBIT 10.1
LEASE AGREEMENT
(Net)
THIS LEASE AGREEMENT ("Lease") is made between Xxxxxx Investment Properties -
Nevada, LLC, an Oregon limited liability company ("Landlord"), and Electrograph
Systems, Inc., a New York corporation ("Tenant"), as of March 15, 2005 (the
"date of this Lease").
BASIC LEASE INFORMATION
DESCRIPTION OF PREMISES: 000 Xxxxxx Xxxxx, Xxxxx 000-000, Xxxxxxxxx, Xxxxxx
00000, (the Premises as shown on Exhibit A), consisting of approximately 26,431
square feet within Building B (the "Building") of Landlord's multi-tenant
development known as Xxxxxxxxx Commerce Center (the "Project"). "Tenant's
Proportionate Share" (a) of the Building is 39.661% and/or (b) of the Project is
6.766%. (See Lease Paragraph 1 and Exhibit F Paragraph 37 for special
allocations during Tenant Improvement Work)
PERMITTED USE: Tenant shall utilize the premises for general/administration
offices, storage and distribution of any and all of Tenant's product line
consistent with Lease provisions, which is initially intended to be for
television and audio equipment and related items.
INITIAL LEASE TERM: Sixty-three (63) months EARLY OCCUPANCY DATE: Subject to
Landlord Approval
SCHEDULED WAREHOUSE COMMENCEMENT DATE: April 1, 2005 SCHEDULED EXPIRATION DATE:
July 31, 2010
BASE RENT, OPERATING EXPENSES AND SECURITY DEPOSIT (See Exhibit F Paragraph 37
for Warehouse-only Base Rent)
(a) Base Rent due pursuant to Paragraph 3: (b) Tenant's Proportionate Share of First Year
Estimated Operating Expenses pursuant to
Paragraph 4.2: $3,172.00 per month
May 1, 2005 through May 31, 2005 $12,687.00 per month for entire Premises
June 1, 2005 through June 30, 2005 $00.00 per month
July 1, 2005 through April 30, 2006 $12,687.00 per month
May 1, 2006 through May 31, 2006 $00.00 per month (c) Security Deposit pursuant to Paragraph 6:
June 1, 2006 through April 30, 2007 $13,194.00 per month $18,608.00.
May 1, 2007 through April 30, 2008 $13,722.00 per month
May 1, 2008 through May 31, 2008 $00.00 per month (d) Monthly HVAC Service Charge pursuant to
June 1, 2008 through April 30, 2009 $14,271.00 per month Paragraph 7.1.2: $Not Applicable
June 1, 2009 through July 31, 2010 $14,842.00 per month
NOTICE NOTICE TO LANDLORD: NOTICE TO TENANT:
ADDRESSES: Xxxxxx Investment Properties - Nevada, LLC Electrograph Systems, Inc.
0000 Xxxxx Xxxxxx Xxxx Xxxx., Xxxxx X-000 00 Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000 Xxxxxxxxx, Xxx Xxxx 00000
Attn: Property Manager Attn: Xxxx Xxxxx
Fax: (000) 000-0000 Telephone: (000) 000-0000
BILLING AND LOCKBOX REMITTANCE TO LANDLORD: BILLING TO TENANT:
PAYMENT Henderson Commerce Ctr. Electrograph Systems, Inc
ADDRESSES: Xxxx Xx. 00 00 Xxxxxx Xxxx
X X Xxx 0000 Xxxxxxxxx, Xxx Xxxx 00000
Xxxxxxxx, Xxxxxx 00000- 5000 Attn: Xxxx Xxxxxx
TENANT'S TAXPAYER ID #: 00-0000000
GUARANTOR: Manchester Technologies, Inc., a New York corporation
(If any, see Exhibit G)
TENANT CONTACT:Xxxxxx Xxxxxx Telephone: (000) 000-0000 Fax: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have executed this Lease, consisting of
the foregoing Basic Lease Information, the following Paragraphs 1 through 29
(the "Standard Lease Provisions") and Exhibits A (Premises/Project), B
(Insurance), C (Signage Criteria), D (Tenant Improvement Agreement), E (Rules &
Regulations) F (Further Provisions Paragraphs 30 through 37) and G (Guarantor)
all of which are incorporated herein by this reference (collectively, this
"Lease"). In the event of any conflict between the provisions of the Basic Lease
Information and the provisions of the Standard Lease Provisions, the Standard
Lease Provisions shall control.
Landlord Tenant
Xxxxxx Investment Properties-Nevada LLC Electrograph Systems, Inc., a
New York corporation
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxxxxx
--- ----------------- --------------------
Name Xxxxx Xxxxxxx Xxxx Xxxxxxx,
Title Sr. VP
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STANDARD LEASE PROVISIONS
(Net)
1. Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, subject to the following terms and conditions, the Premises initially
consisting of the Warehouse Portion of approximately 22,431 square feet and the
balance of approximately 4,000 square feet referred to as the Office Portion for
staging and construction of an office area of approximately 1,356 square feet
located in the Project and described in the Basic Lease Information and shown on
the attached Exhibit A. Landlord reserves the right to make such changes,
additions and/or deletions to the Project and/or the common areas and parking or
other facilities thereof as it shall determine from time to time.
2. Term.
2.1 Unless delayed or sooner terminated in accordance herewith, the term of
this Lease (the "Term") shall be as set forth in the Basic Lease Information. If
the Term Commencement Date (defined below) is not the first day of a calendar
month, there shall be added to the Term the partial month ("Partial Lease
Month") from the Term Commencement Date through the last day of that calendar
month containing the Term Commencement Date.
2.2 The Term shall commence as to the Warehouse Portion of the Premises on
the date specified in the Basic Lease Information on the Scheduled Term
Commencement Date and as to the Office Portion of the Premises upon substantial
completion of the Tenant Improvements (as defined below), which is estimated to
be on or before May 31, 2005. If the Landlord has not delivered the Office
Portion of the Premises to Tenant by May 31, 2005, the Term Commencement Date as
to the Office Portion of the Premises shall be the earlier of the date Landlord
delivers the Office Portion of the Premises to Tenant or the date Tenant takes
possession or commences use of the Office Portion of the Premises for any
business purpose (including moving in). If this Lease contemplates the
construction of tenant improvements in the Premises by Landlord, Landlord shall
be deemed to have delivered the Office Portion of the Premises to Tenant on the
date determined by Landlord's space planner to be the date of substantial
completion of the work to be performed by Landlord (as described in the Tenant
Improvement Agreement, if any, attached hereto as Exhibit D). Landlord
represents and warrants that upon Lease commencement of the applicable portion
of the Leased Premises (Warehouse or Office, as the case may be), the public and
common areas and facilities of and comprising the Building and Project,
including, but not limited to, the roof and roof membrane, mechanical rooms,
pest extermination, parking and service areas, driveways, sidewalks, truck
staging areas, fire sprinkler systems, sanitary and storm sewer lines, utility
services, heating/ventilation/air conditioning systems, electrical, mechanical
or other systems, plumbing and lighting of the Building or Project Premises are
in good working condition and free of faults or defects. This Lease shall be a
binding contractual obligation upon execution and delivery hereof by Landlord
and Tenant, notwithstanding the later commencement of the Term.
2.3 Landlord's Work. Landlord's Work, if any, shall be installed by
Landlord in compliance with all then applicable codes. Tenant, at its sole
expense, agrees to comply with all laws, codes, ordinances and other legal
requirements (including covenants and restrictions) applicable to the Premises
(herein "Laws"). After the applicable Commencement Date, Tenant agrees to cause
the Premises to comply with all Laws, including by making any changes to the
Premises necessitated by any Tenant activity, including but not limited to
changes required by (a) any Tenant's Work or Tenant Alterations (as defined
below), or (b) any use of the Premises or Project by Tenant. If any activity of
Tenant necessitates changes to the Project other than the Premises, then
Landlord shall elect that Landlord accomplish the same at the expense of Tenant
or that Tenant accomplish the same at its own expense.
2.4 Delivery of Possession. As set forth above, the parties contemplate
delivery of possession of the Premises in two (2) phases with a separate
Commencement Date for each applicable portion. The Warehouse Portion of the
Premises shall be delivered on or before April 1, 2005, and the Office Portion
of the Premises shall be delivered upon substantial completion by Landlord of
the Tenant Improvement Work as described in Exhibit D, which is expected to
occur on or before May 31, 2005. If for any reason Landlord cannot deliver
possession of the Office Portion of the Premises on or before May 31, 2005, then
except as provided below, Landlord will not be subject to any liability nor will
the validity of this Lease be affected in any manner. Rather, the Commencement
Date for the Office Portion of the Premises shall be delayed until delivery of
possession and the expiration date of the Lease Term shall be unaffected
thereby. If for any reason possession of the Office Portion of the Premises is
not delivered by May 31, 2005, or within the ninety (90) day period thereafter
(the "Allowed Grace Period"), Landlord or Tenant may terminate this Lease as to
the entire Premises (Warehouse and Office portions) by written notice given
after the Allowed Grace Period but prior to delivery of possession; provided,
the Allowed Grace Period shall be extended by (a) the number of days of delays
attributable to Tenant (including but not limited to delays in approvals of
plans or cost estimates, delays related to changes in plans requested by Tenant
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whether or not approved by Landlord, delays caused by Tenant installing any
"Tenant's Work", delays caused by other early entry or early occupancy by Tenant
in the Office Portion of the Premises, and/or other delays attributable to
Tenant), plus (b) the number of days of delays caused by events beyond the
reasonable control of Landlord (including but not limited to fire, earthquake,
other casualty, inclement weather, acts of God, shortages of labor or material,
lead times on ordered items, strike, acts or omissions of government, and/or
delays in governmental permits, inspections or approvals). Any such termination
shall be without liability of Landlord. Any such termination by Tenant shall be
Tenant's sole remedy for delay in delivery of possession of the Office Portion
of the Premises.
2.5 Upon full execution and delivery of this Lease and receipt by Landlord
of satisfactory evidence of Tenant's compliance with the insurance provisions of
the Lease, Tenant may be permitted to occupy the Warehouse Portion of the
Premises prior to the Term Commencement Date to install furniture, fixtures and
the like. Early occupancy shall not advance the expiration date of the Lease and
no Base Rent shall be payable, but Tenant shall be responsible for any
separately metered utility usage and bound by all other provisions of the Lease,
including, without limitation, Additional Rent (defined below). During any early
occupancy or other period in which Landlord and Tenant are simultaneously
occupying and/or performing work in either portion of the Premises, Landlord's
construction supervisor shall be authorized to resolve any conflicts as to
scheduling, access or the like.
3. Rent; Payment of Additional Rent; Operating Expenses.
3.1 Subject to the provisions of this Paragraph 3, Tenant agrees to pay
during the Term as rent for the applicable portions of the Premises the sums
specified in the Basic Lease Information (as increased from time to time as
provided in the Basic Lease Information or as may otherwise be provided in this
Lease) (the "Base Rent"). The adjustments to Base Rent set forth in the Basic
Lease Provisions shall occur at the stated times and be applicable to the entire
Premises, notwithstanding the delivery of the Office Portion of the Premises at
a later date than the Warehouse Portion. Base Rent shall be payable in
consecutive monthly installments, in advance, without prior notice, demand,
deduction or offset, commencing on the applicable Term Commencement Date and
continuing on the first day of each calendar month thereafter, except that the
first full monthly installment of Base Rent shall be payable upon Tenant's
execution of this Lease. If the applicable Term Commencement Date is not the
first day of a calendar month, then the Base Rent for the Partial Lease Month
shall be prorated based on a 30-day month and shall be payable on the first day
of the calendar month following the Term Commencement Date.
