1
EXHIBIT 10.7
LEASE AGREEMENT
STATE OF TEXAS
COUNTY OF BEXAR
THIS LEASE AGREEMENT made and entered into on this day,
the 10th day of June, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, L.L.P. (hereinafter called "Lessor") whose address for
purposes hereof is ▇▇▇ ▇. ▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ and National Bancshares Corporation (hereinafter
called "Lessee"). Lessee's address for purposes hereof until
commencement of the term of this Lease being ▇▇▇ ▇. ▇. ▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and that thereafter being that
of the "Building" (hereinafter defined).
WITNESSETH
ARTICLE I.
LEASED
PREMISES
1. Subject to and upon the terms, provisions and
conditions hereinafter set forth, and each in consideration of
the duties, covenants and obligations of the other hereunder,
Lessor does hereby lease, demise and let to Lessee and Lessee
does hereby lease from Lessor those certain premises
(hereinafter sometimes called the "Leased Premises") in the
building known as the SPECTRUM (herein called the "Building"
and its legal description is attached hereto and marked as
Exhibit "A") located in San Antonio, Texas, such premises
being more particularly described as follows:
Approximately One Thousand Eighty Six Feet of Net Rentable
Area (1,086 NRA) located on the sixth (6th) floor of the
Spectrum Building
as reflected on the floor plan of such premises attached
hereto and made a part hereof as Exhibit B.
2. The term "Net Rentable Area" (NRA) as used herein,
shall refer to (i) in the case of a single tenancy floor, all
floor area measured from the inside surface of the outer glass
or exterior wall of the Building to the inside surface of the
opposite exterior wall, excluding only the areas within the
outside walls used for elevator mechanical rooms, building
stairs, fire towers, elevator shafts, flues, vents, stacks,
vertical pipe shafts and vertical
2
ducts, but including such areas which are for the specific use
of the particular tenant such as special stairs or elevators,
plus an allocation of the square footage of the Building's
elevator and main mechanical rooms, ground level lobbies and
basement service area, and (ii) in the case of a partial
floor, all floor within the inside surface of the outer glass
or exterior wall enclosing the portion of the Leased Premises
on such floor and measured to the mid-point of the walls
separating areas leased by or held for lease to other tenants
or from areas devoted to corridors, elevator foyers, rest
rooms, mechanical rooms, janitor closets, vending areas and
other similar facilities for the use of all Tenants on the
particular floor (hereinafter sometimes called "Common
Areas"), but including a proportionate part of the Common
Areas located on such floor based upon the ratio which the
tenant's NRA on such floor bears to the aggregate NRA on such
floor plus an allocation of the square footage of the
Building's elevator and main mechanical rooms, columns or
projections necessary to the Building. All parking facilities
located within the Building are excluded from NRA. The NRA in
the Leased Premises has been calculated on the basis of the
foregoing definition and is hereby stipulated for all purposes
hereto to be approximately 1,086 square feet, whether the same
should be more or less as a result of minor variations
resulting from actual construction and completion of the
Leased Premises for occupancy so long as such work is in
accordance with the terms and provisions hereof.
ARTICLE II.
TERM 1. (a) Subject to and upon the terms and conditions
set forth herein, or in any exhibit or addendum hereto, this
lease shall continue in force for a term of eighteen (18)
months, beginning on the 1st day of July, 1996, and ending on
the 31st day of December, 1997.
(b) In the event the Leased Premises should not
be ready for occupancy by said commencement date for any
reason, Lessor shall not be liable or responsible for any
claims, damages or liabilities in connection therewith or by
reason thereof. This Lease Agreement shall be effective only
from the time that the Leased Premises are ready for occupancy
by Lessee which date shall be the date of commencement of the
term of the Lease. Should the term of this lease commence on
a date other than that specified in Paragraph (1)a above, of
Article II, Lessor and Lessee will, at the request of either,
execute a declaration specifying the beginning date of the
term of this Lease Agreement. In such event, rental under
this Lease shall not commence until said revised commencement
date, and the stated term in this Lease shall thereupon
commence and the
2
3
expiration date shall be extended so as to give effect to the
full stated term.
USE
2. The Leased Premises are to be used and occupied by
Lessee solely for the purpose of general office space.
BASE
RENTAL
3. Lessee hereby agrees to pay annual rental (herein
called "Base Rental") in the sum of $15,747.00 per year.
Lessee shall pay, as additional rent, all other sums of money
as shall become due and payable by Lessee to Lessor under this
Lease. The Lessor shall have the same remedies of default for
the payment of additional rent as are available to Lessor in
the case of a default in the payment of Base Rental. Such
Base Rental, together with any adjustments of rent provided
for herein then in effect, shall be due and payable in twelve
(12) equal installments on the first day of each calendar
month during the initial term or any extensions or renewals
thereof, and Lessee hereby agrees to so pay such rent to
Lessor at such address as may be designated by Lessor monthly
in advance without demand. If the term of this Lease as
heretofore established commences on other than the first day
of a month or terminates on other than the last day of a
month, then the installment of Base Rental of such month or
months shall be prorated and the installment or installments
so prorated shall be paid in advance. All past due
installments of rent shall bear interest at 10% per annum
until paid.
