STANDARD COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 Parties. This lease agreement ("Lease") is entered into by and
between the following Lessor and Lessee:
EGP Houston Partners, Ltd. ("Lessor")
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Techdyne Incorporated ("Lessee")
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1.02 Leased Premises. In consideration of the rents, terms, provisions
and covenants of this Lease, Lessor hereby leases, lets and demises to Lessee
the following described premises ("leased premises"):
15,000 (Approximate sq. ft.) AP96083 (Job no.)
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Northwest Point Distribution Center (Name of building or project)
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇ address/suite number)
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (City, State, and Zip Code)
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1.03 Term. Subject to and upon the conditions set forth herein, the term
of this Lease shall commence on July 1, 1997 (the "commencement date"), plus
the number of days necessary to end the Lease term on the last day of a month,
and shall terminate 62 months thereafter. Lessor shall not be liable to Lessee
in the event Lessor does not deliver possession of the leased premises to
Lessee on the commencement date, and Lessor's non-delivery of the leased
premises to Lessee on the commencement date shall not effect this Lease or the
obligations of Lessee hereunder. The commencement date shall be delayed,
however, until possession of the leased premises is delivered to Lessee, and
the Lease term shall be extended for a period equal to the delay in delivery of
the possession of the leased premises to Lessee plus the number of days
necessary to end the lease term on the last day of the month. If delivery of
possession of the leased premises is delayed, Lessor and Lessee shall, upon
such delivery execute an amendment to this Lease setting forth a commencement
date and expiration date of the Lease. In the event Lessee enters the leased
premises prior to the commencement date, Lessee shall execute and deliver to
Lessor a Hold Harmless Agreement in a form provided by Lessor whereby Lessee
releases Lessor from all liabilities, claims and causes of action arising out
of any construction or other work performed at the leased premises and agrees
to pay utility charges incurred by Lessee during such early possession. In
addition, Lessee shall provide Lessor a copy of it's insurance certificate
insuring such work and naming Lessor as an additional insured.
1.04 Base Rent, Common Area Maintenance Charge and Security Deposit.
Base rent is $(see 16.02) per month. The initial Common Area
Maintenance Charge estimate is $320.00 per month.
Security deposit is $5,850.00.
1.05 Addresses.
Lessor's Address: Lessee's Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 7110 Brittmoore, Suite 300
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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1.06 Permitted Use. General Office and Light Manufacturing
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ARTICLE 2.00 RENT
2.01 Base Rent. Lessee agrees to pay monthly as base rent during the term
of this Lease without notice, demand, counter-claim, set-off or abatement, the
sum of money set forth in section 1.04 of this Lease, which amount shall be
payable to Lessor at the address shown above. One monthly installment of rent
shall be due and payable on the date of execution of this Lease by Lessee for
the first month's rent and a like monthly installment shall be due and payable
on or before the first day of each calendar month succeeding the commencement
date during the term of this Lease; provided, if the commencement date should
be a date other than the first day of a calendar month, the monthly rental set
forth above shall be prorated to the end of that calendar month, and all
succeeding installments of rent shall be payable on or before the first day of
each succeeding calendar month during the term of this Lease. Lessee shall pay,
as additional rent, all other sums due under this Lease.
2.02 Operating Expenses. In the event Lessor's operating expenses for the
building and/or project of which the leased premises are a part shall, in any
calendar year during the term of this Lease, exceed the sum of $ Base Year 1997
per square foot, Lessee agrees to pay as additional rent Lessee's pro rata
share of such excess operating expenses. Lessor may invoice Lessee monthly for
Lessee's pro rata share of the estimated operating expenses for each calendar
year, which amount shall be adjusted each year based upon anticipated operating
expenses. Within nine months following the close of each calendar year, Lessor
shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. In the event the
accounting shows that the total of the monthly payments made by Lessee exceeds
the amount of additional rent due by Lessee under this section, the accounting
shall be accompanied by a refund. In the event the accounting shows that the
total of the monthly payments made by Lessee is less than the amount of
additional rent due by Lessee under this section, the account shall be
accompanied by an invoice for the additional rent. Notwithstanding any other
provision in this Lease, during the year in which the Lease terminates, Lessor,
prior to the termination date, shall have the option to invoice Lessee for
Lessee's pro rata share of the excess operating expenses based upon the
previous year's operating expenses. If this Lease shall terminate on a day
other than the last day of a calendar year, the amount of any additional rent
payable by Lessee applicable to the year in which such termination shall occur
shall be prorated on the ratio that the number of days from the commencement of
the calendar year to and including the termination date bears to 365. Provided
Lessee is not in default of any terms of this Lease, Lessee shall have the
right, at its own expense, to audit Lessor's books relevant to the additional
rent payable under this section. Lessee agrees to pay any additional rent due
under this section. With respect to such audit, Lessee 1) may review Lessor's
books during office hours, 2) must perform such audit at the location of
Lessor's books, 3) must request such audit within thirty (30) days of receipt
of it's annual reconciliation of operating expenses, 4) must deliver to Lessor
a copy of the results of such audit, 5) may not audit the same calendar year
more than one time and 6) may only audit Lessor's books should Lessee's share
of excess operating expenses increase from the previous calendar year.
Assignees of Lessee may only audit periods for which they occupy the leased
premises and subtenants of Lessee shall have no audit rights. Lessee agrees to
pay any additional rent due under this section within ten days following
receipt of the invoice or accounting showing additional rent due.
2.03 Definition of Operating Expenses. The term "operating expenses"
includes all expenses incurred by Lessor with respect to the maintenance and
operation of the building of which the leased premises are a part, including,
but not limited to, the following: maintenance, repair and replacement costs;
security; management fees, wages and benefits payable to employees of Lessor
whose duties are directly connected with the operation and maintenance of the
building; all services, utilities, supplies, repairs, replacements or other
expenses for maintaining and operating the common parking and plaza areas;
barrier removal assessment plans; the cost, including interest, amortized over
its useful life, of any capital improvement made to the building by Lessor
after the date of this Lease which is required under any governmental law or
regulation that was not applicable to the building at the time it was
constructed; the cost, including interest, amortized over its useful life, of
installation of any device or other equipment which improves the operating
efficiency of any system within the leased premises and thereby reduces
operating expenses; all other expenses which would generally be regarded as
operating and maintenance expenses which would reasonably be amortized over a
period not to exceed five years; all real property taxes and installments of
special assessments, including dues and assessments by means of deed
restrictions and/or owners' associations which accrue against the building of
which the leased premises are a part during the term of this Lease; and all
insurance premiums Lessor is required to pay or deems necessary to pay,
including public liability insurance, with respect to the building. The term
operating expenses does not include the following: repairs, restoration or
other work occasioned by fire, wind, the elements or other casualty; income and
franchise taxes of Lessor; expenses incurred in leasing to or procuring of
lessee, leasing commissions, advertising expenses and expenses for the
renovating of space for new lessees; interest or principal payments on any
mortgage or other indebtedness of Lessor; compensation paid to any employee of
Lessor above the grade of property manager; any depreciation allowance or
expense (except for depreciation of capital improvements and equipment
specifically included within the definition of operating expenses); or
operating expenses which are the responsibility of Lessee; or "common area
maintenance expenses" as defined in paragraph 2.05 of this Lease.
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2.04 Common Area Maintenance Charge. The common area maintenance charge
reflected in paragraph 1.04 of this Lease is Lessor's estimate of the Lessee's
pro rata share of the common area maintenance expenses for the calendar year in
which this Lease was executed. Lessor will invoice Lessee for such monthly
common area maintenance charge, which Lessee agrees to pay. The common area
maintenance charge will be adjusted each calendar year based upon anticipated
future common area maintenance expenses. Within nine (9) months following the
close of each calendar year, Lessor will provide Lessee an accounting showing
in reasonable detail all computations of actual total common area maintenance
expenses and Lessee's pro rata share of the common area maintenance expenses
incurred by Lessor for the immediately preceding year. If the accounting
indicates that the total of the monthly payments made by Lessee for common area
maintenance charges exceeds Lessee's actual pro rata share of the common area
maintenance expenses, the accounting shall be accompanied by a refund from the
Lessor to the Lessee. If the accounting indicates that the total of the monthly
payments made by Lessee for common area maintenance charges is less than
Lessee's actual pro rata share of the common area maintenance expenses, the
accounting will be accompanied by an invoice from the Lessor to the Lessee for
the additional common area maintenance charges, which Lessee agrees to pay.
