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EXHIBIT 10.16
LEASE AGREEMENT WITH OPTION TO PURCHASE
THIS LEASE AGREEMENT (the "Lease") is entered into by and between
▇▇▇▇▇ INDUSTRIES, INCORPORATED, a Texas corporation debtor-in-possession in a
proceeding pending under Chapter 11 of the United States Code pending in the
United States Bankruptcy Court (the "Bankruptcy Court"), Southern District of
Texas, Houston Division, as Case No. 94- 43705-H3-11 ("Landlord") and HANOVER
COMPRESSOR COMPANY, a Delaware corporation ("Tenant").
W I T N E S S E T H:
It is agreed by the parties hereto as follows:
1. DESCRIPTION OF PREMISES.
Landlord hereby leases to Tenant, and Tenant hereby takes from
Landlord those certain premises ("Demised Premises") situated within the County
of Colorado, State of Texas described on Exhibit "A" attached hereto and made a
part hereof, together with all rights, privileges, easements and appurtenances
belonging to or in any way pertaining to the Demised Premises and all
improvements now situated or to be erected upon the Demised Premises.
2. TERM.
The term of this Lease shall be for a period of 24 months, commencing
on a date that the Demised Premises are ready for occupancy, but in no event
later than May 31, 1995, and terminating 24 months thereafter, unless sooner
terminated as provided in this Lease.
Tenant shall give at least three (3) days advance written notice to
Landlord providing that Tenant shall commence occupying the Demised Premises.
3. RENT.
a) Tenant shall perform all covenants and obligations as
stated herein, including making all monthly rental payments and all other
payments to Landlord provided for herein during the term of this Lease.
b) Tenant shall pay Landlord rent for the Demised
Premises in the amount of Fifteen Thousand and No/100 Dollars ($15,000.00) per
month. The first of such monthly rental payments is due and payable on ______,
1995, with a like monthly rental payment being due and payable on the first day
of each succeeding calendar month thereafter during the term of this Lease;
provided that, in the event the Lease term shall not commence or end on the
first day of a calendar month, the rent for any fractional calendar month
following the commencement or proceeding the end of the term of this Lease
shall be pro rated accordingly.
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c) All payments of monthly rent hereunder shall be made
to Landlord at its address stated in Paragraph 30 herein, or to such other
address the Landlord may designate from time to time in writing to Tenant.
Should Tenant fail to timely pay any installment of monthly rent due hereunder,
Landlord shall have the option to charge Tenant a late fee equal to ten percent
(10%) of the delinquent installment. In the event the monthly rent due remains
unpaid after the expiration of thirty (30) days from its due date, interest
shall accrue thereon at the rate of ten percent (10%) per annum but in no event
to exceed the maximum rate allowed under applicable law.
d) The obligation of Tenant to pay rent hereunder and
the obligations of Tenant to perform other covenants and duties hereunder
constitute independent and unconditional obligations to be performed at all
times as provided for herein. All obligations of Landlord hereunder are
covenants and not conditions to Tenant's performance of obligations hereunder;
Tenant waives and relinquishes all rights which Tenant might have to claim any
nature of lien against, withhold, deduct or off-set against, any rentals and
other sums provided hereunder to be paid to Landlord by Tenant.
4. USE.
a) The premises are leased to the Tenant for the purpose
of conducting an oil and gas equipment fabrication business, or with any other
lawful business with prior written notice to Landlord.
b) Tenant shall not commit or suffer to be committed any
waste on the Demised Premises nor shall Tenant permit the Demised Premises to
be used in any way which would, in the opinion of Landlord, be extra hazardous
on account of fire, environmental contamination or otherwise or which would in
any way increase or render void any of the liability insurance, including, but
not limited to, the fire insurance on the Demised Premises or contents in the
buildings. Tenant and Landlord hereby acknowledge that the business of Tenant
will require the use of hazardous substances, and Tenant hereby agrees that it
will comply with all applicable governmental licensed regulations. In addition,
Tenant shall not change its status as a licensed user of such hazardous
substances or cause or permit the storage, manufacture, transportation or
treatment in any manner of hazardous substances, hazardous waste, or toxic
waste on the Demised Premises, and shall not install or permit to be installed
any asbestos containing material or underground storage tanks thereon.
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5. ACCEPTANCE OF PREMISES.
a) Tenant acknowledges that it has fully inspected the
Demised Premises and accepts same in their present condition, "AS IS, WHERE IS"
and with all faults. Tenant further acknowledges that Landlord makes no
representations or warranties, express, implied or statutory, relating to the
Demised Premises or the improvements and structures located thereon, including,
without limitation, any representations, or warranties relating to the
improvements' and structures' condition, suitability for any intended purpose,
or compliance with any applicable laws, statutes, ordinances or regulations;
the quality or condition of the Demised Premises; the suitability or safety of
the Demised Premises for any and all activities and uses which Tenant may
conduct thereon, the environmental condition of the Demised Premises and the
presence or absence of or contamination by hazardous or toxic materials or the
compliance of the Demised Premises with all regulations or laws relating to
health or the environment; or the soil conditions, drainage, flooding
characteristics, topography, geologic conditions, utilities or other conditions
existing in or on the Demised Premises. Landlord and Tenant expressly disclaim
any implied warranty that the Demised Premises are suitable for Tenant's
intended commercial purpose. Tenant hereby expressly assumes all risks,
liabilities, claims, damages and costs (and agrees Landlord shall not be liable
for any special, indirect, consequential or other damages) resulting or arising
from or related to the Demised Premises or other use, condition, location,
maintenance, repair or operation thereof; expressly provided that, Tenant shall
not be responsible for any damages to the Demised Premises that were existing
prior to the occupancy of the Demised Premises by Tenant.
