LEASE AGREEMENT Exhibit 10.2
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This Lease Agreement ("Lease") is made and entered into this 20th day of
April, 1999, by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(herein collectively called the "Landlord") and Bolt Technology Corporation, a
Connecticut corporation (herein called "Tenant"), for the terms of which,
W I T N E S S E T H:
1. PREMISES
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1.1 For and in consideration of the covenants and agreements herein set
forth to be kept and performed by Tenant, and subject to the terms and
conditions set out below, and subject to all matters of record in ▇▇▇▇▇▇ County,
Texas affecting the Premises herein-described, Landlord does hereby demise and
lease to Tenant, and Tenant does hereby lease and take from Landlord (for the
Term herein stipulated) the premises (including all land and improvements
located thereto), said land containing 4.9693 acres, more or less, described on
Exhibit "A" which is attached hereto and made a part hereof for all purposes
(said land and improvements herein called the "Premises").
2. TERM AND OPTION
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2.1 Term. The term (referred to herein sometimes as "Term" or "Primary
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Term") shall be for three (3) years commencing on April 20, 1999, and ending on
April 20, 2002, unless sooner terminated pursuant to any provision hereof.
2.2 Option. Provided Tenant is not in default hereunder, Tenant shall
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have an option to extend the Term of this Lease for one (1) additional period
(referred to herein as "Extension Term") of three (3)years; such Extension Term
(if the option to extend is exercised) shall commence on the first day following
the expiration of the Primary Term of this Lease and Tenant's option to extend
the Term of this Lease are contingent upon the following conditions being
satisfied:
2.2.1 Tenant shall not be in default under the terms and
conditions of this Lease at the time Tenant elects to exercise such option, and
on the date upon which such option becomes effective; and
2.2.2 Tenant shall have given written notice to Landlord of the
exercise of such option no less than one hundred eighty (180) days prior to the
expiration of the Primary Term. It is understood and agreed that time is of the
essence in all provisions of this Lease. Further, if Tenant fails to timely
exercise the option to extend, then such option and rights to extend the Term of
this Lease shall be null, void and of no force and effect.
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2.2.3 In the event Tenant effectively exercises such option to
extend the Term of this Lease, then all of the terms and provisions of this
Lease applicable during the Primary Term hereof shall likewise be applicable
during the Extension Term, except: (i) after the expiration of the Extension
Term (if the option to extend the Term is exercised) Tenant shall have no
further rights to extend the Term of this Lease, and (ii) the Rent (as herein
defined) which shall be due and payable, in advance, for each month of the
Extension Term shall be Ten Thousand and No/100 Dollars ($10,000.00) multiplied
by a fraction the numerator of which is the Index Number of the Consumer Price
Index (as defined below) for April, 2002, and the denominator of which is the
Index Number of the Consumer Price Index for April, 1999. "CPI," as that term
is used herein, means the Consumer Price Index For All Urban Consumers (Houston,
Texas) of the Bureau of Labor Statistics of the U.S. Department of Labor (for
which 1982-1984 is 100). "Bureau" shall mean the U.S. Department of Labor,
Bureau of Labor Statistics, or any successor agency of the United States that
shall issue the indexes or data referred to in this Article 2.2.3. In the event
that (i) the Bureau ceases to use the 1982-1984 average of 100 as the basis of
calculation, or (ii) a substantial change is made in the number or character of
"market basket" items used in determining the CPI, or (iii) Landlord and Tenant
mutually agree in writing that the CPI does not accurately reflect the
purchasing power of the dollar, or (iv) the CPI shall be discontinued for any
reason, Landlord shall designate from indexes supplied by the Bureau an
alternative index comparable to the CPI together with information which will
make possible the conversion to the alternative index in computing the adjusted
rental. If for any reason the Bureau does not furnish such an index and such
information, the parties shall thereafter accept and use such other index of
comparable statistics on the cost of living for the county in which the Premises
is located, as shall be computed and published by an agency of the United States
or by a responsible financial periodical of recognized authority then to be
selected by Landlord (but subject to reasonable approval by Tenant). In no
event shall the Rent be reduced. If there is a decrease in the CPI then the
Rent in effect shall remain unchanged.
3. RENT
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3.1 Tenant shall pay to Landlord as rent ("Rent") for the Premises in
monthly installments of Ten Thousand and No/100 Dollars ($10,000.00), in
advance, on the first day of each month of the Term hereof. Rent for any period
during the Term hereof which is for less than one month shall be a pro rata
portion of the monthly installment. Except as expressly set forth in any
provision of this Lease, Rent shall be payable without notice or demand and
without any deduction, offset, or abatement in lawful money of the United States
of America to Landlord at the address stated herein or to such other persons or
at such other places as Landlord may designate in writing.
3.2 Additional Charge. This Lease is what is commonly called a "Net, Net,
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Net Lease," it being understood that Landlord shall receive the Rent set forth
in Article 3.1 free and clear of any and all impositions, taxes, real estate
taxes, liens, charges or expenses of any nature whatsoever in connection with
the ownership and operation of the Premises. In addition to the Rent reserved by
Article 3.1, Tenant shall pay to the parties respectively
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entitled thereto all impositions, taxes, real estate taxes, insurance premiums,
operating charges, maintenance charges, construction costs, and any other
charges, costs and expenses which arise or may be contemplated under any
provisions of this Lease during the Term hereof. All of such charges, costs, and
expenses shall constitute additional charges, and upon the failure of Tenant to
pay any of such costs, charges, or expenses, Landlord shall have the same rights
and remedies as otherwise provided in this Lease for the failure of Tenant to
pay Rent. It is the intention of the parties hereto that this Lease shall not be
terminable for any reason by the Tenant and that the Tenant shall in no event be
entitled to any abatement of or reduction in Rent payable hereunder, except as
herein expressly provided. Any present or future law to the contrary shall not
alter this agreement of the parties. Notwithstanding the foregoing, items which
are not customarily included as additional charges or Rent in "Triple Net"
leases, such as income taxes and debt service (both principal and interest), are
specifically excluded from additional charges pursuant to this paragraph.
4. USE
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4.1 Use. The Premises shall be used and occupied only for manufacturing,
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office and warehouse purposes.
4.2 Compliance with the Law. Tenant shall obtain, at its sole cost, all
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permits and licenses required for the transaction of its business in the
Premises. Tenant shall, at Tenant's expense, comply promptly with all
applicable statutes, ordinances, rules, laws, regulations, orders, and
requirements in effect during the Term or any part of the Term hereof regulating
the use by Tenant of the Premises. Tenant shall not use or permit the use of the
Premises in any manner that will tend to create waste or a nuisance. Tenant
represents, warrants and covenants to Landlord that any future permitted
construction, enlargements, replacements, alterations, or modifications to the
Premises which are made by Tenant shall comply with the American With
Disabilities Act and all amendments promulgated thereto from time to time at
Tenant's cost.
4.3 Condition of Premises. Tenant hereby accepts the Premises in their
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condition existing as of the date of the possession hereunder, subject to all
applicable zoning, municipal, county, and state laws, ordinances and regulations
governing and regulating the use of the Premises, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto. Tenant acknowledges that Landlord has made no representation or warranty
as to the suitability or habitability of the Premises for the conduct of
Tenant's business.
4.4 Insurance Cancellation. Notwithstanding the provisions of Article 4.1,
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hereinabove, no use shall be made or permitted to be made of the Premises nor
acts done which will cause the cancellation of any insurance policy covering
said Premises; and, if Tenant's use of the Premises causes an increase in said
insurance rates, Tenant shall pay any such increase.
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4.5 Landlord's Rules and Regulations. Tenant shall faithfully observe and
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comply with reasonable rules and regulations that Landlord may from time to time
promulgate. Landlord reserves the right from time to time to make all reasonable
modifications to said rules and regulations. The additions and modifications to
those rules and regulations shall be binding upon Tenant upon delivery of copy
of them to Tenant.