During the year in which this Lease terminates, Lessor, prior to the
termination date, has the option to invoice Lessee for Lessee's pro rata share
of that year's common area maintenance expenses based upon the actual common
area maintenance expenses for the prior calendar year. If this Lease terminates
on a date other than the last day of a calendar year, the amount of any
additional common area maintenance charges payable by Lessee, applicable to the
year in which the Lease terminates, will be prorated on the ratio that the
number of days from the commencement of the calendar year to and including the
termination date bears to 365. Lessee agrees to pay any common area maintenance
charges due under this paragraph within ten (10) days following receipt of the
invoice for same.
2.05 Definition of Common Area Maintenance Expenses. If the leased
premises is a part of a multi-occupancy building, the term "common area
maintenance expenses" includes all expenses incurred by Lessor for utilities
that are common to more than one tenant that serve the leased premises, lawn
maintenance, exterior painting, repair and maintenance and/or replacement of
exterior lighting and common domestic and sanitary sewer facilities, and any
other expenses incurred by Lessor that are common to all of the tenants in said
multi-occupancy building.
2.06 Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by Lessor on or
before the tenth day of the month for which the rent is due, or if any other
payment due Lessor by Lessee is not received by Lessor on or before the tenth
day of the month next following the month in which Lessee was invoiced, a late
payment charge of five percent of such past due amount shall be come due and
payable in addition to such amounts owed under this Lease. In addition, Lessor
shall be entitled to charge twenty-five dollars ($25.00) for each check or
payment which is not honored by Lessee's bank. Said charge to be in addition to
any other amounts owed under this Lease.
2.07 Increase in Insurance Premiums. If an increase in any insurance
premiums paid by Lessor for the building is caused by Lessee's use of the
leased premises in a manner other than as set forth in section 1.06, or if
Lessee vacates the leased premises and causes an increase in such premiums,
then Lessee shall pay as additional rent the amount of such increase to Lessor.
2.08 Security Deposit. The security deposit set forth above shall be held
by Lessor for the performance of Lessee's covenants and obligations under this
Lease, it being expressly understood that the deposit shall not be considered
an advance payment of rental or a measure of Lessor's damage in case of default
by Lessee. Upon the occurrence of any event of default by Lessee or breach by
Lessee of Lessee's covenants under this Lease, Lessor may, from time to time,
without prejudice to any other remedy, use the security deposit to the extent
necessary to make good any arrears of rent, or to repair any damage or injury,
or pay any expense or liability incurred by Lessor as a result of the event of
default or breach of covenant, and any remaining balance of the security
deposit shall be returned by Lessor to Lessee within a reasonable period of
time following termination of this Lease. If any portion of the security
deposit is so used or applied, Lessee shall upon ten days written notice from
Lessor, deposit with Lessor by cash or cashier's check an amount sufficient to
restore the security deposit to its original amount.
2.09 Holding Over. In the event that Lessee does not vacate the leased
premises upon the expiration or termination of this Lease, Lessee shall be a
tenant at will for the holdover period and all of the terms and provisions of
this Lease shall be applicable during that period, except that Lessee shall pay
Lessor as base rental for the period of such holdover an amount equal to one
and one half times the base rent which would have been payable by Lessee had
the holdover period been a part of the original term of this Lease. Lessee
agrees to vacate and deliver the leased premises to Lessor immediately upon
Lessee's receipt of notice from Lessor to vacate. The rental payable during the
holdover period shall be payable to Lessor on demand. No holding over by
Lessee, whether with or without the consent of Lessor and notwithstanding
receipt by Lessee of an invoice from Lessor for holdover rent, shall operate to
extend the term of this Lease.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 Use. Lessee warrants and represents to Lessor that the leased
premises shall be used and occupied only for the purpose as set forth in
section 1.06. Lessee shall occupy the leased premises, conduct its business and
control its agents, employees, invitees and visitors in such a manner as is
lawful, reputable and will not create a nuisance. Lessee shall not permit any
operation which emits any odor or matter which intrudes into other portions of
the building, use any apparatus or machine which makes undue noise or causes
vibration in any portion of the building or otherwise interfere with, annoy or
disturb any other lessee in its normal business operations or Lessor in its
management of the building. Lessee shall neither permit any waste on the leased
premises nor allow the leased premises to be used in any way which would, in
the opinion of Lessor, be extra hazardous on account of fire or which would in
any way increase or render void the fire insurance on the building. Lessee
warrants to Lessor that the insurance questionnaire (filled out by Lessee,
signed and presented to Lessor prior to the execution of this Lease) accurately
reflects Lessee's original intended use of the leased premises. The insurance
questionnaire is made a part of this Lease by reference as though fully copied
herein. If at any time during the term of this Lease the State Board of
Insurance or other insurance authority disallows any of Lessor's sprinkler
credits or imposes an additional penalty or surcharge in Lessor's insurance
premiums because of Lessee's original or subsequent placement or use of storage
racks or bins, method of storage or nature of Lessee's inventory or any other
act of Lessee, Lessee agrees to pay as additional rent the increase (between
fire walls) in Lessor's insurance premiums.
3.02 Signs. No sign of any type or description shall be erected, placed
or painted in or about the leased premises or project except those signs
submitted to Lessor in writing and approved by Lessor in writing, and which
signs are in conformance with Lessor's sign criteria established for the
project.
3.03 Compliance with Laws, Rules and Regulations. Lessee, at Lessee's
sole cost and expense, shall comply with all laws, ordinances, orders, rules
and regulations now in effect or enacted subsequent to the date hereof of
state, federal, municipal or other agencies or bodies having jurisdiction over
Lessee or the use, condition and occupancy of the leased premises. Lessee will
comply with the rules and regulations of the building adopted by Lessor which
are set forth on a schedule attached to this Lease. Lessor shall have the right
at all times to change and amend the rules and regulations in any reasonable
manner as may be deemed advisable for the safety, care, cleanliness,
preservation of good order and operation or use of the building or the leased
premises. All changes and amendments to the rules and regulations of the
building will be sent by Lessor to Lessee in writing and shall thereafter be
carried out and observed by Lessee. Should the building of which the leased
premises are a part not be classified as a "commercial facility which is a
place of public accommodations" as defined in Title III of the American With
Disabilities Act of 1990 (the Act) on the date hereof, and Lessee's use,
alterations or improvements thereafter causes the building to be classified as
such, Lessee shall be responsible for and shall indemnify Lessor against any
and all costs and expenses of Lessor associated with complying with the Act.
3.04 Warranty of Possession. Lessor warrants that it has the right and
authority to execute this Lease, and Lessee, upon payment of the required rents
and subject to the terms, conditions, covenants and agreements contained in
this Lease, shall have possession of the leased premises during the full term
of this Lease as well as any extension or renewal thereof. Lessor shall not be
responsible for the acts or omissions of any other Lessee or third party that
may interfere with Lessee's use and enjoyment of the leased premises, except
for those claiming by, through or under Lessor.
3.05 Inspection. With reasonable notice to Lessee, except in a bonafide
emergencies, Lessor or its authorized agents shall at any and all reasonable
times have the right to enter the leased premises to inspect the same, conduct
tests, environmental audits or other procedures to determine Lessee's
compliance with the terms; to supply janitorial service or any other service to
be provided by Lessor, to show the leased premises to prospective purchasers,
lessees or mortgagees; to alter, improve or repair the leased premises or any
other portion of the building or for any other purpose Lessor deems necessary.
Lessor shall at all times have and retain a key with which to unlock all of the
doors in, upon and about the leased premises. Lessee shall not change Lessor's
lock system or in any other manner prohibit Lessor from entering the leased
premises. Lessor shall have the right to use any and all means which Lessor may
deem proper to open any door in an emergency without liability therefor. During
the final one-hundred fifty days of the Lease term, Lessor or its authorized
agents shall have the right to erect or maintain on or about the leased
premises or the building customary signs advertising the leased premises for
lease or sale.