b) In connection with the option to purchase the Demised
Premises contained in Paragraph 28 hereof, Tenant acknowledges that during the
term of this Lease, it shall have the right to make such inspections and
perform such examinations and investigations of the Demised Premises as it may
require, at its sole cost and expense, including specifically, without
limitation, examinations and inspections relating to the status of title of the
Demised Premises; the surveying of the Demised Premises; the electrical,
mechanical, topographical, geological and environmental condition of the
Demised Premises; and the presence of hazardous wastes and toxic materials on
the Demised Premises; provided however, upon termination of this Lease, Tenant
shall deliver the Demised Premises to Landlord in good order and condition and
in substantially the same condition as of the commencement of this Lease,
excepting reasonable wear and tear.
6. MAINTENANCE.
a) Tenant shall, at its own expense, during the term of
this Lease, maintain all of the Demised Premises in good repair and condition,
including all necessary replacements, and any periodic repainting and
resurfacing that is required to prevent
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deterioration thereof. Subject to the provisions herein, upon termination of
this Lease, Tenant shall deliver the Demised Premises to Landlord in good order
and condition and in substantially the same condition as of the commencement of
this Lease, excepting reasonable wear and tear.
b) Landlord shall not be required to furnish any
services or make any repairs or alterations in or to the Demised Premises,
throughout the term of this Lease, the Tenant hereby assuming the full and sole
responsibility for the maintenance, repair and protection of the Demised
Premises.
7. ALTERATIONS.
a) Tenant shall not create any openings in the roof or
exterior walls, nor make any alterations, additions or improvements to the
exterior Demised Premises without prior written consent of Landlord. Consent
for minor alterations, additions, or improvements shall not be unreasonably
withheld by Landlord. Tenant shall have the right to make alterations and
improvements to the interior of the building on the Demised Premises and at all
times to install Tenant's shelves, bins, machinery, equipment and trade
fixtures, provided Tenant complies with all applicable governmental laws,
ordinances and regulations, and further provided that such installations by
Tenant shall not cause any structural or other damage or deface the Demised
Premises. Providing Tenant is not in default of any of the terms, covenants or
conditions of this Lease, Tenant shall have the right to remove at the
termination of this Lease such items so installed, including any machinery or
equipment installed and paid for by Tenant, if any (as specifically
differentiated from any such equipment owned by Landlord); however, Tenant
shall, prior to the termination of this Lease, promptly repair any damage
caused by such removal.
b) Except as otherwise provided above regarding Tenant's
right to remove certain installations or additions, all alterations, additions
and improvements made by Tenant shall become the property of Landlord at the
termination or expiration of this Lease, or Landlord may require Tenant to
remove such alterations, additions and improvements and any other property
placed in or on the Demised Premises by Tenant and restore the property to its
original condition, and Tenant shall repair any damage caused by such removal
and leave the Demised Premises in a broom clean and orderly condition.
8. COMPLIANCE WITH LAW.
Tenant shall comply with all governmental laws, ordinances and
regulations applicable to the use of the Demised Premises, and shall promptly
comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances in or upon, or connected with the Demised
Premises, all at Tenant's sole
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risk and expense. Tenant hereby indemnifies and holds the Landlord, its
officers, directors, employees and agents harmless from and against any and all
liability, loss, damages, claims, causes of action, costs and expenses
(including without limitation, reasonable attorneys' fees and court costs)
incurred or suffered by Landlord, its officers, directors, employees and agents
arising from the violation of any such laws, rules, ordinances or regulations
by Tenant.
9. ASSIGNMENT AND SUBLEASING.
a) Tenant shall be permitted, with thirty (30) days
prior written notice to Landlord, to assign this Lease or sublet the Demised
Premises or any portion thereof. In the event Tenant effects a transfer in
connection with a merger, a share exchange or sale of all or substantially all
of the assets of Tenant, Tenant shall be permitted, upon providing written
notice to Landlord, to assign the option to purchase the Demised Premises
contained in Paragraph 28 hereof. Any permitted assignment or subletting shall
be expressly subject to all terms and provisions of this Lease, including the
provisions of Paragraph 4 pertaining to the use of the Demised Premises. In the
event of any assignment or subletting, Tenant shall remain fully liable for the
full performance of all Tenant's obligations under this Lease. Tenant shall
not assign its rights hereunder or sublet the Demised Premises without first
obtaining a written agreement from assignee or sublessee whereby assignee or
sublessee agrees to be bound by the terms of this Lease. No such assignment or
subletting shall constitute a novation. In the even of the occurrence of an
event of default while the Demised Premises are assigned or sublet, Landlord,
in addition to any other remedies provided herein or by law, may at Landlord's
option, collect directly from such assignee or subtenant all rents becoming due
under such assignment or subletting and apply such rent against any sums due to
Landlord hereunder. No direct collection by Landlord from any such assignee or
subtenant shall release Tenant for the performance of its obligations
hereunder.
b) Landlord shall have the right to sell, convey,
transfer or assign, in whole or in part, all and every feature of Landlord's
rights and obligations hereunder and in the Demised Premises. Upon the
occurrence of such sale, conveyance, transfer or assignment, Landlord shall be
immediately and unconditionally released from all obligations hereunder. Upon
any such sale or conveyance, the purchaser or transferee of the Demised
Premises shall be substituted as to all rights and obligations of Landlord.