3.2 All monies to be paid by Tenant hereunder, including Tenant's
Proportionate Share of Operating Expenses as specified in Paragraph 4 (estimated
and/or revised), and all other amounts, fees, payments or charges payable
hereunder by Tenant (collectively, "Additional Rent"), together with Base Rent,
shall (i) each constitute rent payable hereunder (and shall sometimes
collectively be referred to herein as "Rent"), (ii) be payable to Landlord in
lawful money of the United States when due without any prior demand therefor,
except as may be expressly provided to the contrary herein, (iii) be payable to
Landlord at Landlord's Remittance Address set forth in the Basic Lease
Information or to such other person or to such other place as Landlord may from
time to time designate in writing to Tenant, and (iv) if applicable, be prorated
based upon a 30 day month for any partial month.
4. Operating Expenses.
4.1 Operating Expenses. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Landlord and Tenant acknowledge that if the number of buildings which
constitute the Project increases or decreases, or if physical changes are made
to the Premises, Building and/or Project or the configuration of any thereof,
Landlord may at its discretion reasonably adjust Tenant's Proportionate Share of
the Building and/or Project to reflect the change. Landlord's determination of
Tenant's Proportionate Share of the Building and/or Project shall be conclusive
absent manifest error. "Operating Expenses" shall mean all expenses and costs of
every kind and nature which Landlord shall pay or become obligated to pay,
because of or in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building and/or Project and its
supporting facilities and such additional facilities now and in subsequent years
as may be determined by Landlord to be necessary or desirable to the Building
and/or Project (as determined in a reasonable manner) other than those expenses
and costs which are specifically attributable to Tenant or which are expressly
made the financial responsibility of Landlord or specific tenants of the
Building or Project pursuant to this Lease. Operating Expenses shall include,
but are not limited to, the following:
4.1.1 Taxes. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes or fees,
gross receipts taxes, service payments in lieu of such taxes or fees, annual or
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periodic license or use fees, excises, transit charges, and other impositions,
general and special, ordinary and extraordinary, unforeseen as well as foreseen,
of any kind (including fees "in-lieu" of any such tax or assessment) which are
now or hereafter assessed, levied, charged, confirmed, or imposed by any public
authority upon the Landlord, Building, or the Project, its operations or the
Rent (or any portion or component thereof), or any tax, assessment or fee
imposed in substitution, partially or totally, of any of the above. Operating
Expenses shall also include any taxes, assessments, reassessments, or other fees
or impositions with respect to the development, leasing, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises,
Building or Project or any portion thereof, including, without limitation, by or
for Tenant, and all increases therein or reassessments thereof whether the
increases or reassessments result from increased rate and/or valuation (whether
upon a transfer of the Building or Project or any portion thereof or any
interest therein or for any other reason). Operating Expenses shall not include
inheritance or estate taxes imposed upon or assessed against the interest of any
person in the Project, or taxes computed upon the basis of the net income of any
owners of any interest in the Project. If it shall not be lawful for Tenant to
reimburse Landlord for all or any part of such taxes, the monthly rental payable
to Landlord under this Lease shall be revised to net Landlord the same net
rental after imposition of any such taxes by Landlord as would have been payable
to Landlord prior to the payment of any such taxes.
4.1.2 Insurance. All insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of insurance
incurred by Landlord, including for the insurance coverage required under
Paragraph 11.1 herein.
4.1.3 Common Area Maintenance.
4.1.3.1 Repairs, replacements, and general maintenance of and for the
Building and Project and public and common areas and facilities of and
comprising the Building and Project, including, but not limited to, the
roof and roof membrane, elevators, mechanical rooms, alarm systems, pest
extermination, landscaped areas, parking and service areas, driveways,
sidewalks, truck staging areas, rail spur areas, fire sprinkler systems,
sanitary and storm sewer lines, utility services, heating/ventilation/air
conditioning systems, electrical, mechanical or other systems, telephone
equipment and wiring servicing, plumbing, lighting, and any other items or
areas which affect the operation or appearance of the Building or Project,
which determination shall be at Landlord's discretion, except for: those
items to the extent paid for by the proceeds of insurance; and those items
attributable solely or jointly to specific tenants of the Building or
Project.
4.1.3.2 Repairs, replacements, and general maintenance shall include
the cost of any improvements made to or assets acquired for the Project or
Building that in Landlord's discretion may reduce any other Operating
Expenses, including present or future repair work, are reasonably necessary
for the health and safety of the occupants of the Building or Project, or
for the operation of the Building systems, services and equipment, or are
required to comply with any Regulation, such costs or allocable portions
thereof to be amortized over such reasonable period as Landlord shall
determine, together with interest on the unamortized balance.
4.1.3.3 Payment under or for any easement, license, permit, operating
agreement, declaration, restrictive covenant or instrument relating to the
Building or Project.
4.1.3.4 All expenses and rental related to services and costs of
supplies, materials and equipment used in operating, managing and
maintaining the Premises, Building and Project, the equipment therein and
the adjacent sidewalks, driveways, parking and service areas, including,
without limitation, expenses related to service agreements regarding
security, fire and other alarm systems, janitorial services to the extent
not furnished by Tenant under Paragraph 7.2 hereof, window cleaning,
elevator maintenance, Building exterior maintenance, landscaping and
expenses related to the administration, management and operation of the
Project.
4.1.3.5 The cost of supplying any services and utilities which benefit
all or a portion of the Premises, Building or Project to the extent not
furnished by Tenant under Paragraph 7.2 hereof.
4.1.3.6 Legal expenses and the cost of audits by certified public
accountants; provided, however, that legal expenses chargeable as Operating
Expenses shall not include the cost of negotiating leases, collecting
rents, evicting tenants nor shall it include costs incurred in legal
proceedings with or against any tenant or to enforce the provisions of any
lease.
4.1.3.7 A management fee equal to five percent (5%) of the sum of the
Landlord's effective gross income from the Project which consists of the
gross rents charged the tenants of the Project plus expense reimbursements
and other operating income.
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The above enumeration of services and facilities shall not be deemed to impose
an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that it
shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.
4.2 Payment of Estimated Operating Expenses. "Estimated Operating Expenses"
for any particular year shall mean Landlord's estimate of the Operating Expenses
for such calendar year. During the last month of each calendar year during the
Term, or as soon thereafter as practicable, Landlord shall give Tenant written
notice of the Estimated Operating Expenses for the ensuing calendar year. Tenant
shall pay Tenant's Proportionate Share of the Estimated Operating Expenses with
installments of Base Rent for the calendar year to which the Estimated Operating
Expenses applies in monthly installments on the first day of each calendar month
during such year, in advance, prorated for any partial month, if applicable. If
at any time during the course of the calendar year, Landlord determines that
Operating Expenses are projected to vary from the then Estimated Operating
Expenses by more than five percent (5%), Landlord may, by written notice to
Tenant, revise the Estimated Operating Expenses for the balance of such calendar
year, and Tenant's monthly installments for the remainder of such year shall be
adjusted so that by the end of such calendar year Tenant has paid to Landlord
Tenant's Proportionate Share of the revised Estimated Operating Expenses for
such year. Tenant's share of the Operating Expenses (excluding for this purpose
Taxes and Insurance premiums) cannot be increased by more than five percent (5%)
per annum.
4.3 Computation of Operating Expense Adjustment. "Operating Expense
Adjustment" shall mean the difference between Estimated Operating Expenses and
actual Operating Expenses for any calendar year determined as hereinafter
provided. Within one hundred twenty (120) days after the end of each calendar
year, or as soon thereafter as practicable, Landlord shall deliver to Tenant a
statement of actual Operating Expenses for the calendar year just ended,
accompanied by a computation of Operating Expense Adjustment. If such statement
shows that Tenant's payment based upon Estimated Operating Expenses is less than
Tenant's Proportionate Share of Operating Expenses, then Tenant shall pay to
Landlord the difference within twenty (20) days after receipt of such statement.
If such statement shows that Tenant's payments of Estimated Operating Expenses
exceed Tenant's Proportionate Share of Operating Expenses, then (provided that
Tenant is not in default under this Lease) Landlord shall pay to Tenant the
difference within twenty (20) days after delivery of such statement to Tenant.
If this Lease has been terminated or the Term hereof has expired prior to the
date of such statement, then the Operating Expense Adjustment shall be paid by
the appropriate party within twenty (20) days after the date of delivery of the
statement. Tenant's Proportionate Share of the Operating Expense Adjustment
shall be prorated based on a month of 30 days and the number of calendar months
during such calendar year that this Lease is in effect. Notwithstanding anything
to the contrary contained in Paragraph 4.1 or 4.2, Landlord's failure to provide
any notices or statements within the time periods specified in those paragraphs
shall in no way excuse Tenant from its obligation to pay Tenant's Proportionate
Share of Operating Expenses.
4.4 Net Lease. This shall be a net Lease and Base Rent shall be paid to
Landlord net of all costs and expenses, except as specifically provided to the
contrary in this Lease. The provisions for payment of Operating Expenses and the
Operating Expense Adjustment are intended to pass on to Tenant and reimburse
Landlord for all costs and expenses of the nature described in Paragraph 4.1.
incurred in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building and/or Project and its
supporting facilities and such additional facilities now and in subsequent years
as may be determined by Landlord to be necessary or desirable to the Building
and/or Project.
4.5 Tenant Audit. If Tenant shall dispute the amount set forth in any
statement provided by Landlord under Paragraph 4.3 above, Tenant shall have the
right, not later than twenty (20) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to cause Landlord's books and records with respect to Operating
Expenses for such calendar year to be audited by certified public accountants
selected by Tenant and subject to Landlord's reasonable right of approval. The
Operating Expense Adjustment shall be appropriately adjusted on the basis of
such audit. If such audit discloses a liability for a refund in excess of ten
percent (10%) of Tenant's Proportionate Share of the Operating Expenses
previously reported, the cost of such audit shall be borne by Landlord;
otherwise the cost of such audit shall be paid by Tenant. If Tenant shall not
request an audit in accordance with the provisions of this Paragraph 4.5 within
twenty (20) days after receipt of Landlord's statement provided pursuant to
Paragraph 4.3, such statement shall be final and binding for all purposes
hereof. Tenant acknowledges and agrees that any information revealed in the
above described audit may contain proprietary and sensitive information and that
significant damage could result to Landlord if such information were disclosed
to any party other than Tenant's auditors. Tenant shall not in any manner
disclose, provide or make available any information revealed by the audit to any
person or entity without Landlord's prior written consent, which consent may be
withheld by Landlord in its sole and absolute discretion. The information
disclosed by the audit will be used by Tenant solely for the purpose of
evaluating Landlord's books and records in connection with this Paragraph 4.5.
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5. Delinquent Payment; Handling Charges. If Tenant is more than ten (10) days
late in paying any amount of Rent, Tenant shall pay Landlord a late charge equal
to ten percent (10%) of the delinquent amount. In addition, any amount due from
Tenant to Landlord which is not paid within ten (10) days of the date due shall
bear interest at an annual rate (the "Default Rate") equal to fifteen percent
(15%).
6. Security Deposit. Upon execution of this Lease, Tenant shall pay to Landlord
the amount of Security Deposit specified in the Basic Lease Information. If
Tenant defaults with respect to any provision of this Lease, Landlord may, but
shall not be required to, use, apply or retain all or any part of the Security
Deposit. If any portion of the Security Deposit is so used or applied, Tenant
shall, within ten (10) days after demand therefor by Landlord, deposit with
Landlord cash in an amount sufficient to restore the Security Deposit to the
amount required to be maintained by Tenant hereunder. Anytime the Base Rent
increases during the term of this Lease, Tenant shall, upon written request from
Landlord, deposit additional monies with Landlord sufficient to maintain the
same ratio between the Security Deposit and the Base Rent as those amounts are
specified in the Basic Lease Information. Within a reasonable period following
expiration or the sooner termination of this Lease, provided that Tenant has
performed all of its obligations hereunder, Landlord shall return to Tenant the
remaining portion of the Security Deposit. The Security Deposit may be
commingled by Landlord with Landlord's other funds, and no interest shall be
paid thereon.