4.6 Landlord represents that to their current actual knowledge, as of the
date of this Lease, the condition of the Premises is in compliance with
applicable statutes, ordinances, laws and regulations, including, but not
limited to, the Americans With Disabilities Act and applicable municipal, county
and state laws, ordinances and regulations.
5. MAINTENANCE, REPAIRS, AND ALTERATIONS
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5.1. Tenant's Obligations. Tenant shall, during the Term of this Lease,
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keep in good order, condition, and repair, (at least as good as that which
existed at the commencement of this Lease) the Premises and every part thereof,
structural or nonstructural and all adjacent sidewalks, landscaping, driveways,
parking lots, fences, and signs located in the areas which are adjacent to and
included with the Premises. Landlord shall incur no expense nor have any
obligation of any kind whatsoever in connection with maintenance of the
Premises, and Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition, and repair.
5.2 Surrender. On the last day of the Term hereof, or on any sooner
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termination, Tenant shall surrender the Premises to Landlord in good condition
(the same condition that existed at the commencement of this Lease), broom
clean, ordinary wear and tear expected. Tenant shall repair any damage to the
Premises occasioned by its use thereof, or by the removal of Tenant's trade
fixtures, furnishings, and equipment pursuant to Article 5.4.3, which repair
shall include the patching and filling of holes and repair of structural damage.
5.3 Landlord's Rights. If Tenant fails to perform Tenant's obligations
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under this Article 5, Landlord may at their option (but shall not be required
to) enter upon the Premises after twenty (20) days' prior written notice to
Tenant (provided Tenant has not performed such obligations during such twenty
(20) days) and put the same in good order, condition, and repair, and the cost
thereof together with interest thereon at the rate of ten percent (10%) per
annum shall become due and payable as additional Rent to Landlord together with
Tenant's next monthly Rent installment.
5.4 Alterations, Additions, and Improvements.
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5.4.1 Tenant shall not, without Landlord's prior written consent,
make any alterations, improvements, or additions in, on, or about the Premises.
As a condition to
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giving such consent, Landlord may require that Tenant remove any such
alterations, improvements, additions, or utility installations at the expiration
of the Term, and to restore the Premises to their prior condition.
5.4.2 Before commencing any work relating to alterations,
additions, and improvements affecting the Premises, Tenant shall notify Landlord
in writing of the expected date of commencement thereof. Landlord shall then
have the right at any time and from time to time to post and maintain on the
Premises such notices as Landlord reasonably deems necessary to protect the
Premises and Landlord from mechanics' liens, materialmen's liens, or any other
liens. In any event, Tenant shall pay, when due, all claims for labor or
materials furnished to or for Tenant at or for use in the Premises. Tenant shall
not permit any mechanics' or materialmen's liens to be levied against the
Premises for any labor or material furnished to Tenant or claimed to have been
furnished to Tenant or to Tenant's agents or contractors in connection with work
of any character performed or claimed to have been performed on the Premises by
or at the direction of Tenant.
5.4.3 Unless Landlord requires their removal, as set forth in
Article 5.4.1, all alterations, improvements, or additions which may be made on
the Premises shall become the property of Landlord and remain upon and
surrendered with the Premises at the expiration of the Term. Notwithstanding the
provisions of this Article 5.4.3, Tenant's machinery, equipment, and other trade
fixtures other than that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises, shall remain the Property of
Tenant and may be removed by Tenant subject to the provisions of Article 5.2.
5.4.4 All construction work done by Tenant within the Premises
shall be performed in a good and workmanlike manner, in compliance with all
applicable laws, regulations, and governmental requirements, and the
requirements of any contract or deed of trust to which the Landlord may be
party. Tenant agrees to indemnify Landlord and hold it harmless against any
loss, liability or damage resulting from such work, and Tenant shall, if
requested by Landlord, furnish a bond or other security reasonably satisfactory
to Landlord against any such loss, liability or damage.
5.4.5 Tenant agrees that all venting, opening, sealing,
waterproofing or any altering of the roof of the Premises shall be performed by
Landlord's roofing contractor, or other contractor approved in advance of such
work by Landlord.
5.5 Signs. Tenant shall not place, or affix any signs or other objects
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upon or to the roof or exterior walls of the Premises or on the interior which
can be seen from the exterior, or paint, or otherwise deface the exterior walls
of the Premises without the prior written consent of Landlord. Any signs
installed by Tenant shall be maintained and repaired solely by Tenant and shall
conform with applicable laws and other restrictions. Tenant shall remove all
signs at the termination of this Lease and shall repair any damage and close any
holes caused or revealed by such removal.
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6. INSURANCE, INDEMNITY
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6.1 Liability Insurance. Tenant shall obtain and keep in force during the
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Term of this Lease a policy of comprehensive public liability insurance insuring
Landlord and Tenant against any liability arising out of the ownership, use,
occupancy, or maintenance of the Premises and all areas appurtenant thereto.
Such insurance shall be in an amount of not less than Two Million and No/100
Dollars ($2,000,000.00) for injury to or death of one person in any one accident
or an amount of not less than Two Million and No/100 Dollars ($2,000,000.00) for
injury to or death of more than one person in any one accident or occurrence.
Such insurance shall further insure Landlord and Tenant against liability for
property damage of at least Five Hundred Thousand and No/100 Dollars
($500,000.00). The limits on the amount of insurance coverage provided above
shall not, however, limit the liability of Tenant hereunder. If the Tenant shall
fail to procure and maintain said insurance the Landlord may, but shall not be
required, to procure and maintain the same, but at the expense of the Tenant.
6.2 Property Insurance. Tenant shall obtain and keep in force during the
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Term of this Lease a policy or policies of insurance covering loss or damage to
the Premises in the amount of $1,000,000.00 providing protection against all
perils included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk) and sprinkler leakage.
Said insurance shall provide for payment for loss thereunder to Landlord and to
the holder of a first mortgage or deed of trust on the Premises, as their
respective interests may appear. If Tenant shall fail to procure and maintain
said insurance, Landlord may, but shall not be required to, procure and maintain
the same, but at the expense of the Tenant.
6.3 Insurance Policies. Insurance required hereunder shall be in companies
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approved by Landlord. Tenant shall deliver prior to possession to Landlord
copies of policies of such insurance or certificates evidencing the existence
and amount of such insurance with loss payable clauses satisfactory to Landlord.
No such policy shall be cancellable or subject to reduction of coverage or other
modification except after ten (10) days' prior written notice to Landlord.
Tenant shall within ten (10) days prior to the expiration of such policies
furnish Landlord with renewals or "binders" thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant upon demand. Tenant shall not do or permit to be done anything which
shall invalidate the insurance policies referred to in this Article 6. Tenant
shall forthwith, upon Landlord's demand, reimburse Landlord for any additional
premiums attributable to any act or omission or operation of Tenant causing such
increase in the cost of insurance.
6.4 Waiver of Subrogation. Tenant and Landlord each waives any and all
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rights of recovery against the other, or against the officers, employees,
agents, and representatives of the other, for loss of or damage to such waiving
party or its property or the property of others under its control, when such
loss or damage is insured under any insurance policy in force at the time of
such loss or damage. Tenant and Landlord shall,
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upon obtaining the policies of insurance required hereunder, give notice to the
insurance carriers that the foregoing mutual waiver of subrogation is contained
in this Lease.