10. FIRE AND CASUALTY DAMAGE.
If the building or other improvements on the Demised Premises should
be damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. The rights and obligations of Landlord and
Tenant in the event of such casualty shall be as follows:
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a) Total Destruction: If the building situated on
the Demised Premises should be totally destroyed by fire, tornado or other
casualty, or if it should be so damaged that rebuilding or repairs cannot
reasonably be completed within one hundred and twenty (120) working days after
the date of written notification by Tenant to Landlord of the happening of the
damage, either the Landlord or Tenant may terminate this Lease, and the rent
shall be abated for the unexpired portion of this Lease from the date of
destruction; provided, however, that if Landlord given Tenant written
notification of its intent to terminate this Lease, Tenant shall have the
right, for a period of thirty (30) days following any such notice, to exercise
its option to purchase the Demised Premises in accordance with the terms and
provisions of Paragraph 28.
b) Partial Destruction: If the building or other
improvements situated on the Demised Property should be damaged by fire,
tornado or other casualty but not to such an extent that rebuilding or repairs
cannot be reasonable completed within sixty (60) working days from the date of
written notification by Tenant to Landlord of the happening of the damage, this
Lease shall not terminate, but Landlord shall, subject to the terms of (c)
below, out of the insurance proceeds, proceed with reasonable diligence to
rebuild or repair such building and other improvements to substantially the
condition in which they existed prior to such damage. If the Demised Premises
are to be rebuilt or repaired and are untenantable in whole or in part
following such damage, and such damage was not caused by act or negligence of
the Tenant, its agents, employees, invitees or those for whom the Tenant is
responsible, the rent payable hereunder during the period in which they are
untenantable shall be adjusted to such extent as may be fair and reasonable
under all of the circumstances.
c) Notwithstanding the foregoing, Tenant acknowledges
that the insurance proceeds relating to the Demised Premises have been assigned
by Landlord to Texas Commerce Bank National Association ("Bank") in accordance
with the terms of that certain Deed of Trust and Security Agreement (the "Deed
of Trust") dated as of June 1, 1994, executed by Landlord in favor of Bank.
Tenant further acknowledges that such proceeds may be applied to Landlord's
indebtedness to Bank at the option of Bank. In the event that Bank applies
insurance proceeds to Landlord's indebtedness to it and Landlord does not make
the repairs as described in (b) above, (i) Tenant shall have the right to
terminate the Lease; or (ii) provided that Tenant elects to purchase the
Demised Premises in accordance with Paragraph 28 hereof, Tenant shall receive a
credit to the Purchase Price (as hereinafter defined) in the amount of the
insurance proceeds applied against Landlord's indebtedness to Bank.
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11. CONDEMNATION.
a) If, during the term of this Lease, all or a
substantial part of the Demised Premises should be taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by
right of eminent domain, or should be sold to the condemning authority under
threat of condemnation, this Lease shall terminate and the rent shall be abated
during the unexpired portion of this Lease, effective from the date of taking
of the Demised Premises by the condemning authority.
b) If less than a substantial part of the Demised
Premises is taken for public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, or is sold to the
condemning authority under threat of condemnation, Landlord, at its option, may
by written notice terminate this Lease or shall forthwith at its sole expense
restore and reconstruct the buildings and improvements (other than leasehold
improvements made by Tenant or any assignee, subtenant or other occupant of the
Demised Premises) situated on the Demised Premises in order to make the same
reasonably tenantable and suitable for the uses for which the Demised Premises
are leased as defined in Paragraph 4. The rent payable hereunder during the
unexpired portion of this Lease shall be reduced on an average price basis that
depends on whether improvements or raw land was condemned and an abatement that
is based on the value of the property actually taken in proportion to the
number of square feet condemned.
c) Landlord and Tenant shall each be entitled to receive
such separate awards and portions of lump sum awards as may be allocated to
their respective interests in any condemnation proceedings. The termination of
this Lease shall not affect the rights of the respective parties to such
awards. Notwithstanding the foregoing, any such awards received by Landlord
have been collaterally assigned by Landlord to Bank in accordance with the
terms of the Deed of Trust; and Tenant agrees that, upon demand from Bank, it
shall immediately send any such awards received by it for the account of the
Landlord to Bank. In the event that Bank applies condemnation award to
Landlord's indebtedness to it and Landlord doe snot make the repairs as
described in (b) above, and Tenant elects to purchase the Demised Premises in
accordance with Paragraph 28 hereof, Tenant shall receive a credit to the
Purchase Price (as hereinafter defined) in the amount of the condemnation
awards applied against Landlord's indebtedness to Bank.