7. Repairs and Maintenance.
7.1 Landlord's Obligations.
7.1.1 Landlord shall, subject to reimbursement under Paragraph 4,
maintain in good repair, reasonable wear and tear excepted, the structural
soundness of the roof, foundations, and exterior walls of the Building
together with the common areas and other equipment used in common by
tenants in the Project. The term "exterior walls" as used herein shall not
include windows, glass or plate glass, doors, dock bumpers or dock plates,
special store fronts or office entries. Any damage caused by or repairs
necessitated by any negligence or act of Tenant, including, without
limitation, any contractor, employee, agent, invitee or visitor of Tenant
(each, a "Tenant Party") may be repaired by Landlord at Landlord's option
and Tenant's expense. Tenant shall immediately give Landlord written notice
of any defect or need of repairs in such components of the Building for
which Landlord is responsible, after which Landlord shall furnish Tenant
with notice of the need to enter the premises, unless there is an emergency
which requires an immediate response from Landlord, Tenant will give
Landlord the right to enter the Premises at a reasonable time accompanied
by Tenant's representative to repair same. Landlord's liability with
respect to any defects, repairs, or maintenance for which Landlord is
responsible under any of the provisions of this Lease shall be limited to
the cost of such repairs or maintenance, and there shall be no abatement of
rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of repairs,
alterations or improvements in or to any portion of the Premises, the
Building or the Project or to fixtures, appurtenances or equipment in the
Building, except as provided in Paragraph 15.
7.1.2 Intentionally omitted.
7.2 Tenant's Obligations.
7.2.1 Tenant shall (to the extent possible) contract for and pay
directly when due for all gas, heat, air conditioning, light, power,
telephone and data, sprinkler charges, cleaning, waste disposal in excess
of that provided by Landlord, and other utilities and services (the
"Services") used on or from the Premises, together with any taxes (other
than real estate taxes), penalties, surcharges or the like pertaining
thereto. If any such Services are not separately billed or metered to
Tenant, Tenant shall pay an equitable share, as determined in good faith by
Landlord, of all charges jointly billed or metered with other premises in
the Project. Tenant shall also be responsible and pay for any personal
property, sales, use or income taxes associated with Tenant's use or
occupancy of the Premises, insurance required to be carried by Tenant under
the Lease, and Tenant's repair and maintenance duties under the Lease.
7.2.2 Tenant shall at all times during the Term at Tenant's expense
maintain all parts of the Premises and such portions of the Building as are
within the exclusive control of Tenant in a good, clean and secure
condition and promptly make all necessary repairs and replacements, as
determined by Landlord, including but not limited to, all windows, glass,
doors, walls, including demising walls, and wall finishes, floors and floor
covering, heating, ventilating and air conditioning systems, ceiling
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insulation, truck doors, hardware, dock bumpers, dock plates and levelers,
plumbing work and fixtures, downspouts, entries, skylights, smoke hatches,
roof vents, electrical and lighting systems, and fire sprinklers, with
materials and workmanship of the same character, kind and quality as the
original. Tenant shall at Tenant's expense also perform regular removal of
trash and debris. Notwithstanding anything to the contrary contained
herein, Tenant shall, at its expense, promptly repair any damage to the
Premises or the Building or Project resulting from or caused by any
negligence or act of Tenant or Tenant's Parties. Nothing herein shall
expressly or by implication render Tenant Landlord's agent or contractor to
effect any repairs or maintenance required of Tenant under Paragraph 7.2,
as to all of which Tenant shall be solely responsible.
7.2.3 Tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees, possessory interest
taxes, fees or charges in lieu of any such taxes, capital levies, or other
charges imposed upon, levied with respect to or assessed against its
fixtures, furnishings, equipment, personal property or its Alterations
(defined below), and on Tenant's interest pursuant to this Lease, or any
increase in any of the foregoing. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay the amount
thereof as invoiced to Tenant by Landlord.
8. Improvements, Alterations & Mechanic's Liens.
8.1 Improvements; Alterations.
8.1.1 Tenant shall not make, or allow to be made, any alterations,
physical additions, improvements or partitions, including without
limitation the attachment of any fixtures or equipment, in, about or to the
Premises ("Alterations") without obtaining the prior written consent of
Landlord, which consent shall not be unreasonably withheld with respect to
proposed Alterations which: (1) comply with all applicable Regulations; (2)
are, in Landlord's opinion, compatible with the Building or the Project and
its mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems, and will not cause the Building or Project or such systems to be
required to be modified to comply with any Regulations (including, without
limitation, the Americans With Disabilities Act); and (3) will not
interfere with the use and occupancy of any other portion of the Building
or Project by any other tenant or its invitees. Specifically, but without
limiting the generality of the foregoing, Landlord shall have the right of
written consent for all plans and specifications for the proposed
Alterations, construction means and methods, all appropriate permits and
licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose
rules and regulations for contractors and subcontractors performing such
work. Tenant shall also supply to Landlord any documents and information
reasonably requested by Landlord in connection with Landlord's
consideration of a request for approval hereunder. Tenant shall cause all
Alterations to be accomplished in a good and workmanlike manner, and to
comply with all applicable Regulations. Tenant shall at Tenant's sole
expense, perform any additional work required under applicable Regulations
due to the Alterations hereunder. No review or consent by Landlord of or to
any proposed Alteration or additional work shall constitute a waiver of
Tenant's obligations under this Paragraph 8.1. Tenant shall reimburse
Landlord for all costs which Landlord may incur in connection with granting
approval to Tenant for any Alterations beyond those originally agreed upon
at the commencement of the Lease, including any costs or expenses which
Landlord may incur in electing to have outside architects and engineers
review said plans and specifications. All such Alterations shall remain the
property of Tenant until the expiration or earlier termination of this
Lease, at which time they shall be and become the property of Landlord;
provided, however, that Landlord may, at Landlord's option, require that
Tenant, at Tenant's expense, remove any or all Alterations made by Tenant
and restore the Premises by the expiration or earlier termination of this
Lease, to their condition existing prior to the construction of any such
Alterations. All such removals and restoration shall be accomplished in a
first-class and good and workmanlike manner so as not to cause any damage
to the Premises or Project whatsoever. If Tenant fails to remove such
Alterations or Tenant's trade fixtures or furniture or other personal
property, Landlord may keep and use them or remove any of them and cause
them to be stored or sold in accordance with applicable law, at Tenant's
sole expense.
8.1.2 Notwithstanding the foregoing, at Landlord's option (but without
obligation), all or any portion of the Alterations shall be performed by
Landlord for Tenant's account and Tenant shall pay Landlord's estimate of
the cost thereof (including a reasonable charge for Landlord's overhead and
profit) prior to commencement of the work. In addition, at Landlord's
election and notwithstanding the foregoing, however, Tenant shall pay to
Landlord the cost of removing any such Alterations and restoring the
Premises to their original condition such cost to include a reasonable
charge for Landlord's overhead and profit as provided above, and such
amount may be deducted from the Security Deposit or any other sums or
amounts held by Landlord under this Lease.
8.1.3 At least ten (10) business days before beginning construction of
any Alteration, Tenant shall give Landlord written notice of the expected
commencement date of that construction to permit Landlord to post and
record a notice of non-responsibility. Upon substantial completion of
construction, if the law so provides, Tenant shall cause a timely notice of
completion to be recorded in the office of the recorder of the county in
which the Building is located.
8.2 Mechanic's Liens. Tenant shall not cause, suffer or permit any
mechanic's or materialman's lien or claim to be filed or asserted against
the Premises or the Project for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant or any Tenant Party.
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9. Use.
9.1 Permitted Use. Tenant shall continuously occupy and use the Premises
only for the Permitted Use stated in the Basic Lease Information (the "Permitted
Use") and shall not create or permit any nuisance or unreasonable interference
with or disturbance of any other tenants of Landlord. Tenant shall at its sole
cost and expense strictly comply with all existing or future applicable
governmental laws, rules, requirements and regulations, and covenants, easements
and restrictions of record governing and relating to the use, occupancy or
possession of the Premises, or to Tenant's use of the common areas together with
all rules which may now or hereafter be adopted by Landlord affecting the
Premises and/or the common areas (collectively "Regulations"). Should any
Regulation now or hereafter be imposed on Tenant or Landlord by any governmental
body relating to the use or occupancy of the Premises by Tenant or any Tenant
Party, then Tenant agrees, at its sole cost and expense, to comply promptly with
such Regulations.
9.2 Hazardous Materials. As used in this Lease, the term "Hazardous
Material" means any flammable items, hazardous or toxic substances, including
any substances defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials" or "toxic substances" now
or subsequently regulated under any applicable federal, state or local laws or
regulations, including without limitation petroleum-based products, paints,
pesticides, asbestos, PCBs and similar compounds, and including any materials
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant or any Tenant Party without the prior written
consent of Landlord. Notwithstanding the foregoing, Tenant may, without
Landlord's prior written consent but in compliance with all applicable laws and
Regulations, use any materials customarily used by occupants of commercial
office space, so long as such use does not expose the Premises, the Building or
the Project to any meaningful risk of contamination or damage or expose Landlord
to any liability therefore.
10. Assignment and Subletting.
10.1 Transfers; Consent. Tenant shall not, without the prior written
consent of Landlord, (a) assign, transfer, mortgage, hypothecate, or encumber
this Lease or any estate or interest herein, whether directly, indirectly or by
operation of law, (b) permit any other entity to become a Tenant hereunder by
merger, consolidation, or other reorganization (but this subparagraph (b) shall
not be applicable if Tenant is a corporation whose stock is publicly traded),
(c) if Tenant is a corporation, partnership, limited liability company, limited
liability partnership, trust, association or other business entity (other than a
corporation whose stock is publicly traded), permit, directly or indirectly, the
transfer of any ownership interest in Tenant so as to result in (i) a change in
the current control of Tenant, (ii) a transfer of twenty-five percent (25%) or
more in the aggregate in any twelve (12) month period in the beneficial
ownership of such entity or (iii) a transfer of all or substantially all of the
assets of Tenant, (d) sublet any portion of the Premises, or (e) grant any
license, concession, or other right of occupancy of or with respect to any
portion of the Premises, or (f) permit the use of the Premises by any party
other than Tenant or a Tenant Party (each of the events listed in this Paragraph
9.1 being referred to herein as a "Transfer"). At least twenty (20) business
days prior to the effective date of any proposed Transfer, Tenant shall provide
Landlord with a written description of all terms and conditions of the proposed
Transfer and all consideration therefor, copies of the proposed documentation,
and such information as Landlord may reasonably require. Any Transfer made
without Landlord's consent shall be void and shall constitute an Event of
Default by Tenant. Tenant shall pay to Landlord $500 as a review fee for each
Transfer request, and reimburse Landlord for its reasonable attorneys' fees and
all other costs incurred in connection with considering any request for consent
to a proposed Transfer. Landlord's consent to a Transfer shall not release
Tenant from its obligations under this Lease (or any guarantor of this Lease of
its obligations with respect thereto). Landlord's consent to any Transfer shall
not waive Landlord's rights as to any subsequent Transfers.
10.2 Cancellation and Recapture. Notwithstanding Paragraph 10.1, Landlord
may (but shall not be obligated to), within ten (10) business days after receipt
of Tenant's written request for Landlord's consent to an assignment or
subletting, cancel this Lease as to the portion of the Premises proposed to be
sublet or subject to an assignment of this Lease ("Transfer Space") as of the
date such proposed Transfer is proposed to be effective and, thereafter,
Landlord may lease such portion of the Premises to the prospective transferee
(or to any other person or entity or not at all) without liability to Tenant
11. Insurance, Waivers, Subrogation and Indemnity.
11.1 Insurance. Each of Landlord and Tenant shall maintain throughout
the Term insurance policies as required on Exhibit B attached hereto and shall
otherwise comply with the obligations and requirements provided on Exhibit B.