6.5 Hold Harmless. Tenant shall indemnify, defend and hold Landlord
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harmless from any and all claims arising from Tenant's use of the Premises or
from the conduct of its business or from any activity, work, or things which may
be permitted or suffered by Tenant in or about the Premises and shall further
indemnify, defend, and hold Landlord harmless from and against any and all
claims (including, without limitation, for death or injury to person or persons
or property damage) arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the provision of this Lease or
arising from any act of Tenant or any of its agents, contractors, employees, or
invitees, and from any and all costs, attorney's fees, expenses, and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon. Tenant hereby assumes all risk of damage to the Premises or injury or
death to persons in or about the Premises from any cause, and Tenant hereby
waives all claims in respect thereof against Landlord, excepting where said
damage, injury or death, arises out of the gross negligence or wilful misconduct
of Landlord. Notwithstanding anything herein to the contrary, Landlord shall
indemnify, defend and hold harmless, Tenant from any claims of any nature or
kind which arise from or relate to, or are alleged to arise from or relate to,
any use, business, activity, work or other things permitted to have been done on
the Premises prior to the date hereof.
6.6 Exemption of Landlord from Liability. Tenant hereby agrees that
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Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the goods, wares, merchandise, machinery or
other property of Tenant, Tenant's employees, invitees, customers, or any other
person or persons in or about the Premises; nor, unless through their gross
negligence or wilful misconduct, shall Landlord be liable for any injury or
death to Tenant's employees, agents, or contractors, and invitees, whether such
damage, injury or death is caused by or results from fire, steam, electricity,
gas, water, or rain, or from the breakage, leakage, obstruction, or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether the said damage, injury or
death results from conditions arising upon the Premises, or from other sources
or places, and regardless of whether the cause of such damage, injury or death
or the means of repairing the same is inaccessible to Landlord or Tenant.
7. DAMAGE OR DESTRUCTION
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7.1 In the event the improvements on the Premises are damaged or
destroyed, partially or totally, from any cause whatsoever, whether or not such
damage or destruction is covered by insurance required to be maintained under
Article 6, the Tenant shall repair, restore, and rebuild the Premises to their
condition existing upon the date of commencement of this Lease, excluding any
additions or alterations which were made and paid for by the Tenant, and this
Lease shall continue in full force and effect. Such repair, restoration, and
rebuilding (all of which are herein called the "repair") shall be commenced
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within a reasonable time after such damage or destruction shall be diligently
prosecuted to completion. There shall be no abatement of Rent or any other
obligation of Tenant hereunder by reason of such damage or destruction. The
proceeds of any insurance maintained under Article 6 shall be made available to
Tenant for payment of the cost and expense of the repair, provided, however,
that such proceeds may be made available to Tenant subject to reasonable
conditions including, but not limited to, architect's certification of costs and
retention of a percentage of such proceeds pending final notice of completion.
Notwithstanding anything to the contrary set forth herein, in the event that
such proceeds are not made available to Tenant within ninety (90) days after
such damage or destruction, Tenant shall have the option for thirty (30) days,
commencing on the expiration of such ninety (90) day period of canceling this
Lease. In the event that the insurance proceeds are insufficient to cover the
cost of the repair, then any amount in excess thereof required to complete the
repair shall be paid by Tenant. Provided, however, that Tenant shall not be
required to pay for any insufficiency in insurance proceeds which is the direct
result of complying with any provision of any mortgage on the Premises which
requires the insurance proceeds to be paid to the mortgagee and results in the
mortgagee electing to apply insurance proceeds to the mortgage debt rather than
to be used for repairs. Notwithstanding anything contained herein to the
contrary, this Article 7 shall be subject to the terms of any and all mortgages
on the Premises.
7.2 Damage Near End of Term. If the Premises are partially destroyed or
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damaged during the last six (6) months of the Term of this Lease, Landlord may,
at Landlord's option, cancel and terminate this Lease, as of the date of
occurrence of such damage, by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the date of occurrence of such
damage. Landlord's election to terminate this Lease will not be a termination
of Tenant's option to purchase the Premises pursuant hereto, if Tenant, after
Landlord exercise its right of termination, within ten (10) days thereafter,
exercises its option to purchase the Premises and concludes the purchase of the
Premises as herein provided. Upon the closing of such purchase, Landlord agrees
to assign all of its right, title and interest in and to any insurance proceeds,
which were recovered or are recoverable, by the Landlord to the Tenant at the
closing.
7.3 Proration. Upon termination of this Lease pursuant to this Article 7,
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a pro rata adjustment of Rent based upon a thirty (30) day month shall be made.
8. REAL PROPERTY TAXES
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8.1 Payment of Taxes. Tenant shall pay all real property taxes applicable
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to the Premises during the Term of this Lease. All such payments shall be made
at least ten (10) days prior to the delinquency of such payment. Tenant shall
promptly (within ten [10] days after payment) furnish Landlord with satisfactory
evidence that such taxes have been paid. If any such taxes paid by Tenant shall
cover any period of the time prior to or after the expiration of the Term
hereof. Tenant's share of such taxes shall be equitably prorated to cover only
the period of time within the tax fiscal year during which this Lease shall be
in effect, and Landlord shall reimburse Tenant to the extent required. If Tenant
shall fail to
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pay any such taxes, Landlord shall have the right to pay the same, in which case
Tenant shall repay such amount to Landlord with Tenant's next Rent installment
together with interest at the rate of ten percent (10%) per annum.
8.2 Definition of "Real Property" Taxes. As used herein, the term "real
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property tax" shall include any form of assessment, license fee, Rent tax, levy,
penalty, or tax (other than inheritance or estate taxes), imposed by any
authority having the direct or indirect power to tax, including any city,
county, state, or federal government, or any school, agricultural, lighting,
drainage, or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, as against Landlord's right to Rent or other income
therefrom, or as against Landlord's business of leasing the Premises; and Tenant
shall pay any and all charges and fees which may be imposed by the Environmental
Protection Agency or other similar government regulations or authorities.
8.3 Personal Property Taxes. Tenant shall pay prior to the delinquency
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all taxes assessed against and levied upon leasehold improvements, trade
fixtures, furnishings, equipment, trade fixtures, furnishings, equipment, and
all other personal property to be assessed and billed separately from the
Premises.
9. UTILITIES
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9.1 Tenant shall promptly pay, when due, all charges for electricity,
water, gas, telephone service, sewerage service and other utilities furnished to
the Premises. It is expressly agreed that Landlord shall not be liable for any
interruption or failure in any utility services, unless caused by the gross
negligence or wilful misconduct of the Landlord. Further, no such interruption
or failure shall be construed as either a constructive or actual eviction of
Tenant, nor work an abatement of Rent, nor relieve Tenant from fulfilling any
covenant or condition of this Lease. If the interruption or failure is caused
by the gross negligence or willful misconduct of Landlord, then the Rent shall
be abated during the period of such interruption in services.
10. ASSIGNMENT AND SUBLETTING
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10.1 Landlord's Consent Required. Tenant shall not voluntarily or by
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operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in this Lease or in the Premises
without Landlord's prior written consent. Any assignment to an affiliate of the
Tenant, such as a parent or subsidiary company, shall not require consent,
provided Tenant shall still remain liable on this Lease. Any attempted
assignment, transfer, mortgage, encumbrances, or subletting without such consent
shall be void and shall constitute a breach of the Lease. Any transfer of
Tenant's interest in this Lease or in the Premises from Tenant by merger,
consolidation, or liquidation, or by any subsequent change in the ownership of
thirty percent (30%) or more of the capital stock of Tenant shall be deemed a
prohibited assignment within the meaning of this Article 10.
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10.2 No Release of Tenant. Regardless of Landlord's consent, no subletting
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or assignment shall release Tenant of Tenant's obligations to pay the Rent and
to perform all other obligations to be performed by Tenant hereunder for the
Term of this Lease. The acceptance of Rent by Landlord from any other person
shall not be deemed to be a waiver by Landlord of any provision hereof. Consent
to one assignment or subletting shall not be deemed consent to any subsequent
assignment of subletting.