12. INDEMNITY AND PUBLIC LIABILITY INSURANCE.
a) Landlord shall not be liable to Tenant or Tenant's
employees, agents, patrons or visitors, or to any other person whomsoever, for
any injury to person or damage to property on or about the Demised Premises,
caused by the negligence or misconduct
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of Tenant, its agents, servants, employees, or of any other person entering
upon the Demised Premises under express or implied invitation of Tenant, or
caused by the buildings and improvements located on the Demised Premises
becoming out of repair, or caused by leakage of gas, oil, water or steam or by
electricity emanating from the Demised Premises, or due to any other cause
whatsoever, and Tenant agrees to indemnify Landlord and hold it harmless from
and against any loss, expense or claims including attorneys' fees, arising out
of any such damage or injury, INCLUDING LANDLORD'S OWN NEGLIGENCE, except
injury to persons or damage to property the cause of which is the gross
negligence or willful misconduct of the Landlord. Tenant agrees that such
indemnification shall survive the expiration or termination of the Lease.
b) Tenant shall procure and maintain throughout the term
of this Lease a policy or policies of insurance, at its sole cost and expense,
insuring Landlord, Tenant and Bank against all claims, demands, or actions
arising out of or in connection with: (i) the Demised Premises; and (ii) the
condition of the Demised Premises. The limits of such policy or policies shall
be in the amount of not less than $1,000,000 per person and $2,000,000 per
occurrence in respect of injury to persons (including death), and in the amount
of not less than $1,000,000 per occurrence in respect to property damage or
destruction, including loss of use thereof. All such policies shall be procured
by Tenant from responsible insurance companies satisfactory to Landlord.
Current certificates of insurance naming Landlord and Bank as additional
insured, together with receipts evidencing payment of premiums therefor, shall
be delivered to Landlord prior to the commencement date of this Lease. Not less
than fifteen (15) days prior to the expiration date of any such policies,
certificates of insurance of the renewals thereof (bearing notations evidencing
the payment of renewal premiums) shall be delivered to Landlord. Such policies
shall further provide that not less than thirty (30) days written notice shall
be given to Landlord and Bank before such policy may be cancelled or changed to
reduce insurance provided thereby.
c) If Tenant should fail to comply with the foregoing
requirements relating to insurance, Landlord may obtain such insurance, and
Tenant shall pay to Landlord on demand, as additional rental hereunder, the
premium cost thereof plus interest at the rate of ten percent (10%) per annum
from the date of payment by Landlord until repaid by Tenant.
13. QUIET ENJOYMENT.
Subject to Bankruptcy Court approval, Landlord covenants, warrants and
represents that it has full right and power to execute this Lease and to grant
the estate demised herein and that Tenant, upon payment of the rents herein
reserved, and performing the terms, conditions, covenants, and agreements
herein contained, shall peaceably and quietly have, hold and enjoy the Demised
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Premises during the full term of this Lease. Notwithstanding anything herein to
the contrary, Tenant accepts this Lease subject and subordinate to any recorded
mortgage, deed of trust or any other lien presently existing upon the Demised
Premises. Landlord is hereby irrevocably vested with full power and authority
to subordinate Tenant's interest hereunder to any mortgage, deed of trust or
other lien hereafter placed on the Demised Premises, provided same is then
recorded, and Tenant agrees upon demand to execute such further instruments
subordinating this Lease as Landlord may request, provided such further
subordination shall be upon the express condition that this Lease shall be
recognized by the mortgagee and that the rights of the Tenant shall remain in
full force and effect during the term of this Lease, so long as the Tenant
shall continue to perform all the covenants of this Lease. Landlord hereby
agrees to use its good faith efforts to obtain an agreement of quiet enjoyment
and nondisturbance from Bank.
14. REAL ESTATE TAXES.
Tenant shall pay all taxes and assessments which may be levied
or assessed upon the Demised Premises, and Tenant shall provide proof of such
payment to Landlord by copies of receipts furnished to Tenant prior to
delinquency; provided that, all real estate taxes and assessments on the
Demised Premises shall be prorated accordingly between Landlord and Tenant with
respect to the tax year in which this Lease commences, and in the event the
option provided in Paragraph 28 is not exercised by Tenant, with respect to the
tax year in which this Lease expires or is terminated.
15. FIRE AND EXTENDED COVERAGE INSURANCE.
a) Tenant agrees, at its sole cost and expense, to keep
the building and improvements leased hereunder insured to the full extent of
the insurable replacement value thereof in reliable companies against loss or
damage by fire or other causes insured by extended coverage. Any proceeds from
such insurance shall be payable to Landlord or to Tenant as their interests in
the improvements may appear.
b) All such insurance policies shall be procured by
Tenant from responsible insurance companies satisfactory to Landlord. Current
certificates of insurance naming Landlord and Bank as additional insured,
together with receipts evidencing payment of premiums therefor, shall be
delivered to Landlord prior to the commencement date of this Lease. Not less
than fifteen (15) days prior to the expiration date of any such policies,
certificates of insurance of the renewals thereof (bearing notations evidencing
the payment of renewal premiums) shall be delivered to Landlord. Such policies
shall further provide that not less than thirty (30) days written notice shall
be given to Landlord and Bank before such policy may be cancelled or changed to
reduce insurance provided thereby.
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c) If Tenant should fail to comply with the foregoing
requirements relating to insurance, Landlord may obtain such insurance, and
Tenant shall pay to Landlord on demand, as additional rental hereunder, the
premium cost thereof plus interest at the rate of ten percent (10%) per annum
from the date of payment by Landlord until repaid by Tenant.
16. UTILITIES.
Tenant accepts the present utility service connections to the Demised
Premises. Tenant shall pay the cost of all utility services, including, but not
limited to, all gas, water, sewer charges and electricity used by Tenant on the
Demised Premises. In the event Tenant exercises its option to purchase the
Demised Premises in accordance with the terms and provisions of ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ may seek the return of any deposits currently held by a utility, and
Tenant shall be responsible for providing any new deposit required.