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3.06 HAZARDOUS WASTE. The term "Hazardous Substances," as used in this
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the use and/or the removal of which is required or the use of
which is restricted, prohibited or penalized by any "Environmental Law," which
term shall mean any federal, state or local law, ordinance or other statute of
a governmental or quasi-governmental authority relating to pollution or
protection of the environment. Lessee hereby agrees that (i) no activity will
be conducted on the premises that will produce any Hazardous Substance, except
for such activities that are part of the ordinary course of Lessee's business
activities (the "Permitted Activities") provided said Permitted Activities are
conducted in accordance with all Environmental Laws and have been approved in
advance in writing by Lessor; Lessee shall be responsible for obtaining any
required permits and paying any fees and providing any testing required by any
governmental agency; (ii) the premises will not be used in any manner for the
storage of any Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Lessee's business (the
"Permitted Materials") provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the premises will be used as a
landfill or a dump; (iv) Lessee will not install any underground or above
ground tanks of any type; (v) Lessee will not allow any surface or subsurface
conditions to exist or come into existence that constitute, or with the passage
of time may constitute a public or private nuisance; (vi) Lessee will not
permit any Hazardous Substances to be brought onto the premises, except for the
Permitted Materials described below, and if so brought or found located
thereon, the same shall be immediately removed, with proper disposal, and all
required cleanup procedures shall be diligently undertaken pursuant to all
Environmental Laws. Lessor or Lessor's representative shall have the right but
not the obligation to enter the premises for the purpose of inspecting the
storage, use and disposal of Permitted Materials to ensure compliance with all
Environmental Laws. Should it be determined, in Lessor's sole opinion, that
said Permitted Materials are being improperly stored, used, or disposed of,
then Lessee shall immediately take such corrective action as requested by
Lessor. Should Lessee fail to take such corrective action within 24 hours,
Lessor shall have the right to perform such work and Lessee shall promptly
reimburse Lessor for any and all costs associated with said work. If at any
time during or after the term of the Lease, the premises is found to be so
contaminated or subject to said conditions, Lessee shall diligently institute
proper and thorough cleanup procedures at Lessee's sole cost. Before taking any
action to comply with hazardous material laws or to clean up hazardous material
contaminating the premises, Lessee shall submit to Lessor a plan of action,
including any and all plans and documents required by any hazardous material
law to be submitted to a governmental authority (collectively, a "plan of
action"). Before Lessee begins the actions necessary to comply with hazardous
material laws or to clean up contamination from hazardous materials, Lessor
shall have (1) approved the nature, scope and timing of the plan of action, and
(2) approved any and all covenants and agreements to effect the plan of action.
Lessee agrees to indemnify and hold Lessor harmless from all claims, demands,
actions, liabilities, costs, expenses, damages and obligations of any nature
arising from or as a result of the use of the premises by Lessee. The foregoing
indemnification and the responsibilities of Lessee shall survive the
termination or expiration of this Lease.
Permitted Materials: (list permitted materials, if none, enter "None")
NONE
3.07 CERTIFICATE OF OCCUPANCY. Upon occupancy of the leased premises,
Lessee shall be required to obtain a Certificate of Occupancy (the CO) from the
municipality in which the building is located. Failure of Lessee to obtain and
deliver the CO to Lessor upon occupancy shall be a default which shall allow
Lessor to pursue the remedies set forth in Article 11.02 of this Lease.
ARTICLE 4.00 UTILITIES AND SERVICE
4.01 Building Services. Lessor shall provide the normal utility service
connections to the building. Lessee shall pay directly to the appropriate
supplier the cost of all utility services, including, but not limited to,
initial connection charges, all charges for gas, electricity, water, sanitary
and storm sewer service, and for all electric lights. Lessee shall pay all
costs caused by Lessee introducing excessive pollutants or solids other than
ordinary human waste into the sanitary sewer system, including permits, fees
and charges levied by any governmental subdivision for any such pollutants or
solids. Lessee shall be responsible for the installation and maintenance of any
dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand
traps, grease traps or similar devices as may be required by any governmental
subdivision for Lessee's use of the sanitary sewer system. If the leased
premises are in a multi-occupancy building, Lessee shall pay all surcharges
levied due to Lessee's use of sanitary sewer or waste removal services insofar
as such surcharges affect Lessor or other lessees in the building. Cessation of
any of these defined services shall not render Lessor liable in any respect for
damages to either person or property, be construed as an eviction of Lessee,
work an abatement of rent or relieve Lessee from fulfillment of any covenant in
this Lease, except as due to intentional acts of the Lessor.
4.02 Theft or Burglary. Lessor shall not be liable to Lessee for losses
to Lessee's property or personal injury caused by criminal acts or entry by
unauthorized persons into the leased premises or the building. Lessee shall be
responsible for repairs of damage and restoration of the leased premises
following any such act.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 Existing Conditions. Lessee accepts the leased premises in its
present as-is condition as of the date hereof, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Lessee acknowledges
that neither Lessor nor any agent of Lessor has made any warranty or
representation of any kind, either express or implied as to the condition of
the leased premises or the suitability of the leased premises for Lessee's
intended use. The taking of possession of the leased premises by Lessee shall
be conclusive evidence, as against Lessee, that Lessee accepts the leased
premises and that the leased premises were in good and satisfactory condition
at the time such possession was so taken. Prior to taking occupancy of the
leased premises, Lessee shall sign a copy of the space plan of the leased
premises acknowledging its condition on the date thereof.
5.02 Lessor Repairs. Lessor shall not be required to make any
improvements, replacements or repairs of any kind or character to the leased
premises or the project during the term of this Lease except as are set forth
in this section. Lessor shall maintain only the roof, foundation, parking and
common areas, and the structural soundness of the exterior walls (excluding
windows, window glass, plate glass and doors and surfaces of walls). Lessor's
costs of maintaining the items set forth in this section are subject to the
additional rent provisions in section 2.02. Lessor shall not be liable to
Lessee, except as expressly provided in this Lease, for any damage or
inconvenience, and Lessee shall not be entitled to any abatement or reduction
of rent by reason of any repairs, alterations or additions made by Lessor under
this Lease. Nothing contained herein shall entitle Lessee to make any repairs,
alterations or additions to the leased premises at Lessor's expense or to
terminate the Lease based on the physical condition of the leased premises.
5.03 Lessee Repairs. Lessee shall, at its sole cost and expense,
maintain, repair and replace all other parts of the leased premises in good
repair and condition, including, but not limited to, heating, ventilating and
air conditioning systems, down spouts, fire sprinkler system, dock bumpers,
lawn maintenance, pest control and extermination, trash pick-up and removal,
and painting the building and exterior doors. Lessee shall repair and pay for
any damage caused by any act or omission of Lessee or Lessee's agents,
employees, invitees, licensees or visitors. If the leased premises are served
by rail, Lessee agrees, if requested by the railroad, to enter into a joint
maintenance agreement with the railroad and bear its pro rata share of the cost
of maintaining the railroad spur. If Lessee fails to make the repairs or
replacements promptly as required herein, Lessor may, at its option, make the
repairs and replacements and the cost of such repairs and replacements shall be
charged to Lessee as additional rent and shall become due and payable by Lessee
within ten days from receipt of Lessor's invoice. Costs incurred under this
section are the total responsibility of Lessee and do not constitute operating
expenses under section 2.02.
5.04 Request for Repairs. All requests for repairs or maintenance that
are the responsibility of Lessor pursuant to any provision of this Lease must
be made in writing to Lessor at the address in section 1.05 and delivered
pursuant to section 14.07. Notices sent by facsimile transmission shall not be
considered proper notice for the purposes hereof. Lessor shall have a
reasonable time, but in no event more than 60 days, to begin such repairs or
maintenance and shall have a reasonable time within which to perform such
repairs or maintenance after they have begun.
5.05 Lessee Damages. Lessee shall not allow any damage to be committed on
any portion of the leased premises or building, and at the termination of this
Lease, by lapse of time or otherwise, Lessee shall deliver the leased premises
to Lessor in as good condition as existed at the commencement date of this
Lease, ordinary wear and tear excepted. Lessor's standard move-out checklist
shall be followed by Lessee to ensure compliance with this provision. The cost
and expense of any repairs necessary to restore the condition of the leased
premises shall be borne by Lessee.
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5.06 Maintenance Contract. Lessee shall, at its sole cost and expense,
during the term of this Lease maintain a regularly scheduled preventative
maintenance/service contract on an annual basis with a maintenance contractor
for the servicing of all hot water, heating and air conditioning systems and
equipment within or serving the leased premises. The maintenance contractor and
contract must be approved by Lessor and must include all services suggested by
the equipment manufacturer. A copy of the service contract shall be provided to
Lessor within sixty (60) days following the commencement date. In the event the
service contract is not provided, then Lessor shall have the right, but not the
obligation to have the work done and the cost therefore shall be charged to
Lessee as additional rent and shall become payable by Lessee with the payment
of the rent next due hereunder.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 Lessor Improvements. If construction to the leased premises is to be
performed by Lessor prior to or during Lessee's occupancy, Lessor will complete
the construction of the improvements to the leased premises, in accordance with
plans and specifications agreed to by Lessor and Lessee, which plans and
specifications are made a part of this Lease by reference. Lessee shall execute
a copy of the plans and specifications and change orders, if applicable,
setting forth the amount of any costs to be borne by Lessee within seven days
of receipt of the plans and specifications. In the event Lessee fails to
execute the plans and specifications and change order within the seven day
period, Lessor may, at its sole option, declare this Lease canceled or notify
Lessee that the base rent shall commence on the commencement date specifically
set forth in section 1.03 even though the improvements to be constructed by
Lessor may not be complete. Any changes or modifications to the approved plans
and specifications shall be made and accepted by written change order or
agreement signed by Lessor and Lessee and shall constitute an amendment to this
Lease. Any improvements made by Lessor shall at once become the property of
Lessor and shall be surrendered to Lessor upon termination of this Lease
without credit to Lessee.
