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EXHIBIT 10(n)
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▇▇▇▇▇▇▇▇ ▇▇▇▇ Company
COMMERCIAL LEASE AGREEMENT
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POST AND PADDOCK ASSOCIATES
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Lessor
AND
CRAFTMADE INTERNATIONAL, INC.
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Lessee
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STANDARD INDUSTRIAL LEASE AGREEMENT 118,843 square feet
▇▇▇▇▇▇▇▇ ▇▇▇▇ COMPANY ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Code #220340-07
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by and between Post and Paddock
Associates, A Texas Joint Venture hereinafter referred to as "Lessor", and
Craftmade International, Inc. hereinafter referred to as "Lessee";
WITNESSETH:
1. PREMISES AND TERM. In consideration of the mutual obligations of Lessor
and Lessee set forth herein, Lessor leases to Lessee, and Lessee hereby takes
from Lessor the Premises situated within the County of Tarrant, State of Texas,
more particularly described on EXHIBIT "A" attached hereto and incorporated
herein by reference, (the "Premises"), together with all rights, privileges,
easements, appurtenances, and amenities belonging to or in any way pertaining to
the Premises, to have and to hold, subject to the terms, covenants and
conditions in this Lease. The term of this Lease shall commence on the
commencement date hereinafter set forth and shall end on the last day of the
month that is sixty (60) months after the commencement date.
A. EXISTING BUILDING. If no improvements are to be constructed to the
Premises, the commencement date shall be July 1, 1990. Lessee acknowledges that
(i) it has inspected and accepts the Premises, (ii) the buildings and
improvements comprising the same are suitable for the purpose for which the
Premises are leased, (iii) the Premises are in good and satisfactory condition,
and (iv) no representations as to the repair of the Premises, nor promises to
alter, remodel or improve the Premises have been made by Lessor (unless
otherwise expressly set forth in this Lease).
B. BUILDING TO BE CONSTRUCTED OR SHELL SPACE. If the Premises or part
thereof are to be constructed, the commencement date shall be deemed to be the
date upon which the Premises and other improvements to be erected in accordance
with the plans and specifications described on Exhibit "B" attached hereto and
incorporated herein by reference (the "Plans") have been substantially
completed. As used herein, the term "substantially completed" shall mean, that
in the opinion of the architect or space planner that prepared the Plans, such
improvements have been completed in accordance with the Plans and the Premises
are in good and satisfactory condition, subject only to completion of minor
punch list items. As soon as such improvements have been substantially
completed, Lessor shall notify Lessee in writing that the commencement date has
occurred. Within ten (10) days thereafter, Lessee shall submit to Lessor in
writing a punch list of items needing completion or correction. Lessor shall use
its best efforts to complete such items within thirty (30) days after the
receipt of such notice. In the event Lessee, its employees, agents or
contractors cause construction of such improvements to be delayed, the
commencement date shall be deemed to be the date that, in the opinion of the
architect or space planner that prepared the Plans, substantial completion would
have occurred if such delays had not taken place.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.
A. Lessee agrees to pay to Lessor rent for the Premises, in advance, without
demand, deduction or set off, at the rate of Twenty-nine Thousand Seven Hundred
Ten & 75/100 Dollars ($29,710.75) per month during the term hereof. One such
monthly installment, plus the other monthly charges set forth in Paragraph 2C
below shall be due and payable on the date hereof and a like monthly installment
shall be due and payable on or before the first day of each calendar month
succeeding the commencement date, except that all payments due hereunder for any
fractional calendar month shall be prorated.
B. In addition, Lessee agrees to deposit with Lessor on the date hereof the
sum of Thirty-five Thousand One Hundred Fifty-seven and 74/100 Dollars
($35,157.74), which shall be held by Lessor, without obligation for interest, as
security for the performance of Lessee's obligations under this lease, it being
expressly understood and agreed that this deposit is not an advance rental
deposit or a measure of Lessor's damages in case of Lessee's default. Upon each
occurrence of an event of default, Lessor may use all or part of the deposit to
pay past due rent or other payments due Lessor under this Lease, and the cost of
any other damage, injury, expense or liability caused by such event of default
without prejudice to any other remedy provided herein or provided by law. On
demand, Lessee shall pay Lessor the amount that will restore the security
deposit to its original amount. The security deposit shall be deemed the
property of Lessor, but any remaining balance of such deposit shall be returned
by Lessor to Lessee when Lessee's obligations under this Lease have been
fulfilled.
