Document:

ex_348806.htm

Exhibit 10.24

 

 

 

 

 

 

 

 

Lease Agreement Between

 

Athens County Port Authority

(“Landlord”)

 

 

and

 

 

Global Cooling Inc.

A Delaware Corporation

(“Tenant”)

 

 

 

 

 

 

 

 

 

 

ARTICLE ONE: BASIC TERMS

 

This Article One contains the Basic Terms of this Lease between the Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the Lease referred to in this Article One explains and defines the Basic Terms and are to be read in conjunction with the Basic Terms.

 

Section 1.01. Date of Lease:                                                            , 2011.

 

Section 1.02. Landlord (include legal entity): Athens County Port Authority

 

Address of Landlord: 340 W. State Street, Unit #26, Athens, Ohio 45701

 

Section 1.03. Tenant (include legal entity): Global Cooling, Inc. (a Delaware Corporation)

 

Address of Tenant: 141 Columbus Road, Athens, OH 45701

 

Section 1.04. Property: (include Street address, approximate square footage and description) 6000 Poston Road, The Plains, Ohio, with approximately 50,000 rentable square feet.

 

Section 1.05. Lease Term: Ten (10) years 0 months beginning on April 1, 2011, or such other date as is specified in this Lease and ending on March 31, 2021.

 

Section 1.06. Permitted Uses: (See Article Five) The property shall be used for offices, assembly/light manufacturing, research and development, and parts/inventory storage for the business of developing, assembling, and selling Ultra-Low Temperature cooling engines and freezers. The Premises shall not be used for other purposes without the prior written consent of Landlord. Tenant is responsible to obtain the proper zoning and occupancy permit for this usage.

 

Section 1.07. Tenant’s Guarantor: (If none, so state) None

 

Section 1.08. Brokers:

 

Landlord’s Broker: None

 

Tenant’s Broker: None

 

Section 1.09. Commission Payable to Landlord’s Broker: (See Article Fourteen)

 

Section 1.10. Initial Security Deposit: None.

 

Section 1.11. Vehicle Parking Spaces Allocated to Tenant: Entire Parking Lot

 

 

 

 

Section 1.12. Rent and Other Charges Payable by Tenant:

 

	 	
			a.

				
			RENT: Monthly rent shall be as follows:

			

 

	
			Year 1:

				
			$0

			
	
			Year 2:

				
			$16,000

			
	
			Year 3:

				
			$16,500

			
	
			Year 4:

				
			$17,000

			
	
			Year 5:

				
			$17,500

			
	
			Year 6:

				
			$18,000

			
	
			Year 7:

				
			$18,500

			
	
			Year 8:

				
			$19,000

			
	
			Year 9:

				
			$19,500

			
	
			Year 10:

				
			$20,000

			

 

This is a “Triple Net” lease. Tenant is responsible for Taxes, Insurance, and Repairs and Maintenance (see further below).

 

RENT REDUCTION: In consideration of the lease term of ten (10) years, and as inducement for Tenant to enter into this Lease, Landlord will offer free rent for Year 1. This inducement is offered in good faith based upon, among other things, the extent to which Tenant provides for Tenant improvements.

 

	 	
			b.

				
			OTHER PAYMENTS:

			

(I) Real Property Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4:04); (iv) Impounds for Insurance Premiums and Property Taxes (See Section 4.07); (v) Maintenance, Repairs and Alterations (See Article Six).

 

c.    OPTION TO RENEW: Lease renewal shall be negotiable between Landlord and Tenant.

 

Section 1.13. Landlord’s Share of Profit on Assignment or Sublease: (See Section 9.05) seventy five percent (75%) of the Profit (the “Landlord’s Share”).

 

Section 1.14. Riders:         The following Riders are attached to and made a part of this Lease (If none, so state)                    

 

 

 

 

ARTICLE TWO LEASE TERM

 

Section 2.01. Lease of Property For Lease Term. Landlord leases the Property to Tenant and Tenant leases the Property from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.05 above and shall begin and end on the dates specified in Section 1.05 above unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be on the sooner of (1) the date the Tenant occupies the Premises, or (2) 30 days after Delivery Date below (the “Commencement Date”).

 

Delivery Date: Landlord shall deliver the Premises, in a condition suitable for the Tenant’s commencement of construction of its improvements, on or about April 1, 2011 (the “Delivery Date”). The Landlord will be responsible for any repairs, if any, necessary to bring the building in compliance.

 

Section 2.02. Delay in Commencement. Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Property to Tenant on the Commencement Date. Landlord’s non- delivery of the Property to Tenant on that date shall not affect this Lease or the obligations of Tenant under this Lease except that the Commencement Date shall be delayed until Landlord delivers possession of the Property to Tenant and the Lease Term shall be extended for a period equal to the delay in delivery of possession of the Property to Tenant, plus the number of days necessary to end the Lease Term on the last day of a month. If Landlord does not deliver possession of the Property to Tenant within sixty (60) days after the Commencement Date, Tenant may elect to cancel this Lease by giving written notice to Landlord within ten (10) days after the sixty (60) day period ends. If Tenant gives such notice, the Lease shall be cancelled and neither the Landlord nor Tenant shall have any further obligations to the other. If Tenant does not give such notice, Tenant’s right to cancel the Lease shall expire and the Lease Term shall commence upon the delivery of possession of the Property to Tenant. If delivery of possession of the Property to Tenant is delayed, Landlord and Tenant shall, upon such delivery, execute an amendment to this Lease setting forth the actual Commencement Date and expiration date of the Lease. Failure to execute such amendment shall not affect the actual Commencement Date and expiration date of the Lease.

 

Section 2.03. Early Occupancy. If Tenant occupies the Property prior to the Commencement Date, Tenant’s occupancy of the Property shall be subject to all of the provisions of this Lease. Early occupancy of the Property shall not advance the expiration date of this Lease. Tenant shall pay Rent and all other charges specified in this Lease for the early occupancy period.

 

Section 2.04. Holding Over. Tenant shall vacate the Property upon the expiration or earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against all damages, which Landlord incurs from Tenant’s delay in vacating the Property. If Tenant does not vacate the Property upon the expiration or earlier termination of the Lease and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Property shall be a “month-to- month” tenancy, subject to all of the terms of this Lease applicable to a month-to-month tenancy, except that the Rent then in effect shall be increased by twenty-five percent (25%).

 

 

 

 

ARTICLE THREE; RENT

 

Section 3.01. Time and Manner of Payment. Upon execution on of this Lease, Tenant shall pay Landlord the Rent in the amount stated in paragraph 1.12(a) above beginning April 1, 2012, and each month thereafter, Tenant shall pay Landlord the Rent as stated in paragraph 1.12 (a), in advance, without offset, deduction or prior demand. The Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing Tenant shall not be obligated to make lease payments under this lease until the latter of the following; (a) Tenant has occupancy of the building or (b) Commencement Date as stated in Section 1.05.

 

Section 3.02. Security Deposit. N/A

 

Section 3.03. Termination; Advance Payments. N/A

 

Section 3.04. Renewal. Lease renewal shall be negotiable between the Landlord and Tenant provided that Tenant is not delinquent in the payment of rent or is not in default of the performance of any other terms or conditions of this lease. Tenant shall provide to Landlord nine months’ notice for renewal of lease. All provisions of this lease shall remain in full force and effect during any renewal term.

 

ARTICLE FOUR OTHER CHARGES PAYABLE BY TENANT

 

Section 4.01. Additional Rent. All charges payable by Tenant other than Rent are called “Additional Rent.” Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due with the next monthly installment of Rent. The term “rent’ shall mean Rent and Additional Rent.

 

Section 4.02. Property Taxes.