6.02 Lessee Improvements. Lessee shall not make or allow to be made any
alterations or physical additions in or to the leased premises without
complying with all local, state and federal ordinances, laws, statutes and
without first obtaining the written consent of Lessor, which consent may in the
sole and absolute discretion of Lessor be denied. Any alterations, physical
additions or improvements to the leased premises made by Lessee shall at once
become the property of Lessor and shall be surrendered to Lessor upon the
termination of this Lease without credit to Lessee; provided, however, Lessor,
at its option, may require Lessee to remove any physical additions and/or
repair any alterations in order to restore the leased premises to the condition
existing at the time Lessee took possession, all costs of removal and/or
alterations to be borne by Lessee. This clause shall not apply to moveable
equipment or furniture owned by Lessee, which may be removed by Lessee at the
end of the term of this Lease if Lessee is not then in default, if such
equipment and furniture are not then subject to any other rights, liens and
interest of Lessor and such removal can be accomplished without material damage
to the leased premises. Upon completion of any such work Lessee shall provide
Lessor with "as built plans", copies of all construction contracts and proof of
payment for all labor and materials.
6.03 Mechanics Lien. Lessee shall not permit any mechanic's or
materialman's lien(s) or other lien to be placed upon the leased premises or
the building and nothing in the Lease shall be deemed or construed in any way
as constituting the consent or request of Lessee, express or implied, by
inference or otherwise, to any person for the performance of any labor or the
furnishing of any materials to the leased premises, or any part that would give
the rise to any mechanic's or materialman's or other lien against the leased
premises. In any event if any such lien is attached to the leased premises,
then, in addition to any other right or remedy of Lessor, Lessor may, but shall
not be obligated to, obtain the release or otherwise discharge the same. Any
amount paid by Lessor for any of the aforesaid purposes shall be paid by Lessee
to Lessor on demand as additional rent.
ARTICLE 7.00 CASUALTY AND INSURANCE
7.01 Substantial Destruction. If the leased premises should be totally
destroyed by fire or other casualty, if the leased premises should be damaged
so that rebuilding cannot reasonably be completed within one hundred fifty days
after the date of written notification by Lessee to Lessor of the destruction,
or if the leased premises are part of a building which is substantially
destroyed (even though the leased premises are not totally or substantially
destroyed) this Lease shall terminate and the rent shall be abated for the
unexpired portion of the Lease, effective as of the date of the written
notification.
7.02 Partial Destruction. If the leased premises should be partially
damaged by fire or other casualty, and rebuilding or repairs can reasonably be
completed within one hundred twenty days from the date of written notification
by Lessee to Lessor of the destruction, this Lease shall not terminate, and
Lessor shall at its sole risk and expense proceed with reasonable diligence to
rebuild or repair the building or other improvements to substantially the same
condition in which they existed prior to the damage, provided, Lessor shall
have no obligation to repair or rebuild Lessee's furniture, fixtures or
personal property. If the destruction was caused by an act or omission of
Lessee, its employees, agents, or invitees, Lessee shall pay Lessor the
difference between the actual cost of rebuilding or repairing the leased
premises and any insurance proceeds received by Lessor. If the leased premises
are to be rebuilt or repaired and are untenantable in whole or in part
following the damage, and the damage or destruction was not caused or
contributed to by act or negligence of Lessee, its agents, employees, invitees
or those for whom Lessee is responsible, the rent payable under this Lease
during the period for which the leased premises are untenantable shall be
adjusted to such an extent as may be fair and reasonable under the
circumstances. In the event that Lessor fails to complete the necessary repairs
or rebuilding within one hundred twenty days from the date of written
notification by Lessee to Lessor of the destruction, Lessee may at its option
terminate this Lease by delivering written notice of termination to Lessor,
whereupon all rights and obligations under this Lease shall cease to exist.
7.03 Property Insurance. Lessor shall at all times during the term of
this Lease maintain a policy or policies of insurance with the premiums paid in
advance, issued by and binding upon some solvent insurance company, insuring
the building against all risk of direct physical loss in an amount equal to at
least ninety percent of the full replacement cost of the building structure and
its improvements as of the date of the loss; provided, Lessor shall not be
obligated in any way or manner to insure any personal property (including, but
not limited to, any furniture, machinery, goods or supplies) of Lessee upon or
within the leased premises, any fixtures installed or paid for by Lessee upon
or within the leased premises, or any improvements which Lessee may construct
on the leased premises. Lessee shall have no right in or claim to the proceeds
of any policy of insurance maintained by Lessor even if the cost of such
insurance is borne by Lessee as set forth in article 2.00.
7.04 Release of Claims and Waiver of Subrogation. Lessor and Lessee
release each other from any claim, by subrogation or otherwise, for any damages
to the leased premises, improvements to the building of which the leased
premises are a part, or personal property located at or within the leased
premises or the building to which the leased premises are a part, by reason of
fire, the elements, explosion or any other occurrence, regardless of cause,
including negligence of either Lessor or Lessee. This release applies only to
the extent permitted by law, the damage is covered by insurance proceeds, and
the release does not adversely affect any insurance coverage.
Lessor and Lessee will notify the issuing insurance company of the release and
waiver set forth in this paragraph and will have the insurance policies
endorsed, if necessary, to prevent invalidation of the insurance coverage.
7.05 Hold Harmless. (See 16.07)
7.06 LIABILITY INSURANCE. Lessee shall, at its sole expense, maintain at
all times during the term of this Lease public liability insurance with respect
to the leased premises and the conduct or operation of Lessee's business
therein, naming Lessor as an additional insured, with limits of not less that
$2,000,000.00 for death or bodily injury to any one or more persons in a single
occurrence and $500,000.00 for property damage. Lessee shall deliver a
certificate of such insurance to Lessor on or before the commencement date and
thereafter from time to time upon request.
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ARTICLE 8.00 CONDEMNATION
8.01 Substantial Taking. If all or a substantial part of the leased
premises or a substantial part of the building of which the leased premises are
a part (even though the leased premises are not taken) are taken for any public
or quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by purchase in lieu thereof, and the taking would
prevent or materially interfere with the use of the leased premises or the
building of which the leased premises are a part for the purpose for which it
is then being used, this Lease shall terminate and the rent shall be abated
during the unexpired portion of this Lease effective on the date title or
physical possession is taken by the condemning authority. Lessee shall have no
claim to any condemnation award or proceeds in lieu thereof.
8.02 Partial Taking. If a portion of the leased premises or a substantial
portion of the building of which the leased premises are a part shall be taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in section 8.01 above, Lessor shall at
Lessor's sole risk and expense, restore and reconstruct the building and other
improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances. Lessee shall have no claim to any
condemnation award or proceeds in lieu thereof.
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 Lessor Assignment. Lessor shall have the right to sell, transfer or
assign, in whole or in part, its rights and obligations under this Lease and in
the leased premises. Any such sale, transfer or assignment shall operate to
release Lessor from any and all liabilities under this Lease arising after the
date of such sale, assignment or transfer.