C. Lessee agrees to pay its proportionate share (as defined in Paragraph 22B
below) of (i) Taxes (hereinafter defined) payable by Lessor pursuant to
paragraph 3A below, (ii) the cost of utilities payable pursuant to paragraph 8
below, (iii) the cost of maintaining insurance pursuant to paragraph 9 below,
(iv) the cost of any common area charges payable by Lessee in accordance with
paragraph 4 below and (v) the cost of security provided to the Premises as set
forth in paragraph 23 below. During each month of the term of this Lease, on the
same day that rent is due hereunder, Lessee shall escrow with Lessor an amount
equal to 1/12 of the estimated annual cost of its proportionate share of such
items. Lessee authorizes Lessor to use the funds deposited with Lessor under
this ▇▇▇▇▇▇▇▇▇ ▇▇ to pay such costs. The initial monthly escrow payments are
based upon the estimated amounts for the year in question, and shall be
increased or decreased annually to reflect the projected actual cost of all such
items. If the Lessee's total escrow payments are less than Lessee's actual
proportionate share of all such items, Lessee shall pay the difference to Lessor
within ten (10) days after demand. If the total escrow payments of Lessee are
more than Lessee's actual proportionate share of all such items, Lessor shall
retain such excess and credit it against Lessee's next annual escrow payments.
The amount of the monthly rental and the initial monthly escrow payments are as
follows:*
(1) Base Rent as set forth in Paragraph 2A............................................................. $29,710.75
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(2) Tax Escrow Payment................................................................................. $ 4,159.51
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(3) Insurance Escrow Payment........................................................................... $ 297.11
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(4) Utility Charge (Electric = $99.04; Water = $99.04)................................................. $ 198.08
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(5) Common Area Charge (Maintenance)................................................................... $ 198.07
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(6) Security Services.................................................................................. $ --
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(7) Other (Landscape).................................................................................. $ 594.22
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Monthly Payment Total.......................................................................... $35,157.74
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* Lessor agrees to allow Lessee to audit said expense charges pursuant to
▇▇▇▇▇▇▇▇▇ ▇▇ at Lessee's Cost.
FORM 87
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3. TAXES.
A. Lessor agrees to pay all taxes, assessments and governmental charges of
any kind and nature (collectively referred to herein as "Taxes") that accrue
against the Premises, and/or the land and/or improvements of which the Premises
are a part. If at any time during the term of this Lease, there shall be levied,
assessed or imposed on Lessor a capital levy or other tax directly on the rents
received therefrom and/or a franchise tax, assessment, levy or charge measured
by or based, in whole or in part, upon such rents from the Premises and/or the
land and improvements of which the Premises are a part, then all such taxes,
assessments, levies or charges, or the part, thereof so measured or based, shall
be deemed to be included within the term "Taxes" for the purposes hereof. The
Lessor shall have the right to employ a tax consulting firm to attempt to assure
a fair tax burden on the building and grounds within the applicable taxing
jurisdiction. Lessee agrees to pay its proportionate share of the cost of such
consultant.
B. Lessee shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Lessor or Lessor's property and (i) Lessor pays the
same or (ii) the assessed value of Lessor's property is increased by inclusion
of such personal property and fixtures and Lessor pays the increased taxes,
then, upon demand Lessee shall pay to Lessor such taxes.
4. LESSOR'S REPAIRS.
A. Lessor, at its own cost and expense, shall maintain the roof, foundation
and the structural soundness of the exterior walls of the building of which the
Premises are a part in good repair, reasonable wear and tear excluded.
Additionally, Lessor agrees to warrant any repair in the Truck Court deemed to
be in excess of normal wear and tear for the 1st year of the primary term of
this Lease. The term "walls" as used herein shall not include windows, glass or
plate glass, doors, special store fronts or office entries. Lessee shall
immediately give Lessor written notice of defect or need for repairs, after
which Lessor shall have reasonable opportunity to repair same or cure such
defect.