 

Tenant shall pay all taxes, assessments, liens and license fees (“Taxes”) levied, assessed or imposed by any authority having the direct or indirect power to tax or assess any such liens, by reason of Tenant’s use of the Premises, and all Taxes on Tenant’s personal property located on the Premises as addressed in the following:

 

a.    Real Property Taxes. Tenant shall pay all real property taxes on the Property (including any fees, taxes or assessments against or as a result of, any tenant improvements installed on the Property by or for the benefit of Tenant) during the Lease Term, Subject to Paragraph 4.02(e) and Section 4.07 below, such payment shall be made at least ten (10) days prior to the delinquency date of the taxes. Within such ten (10) day period, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall reimburse Tenant for any real property taxes paid by Tenant covering any period of time prior to or after the Lease Term. If Tenant fails to pay the real property taxes when due, Landlord may pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent.

 

 

 

 

b.    Definition of “Real Property Tax.”: “Real property tax” means; (1) any fee, license fee, license tax, business license fee commercial rental tax, levy, charge assessment, penalty or tax imposed by any taxing authority against the Property; (ii) any tax on the Landlord’s right to receive, or the receipt of, rent or income from the Property or against Landlord’s business of leasing the Property; (iii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Property by any governmental agency; (iv) any tax imposed upon this transaction or based upon a re-assessment of the Property due to a change of ownership, as defined by applicable law, or other transfer of all or part of Landlord’s interest in the Property; and (v) any charge or fee replacing any tax previously included within the definition of real property tax. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes.

 

c.    Personal Property Taxes. Tenant shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to Tenant, Tenant shall try to have personal property taxes separated from the Property. If any of Tenant’s personal property is taxed with the Property, Tenant shall pay Landlord the taxes for the personal property within fifteen (15) days after Tenant receives a written statement from Landlord for such personal property taxes.

 

d.    Tenant’s Right to Contest Taxes. Tenant may attempt to have the assessed valuation of the Property reduced or may initiate proceedings to contest the real property taxes. If required by law, Landlord shall join in the proceedings brought by Tenant. However, Tenant shall pay all costs of the proceedings, including any costs or fees incurred by Landlord. Upon the final determination of any proceeding or contest, Tenant shall immediately pay the real property taxes due, together with all costs, charges. interest and penalties incidental to the proceedings. If Tenant does not pay the real property taxes when due and contests such taxes, Tenant shall not be in default under this Lease for nonpayment of such taxes if Tenant deposits funds with Landlord or opens an interest- bearing account reasonably acceptable to Landlord in the joint names of Landlord and Tenant. The amount of such deposit shall be sufficient to pay the real property taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Tenant’s action is unsuccessful, less any applicable tax impounds previously paid by Tenant to Landlord. The deposit shall be applied to the real property taxes due, as determined at such proceedings. The real property taxes shall be paid under protest from such deposit if such payment under protest is necessary to prevent the Property from being sold under a “tax sale” or similar enforcement proceeding.

 

Section 4.03. Utilities. To the best of its ability, Landlord shall provide the Premises with water, electricity, and gas, seven (7) days per week, twenty-four (24) hours per day. Tenant shall pay all utilities directly to the appropriate supplier, the cost of all utilities, including but not limited to natural gas, water and electric, and at Tenant’s sole expense, shall provide for all other utilities, (including but not limited to heating, ventilation, air conditioning, janitorial services, telephone/cable service and refuse).

 

Section 4.04. Insurance Policies.

 

	 	
			a.

				
			Liability Insurance. During the Lease Term, Tenant shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring Tenant against liability for bodily injury, property damage (including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Property. Tenant shall name Landlord as an additional insured under such policy. The initial amount of such insurance shall be Two Million Dollars (2,000,000) per occurrence and Three Million Dollars (3,000,000) aggregate, and shall be subject to periodic increase based upon inflation, increased liability awards, recommendation of Landlord’s professional insurance advisers and other relevant factors. The liability insurance obtained by Tenant under this paragraph 4.04(a) shall (I) be primary and non-contributing; (ii) contain cross-liability endorsements; and (iii) insure Landlord against Tenant’s performance under Section 5.05, if the matters giving rise to the indemnity under Section 5.05 results from the negligence of the Tenant. The amount and coverage of such insurance shall not limit Tenant’s liability nor relieve Tenant of any other obligation under this Lease. Landlord may also obtain comprehensive public liability insurance in an amount and with coverage determined by Landlord insuring Landlord against liability arising out of ownership, operation, use or occupancy of the Property. The policy obtained by Landlord shall not be contributory and shall not provide primary insurance.

			

 

 

 

 

	 	
			b.

				
			Property and Rental Income Insurance. During the Lease Term, Landlord shall maintain policies of insurance governing loss of or damage to the Property in the full amount of its replacement value. Such policy shall contain an Inflation Guard Endorsement and shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which Landlord deems reasonably necessary. Landlord shall have the right to obtain flood and earthquake insurance if required by any lender holding a security interest in the Property. Landlord shall not obtain insurance for Tenant’s fixtures or equipment or building improvements installed by Tenant on the Property. During the Lease Term, Landlord shall also maintain a rental income insurance policy, with loss payable to Landlord, in an amount equal to one year’s Rent, plus estimated real property taxes and insurance premiums. Tenant shall be liable for the payment of any deductible amount under Landlord’s or Tenant’s insurance policies maintained pursuant to this Section 4.04 in an amount not to exceed Ten Thousand Dollars ($10,000.00). Tenant shall not do or permit anything to be done which invalidates any such insurance policies.

			

 

	 	
			c.

				
			Payment of Premiums. Subject to Section 4.07, Tenant shall pay all premiums for the insurance policies described in Paragraphs 4.04(a) and (b) (whether obtained by Landlord or Tenant) within fifteen (15) days after Tenant’s receipt of a copy of the premium statement or other evidence of the amount due, except Landlord shall pay all premiums for non-primary comprehensive public liability insurance which Landlord elects to obtain as provided in Paragraph 4.04(a). If insurance policies maintained by Landlord cover improvements on real property other than the Property, Landlord shall deliver to Tenant a statement of the premium applicable to the Property showing in reasonable detail how Tenant’s share of the premium was computed. If the Lease Term expires before the expiration of an insurance policy maintained by Landlord, Tenant shall be liable for Tenant’s prorated share of the insurance premiums. Before the Commencement Date, Tenant shall deliver to Landlord a copy of any policy of insurance which Tenant is required to maintain under this Section 4 04. At least thirty (30) days prior to the expiration of any such policy, Tenant shall deliver to Landlord a renewal of such policy. As an alternative to providing a policy of insurance, Tenant shall have the right to provide Landlord a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which Tenant is required to maintain under this Section 4.04 is in full force and effect and containing such other information which Landlord reasonably requires. The Tenant shall be responsible for an insurance deductible not to exceed Ten Thousand Dollars ($10,000.00).

			

 

	 	
			d.

				
			General Insurance Provisions.

			

 

(I)    Any insurance which Tenant is required to maintain under this Lease shall include a provision which requires the insurance carrier to give Landlord not less than thirty (30) days written notice prior to any cancellation or modification of such coverage.

 

(ii)    If Tenant fails to deliver any policy, certificate or renewal to Landlord required under this Lease within the prescribed tine period or if any such policy is cancelled or modified during the Lease Term without Landlord’s consent, Landlord may obtain such insurance in which case Tenant shall reimburse Landlord for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

 

 

 

 

(iii)    Tenant shall maintain all insurance required under this Lease with companies holding a “General Policy Rating of A-12 or better, as set forth in the most current issue of “Best Key Rating Guide.” Landlord and Tenant acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4 04 may not be available in the future. Tenant acknowledges that the insurance described in this Section 4.04 is for the primary benefit of the Landlord. If at any time during the Lease Term, Tenant is unable to maintain the insurance required under the Lease, Tenant shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for Tenant’s type of business, as that coverage may change from time to time. Landlord makes no representation as to the adequacy of such Insurance to protect Landlord’s or Tenant’s interests, Therefore, Tenant shall obtain any such additional property or liability, which Tenant deems necessary to protect Landlord and Tenant.