9.02 Lessee Assignment. (See 16.08)
9.03 Conditions of Assignment. If Lessee desires to assign or sublet all
or any part of the leased premises, it shall so notify Lessor at least thirty
days in advance of the date on which Lessee desires to make such assignment or
sublease. Lessee shall provide Lessor with a copy of the proposed assignment or
sublease and such information as Lessor might request concerning the proposed
sublessee or assignee to allow Lessor to make informed judgments as to the
financial condition, reputation, operations and general desirability of the
proposed sublessee or assignee. Within fifteen days after Lessor's receipt of
Lessee's proposed assignment or sublease and all required information
concerning the proposed sublessee or assignee, Lessor shall have the following
options: (1) cancel this Lease as to the leased premises or portion thereof
proposed to be assigned or sublet; (2) consent to the proposed assignment or
sublease, and, if the rent due and payable by any assignee or sublessee under
any such permitted assignment or sublease (or a combination of the rent payable
under such assignment or sublease plus any bonus or any other consideration or
any payment incident thereto) exceeds the rent payable under this Lease for
such space, Lessee shall pay to Lessor all such excess rent and other excess
consideration within ten days following receipt thereof by Lessee; or (3)
refuse, in its sole and absolute discretion and judgment, to consent to the
proposed assignment or sublease, which refusal shall be deemed to have been
exercised unless Lessor gives Lessee written notice providing otherwise. Upon
the occurrence of an event of default, if all or any part of the leased
premises are then assigned or sublet, Lessor, in addition to any other remedies
provided by this Lease or provided by law, may, at its option, collect directly
from the assignee or sublessee all rents becoming due to Lessee by reason of
the assignment or sublease, and Lessor shall have a security interest in all
properties on the leased premises to secure payment of such sums. Any
collection directly by Lessor from the assignee or sublessee shall not be
construed to constitute a novation or a release of Lessee or any guarantor from
the further performance of its obligations under this Lease. As a condition to
Lessor's review of any assignment or sublease, Lessee shall deliver to Lessor a
non-refundable fee of $500.00 to defer Lessor's administrative costs with
respect thereto. In addition, all legal fees and expenses incurred by Lessor in
connection with the review by Lessor of Lessee's requested assignment or
sublease together with any legal fees and disbursements incurred in the
preparation and/or review of any documentation required by the requested
assignment or sublease, shall be the responsibility of Lessee and shall be paid
by Lessee within five (5) days of demand for payment thereof.
9.04 Subordination. Lessee accepts this Lease subject and subordinate to
any recorded mortgage or deed of trust lien presently existing or hereafter
created upon the building or project of which the leased premises are a part
and to all existing recorded restrictions, covenants, easements and agreements
with respect to the building or project of which the leased premises are a
part. Lessor is hereby irrevocably vested with full power and authority to
subordinate Lessee's interest under this Lease to any first mortgage or deed of
trust lien hereafter placed on the leased premises, and Lessee agrees upon
demand to execute additional instruments subordinating this Lease as Lessor may
require. If the interest of Lessor under this Lease shall be transferred by
reason of foreclosure or other proceedings for enforcement of any first
mortgage or deed of trust on the leased premises, Lessee shall be bound to the
transferee (sometimes called the "Purchaser") at the option of the Purchaser,
under the terms, covenants and conditions of this Lease for the balance of the
term remaining, including any extensions or renewals, with the same force and
effect as if the Purchaser were Lessor under this Lease, and, if requested by
the Purchaser, Lessee agrees to attorn to the Purchaser, including the first
mortgagee under any such mortgage if it be the Purchaser, as its Lessor.
9.05 Estoppel Certificates. Lessee agrees to furnish, from time to time,
within five days after receipt of a request from Lessor, Lessor's mortgagee or
any potential purchaser of the building or project, a statement certifying, if
applicable, the following: Lessee is in possession of the leased premises; the
leased premises are acceptable; the Lease is in full force and effect; the
Lease is unmodified; Lessee claims no present charge, lien, or claim of offset
against rent; the rent is paid for the current month, but is not prepaid for
more than one month and will not be prepaid for more than one month in advance;
there is no existing default by reason of some act or omission by Lessor; and
such other matters as may be reasonably required by Lessor or Lessor's
mortgagee or any potential purchaser. Lessee's failure to deliver such
statement, in addition to being a default under this Lease, shall be deemed to
establish conclusively that this Lease is in full force and effect except as
declared by Lessor, that Lessor is not in default of any of its obligations
under this Lease, and that Lessor has not received more than one month's rent
in advance. Any notice and cure provisions set forth in any other part of this
Lease shall not apply to a default of this section 9.05.
ARTICLE 10.00 LIENS
10.01 Landlord's Lien.
10.02 Uniform Commercial Code.
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ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 Default by Lessee. The following shall be deemed to be events of
default by Lessee under this Lease:
(a) Lessee shall fail to pay when due any installment of rent or any
other payment required pursuant to this Lease;
(b) Lessee shall abandon any substantial portion of the leased premises;
(c) Lessee shall fail to comply with any term, provision or covenant of
this Lease, other than the payment of rent;
(d) Lessee or any guarantor of Lessee's obligations hereunder shall file
a petition or be adjudged bankrupt or insolvent under any applicable federal or
state bankruptcy or insolvency law, or admit that it cannot meet its financial
obligations as they become due; or a receiver or trustee shall be appointed for
all or substantially all of the assets of Lessee or such guarantor; or Lessee
or any guarantor of Lessee's obligations hereunder shall make a transfer in
fraud of creditors or shall make an assignment for the benefit of creditors; or
(e) Lessee shall do or permit to be done any act which results in a lien
being filed against the leased premises or the building and/or project of which
the leased premises are a part.
11.02 Remedies for Lessee's Default. Upon the occurrence of any event of
default set forth in this Lease, Lessor shall have the option to pursue any one
or more of the remedies set forth herein without any notice or demand.
(1) Without declaring the Lease terminated, Lessor may enter upon and
take possession of the leased premises, by picking or changing locks if
necessary, and lock out, expel or remove Lessee and any other person who may be
occupying all or any part of the leased premises without being liable for any
claim for damages, and relet the leased premises on behalf of Lessee and
receive the rent directly by reason of the reletting. Lessee agrees to pay
Lessor on demand any deficiency that may arise by reason of any reletting of
the leased premises; further, Lessee agrees to reimburse Lessor for any
expenditures made by it in order to relet the leased premises, including, but
not limited to, remodeling and repair costs.
(2) Without declaring the Lease terminated, Lessor may enter upon the
leased premises, by picking or changing locks if necessary, without being
liable for any claim for damages, and do whatever Lessee is obligated to do
under the terms of this Lease. Lessee agrees to reimburse Lessor on demand for
any expenses which Lessor may incur in effecting compliance with Lessee's
obligations under this Lease; further, Lessee agrees that Lessor shall not be
liable for any damages resulting to Lessee from effecting compliance with
Lessee's obligations under this Lease caused by the negligence of Lessor or
otherwise.
(3) Lessor may terminate this Lease, in which event Lessee shall
immediately surrender the leased premises to Lessor, and if Lessee fails to
surrender the leased premises, Lessor may, without prejudice to any other
remedy which it may have for possession or arrearages in rent, enter upon and
take possession of the leased premises, by picking or changing locks if
necessary, and lock out, expel or remove Lessee and any other person who may be
occupying all or any part of the leased premises without being liable for any
claim for damages. Lessee agrees to pay on demand the amount of all loss and
damage which Lessor may suffer by reason of the termination of this Lease under
this section, including without limitation, loss and damage due to failure of
Lessee to maintain and or repair the leased premises as required hereunder
and/or due to the inability to relet the leased premises on satisfactory terms
or otherwise. In addition, upon termination Lessor may collect from Lessee the
value of all future rentals required to be paid under this Lease from the date
Lessor terminates the Lease until the original termination date, discounted to
present value using a discount rate of six percent (6%), less the reasonable
market value of the leased premises in the specific area in which the leased
premises are located on the date of termination. Notwithstanding anything
contained in this Lease to the contrary, this Lease may be terminated by Lessor
only by mailing or delivering written notice of such termination to Lessee, and
no other act or omission of Lessor shall be construed as a termination of this
Lease.
(4) In the event that Lessor exercises its remedy to lock out Lessee in
accordance with any provision of this Lease, Lessee agrees that no notice shall
be required to be posted by Lessor on any door to the leased premises (or
elsewhere) disclosing the reason for such action or any other information, and
that Lessor shall not be obligated to provide a key to the changed lock to
Lessee unless Lessee shall have first:
(I) brought current all payments due to Lessor under this Lease
(unless Lessor has permanently repossessed the leased premises or terminated
this Lease, in which event payment of all past due amounts shall not obligate
Lessor to provide a key);
(II) fully cured and remedied to Lessor's satisfaction all other
defaults of Lessee under this Lease (unless Lessee has abandoned or vacated the
leased premises, in which event Lessor shall not be obligated to provide the
new key to Lessee under any circumstances) and;
(III) provided Lessor with additional security deposit and
assurances satisfactory to Lessor that Lessee intends to and is able to meet
and comply with its future obligations under this Lease, both monetary and
nonmonetary. Lessor may, upon written request by Lessee, at Lessor's
convenience and upon Lessee's execution and delivery of such waivers and
indemnifications as Lessor may require at Lessor's option either:
(i) escort Lessee or its specifically authorized employees or
agents to the leased premises to retrieve personal belongings of Lessee's
employees and property of Lessee that is not subject to a Security Interest
provided in this Lease, or
(ii) obtain from Lessee a list of such property and arrange for
such items to be removed from the leased premises and made available to Lessee
at such place at such time as Lessor may designate, provided however, that if
Lessor elects option (ii), then Lessee shall be required to pay in cash in
advance to Lessor the estimated cost that Lessor may incur upon moving and
storage charges theretofore incurred by Lessor with respect to such property.
