Lease Agreement (D&D Development Co.)

Exhibit 10.9


LEASE AGREEMENT


THIS LEASE AGREEMENT, effective as of the 1st day of December, 1994 by and between D&D DEVELOPMENT CO., an Arizona general partnership, hereinafter referred to as "Landlord", and THE ANTIGUA GROUP, INC., a Nevada corporation, hereinafter referred to as "Tenant";


WITNESSETH:


1. PREMISES. In consideration of the mutual obligations of Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant hereby takes from Landlord the property consisting of a one-story building containing 42,532 square feet of space together with various landscaped and parking areas all of which is situated within the County of Maricopa, State of Arizona, legally described as Lots 26, 27 and 28, McCormick Ranch Industrial Center Unit II, according to Book 277 of Maps, Page 36, records of Maricopa County, Arizona, and more commonly known as 9319 North 94th Way, Scottsdale, Arizona (the "Premises"), together with all rights, privileges, easements, appurtenances, and amenities belonging to or in any way pertaining to the Premises, to have and to hold, subject to the terms, covenants and conditions in this Lease.


A. TERM. Subject to Tenant's right to extend the term set forth herein the term of this Lease shall commence on the commencement date hereinafter set forth and shall end on the last day of the month that is twenty-four (24) months after the commencement date.


B. COMMENCEMENT DATE. The commencement date shall be December 1, 1994.


C. OPTIONS. Upon the expiration of this Lease, Tenant shall have the option to extend the term for an additional twelve (12) months (the "First Extension"). Upon the expiration of the First Extension, Tenant shall have the option to extend the term for an additional twelve (12) months (the "Second Extension"). Upon the expiration of the Second Extension, Tenant shall have the option to extend the term an additional twelve (12) months (the "Final Extension"). The First Extension, Second Extension and Final Extension will be referred to herein collectively as the "Extensions". Tenant may exercise the Extensions by giving notice to the Landlord before the end of the terms set forth herein. If exercised, the Extensions will not effect the base rent or obligations of Tenant under the Lease and the rent for the Premises shall remain unchanged.


D. EXISTING BUILDING. Tenant acknowledges that (i) it has inspected and accepts the Premises, (ii) the buildings and improvements comprising the same are presently suitable for the purpose for which the Premises are leased, (iii) the Premises are presently in good and satisfactory condition, and (iv) no representations as to the repair of the Premises, nor promises to alter, remodel or improve the Premises have been made by Landlord (unless otherwise expressly set forth in this Lease).


2. BASE RENT. Tenant agrees to pay to Landlord rent for the Premises, in advance, at the rate of Nineteen Thousand One Hundred Thirty-Nine and 40/100 Dollars ($19,139.40) per month [forty-five cents (45(cent)) per square foot per month] during the term hereof.


3. TAXES. Tenant agrees to pay all taxes, assessments and governmental charges of any kind and nature (collectively referred to herein as "Taxes") that accrue against the Premises. Tenant shall be liable for all taxes levied or assessed against any personal property or fixtures placed in the Premises by Tenant.


4. TENANT IMPROVEMENTS. Landlord agrees to pay for the completion of improvements to the Premises as may be required by Tenant at any time and/or from time to time, in an amount not to exceed $10,000 in the aggregate. Contemporaneously herewith Tenant has completed improvements to the Premises at a cost in excess of $10,000 and has provided to Landlord invoices in support of such expenditures. Consequently, upon the execution hereof, Landlord shall pay to Tenant the sum of $10,000 in satisfaction of Landlord's obligations hereunder.


5. TENANT'S REPAIRS. Tenant, at its own cost and expense, shall (i) maintain all parts of the Premises, landscape and grounds surrounding the Premises in good condition, (ii) promptly make all necessary repairs and replacements, and (iii) keep the parking areas, driveways and alleys surrounding the Premises in a reasonably clean and sanitary condition.


6. ALTERATIONS. Tenant shall not make any alterations, additions or improvements to the Premises without the prior approval of Landlord, which approval shall not be unreasonably withheld or delayed by Landlord. Tenant, at its own cost and expense, may erect upon the Premises such shelves, bins, machinery and trade fixtures as it desires for Tenant's business. All alterations, additions, improvements and partitions erected by Tenant shall be and remain the property of Tenant during the term of this Lease.


7. SIGNS. Any signage Tenant desires for the Premises shall be subject to Landlord's approval, which approval shall not be unreasonably withheld or delayed by Landlord. Tenant shall, to Landlord's reasonable satisfaction, repair, paint, and/or replace the building facia surface to which its signs are attached upon vacation of the Premises, or the removal or alteration of its signage.


8. PARKING. Tenant shall be entitled to park in those areas
2 designated for parking.


9. UTILITIES. Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler charges, refuse and trash collection, and other utilities and services used on or at the Premises, together with any taxes, penalties, surcharges or the like pertaining to the Tenant's use of the Premises, and any maintenance charges for utilities.


10. INSURANCE.


A. Tenant shall maintain insurance covering the buildings situated on the Premises for the full "replacement cost" thereof, except for a commercially reasonable deductible, insuring against the perils of fire, lightning, extended coverage, vandalism and malicious mischief.


B. Tenant, at its own expense, shall maintain during the term of this Lease a policy or policies of worker's compensation and comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of Five Hundred Thousand Dollars ($500,000.00) for property damage and One Million Dollars ($1,000,000.00) per occurrence for personal injuries or deaths of persons occurring in or about the Premises. Tenant, at its own expense, also shall maintain during the term of this Lease, fire and extended coverage insurance covering the replacement cost of (i) all alterations, additions, partitions and improvements installed or placed on the Premises by Tenant or by Landlord on behalf of Tenant and (ii) all of Tenant's personal property contained within the Premises. Said policies shall (i) name Landlord as an additional insured and insure Landlord's contingent liability under this Lease (except for the worker's compensation policy, which instead shall include waiver of subrogation endorsement in favor of Landlord), and (ii) be issued by an insurance company which is approved by Landlord, which approval shall not be unreasonably withheld or delayed.


11. FIRE AND CASUALTY DAMAGE.


A. If the Premises should be damaged or destroyed by fire or other peril, Tenant immediately shall give written notice to Landlord. If the Premises should be totally destroyed by any peril covered by insurance or if they should be so damaged thereby that rebuilding or repairs cannot be completed within sixty (60) days after the date of such damage, Tenant shall have the right to terminate this Lease and the rent shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such damage.


B. If the Premises should be damaged by any peril covered by insurance and rebuilding or repairs can be within sixty
3 (60) days after the date of such damage, this Lease shall not terminate, and Landlord shall restore the Premises to its previous condition, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, additions and other improvements that may have been constructed, erected or installed in, or about the Premises or for the benefit of, or by or for Tenant. If such repairs and rebuilding have not been completed within sixty (60) days after the date of such damage Tenant may (in addition to any other remedies that may be available to Tenant), upon payment of any past due rent, fees and/or charges payable by Tenant, terminate this Lease by delivering written notice of termination to Landlord.


C. Anything in this Lease to the contrary notwithstanding, Landlo ...