10.3 Assignment by Landlord. In the event of the transfer and assignment
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by Landlord of its interest in this Lease to a person expressly assuming
Landlord's obligations under this Lease, Landlord shall thereby be released from
any further obligations hereunder (but Landlord shall not be relieved or
released from obligations which may have accrued prior to assignment or transfer
of this Lease by Landlord), and Tenant agrees to look solely to such successor
in interest of the Landlord for performance of such obligations, provided that
Landlord has given Tenant thirty (30) days prior written notice of the identity
of the transferee and transferee's agreement to assume the liability of the
Landlord under the Lease.
10.4 Mortgage of Lease by Tenant. Tenant shall not mortgage, pledge or
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otherwise encumber its interest in this Lease or in the Premises.
10.5 Assignment to Subsidiary(ies). Notwithstanding the foregoing
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provisions of this Article 10, Tenant shall have the right to assign this Lease
to a subsidiary of Tenant, provided that the use of the Premises shall not be
changed and that the Tenant shall not be released from its obligations under
this Lease.
11. DEFAULT AND REMEDIES
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11.1 The following events (any one or more of them) shall be deemed to be
"Events of Default" by Tenant under this Lease:
11.1.1 Tenant shall fail to pay any Rent, additional Rent, or any
monthly payment, or any other cost, sum, expense, charge or amounts ("Payments")
due to Landlord as herein provided, and such failure shall continue for a period
of ten (10) days after any such Payments are due.
11.1.2 Tenant shall fail to make any payment to third parties as
required by the terms of this Lease, or shall fail to comply with any other
term, provision or covenant of this Lease [other than the payment of the
Payments referred to in Article 11.1.1 above] and shall not cure such failure
within thirty (30) days after written notice thereof to Tenant. The Tenant
shall not be considered in default under this Lease if such curative action
cannot be completed within such thirty (30) day period, and Tenant has commenced
efforts to cure the same within such period and is diligently pursuing the cure
of such default.
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11.1.3 Tenant shall become insolvent, or shall make a transfer in
fraud of creditors, or shall make an assignment for the benefit of creditors.
11.1.4 Tenant shall file a petition under any section or chapter of
the Bankruptcy Code, as amended, or under any similar law or statute of the
United States or any State thereof; or Tenant shall be adjudged bankrupt or
insolvent in proceedings filed against Tenant.
11.1.5 A receiver or Trustee shall be appointed for all of the
Premises or for all or substantially all of the assets of Tenant under this
Lease.
11.1.6 Tenant shall do or permit to be done anything which creates
a lien upon the Premises.
11.1.7 The business operated by Tenant shall be closed for failure
to pay any State sales tax as required, for violation of law, or for any other
reason.
11.1.8 The vacating or abandonment of the Premises by Tenant.
11.1.9 The making by Tenant it of any general assignment, or
general arrangement for the benefit of creditors.
11.1.10 The attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days.
11.2 Upon the occurrence of any one or more of such Events of Default,
Landlord shall have the option to pursue any one or more of the following
remedies, or any other remedy set forth in this Lease or otherwise permitted by
law, or in equity, without any notice or demand whatsoever (except as expressly
required by the terms of this Lease):
11.2.1 Terminate this Lease in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rental, enter upon and take possession of the Premises and expel
or remove Tenant and any other person who may be occupying the Premises or any
part thereof, by force if necessary, without being liable for prosecution or any
claim of damages therefor.
11.2.2 Terminate Tenant's right of possession, without terminating
this Lease, and enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor.
11.2.3 Enter upon the Premises by force if necessary without being
liable for prosecution or any claim for damages therefor, and do whatever Tenant
is
Page 11 of 27
obligated to do under the terms of this Lease, and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus affecting
compliance with Tenant's obligations under this Lease, and Tenant further agrees
that Landlord shall not be liable for any damages resulting to the Tenant from
such action.
11.2.4 The remedies stated herein for an Event of Default by Tenant
are not exclusive, and Landlord shall have the right to pursue any one or more
of the remedies stated above or any other remedy provided by law or in equity.
Forbearance by Landlord to enforce one or more of the remedies herein provided
upon an Event of Default shall not be deemed or construed to constitute a waiver
of such default.
11.3 Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises, whether by agreement or by operation of law, it being understood that
such surrender can be effected only by the written agreement of Landlord and
Tenant.
11.4 In the event Tenant fails or refuses to make timely and punctual
payment of any Rent, additional Rent or other sums payable or charges due under
this Lease as and when the same shall become due and payable, or in the event of
any breach of any of the terms or provisions of this Lease by Tenant, in
addition to the other remedies available to Landlord, Landlord at their option,
shall be entitled, and is hereby authorized, without any notice to Tenant
whatsoever, to enter into and upon the Premises by any peaceable means, and to
change, alter and/or modify the door locks on all entry doors of the Premises,
permanently excluding Tenant and its officers, principals, agents, employees,
representatives and invitees therefrom. In the event that Landlord has either
permanently repossessed the Premises as aforesaid or has elected to terminate
this Lease by reason of Tenant's default, Landlord shall not thereafter be
obligated to provide Tenant with a key to the Premises at any time, regardless
of any amounts subsequently paid by Tenant; provided, however, that in any such
instance, during Landlord's normal business hours and at the convenience of
Landlord, and upon receipt of a written request from Tenant accompanied by such
written waivers and releases as Landlord may require, Landlord may, at their
option, (a) escort Tenant or its authorized representative to the Premises to
retrieve any personal belongings or other property of Tenant not subject to the
Landlord's lien or security interest described herein, or (b) obtain a list from
Tenant of such personal property Tenant intends to remove, whereupon Landlord
shall remove such property and make it available to Tenant at a time and place
designated by Landlord. In the event Landlord elects option (b) above, Tenant
shall pay, in cash and in advance, all costs and expenses estimated by Landlord
to be incurred in removing such property and making it available to Tenant,
including, but not limited to, all moving and/or storage charges theretofore
incurred by Landlord with respect to such property. If Landlord elects to
exclude Tenant from the Premises without permanently repossessing the Premises
or terminating this Lease pursuant to the foregoing, then Landlord shall not be
obligated to permit Tenant entry into the Premises or provide Tenant with a key
to re-enter the Premises until such time as all delinquent Rent and other sums,
including interest and late charges thereon, if any, due under this Lease have
been fully paid, and all other defaults,
Page 12 of 27
if any, have been completely and timely cured to Landlord's satisfaction (if
such cure occurs prior to actual permanent repossession or termination), and
Landlord has been given assurances by Tenant reasonably satisfactory to Landlord
evidencing Tenant's ability to satisfy its remaining obligations under this
Lease. Landlord's remedies hereunder shall be in addition to, and not in lieu
of, any of its other remedies set forth in this Lease, or otherwise available to
Landlord at law or in equity. It is intended that this paragraph, and the
provisions herein contained, shall supersede and be paramount to any conflicting
provisions of the Texas Property Code, as well as any successor statute
governing the rights of landlords to change locks of commercial tenants.
11.5 In the event Landlord elects to terminate this Lease by reason of an
Event of Default, then notwithstanding such termination, Tenant shall be liable
for and shall pay to Landlord, at the address specified for notice to Landlord
herein the sum of all Rent and other indebtedness accrued to date of such
termination, plus an amount equal to the difference between (a) the total Rent
due plus any other payment required to be made by Tenant hereunder for the
remaining portion of the Lease Term (had such Term not been terminated by
Landlord prior to the date of expiration stated in Article 2), and (b) the then
present value of the then fair rental value of the Premises for such period.