▇. ▇▇▇▇▇▇ reserves the right to perform the paving, common area and
landscape replacement and maintenance, exterior painting, common sewage line
plumbing and any other items that are otherwise Lessee's obligations under
Paragraph 5A, in which event, Lessee shall be liable for its proportionate share
of the cost and expense of such repair, replacement, maintenance and other such
items.
C. Lessee agrees to pay its proportionate share of the cost of (i)
maintenance and/or landscaping of any property that is a part of the building
and/or project of which the Premises are a part, (ii) maintenance and/or
landscaping of any property that is maintained or landscaped by any property
owner or community owner association that is named in the restrictive covenants
or deed restrictions to which the Premises are subject, and (iii) operating and
maintaining any property, facilities or services provided for the common use of
Lessee and other lessees of any project or building of which the Premises are a
part.
5. LESSEE'S REPAIRS.
A. Lessee, at its own cost and expense, shall (i) maintain all parts of the
Premises, landscape and grounds surrounding the Premises (except those for which
Lessor is expressly responsible hereunder) in good condition, (ii) promptly make
all necessary repairs and replacements, (iii) keep the parking areas, driveways
and alleys surrounding the Premises in a clean and sanitary condition, and
B. Lessee and its employees, customers and licensees shall have the
exclusive rights to use any parking areas that have been designated for such use
by Lessor in writing, subject to (i) all rules and regulations promulgated by
Lessor and (ii) rights of ingress and egress of other lessees. Lessor shall not
be responsible for enforcing Lessee's parking rights against any third parties.
Lessee agrees not to use more spaces than so provided.
C. Lessee, at its own cost and expense, shall enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
approved by Lessor for servicing all hot water, heating and air conditioning
systems and equipment within the Premises. The service contract must include all
services suggested by the equipment manufacturer in its operations/maintenance
manual and must become effective within thirty (30) days of the date Lessee
takes possession of the Premises.
6. ALTERATIONS. Lessee shall not make any alterations, additions or
improvements to the Premises without the prior written consent of Lessor.
Lessee, at its own cost and expense, may erect such shelves, bins, machinery and
trade fixtures as it desires provided that (a) such items do not alter the basic
character of the Premises or the building and/or improvements of which the
Premises are a part; (b) such items do not overload or damage the same; (c) such
items may be removed without injury to the Premises; and (d) the construction,
erection or installation thereof complies with all applicable governmental laws,
ordinances, regulations and with Lessor's specifications and requirements. All
alterations, additions, improvements and partitions erected by Lessee shall be
and remain the property of Lessee during the term of this Lease. All shelves,
bins, machinery and trade fixtures installed by Lessee shall be removed on or
before the earlier to occur of the date of termination of this Lease or vacating
the Premises, at which time Lessee shall restore the Premises to their original
condition. All alterations, installations, removals and restoration shall be
performed in a good and workmanlike manner so as not to damage or alter the
primary structure or structural qualities of the buildings and other
improvements situated on the Premises or of which the Premises are a part.
7. SIGNS. Any signage Lessee desires for the Premises shall be subject to
Lessor's written approval and shall be submitted to Lessor prior to the
commencement date of this Lease. Lessee shall repair, paint, and/or replace the
building facia surface to which its signs are attached upon vacation of the
Premises, or the removal or alteration of its signage. Lessee shall not, (i)
make any changes to the exterior of the Premises, (ii) install any exterior
lights, decorations, balloons, flags, pennants, banners or painting, or (iii)
erect or install any signs, windows or door lettering, placards, decorations or
advertising media of any type which can be viewed from the exterior of the
Premises, without Lessor's prior written consent. All signs, decorations,
advertising media, blinds, draperies and other window treatment or bars or other
security installations visible from outside the Premises shall conform in all
respects to the criteria established by Lessor.