17. WAIVER OF SUBROGATION.
Each party hereto waives any and every claim which arises or may arise
in its favor against the other party hereto during the term of this Lease for
any and all loss of, or damage to, any of its property located within or upon,
or constituting a party of, the Demised Premises, which loss or damage is
covered by valid and collectible fire and extended coverage insurance policies,
to the extent that such loss or damage is recoverable under such insurance
policies. Such mutual waivers shall be in addition to, and not in limitation or
derogation of, any other waiver or release contained in this Lease with respect
to any loss of, or damage to, property of the parties hereto. Inasmuch as such
mutual waivers will preclude the assignment of any aforesaid claim by way of
subrogation or otherwise to an insurance company (or any other person), each
party hereby agrees immediately to give to each insurance company which has
issued its policies of fire and extended coverage insurance, written notice of
the terms of such mutual waivers, and to cause such insurance policies to be
properly endorsed, if necessary, to prevent the invalidation of such insurance
coverages by reason of such waivers.
18. LIENS.
If any act or omission of Tenant or claim against Tenant results in a
lien or claim of lien against Landlord's title, Tenant, upon notice thereof, is
obligated to and shall promptly remove or release same by posting of bond or
otherwise. If not so released in thirty (30) days after notice to Tenant to do
so, Landlord shall have the right (but not the obligation) to pay or
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discharge the same without inquiry as to the validity thereof and the costs
therefor expended by Landlord shall be paid by Tenant on written demand. Tenant
may contest said lien by first furnishing Landlord with a good and sufficient
surety bond issued on terms acceptable to Landlord by a reputable surety
company.
19. LANDLORD'S EXPENDITURES.
Landlord shall have the right (but not the obligation) in the event of
the Tenant's failure, omission or inadequate compliance with any of its
undertakings hereunder, to make all expenditures or to do such acts and things
necessary to fulfill and satisfy any such undertakings. Such expenditures and
costs in connection therewith shall be at the Tenant's expense and shall be
payable upon demand. The Tenant shall also pay the Landlord's reasonable costs
and expenses, including the reasonable attorneys' fees, which may be occasioned
in enforcing the Tenant's obligations hereunder.
20. WAIVER AND CUMULATIVE RIGHTS.
No waiver of any breach of this Lease by Tenant or Landlord shall be
considered to be a waiver of any other or subsequent breach. All rights and
remedies of Landlord or Tenant herein provided or allowed by law shall be
cumulative.
21. DEFAULT BY TENANT.
The following events shall be deemed to be events of default under
this Lease:
a) Failure of Tenant to pay any installment of the rent
or other sum payable to Landlord hereunder on the date that same is due, and
such failure shall not be cured within ten (10) days after written notice
thereof to Tenant. Landlord shall only be obligated to give Tenant notice of
default in payment twice in any calendar year; after giving notice twice,
Tenant's cure period shall commence on the day after the payment is due.
b) Failure of Tenant to comply with any term, condition
or covenant of this Lease, other than the payment of rent or other sum of
money, and such failure shall not be cured within twenty (20) days after
written notice thereof to Tenant.
c) Insolvency of Tenant, or the making of a transfer in
fraud of creditors, or an assignment for the benefit of creditors by Tenant or
any guarantor of Tenant's obligations.
d) Filing of a petition under any section or chapter of
the United States Bankruptcy Code, as amended, or under any similar law or
statute of the United States or any state thereof by Tenant or any guarantor of
Tenant's obligations, or the adjudication of
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Tenant or such guarantor as a bankrupt or insolvent in any such proceeding.
e) Appointment of a receiver or trustee for all or
substantially all of the assets of Tenant or any guarantor of Tenant's
obligations hereunder.
f) Abandonment by Tenant of any substantial portion of
the Demised Premises or cessation of use of the Demised Premises for the
purpose leased.
22. REMEDIES OF LANDLORD.
Upon the occurrence of any of the events of default listed in
▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:
a) Terminate this Lease, in which event Tenant shall
immediately surrender the Demised Premises to Landlord. If Tenant fails to so
surrender the Demised Premises, Landlord may, without prejudice to any other
remedy which it may have for possession of the Demised Premises or arrearages
in rent, enter upon and take possession of the Demised Premises and expel or
remove Tenant and any other person who may be occupying such premises or any
part thereof, without being liable for prosecution or any claim for damages
therefor. Tenant shall pay to Landlord on demand the amount of all loss and
damage which Landlord may suffer by reason of such termination, whether through
inability to relet the Demised Premises on satisfactory terms or otherwise.
b) Enter upon and take possession of the Demised
Premises, by force if necessary, without terminating this Lease and without
being liable for prosecution or for any claim for damages therefor, and expel
or remove Tenant and any other person who may be occupying such premises or any
part thereof. Landlord may relet the Demised Premises and receive the rent
therefor. Tenant agrees to pay to Landlord monthly or on demand from time to
time any deficiency that may arise by reason of any such reletting. In
determining the amount of such deficiency, the brokerage commission, attorney's
fees, remodeling expenses and other costs of reletting shall be subtracted from
the amount of rent received under such reletting.
c) Enter upon the Demised Premises, without terminating
this Lease and without being liable for any prosecution or for any claim for
damages therefor, and do whatever Tenant is obligated to do under the terms of
this Lease. Tenant agrees to pay Landlord on demand for expenses which Landlord
may incur in effecting compliance with Tenant's obligations under this Lease,
together with interest thereon at the rate of 10% per annum from the date
expended until paid. Landlord shall not be liable for any damages
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resulting to the Tenant from such action, whether caused by negligence of
Landlord or otherwise.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided by law
or equity, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any rent due to Landlord hereunder or of any damages
accruing to Landlord by reason of the violation of any of the terms, conditions
and covenants herein contained.