11.6 In the event that Landlord elects to repossess the Premises without
terminat ing this Lease, then Tenant shall be liable for and shall pay to
Landlord at the address specified for notice to Landlord herein all Rent and
other indebtedness accrued to the date of such repossession, plus Rent required
to be paid by Tenant to Landlord during the remainder of the Lease Term until
the date of expiration of the Term as stated in Article 2 hereof, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during said period (after deducting expenses incurred by Landlord as provided in
this Article 11 hereof). In no event shall Tenant be entitled to any excess of
any rental obtained by reletting over and above the rental herein reserved.
Actions to collect amounts due by Tenant to Landlord as provided in this Article
11 may be brought from time to time, on one or more occasions, without the
necessity of Landlord's waiting until expiration of the Lease Term.
11.7 In case of any Event of Default or breach by Tenant, Tenant shall also
be liable for and shall pay to Landlord, at the address specified for notice to
Landlord herein, in addition to any sum provided to be paid above, broker's fees
incurred by Landlord in connection with reletting the whole or any part of the
Premises; the costs of removing and storing Tenant's or other occupant's
property; the costs of repairing, altering, remodeling or otherwise putting the
Premises into condition acceptable to a new tenant or tenants, and all
reasonable expenses incurred by Landlord in enforcing or defending Landlord's
rights and/or remedies hereunder including reasonable attorneys' fees incurred
by Landlord.
11.8 In the event of termination or repossession of the Premises for an
Event of Default, Landlord shall not have any obligation to relet or attempt to
relet the Premises, or any portion thereof, or to collect rental after
reletting; and in the event of reletting, Landlord
Page 13 of 27
may relet the whole or any portion of the Premises for any period, for any
rental, to any tenant, and for any use and purpose, which Landlord may desire.
11.9 If Tenant should fail to make any payment or cure any default
hereunder within the time expressly permitted herein, Landlord, without being
under any obligation to do so and without thereby waiving such default, may make
such payment and/or remedy such other default for the account of Tenant (and
enter the Premises for such purpose), and thereupon Tenant shall be obligated
to, and hereby agrees, to pay Landlord, upon demand, all costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Landlord in
taking such remedial action.
11.10 In the event of any default by Landlord, Tenant's exclusive
remedy shall be an action for damages (Tenant hereby waiving the benefit of any
laws granting it a lien upon the property of Landlord, and/or upon Rent due
Landlord), but prior to any such action Tenant will give Landlord written notice
specifying such default with particularity, and Landlord shall thereupon have
thirty (30) days in which to cure any default; provided, however, Landlord shall
not be considered in default under this Lease if such curative action cannot be
completed within such thirty (30) day period, and Landlord has commenced efforts
to cure within such period and is diligently pursuing the cure of such default.
All obligations of Landlord hereunder will be construed as covenants, not
conditions; and all such obligations will be binding upon Landlord only during
the period of its ownership of the Premises, and not thereafter, provided that
in the event of a transfer (excepting an involuntary transfer such as a
foreclosure) such transferee of Landlord's ownership interest has assumed all of
Landlord's obligations hereunder and that notice has been given to Tenant
pursuant to Section 10.3.
11.11 The term "Landlord" shall mean only the owner, for the time
being, of the Premises, and in the event of the transfer by such owner of its
interest in the Premises, pursuant to Section 10.3 of this Lease, such owner
shall thereupon be released and discharged from all covenants and obligations of
the Landlord thereafter accruing.
11.12 Notwithstanding any other provisions hereof, Landlord shall not
have any personal liability hereunder, provided that in the event of a transfer
(excepting an involuntary transfer such as a foreclosure) such transferee of
Landlord's ownership interest has assumed all of Landlord's obligations
hereunder and that notice has been given to Tenant pursuant to Section 10.3. In
the event of any breach or default by Landlord in any term or provision of this
Lease, Tenant agrees to look solely to the equity or interest then owned by
Landlord in the land and improvements which constitute the Premises; however, in
no event shall any deficiency judgment or any money judgment of any kind be
sought or obtained against Landlord, or any of its partners.
11.13 In the event that Landlord shall have taken possession of the
Premises pursuant to the authority herein granted, then Landlord shall have the
right to keep in place and use all the furniture, fixtures and equipment at the
Premises, including that which is owned by or leased to Tenant at all times
prior to any foreclosure thereon by Landlord or
Page 14 of 27
repossession thereof by a lessor thereof or third party having a lien thereon.
Landlord shall also have the right to remove from the Premises (without the
necessity of obtaining a distress warrant, writ of sequestration or other legal
process) all or any portion of such furniture, fixtures, equipment and other
property located thereon and place same in storage at any premises within the
county in which the Premises is located; and in such event, Tenant shall be
liable to Landlord for all costs incurred by Landlord in connection with such
removal and storage. Landlord shall also have the right to relinquish possession
of all or any portion of such furniture, fixtures, equipment and other property
to any person ("Claimant") claiming to be entitled to possession thereof who
presents to Landlord a copy of any instrument represented to Landlord by
Claimant to have been executed by Tenant (or any predecessor of Tenant) granting
Claimant the right to take possession of such furniture, fixtures, equipment or
other property, without the necessity on the part of Landlord to inquire into
the authenticity of said instrument's copy or Tenant's or Tenant's predecessor's
signature thereon and without the necessity of Landlord's making any nature of
investigation or inquiring as to the validity of the factual or legal basis upon
which Claimant purports to act; and, Tenant agrees to indemnify and hold
Landlord harmless from all cost, expense, loss, damage and liability incident to
Landlord's relinquishment of possession of all or any portion of such furniture,
fixtures, equipment or other property to Claimant. The rights of Landlord herein
stated shall be in addition to any and all other rights which Landlord has or
may hereafter have at law or in equity; and Tenant stipulates and agrees that
the rights herein granted Landlord are commercially reasonable.
11.14 Late Charges. Tenant hereby acknowledges that late payment by
------------
Tenant to Landlord of Rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of Rent or any other sum due from Tenant shall
not be timely received by Landlord or Landlord's designee, then Tenant shall pay
to Landlord a late charge which shall be additional Rent hereunder equal to ten
percent (10%) of such overdue amount. All parties hereby agree that such late
charge represents a fair and reasonable estimate of the cost Landlord will incur
by reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
11.15 LANDLORDS 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 GOODS,
WARES, EQUIPMENT, FIXTURES, FURNITURE, AND OTHER PERSONAL PROPERTY OF TENANT
SITUATED IN OR UPON THE PREMISES, TOGETHER WITH THE PROCEEDS FROM THE SALE OR
LEASE THEREOF, 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
Page 15 of 27
AND DISCHARGED. UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, LANDLORD MAY, IN
ADDITION TO ANY OTHER REMEDIES PROVIDED HEREIN OR BY LAW, ENTER UPON THE
PREMISES AND TAKE POSSESSION OF ANY AND ALL GOODS, WARES, EQUIPMENT, FIXTURES,
AND OTHER PERSONAL PROPERTY OF TENANT SITUATED ON THE PREMISES WITHOUT LIABILITY
OF 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 IN THE 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 ▇▇▇▇▇▇ 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
WITHIN THIS PARAGRAPH, LESS ANY AND ALL EXPENSES CONNECTED WITH THE TAKING OF
POSSESSION, HOLDING, AND SELLING OF 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 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. NOTWITHSTANDING THE FOREGOING,
THIS LANDLORD'S LIEN SHALL BE SUBORDINATE TO ANY LIENS PROVIDED BY TENANT OR A-G
GEOPHYSICAL PRODUCTS, INC. TO LANDLORD RESPECTING THE SECURITY DOCUMENTS
EXECUTED OF EVEN DATE HEREWITH BY THE PARTIES IN CONNECTION WITH THE PURCHASE BY
TENANT OF THE BUSINESS OF A-G GEOPHYSICAL PRODUCTS, INC., OR FOR ANY LIEN FOR
THE PURCHASE BY TENANT OF ANY FURNITURE, EQUIPMENT, INVENTORY OR PERSONAL
PROPERTY.