THE PROVISIONS OF THIS ARTICLE ARE INTENDED TO OVERRIDE AND SUPERSEDE ANY
CONFLICTING PROVISIONS OF THE TEXAS PROPERTY CODE AND ANY AMENDMENTS OR
SUCCESSOR STATUTES THERETO, AND OF ANY OTHER LAW, TO THE MAXIMUM EXTENT
PERMITTED BY THE LAW.
(5) Notwithstanding any other remedy set forth in this Lease, in the
event Lessor has made rent concessions of any type or character, or waived any
base rent, and Lessee fails to take possession of the leased premises on the
commencement or completion date or otherwise defaults at any time during the
term of this Lease, the rent concessions, including any waived base rent, shall
be canceled and the amount of the base rent or other rent concessions shall be
due and payable immediately as if no rent concessions or waiver of any base
rent had ever been granted. A rent concession or waiver of the base rent shall
not relieve Lessee of any obligation to pay any other charge due and payable
under this Lease including without limitation any sum due under section 2.02.
(6) In the event Lessor exercises any of its rights provided herein and
Lessee subsequently cures such default, Lessor shall be entitled to receive a
service charge of $500.00 from the Lessee for its time and expense, in addition
to any other amounts owed hereunder, prior to allowing the Lessee to reenter
and reoccupy the premises.
ARTICLE 12.00 RELOCATION
12.01 Relocation Option. In the event Lessor determines to utilize the
leased premises for other purposes during the term of this Lease, Lessee agrees
to relocate to other space in the building and/or project designated by Lessor,
provided such other space is of equal or larger size than the leased premises.
12.02 Expenses. Lessor shall pay all out-of-pocket expenses of any such
relocation, including the expenses of moving and reconstruction of all Lessee
furnished and Lessor furnished improvements. In the event of such relocation,
this Lease shall continue in full force and effect without any change in the
terms or conditions of this Lease, but with the new location substituted for
the old location set forth in section 1.02 of this Lease.
-6-
ARTICLE 13.00 DEFINITIONS
13.01 Abandon. "Abandon" means the vacating of all or a substantial
portion of the leased premises by Lessee, whether or not Lessee is in default
of the rental payments due under this Lease.
13.02 Act of God or Force Majeure. An "act of God" or "force majeure" is
defined for purposes of this Lease as strikes, lockouts, sit downs, material or
labor restrictions by any governmental authority, unusual transportation
delays, riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections and any other cause not reasonably
within the control of Lessor and which by the exercise of due diligence Lessor
is unable, wholly or in part, to prevent or overcome.
13.03 Building or Project. "Building" or "project" as used in this Lease
means the building and/or project described in section 1.02, including the
leased premises and the land upon which the building or project is situated.
13.04 Commencement Date. "Commencement date" shall be the date set forth
in section 1.03. The commencement date shall constitute the commencement of the
term of this Lease for all purposes, whether or not Lessee has actually taken
possession.
13.05 Square Feet. "Square feet" or "square foot" as used in this Lease
includes the area contained within the leased premises together with a common
area percentage factor of the leased premises proportionate to the total
building area.
ARTICLE 14.00 MISCELLANEOUS
14.01 Waiver. Failure of Lessor to declare an event of default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not constitute a waiver of the default, but
Lessor shall have the right to declare the default at any time and take such
action as is lawful or authorized under this Lease. Pursuit of any one or more
of the remedies set forth in article 11.00 above shall not preclude pursuit of
any one or more of the other remedies provided elsewhere in this Lease or
provided by law, nor shall pursuit of any remedy constitute forfeiture or
waiver of any rent or damages accruing to Lessor by reason of the violation of
any of the terms, provisions or covenants of this Lease. Failure by Lessor to
enforce one or more of the remedies provided upon an event of default shall not
be deemed or construed to constitute a waiver of the default or of any other
violation or breach of any of the terms, provisions and covenants contained in
this Lease.
14.02 Act of God. Lessor shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Lessee, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
or prevented by an act of God, force majeure or by Lessee.
14.03 Attorney's Fees. In the event Lessee defaults in the performance of
any of the terms, covenants, agreements or conditions contained in this Lease
and Lessor places in the hands of an attorney the enforcement of all or any
part of this Lease, the collection of any rent due or to become due or recovery
of the possession of the leased premises, Lessee agrees to pay Lessor's costs
of collection, including reasonable attorney's fees for the services of the
attorney, whether suit is actually filed or not.
14.04 Successors. This Lease shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and agreed
that should Lessor's interest in the leased premises cease to exist for any
reason during the term of this Lease, then notwithstanding the happening of
such event this Lease nevertheless shall remain unimpaired and in full force
and effect, and Lessee hereunder agrees to attorn to the then owner of the
leased premises.
14.05 Rent Tax. If applicable in the jurisdiction where the leased
premises are situated, Lessee shall pay and be liable for all rental, sales and
use taxes or other similar taxes, if any, levied or imposed by any city, state,
county or other governmental body having authority, such payments to be in
addition to all other payments required to be paid to Lessor by Lessee under
the terms of this Lease. Any such payment shall be paid concurrently with the
payment of the rent, additional rent, operating expenses or other charge upon
which the tax is based as set forth above.
14.06 Captions. The captions appearing in this Lease are inserted only as
a matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
14.07 Notice. All rent and other payments required to be made by Lessee
shall be payable to Lessor at the address set forth in section 1.05. All
payments required to be made by Lessor to Lessee shall be payable to Lessee at
the address set forth in section 1.05 or at any other address within the United
States as Lessee may specify from time to time by written notice. For the
purposes hereof, any notice or document required or permitted to be delivered
by the terms of this Lease (other than delivery of rental payments) shall be
deemed to be delivered upon the earlier of actual receipt or (whether or not
actually received) when deposited in the United States Mail, postage prepaid,
certified mail, return receipt requested, addressed to the parties at the
respective addresses set forth in section 1.05. Rental payments shall be deemed
received upon actual receipt. In no event shall notice by facsimile
transmission be proper notice under the terms of this Lease.
14.08 Submission of Lease. Submission of this Lease to Lessee for
signature does not constitute a reservation of space or an option to lease.
This Lease is not effective until execution by and delivery to both Lessor and
Lessee.
14.09 Corporate Authority. If Lessee executes this Lease as a
corporation, each of the persons executing this Lease on behalf of Lessee does
hereby personally represent and warrant that Lessee is a duly authorized and
existing corporation, that Lessee is qualified to do business in the state in
which the leased premises are located, that the corporation has full right and
authority to enter into this Lease, and that each person signing on behalf of
the corporation is authorized to do so. In the event any representation or
warranty is false, all persons who execute this Lease shall be liable,
individually, as Lessee. Lessee shall additionally deliver 1) a corporate
resolution authorizing execution of this Lease and confirming the authority of
those persons executing the Lease, 2) certified Articles of Incorporation and
3) a certificate of existence and good standing from Lessee's state of
incorporation and a certificate evidencing Lessee's authority to do business in
the State of Texas.
14.10 Partnership Authority. If Lessee executes this Lease as a general
or limited partnership, each person executing this Lease on behalf of Lessee
does hereby personally represent and warrant that Lessee is a duly authorized
and existing partnership, that, if applicable, Lessee is qualified to do
business in the state where the leased premises are located, that the
partnership has full right and authority to enter into this Lease, and that
each person signing on behalf of the partnership is authorized to do so. In the
event any representation or warranty is false, all persons who execute this
Lease shall be liable, individually, as Lessee. Lessee, shall additionally
deliver a copy of its partnership agreement, and if a limited partnership, a
copy of its certificate of limited partnership. The party executing the Lease
on behalf of Lessee, if a corporate managing general partner or general
partner, shall additionally deliver 1) a corporate resolution authorizing
execution of the Lease and confirming the authority of those executing this
Lease, 2) certified Articles of Incorporation, 3) a certificate of existence
and good standing from the State of Texas or if such party is not incorporated
in Texas, a certificate of existence and good standing from such party's state
of incorporation and a certificate evidencing such party's authority to do
business in the State of Texas.