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11.2 Waiver of Subrogation. Landlord and Tenant each waives any claim, loss
or cost it might have against the other for any damage to or theft, destruction,
loss, or loss of use of any property (a "Loss"), to the extent the same is
insured against (or is required to be insured against under the terms hereof)
under any "all risk" property damage insurance policy covering the Building, the
Project, the Premises, Landlord's or Tenant's fixtures, personal property,
leasehold improvements, or business, regardless of whether the negligence of the
other party caused such Loss.
11.3 Indemnity. Subject to Paragraph 11.2, Tenant shall indemnify, defend
by either Insurer's counsel or by counsel reasonably acceptable to Landlord,
protect and hold harmless Landlord and its affiliates, and each of their
respective directors, shareholders, partners, lenders, members, managers,
contractors, affiliates and employees (collectively, "Landlord Indemnitees")
from and against all claims, losses, liabilities, causes of suit or action,
judgments, damages, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees, consultant's fees, and court costs)
arising from or asserted in connection with the use or occupancy of the
Premises, the Building or the Project by Tenant or any Tenant Party, or any
negligence or misconduct or omissions of Tenant or of any Tenant Party in or
about the Premises or the Project, or Tenant's breach of any of its covenants
under this Lease, except in each case to the extent arising from the gross
negligence or willful misconduct of Landlord or any Landlord Indemnitee. Except
to the extent expressly provided in this Lease, Tenant hereby waives all claims
against and releases Landlord and each Landlord Indemnitee for any injury to or
death of persons, damage to property or business loss in any manner related to
(i) Tenant's use and occupancy of the Premises, the Building or the Project by
or from any cause whatsoever (other than Landlord's gross negligence or willful
misconduct), (ii) acts of God, (iii) acts of third parties, or (iv) any matter
outside of the reasonable control of Landlord. This Paragraph 11.3 shall survive
termination or expiration of this Lease.
12. Subordination; Attornment.
12.1 Subordination. This Lease is subject and subordinate to all present
and future ground or master leases of the Project and to the lien of all
mortgages or deeds of trust (collectively, "Security Instruments") now or
hereafter encumbering the Project, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors under
such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "Holders") require in writing that this Lease
be superior thereto. Tenant shall, within fifteen (15) days of request to do so
by Landlord, execute, acknowledge and deliver to Landlord such further
instruments or assurances as Landlord may deem necessary or appropriate to
evidence or confirm the subordination or superiority of this Lease to any such
Security Instrument.
12.2 Attornment. Tenant covenants and agrees that in the event that any
proceedings are brought for the foreclosure of any mortgage or deed of trust, or
if any ground or master lease is terminated, it shall attorn, without any
deductions or set-offs whatsoever, to the purchaser upon any such foreclosure
sale, or to the lessor of such ground or master lease, as the case may be, if so
requested to do so by such purchaser or lessor, and to recognize such purchaser
or lessor as "Landlord" under this Lease. In the event that the holder of any
such mortgage or deed of trust becomes the "Landlord" under this Lease, such
holder shall not be liable for any act or omission of Landlord which occurred
prior to such holder's acquisition of title.
12.3 Non-Disturbance. In the event any mortgage shall be foreclosed and
provided that there has not occurred an Event of Default hereunder, this Lease
shall not terminate on account thereof so long as the Tenant continues to pay
the rents reserved in this Lease and otherwise performs and observes all of the
terms, covenants, conditions, and provisions of this Lease to be performed and
observed by or on behalf of Tenant thereunder.
13. Rules and Regulations and Signage. Tenant shall comply, and shall cause each
Tenant Party to comply, with the Rules and Regulations of the Project which are
attached hereto as Exhibit E and the signage criteria which are attached hereto
as Exhibit C, and all such nondiscriminatory modifications, additions, deletions
and amendments thereto as Landlord shall adopt in good faith from time to time.
14. Condemnation. If the entire Project or Premises are taken by right of
eminent domain or conveyed by Landlord in lieu thereof (a "Taking"), this Lease
shall terminate as of the date of the Taking. If any material portion, but less
than all of the Premises or the Building, become subject to a Taking and such
Taking will render the Premises untenantable for a period of more than one
hundred eighty (180) days, then Tenant may terminate this Lease as of the date
of such Taking by giving written notice to Landlord within thirty (30) days
after the Taking, and all Rent paid or payable hereunder shall be apportioned
between Landlord and Tenant as of the date of such Taking. If any material
9
portion, but less than all, of the Project, Building or the Premises becomes
subject to a Taking, or if Landlord is required to pay any of the proceeds
received for a Taking to any Holder of any Security Instrument, then Landlord
may terminate this Lease by delivering written notice thereof to Tenant within
thirty (30) days after such Taking, and all Rent paid or payable hereunder shall
be apportioned between Landlord and Tenant as of the date of such Taking. If
this Lease is not so terminated, then Base Rent thereafter payable hereunder
shall be abated for the duration of the Taking in proportion to that portion of
the Premises rendered untenantable by such Taking. If any Taking occurs, then
Landlord shall receive the entire award or other compensation for the land on
which the Project is situated, the Project, and other improvements taken, and
Tenant may separately pursue a claim (to the extent it will not reduce
Landlord's award).
15. Fire or Other Casualty.
15.1 Repair Estimate; Right to Terminate. If all or any portion of the
Premises or the Project is damaged by fire or other casualty (a "Casualty"),
Landlord shall, within ninety (90) days after Landlord's discovery of such
damage, deliver to Tenant its good faith estimate (the "Damage Notice") of the
time period following such notice needed to repair the damage caused by such
Casualty. Landlord may elect to terminate this Lease in any case where (a) any
portion of the Premises or any material portion of the Project are damaged and
(b) either (i) Landlord estimates in good faith that the repair and restoration
of such damage under Paragraph 15.2 ("Restoration") cannot reasonably be
completed (without the payment of overtime) within two hundred (200) days of
Landlord's actual discovery of such damage, (ii) the Holder of any Security
Instrument requires the application of any insurance proceeds with respect to
such Casualty to be applied to the outstanding balance of the obligation secured
by such Security Instrument, (iii) the cost of such Restoration is not fully
covered by insurance proceeds available to Landlord and/or payments received by
Landlord from tenants, or (iv) Tenant shall be entitled to an abatement of rent
under this Paragraph 15 for any period of time in excess of thirty-three percent
(33%) of the remainder of the Term.
15.2 Repair Obligation; Abatement of Rent. Subject to Paragraph 15.1,
Landlord shall, within a reasonable time after the discovery by Landlord of any
damage resulting from a Casualty, begin with reasonable diligence to restore the
Premises to substantially the same condition as existed immediately before such
Casualty, except for modifications required by Regulations, and modifications to
the Project reasonably deemed desirable by Landlord; provided, however, that
Landlord shall not be required as part of the Restoration to repair or replace
any of the Alterations, furniture, equipment, fixtures, and other improvements
which may have been placed by, or at the request of, Tenant or other occupants
in the Premises. Landlord shall have no liability for any inconvenience or
annoyance to Tenant or injury to Tenant's business as a result of any Casualty,
regardless of the cause therefor. Base Rent shall xxxxx if and to the extent a
Casualty damages the Premises and renders them unfit for occupancy, and are not
occupied by Tenant.
16. Parking. Tenant shall have the right to the nonexclusive use of the parking
facilities of the Project for the parking of motor vehicles used by Tenant and
Tenant Parties only; such rights are not transferable without Landlord's
approval. The use of such parking facilities shall be subject to such rules and
regulations as may be adopted by Landlord from time to time for the use of such
facilities.
17. Events of Default. Each of the following occurrences shall be an "Event of
Default" and shall constitute a material default and breach of this Lease by
Tenant: (a) any failure by Tenant to pay Rent or any other amount due and
payable hereunder when due; (b) the abandonment or vacation of the Premises by
Tenant; (c) any failure by Tenant to obtain insurance and/or deliver insurance
certificates required under Paragraph 11; (d) any failure by Tenant to execute
and deliver any estoppel certificate or other document described in Paragraphs
12 or 21 requested by Landlord, where such failure continues for five (5) days
after delivery of written notice of such failure by Landlord to Tenant; (e) any
failure by Tenant to fully perform any other obligation of Tenant under this
Lease, where such failure continues for thirty (30) days after delivery of
written notice of such failure by Landlord to Tenant; (f) the voluntary or
involuntary filing of a petition by or against Tenant or any general partner of
Tenant or any guarantor (i) in any bankruptcy or other insolvency proceeding,
(ii) seeking any relief under any state or federal debtor relief law, or (iii)
for the appointment of a liquidator or receiver for all or substantially all of
Tenant's property or for Tenant's interest in this Lease; (g) the default,
repudiation or revocation of any guarantor of Tenant's obligations hereunder.
Any notice of any failure of Tenant required under this Paragraph 17 shall be in
lieu of, and not in addition to, any notice required under applicable law.
18. Remedies. Upon the occurrence of any Event of Default by Tenant, Landlord
shall have, in addition to any other remedies available at law or in equity, the
option to pursue any one (1) or more of the following remedies, each and all of
which shall be cumulative and nonexclusive, without any notice or demand
whatsoever:
18.1 Terminate this Lease, and Landlord may recover from Tenant all amounts
permitted by law necessary to compensate Landlord for the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease
10
(specifically including, without limitation, brokerage commissions and
advertising expenses incurred, expenses of remodeling the Premises, the
Building, or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant);
18.2 If Landlord does not elect to terminate this Lease on account of any
Event of Default by Tenant, Landlord may, from time to time, without terminating
this Lease, enforce all of its rights and remedies under this Lease, including
the right to recover all Rent as it becomes due.
18.3 Landlord shall at all times have the right to seek any declaratory,
injunctive, or other equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof.
18.4 Following the occurrence of two instances of payment of Rent more than
ten (10) days late in any twelve (12) month period, the late charge set forth in
Paragraph 5 shall apply from the date payment was due and Landlord may require
that all remaining monthly installments of Rent payable under this Lease shall
be payable by cashier's check or electronic funds transfer two (2) months in
advance, and may require that Tenant increase the Security Deposit to an amount
equal to two times the current month's Rent at the time of the most recent
default.
18.5 Cure Tenant's default at the expense of Tenant (A) immediately and
without notice in the case (1) of emergency, (2) where such default unreasonably
interferes with any other tenant in the Project, or (3) where such default will
result in the violation of any Regulation or the cancellation of any insurance
policy maintained by Landlord, and (B) in any other case if such default
continues for ten (10) days following the receipt by Tenant of notice of such
default from Landlord and all costs incurred by Landlord in curing such
default(s), including, without limitation, attorneys' fees, shall be
reimbursable by Tenant as Rent hereunder upon demand, together with interest
thereon, from the date such costs were incurred by Landlord, at the Default
Rate.
19. Surrender of Premises. No agreement to accept a surrender of the Premises
shall be valid unless it is in writing and signed by Landlord. At the expiration
or earlier termination of this Lease, Tenant shall deliver to Landlord all keys
to the Premises, and Tenant shall deliver to Landlord the Premises in the same
condition as existed on the date Tenant originally took possession thereof,
ordinary wear and tear excepted. In addition, prior to the expiration of the
Term or any sooner termination thereof, (a) Tenant shall remove such Alterations
as Landlord shall request (even if installed with Landlord's consent) and shall
restore the portion of the Premises affected by such Alterations and such
removal to its condition existing immediately prior to the making of such
Alterations, (b) Tenant shall remove from the Premises all unattached trade
fixtures, furniture, equipment and personal property located in the Premises,
including, without limitation, phone equipment, wiring, cabling and all garbage,
waste and debris, and (c) Tenant shall repair all damage to the Premises or the
Project caused by any such removal including, without limitation, full
restoration of all holes and gaps resulting from any such removal and repainting
required thereby. All personal property and fixtures of Tenant not so removed
shall, to the extent permitted under applicable Regulations, be deemed to have
been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or
otherwise disposed of by Landlord without notice to Tenant and without any
obligation to account for such items.