SECURITY
DEPOSIT
4. Upon execution of this Lease, Lessee shall deposit
with Lessor and Lessor will keep on deposit at all times
during the term of this Lease, the sum of One Thousand Three
Hundred Twelve & 25/100 Dollars ($1,312.25) (the "Security
Deposit"), as security for the payment by Lessee of all rent
and other amounts herein agreed to be paid and for the
faithful performance of all the terms, conditions, and
covenants of this Lease. If, at any time during the term of
this Lease, Lessee shall be in default in the performance of
any provision of this Lease, Lessor shall have the right to
use said deposit, or so much thereof as necessary, in payment
of any rent or other amount of default in reimbursement of any
expense incurred by Lessor, and in payment of any damages
incurred by Lessor by reason of Lessee's default. In such
event, Lessee shall, on
3
4
written demand of Lessor, pay to Lessor a sufficient amount in
cash to restore the deposit. To the extent the deposit has
not been utilized, for such purposes, it shall be refunded to
Lessee within sixty (60) days after the termination of the
Lease or surrender and acceptance of the Premises, whichever
occurs last. Lessor shall have the right to commingle the
deposit with other funds of Lessor and no interest shall be
paid thereon to Lessee (except as required by law). Lessor
shall deliver the funds deposited by Lessee to the purchaser
of Lessor's interest in the Premises in the event such
interest be sold and, thereupon, Lessor shall be discharged
from further liability with respect to the deposit. If claims
of Lessor exceed the deposit, Lessee shall remain liable for
the balance of such claims.
BASE
RENTAL
ADJUSTMENT
5. The Base Rental Adjustment shall be calculated in
accordance with the following:
(a) Lessee's Base Rental includes a component
applicable to Basic Costs (hereinafter defined) equal to the
1996 cost per square foot of NRA of the Leased Premises.
(b) Prior to the commencement of each calendar
year of Lessee's occupancy, Lessor shall provide an estimate
of Basic Costs for said calendar year. Lessee shall pay a
Base Rental for said calendar year adjusted upward or
downwards, as appropriate, by the amount of difference between
the prior calendar year's estimated Basic Costs and the coming
year's estimated Basic Costs.
(c) Within 150 days or as soon thereafter as
possible of the conclusion of each calendar year of the lease
term, Lessor shall furnish to Lessee a statement of Lessor's
Basic Costs for said lease year. A lump sum payment will be
made from Lessor to Lessee or from Lessee to Lessor, as
appropriate, within 30 days of the delivery of such statement
equal to the difference in actual Basic Costs and estimated
Basic Costs for which payments have been included in the
adjusted Base Rental set forth above for the just completed
year. The effect of this reconciliation payment is that
Lessee will pay during the lease term its share of Basic Costs
increases over the original 1996 cost per square foot and no
more.
(d) All increases in Basic Costs shall be paid by
Lessee in the proportion which Lessee's Net Rentable Area
4
5
bears to 100% of the total Net Rentable Area in the Building
or to the total Net Rentable Area leased in the Building (if
such total leased is greater than 100% of the total Building
NRA).
Nothing contained in this Paragraph 4 shall be
construed at any time so to reduce the monthly installments of
Base Rental payable hereunder below the amount set forth in
Article II, Paragraph 3, of this lease.
BASIC
COSTS
6. "Basic Costs" as said term is used herein shall
consist of all operating expenses of the Building, which shall
be computed on the accrual basis and shall include all
expenditures by Lessor to maintain and operate all facilities
of the Building in operation from the beginning of the lease
term and such additional facilities in subsequent years as may
be determined by Lessor to be necessary. All operating
expenses shall be determined in accordance with generally
accepted accounting principles which shall be consistently
applied. The term "operating expenses" as used herein shall
mean all expenses, costs and disbursements (but not
replacement of capital investment items nor specific costs
especially billed to and paid by specific tenants) of every
kind and nature which Lessor shall pay or become obligated to
pay because of or in connection with the ownership and
operation of the Building, including but not limited to the
following:
(a) Wages, salaries and all related expenses and
benefits, of all employees engaged in operation and
maintenance, or security, of the Building and personnel who
may provide traffic control relating to ingress and egress to
and from the parking facilities which are part of the Building
to the surrounding public streets. All taxes, insurance and
benefits relating to employees providing these services shall
be included.
(b) Cost of all supplies and materials and
equipment rented or used in operation and maintenance of the
Building.
(c) Cost of all utilities for the Building,
including the cost of water and power, heating, lighting, air
conditioning and ventilating for the Building (including
charges to the Building for any such services for the Building
provided from a central plant which also serves other parts of
the Building).
(d) Management costs and the cost of all
maintenance and service agreements for the Building and the
equipment
5
6
therein, including, but not limited to, alarm service, window
cleaning, security service, traffic control, janitorial
service and elevator maintenance.