14.11 Severability. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
14.12 Lessor's Liability. If Lessor shall be in default under this Lease
and, if as a consequence of such default, Lessee shall recover a money judgment
against Lessor, such judgment shall be satisfied only out of the right, title
and interest of Lessor in the building as the same may then be encumbered and
neither Lessor nor any person or entity comprising Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy execution
against any property of Lessor nor any person or entity comprising Lessor other
than its interest in the building as herein expressly provided.
14.13 Indemnity. Lessor agrees to indemnify and hold harmless Lessee from
and against any liability or claim, whether meritorious or not, arising with
respect to any broker whose claim arises by, through or on behalf of Lessor.
Lessee agrees to indemnify and hold harmless Lessor from and against any
liability or claim, whether meritorious or not, arising with respect to any
broker whose claim arises by, through or on behalf of Lessee.
14.14 Notice to Mortgagees. Provided that Lessee has received prior
written notice of the name and address of such lender, Lessee shall serve
written notice of any claimed default or breach by Lessor under this Lease upon
any lender which is a beneficiary under any deed of trust or mortgage against
the leased premises, and no notice to Lessor shall be effective against Lessor
unless such notice is served upon said lender; notwithstanding anything to the
contrary contained herein, Lessee shall allow such lender the same period
following lender's receipt of such notice to cure such default or breach as is
afforded Lessor.
14.15 No Recordation. Lessee shall not record this Lease without the
prior written consent of Lessor.
14.16 Counterparts. This Lease may be executed in two or more
counterparts, and it shall not be necessary that any one of the counterparts be
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executed by all of the parties hereto. Each fully or partially executed
counterpart shall be deemed an original, but all such counterparts taken
together shall constitute but one and the same instrument.
14.17 Governing Law. THE LEASE SHALL BE CONSTRUED UNDER AND IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA AS APPLICABLE TO TRANSACTIONS WITHIN THE STATE OF TEXAS.
14.18 Broker. Lessee represents and warrants that Lessee has dealt with,
and only with Lessee's Broker named below as broker in connection with this
Lease and that, insofar as Lessee knows, no other broker negotiated this Lease
or is entitled to any commission in connection herewith. Lessee shall indemnify
and hold Lessor harmless from and against all claims (and costs of defending
against and investigating such claims) of any other broker or similar parties
claiming under Lessee in connection with this Lease.
Lessee's Broker: ▇▇▇▇▇▇ Internatinal
---------------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
---------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------
14.19 Publication. Lessee hereby agrees that Lessor shall have the right,
but not the obligation, at no cost to Lessee, to publicize and/or advertise the
execution of this Lease and the related transaction.
WAIVER OF CONSUMER RIGHTS
14.20 DTPA Waiver. LESSEE WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ., TEXAS BUSINESS &
COMMERCE CODE (THE "DTPA"), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTION. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, LESSEE
VOLUNTARILY CONSENTS TO THIS WAIVER.
LESSEE REPRESENTS AND WARRANTS TO LESSOR THAT (I) THIS DTPA WAIVER IS IN
WRITING; (ii) THIS DTPA WAIVER IS SIGNED BY THE LESSEE; (iii) THE LESSEE IS NOT
IN A SIGNIFICANT DISPARATE BARGAINING POSITION WITH LESSOR WITH RESPECT TO THIS
TRANSACTION; (iv) THE LESSEE IS REPRESENTED BY LEGAL COUNSEL IN THE TRANSACTION
WHICH IS THE SUBJECT OF THIS LEASE; (v) LESSEE'S LEGAL COUNSEL WAS NOT DIRECTLY
OR INDIRECTLY IDENTIFIED, SUGGESTED OR SELECTED BY LESSOR OR ANY AGENT OF
LESSOR; AND (vi) THE TRANSACTION WHICH IS THE SUBJECT OF THIS LEASE DOES NOT
INVOLVE THE LESSEE'S RESIDENCE.
ARTICLE 15.00 AMENDMENT AND LIMITATION OF WARRANTIES
15.01 Entire Agreement. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE
OR TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
15.02 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
15.03 Limitation of Warranties. LESSOR AND LESSEE EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS
LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET
FORTH IN THIS LEASE.
ARTICLE 16.00 OTHER PROVISIONS
16.01 Rules and Regulations
6.02 Base Rent Schedule: Months 1 & 2 Base Rent Abated
Months 3 - 14 $5,550.00 per month
Months 15 - 26 $5,700.00 per month
Months 27 - 38 $5,850.00 per month
Months 39 - 49 $6,000.00 per month
Months 50 - 62 $6,150.00 per month
16.03 Lessor Improvements
16.04 Cancellation Option
16.05 Alterations, Additions or Improvements to Warehouse
16.06 Renewal Option
16.07 Reciprocal Hold Harmless
16.08 Lessee Assignment
ARTICLE 17.00 SIGNATURES
SIGNED at Hialeah, FL this 29th day of April, 1997.
------------------ -------- ----------
LESSOR LESSEE
EGP Houston Partners, Ltd. Techdyne Incorporated
------------------------------------ ------------------------------------
/s/ Stewart R. Speed /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------ ------------------------------------
By: Stewart R. Speed By: ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------ ------------------------------------
Vice President President
------------------------------------ ------------------------------------
(Type Name and Title) (Type Name and Title)
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RULES AND REGULATIONS
1. Lessor agrees to furnish Lessee two keys without charge. Additional keys
will be furnished at a nominal charge. Lessee shall not change locks or
install additional locks on doors without prior written consent of
Lessor. Lessee shall not make or cause to be made duplicates of keys
procured from Lessor without prior approval of Lessor. All keys to leased
premises shall be surrendered to Lessor upon termination of this Lease.
2. Lessee will refer all contractors, contractor's representatives and
installation technicians rendering any service on or to the leased
premises for Lessee to Lessor for Lessor's approval before performance of
any contractual service. Lessee's contractors and installation
technicians shall comply with Lessor's rules and regulations pertaining
to construction and installation. This provision shall apply to all work
performed on or about the leased premises or project, including
installation of telephones, telegraph equipment, electrical devices and
attachments and installations of any nature affecting floors, walls,
woodwork, trim, windows, ceilings and equipment or any other physical
portion of the leased premises or project.
3. Lessee shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.
4. Lessee shall not place, install or operate on the leased premises or in
any part of the building any engine, stove or machinery, or conduct
mechanical operations or ▇▇▇▇ thereon or therein, or place or use in or
about the leased premises or project any explosives, gasoline, kerosene,
oil acids, caustics, or any flammable, explosive or hazardous material
without written consent of Lessor.
5. Lessor will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the leased premises or the project
regardless of whether such loss occurs when the area is locked against
entry or not.
6. No dogs, cats, fowl, or other animals shall be brought into or kept in or
about the leased premises or project.
7. Employees of Lessor shall not receive or carry messages for or to any
Lessee or other person or contract with or render free or paid services
to any Lessee or to any of Lessee's agents, employees or invitees.
8. None of the parking, plaza, recreation or lawn areas, entries, passages,
doors, elevators, hallways or stairways shall be blocked or obstructed or
any rubbish, litter, trash, or material of any nature placed, emptied or
thrown into these areas or such area used by Lessee's agents, employees
or invitees at any time for purposes inconsistent with their designation
by Lessor.
9. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed, and any damage
resulting to them from misuse or by the defacing or injury of any part of
the building shall be borne by the person who shall occasion it. No
person shall waste water by interfering with the faucets or otherwise.
10. No person shall disturb occupants of the building by the use of any
radios, record players, tape recorders, musical instruments, the making
of unseemly noises or any unreasonable use.
11. Nothing shall be thrown out of the windows of the building or down the
stairways or other passages.
12. Lessee and its employees, agents and invitees shall park their vehicles
only in those parking areas designated by Lessor. Lessee shall furnish
Lessor with state automobile license numbers of Lessee's vehicles and its
employees' vehicles within five days after taking possession of the
leased premises and shall notify Lessor of any changes within five days
after such change occurs. Lessee shall not leave any vehicle in a state
of disrepair (including without limitation, flat tires, out of date
inspection stickers or license plates) on the leased premises or project.
If Lessee or its employees, agents or invitees park their vehicles in
areas other than the designated parking areas or leave any vehicle in a
state of disrepair, Lessor, after giving written notice to Lessee of such
violation, shall have the right to remove such vehicles at Lessee's
expense.