8. UTILITIES. Lessor agrees to provide normal water and electricity service
to the Premises. Lessee shall pay for all water, gas, heat, light, power,
telephone, sewer, sprinkler charges and other utilities and services used on or
at the Premises, together with any taxes, penalties, surcharges or the like
pertaining to the Lessee's use of the Premises, and any maintenance charges for
utilities. Lessor shall have the right to cause any of said services to be
separately metered to Lessee, at Lessee's expense. Lessee shall pay its pro rata
share, as reasonably determined by Lessor, of all charges for jointly metered
utilities. Lessor shall not be liable for any interruption or failure of utility
service on the Premises.
FORM 87
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9. INSURANCE.
A. Lessor shall maintain insurance covering the buildings situated on the
Premises or of which the Premises are a part in an amount not less than eighty
percent (80%) of the "replacement cost" thereof insuring against the perils of
Fire, Lightning, Extended Coverage, Vandalism and Malicious Mischief.
B. Lessee, at its own expense, shall maintain during the term of this Lease
a policy or policies of worker's compensation and comprehensive general
liability insurance, including personal injury and property damage, with
contractual liability endorsement, in the amount of Five Hundred Thousand
Dollars ($500,000.00) for property damage and One Million Dollars
($1,000,000.00) per occurrence for personal injuries or deaths of persons
occurring in or about the Premises. Lessee, at its own expense, also shall
maintain during the term of this Lease, fire and extended coverage insurance
covering the replacement cost of (i) all alterations, additions, partitions and
improvements installed or placed on the Premises by Lessee or by Lessor on
behalf of Lessee and (ii) all of Lessee's personal property contained within the
Premises. Said policies shall (i) name Lessor as an additional insured and
insure Lessor's contingent liability under this Lease (except for the worker's
compensation policy, which instead shall include waiver of subrogation
endorsement in favor of Lessor), (ii) be issued by an insurance company which is
acceptable to Lessor, and (iii) provide that said insurance shall not be
cancelled unless thirty (30) days prior written notice shall have been given to
Lessor. Said policy or policies or certificates thereof shall be delivered to
Lessor by Lessee upon commencement of the term of the Lease and upon each
renewal of said insurance.
C. Lessee will not permit the Premises to be used for any purpose or in any
manner that would (i) void the insurance thereon, (ii) increase the insurance
risk, or (iii) cause the disallowance of any sprinkler credits, including
without limitation, use of the Premises for the receipt, storage or handling of
any product, material or merchandise that is explosive or highly inflammable. If
any increase in the cost of any insurance on the Premises or the building of
which the Premises are a part is caused by Lessee's use of the Premises, or
because Lessee vacates the Premises, then Lessee shall pay the amount of such
increase to Lessor.
10. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the building of which the Premises are a part should
be damaged or destroyed by fire or other peril, Lessee immediately shall give
written notice to Lessor. If the buildings situated upon the Premises or of
which the Premises are a part should be totally destroyed by any peril covered
by the insurance to be provided by Lessor under Paragraph 9A above, or if they
should be so damaged thereby that, in Lessor's estimation, rebuilding or repairs
cannot be completed within one hundred eighty (180) days after the date of such
damage, this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective upon the date of the occurrence of
such damage.
B. If the buildings situated upon the Premises or of which the Premises are
a part, should be damaged by any peril covered by the insurance to be provided
by Lessor under Paragraph 9A above, and in Lessor's estimation, rebuilding or
repairs can be substantially completed within one hundred eighty (180) days
after the date of such damage, this Lease shall not terminate, and Lessor shall
restore the Premises to substantially its previous condition, except that Lessor
shall not be required to rebuild, repair or replace any part of the partitions,
fixtures, additions and other improvements that may have been constructed,
erected or installed in, or about the Premises or for the benefit of, or by or
for Lessee. If such repairs and rebuilding have not been substantially completed
within one hundred eighty (180) days after the date of such damage, Lessee, as
Lessee's exclusive remedy, may terminate this Lease by delivering written notice
of termination to Lessor in which event the rights and obligations hereunder
shall cease and terminate.
C. Notwithstanding anything herein to the contrary, in the event the holder
of any indebtedness secured by a mortgage or deed of trust covering the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Lessor shall have the right to terminate this Lease by delivering written notice
of termination to Lessee within fifteen (15) days after such requirement is made
known by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.