12. CONDEMNATION
-----------------
12.1 If the Premises or any portion thereof are taken under the power of
eminent domain or sold by Landlord under the threat of the exercise of said
power (all of which is
Page 16 of 27
herein referred to as "condemnation"), this Lease shall terminate as to the part
so taken as of the date the condemning authority takes title or possession,
whichever occurs first. If more than twenty-five percent (25%) of the floor area
of any buildings which are part of the Premises or more than twenty-five percent
(25%) of the land area of the Premises not covered with buildings is taken by
condemnation, either Landlord or Tenant may terminate this Lease as of the date
of the condemning authority takes possession by notice in writing of such
election within twenty (20) days after Landlord shall have notified Tenant of
the taking or, in the absence of such notice, then within twenty (20) days after
the condemning authority shall have taken possession.
12.2 If this Lease is not terminated by either Landlord or Tenant, then it
shall remain in full force and effect as to the portion of the Premises
remaining, provided the Rent shall be reduced in proportion to the floor area of
the buildings taken within the Premises as bears to the total floor area of all
buildings located on the Premises. In the event this Lease is not so terminated,
then Landlord agrees, at Landlord's sole cost, to as soon as reasonably possible
restore the Premises to a complete unit of like quality and character as existed
prior to the condemnation. All awards for the taking of any part of the Premises
or any payment made under the threat of the exercise of power of eminent domain
shall be the property of Landlord, whether made as compensation for diminution
of value of the leasehold or for the taking of the fee or as severance damages;
provided, however, that Tenant shall be entitled to any award for loss of or
damage to Tenant's trade fixtures and removable personal property.
Notwithstanding anything contained herein to the contrary, this Article 12 shall
be subject to the terms of any and all mortgages on the Premises.
13. GENERAL PROVISIONS
-----------------------
13.1 Estoppel Certificate.
--------------------
13.1.1 Tenant shall at any time upon not less than ten (10) days'
prior written notice from Landlord execute, acknowledge, and deliver to Landlord
a statement in writing (a) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the Rent, security deposit, and other charges are paid in advance,
if any, and (b) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, or specifying such defaults,
if any, which are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Premises.
13.1.2 Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (a) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) that there
are no uncured defaults in Landlord's performance, and (c) that not more than
one (1) month's Rent has been paid in advance.
Page 17 of 27
13.1.3 If Landlord desires to finance or refinance the Premises, or
any part thereof, Tenant hereby agrees to deliver to any lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such lender. Such statements shall include the past three (3) years' financial
statements of Tenant. All such financial statements shall be received by
Landlord in confidence and shall be used only for the purposes herein set forth.
Landlord shall give Tenant at least thirty (30) days prior written notice of
their intent to refinance the debt on the Premises. Further, Landlord agrees
that they will not place any additional debt on the Premises or increase the
outstanding balance of any existing debt without the prior written consent of
the Tenant, which consent shall not be unreasonably withheld.
13.2 Landlord's Interests. In the event of any transfer of such title or
--------------------
interest, Landlord herein named (and in case of any subsequent transfers the
then grantor) shall be relieved from and after the date of such transfer of all
liability as respects Landlord's obligations thereafter to be performed provided
that any funds in the hands of Landlord or the then grantor at the time of such
transfer, in which Tenant has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Landlord shall,
subject as aforesaid, be binding on Landlord's successors and assigns, only
during their respective periods of ownerships. The foregoing provisions of this
Section 13.2 shall apply only to transfers made in accordance with the
provisions of Section 10.3 hereof.
13.3 Severability. The invalidity of any provision of this Lease, as
------------
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
13.4 Interest on Past-Due Obligations. Except as expressly herein provided,
--------------------------------
any amount due to Landlord not paid when due shall bear interest at ten percent
(10%) per annum from the date due. Payment of such interest shall not excuse or
cure any default by Tenant under this Lease.
13.5 Time of Essence. Time is of the essence.
---------------
13.6 Captions. Article and paragraph captions are not a part hereof, but
--------
are for convenience only.
13.7 Incorporation of Prior Agreements; Amendments. This Lease contains all
---------------------------------------------
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification.
13.8 Waivers. No waiver by Landlord of any provision hereof shall be deemed
-------
a waiver of any other provision hereof or of any matter subsequent breach by
Tenant of the same or any other provision. Landlord's consent to or approval of
any act shall not be deemed to rendered unnecessary the obtaining of Landlord's
consent to or approval of any
Page 18 of 27
subsequent act by Tenant. The acceptance of Rent hereunder by Landlord shall not
be a waiver of any preceding breach by Tenant of any provision hereof, other
than the failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent.
13.9 Recording. Tenant shall not record this Lease. Any such recordation
---------
shall be a breach under this Lease.
13.10 Holding Over. If Tenant should remain in possession of the
------------
Premises after the expiration or termination of the Term of this Lease, without
the execution by Landlord and Tenant of a new Lease, then Tenant shall be deemed
to be occupying the Premises as a tenant-at-sufferance subject to all the
covenants and obligations of this Lease and at a daily rental of two (2) times
the per-day rental provided hereunder (and which is applicable for the month
preceding the month in which the date of expiration or termination occurs),
computed on the basis of a thirty (30) day month.
13.11 Cumulative Remedies. No remedy or election hereunder shall be
-------------------
deemed exclusive but shall wherever possible be cumulative with all other
remedies at law or in equity.
13.12 Covenants and Conditions. Each provision of this Lease
------------------------
performable by Tenant shall be deemed both a covenant and a condition.
13.13 Binding Effect; Choice of Law. Subject to any provisions hereof
-----------------------------
restricting assignment or subletting by Tenant and subject to provisions of
Article 13.2, this Lease shall bind the parties, their heirs, personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of Texas.
13.14 Subordination.
-------------
13.14.1 This Lease, at Landlord's option, shall be subordinate to
any mortgage, deed of trust, or any other hypothecation for security now and
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof. Notwithstanding such subordination,
Tenant's right to quiet possession of the Premises shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay the Rent and observe
and perform all of the provisions of this Lease unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee or trustee shall elect to
have this Lease prior to the lien of its mortgage or deed of trust, and shall
have given written notice thereof to Tenant, this Lease shall be deemed prior to
such mortgage or deed of trust, whether this Lease is dated prior or subsequent
to the date of said mortgage or deed of trust or the date of recording thereof.
13.14.2 Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of any
mortgage or deed of trust,
Page 19 of 27
as the case may be, and failing to do so within ten (10) days after written
demand does hereby make, constitute, and irrevocably appoint Landlord as Tenant
it's attorney-in-fact and in Tenant's name, place, and stead to do so.
13.15 Attorney's Fees. If either party named herein brings an action to
---------------
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the Court.
13.16 Venue. Venue for all purposes shall be ▇▇▇▇▇▇ County, Texas.
-----
13.17 Landlord's Access. Landlord and Landlord's agents shall have the
-----------------
right to enter the Premises during business hours for the purpose of inspecting
the same, showing the same to prospective purchasers or lenders, and making such
alterations, repairs, improvements, or additions to the Premises, or to the
building of which they are a part, as Landlord may deem necessary or desirable.
Landlord may, at any time, place on or about the Premises any ordinary "For
Sale" signs; and Landlord may, at any time, during the last one hundred twenty
(120) days of the Term hereof place on or about the Premises any ordinary "For
Sale or Lease" signs, all without rebate of Rent or liability to Tenant.
13.18 Auctions. Tenant shall not place any auction sign upon the
--------
Premises or conduct any auction thereon without Landlord's prior written
consent.