23. LANDLORD'S LIEN.
In addition to the statutory Landlord's lien, Tenant hereby grants to
Landlord a security interest to secure payment of all rent and other sums of
money becoming due hereunder from Tenant, upon all vehicles, trailers, goods,
wares, inventory, equipment, fixtures, furniture and other personal property of
Tenant situated in or upon the Demised Premises, together with the proceeds
from the sale or lease thereof, subject to and subordinate to any first and
prior liens on assets of Tenant by bank of Tenant. Such property shall not be
removed without the consent of Landlord until all arrearages in rent and other
sums of money then due to Landlord hereunder shall first have been paid and
discharged. Upon the occurrence of any event of default, Landlord may, in
addition to any other remedies provided herein or by law or equity, enter upon
the Demised Premises and take possession of any and all goods, wares,
inventory, equipment, fixtures, furniture and other personal property of Tenant
situated on the Demised Premises without liability for trespass or conversion,
and sell the same at public or private sale, with or without having such
property at the sale, after giving Tenant reasonable notice of the time and
place of any such sale. Unless otherwise required by law, notice to Tenant of
such sale shall be deemed sufficient if given in the manner prescribed in this
Lease at least ten (10) days before the time of the sale. Any public sale made
under this paragraph shall be deemed to have been conducted in a commercially
reasonable manner if held on the Demised Premises or where the property is
located, after the time, place and method of sale and a general description of
the types of property to be sold have been advertised in a daily newspaper
published in Colorado County, Texas for five (5) consecutive days before the
date of the sale. Landlord or its assigns may purchase at a public sale and,
unless prohibited by law, at a private sale. The proceeds from any disposition
dealt with in this paragraph, less any and all expenses connected with the
taking of possession, holding and selling of the property (including reasonable
attorneys' fees and legal expenses), shall be applied as a credit against the
indebtedness secured by the security interest granted herein. Any surplus shall
be paid to Tenant or as otherwise required by law; Tenant shall pay any
deficiencies forthwith. Upon request by Landlord, Tenant agrees to execute and
deliver to Landlord a financing statement in form
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sufficient to perfect the security interest of Landlord in the aforementioned
property and proceeds thereof under the provisions of the Uniform Commercial
Code in force in the State of Texas. The statutory lien for rent is expressly
reserved; the security interest herein granted is in addition and supplementary
thereto.
24. ATTORNEYS' FEES.
If, on account of any breach or default by Landlord or Tenant of their
respective obligations under this Lease, it shall become necessary for the
other to employ an attorney to enforce or defend any of its rights or remedies
hereunder, and should such party prevail, it shall be entitled to any
reasonable attorneys' fees incurred in such connection.
25. USE OF LANGUAGE.
Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular shall be held
to include the plural, unless the context otherwise requires.
26. CAPTIONS OR HEADINGS.
The captions or headings of paragraphs in this Lease are inserted and
included solely for convenience and shall never be considered or given any
effect in construing the provisions hereof if any question of intent should
arise.
27. LANDLORD'S RIGHT OF ENTRY.
Landlord and its authorized agents shall have the right to enter the
Demised Premises during normal working hours for the following purposes: (a)
inspecting the general condition and state of repair of the Demised Premises;
(b) any making of repairs required of Landlord; or (c) to show the building for
any other legal or reasonable purpose.
28. OPTION TO PURCHASE.
a) For and in consideration of the sum of TEN and NO/100
DOLLARS ($10.00), the execution and delivery of certain other agreements of
even date herewith by and between Landlord and Tenant, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, Landlord, for itself and its successors and
assigns, hereby grants and gives to Tenant the right and option to purchase
from Landlord, subject to the terms and conditions hereinafter set forth and as
set fort in the Special Warranty Deed (the "Special Warranty Deed"), attached
hereto as Exhibit "B," the Demised Premises. At time of such sale, Landlord
shall cause the Bank to release its lien against the Demised Premises.
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b) Provided Tenant is not then in default, it shall have
the right and option to purchase the Demised Premises at any time during the
term hereof, for a cash purchase price in an amount equal to Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000.00) (the "Purchase Price").
Tenant's option to purchase the Demised Premises granted herein shall be
exercised by giving written notice thereof to Landlord as herein provided.
Within fifteen (15) days after Landlord's receipt of such written notice, the
Landlord shall be obligated to convey and the Tenant shall be obligated to
accept the Demised Premises pursuant to the terms of the Special Warranty Deed.
c) Landlord's sale of the Demised Premises to Tenant
pursuant to the terms of this Paragraph 28 is subject to all of the
disclaimers, waivers and other matters set forth in Paragraph 5 hereof, which
are fully incorporated into this Paragraph 28 by reference.
d) At the Closing (defined below) Landlord shall provide
Tenant an Owner Policy of Title Insurance, subject to the standard printed
exceptions and all matters shown of record as of the date hereof. Landlord
shall have no obligation to cure any defects in title, but shall render
reasonable cooperation to Tenant in the event Tenant desires to cure any
objections. In the event Tenant desires a survey of the Demised Premises, it
may obtain one and, at Closing, Landlord shall give Tenant a credit of
$10,000.00 for the survey.