(e) Cost of all insurance relating to the
Building, including, but not limited to, the cost of fire,
rental abatement, casualty and liability insurance applicable
to the Building and Lessor's personal property used in
connection therewith.
(f) All taxes and assessments and governmental
charges whether federal, state, county or municipal, and
whether they be by taxing districts or authorities presently
taxing the Building or by others subsequently created or
otherwise, and any other taxes and assessments attributable to
the Building or its operation and an allocation to the
Building of the taxes for the service roads which serve the
Building. It is agreed that Lessee will be responsible for ad
valorem taxes on its personal property and on the value of
leasehold improvements to the extent that same exceed standard
building allowances.
(g) Cost of repairs and general maintenance of
the Building (excluding repairs and general maintenance paid
by proceeds of insurance or by Lessee or other third parties,
and alterations attributable solely to tenants of the Building
other than Lessee).
(h) Amortization of the cost of installation of
capital investment items which are primarily for the purpose
of reducing operating costs or which may be required by
governmental authority. All such costs shall be amortized
over the reasonable life of the capital investment items by
including in Basic Costs annually the applicable amortization
amount, with the reasonable life and amortization schedule
being determined in accordance with generally accepted
accounting principles and in no event to extend beyond the
reasonable life of the Building.
(i) Lessor's central accounting costs applicable
to the Building.
(j) Any allocation of expenditures for service or
operation of the Building attributable to the Building,
determined in accordance with generally accepted accounting
principles.
(k) Cost of an office in the Building maintained
for management of the Building
6
7
Notwithstanding any other provision herein to the
contrary, it is agreed that in the event the Building is not
fully occupied during any year of the lease term, an
adjustment shall be made in computing the Basic Costs for such
year so that the Basic Costs shall be computed for such year
as though the Building had been fully occupied during such
year.
Lessee at its expense shall have the right at any
reasonable time within twelve months after the end of a year
in which additional rent is due, to retain an independent
certified public accountant to audit Lessor's books and
records relating to this Lease for any year or years for which
additional rental payments become due; or at Lessor's sole
discretion, Lessor will provide such audit prepared by a
certified public accountant.
ARTICLE III.
Lessor covenants and agrees with Lessee:
SERVICES
TO BE
FURNISHED
BY LESSOR
1. To use its best efforts to cause public utilities to
furnish the electricity, gas and water utilized in operating
any and all facilities serving the leased premises.
2. To provide (as part of the Basic Costs of the
Building) access to the Building during weekends and after
normal working hours during the week via access cards and
proximity access card readers. Lessor shall not be liable to
Lessee for losses due to theft or burglary, or for damages
done by unauthorized persons on the premises. Normal building
hours are 7:00 a.m.-6:00 p.m. Monday-Friday, and 8:00 a.m.-
12:00 p.m. Saturdays.
3. To furnish (as part of the Basic Costs of the
Project) Lessee while occupying the premises:
(a) Hot and cold water at those points of supply
provided for general use of other tenants in the Building;
central heat and air considered by Lessor to be standard, but
such service at times during weekdays other than normal
business hours for the Building, on Saturday afternoons,
Sundays and holidays to be furnished only upon request of
Lessee, who shall bear the entire cost thereof; routine
maintenance and electric lighting service for all public areas
and special service areas of the Building in the manner and to
the extent deemed by Lessor to be standard.
7
8
(b) Janitor service on a five (5) day week basis
at no extra charge; provided, however, if Lessee's floor
coverings or other improvements are other than building
standard, Lessee will pay the additional cleaning cost
attributable thereto as additional rent. Lessee will pay said
additional rent upon presentation of a statement therefor by
Lessor, and Lessee's failure to pay shall constitute default
hereunder.
(c) Electrical facilities to furnish sufficient
power for typewriters, voice writers, calculating machines,
personal computers, copiers and other machines of similar low
electrical consumption (total consumption not to exceed one
watt per square foot of Net Rentable Area per month); but not
including electricity required for duplicating and electronic
data processing equipment, special lighting in excess of
building standard, and any other item of electrical equipment
which (singly) consumes more than 0.5 kilowatts at rated
capacity or requires a voltage other than 120 volts single
phase and provided that if the installation of said electrical
equipment requires additional air conditioning capacity above
that provided by the building standard system, then the
additional air conditioning installation including any
submetering devices necessary and operating costs will be the
obligation of Lessee.
(d) All building standard fluorescent bulb
replacement in all areas and all incandescent bulb replacement
in public areas, toilet and rest room areas and stairwells.
Failure by Lessor to any extent to furnish these
defined services, or any cessation thereof, resulting from
causes beyond the reasonable control of Lessor shall not
render Lessor liable in any respect for damages to either
person or property, nor be construed as an eviction of Lessee,
nor work an abatement of rent, nor relieve Lessee from
fulfillment of any covenant or agreement hereof. Should any
of the equipment or machinery serving the Building break down,
or for any cause cease to function properly, Lessee shall have
no claim for rebate of rent or damages on account of an
interruption of service occasioned thereby or resulting
therefrom.