13. Parking in a parking garage or area shall be in compliance with all
parking rules and regulations including any sticker or other
identification system established by Lessor. Failure to observe the rules
and regulations shall terminate Lessee's right to use the parking garage
or area and subject the vehicle in violation of the parking rules and
regulations to removal and impoundment. No termination of parking
privileges or removal of impoundment of a vehicle shall create any
liability on Lessor or be deemed to interfere with Lessee's right to
possession of its leased premises. Vehicles must be parked entirely
within the stall lines and all directional signs, arrows and posted speed
limits must be observed. Parking is prohibited in areas not striped for
parking, in aisles, where "No Parking" signs are posted, on ramps, in
cross hatched areas, and in other areas as may be designated by Lessor.
Parking stickers or other forms of identification supplied by Lessor
shall remain the property of Lessor and not the property of Lessee and
are not transferable. Every person is required to park and lock his
vehicle. All responsibility for damage to vehicles or persons is assumed
by the owner of the vehicle or its driver.
14. Movement in or out of the building of furniture or office supplies and
equipment, or dispatch or receipt by Lessee of any merchandise or
materials which requires use of elevators or stairways, or movement
through the building entrances or lobby, shall be restricted to hours
designated by Lessor. All such movement shall be under supervision of
Lessor and carried out in the manner agreed between Lessee and Lessor by
prearrangement before performance. Such prearrangement will include
determination by Lessor of time, method, and routing of movement and
limitations imposed by safety or other concerns which may prohibit any
article, equipment or any other item from being brought into the
building. Lessee assumes, and shall indemnify Lessor against, all risks
and claims of damage to persons and properties arising in connection with
any said movement.
15. Lessor shall not be liable for any damages from the stoppage of elevators
for necessary or desirable repairs or improvements or delays of any sort
or duration in connection with the elevator service.
16. Lessee shall not lay floor covering within the leased premises without
written approval of the Lessor. The use of cement or other similar
adhesive materials not easily removed with water is expressly prohibited.
17. Lessee agrees to cooperate and assist Lessor in the prevention of
canvassing, soliciting and peddling within the building or project.
18. Lessor reserves the right to exclude from the building or project,
between the hours of 6:00 p.m. and 7:00 a.m. on weekdays and at all hours
on Saturday, Sunday and legal holidays, all persons who are not known to
the building or project security personnel and who do not present a pass
to the building signed by the Lessee. Each Lessee shall be responsible
for all persons for whom he supplies a pass.
19. It is Lessor's desire to maintain in the building or project the highest
standard of dignity and good taste consistent with the comfort and
convenience for Lessees. Any action or condition not meeting this high
standard should be reported directly to Lessor. Your cooperation will be
mutually beneficial and sincerely appreciated. Lessor reserves the right
to make such other and further reasonable rules and regulations as in its
judgment may from time to time be necessary, for the safety, care and
cleanliness of the leased premises and for the preservation of good order
therein.
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16.03 Lessor Improvements. The following is hereby added to the end of
Section 6.01
Lessor agree to make leasehold improvements to the leased premises as per the
attached drawing, Exhibit "A". The cost of such improvements shall not exceed
$45,000. In the event cost of said improvements do exceed $45,000 or additional
work is requested by Lessee the excess cost shall be amortized over the term of
the lease at an annual interest rate of 10.0% and shall be paid monthly. The
total cost that Lessor will amortize shall not exceed $55,000.00.
16.04 Cancellation Option
Lessor hereby grants to Lessee the option to cancel this Lease during the
thirty-sixth (36th) month, following the commencement of this Lease provided
Lessee (i) has made a written request for additional lease space (in Northwest
Point Business Park) and the Lessor cannot meet such requirement (additional
space requirements must contain at least 4,000 square feet), (ii) gives Lessor
at least one hundred eighty (180) prior written notice of the exercise of this
option, and (iii) simultaneously with the delivery of the notice pays to Lessor
$55,742.00 as consideration for the cancellation of this Lease.
16.05 Alterations, Additions or Improvements to Warehouse
Any alterations, physical additions or improvements to the warehouse area,
including but not limited to the drop ceiling depicted by footnote 7 on the
attached drawing, requested or made by Lessee shall be surrendered to Lessor
upon the termination of this Lease without credit to Lessee; provided, however,
Lessor, at its option, may require Lessee to remove any physical additions
and/or repair any alterations in order to restore the warehouse to the condition
existing at the time Lessee executed this Lease Agreement, all costs of removal
and/or alterations to be borne by Lessee.
16.06 Renewal Option
If, at the end of the primary term of this lease, Lessee is not in default in
any of the terms, conditions or covenants of the Lease, Lessee, but not any
assignee or subtenant of Lessee, is hereby granted an option to renew this Lease
for an additional term of sixty (60) months upon the same terms and conditions
contained in this Lease with the following exceptions:
A: The renewal option will contain no further renewal options unless expressly
granted by Lessor in writing; and
B: The rental for the renewed term shall be based upon the then prevailing
rental rates for properties of equivalent quality, size, utility and location,
with the length of the lease term and credit standing of the Lessee to be taken
into account.
If Lessee desires to renew this Lease, Lessee will notify Lessor of its
intention to renew no later than four months prior to the expiration date of
this Lease; Lessor shall, within the next fifteen days notify Lessee in writing
of the proposed renewal rate and the Lessee shall, within the next fifteen days
following receipt of the proposed rate, notify the Lessor in writing of its
acceptance or rejection of the proposed rental rate. Rejection of the proposed
rental rate terminates any renewal option pursuant to this paragraph.
16.07 Hold Harmless.
Lessor shall not be liable to Lessee's employees, agents, invitees, licensees or
visitors, or to any other person, for an injury to person or damage to property
on or about the leased premises caused by any act or omission of Lessee, it
agents, servants or employees, any Tenant in the building of which the leased
premise are a part, or of any other person entering upon the leased premises
under express or implied invitation by Lessee, or caused by the improvements
located on the leased premises becoming out of repair, the failure or cessation
of any service provided by Lessor (including security service and devices), or
caused by leakage of gas, oil, water or steam or by electricity emanating form
the leased premises.
Lessee shall not be liable to Lessor's employees, agents, invitees, licensees or
visitors, or to any other person, for an injury to person or damage to property
on or about the leased premises caused by any act or omission of Lessor, its
agents, servants or employees, any Tenant in the building of which the leased
premises are a part, or of any other person entering upon the leased premises
under express or implied invitation by Lessor, or caused by the improvements
located on the leased premises becoming out of repair, the failure or cessation
of any service provided by Lessee (including security service and devices), or
caused by leakage of gas, oil, water or steam or by electricity emanating from
the leased premises.
16.08 Lessee Assignment.
Lessee shall not assign or in any manner transfer this Lease or any estate or
interest therein, or sublet the leased premises or any part thereof, or grant
any license, concession, or other right of occupancy of any portion of the
leased premises without the prior written consent Lessor. Lessor shall not
unreasonably withhold or delay granting its prior written consent to an
assignment of this Lease or to a sublease proposed by Lessee; provided, however,
it is agreed that withholding of said consent by Lessor to a proposed assignment
or sublease where the proposed assignee or Sublessee has a financial net worth
greater than or equal to that of Lessee's shall be deemed unreasonable. Consent
by Lessor to one or more assignments or sublettings shall not operate as a
waiver of Lessor's rights as to any subsequent assignments and sublettings.
Notwithstanding anything to the contrary contained herein, provided that any
original guarantee or comparable guarantee is still in place or has been waived
or released by Lessor, Lessee may, without any further consent of Lessor, at any
time assign or otherwise tranfer this Lease or any portion thereof to any
parent, subsidiary, or affiliate corporation or entity or to any corporation
resulting from the consolidation or merger of Lessee into or with any other
business organization, or to any person, firm, or corporation acquiring a
majority of Lessee's issued and outstanding capital stock or a substantial part
of the entirety of Lessee's physical assets (not just those located in the
leased premises). As used herein, the expression "affiliate corporation or
entity" means a person or business entity, corporate or otherwise, that directly
or indirectly through one or more intermediaries controls or is controlled by,
or is under common control with, Lessee. The word "control" means the right and
power, directly or indirect, to direct or cause the direction of the management
and policies of a person or business entity, corporation, or otherwise, through
ownership of voting securities, by contract or otherwise.
16.09 Base Monthly Rental Abatement.
Not withstanding the foregoing, it is expressly understood and agreed between
the parties that Lessor shall waive the payment of the first two (2) months of
base rent following the commencement date and Lessee shall occupy the leased
premises during this two (2) month period at no charge for base rent, however,
Lessee shall pay operating expenses and common area maintenance charges during
the two (2) month period.
[DIAGRAM OF FLOOR PLAN]