20. Holding Over. If Tenant holds over after the expiration or earlier
termination of the Term hereof, with or without the express or implied consent
of Landlord, Tenant shall be only a month-to-month tenant and otherwise upon the
terms, covenants and conditions herein specified and Tenant's Base Rent shall be
at a rate equal to one hundred fifty percent (150%) of the monthly installment
of Base Rent payable by Tenant immediately prior to such expiration or
termination.
21. Substitution or Demolition. Intentionally Omitted.
22. Landlord Transfers and Liability. Landlord may, without restriction, sell,
assign or transfer in any manner all or any portion of the Project, any interest
therein or any of Landlord's rights under this Lease and then Landlord shall
automatically be released from any further obligations hereunder. The liability
of Landlord to Tenant for any default by Landlord under the terms of this Lease
or with respect to any obligation or liability related to the Premises or the
Project shall be recoverable only from the interest of Landlord in the Project,
and neither Landlord nor any affiliate thereof shall have any personal liability
with respect thereto and in no case shall Landlord be liable to Tenant for any
lost profits, damage to business, or any form of special, indirect or
consequential damage on account of any breach of this Lease. In the event that
the holder of a mortgage or deed of trust on the Premises becomes the "Landlord"
under this Lease, such holder shall not be liable for any act or omission of
Landlord which occurred prior to such holder's acquisition of title.
11
23. Estoppel Certificates; Financial Statements. At any time and from time to
time during the Term, Tenant shall, without charge, execute, acknowledge and
deliver to Landlord within ten (10) days after Landlord's request therefor, an
estoppel certificate in recordable form containing such factual certifications
and other provisions as are commonly found in the estoppel certificate forms
requested by institutional lenders and purchasers.
24. Notices. All Notices, demands, consents, or other information desired or
required to be given under this Lease shall be effective only if given in
writing and sent by (a) certified United States mail, postage prepaid, return
receipt requested, (b) nationally recognized express mail courier that provides
written evidence of delivery, fees prepaid, (c) facsimile, (d) United States
first-class mail, postage prepaid, or (e) personal delivery, and addressed to
the Addresses For Notices as set forth in the Basic Lease Information, or at
such other address as may be specified from time to time, in writing, or, if to
Tenant, at the Premises. Any such notice, demand, consent, or other information
shall be deemed given (i) if sent by certified mail, on the date of delivery
shown on the receipt card, (ii) if sent by courier, on the date it is officially
recorded by such courier, (iii) if delivered by facsimile, on the date the
sender obtains written telephonic confirmation that the electronic transmission
was received, (iv) if sent by United States first-class mail, five (5) business
days from the date mailed, or (v) if delivered personally, upon delivery or, if
refused by the intended recipient, upon attempted delivery.
25. Payment by Tenant; Non-Waiver. Landlord's acceptance of Rent following an
Event of Default shall not waive Landlord's rights regarding such Event of
Default. No waiver by Landlord of any violation or breach of any of the terms
contained herein shall waive Landlord's rights regarding any future violation of
such terms. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
26. Certain Rights Reserved by Landlord. Landlord hereby reserves and shall have
the following rights with respect to the Premises and the Project: (a) to make
inspections, repairs, or improvements, whether structural or otherwise, in and
about the Premises or any part thereof; and (b) to enter the Premises at
reasonable hours with adequate notice to Tenant accompanied by Tenant's
representative (or at any time in an emergency) to perform repairs, to take any
action authorized hereunder, or to show the Premises to prospective purchasers
or lenders, or, during the last six (6) months of the Term, prospective tenants.
27. Miscellaneous. If any clause or provision of this Lease is illegal, invalid,
or unenforceable under present or future laws, then the remainder of this Lease
shall not be affected thereby. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by Landlord unless such waiver is in writing
signed by Landlord. The terms and conditions contained in this Lease shall inure
to the benefit of and be binding upon the parties hereto, and upon their
respective successors in interest and legal representatives, except as otherwise
herein expressly provided. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Tenant and the person or persons
signing on behalf of Tenant represent and warrant that Tenant has full right,
power, and authority to enter into this Lease, and that all persons signing this
Lease on its behalf are authorized to do so. If Tenant is comprised of more than
one party, each such party shall be jointly and severally liable for Tenant's
obligations under this Lease. All exhibits and attachments attached hereto are
incorporated herein by this reference. This Lease shall be governed by and
construed in accordance with the laws of the jurisdiction where the Project is
located. In any action which Landlord or Tenant brings to enforce its respective
rights hereunder, the unsuccessful party shall pay all costs incurred by the
prevailing party, including without limitation, reasonable attorneys' fees and
court costs. Tenant shall not record this Lease or any memorandum hereof. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE RIGHT TO TRIAL
BY JURY IN ANY LITIGATION ARISING OUT OF OR WITH RESPECT TO THIS LEASE. This
Lease may be executed in any number of counterparts, each of which shall be
deemed an original. Time is of the essence as to the performance of each
covenant hereunder in which time of performance is a factor.
28. No Broker. Landlord and Tenant each warrant that they have dealt with no
real estate broker in connection with this transaction with the exception of the
brokers, if any, named in Exhibit F. Landlord and Tenant each agree to hold each
other harmless from and against any and all damages, costs and expenses
resulting from any claim(s) for a brokerage commission or finder's fee that may
be asserted against either of them by any broker or finder with whom the other
has dealt.
29. Further provisions, if any, are contained in Exhibit F, attached hereto.
Submission of this Lease to Tenant does not constitute an option or offer to
lease and this Lease is not effective otherwise until execution and delivery by
both Landlord and Tenant.
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EXHIBIT A
PREMISES/PROJEXCT
HENDERSON COMMERCE CENTER
(GRAPHIC OMITTED)
Exhibit B
INSURANCE
Tenant's Insurance. Tenant shall, at Tenant's sole cost and expense, procure and
keep in effect from the date of this Lease (or earlier authorized occupancy) and
at all times until the end of the Term, the following insurance coverage:
1. Property Insurance. Insurance on all personal property and fixtures of Tenant
and all improvements made by or for Tenant to the Premises on an "All Risk" or
"Special Form" basis, for the full replacement value of such property.
2. Liability Insurance. Commercial General Liability Insurance written on an ISO
CG 00 01 10 93 or equivalent form, on an occurrence basis, with a per occurrence
limit of at least $2,000,000, and a minimum general aggregate limit of at least
$3,000,000, covering bodily injury and property damage liability occurring in or
about the Premises or arising out of the use and occupancy of the Premises
and/or the Project by Tenant or any Tenant Party. Such insurance shall include
contractual liability coverage insuring Tenant's indemnity obligations under
this Lease, and shall be endorsed to name Landlord, any Holder of a Security
Instrument and any other party specified by Landlord as an additional insured
with regard to liability arising out of the ownership, maintenance or use of the
Premises.
3. Worker's Compensation and Employer's Liability Insurance. (a) Worker's
Compensation Insurance as required by any Regulation, and (b) Employer's
Liability Insurance in amounts not less than $1,000,000 each accident for bodily
injury by accident and for bodily injury by disease, and for each employee for
bodily injury by disease.
4. Commercial Auto Liability Insurance. Commercial auto liability insurance with
a combined limit of not less than One Million Dollars ($1,000,000) for bodily
injury and property damage for each accident. Such insurance shall cover
liability relating to any auto (including owned, hired and non-owned autos.)
5. Alteration Requirements. In the event Tenant shall desire to perform any
Alterations, Tenant shall deliver to Landlord, prior to commencing such
Alterations (i) evidence satisfactory to Landlord that Tenant carries "Builder's
Risk" insurance covering construction of such Alterations in an amount and form
approved by Landlord, (ii) and such other insurance as Landlord shall reasonably
require, and (iii) a lien and completion bond or other security in form and
amount satisfactory to Landlord.
6. General Insurance Requirements. All coverages described in this Exhibit B
shall be endorsed to (i) provide Landlord with thirty (30) days' notice of
cancellation or change in terms; and (ii) be primary and non-contributing with
Landlord's insurance. The property insurance coverage required of Tenant shall
be endorsed to waive all rights of subrogation by the insurance carrier against
Landlord or shall otherwise state that the carrier shall be so bound by Tenant's
waiver of the carrier's right of subrogation. If at any time during the Term the
amount or coverage of insurance which Tenant is required to carry under this
Exhibit B is, in Landlord's reasonable judgment, materially less than the amount
or type of insurance coverage typically carried by owners or tenants of
properties located in the general area in which the Premises are located which
are similar to and operated for similar purposes as the Premises or if Tenant's
use of the Premises should change with or without Landlord's consent, Landlord
shall have the right o require Tenant to increase the amount or change the types
of insurance coverage required under this Exhibit B. All insurance policies
required to be carried by Tenant under this Lease shall be written by companies
rated A-X or better in "Best's Insurance Guide" and authorized to do business in
the State of Nevada. Deductible amounts under all insurance policies required to
be carried by Tenant under this Lease shall not exceed $10,000 per occurrence.
Tenant shall deliver to Landlord on or before the Term Commencement Date, and
thereafter at least thirty (30) days before the expiration dates of the expired
policies, certified copies of Tenant's insurance policies, or a certificate
evidencing the same issued by the insurer thereunder, and, if Tenant shall fail
to procure such insurance, or to deliver such policies or certificates, Landlord
may, at Landlord's option and in addition to Landlord's other remedies in the
event of a default by Tenant under the Lease, procure the same for the account
of Tenant, and the cost thereof (with interest theron at the Default Rate) shall
be paid to Landlord as Additional Rent.
Landlord's Insurance. All insurance maintained by Landlord shall be for the sole
benefit of Landlord and under Landlord's sole control.
1. Property Insurance. Landlord agrees to maintain property insurance insuring
the Building against damage or destruction due to risk including fire,
vandalism, and malicious mischief in an amount not less than the replacement
cost thereof, in the form and with deductibles and endorsements as selected by
Landlord. At its election, Landlord may instead (but shall have no obligation
to) obtain "All Risk" coverage, and may also obtain earthquake, pollution,
and/or flood insurance in amounts selected by Landlord.
2. Optional Insurance. Landlord, at Landlord's option, may also (but shall have
no obligation to) carry (i) insurance against loss of rent, in an amount equal
to the amount of Base Rent and Additional Rent that Landlord could be required
to xxxxx to all Project tenants in the event of condemnation or casualty damage
for a period of twelve (12) months; and (ii) liability insurance and such other
insurance as Landlord may deem prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as Landlord
shall determine. Landlord shall not be obligated to insure, and shall have no
responsibility whatsoever for any damage to, any furniture, machinery, goods,
inventory or supplies, and other personal property or fixtures which Tenant may
keep or maintain in the Premises, or any leasehold improvements, additions or
alterations within the Premises.
EXHIBIT C
SIGN CRITERIA
1. Purpose. These Sign criteria have been established for the purpose of
maintaining a consistent overall appearance of the Project and shall be strictly
enforced.
2. Signage. As used herein, Signage shall mean any signs, advertising placards,
banners, pennants, names insignias, trademarks, balloons, flags, decals or other
decorative or descriptive material installed on the Project.