KEYS
and
LOCKS
4. To furnish Lessee two (2) keys for each corridor door
entering the Leased Premises. Additional keys will be
furnished at a charge by Lessor on an order signed by
8
9
Lessee's authorized representative. All such keys shall
remain the property of Lessor. No additional locks shall be
allowed on any door of the Leased Premises without Lessor's
permission, and Lessee shall not make, or permit to be made
any duplicate keys, except those furnished by Lessor. Upon
termination of this Lease, Lessee shall surrender to Lessor
all keys of the Leased Premises, and give to Lessor the
explanation of the combination of all locks for safe, safe
cabinets and vault doors, if any, in the Leased Premises.
WINDOW
COVERINGS
5. To provide horizontal mini-blind window coverings.
Lessee agrees that any window coverings in addition to those
provided are at Lessee's cost and are subject to Lessor's
written approval.
IMPROVEMENTS
to be MADE
by LESSOR
6. To provide and install all letters or numerals on
doors into the Leased Premises. All such letters and numerals
shall be in Building standard graphics, and no others shall be
used or permitted on the Leased Premises. Lessor also agrees
to provide and install, a listing on the Building directory
board.
7. Lessor is to Lease the Leased Premises to the Lessee
on an "as is" basis.
PEACEFUL
ENJOYMENT
8. That Lessee shall, and may peacefully have, hold and
enjoy the Leased Premises, subject to the other terms hereof,
provided that Lessee pays the rental and other sums herein
recited to be paid by Lessee and performs all of Lessee's
covenants and agreements herein contained. It is understood
and agreed that this covenant and any and all other covenants
of Lessor contained in this Lease shall be binding upon Lessor
and its successors only with respect to breaches occurring
during its and their respective ownership of the Lessor's
interest hereunder.
9
10
LIMITATION
of LESSOR'S
PERSONAL
LIABILITY
9. Lessee specifically agrees to look solely to Lessor's
interest in the Building for the recovery of any judgment from
Lessor, it being agreed that Lessor shall never be personally
liable for any such judgment. The provisions contained in the
foregoing sentence are not intended to, and shall not limit
any right that Lessee might otherwise have to obtain
injunctive relief against Lessor or Lessor's successors in
interest, or any other action not involving the personal
liability of Lessor to respond in monetary damages from assets
other than Lessor's interest in the Building or any suit or
action in connection with enforcement or collection of amounts
which may become owing or payable under or on account of
insurance maintained by Lessor.
PARKING
10. Lessee shall at all times during the term of this
lease have parking rights for at least 3 vehicles in the
Parking Garage located adjacent to the Building. No specific
spaces in the parking Garage are to be assigned to Lessee but
Lessor will issue Lessee the aforesaid number of parking
stickers each of which will authorize parking in the Parking
Garage of a vehicle on which the sticker is displayed, or
Lessor will provide a reasonable alternative means of
identifying and controlling vehicles authorized to be parked
in the Parking Garage. Lessor may designate the area within
which each such vehicle may be parked, and Lessor may change
such designations from time to time. Lessor may make, modify
and enforce rules and regulations relating to the parking of
automobiles in the Parking Garage, and Lessee will abide by
such rules and regulations. Lessor also reserves the right to
increase the size of the Parking Garage.
As the Basic Parking Charge, Lessee covenants
and agrees to pay Lessor during the term of this Lease, as
additional rental hereunder, the sum of $ -0- per month for
each of the parking stickers to be issued by Lessor as herein
provided, such sum to be payable monthly in advance on the
first day of each and every calendar month during the lease
term, and calendar month in the event the lease term commences
on a date other than the first day of a calendar month.
10
11
ARTICLE IV.
Lessee covenants and agrees with Lessor:
PAYMENTS
by LESSEE
1. To pay all rent and sums provided to be paid to
Lessor in the times and in the manner herein provided.
REPAIRS
by LESSOR
2. Unless otherwise stipulated herein, Lessor shall not
be required to make any improvements or repairs of any kind or
character on the Leased Premises during the term of this
Lease, except such repairs as may be required for normal
maintenance operations. The obligation of Lessor to maintain
and repair the Leased Premises shall be limited to building
standard items. Special leasehold improvements will, at
Lessee's written request, be maintained by Lessor at Lessee's
cost, plus an additional charge to cover overhead.
REPAIRS
by LESSEE
3. At its own cost and expense, to repair or replace any
damage or injury done to the Building, or any part thereof,
caused by Lessee or Lessee's agents, employees, invitees or
visitors; provided however, if Lessee fails to make such
repairs or replacements promptly, Lessor may, at its option,
make such repairs or replacements, and Lessee shall repay the
cost thereof to the Lessor on demand, subject to Article V,
paragraph 15.
CARE of
the LEASED
PREMISES
4. Not to commit or allow any waste or damage to be
committed on any portion of the Leased Premises, and at the
termination of this Lease, by lapse of time or otherwise, to
deliver up said Leased Premises to Lessor in as good condition
as at date of possession by Lessee, ordinary wear and tear
excepted, and upon such termination of this Lease, Lessor
shall have the right to re-enter and resume possession of the
Leased premises.