 

(iv)    Unless prohibited under any applicable insurance policies maintained, Landlord and Tenant each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this Lease) at the time of such loss or damage. Upon obtaining the required policies of insurance, Landlord and Tenant shall give notice to the insurance carriers of this mutual waiver of subrogation.

 

Section 4.05. Late Charges. Tenant’s failure to pay rent promptly may cause Landlord to incur unanticipated costs. The exact amount of such costs are impractical or extremely difficult to ascertain. Such costs may include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by any ground lease, mortgage or trust deed encumbering the Property. Therefore if Landlord does not receive any rent payment within ten (10) days after it becomes due, Tenant shall pay Landlord a late charge equal to three percent (3%) of the overdue amount. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of such late payment.

 

Section 4.06. Interest on Past Due Obligations. Any amount owed by Tenant to Landlord which is not paid when due shall bear interest at the rate of fifteen percent (15%) per annum from the due date of such amount. However, interest shall not be payable on late charges to be paid by Tenant under this Lease. The payment of interest on such amounts shall not excuse or cure any default by Tenant under this Lease. If the interest rate specified in this Lease is higher than the rate permitted by law, the interest rate is hereby decreased to the maximum legal interest rate permitted by law.

 

Section 4.07. Impounds for Insurance Premiums and Real Property Taxes. If requested by any ground lessor or lender to whom Landlord has granted a security interest in the Property, or if Tenant is more than ten (10) days late in the payment of rent more than once in any consecutive twelve (12) month period, Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the annual real property taxes and insurance premiums payable by Tenant under this Lease, together with each payment of Rent. Landlord shall hold such payments in a non-interest bearing impound account. If unknown, Landlord shall reasonably estimate the amount of real property taxes and insurance premiums when due. Tenant shall pay any deficiency of funds in the impound account to Landlord upon written request. If Tenant defaults under this Lease, Landlord may apply any funds in the impound account to any obligation then due under this Lease.

 

 

 

 

ARTICLE FIVE USE OF PROPERTY

 

Section 5.01. Permitted Uses. Tenant may use the Property only for the Permitted Uses set forth in Section 1.06 above.

 

Section 5.02. Manner of Use. Tenant shall not cause or permit the Property to be used in any way which constitutes a violation of any law, ordinance or government regulation or order, which annoys or interferes with the rights of other tenants of Landlord, or which constitutes a nuisance or waste. Tenant shall obtain and pay for all permits, including a Certificate of Occupancy, required for Tenant’s occupancy of the Property and shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the use by Tenant of the Property, including the Occupational Safety and Health Act.

 

Section 5.03. Hazardous Materials. As used in this Lease, the term “Hazardous Material” means any flammable items, explosives radioactive materials hazardous or toxic substances, material or waste or related materials, 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, solvents, lead, cyanide. DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar compounds and including any different products and materials which are 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 (other than cleaning and other products used in the ordinary course of business) to be generated, produced, brought upon, used, stored, treated or disposed of in or about the Property by Tenant, its agents. employees, contractors subleasees or invitees without the prior written consent of Landlord. Landlord shall be entitled to take into account such other factors or facts as Landlord may reasonably determine to be relevant in determining whether to grant or withhold consent to Tenant’s proposed activity with respect to Hazardous Material. In no event, however, shall Landlord be required to consent to the installation or use of any storage tanks on the Property.

 

Section 5.04. Signs and Auctions. Tenant’s signage must conform to and abide by any relevant regulations and must be pre-approved by Landlord. Tenant shall not conduct or permit any auctions or sheriff’s sales at the Property. Landlord will permit Tenant to place business identifying signs on the property with the consent of Landlord, which shall not unreasonably be withheld.

 

Section 5.05. Indemnify. Tenant shall indemnify Landlord against and hold Landlord harmless from any and all costs, claims or liability arising from (a) Tenant’s use of the Property; (b) the conduct of Tenant’s business or anything else done or permitted by Tenant to be done in or about the Property, including any contamination of the property or any other property resulting from the presence or use of Hazardous Materials caused or permitted by Tenant; (c) any breach or default in the performance of Tenant’s obligations under this lease; (d) any misrepresentation or breach of warranty by Tenant under this Lease; or (e) other acts or omissions of Tenant. Tenant shall defend Landlord against any such cost, claim or liability at Tenant’s expense with counsel reasonably acceptable to Landlord. As a material part of the consideration to Landlord, Tenant assumes all risk of damage to property or injury to persons in or about the Property arising from any cause, and Tenant hereby waives all claims in respect thereof against Landlord, except for any claim arising out of Landlord’s gross negligence or willful misconduct. As used in this Section, the term “Tenant” shall include Tenant’s employees, agents, contractors and invitees, if applicable.

 

Section 5.06. Landlord’s Access. Landlord or its agents may enter the Property at all reasonable times to show the Property to potential buyers, investors or tenants or other parties; to do any other act or to inspect and conduct tests in order to monitor Tenant’s compliance with all applicable environmental laws and all laws governing the presence and use of Hazardous Material; or for any other purpose Landlord deems necessary. Landlord shall give Tenant prior notice of such entry, except in the case of an emergency. Landlord may place customary “For Sale” or “For Lease” signs on the Property during the final six months of the lease term.

 

Section 5.07. Quiet Possession. If Tenant pays the rent and complies with all other terms of this Lease, Tenant may occupy and enjoy the Property for the full Lease Term, subject to the provisions of this Lease.

 

 

 

 

ARTICLE SIX; CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS

 

Tenant shall, at its sole expense, maintain the Premises, in good condition, and promptly make all repairs and replacement, whether structural or non-structural, necessary to keep the Premises safe and in good condition, including all utilities and other systems serving the Premises. Landlord shall maintain and repair the building structure, foundations, exterior walls and roof.

 

Section 6.01. Existing Conditions. Tenant accepts the Property in its condition as of the execution of the Lease, subject to all recorded matters, laws, ordinances, and governmental regulations and orders. Except as provided herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representations as to the condition of the Property or the suitability of the Property for Tenant’s intended use. Tenant represents and warrants that Tenant has made its own inspection of and inquiry regarding the condition of the Property and is not relying on any representations of Landlord with respect thereto. If Landlord has provided a Property Information Sheet or other Disclosure Statement regarding the Property, a copy is attached as an exhibit to the Lease. Landlord will provide Tenant with a copy of the title policy on the property

 

Section 6.02. Exemption of Landlord from Liability. Landlord shall not be liable for any damage or injury to the person, business (or any loss of income therefrom). goods, wares, merchandise or other property of the Tenant, Tenant’s employees, invitees, customers or any other person in or about the Property, whether such damage or injury is caused by or results from fire, steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other defects of pipes, sprinklers wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause; (c) conditions arising in or about the Property or upon other portions of the Project, or from other sources or places; or (d) any act or omission of any other tenant of the Project. Landlord shall not be liable for any such damage or injury even though the cause of or the means of repairing such damage or injury are not accessible to Tenant. The provisions of this Section 6.02 shall not, however exempt Landlord from liability for Landlord’s gross negligence or willful misconduct.

 

Section 6.03. Landlord’s Obligations. Subject to the provisions of Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall have absolutely no responsibility to repair, maintain or replace any portion of the Property at any time with the exception of the foundation and roof structure. Tenant waives the benefit of any present or future law, which might give Tenant the right to repair the Property at Landlord’s expense or to terminate the Lease due to the condition of the Property.

 

Section 6.04. Tenants Obligations.