3. Tenant Responsibility: Tenant, at its sole expense, shall be responsible for
any Signage it requires at the Premises, including conforming with these Sign
Criteria and all applicable laws, obtaining required permits, installing,
maintaining and removing such Signage, as well as restoring the Premises to
Landlord's satisfaction after such Signage is removed.
4. Approved Contractor: Tenant shall contract with a professionally licensed
sign company approved by Landlord for the design, fabrication and installation
of Tenant's Signage.
5. Landlord Approval Required. Tenant shall obtain Landlord's written approval
prior to the installation or removal of any Signage on the Premises. Prior to
Tenant's Signage installation, Tenant shall submit to Landlord for its review
and approval, a scaled drawing of Tenant's proposed Signage including colors,
construction details, method of attachment, electrical loads and electrical
plans. Any sign installed without the prior approval of Landlord will be brought
into conformity or removed at Tenant's expense.
6. Permitted Signage. Tenant shall be permitted Identification Signage at
Tenant's main entrance displaying Tenant's business name, type of business
and/or logo only. Tenant shall also be permitted Information Signage at Tenant's
main entrance displaying Tenant's hours of operations and such other information
approved by Landlord. Landlord shall designate the specific location of Tenant's
Signage.
7. Sign Specifications. All Tenant Signage shall comply with these Sign Criteria
and the Sign Specifications attached hereto as Exhibit C-1.
8. Installation. Tenant shall notify Landlord prior to the installation of any
Signage. Tenant or its contractor shall repair any damage to any property caused
by such installation work.
9. Maintenance. Tenant shall be solely responsible for the proper maintenance of
its Signage, including illumination. Landlord may repair or maintain Tenant's
Signage, at Tenant's expense, if Tenant has not commenced required maintenance
of its signage within ten days after receipt of written notice from Landlord
informing Tenant of such required repairs or maintenance.
10. Removal. Tenant shall remove all of its Signage upon the expiration or early
termination of the Lease. Tenant shall notify Landlord prior to such removal.
Landlord, at Tenant's expense, shall repair any damage to the building required
as a result of Tenant's sign removal.
11. Interior Signage. Except as provided herein, no signs visible from the
exterior of the Premises shall be permitt4ed in the interior of the Premises
without Landlord's consent.
12. Vehicle Signs. Without restricting Tenant's rights to park its delivery or
other vehicles used in the normal course of business on the Project, no signs
may be affixed to any vehicles or trailers parked on the Project that advertise
promotions or direct customers to the Premises.
13. Prohibited Signs. Signs consisting of moving, swinging, rotating, flashing,
blinking, scintillating, fluctuating or otherwise animated light are prohibited.
Off-premise signs or any sign installed for the purpose of advertising a
product, event, person, or subject not related to the premises upon which said
sign is located are prohibited, without written consent of the Landlord.
14. No Exceptions. Except as provide herein, no Signage shall be affixed,
without Landlord's prior approval, anywhere on the Project, including but not
limited to on the glass, in the window area or on the exterior walls of the
building, landscaping areas, sidewalks or the driveways or parking areas of the
Project.
15. Changes. These Sign Criteria are subject to change by Landlord. In the event
Landlord changes the Sign Criteria for the Project during the term of this
Lease, Landlord may update Tenant's Signage in compliance with the new Sign
Criteria provided that any costs associated with such change shall be at
Landlord's sole expense.
EXHIBIT C-1
SIGN SPECIFICATIONS
Henderson Commerce Center
These sign criteria have been established for the purpose of maintaining the
overall appearance of Henderson Commerce Center.
Identification Signage
1. Signs shall be made from high-density foam cut letters with black fascia
and black sides in a font style to be specified by Tenant. Signs will be
glue adhered to the concrete face of the building in a location to be
designated by Landlord.
2. The letter style, wording and logo shall be submitted to Landlord for
approval.
3. The maximum sign dimensions, including Tenant's logo, shall be 2' 6" in
height and 9' 0" in length. The sign and/or logo shall be centered within
the center panel above the main entrance. Letters and logo shall have a
depth of 2" to 2 1/2".
4. No electrical signs shall be permitted.
5. Following, for the purpose of reference only, is an example of a typical
to-scale sign layout.
(GRAPHIC OMITTED)
Information Signage
1. Tenant's information signage shall only be installed in the area designated
by Landlord on the door or storefront of the building at Tenant's main entrance.
2. Tenant's Information signage shall consist of white vinyl letters not to
exceed 2" in height.
Exhibit "D"
Tenant Improvement Agreement
Work to be Performed by Landlord
This Tenant Improvement Agreement is made a part of the Lease Agreement dated
March 15, 2005 (the "Lease") between Xxxxxx Investment Properties - Nevada, LLC
("Landlord") and Electrograph Systems, Inc., a New York corporation ("Tenant").
Landlord has leased to Tenant and Tenant has leased from Landlord, the premises
commonly known as 000 Xxxxxx Xxxxx, Xxxxx 000-000, Xxxxxxxxx, Xxxxxx (the
premises). This Exhibit "D" sets forth the Agreement of Landlord and Tenant with
respect to certain tenant improvements that are to be made to the Premises. This
Exhibit "D" provides the terms and conditions under which Landlord and Tenant
shall cause the Premises to be improved for Tenant's initial occupancy under the
Lease.
1. Tenant Improvements.
1.1. Scope of Work. Landlord shall construct improvements to the Premises
(the "Tenant Improvements") in accordance with a set of mutually
acceptable plans ("Tenant Improvement Plans") including but not
limited to:
1.1.1. Construction of standard office improvements which shall include:
1.1.1.1. All partitions and ceiling systems in the various offices, server
room, kitchenette, restrooms, floor and wall finishes, and such other
improvements as may be required to prepare such portions of the
Premises for occupancy.
1.1.1.2. Installation of HVAC equipment, distribution ducting, thermostats,
diffusers and return air grills.
1.1.1.3. Installation of electrical service from the main switchgear to the
electrical panels in the electrical closet in the Building;
distribution from the electrical panels serving the Premises to light
fixtures and electrical receptacles throughout the Premises; and
installation of all light fixtures and fire/life safety equipment in
the Premises.
1.1.2 Landlord shall retain the services of a space planner or architect to
prepare necessary drawings and plans for construction of the tenant improvements
("Tenant Improvement Plans"). Within five (5) business days after Landlord
delivers to Tenant a copy of the Tenant Improvement Plans, Tenant shall either
approve them or shall set out the requested revisions. Tenant shall clearly
identify and locate on the Tenant Improvement Plans (i) any special
requirements; and (ii) locations of telephone and electrical receptacles,
outlets, and other items requiring electrical power (for special conditions,
equipment, power requirements, and manufacturer's model numbers must be
included). Landlord shall review any revisions made by Tenant and shall, in
writing within three (3) business days after receipt, either approve the revised
Tenant Improvement Plans or reject them, in which case Landlord shall specify in
reasonable detail the deficiencies as submitted. If rejected, Tenant shall
resubmit required changes as soon as practicable until Landlord's approval has
been obtained. If the estimated cost of construction in accordance with the
approved Tenant Improvement Plans exceeds the Landlord's Contribution (as
defined below), either the Tenant must agree to bear the additional cost or the
Tenant must identify the changes it wants made to the Tenant Improvement Plans
to bring the cost of the mutually agreed scope of work to within the Landlord's
Contribution.
D (1 OF 4)
1.2 Construction. Landlord shall engage the services of a General Contractor to
construct the Tenant Improvements. The Landlord will also provide Project
Management services for the duration of the Tenant Improvements. The Tenant
Improvements shall be constructed in accordance with the Tenant Improvement
Plans and Tenant's construction schedule.
1.2.1Tenant shall be responsible for delays and additional costs in
completion of the design and construction of the Tenant Improvements
caused by its changes to the Tenant Improvement Plans or by delays
caused by Tenant's special materials that require a long lead-time for
delivery.
1.2.2If Tenant desires any change to the Tenant Improvements, Tenant's
change order request shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld.
1.2.3Landlord and its contractors shall comply with the following
requirements that shall be applicable to any work to be performed on
the Premises by Landlord or its contractors:
1.2.3.1 All such work shall be done in conformity with a valid
building permit when required, all such work shall be performed
in accordance with all applicable governmental regulations and
all applicable safety regulations applicable to the Premises.
During any period in which Landlord and Tenant are simultaneously
occupying and/or performing work in the Premises, Landlord's
Project Manager shall be authorized to resolve any conflict as to
scheduling, access or the like.
1.2.3.2 Tenant shall store materials only in areas designated and
approved by the Landlord's Project Manager from time to time. All
trash and surplus construction materials shall be promptly
removed from the Property.
1.2.4Tenant's entry into the Premises for any purpose, including without
limitation inspection or performance of work by Landlord's
contractors, prior to the Commencement Date, shall be subject to all
the terms and conditions of the Lease, including without limitation
the provisions of the Lease relating to the maintenance of insurance,
but excluding the provisions of the Lease relating to the payment of
Base Rent. Tenant's entry shall mean entry by Tenant, its officers,
contractors, subcontractors, licensees, agents, employees, guests,
invitees, or visitors.
1.2.5Tenant shall indemnify and hold harmless Landlord from and against
any and all claims, losses, liabilities, and expenses (including
without limitation attorneys' fees) arising out of or in any way
D (2 OF 2)
related to the activities of Tenant's contractors and their
subcontractors in the Premises or on the Property, if any. Without
limiting the generality of the foregoing, Tenant shall promptly
reimburse Landlord upon demand for any extra expense incurred by the
Landlord as a result of faulty work performed by any of Tenant's
contractors, any delays caused by such work, or inadequate clean-up of
such work.
1.3 Cost. The cost to design, permit and construct the Tenant Improvements
shall be paid by Landlord and Tenant as follows:
1.3.1Provided that Tenant complies with each and every term and condition
of this Agreement, Landlord will contribute a Tenant Improvement
Allowance of up to Fifty-nine Dollars and 00/100 ($59.00) per square
foot as to the 1,356 square feet of office area or Eighty Thousand
Dollars and 00/100 ($80,000.00) ("Landlord's Contribution") towards
the approved Tenant Improvements for Tenant's Premises ("Tenant's
Work") to be used by Landlord solely for improvements to the interior
of the Premises. Landlord will guarantee all electrical equipment,
mechanical equipment and loading doors for the first year of the Lease
Term. Tenant shall be responsible for the cost of any additional
improvements to the Premises over and above the Tenant Improvement
Allowance.
In the event that the total dollar amount due the Contractor upon
completion of the tenant improvements should be less than the Eighty
Thousand and 00/100 Dollars ($80,000.00), Tenant shall not be entitled
to any monetary reimbursement or rent credit of any kind. In the event
Tenant should not fulfill it obligations hereunder for the entire
Lease Term for any reason, including default by Tenant, or
specifically if at any time during the Lease Term Landlord and Tenant
should execute a Lease Termination Agreement specifying that Tenant
shall be relieved of all obligations and liabilities arising after the
effective date of termination, Tenant shall be required to reimburse
Landlord the unamortized portion of the Tenant Improvement Allowance
expended by Landlord, which shall be calculated based on an annual
interest rate of ten percent (10%) and amortized over five (5) years.
Payment shall be submitted in the form of a cashier's check payable to
Landlord promptly upon the termination of Tenant's right to occupancy
or execution of the Termination Agreement, whichever shall first
occur.
1.3.2 Prior to commencement of construction of the Tenant Improvements,
Landlord shall submit to Tenant the final estimated cost of the Tenant
Improvements.
2. Tenant's Furniture, Fixtures and Equipment.
2.1 Scope of Work. Tenant shall procure and install all furniture,
fixtures and equipment in the Building ("Tenant's FF&E") including but
not limited to:
2.1.1 All furniture, fixtures and equipment in the offices and support
areas.