11
12
ASSIGNMENT of
SUBLEASE
5. In the event Lessee should desire to assign this
Agreement or sublet the Leased Premises or any part thereof,
Lessee shall give Lessor written notice of such desire at
least sixty (60) days in advance of the date on which Lessee
desires to make such assignment or sublease. Lessor shall
then have a period of thirty (30) days following receipt of
such notice within which to notify Lessee in writing that
Lessor elects either (1) to terminate this Agreement as to the
space so affected as of the date so specified by Lessee in
which event Lessee will be relieved of all further obligation
hereunder as to such space, or (2) permit Lessee to assign or
sublet such space, subject, however, to subsequent written
approval of the proposed assignee or sublessee by Lessor; if
however, the rental rate agreed upon between Lessee and
Sublessee is greater than the rental rate that Lessee must pay
Lessor, then such excess rental shall be deemed additional
rent owed by Lessee to Lessor and shall be paid by Lessee to
Lessor in the same manner that Lessee pays the base rent as
outlined in Section II, paragraph 3, or (3) to refuse to
consent (with cause only) to Lessee's assignment or subleasing
such space and to continue this Lease in full force and effect
as to the entire Leased Premises. If Lessor should fail to
notify Lessee in writing of such election within said thirty
(30) day period, Lessor shall be deemed to have elected option
(2) above. If Lessor elects to exercise option (2) above,
Lessee agrees to provide at its expense, direct access from
such sublet space to a public corridor of the Building. No
assignment or subletting by Lessee shall relieve Lessee of any
obligation under this Lease. Any attempted assignment or
sublease by Lessee in violation of the terms and covenants of
this paragraph shall be void.
ALTERATIONS,
ADDITIONS,
IMPROVEMENTS
6. Not to permit the Leased Premises to be used for any
purpose other than that stated in the use clause hereof, or
make or allow to be made any alterations or physical additions
in or to the Leased Premises, without first obtaining the
written consent of Lessor. Any and all such alterations,
physical additions, or improvements, when made to the Leased
Premises by Lessee, shall at once become the property of
Lessor and shall be surrendered to Lessor upon the termination
of this Lease by lapse of time or otherwise; provided,
however, this clause shall not apply to movable equipment or
furniture owned by Lessee. Lessee
12
13
agrees specifically that no food, soft drink or other vending
machine will be installed within the Leased Premises.
LEGAL USE
and VIOLATIONS
of INSURANCE
COVERAGE
7. Not to occupy or use any portion of the Leased
Premises to be occupied or used for any business or purpose
which is unlawful, disreputable or deemed to be
extra-hazardous on account of fire, or permit anything to be
done which would in any way increase the rate of fire
insurance coverage on said Building and/or its contents.
LAWS and
REGULATIONS;
RULES of
BUILDING
8. To comply with all laws, ordinances, orders, rules
and regulations (state, federal, municipal and other agencies
or bodies having any jurisdiction thereof) relating to the
use, condition or occupancy of the Leased Premises. Lessee
will comply with the rules of the Building adopted by Lessor
from time to time for the safety, care and cleanliness of the
Leased Premises and for preservation of good order therein,
all of which will be sent by Lessor to Lessee in writing and
shall be thereafter carried out and observed by Lessee.
ENTRY for
REPAIRS and
INSPECTION
9. To permit Lessor or its agents or representatives to
enter into and upon any part of the Leased Premises at all
reasonable hours to inspect same, clean or make repairs,
alterations or additions thereto, as Lessor may deem necessary
or desirable, and Lessee shall not be entitled to any
abatement or reduction of rent by reason thereof.
NUISANCE
10. To conduct its business and control its agents,
employees, invitees and visitors in such manner as not to
create any nuisance, or interfere with, annoy or disturb any
other Lessee or Lessor in his operation of the Building.
13
14
SUBORDINATION
to MORTGAGE
11. This Lease is subject and subordinate to any first
lien mortgage or deed of trust which may now or hereafter
encumber the Building of which the Leased Premises form a part
and to all renewals, modifications, consolidations,
replacements and extensions thereof. This clause shall be
self-operative and no further instrument of subordination
need be required by any mortgagee. In confirmation of such
subordination, however, Lessee shall at Lessor's request
execute promptly any appropriate certificate or instrument
that Lessor may request. Lessee hereby constitutes and
appoints Lessor the Lessee's attorney-in-fact to execute any
such certificate or instrument for and on behalf of Lessee.
In the event of the enforcement by the trustee or the
beneficiary under any such mortgage or deed of trust, Lessee
will, upon request of any person or party succeeding to the
interest of Lessor as a result of such enforcement,
automatically become the Lessee of such successor in interest
without change in the terms or other provisions of such lease;
provided, however, that such successor in interest shall not
be bound by (i) any payment of rent or additional rent for
more than one month in advance except pre-payments in the
nature of security for the performance by Lessee of its
obligations under this Lease, or (ii) any amendment or
modification of this Lease made without the written consent of
such trustee or such beneficiary or such successor in
interest. Upon request by such successor in interest, Lessee
shall execute and deliver an instrument or instruments
confirming the attornment herein provided for.