 

	 	
			(a)

				
			Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation), and Section 6.03 above, Tenant shall keep all portions of the Property (including structural, nonstructural, interior, exterior, and landscaping areas, portions, systems and equipment) in good order, condition and repair (including interior painting and refinishing, as needed). If any portion of the Property or any system or equipment in the Property which Tenant is obligated to repair cannot be fully repaired or restored, Tenant shall promptly replace such portion of the Property or system or equipment in the Property, regardless of whether the benefit of such replacement extends beyond the Lease Term; but if the benefit or useful life of such replacement extends beyond the Lease Term (as such term may be extended by exercise of any options), the useful life of such replacement shall be prorated over the remaining portion of the Lease Term (as extended), and Tenant shall be liable only for that portion of the cost which is applicable to the lease Term (as extended). Tenant shall maintain a preventive maintenance contract providing for the regular inspection and maintenance of the heating and air-conditioning system by a licensed heating and air-conditioning contractor. If any part of the Property is damaged by any act or omission of Tenant, Tenant shall pay Landlord the cost of repairing or replacing such damaged property, whether or not Landlord would otherwise be obligated to pay the cost of maintaining or repairing such property. It is the intention of the Landlord and Tenant that at all times Tenant shall maintain the portions of the Property which Tenant is obligated to maintain in an attractive, first-class and fully operative condition.

			

 

	 	
			(b)

				
			Tenant shall fulfill all of Tenant’s obligations under this Section 6.04 at Tenant’s sole expense. If Tenant fails to maintain, repair or replace the Property as required by this Section 6 04, Landlord may, upon ten (10) days’ prior notice to Tenant (except that no notice shall be required in the case of an emergency), enter the Property and perform such maintenance or repair (including replacement, as needed) on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all costs incurred in performing such maintenance or repair immediately upon demand.

			

 

 

 

 

Section 6.05. Alterations, Additions, and Improvements.

 

	 	
			(a)

				
			Tenant shall only make alterations, additions, or improvements to the Premises with prior written consent of the Landlord, non-structural alterations which do not exceed Ten Thousand Dollars ($10,000) in cost and which are not visible from the outside of any building of which the Property is part. Landlord may require Tenant to provide demolition and/or lien and completion bonds in form and amount satisfactory to the Landlord. Tenant shall promptly remove alterations, additions, or improvements constructed in violation of this Paragraph 6.05(a) upon Landlord’s written request all alterations additions and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, and by a contractor approved by the Landlord. Upon completion of any such work, Tenant shall provide Landlord with “as built” plans copies of air construction contracts, and proof of payment for all labor and materials.

			

 

	 	
			(b)

				
			Tenant shall pay when due all claims for labor and material furnished to the Property. Tenant shall give Landlord at least twenty (20) days prior written notice of the commencement of any work on the Property, regardless of whether Landlord’s consent to such work is required. Landlord may elect to record and post notices of non-responsibility on the Property.

			

 

	 	
			(c)

				
			This Lease anticipates the following improvements to be completed at Tenant’s sole expense: (1) Paving of the parking lot, including an additional entrance from Poston Road and; (2) additional exterior lighting. Landlord will approve the specifications and scope of work for the parking lot prior to work beginning. Rent reduction for Year 1 will be contingent on the Tenant improvements being equal to or greater than $120,000.00. The tenant will be required to provide verification of project costs to the landlord in writing. If the verifiable expenses are less than the $120,000.00 threshold, the balance shall be payable to the landlord immediately.

			

 

Section 6.06. Condition upon Termination. Upon the termination of the lease, Tenant shall surrender the Property to Landlord broom clean and in the same condition as received except for ordinary wear and tear which tenant was not otherwise obligated to remedy under any provision of this Lease. However, Tenant shall not be obligated to repair any damage, which Landlord is required to repair under Article Seven (Damage or Destruction). In addition, Landlord may require Tenant to remove any alterations, additions or improvements (whether or not made with Landlords consent) prior to the expiration of the Lease and to restore the Property to its prior condition, all at Tenant’s expense. All alternations, additions and improvements which Landlord has not required Tenant to remove shall become Landlord’s property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease, except that Tenant may remove any of Tenant’s machinery or equipment which can be removed without material damage to the Property. Tenant shall repair, at Tenant’s expense any damage to the Property caused by the removal of any such machinery or equipment. In no event, however shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord’s property) without Landlord’s prior written consent; any power wiring or power panels; lighting or lighting fixtures; wall coverings; drapes; blinds or other window coverings, carpet or other floor coverings; heaters; air conditioners or any other heating or air-conditioning equipment; fencing or security gates; or similar building operating equipment and decorations.

 

ARTICLE SEVEN DAMAGE OR DESTRUCTION

 

Section 7.01. Partial Damage to Property.

 

	 	
			(a)

				
			Tenant shall notify Landlord in writing immediately upon the occurrence of any damage to the Property. If the Property is only partially damaged (i.e., less than fifty percent (50%) of the Property is untenantable as a result of such damage or less than fifty percent (50%) of Tenant’s operations are materially impaired) and if the proceeds received by the Landlord from the insurance policies described in Paragraph 4.04(b) are sufficient to pay for necessary repairs, this Lease shall remain in effect and Landlord shall repair the damage as soon as reasonably possible Landlord may elect (but is not required) to repair any damage to Tenant’s fixtures equipment, or improvements.

			

 

 

 

 

	 	
			(b)

				
			If the insurance proceeds received by Landlord are not sufficient to pay the entire cost of repair, or if the cause of the damage is not covered by the insurance policies which Landlord maintains under Paragraph 4.04(b), Landlord may elect either to (i) repair the damage as soon as reasonably possible, in which case this Lease shall remain in full force and effect, or (ii) terminate this Lease as of the date the damage occurred Landlord shall notify Tenant within thirty (30) days after receipt of notice of the occurrence of the damage whether Landlord elects to repair the damage or terminate the Lease. If Landlord elects to repair the damage, Tenant shall pay Landlord the “deductible amount” (if any) under Landlord’s insurance policies and, if the damage was due to an act or omission of Tenant, or Tenant’s employees, agents, contractors or invitees, the difference between the actual cost of repair and any insurance proceeds received by the Landlord. If Landlord elects to terminate the Lease, Tenant may elect to continue this Lease in full force and effect, in which case Tenant shall repair any damage to the Property and any building in which the Property is located Tenant shall pay the cost of such repairs, except that upon satisfactory completion of such repairs, Landlord will deliver to Tenant any insurance proceeds received by Landlord for the damage repaired by the Tenant. Tenant shall give Landlord written notice of such election within ten (10) days after receiving Landlord’s termination notice.

			

 

	 	
			(c)

				
			If the damage occurs to the Property during the last six (6) months of the Lease Term and such damage will require more than thirty (30) days to repair, either Landlord or Tenant may elect to terminate this Lease as of the date the damage occurred, regardless of the sufficiency of any insurance proceeds. The party electing to terminate the Lease shall give written notification to the other party of such election within thirty (30) days after Tenant’s notice to Landlord of the occurrence of the damage.

			

 

Section 7.02. Substantial or Total Destruction. If the Property is substantially or totally destroyed by any cause whatsoever (i.e., the damage to the Property is greater than partial damage as described in Section 7.01), and regardless of whether Landlord receives any insurance proceeds, this Lease shall terminate as of the date the destruction occurred. Notwithstanding the preceding sentence, if the Property can be rebuilt within six (6) months after the date of destruction, Landlord may elect to rebuild the Property at Landlord’s own expense, in which case this Lease shall remain in full force and effect. Landlord shall notify Tenant of such election within thirty (30) days after Tenant’s notice of the occurrence of total or substantial destruction.

 

Section 7.03. Temporary Reduction of Rent. If the property is destroyed or damaged and Landlord or Tenant repairs or restores the Property pursuant to the provisions of this Article Seven, any rent payable during the period of such damage, repair and/or restoration shall be reduced according to the degree, if any, to which Tenant’s use of the Property is impaired. However, the reduction shall not exceed the sum of one year’s payment of Rent, insurance premiums and real property taxes. Except for such possible reduction in Rent, insurance premiums and real property taxes, Tenant shall not be entitled to any compensation, reduction, or reimbursement from Landlord as a result of damage, destruction, repair, or restoration of or to the Property.