e) Within the period provided in (b) above, a closing of
the sale of the Demised Premises (the "Closing") shall occur at the offices of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. At the
Closing, Landlord shall (i) deliver to Tenant the Special Warranty Deed,
executed and acknowledged by Landlord, conveying the Demised Premises to
Tenant, subject to the terms and provisions therein; (ii) deliver to Tenant a
FIRPTA Affidavit duly executed by Landlord, stating that Landlord is not a
"foreign person" as defined in the federal Foreign Investment in Real Property
Tax Act of 1980 and the 1984 Tax Reform Act, and in the event Landlord is
unable or unwilling to deliver the FIRPTA Affidavit, in lieu thereof the
Purchase Price payable to Landlord shall be adjusted in such a manner as to
comply with the withholding provisions of such statutes; (iii) deliver to
Tenant such evidence as Tenant's counsel may reasonably require authorizing the
execution and delivery of all documents required to be executed by Landlord,
and the consummation of the transactions contemplated herein; (iv) join with
Tenant in the execution of a Closing Statement relating to the sale of the
Demised Premises; and (v) execute such other necessary documents to effectuate
the sale and transfer of the Demised Premises. At the Closing, Tenant shall (i)
deliver, in cash, the Purchase Price to Landlord; (ii) deliver to Landlord such
evidence as Landlord's counsel may reasonably require authorizing the execution
and delivery of all documents
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required to be executed by Tenant, and the consummation of the transactions
contemplated herein; (iii) join with Landlord in the execution of a Closing
Statement relating to the sale of the Demised Premises; and (iv) execute such
other necessary documents to effectuate the sale and transfer of the Demised
Premises.
29. HOLDING OVER.
In the event Tenant remains in possession of the Demised Premises or
any portion thereof, after expiration of this Lease term without exercising its
option to purchase or after termination of this Lease, then Tenant shall be
deemed to be a tenant from month to month, at a monthly rental equal to 150% of
the monthly rental provided for in the Lease unless otherwise agreed in writing
by the Landlord and the Tenant.
30. NOTICES.
Any notice or document required or permitted to be delivered hereunder
may be delivered in person or shall be deemed to be delivered, whether actually
received or not, when deposited in the United States mail, postage prepaid,
registered or certified mail, return receipt requested, addressed to the party
to whom directed at the addresses indicated below, or at such other addresses
as may have theretofore been specified by written notice delivered in
accordance herewith, as follows:
TO LANDLORD:
▇▇▇▇▇ Industries, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, President
WITH COPY TO:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bond, Esq.
TO TENANT:
Hanover Compressor Company
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Chairman
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WITH COPY TO:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
31. SEVERABILITY.
If any provision in this Lease should be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this Lease shall not be affected thereby.
32. BROKERAGE COMMISSIONS.
a) Subject to the terms of this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇
agrees to pay to ▇▇▇▇▇▇, Womack, Ricks, Herder and Parsley, Inc. ("Broker"), a
brokerage commission equal to five percent (5%) of the monthly rental due under
this Lease, month by month, if, as and when Landlord receives such monthly
rental payments from Tenant. In the event Tenant exercises its option to
purchase the Demised Premises in accordance with Paragraph 28 of this Lease,
Landlord further agrees to pay to Broker, a brokerage commission equal to five
percent (5%) of the Purchase Price, if, as and when Landlord receives the
Purchase Price from the Tenant.
b) Landlord and Tenant each represents to the other that
there has been no broker or finder other than the Broker engaged in connection
with the sale or lease of the Demised Premises. Each party agrees that should
any claim be made for brokerage commissions or finder's fees by any broker or
finder other than the Broker by, through or on account of any acts of the said
party or its representatives, said party will hold the other party free and
harmless from and against any and all loss, liability, cost, damage and expense
in connection therewith.
33. EXHIBITS.
All exhibits, attachments, annexed instruments and addenda referred to
herein shall be considered a part hereof for all purposes with the same force
and effect as if copied at full length herein.
34. AMENDMENTS.
No modifications, amendments or changes to any provision in this Lease
shall be effective unless in writing.
35. SUCCESSORS AND ASSIGNS.
The covenants and conditions hereof shall be binding upon and for the
benefit of the heirs, executors, administrators,
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successors, permissive sublessees and assigns of the parties hereto, except as
otherwise herein expressly provided. Without limiting the foregoing, all of
Landlord's rights hereunder shall be assignable to the holder of the first lien
on the Demised Premises, Bank, and Bank shall, upon foreclosure of its lien or
receipt of a deed in lieu of foreclosure, be entitled to enforce all of
Landlord's rights hereunder.
36. MEMORANDUM OF LEASE.
A memorandum of this Lease shall be filed in the Real Property Records
of Colorado County, Texas.
EXECUTED on this ___day of January, 1995.