ESTOPPEL
CERTIFICATE
or THIRD
PARTY
AGREEMENT
12. At Lessor's request Lessee will execute either an
Estoppel Certificate addressed to Lessor's mortgagee or a
three-party agreement among Lessor, Lessee and said mortgagee
certifying as to such facts (if true) and agreeing to such
notice provisions and other matters as such mortgagee may
reasonably require in connection with Lessor's financing.
NAME
CHANGES
13. That Lessor shall have the right to change the name
of the Building or the design of construction thereof whenever
Lessor, in its sole discretion deems it appropriate without
14
15
any liability to Lessee and without any consent of Lessee
being necessary.
ARTICLE ▇.
▇▇▇▇▇▇ and Lessee mutually covenant and agree as follows:
CONDEMNATION
and LOSS
or DAMAGE
1. If the Leased Premises shall be taken or condemned
for the public purpose to such an extent as to render the
Leased Premises untenantable this Lease shall, at the option
of either party, forthwith cease and terminate. All proceeds
from any taking or condemnation of the Leased Premises shall
belong to and be paid to Lessor.
DAMAGES FROM
CERTAIN
CAUSES
2. Lessor shall not be liable or responsible to Lessee
for any loss or damage to any property or person occasioned by
theft, fire, act of God, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition or order
of governmental body or authority, or for any damage or
inconvenience which may arise through repair or alteration of
any part of the Building, or failure to make any such repairs.
LESSOR'S RIGHT
to RELET
3. In the event of default by Lessee in any of the terms
or covenants of this Lease or in the event the Leased Premises
are abandoned by Lessee, Lessor shall have the right, but not
the obligation, to relet same for the remainder of the term
provided for herein; and if the rent received through such
reletting does not at least equal the rent provided for
herein, Lessee shall pay and satisfy any deficiency between
the amount of the rent so provided for, and that received
through reletting and in addition thereto, shall pay all
reasonable expenses incurred in connection with any such
reletting, including but not limited to the cost of
renovating, altering and decorating for a new occupant.
Nothing herein shall be construed as in any way denying Lessor
the right in the event of abandonment of said premises or
other breach of this agreement by Lessee, to treat the same as
an entire breach and at Lessor's option to immediately ▇▇▇ for
the entire
15
16
breach of this agreement and any and all damages which Lessor
suffers thereby.
HOLDING
OVER
4. In the event of holding over by Lessee after
expiration or termination of the Lease without the written
consent of Lessor, Lessee shall pay as liquidated damages
double rent for the entire holdover period. No holding over
by Lessee after the term of this Lease shall operate to extend
the Lease; in the event of any unauthorized holding over,
Lessee shall indemnify Lessor against all claims for damages
by any other Lessee to whom Lessor may have leased all or any
part of the premises covered hereby effective upon the
termination of this Lease. Any holding over with the consent
of Lessor in writing shall thereafter constitute this Lease a
lease from month to month.
FIRE
CLAUSE
5. In the event of a fire in the Leased Premises, Lessee
shall immediately give notice thereof to Lessor. If the
Leased Premises, though no fault or neglect of Lessee, its
agents, employees, invitees or visitors, shall be partially
destroyed by fire or other casualty so as to render the Leased
Premises untenantable, the rental herein shall ▇▇▇▇▇
thereafter until such time as the Leased Premises are made
tenantable as determined by Lessor. In the event of the total
destruction of the Leased Premises without fault or neglect of
Lessee, its agent, employees, invitees or visitors, or if from
such cause the same shall be so damaged that Lessor shall
decide not to rebuild, then all rent owed up to the time of
such destruction or termination shall be paid by Lessee and
henceforth this Lease shall cease and come to an end.
ATTORNEY'S
FEES
6. In the event Lessee makes default in the performance
of any of the terms, covenants, agreements or conditions
contained in this Lease and Lessor places the enforcement of
this Lease, or any part thereof, or the collection of any rent
due, or to become due hereunder, or recovery of the possession
of the Leased Premises in the hands of an attorney, or files
suit upon the same, Lessee agrees to pay Lessor's attorney's
fees.
16
17
ALTERATION
7. This agreement may not be altered, changed or
amended, except by an instrument in writing, signed by both
parties hereto.
ASSIGNMENT
by LESSOR
8. Lessor shall have the right to transfer and assign,
in whole or in part, all its rights and obligations hereunder
and in the Building and property referred to herein, and in
such event and upon its transferee's assuming Lessor's
obligations hereunder (any such transferee to have the benefit
of, and be subject to, the provisions of Paragraph 8 and 9 of
Article III hereof) no further liability or obligation shall
thereafter accrue against Lessor hereunder.