 

Section 7.04. Waiver. Tenant waives the protection of any statute, code or judicial decision, which grants a tenant the right to terminate a lease in the event of substantial or total destruction of the leased property. Tenant agrees that the provisions of Section 7.02 above shall govern the rights and obligations of Landlord and Tenant in the event of any substantial or total destruction to the Property.

 

 

 

 

ARTICLE EIGHT: CONDEMNATION

 

If all or any portion of the Property is taken under the power of eminent domain or sold under the threat of that power (all of which are called “Condemnation”), this Lease shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first. If more than twenty percent (20%) of the floor area of the building in which the Property is located or which is located on the Property is taken, either Landlord or Tenant may terminate this Lease as of the date the condemning authority takes title or possession, by delivering written notice to the other within ten (10) days after receipt of the written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority takes title or possession). If neither Landlord nor Tenant terminates this Lease, this Lease shall remain in effect as to the portion of the Property not taken, except that the Rent and Additional Rent shall be reduced in proportion to the reduction in the floor area of the Property. Any condemnation award or payment shall be distributed in the following order (a) first, to any ground lessor, mortgagee or beneficiary under a deed of trust encumbering the Property, the amount of its interest in the Property; (b) second, to Tenant, only the amount of any award specifically designated for loss of or damage to Tenants trade fixtures or removable personal property; and (c) third, to the Landlord, the remainder of such award, whether as compensation for reduction if the value of the leaseholder, the taking of the fee, or otherwise. If this Lease is not terminated, Landlord shall repair any damage to the Property caused by Condemnation, except that Landlord shall not be obligated to repair any damage for which Tenant has been reimbursed by the condemning authority. If the severance damages received by Landlord are not sufficient to pay for such repair, Landlord shall have the right to either terminate this Lease or make such repair at Landlord’s expense.

 

ARTICLE NINE; ASSIGNMENT AND SUBLETTING

 

Section 9.01. Landlord’s Consent Required. No portion of the Property or of Tenant’s interest in this Lease may be transferred to any other person or entity, whether by sale, assignment, mortgage, sublease, transfer, operation of law, or act of Tenant, without Landlord’s prior written consent, except as provided in Section 9.02 below. Landlord has the right to grant or withhold its consent as provided in Section 9 05 below. Any attempted transfer without consent shall be void and shall constitute a non-curable breach of this Lease.

 

Section 9.02. Tenant Affiliate. Tenant may assign this Lease or sublease the Property without Landlord s consent to any corporation which controls, is controlled by or is under common control with Tenant, or to any corporation resulting from the merger or consolidation with Tenant (“Tenant’s Affiliate”). In such case, any Tenant’s Affiliate shall assume all of Tenant’s obligations under this Lease.

 

Section 9.03. No Release of Tenant. No transfer permitted by this Article Nine, whether with or without Landlord’s consent, shall release Tenant or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Article Nine. Consent to one transfer is not a consent to any subsequent transfer If Tenant’s transferee defaults under this Lease. Landlord may proceed directly against Tenant without pursing remedies against the transferee. Landlord may consent to subsequent assignments or modifications of this Lease by Tenant’s transferee, without notifying Tenant or obtaining its consent. Such action shall not relieve Tenant’s liability under this Lease.

 

Section 9.04. Offer to Terminate. If Tenant desires to assign the Lease or sublease the Property, Tenant shall have the right to offer, in writing, to terminate the Lease as of a date specified in the offer. If Landlord elects in writing to accept the offer to terminate within twenty (20) days after notice of the offer, the Lease shall terminate as of the date specified and all the terms and provisions of the Lease governing termination shall apply. If Landlord does not so elect, the Lease shall continue in effect until otherwise terminated and the provisions of Section 9.05 with respect to any proposed transfer shall continue to apply.

 

Section 9.05. Landlord’s Consent.

 

	 	
			(a)

				
			Tenant’s request for consent to any transfer described in Section 9.01 shall set forth in writing the details of the proposed transfer, including the name, business and financial condition of the prospective transferee, financial details of the proposed transfer (e g , the term of and the rent and security deposit payable under any proposed assignment or sublease), and any other information Landlord deems relevant. Landlord shall have the right to withhold consent, if reasonable, or to grant consent, based on the following factors: (1) the business of the proposed assignee or subtenant and the proposed use of the Property; (ii) the net worth and financial reputation of the proposed assignee or subtenant; (iii) Tenant’s compliance with all of its obligations under the Lease; and (iv) such other factors as Landlord may reasonably deem relevant. If Landlord objects to a proposed assignment solely because of the net worth and/or financial reputation of the proposed assignee. Tenant may nonetheless sublease (but not assign), all or a portion of the Property to the proposed transferee, out only on the other terms of the proposed transfer.

			

 

 

 

 

	 	
			(b)

				
			If Tenant assigns or subleases pursuant to Section 9.01, the following shall apply:

			(i)    Tenant shall pay to Landlord as Additional Rent under the Lease the Landlord’s Share (stated in Section 1.13) of the Profit (defined below) on such transaction as and when received by Tenant, unless Landlord gives written notice to Tenant and the assignee or subtenant that Landlord’s share shall be paid by the assignee or subtenant to Landlord directly. The “Profit” means (A) all amounts paid to Tenant for such assignment or sublease, including “key” money, monthly rent in excess of the monthly rent payable under the Lease, and all fees and other consideration paid for the assignment or sublease, including fees under any collateral agreements, less (B) costs and expenses directly incurred by Tenant in connection with the execution and performance of such assignment or sublease for real estate broker’s commissions and costs of renovation or construction of tenant improvements required under such assignment or sublease. Tenant is entit1ed to recover such costs and expenses before Tenant is obligated to pay the Landlord’s share to Landlord. The Profit in the case of a sublease of less than all the Property is the rent allocable to the subleased space as a percentage on a square footage basis; (ii) Tenant shall provide Landlord a written statement certifying all amounts to be paid from any assignment or sublease of the Property within thirty (30) days after the transaction documentation is signed, and Landlord may inspect Tenant’s books and records to verify the accuracy of such statement. On written request, Tenant shall promptly furnish to Landlord copies of all transaction documentation all of which shall be certified by Tenant to be complete, true and correct. Landlord’s receipt of the Landlord’s share shall not be a consent to any further assignment or subletting. The breach of Tenant’s obligation under this Paragraph 9.05(b) shall be a material default of the Lease.

			

 

Section 9.06. No Merger. No merger shall result from Tenants sublease of the Property under this Article Nine, Tenant’s surrender of this Lease or the termination of this Lease in any other manner. In any such event, Landlord may terminate any or all subtenancies or succeed to the interest of Tenant as sublandlord under any or all subtenancies.

 

ARTICLE TEN: DEFAULTS; REMEDIES

 

Section 10.01. Covenants and Conditions. Tenants performance of each of Tenant’s obligations under this Lease is a condition as well as a covenant. Tenant’s rights to continue in possession of the Property is conditioned upon such performance. Time is of the essence in the performance of all covenants and conditions.