13.19 Merger. The voluntary or other surrender of this Lease by Tenant,
------
or a mutual cancellation thereof, shall not work a merger, and shall, at the
option of Landlord, terminate all or any existing subtenancies or may, at the
option of Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
13.20 Corporate Authority. If Tenant is a corporation, each individual
-------------------
executing this Lease on behalf of said corporation represents and warrants that
he/she is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with duly adopted resolution of the Board of Directors
and said corporation or in accordance with a duly adopted resolution of the
Board of Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
13.21 Landlord's Liability. Tenant agrees to look solely to Landlord's
--------------------
estate and interest in the land and building (or the [ground] lease of the
building, if applicable) and the Premises for the satisfaction of any right or
remedy of Tenant for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord, in the event of any liability by
Landlord, and no other property or assets of Landlord (or the partners or
members thereof, if Landlord is other than an individual or corporation) shall
be subject to levy, execution, or attachment or other enforcement procedure for
the satisfaction of Tenant's remedies under or with respect to this Lease, the
relationship of Landlord and Tenant hereunder, or Tenant's use and occupancy of
the Premises or the
Page 20 of 27
building, or any other liability of Landlord to Tenant. Upon notification to
Tenant of a transfer of this Lease by Landlord, the Landlord shall be and hereby
is entirely freed and relieved of any and all covenants, obligations, and
liabilities of Landlord hereunder, and it shall be deemed and construed as a
covenant running with the land without further agreement between the parties or
their successors in interest or between the parties or any transferee of title
to the land and building (or any applicable ground lease or any lease of the
building) that the transferee or the lessee has assumed and agreed to carry out
any and all such covenants, obligations, and liabilities of Landlord hereunder.
The limitations of liability set forth in this Section 13.21 shall apply only if
they transfer Landlord's interest is made in accordance with the provisions of
Section 10.3 hereof.
13.22 Agency or Partnership-Gender. Nothing herein contained shall be
----------------------------
deemed or construed by the parties hereto, nor by any third party, as creating
the relationship of principal and agent or of partnership or of joint venture
between parties hereto, it being understood and agreed that neither the method
of computation of rental, nor any other provisions contained herein, nor any
acts of the parties hereto, shall be deemed to create any relationship between
the parties hereto other than the relationship of Landlord and Tenant. Whenever
herein the singular number is used, the same shall include the plural, and words
of any gender shall include each other gender.
13.23 Notice To Mortgagee. At any time when there is outstanding a
-------------------
mortgage, deed of trust or similar security instrument covering Landlord's
interest in the Premises, Tenant may not exercise any remedies for default by
Landlord hereunder unless and until the holder of the indebtedness secured by
such mortgage, deed of trust or similar security instrument shall have received
written notice of such default and a reasonable time [which shall not be less
than sixty (60) days] for curing such default shall thereafter have elapsed.
Landlord agrees that should the Landlord be in default under any such mortgage
and the Tenant cures any such default by making payments directly to such
mortgagee, any amounts paid by the Tenant to such mortgagee can be offset
against all amounts owed the Tenant by the Landlord hereunder.
13.24 Quiet Enjoyment. Landlord agrees that if Tenant shall perform
---------------
all of the covenants and agreements herein required to be performed by Tenant,
Tenant shall, subject to the terms of this Lease, have the peaceable and quiet
enjoyment and possession of the Premises.
13.25 Final Agreement. This Lease contains the entire agreement
---------------
between the parties, and no agreement shall be effective to change, modify, or
terminate this Lease, in whole or in part, unless such agreement is in writing
and duly signed by the party against whom enforcement of such change,
modification or termination is sought.
13.26 Exhibits. All exhibits attached hereto are incorporated herein
--------
by reference and made a part of this Lease for all purposes.
Page 21 of 27
13.27 Brokers. The parties hereto acknowledge that neither party hereto
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were represented by any real estate brokers, and that no commissions are due to
any brokers whatsoever respecting this Lease.
13.28 Notices. Whenever under this Lease provision is made for any
-------
demand, notice, or declaration of any kind or where it is deemed desirable or
necessary by either party to give or serve any such notice, demand, or
declaration to the other party, it shall be in writing and served by messenger
or sent by United States mail, certified return receipt, postage prepaid,
addressed at the addresses set forth hereinbelow:
To Landlord at: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 409.826.2950
with copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Weycer, Kaplan, Pulaski & ▇▇▇▇▇, P.C.
Eleven Greenway Plaza
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 713.961.5341
To Tenant at:: Four ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 203.854.9601
with copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, Rockwood & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Post Office Box 5116
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 203.226.8025
14. DTPA WAIVER
----------------
14.1 As a material consideration for Landlord's entering into this Lease,
Tenant acknowledges and agrees as follows:
TENANT HEREBY WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES
CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ., TEXAS BUSINESS &
COMMERCE CODE, A LAW THAT GIVES
Page 22 of 27
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN
ATTORNEY OF TENANT'S OWN SELECTION, TENANT VOLUNTARILY CONSENTS TO
THIS WAIVER.
15. ENVIRONMENTAL MATTERS
--------------------------
15.1 From and after the commencement of the Term of this Lease, Tenant
shall prevent the presence, use, generation, release, discharge, storage,
disposal, or transportation of any Hazardous Materials on, under, in, above, to,
or from the Premises other than in strict compliance with all applicable
federal, state, and local laws, regulations, and order. For the purposes of this
section, "Hazardous Materials" shall refer to any substances, materials, and
wastes that are or become regulated as hazardous or toxic substances under any
applicable local, state, or federal law, regulation, or order. For occurrences
or events which occur from and after the commencement of the Term of this Lease,
Tenant shall indemnify, defend, and hold Landlord harmless from and against:
15.1.1 Any loss, cost, expense, claim, or liability arising out of
any investigation, monitoring, clean-up, containment, removal, storage, or
restoration work ("Remedial Work") required by or incurred by Landlord or any
nongovernmental entity or person in a reasonable belief that such work is
required by any applicable federal, state, or local law, governmental agency, or
political subdivision; and
15.1.2 Any claims of third parties for loss, injury expense, or
damage arising out of the presence, release, or discharge of any Hazardous
Materials on, under, in, above, to, or from the Premises. In the event any
Remedial Work is so required under any applicable federal, state, or local law,
Tenant shall perform or cause to be performed the Remedial Work in compliance
with such law, regulation, or order. All Remedial Work shall be performed by one
or more contractors under the supervision of a consulting engineer, each
selected by Tenant and approved in advance in writing by Landlord. In the event
Tenant shall fail to commence the Remedial Work in a timely fashion or fail to
prosecute diligently the Remedial Work to completion, Landlord may, but shall
not be required to, cause the Remedial Work to be performed, subject fully to
the indemnification provisions of this paragraph. This Article shall survive the
termination of said Lease.
16. OPTION TO PURCHASE
-----------------------
16.1 Option to Purchase.
------------------
16.1 Landlord hereby gives Tenant the exclusive option ("Option") to
purchase the Premises at any time during the Term of this Lease, subject to the
terms and conditions hereinafter set forth, for a purchase price of One Million
and No/100 Dollars ($1,000,000.00) in cash ("Purchase Price") to be paid at the
Closing (hereinafter defined) in the event Option is exercised by the Tenant.
Tenant must exercise its Option to purchase the Premises by providing Landlord
with written notice of such exercise during
Page 23 of 27
the Term of this Lease. Should the Tenant fail to exercise its Option for the
purchase of the Premises within the Term of the Lease, then such Option shall be
considered null and void.