DEFAULT
by LESSEE
9. If default shall be made in the payment of any sum to
be paid by Lessee under this Lease, and default shall continue
for ten (10) days, or default shall be made in the performance
of any of the other covenants or conditions which Lessee is
required to observe and to perform, and such default shall
continue for twenty (20) days, or if the interest of Lessee
under this Lease shall be levied on under execution or other
legal process, or if any petition shall be filed by or against
Lessee to declare Lessee bankrupt or to delay, reduce or
modify Lessee's debts or obligations, or if any petition shall
be filed or other action taken to reorganize or modify
Lessee's capital structure if Lessee be a corporation or other
entity, or if Lessee be declared insolvent according to law,
or if any assignment of Lessee's property shall be made for
the benefit of creditors, or if a receiver or trustee is
appointed for Lessee or its property, or if Lessee shall
abandon the Leased Premises during the term of this Lease or
any renewals or extensions thereof, then Lessor may treat the
occurrence of any one or more of the foregoing events as a
breach of this Lease (provided that no such levy, execution,
legal process or petition filed against Lessee shall
constitute breach of this Lease if Lessee shall vigorously
contest the same by appropriate proceedings and shall remove
or vacate the same within thirty (30) days from the date of
its creation, service or filing) and thereupon, at Lessor's
option, may have any one or more of the following described
remedies in addition to all other rights and remedies provided
at law or in equity.
17
18
(a) Lessor may terminate this Lease and forthwith
repossess the Leased Premises and be entitled to recover
forthwith as damages a sum of money equal to the total of (i)
the cost of recovering the Leased Premises, (ii) the unpaid
rent earned at the time of termination, plus interest thereon
at the maximum lawful rate per annum from the due date, (iii)
the balance of the rent for the remainder of the term less the
fair market value of the Leased Premises for said period, and
(iv) any other sum of money and damages owed by Lessee to
Lessor.
(b) Lessor may terminate Lessee's right of
possession (but not the Lease) and may repossess the Leased
Premises by forcible entry or detainer suit or otherwise,
without demand or notice of any kind to Lessee and without
terminating this Lease, in which event Lessor may, but shall
be under no obligation to do so, relet the same for the
account of Lessee for such rent and upon such terms as shall
be satisfactory to Lessor. For the purpose of such reletting
Lessor is authorized to decorate or to make any repairs,
changes, alterations or additions in or to Leased Premises
that may be necessary or convenient, and (i) if Lessor shall
fail or refuse to relet the Leased Premises, or (ii) if the
same are relet and a sufficient sum shall not be realized from
such reletting after paying the unpaid basic and additional
rent due hereunder earned but unpaid at the time of reletting
plus ten percent per annum thereon, the cost of recovering
possession, and all of the costs and expenses of such
decorations, repairs, alterations and additions and the
expense of such reletting and of the collection of the rent
accruing therefrom to satisfy the rent provided for in this
lease to be paid, then Lessee shall pay to Lessor as damages a
sum equal to the amount of the rental reserved in this Lease
for such period or periods, or if the Leased Premises have
been relet, the Lessee shall satisfy and pay any such
deficiency upon demand therefor from time to time and Lessee
agrees that Lessor may file suit to recover any sums falling
due under the terms of this Article V, Paragraph 9(b) from
time to time; and that no delivery to or recovery of any
portion due Lessor hereunder shall be any defense in any
action to recover any amount not theretofore reduced to
judgment in favor of Lessor, nor shall such reletting be
construed as an election on the part of Lessor to terminate
this Lease unless a written notice of such intention be given
by Lessor to Lessee. Notwithstanding any such reletting
without termination, Lessor may at any time thereafter elect
to terminate this Lease, for such previous breach.
NON-WAVIER
10. Failure of Lessor to declare any default immediately
upon occurrence thereof, or delay in taking action in
18
19
connection therewith, shall not waive such default, but Lessor
shall have the right to declare any such default at any time
and take such action as might be lawful or authorized
hereunder, either in law or in equity.
CASUALTY
INSURANCE
11. Lessor shall maintain fire and extended coverage
insurance on the portion of the Building constructed by
Lessor, including additions and improvements by Lessee which
are required to be made by Lessee by this Lease and which have
become or are to become the property of Lessor upon vacation
of the Leased Premises by Lessee. Said insurance shall be
maintained with an insurance company authorized to do business
in Texas, in amounts and with deductibles desired by Lessor
and at the expense of Lessor and payments for losses
thereunder shall be made solely to Lessor. Lessee shall
maintain at its expense fire and extended coverage insurance
on all of its personal property, including removable trade
fixtures located in the Leased Premises and on all additions
and improvements made by Lessee and not required to be insured
by Lessor above. If the annual premiums to be paid by Lessor
shall exceed the standard rates because Lessee's operations,
contents of the Leased Premises, or improvements with respect
to the Leased Premises beyond building standard, result in
extra-hazardous exposure, Lessee shall promptly pay the excess
amount of the premium upon request by Lessor. Lessee agrees
that it shall keep its furniture, fixtures, merchandise,
equipment and all items Lessee is obligated to maintain and
repair under this Lease but not items or Building nonstandard
items required to be insured by Lessor insured against loss or
damage by fire or other casualty covered by an "all risk",
multi-peril, or "special form" policy, including fire and
extended coverage, to the extent of full replacement cost of
such items. It is understood and agreed that Lessee assumes
all risk of damage to its own property arising from any cause
whatsoever, including without limitation, loss by theft or
otherwise.