 

Section 10.02. Defaults. Tenant shall be in material default under this Lease:

 

	 	
			(a)

				
			If tenant abandons the Property or if Tenant’s vacation of the Property results in the cancellation of any insurance described in Section 4.04;

			

 

	 	
			(b)

				
			If Tenant fails to pay rent or any other charge when due subject to a 10 day grace period for rental payments;

			

 

	 	
			(c)

				
			If Tenant fails to perform any of Tenant’s non-monetary obligations under this Lease for a period of thirty (30) days after written notice from Landlord; provided that if more than thirty (30) days are required to complete such performance, Tenant shall not be in default if Tenant commences such performance within the thirty (30) day period and thereafter diligently pursues its completion. However, Landlord shall not be required to give such notice if Tenant’s failure to perform constitutes a non-curable breach of this Lease. The notice required by this Paragraph is intended to satisfy any and all notice requirements imposed by law on Landlord and is not in addition any such requirement;

			

 

 

 

 

	 	
			(d)

				
			(i) If Tenant makes a general assignment or general arrangement for the benefit of creditors; (ii) if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against Tenant and is not dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed to take possession of substantially all of Tenant’s assets located at the Property or of Tenant’s interest in this Lease and possession is not restored to Tenant within thirty (30) days; or (iv) if substantially all of Tenant’s assets located at the Property or of Tenant’s interest in this Lease is subject to attachment, execution or other judicial seizure which is not discharged within thirty (30) days. If a court of competent jurisdiction determines that any of the acts described in this subparagraph (d) is not a default under this Lease, and a trustee is appointed to take possession (or if Tenant remains a debtor in possession) one such trustee or Tenant transfers Tenant’s interest hereunder, then Landlord shall receive, as Additional Rent the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by Tenant under this Lease;

			

 

	 	
			(e)

				
			If any guarantor of the Lease revokes or otherwise terminates, or purports to revoke or otherwise terminate, any guaranty of all or any portion of Tenant’s obligations under the Lease. Unless otherwise expressly provided, no guaranty of the Lease is revocable.

			

 

Section 10.03. Remedies. On the occurrence of any material default by Tenant, Landlord may, at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy, which Landlord may have.

 

	 	
			(a)

				
			Terminate Tenant’s right to possession of the Property by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Property to Landlord. In such event, Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including (i) the worth at the time of the award of the unpaid Rent, Additional Rent and other charges which Landlord has earned at the time of the termination; (ii) the worth at the time of the award of the amount by which the unpaid Rent, Additional Rent and other changes which Landlord would have earned after termination until the time of the award exceeds the amount of such rental loss that Tenant proves Landlord could have reasonably avoided; (iii) the worth at the time of the award of the amount by which the unpaid Rent, Additional Rent and Other charges which Tenant would have paid for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves Landlord could have reasonably avoided; and (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused the Tenant’s failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to receive therefrom, including, but not limited to any costs or expenses Landlord incurs in maintaining or preserving the Property after such default, the cost of recovering possession of the Property, expenses of releetting, including necessary renovation or alteration of the Property; Landlord’s reasonable attorney’s fees incurred in connection therewith, and any real estate commission paid or payable. As used in subparts (i) and (ii) above, the “worth at the time of the award’ is computed by allowing interest on unpaid amounts at the rate of fifteen percent (15%) per annum, or such lesser amount as may then be the maximum lawful rate. As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). If Tenant has abandoned the Property, Landlord shall have the option of (i) retaking possession of the Property and recovering from Tenant the amount specified in this Paragraph 10.03(a), or (ii) proceeding under Paragraph 10.03(o)

			

 

	 	
			(b)

				
			Maintain Tenant’s right to possession, in which case this Lease shall continue in effect whether or not Tenant has abandoned the Property. In such event, Landlord shall be entitled to enforce all of Landlord’s rights and remedies under this Lease, including the right to recover the rent as it becomes due;

			

 

	 	
			(c)

				
			Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the state in which the Property is located.

			

 

 

 

 

Section 10.04. Deleted intentionally.

 

Section 10.05, Automatic Termination. Notwithstanding any other term or provision hereof to the contrary, the Lease shall terminate on the occurrence of any act which affirms the Landlord’s intention to terminate the Lease as provided in Section 10.03 hereof, including the filing of an unlawful detainer action against Tenant. On such termination, Landlord’s damages for default shall include all costs and fees, including reasonable attorneys’ fees that Landlord incurs in connection with the filing, commencement, pursuing and/or defending of any action in any bankruptcy court or other court with respect to the Lease; the obtaining of relief from any stay in bankruptcy restraining any action to evict Tenant; or the pursuing of any action with respect to Landlord’s right to possession of the Property. All such damages suffered (apart from Rent and other rent payable hereunder) shall constitute pecuniary damages which must be reimbursed to Landlord prior to assumption of the Lease by Tenant or any successor to Tenant in any bankruptcy or other proceeding.

 

Section 10.06. Cumulative Remedies. Landlord’s exercise of any right or remedy shall not prevent it from exercising any other right or remedy.

 

ARTICLE ELEVEN’ PROTECTION OF LENDERS

 

Section 11.01. Subordination. Landlord shall have the right to subordinate this Lease to any ground lease, deed of trust or mortgage encumbering the Property, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded. Tenant shall cooperate with Landlord and any lender, which is acquiring a security in the Property or the Lease. Tenant shall execute such further documents and assurances as such lender may require, provided that Tenant’s obligations under this Lease shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and Tenant shall not be deprived of its rights under this Lease. Tenant’s right to quiet possession of the Property during the Lease Term shall not be disturbed if Tenant pays the rent and performs all of Tenant’s obligations under this Lease and is not otherwise in default. If any ground lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of its ground lease, deed of trust of mortgage and gives written notice thereof to Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or mortgage whether this Lease is dated prior or subsequent to the date of said ground lease, deed of trust or mortgage or the date of recording thereof.

 

Section 11.02. Attornment. If Landlord’s interest in the Property is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or successor to Landlord’s interest in the Property and recognize such transferee or successor as Landlord under this Lease. Tenant waives the protection of any statute or rule of law which gives or purports to give Tenant any right to terminate this Lease or surrender possession of the Property upon the transfer of Landlord’s interest.

 

Section 11.03. Signing of Documents. Tenant shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so. If Tenant fails to do so within ten (10) days after written request, Tenant hereby makes, constitutes and irrevocably appoints Landlord, or any transferee or successor of Landlord, the attorney-in-fact of Tenant to execute and deliver any such instrument or document.

 

Section 11.04. Estoppel Certificates.

 

	 	
			(a)

				
			Upon Landlord’s written request, Tenant shall execute, acknowledge and deliver to Landlord a written statement certifying, (i) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed); (ii) that this Lease has not been cancelled or terminated; (iii) the last date of payment of the Rent and other charges and the time period covered by such payment; (iv) that Landlord is not in default under this Lease (or, if Landlord is claimed to be in default, stating why); and (v) such other representations or information with respect to Tenant or the Lease as Landlord may reasonably request or which any prospective purchaser or encumbrancer of the Property may require. Tenant shall deliver such statement to Landlord within ten (10) days after Landlord’s request Landlord may give any such statement by Tenant to any prospective purchaser or encumbrancer of the Property. Such purchaser or encumbrancer may rely conclusively upon such statement as true and correct. Should Tenant need such Estopptel Certificate Landlord will agree to deliver such statement to Tenant within ten (10) days after the Tenant’s Request.

			

 

 

 

 

	 	
			(b)

				
			If Tenant does not deliver such statement to Landlord within such ten (10) day period, Landlord, and any prospective purchaser or encumbrancer, may conclusively presume and rely upon the following facts:(i) that the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (ii) that this Lease has not been cancelled or terminated except as otherwise represented by Landlord; (iii) that not more than one month’s Rent or other charges have been paid in advance; and (iv) that Landlord is not in default under the Lease. In such event, Tenant shall be estopped from denying the truth of such facts.

			

 

Section 11.05. Tenant’s Financial Condition. Landlord will be given a website where Tenant’s financial statements can be viewed. If Tenant’s financial statements cannot be viewed at given website then, within ten (10) days after written request from Landlord, Tenant shall deliver to Landlord such financial statements as Landlord reasonably requires to verify the net worth of Tenant or any assignee. subtenant or guarantor of Tenant. In addition, Tenant shall deliver to any lender designated by Landlord any financial statements required by such lender to facilitate the financing or refinancing of the Property. Tenant represents and warrants to Landlord that each such financial statement is a true and accurate statement as of the date of such statement. All financial statements shall be confidential and shall be used only for the purposes set forth in this Lease.