2.1.2 All furniture, fixtures and equipment used in the day-to-day
business activities of the Tenant.
2.1.3 All Security Systems, Telephone, Data and Telecommunications
Equipment, Systems and Wiring.
2.1.4 Any and/or all other specialty items.
2.2 Design. Tenant shall be solely responsible for any plans,
specifications and permits required for the installation of the
Tenant's FF&E.
2.3 Installation. Tenant shall be solely responsible for the installation
of Tenant's FF&E. Landlord shall have no liability for the
installation of Tenant's FF&E and any delays in the installation of
Tenant's FF&E shall not delay the Commencement Date of the Lease.
2.4 Cost. All costs to procure and install Tenant's FF&E shall be paid by
Tenant. Landlord shall have no liability for the cost of Tenant's
FF&E.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
Landlord
XXXXXX INVESTMENT PROPERTIES-NEVADA,LLC
By: /s/ Xxxxx Xxxxxxx
Title: Sr. Vice President
Tenant
ELECTROGRAPH SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxx
Title: _President, Manchester Technologies, Inc.
D (4 OF 4)
EXHIBIT E
RULES AND REGULATIONS
Except as otherwise provided in the Multi-Tenant Lease to which this exhibit is
attached, the following rules and regulations shall apply:
1. The sidewalk, entries and driveways of the Project shall not be obstructed
by Tenant or its agents or used by them for any purpose other than ingress
and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor furniture,
etc., in the parking areas, landscaped areas or other areas outside of its
Premises or on the roof of the Project.
3. Except for seeing-eye dogs or service animals, no animals shall be allowed
in the offices, halls or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the making of
loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections in
the Premises, Landlord or its agent will direct the electrician as to where
and how the wires may be introduced and, without such direction, no boring
or cutting of wires will be permitted. Any such installation or connection
shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or boiler or
carry on any mechanical business in the Premises except as specifically
approved in the Lease. The use of oil, gas or flammable liquids for
heating, lighting or any other purpose is expressly prohibited. Explosives
or other articles deemed extra hazardous shall not be brought into the
Project.
7. Parking any type of recreational vehicles is specifically prohibited on or
about the Project. No vehicle of any type shall be stored in the parking
areas at any time. In the event a vehicle is disabled, it shall be removed
within 48 hours. There shall be no "For Sale" or other advertising signs on
or about any parked vehicle. All vehicles shall be parked in designated
parking areas in conformity with all signs and other markings. All parking
will be open parking; numbering or lettering of individual spaces will not
be permitted except as specified by Landlord.
8. Tenant shall maintain the premises free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who shall in any manner do any act in violation of the
Rules and Regulations of the Project.
10. a. Tenant agrees that all Tenant's trash and rubbish shall be deposited in
receptacles and that Tenant shall not cause or permit any trash receptacles
to remain outside the building. All movable trash receptacles provide by
the trash disposal firm for the Premises must be kept in the trash
enclosure areas, if any, provided for that purpose. In the event Landlord
provides or designates trash receptacles, Tenant agrees, at its own cost
and expense, to cause such receptacles to be emptied and trash removed.
Tenant agrees to bag trash before depositing it in the authorized trash
area. Landlord reserves the right o contract for trash removal and xxxx
Tenant for said services. b. Tenant shall not cause any unnecessary labor
by reason of Tenant's carelessness or indifference in the preservation of
good order and cleanliness. Landlord shall not be responsible to Tenant for
any loss of property on the Premises, however occurring, or for any damage
done to the effects of Tenant by the janitors or any other employee or
person.
11. Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus or any other service equipment affecting the Premises.
12. Tenant shall not permit storage outside the Premises including, without
limitation, outside storage of trucks and other vehicles or dumping of
waste or refuse or permit any harmful materials to be placed in any
drainage or sanitary system or trash receptacle in or about the Premises.
13. No auction, public or private, will be permitted on the Premises or the
Project.
14. No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.
15. The premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal Purposes or for any purpose other than that specified in
the Lease.
16. Tenant shall ascertain from Landlord the maximum amount of electrical
current that can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the
needs of other tenants and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not
relieve Tenant from the obligation not the use more electricity than such
safe capacity.
17. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage.
18. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.
EXHIBIT F
FURTHER PROVISIONS
Paragraph 30: Broker
Landlord and Tenant each warrant that they have dealt with no real estate broker
in connection with this transaction with the exception of Xxx X. Xxxxxxx, SIOR
of Colliers International located at 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxx 00000 who represented Landlord and Xxxxx Xxxxxxxx of Coldwell
Banker Commercial located at 0000 Xxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx
00000 who represented Tenant. Landlord shall pay a commission to its broker for
sharing with Tenant's broker per a separate agreement. Landlord and Tenant each
agree to hold the other harmless from and against any and all damages, costs and
expenses resulting from any claim(s) for a brokerage commission or finder's fee
that may be asserted against either of them by any broker or finder other than
those named above with whom the other has dealt. If Tenant exercises its early
termination options as set forth in Paragraph 36, Tenant shall be responsible
for reimbursing Landlord for the unamortized portion of the commissions paid.
Paragraph 31: Option To Renew
So long as Tenant has not assigned or sublet its interest under the Lease, even
an assignment or sublease with Landlord's consent (other than an assignment
pursuant to Paragraph 10.1(b)), and Tenant is not in default at the time of
exercise and no default arises between that time and the expiration of the
existing Term of the Lease, Tenant or any assignee or successor of Tenant
pursuant to Paragraph 10.1(b), but not any other assignee, subtenant or
successor of Tenant, shall have a single option to extend the duration of this
Lease for a period of three (3) years. During the option Term, all of the other
provisions of the Lease shall remain in effect except that the Base Rent shall
be subject to adjustment to a fair market rent as shall be agreed upon between
the parties, but in no event less than four percent (4%) above the amount in
effect during the last year of the primary Term. Tenant shall exercise the
option by giving written notice of same to Landlord not more than twelve (12)
months nor less than nine (9) months prior to the expiration of the existing
Term of the Lease (the "Exercise Date").
The Base Rent applicable during the Option Term shall be established by mutual
agreement of the parties within thirty (30) days of the Exercise Date or, if the
parties cannot so agree, the Base Rent shall be determined as follows. Within
ten (10) days after the thirty (30) day period or sooner if the parties mutually
agree, Landlord and Tenant shall each appoint an expert who shall be an
appraiser or licensed real estate professional with at least five (5) years of
commercial real estate experience within the area where the Premises are
located. Within forty-five (45) days of the appointment, each expert shall
establish the Base Rent for the Premises taking into account the then condition
of the Premises and local market conditions and practices applicable to leases
which are comparable as to duration, size, location and use. If a party fails to
appoint an expert, the determination of the sole expert appointed shall apply.
Each party shall pay the fees and expenses of its own expert and shall share
equally the fees and expenses of a referee, if one is required.
If two experts are appointed and the determinations are capable of direct
comparison and the higher determination is less than one hundred ten percent
(110%) of the lower one, the Base Rent shall be the average of the
determinations. If the determinations are not sufficiently similar in approach
to ascertain that they are within 110% of one another or they are similar in
approach but further apart, the experts shall, within five (5) days of the last
expert's determination, attempt to mutually select a third party as a referee.
If they cannot agree on a referee, either party may ask the presiding judge of
the trial court in the jurisdiction where the Premises are located to appoint a
referee for them. The referee, selected by either means, must have the same type
of qualifications as the experts, except that the referee must not have been
employed regularly or as a consultant, during the prior six (6) month period by
either Landlord or Tenant. Within thirty (30) days of his or her appointment,
the referee must select one of the two (2) experts' determinations as being more
appropriate and that determination shall establish the Base Rent for the Option
Term.
Page 1 of 3
Paragraph 32: Parking
Landlord will provide three (3) reserved parking spaces for the use of Tenant's
employees and visitors at locations in reasonable proximity to the Premises to
be designated from time to time by Landlord, which spaces shall be subject to
the rules and regulations set forth in Paragraph 16.
Paragraph 33: Landlord's Warranty
Landlord warrants that all electrical, mechanical, plumbing, fire sprinklers,
HVAC, roll-up doors, and evaporative cooling systems are in new and good
operating condition at the Commencement of the initial Lease Term. Except for
damage caused by Tenant, its employees, agents and invitees, Landlord shall
warrant the above systems for one (1) year from the date the Tenant occupies the
Premises.
Paragraph 34: Tenant's Alterations
Notwithstanding paragraph 8.1 of this Lease Agreement, Tenant at its own expense
shall be permitted to install four (4) removable steel security posts, two (2)
in front of each grade level door. Said security posts are allowed to be in
place during non-business hours and will not be in place during regular business
hours. Tenant agrees to remove such security posts and restore the ground to its
original condition upon vacating the Premises. In addition, Tenant at its own
expense shall be permitted to install a security fence to separate the warehouse
area from the office area to allow the Tenant to utilize the warehouse area and
have it be secured while the office area is being constructed.
Paragraph 35: Right of First Refusal to Expand
Unit B101, consisting of an area of approximately 10,641 square feet located
adjacent to the Premises, is occupied as of the date of this Lease, but Landlord
anticipates it becoming available for lease during the Term of this Lease
("Expansion Space"). So long as Tenant is not in default of this Lease, Landlord
agrees not to lease all or any portion of the Expansion Space to any other party
without providing Tenant with a right of first refusal ("ROFR") as set forth
herein. If Landlord should receive a written offer from any third party to lease
any portion of the Expansion Area on terms acceptable to Landlord, or if
Landlord should be prepared to make a written offer to lease any portion of the
Expansion Area to a third party (each a "Bona Fide Offer"), Landlord shall
notify Tenant of the terms and conditions of said Bona Fide Offer. Tenant shall
have seven (7) business days after receipt of said notification from Landlord to
exercise Tenant's one time only ROFR by giving written notice to Landlord that
Tenant is prepared to lease all, but not less than all of the Expansion Area
from Landlord upon the same terms and conditions as are contained in the Bona
Fide Offer or other terms mutually agreeable to the parties, except that the
duration of the lease term applicable to the Expansion Area for Tenant shall be
equal to that contained in the Bona Fide Offer, but not less than three (3)
years. If Tenant does elect to lease the Expansion Space, the parties shall
promptly execute an amendment to the Lease reflecting the addition of the
Expansion Space, together with corresponding changes in the Base Rent, Security
Deposit, and other terms and conditions, as appropriate. If Tenant declines the
opportunity to lease the Expansion Space or otherwise fails to timely exercise
its ROFR, the ROFR shall be extinguished, and Tenant shall have no further
entitlement to notice of future Bona Fide Offers even if the Bona Fide Offer
that gave rise to the notification from landlord should fail to result in an
executed lease. Notwithstanding the foregoing, Landlord agrees that Tenant shall
have the exclusive right to expand into the Expansion Space for the first 45
days following the Scheduled Term Commencement Date of the Lease Agreement on
the same terms and conditions as are applicable to the Premises except that
Landlord will not provide any Tenant Improvement Allowance for the Expansion
Space . Thereafter, Tenants rights regarding said Expansion Space shall be
subject to the terms and conditions described above in this Paragraph 35.