LANDLORD:
▇▇▇▇▇ INDUSTRIES, INCORPORATED
By:
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
President
TENANT:
HANOVER COMPRESSOR COMPANY
By:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Chairman
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EXHIBIT A
A tract or parcel of land containing 27.2 acres of land in the ▇▇▇▇▇
▇▇▇▇▇▇ Survey, Abstract 507, Colorado County, Texas, and being a portion of
that certain 99.1 acre tract or parcel of land which is described as "Fourth
Tract" in that certain Deed from ▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux, to ▇.▇. ▇▇▇▇▇▇▇, dated
October 3, 1935, recorded in Volume 97 at Page 210-213 of the Deed Records in
the Office of the County Clerk of Colorado County, Texas, said 27.2 acre tract
or parcel of land being more particularly described by metes and bounds as
follows, to-wit:
Beginning at 3"x3" concrete monument at the base of old fence corner
post, set at the more Westerly corner of the above-mentioned 99.1 acre
tract or parcel of land;
Thence North 45 degrees 25' 26" East along and with the Northwest
boundary line of the above mentioned 99.1 acre tract or parcel of land
a distance of 1786.84 feet to a 3"x3" concrete monument at the base of
a fence corner post, 40 feet from the centerline of State F.M. Highway
No. 949, which said concrete monument is in the Southwesterly
right-of-way line of said State F.M. Highway No. 949;
Thence South 44 degrees 47' 28" East along and with the Southwesterly
right-of-way line of said State F.M. Highway 949, a distance of
662.10' to a 3'x3" concrete monument set in said Southwesterly right-
of-way line of State F.M. Highway No. 949 for the more Easterly corner
of this 27.2 acre tract;
Thence South 45 degrees 25' 26" West a distance of 1782.71' to the
Southwesterly boundary line of the above- mentioned 99.1 acre tract or
parcel of land to a 3"x3" concrete monument at base of old fence
corner post for corner;
Thence North 45 degrees 09' 12" West along and with the Southwesterly
boundary line of the above-mentioned 99.1 acre tract or parcel of land
a distance of 662.10' to a 3"x3" concrete monument at base of old
fence corner post set for the more Westerly corner of the
above-mentioned 99.1 acre tract or parcel of land and the PLACE OF
BEGINNING, containing 27.2 acres of land, together with all
improvements thereon and together with and including all of the
estate, right, title and, or, interest of Grantor in and, or, to that
portion of the right-of-way for State F.M. Highway No. 949 upon which
this 27.2 acre tract or parcel of land abuts;
A tract or parcel of land containing 56.174 acres of land situated
partly in the ▇▇▇▇▇ ▇▇▇▇▇▇ Survey, Abstract 507, Colorado County,
Texas, and partly in the ▇▇▇▇ ▇▇▇▇▇▇▇▇ Survey, Abstract 31, Colorado
County, Texas, and described by metes and bounds as follows:
20
Beginning for connection at a 3"x3" concrete monument at base of old
fence corner post located at the more Westerly corner of the 99.1 acre
tract or parcel of land which is described as "Fourth Tract" in that
certain deed from ▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux to ▇.▇. ▇▇▇▇▇▇▇, dated October
3, 1935, recorded in Volume 97 at Page 210-213 of the Colorado County
Deed Records, and, also, the more Westerly corner of a 27.2 acre tract
or parcel of land described in deed of even date from Grantor to
Grantee, thence South 45 degrees 09' 12" East along and with the
Southwesterly boundary line of said 27.2 acre tract a distance of
662.10 feet to a 3"x3" concrete monument set at base of old fence
corner post and which concrete monument marks the more Southerly
corner of said 27.2 acre tract or parcel of land;
Thence South 47 degrees 40' West a distance of 430.27 feet to a 3"x3"
concrete monument at base of old fence corner post;
Thence South 36 degrees 59' 38" East a distance of 401.53 feet to a
3/8" iron Rebar near a 3"x3" concrete monument and 12" creosote fence
corner post on the Northerly right-of-way line of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇;
Thence North 78 degrees 25' 25" East along and with the Northerly
right-of-way of said Interstate Highway No. 10, a distance of
1,790.27 feet to a concrete highway monument in said Northerly
right-of-way line of Interstate Highway No. 10, and thence continuing
with the Northerly right-of-way line of said ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.▇▇,
▇▇▇▇▇ ▇▇ degrees 38' 03" East a distance of 161.19 feet to a concrete
highway monument, North 78 degrees 25' 25" East a distance of 99.52
feet to a concrete highway monument in said Northerly right-of-way
line and being the more Westerly corner of a 1.917 acre tract or
parcel of land now or formerly owned by ▇▇▇. ▇.▇. ▇▇▇▇▇ and which is
described in Deed recorded in Volume 101 at Page 493 of the Deed
Records in the Office of the County Clerk of Colorado County, Texas;
Thence North 37 degrees 23' 04" East along and with the Northwesterly
line of said tract now or formerly owned by ▇▇▇. ▇.▇. ▇▇▇▇▇ a distance
of 444.78 feet to a 3"x3" concrete monument near base of a fence
corner and old Iron, on the Southwesterly right-of-way line of State
F.M. Highway No. 949; said 3"x3" concrete monument being 40 feet from
the centerline of said State F.M. Highway No. 949;
Thence North 44 degrees 47' 28" West along and with the Southwesterly
right-of-way line of said State F.M. Highway No. 949 a distance of
1520.14 feet to a 3"x3" concrete monument set for the more Easterly
corner of the said 27.2 acre tract or parcel of land described in deed
of even date from Grantor to Grantee;
21
Thence South 45 degrees 25' 26" West along and with the Southeasterly
boundary line of the said 27.2 acre tract or parcel of land a distance
of 1782.71 feet to a 3"x3" concrete monument at the base of old fence
corner post marking the more Southerly corner of the said 27.2 acre
tract or parcel of land and being the PLACE OF BEGINNING, together
with and improvements thereon and together with and including all of
the estate, right, title and, or, interest of Grantor in and, or, to
the portions of the rights-of-way of said State F.M. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇ upon which this 56.174 acre tract or parcel
of land abuts;