 

ARTICLE TWELVE: LEGAL COSTS

 

Section 12.01. Legal Proceedings. If Tenant or Landlord shall be in breach or default under this Lease, such party (the “Defaulting Party”) shall reimburse the other party (the “Nondefaulting Party”) upon demand for any costs or expenses that the Nondefaulting Party incurs in connection with any breach or default of the Defaulting Party under this Lease, whether or not suit is commenced or judgment entered. Such costs shall include legal fees and costs incurred for the negotiation of a settlement, enforcement of rights or otherwise. Furthermore, if any action for breach of or to enforce the provisions of this Lease is commenced, the court in such action shall award to the party in whose favor a judgment is entered, a reasonable sum as attorneys’ fees and costs. The losing party in such action shall pay such attorneys’ fees and costs. Tenant shall also indemnify Landlord against and hold Landlord harmless from all costs, expenses, demands and liability Landlord may incur if Landlord becomes or is made a party to any claim or action (a) instituted by Tenant against any third party, or by any third party against Tenant, or by or against any person holding any interest under or using the Property by license of or agreement with Tenant, (b) for foreclosure of any lien for labor or material furnished to or for Tenant or such other person; (c) otherwise arising out of or resulting from any act on transaction of Tenant or such other person; or (d) necessary to protect Landlord’s interest under this Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the United States Code, as amended. Tenant shall defend Landlord against any such claim or action at Tenant’s expense with counsel reasonably acceptable to Landlord or, at Landlord’s election. Tenant shall reimburse Landlord for any legal fees or costs Landlord incurs in any such clam or action.

 

Section 12.02. Landlord’s Consent. Tenant shall pay Landlord’s reasonable attorneys’ fees incurred in connection with Tenant’s request for Landlord’s consent under Article Nine (Assignment or Subletting), or in connection with any other act which Tenant proposes to do and which requires Landlord’s consent.

 

ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS

 

Section 13.01. Non-Discrimination. Tenant promises, and it is a condition to the continuance of this Lease, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin, or ancestry in the leasing, subleasing, transferring, occupancy, tenure or use of the Property or any portion thereof.

 

 

 

 

Section 13.02. Landlord’s Liability: Certain Duties.

 

	 	
			(a)

				
			As used in this Lease, the term “Landlord” means only the current owner or owners of the fee title to the Property or the leasehold estate under a ground lease of the Property at the time in question. Each Landlord is obligated to perform the obligations of Landlord under this Lease only during the time such Landlord owns such interest or title. Any Landlord who transfers its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date of transfer. However, each Landlord shall deliver to its transferee all funds that Tenant previously paid if such funds have not yet been applied under the terms of this Lease.

			

 

	 	
			(b)

				
			Tenant shall give written notice of any failure by Landlord to perform any of its obligations under this Lease to Landlord and to any ground lessor, mortgagee or beneficiary under any deed of trust encumbering the Property whose name and address have been furnished to Tenant in writing. Landlord shall not be in default under this Lease unless Landlord (or such ground lessor, mortgagee or beneficiary) fails to cure such non-performance within thirty (30) days after receipt of Tenant’s notice. However, if such non-performance reasonably requires more than thirty (30) days to cure, Landlord shall not be in default if such cure is commenced within such thirty (30) day period and thereafter diligently pursued to completion.

			

 

	 	
			(c)

				
			Notwithstanding any term or provision herein to the contrary the liability of the Landlord for the performance of its duties and obligations under this Lease is limited to Landlord’s interest in the Property, and neither the Landlord nor its partners, shareholders, officers or other principals shall have any personal liability under this Lease.

			

 

Section 13.03. Severability. A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision of this Lease, which shall remain in full force and effect .

 

Section 13.04. Interpretation. The captions of the Articles or Sections of this Lease are to assist the parties in reading this Lease and are not part of the terms or provisions of this Lease Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct, acts or omissions of Tenant, the term “Tenant’ shall include Tenant’s agents, employees, contractors, invitees, successors or others using the Property with Tenant’s expressed or implied permission.

 

Section 13.05. Incorporation of Prior Agreements; Modifications. This Lease is the only agreement between the parties pertaining to the lease of the Property and no other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendment shall be void.

 

Section 13.06. Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified mail, return receipt requested, postage paid. Notices to Tenant shall be delivered to the address specified in Section 1.03 above, except that upon Tenant’s taking possession of the Property, the Property shall be Tenant’s address for notice purposes. Notices to Landlord shall be delivered to the address specified in Section 1.02 above. All notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other party.

 

Section 13.07. Waivers. All waivers must be in writing and signed by the waiving party. Landlord’s failure to enforce any provision of this Lease or its acceptance of rent shall be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment check from Tenant or in a letter accompanying a payment check shall be binding on Landlord. Landlord may, with or without notice to Tenant, negotiate such check without being bound to the conditions of such statement.

 

Section 13.08. No Recordation. Tenant shall not record this Lease without prior written consent from Landlord. However, either Landlord or Tenant may require that a “Short Form” memorandum of this Lease executed by both parties be recorded. The party requiring such recording shall pay all transfer taxes and recording fees

 

 

 

 

Section 13.09. Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or Tenant. However, Landlord shall have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the state in which the Property is located shall govern this Lease.

 

Section 13.10. Corporate Authority; Partnership Authority. If Tenant is a corporation, each person signing this Lease on behalf of Tenant represents and warrants that he has full authority to do so and that this Lease binds the corporation. Within thirty (30) days after this Lease is signed, Tenant shall deliver to Landlord a certified copy of a resolution of Tenant’s Board of Directors authorizing the execution of this Lease or other evidence of such authority reasonably acceptable to Landlord. If Tenant is a partnership, each person or entity signing the lease for Tenant represents and warrants that he or it is a general partner of the partnership that he or it has full authority to sign for the partnership and that this Lease binds the partnership and all general partners of the partnership Tenant shall give written notice to Landlord of any general partner’s withdrawal or addition. Within thirty (30) days after this Lease is signed, Tenant shall deliver to Landlord a copy of Tenant’s recorded statement of partnership or certificate of limited partnership.

 

Section 13.11. Joint and Several Liability. All parties signing this Lease as Tenant shall be jointly and severally liable for all obligations of Tenant

 

Section 13.12. Force Majeure. If Landlord or Tenant cannot perform any of its obligations due to events beyond Landlord’s or Tenant’s control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond Landlord’s or Tenant’s control include, but are not limited to, acts of God, war, civil commotion, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, government regulation or restriction and weather conditions.

 

Section 13.13. Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are executed, the counterpart shall constitute a single binding instrument. Landlord’s delivery of this Lease to Tenant shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties.

 

Section 13.14. Survival. All representations and warranties of Landlord and Tenant shall survive the termination of this Lease.

 

ARTICLE FOURTEEN: BROKERS

 

Section 14.01. Broker’s Fee. Tenant represents and warrants to Landlord that it has not engaged any broker, finder or other person who would be entitled to any commission or fees for negotiation, execution, or delivery of the Lease. Landlord represents and warrants to Landlord that is has not engaged any broker, finder or other person who would be entitled to any commission or fees for negotiation, execution, or delivery of the Lease.

 

Section 14.02. Protection of Brokers. N/A

 

Section 14.03. Agency Disclosure; No Other Brokers. See Section 14.01 above.

ARTICLE FIFTEEN. COMPLIANCE

The parties here to agree to comply with all applicable federal, state and local laws, regulations, codes, ordinances and administrative orders having jurisdiction over the parties, property or the subject matter of this Agreement, including, but not limited to, the 1964 Civil Rights Act and all amendments thereto, the Foreign Investment in Real Property Tax Act, the Comprehensive Environmental Response Compensation and Liability Act, and The Americans With Disabilities Act.