Paragraph 36: Early Termination
Notwithstanding the provisions of the Basic Lease Information establishing the
Scheduled Expiration Date of the Lease, Tenant may, for any or no reason, cause
an earlier termination of the Lease to be effective as of the end of the
thirty-sixth (36th) month of the initial Lease Term subject to the following
terms and conditions:
Page2 2 of 3
a) Tenant must notify landlord in writing on or before the last day of
the thirtieth (30th) month of the initial Lease Term of its desire to
terminate the Lease as to all of the Premises occupied by Tenant
within the Project (which, for the purposes of this Paragraph 36 shall
also include the Expansion Space, if applicable, and any other
premises covered by other lease agreements) and the effective date of
that termination shall be not less than six (6) months from the date
of Tenant's notice; Once delivered to Landlord, such notice may not be
withdrawn by Tenant and the parties shall thereafter treat the end of
the thirty-sixth (36th) month of the Lease Term as if it were the
Expiration Date for purposes of the other terms and conditions of the
Lease.
b) At the time of notifying Landlord or at any time after notification
and prior to any early termination date, Tenant must not have assigned
or sublet all or any portion of the Premises and Tenant must not be in
default;
c) Tenant must remit with its termination notice a cashier's check
payable to Landlord for (i) the un-amortized portion of the Real
Estate Commissions and Tenant Improvement Allowance, which amounts are
deemed to be amortized over a five (5) year period at an annual
interest rate of 10% and (ii) an Early Termination fee in the amount
of Twenty-four Thousand Five Hundred forty-nine and 00/100 Dollars
($24,549.00). Landlord shall provide Tenant with reasonable evidence
of the Real Estate Commissions paid.
d) The parties shall execute a Lease Termination Agreement memorializing
the foregoing and specifying that Tenant shall be relieved of all
obligations and liabilities arising after the effective date of
termination, except that if Tenant shall have damaged the Premises or
Landlord's property while vacating the space, upon written notice from
Landlord, Tenant shall promptly make payment to landlord for the
reasonable cost of repairs.
Paragraph 37: Rent Prior to Delivery of Office Portion of Premises
Commencing April 1, 2005 and continuing until Landlord shall have substantially
completed the Office Portion of the Premises and delivered possession of the
Office Portion to Tenant, or until such time as either party causes a Lease
termination due to the Landlord's failure to substantially complete the Office
Portion of the Premises within the Allowed Grace Period, Tenant shall only be
required to pay Base Rent and its Proportionate Share of Operating Expenses for
the Warehouse Portion of the Premises. The Base Rent applicable to the Warehouse
Portion of the Premises shall be $10,767.00 per month and Tenant's Proportionate
Share of Operating Expenses for the Warehouse Portion of the Premises shall
initially be estimated to be $2,692.00 per month. Notwithstanding the scheduled
abatement of Base Rent for the month of June 2005, the parties agree that
Tenant's entitlement to a month of abated Base Rent is intended to occur during
the first calendar month after the Office Portion of the Premises has been
substantially completed and delivered to Tenant, If necessary due to delays in
delivery of the Office Portion of the Premises, the abatement month shall be
delayed accordingly to be applicable to the entire Premises.
Page 3 of 3
EXHIBIT G
GUARANTY OF LEASE
This Guaranty of Lease (the "Guaranty") is attached to and made part of that
certain real estate Lease (the "Lease") dated March 15, 2005, between Xxxxxx
Investment Properties-Nevada, LLC, an Oregon limited liability company, as the
Landlord, and Electrograph Systems, Inc., a New York corporation, as Tenant,
covering the Property commonly known as 000 Xxxxxx Xxxxx, Xxxxx 000-000,
Xxxxxxxxx, Xxxxxx 00000. Except as expressly stated herein, the terms used in
this Guaranty shall have the same definitions as set forth in the Lease. In
order to induce Landlord to enter into the Lease with Tenant, Manchester
Technologies, Inc., a New York corporation ("Guarantor") has agreed to execute
and deliver this Guaranty to Landlord. Guarantor acknowledges that Landlord
would not enter into the Lease if Guarantor did not execute and deliver this
Guaranty to Landlord. If Guarantor consists of more than one person or entity,
all liability of Guarantor hereunder shall be joint and several.
1. Guaranty. In consideration of the execution of the Lease by Landlord and as a
material inducement to Landlord to execute the Lease, Guarantor hereby
irrevocably and unconditionally guarantees the full, timely and complete (a)
payment of all rent and other sums payable by Tenant to Landlord under the Lease
and any amendments or modifications thereto by agreement or course of conduct
and (b) performance of all covenants, representations and warranties made by
Tenant and all obligations to be performed by Tenant pursuant to the Lease and
any amendments or modifications thereto by agreement or course of conduct. The
payment of those amounts and performance of those obligations shall be conducted
in accordance with all terms, covenants and conditions set forth in the Lease,
without deduction, offset or excuse of any nature and without regard to the
enforceability or validity of the Lease or any part thereof or any disability of
Tenant.
2. Landlord's Rights. Landlord may perform any of the following acts at any time
during the Lease Term without notice to or assent of any Guarantor and without
in any way releasing, affecting or impairing any of Guarantor's obligations or
liabilities under this Guaranty: (a) alter, modify or amend the Lease by
agreement or course of conduct, (b) grant extensions or renewals of the Lease,
(c) assign or otherwise transfer its interest in the Lease, the Property or this
Guaranty, (d) consent to any transfer or assignment of Tenant's or any future
tenant's interest under the Lease, (e) release one or more Guarantors or amend
or modify this Guaranty with respect to any Guarantor without releasing or
discharging any other Guarantor from any of such Guarantor's obligations or
liabilities under this Guaranty, (f) take and hold security for the payment of
this Guaranty and exchange, enforce, waive and release any such security, (g)
apply such security and direct the order or manner of sale thereof as Landlord,
in its sole discretion, deems appropriate and (h) foreclose upon any such
security by judicial or non-judicial sale without affecting or impairing in any
way the liability of Guarantor under this Guaranty except to the extent the
indebtedness has been paid.
3. Tenant's Default. This Guaranty is a guaranty of payment and performance and
not of collection. Upon any breach or default by Tenant under the Lease,
Landlord may proceed immediately against Tenant and/or any Guarantor to enforce
any of Landlord's rights or remedies against Tenant or any Guarantor pursuant to
this Guaranty, the Lease or at law or in equity without notice to or demand upon
either Tenant or any Guarantor. This Guaranty shall not be released, modified or
affected by any failure or delay by Landlord to enforce any of its rights or
remedies under the Lease or this Guaranty or at law or in equity.
4. Guarantor's Waivers. Each Guarantor hereby waives (a) presentment, demand for
payment and protest of non-performance under the Lease, (b) notice of any kind
including, without limitation, notice of acceptance of this Guaranty, protest,
presentment, demand for payment, default, nonpayment or the creation or
incurring of new or additional obligations of Tenant to Landlord, (c) any right
to require Landlord to enforce its rights or remedies against Tenant under the
lease or otherwise or against any other Guarantor, (d) any right to require
Landlord to proceed against any security held from Tenant or any other party,
(e) any right of subrogation and (f) any defense arising out of the absence,
impairment or loss of any right of reimbursement or subrogation or other right
or remedy of Guarantor against Landlord or any such security, whether resulting
from an election by Landlord or otherwise. Any part payment by Tenant or other
circumstance which operates to toll any statute of limitations as to Tenant
shall operate to toll the statute of limitations as to Guarantor.
5. Separate and Distinct Obligations. Each Guarantor acknowledges and agrees
that such Guarantor's obligations to Landlord under this Guaranty are separate
and distinct from Tenant's obligations to Landlord under the Lease. The
occurrence of any of the following events shall not have any effect whatsoever
on any Guarantor's obligations to Landlord hereunder, each of which obligations
shall continue in full force or effect as though such event had not occurred:
(a) the commencement by Tenant of a voluntary case under the federal bankruptcy
laws as now constituted or hereafter amended or replaced or any other applicable
federal or state bankruptcy, insolvency or other similar law (collectively, the
"Bankruptcy Laws"), (b) the consent by Tenant to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or similar official of Tenant or for any substantial part of its property, (c)
any assignment by Tenant for the benefit of creditors, (d) the failure of Tenant
generally to pay its debts as such debts become due, (e) the taking of corporate
action by Tenant in the furtherance of any of the foregoing or (f) the entry of
a decree or order for relief by a court having jurisdiction in respect of Tenant
in any involuntary case under the Bankruptcy Laws or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
Tenant or for any substantial part of its property or ordering the winding up or
liquidation of any of its affairs and the continuance of any such decree or
order unstayed and in effect for a period of sixty (60) consecutive days. The
liability of Guarantor under this Guaranty is not, and shall not be, affected or
impaired by any payment made to Landlord under or related to the Lease for which
Landlord is required to reimburse Tenant pursuant to any court order or in
settlement of any dispute, controversy or litigation in any bankruptcy,
reorganization, arrangement, moratorium or other federal or state debtor relief
proceeding. If, during any such proceeding, the lease is assumed by Tenant or
any trustee or thereafter assigned by Tenant or any trustee to a third party,
this Guaranty shall remain in full force and effect with respect to the full
performance of Tenant, any such trustee or any such third party's obligations
under the Lease. If the Lease is terminated or rejected during any such
proceeding or if any of the events described in Subparagraphs (a) through (f) of
this Paragraph 5 occur, as between Landlord and Guarantor, Landlord shall have
the right to accelerate all of Tenant's obligations under the Lease and
Guarantor's obligations under this Guaranty. In such event, all such obligations
shall become immediately due and payable by Guarantor to Landlord. Guarantor
waives any defense arising by reason of any disability or other defense of
Tenant or by reason of the cessation from any cause whatsoever of the liability
of Tenant.
6. Subordination. All existing and future advances by Guarantor to Tenant and
all existing and future debts of Tenant to any Guarantor shall be subordinated
to all obligations owed to Landlord under the Lease and this Guaranty.
7. Successors and Assigns. This Guaranty binds each Guarantor's personal
representative, successors and assigns.
8. Encumbrances. If Landlord's Interest in the Property or the Lease or the
rents, issues or profits therefrom are subject to any deed of trust, mortgage or
assignment for security, any Guarantor's acquisition of Landlord's interest in
the Property or the lease shall not affect any of Guarantor's obligations under
this Guaranty. In such event, this Guaranty shall nevertheless continue in full
force and effect for the benefit of any mortgagee, beneficiary, trustee or
assignee or any purchaser at any sale by Judicial foreclosure or under any
private power of sale and their successors and assigns. Any married Guarantor
expressly agrees that Landlord has recourse against any Guarantor's separate
property for all of such Guarantor's obligations hereunder.
9. Guarantor's Duty. Guarantor assumes the responsibility to remain informed of
the financial condition of Tenant and of all other circumstances bearing upon
the risk of Tenant's default which reasonable inquiry would reveal and agrees
that Landlord shall have no duty to advise Guarantor of Information known to it
regarding such condition or any such circumstance.
10. Landlord's Reliance. Landlord shall not be required to inquire into the
powers of Tenant or the officers, employees, partners or agents acting or
purporting to act on its behalf and any indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed under this
Guaranty.
11. Incorporation of Certain Lease Provisions. Guarantor hereby represents and
warrants to Landlord that Guarantor has received a copy of the Lease, has read
or had the opportunity to read the Lease and understands the terms of the Lease.
The provisions in the Lease relating to the execution of additional documents,
legal proceedings by Landlord against Tenant, severability of the provisions of
the Lease, interpretation of the Lease, notices, waivers, the applicable laws
which govern the interpretation of the Lease and the authority of the Tenant to
execute the Lease are incorporated herein in their entirety by this reference
and made a part hereof. Any reference in those provisions to "Tenant" shall mean
each Guarantor and any reference in those provisions to the "Lease" shall mean
this Guaranty except that (a) any notice which Guarantor desires or is required
to provide to Landlord shall be effective only if signed by Guarantor and (b)
any notice which Landlord desires or is required to provide to Guarantor shall
be sent to Guarantor at Guarantor's address indicated below or, if no address is
indicated below, at the address for notices to be sent to Tenant under the Lease
Signed on March 21, 2005 Manchester Technologies, Inc. a New York corporation
00 Xxxxxx Xxxx. By: /s/ Xxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxx Xxxxx Xxxxxxxxx, XXX
Xxxxxxxxx, XX 00000 ***
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Guarantor's Address