16.2 Title Approval. Landlord has delivered to Tenant on the date of
--------------
this Lease a Commitment for Title Insurance dated March 1, 1999 issued by
▇▇▇▇▇▇▇ Title Company, under G.F. Number 99110602 (the "Commitment") and survey
of the Premises updated as of March 10, 1999 and prepared by ▇.▇. ▇▇▇▇
Surveying, Inc. (the "Survey"). At this time, Tenant has no objections to the
Commitment and Survey referred to in the preceding sentence, and makes no
objection thereto; however, if Tenant exercises its Option to purchase, Landlord
shall cause Tenant to be furnished with an updated Commitment within ten (10)
days after Landlord receives Tenant's exercise of the Option, and Tenant may
within the same ten (10) day period, elect to obtain an updated Survey of the
Premises at its sole cost and expense; and in the event the updated Commitment
or the Survey of the Premises shall reveal any material changes from the
Commitment and/or the Survey delivered as provided for in the first sentence of
this Article 16.2, then Tenant shall have ten (10) days after receipt to make
written objections thereto to Landlord at the address provided herein. Landlord
shall, upon receipt of such objections, have a period of thirty (30) days (from
receipt) within which to cure such objections, and Landlord agrees to utilize
reasonable efforts and due diligence to cure the same, provided; however, that
Landlord shall in no event be required to spend any money or to commence
litigation in order to cure Tenant's objections, except Landlord shall be
obligated to release any additional monetary exceptions created by landlord,
judgment liens and tax liens. If Tenant's objections are not satisfied within
such thirty (30) day period, then Tenant may (i) terminate the exercise of the
Option and at that point neither Landlord nor Tenant shall have any further
rights or obligations with respect to the Option to purchase granted herein
(however, the Lease shall continue in effect if within the Term hereof), or (ii)
waive the unsatisfied objections and close the transaction. In the event Tenant
fails to notify Landlord, in writing, of its election from (i) or (ii) in the
preceding sentence, Tenant shall be deemed to have elected to waive the
unsatisfied objections and shall proceed to the Closing (hereinafter defined) of
the purchase of the Premises as otherwise provided herein.
16.3 Closing. The Closing of the sale pursuant to Tenant's exercise
-------
of the Option (the "Closing") shall take place at a Title Company subject to the
following terms:
16.3.1 The Closing shall occur at a time mutually acceptable
to Landlord and Tenant the later to occur of (i) within forty-five (45) days
after Landlord's receipt of Tenant's written exercise of the Option, or (ii)
when Landlord has removed or released any monetary exceptions created by
Landlord, judgment liens and tax liens.
16.3.2 At the Closing, Landlord shall deliver to Tenant, at
Landlord's sole cost and expense, the following:
Page 24 of 27
16.3.2 (a) A duly executed and acknowledged Special Warranty
Deed conveying good and indefeasible title in fee simple to all of the Premises,
free and clear of any and all liens, encumbrances, conditions, easements,
reservations and restrictions except those noted in the Schedule B of the
Commitment. The form of such Special Warranty Deed shall be as specified in
Exhibit "B," attached hereto and made a part hereof.
16.3.2 (b) An Owner's Policy of Title Insurance (the "Title
Policy") issued by ▇▇▇▇▇▇▇ Title Company in the full amount of the Purchase
Price, dated as of Closing, insuring Tenant's fee simple title to the Premises
to be good and indefeasible subject only to those title exceptions permitted
herein, or as may be approved or waived by Tenant in writing, and the standard
printed exceptions contained in the usual form of the Title Policy, provided,
however:
16.3.2 (b)(i) the exception as to area and
boundaries shall be deleted except for "any shortages in area" and if deleted,
such deletion shall be an expense of Tenant;
16.3.2 (b)(ii) the exception as to restrictive
covenants shall be endorsed "None of Record," unless any existing restrictive
covenants are approved (or objection thereto is waived) by Tenant;
16.3.2 (b)(iii) the exception as to taxes shall be
limited to taxes for the current year and subsequent years, and subsequent
assessments for prior years due to changes in land usage or ownership;
16.3.2 (c) A ▇▇▇▇ of Sale containing special warranties to
title, conveying title free and clear of all liens, to any personal property
owned by Landlord and specified herein and an assignment of leases, prepaid
rents, and security deposits, and to the extent assignable, licenses and
permits, maintenance, management or other contracts, warranties or guaranties,
duly executed by Landlord which pertain to the Premises;
16.3.2 (d) Furnish evidence of its capacity and authority for
the closing of this transaction;
16.3.2 (e) Execute all other necessary documents to close this
transaction.
16.3.3 At the Closing, Tenant shall perform the following:
16.3.3 (a) Pay the Purchase Price in cash;
16.3.3 (b) Furnish evidence of its capacity and
authority for the closing of this transaction; and
Page 25 of 27
16.3.3 (c) Execution of all other necessary documents
to close this transaction.
16.4 Prorations. Assessments, current taxes, and any rents, and
----------
maintenance fees shall be prorated at the date of Closing. If ad valorem taxes
of the year in which the sale is closed are not available on the Closing date,
proration of taxes shall be made on the basis of taxes assessed in the previous
year, with a subsequent cash adjustment of such proration to be made between
Landlord and Tenant, if necessary, when actual tax figures are available. Any
special assessments applicable to the Premises for improvements previously made
to benefit the Premises shall be paid by Landlord. Landlord shall pay to Tenant
at Closing in cash the amount of any deposits paid to Landlord by tenants of the
Premises, including, but not limited to, all rental security, cleaning, utility,
key, damages, and other deposits. All other income and ordinary operating
expenses of the Premises, including, but not limited to, public utility charges,
maintenance, management and other normal operating charges shall be prorated as
of the date of Closing.
16.5 Closing Costs
-------------
16.5.1 Landlord's Expenses. All costs of releasing existing
-------------------
loans and recording the releases; base premium for Owner's Title Policy; survey;
tax statements 1/2 of any escrow fee; preparation of Deed; other expenses
stipulated to be paid by Landlord under other provisions of this Lease.
16.5.2 Tenant's Expenses. All expenses incident to any loan
-----------------
obtained by tenant including procurement fees, preparation of Note, Deed of
Trust, and other loan documents, recording fees, Mortgagee's Title Policy,
prepayable interest, credit reports; 1/2 of any escrow fee; copies of
restrictions, easements, reservations, or conditions affecting the Premises; and
expenses stipulated to be paid by Tenant under other provisions of this Lease.
16.6 Existing Mortgage. In the event Tenant desires to assume
-----------------
Landlord's existing mortgage on the Premises, Tenant shall have the right to do
so and Landlord shall utilize their best efforts in order to obtain approval of
said assumption from any existing lending institution holding a lien on the
Premises. In the event of an assumption, the cash portion of the Purchase Price
to be paid to the Landlord by the Tenant at Closing shall be the difference
between the Purchase Price and the amount of the assumed loan at the time of
Closing. In the event of such assumption, Tenant shall execute a deed of trust
to secure such assumption.
16.7 Memorandum. Contemporaneously with the date hereof, Landlord and
----------
Tenant shall enter into a Memorandum of Option in the form attached hereto and
made a part hereof as Exhibit "C," which shall be the only document to be filed
of record affecting this Lease.
Page 26 of 27
17. CROSS DEFAULT
------------------
17. Cross Default. Should Tenant be in default under the promissory note,
-------------
guaranty, security agreement, collateral pledge or any other documentation
executed by the Tenant or A-G Geophysical Products, Inc. of even date herewith
to the Landlord, such default shall likewise constitute an Event of Default
hereunder and the Landlord shall have entitlement to all remedies specified in
Article 11 hereof.
The parties hereto have executed this Lease on the respective dates
specified immediately adjacent to their respective signatures.
LANDLORD
--------
Date: April 20, 1999 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Date: April 20, 1999 /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
TENANT:
------
Bolt Technology Corporation,
a Connecticut corporation
Date: April 20, 1999 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Title: Chairman and President
-------------------------
Page 27 of 27