LIABILITY
INSURANCE
12. Lessor and Lessee, each at their respective expense,
shall maintain a policy or policies of comprehensive general
liability insurance with the premiums thereon fully paid in
advance issued by and binding upon some solvent insurance
company, such insurance to afford minimum protection of not
less than One Million Dollars ($1,000,000.00) in respect to
any one occurrence, and of not less than Five Hundred Thousand
Dollars ($500,000.00) for property damage in any one
occurrence. The policy or
19
20
policies of insurance to be maintained by Lessee shall name
the Lessor as an additional insured and shall contain an
endorsement that such policies cannot be amended or modified
as to Lessor without fifteen (15) days prior written notice.
Lessee shall deliver duplicate original policies or
certificates of insurance in form satisfactory to Lessor not
less than twenty (20) days prior to the expiration of old
policies.
HOLD
HARMLESS
13. Lessee shall not be liable to Lessor, or to Lessor's
agents, servants, employees, customers or invitees for any
damage to person or property caused by any act, omission or
neglect of Lessor, its servants or employees, and Lessor
agrees to hold Lessee harmless from all claims for such
damage. Lessor shall not be liable to Lessee, or to Lessee's
agents, servants, employees, customers or invitees for any
damage to person or property caused by an act, omission or
neglect of Lessee, its agents, servants or employees, and
Lessee agrees to indemnify and hold Lessor harmless from all
liability and claims for any such damage.
WAIVER of
SUBROGATION
RIGHTS
14. Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee each hereby waives any and
all rights of recovery, claim, action or cause of action,
against the other, its agents, officers, or employees, for any
loss or damage that may occur to the premises hereby demised,
or any part, or any improvements thereto, or any personal
property of such party therein, by reason of fire, the
elements, or any other cause which could be insured against
under the terms of standard fire and extended coverage
insurance policies referred to in Article V, Paragraph 2
hereof, regardless of cause or origin, including negligence of
the other party hereto, its agents, officers or employees, and
covenants that no insurer shall hold any right of subrogation
against such other party. This waiver of subrogation
provision shall be effective to the full extent, but only to
the extent, that the same does not impair the effectiveness of
insurance policies of Lessor and Lessee.
SUBSTITUTION
15. At any time after the execution of this Lease
Agreement, Lessor may substitute for the Leased Premises other
premises in the Building (the "New Premises") in
20
21
which event the New Premises shall be deemed to be the Leased
Premises for all purposes hereunder provided:
(a) The New Premises shall be similar in area and
in appropriateness for Lessee's purposes; and
(b) Any such substitution is effected for the
purpose of accommodating a Lessee that will occupy all or a
substantial portion for the floor on which the Leased Premises
are located; and
(c) If Lessee is occupying the Leased Premises or
has borne costs for work which will have to be redone as a
result of the relocation at the time for any substitution,
Lessor shall pay the expense of moving Tenant, its property
and equipment from the Leased Premises and of completing the
New Premises with improvements at least equal to those located
in the Leased Premises.
(d) Lessor must give Lessee thirty (30) days
prior written notice of its intent to substitute the Leased
Premises.
NOTICE
16. All notices, demands, consents and approvals which
may be or are required to be given by either party to the
other hereunder shall be in writing and shall be deemed to
have been fully given when deposited in the United States
mail, certified or registered, postage prepaid, and addressed
to the party to be notified at the address for such party
specified in this Lease Agreement, or to such other place as
the party to be notified may from time to time designate by at
least fifteen (15) days notice to the notifying party. Lessee
hereby appoints as an agent to receive the service of all
dispossessory or distraint proceedings and notices thereunder
the person in charge of or occupying the Leased Premises at
the time, and, if no person shall be in charge of or occupying
the same, then such service may be made by attaching the same
on the main entrance of the Leased Premises.
NO JOINT
VENTURE
17. This Lease shall not be deemed or construed to create
or establish any relationship (other than that of Landlord and
Tenant) or partnership or joint venture or similar
relationship or agreement between Lessor and Lessee hereunder.
21
22
This Lease shall be binding upon and inure to the
benefit of the successors and assigns of the Lessor, and shall
be binding upon and inure to the benefit of Lessee, its
successors, and, to the extent assignment may be approved by
Lessor hereunder, Lessee's assigns. The pronouns of any
gender shall include the other genders, and either the
singular or the plural shall include the other.
All rights and remedies of Lessor under this Lease
shall be cumulative and none shall exclude any other rights or
remedies allowed by law; and this lease is declared to be a
Texas contract, and all of the terms thereof shall be
construed according to the laws of the State of Texas.
IN TESTIMONY WHEREOF, the parties hereto have
executed this Lease as of the date aforesaid.
LESSOR
Spectrum Building of Texas, L.L.P
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Legal Agent
LESSEE
National Bancshares Corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Its: Chief Financial Officer
22