 

 

 

 

ARTICLE SIXTEEN: LANDLORD COVENANTS

 

Landlord covenants and agrees as follows;

 

	 	
			(a)

				
			Marketable Title. Landlord has marketable title to the Property, subject only to mortgage liens, easements and restrictions of record,

			

 

	 	
			(b)

				
			Quiet Enjoyment. For so long as Tenant is not delinquent in the payment of any rent or is not in default of the performance of any other term or condition of this Lease to be performed by Tenant, then, during the term of this Lease, Tenant may peacefully hold and enjoy the Property without any interruptions by Landlord, its assigns, or any persons lawfully claiming through Landlord.

			

 

	 	
			(c)

				
			Condition of Property. Landlord represents that, as of the date that Landlord delivers possession of the Property to Tenant, the Property shall be structurally sound and good condition, including, without limitation, the roof and mechanical elements. To the Landlord’s knowledge, (i) there are no pollutants or other toxic or hazardous substances at the Property, (ii) no asbestos or asbestos containing materials have been installed, used, incorporated into, or disposed of on the Property: and (iii) there are no underground storage tanks located on the Property. Tenant shall have no liability or responsibility for any such materials on the Property as of the date of possession unless Tenant is directly responsible for such materials.

			

 

	 	
			(d)

				
			Compliance with Laws. As of the date of delivery of possession to Tenant, the Property shall be in compliance with all federal, state and local laws, statutes, ordinances, rules and regulations applicable to the Property, including without limitation, the Americans With Disabilities Act and any state or local law similar thereto, and all zoning ordinances.

			

 

ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE DRAW A LINE THROUGH THE SPACE BELOW.

 

	 
	 
	 
	 
	 

 

CONFIDENTIALITY

 

Landlord and Tenant recognize that the Landlord is a public entity subject to the Public Records Act, in accordance with Ohio Revised Code Section 149.43. Confidentiality of Information for Landlord is further addressed in Ohio Revised Code Section 4582.091.

 

We confirm and agree that this and all future negotiations and disclosures between all parties subject to this agreement will be subject to the following confidentiality provisions:

 

(a)    In the course of our discussions we will each have access to and will be entrusted with detailed confidential information relating to the other; and

 

(b)    The right to maintain the confidentiality of this information constitutes a proprietary right which the other party is entitled to protect and which shall be respected and honored; and

 

(c)    Neither party will at any time disclose any confidential information or use same for any purpose which would give it or any competitor or other interested party in advantage over its counterpart in these discussions;

 

 

 

 

(d)    At the end of these discussions, and subject to any other agreement reached, all copies of any documentation or records referring to or containing confidential information belonging to the other party shall be returned or destroyed, to be confirmed by a statutory declaration if so requested; and

 

(e)    The entering into of the Letter of Intent, and the potential completion of this transaction, will be kept strictly confidential and will not be disclosed to customers, suppliers, employees or other person without the consent of both parties, such consent not be to unreasonably delayed or withheld; this provision shall not apply to professional advisors, potential financiers, or appraisers; provided they agree to maintain the same level of confidentiality required by the parties.

 

CONFIDENTIALITY EXCLUSIONS

 

Confidential information does not include the following information that:

 

(a)    Is developed by the receiving party independently and without use or concerning the disclosing party’s confidential information;

 

(b)    Is obtained by the receiving party from a third party without restriction on disclosure and without breach of a nondisclosure obligation;

 

(c)    Is in or enters the public domain other than through the fault or negligence of the receiving party and without breach of this Agreement;

 

(d)    The receiving party possesses before first receiving it from the disclosing party; or

 

(e)    As legally required to be disclosed, at which point the disclosing party will notify the other party.

 

CONFIDENTIALITY OBLIGATIONS

 

Each party will maintain in strict confidence, and will not use or disclose, except as expressly permitted under this agreement or as required by the Public Records Act, any confidential information received from the other party. Each party further agrees to use the same degree of care to maintain the confidentiality of all confidential information received from the other party as it uses to maintain the confidentiality of its own information of similar importance, but in no event will it sue less than reasonable care.

 

Landlord and Tenant have signed this Lease at the place and on the dates specified adjacent to their signatures below and have initialed all Riders which are attached to or incorporated by reference in this Lease.

 

 

 

 

- THE REMAINDER OF PAGE LEFT INTENTIONALLY BLANK -

 

 

 

 

Athens County Port Authority

 

 

Signed on                                                 20                                                                                

at                                                                                                                                               

 

By                                                                      

 

Its                                                                         

 

 

Global Cooling, Inc., a Delaware Corporation

 

 

Signed on                                                 20                                                                                

at                                                                                                                                               

 

By                                                                      

 

Itsex_348807.htm

Exhibit 10.25

 

LEASE EXTENSION AGREEMENT

To the Lease Agreement Between Athens

County Port Authority ("Landlord")

and

Global Cooling, Inc., A Delaware Corporation ("Tenant'')

 

This Lease Extension is hereby made and entered into by and between the Athens County Port Authority (hereinafter referred to as "Landlord") and Global Cooling, Inc., A Delaware

Corporation (hereinafter referred to as "Tenant'') on this 30 day of May 2018.

 

WHEREAS, Landlord and Tenant wish to extend the Lease Agreement, dated April 1, 2011, and further amended on 30 May 2018 (hereinafter referred to as "Lease'') for premises commonly described as and located at 6000 Poston Road, The Plains, Ohio 45710 with approximately 50,000 rentable square feet for a period of ten (10) years.

 

WHEREAS, the Parties now desire to extend the term of the Lease Agreement as herein stated.

 

NOW THEREFORE, for an in consideration of the mutual covenants and promises herein contained, and other good and valuable consideration, the receipt and sufficiently of which are hereby acknowledge, the Parties hereto agrees to as follows:

 

Section 1.05: The Pat1ies hereby agree to extend the Lease for a term of seven (7) years as the Lease was set to expire on March 3 I, 2021. The Lease will now be extended until March 31, 2028.

 

Section I.12: BASE RENT. The Base Rent shall consist of a monthly rent as follows:

 

	
			Year 2018:

				
			$19,000.00

			
	
			Year 2019:

				
			$21,000.00

			
	
			Year 2020:

				
			$22,000.00

			
	
			Year 2021:

				
			$23,000.00

			
	
			Year 2022:

				
			$24,000.00

			
	
			Year 2023:

				
			$25,000.00

			
	
			Year 2024:

				
			$26,000.00

			
	
			Year 2025:

				
			$27,000.00

			
	
			Year 2026:

				
			$28,000.00

			
	
			Year 2027:

				
			$29,000.00

			

 

This remains a "Triple Net" lease. Tenant v. ill remain responsible for Taxes, Insurance, and Repairs and Maintenance unless provided in Section 6.05 below.

 

Section 6.05. ALTERATION, ADDITIONS, AND IMPROVEMENTS. Landlord will initially fund the repairs for the HVAC and Apron that is located on the premises commonly described as and located at 6000 Poston Road, The Plains, Ohio 45710 and Tenant will be responsible for the total amount pursuant to the final invoice that will provide itemized costs for the repairs. Tenant wit! be responsible for the final costs in sixty (60) equal installments that will be due to the Landlord in addition to the Base Rent set forth in Section I. The monthly installment will be due at the same time as the Base Rent set forth in Section I. The monthly installment shall commence on the month following Tenant's receipt of the final invoice for the repairs. Other than what is specifically stated above, the remaining terms and conditions set forth in Section 6.05 remain in full force and effect.

 

Except as specifically agreed hereinabove, the original terms and provisions of the Lease remain in full force and effect, and are incorporated herein, and the Parties hereby affirm and consent to the Lease as hereinabove extended and amended and agree to be bound by the same.

 

 

 

 

The parties have signed this Lease Extension at the place and on the dates specified adjacent to their signatures below.

 

LEASE EXTENSION

 

ATHENS COUNTY PORT AUTHORITY

 

Signed on June 13, 2018

 

At Athens, Ohio.

 

By: ‐_________________

 

Its: _________________

 

 

 

Global Cooling, Inc., a Delaware Corporation

 

Signed on 30 May, 2018 At Athens, Ohio. 

 

By: ‐_________________

 

Its: _________________

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