D. Anything in this Lease to the contrary notwithstanding, Lessor and Lessee
hereby waive and release each other of and from any and all rights of recovery,
claim, action or cause of action, against each other, their agents, officers and
employees, for any loss or damage that may occur to the Premises, improvements
to the building of which the Premises are a part, or personal property (building
contents) within the building and/or Premises, for any reason regardless of
cause or origin. Each party to this Lease agrees immediately after execution of
this Lease to give each insurance company, which has issued to it policies of
fire and extended coverage insurance, written notice of the terms of the mutual
waivers contained in this subparagraph, and if necessary, to have the insurance
policies properly endorsed.
11. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of recovery
and causes of action that Lessee has released, Lessor shall hold Lessee harmless
and defend Lessee against any and all claims or liability for any injury or
damage to any person in, on or about the Premises or any part thereof and/or the
building of which the Premises are a part, when such injury or damage shall be
caused by the act, neglect, fault of, or omission of any duty with respect to
the same by Lessor, its agents, servants and employees. Except for any claims,
rights of recovery and causes of action that Lessor has released. Lessee shall
hold Lessor harmless from and defend Lessor against any and all claims or
liability for any injury or damage (i) to any person or property whatsoever
occurring in, on or about the Premises or any part thereof and/or of the
building of which the Premises are a part, including without limitation
elevators, stairways, passageways or hallways, the use of which Lessee may have
in accordance with this Lease, when such injury or damage shall be caused by the
act, neglect, fault of, or omission of any duty with respect to the same by
Lessee, its agents, servants, employees, or invitees (ii) arising from the
conduct of management of any work done by the Lessee in or about the Premises,
(iii) arising from transactions of the Lessee, and (iv) all costs, counsel fees,
expenses and liabilities incurred in connection with any such claim or action or
proceeding brought thereon. The provisions of this Paragraph 11 shall survive
the expiration or termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.
12. USE. The Premises shall be used only for the purpose of receiving,
storing, shipping and selling (other than retail) products, materials and
merchandise made and/or distributed by Lessee and for such other lawful purposes
as may be incidental thereto. Outside storage, including without limitation,
storage of trucks and other vehicles, is prohibited without Lessor's prior
written consent. Lessee shall comply with all governmental laws, ordinances and
regulations applicable to the use of the Premises, and promptly shall comply
with all governmental orders and directives for the correction, prevention and
abatement of nuisances in or upon, or connected with, the Premises, all at
Lessee's sole expense. Lessee shall not permit any objectionable or unpleasant
odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, nor
take any other action that would constitute a nuisance or would disturb,
unreasonably interfere with, or endanger Lessor or any other lessees of the
building in which the Premises are a part.
13. INSPECTION. Lessor and Lessor's agents and representatives shall have
the right to enter the Premises at any reasonable time during business hours,
to inspect the Premises and to make such repairs as may be required or
permitted pursuant to this Lease. During the period that is six (6) months
prior to the end of the Lease term, upon telephonic notice to Lessee, Lessor
and lessor's representatives may enter the Premises during business hours for
the purpose of showing the Premises. In addition, Lessor shall have the right
to erect a suitable sign on the Premises stating the Premises are available.
Lessee shall notify Lessor in writing at least thirty (30) days prior to
vacating the Premises and shall arrange to meet the Lessor for a joint
inspection of the Premises prior to vacating. If Lessee fails to give such
notice or to arrange for such inspection, then Lessor's inspection of the
Premises shall be deemed correct for the purpose of determining Lessee's
responsibility for repairs and restoration of the Premises.
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14. ASSIGNMENT AND SUBLETTING. See Paragraph 25B.
B. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et. seq., (the
"Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Lessor, shall be and remain the exclusive property of Lessor and
shall not constitute property of Lessee or of the estate of Lessee within the
meaning of the Bankruptcy Code. Any and all monies or other considerations
constituting Lessor's property under the preceding sentence not paid or
delivered to Lessor shall be held in trust for the benefit of Lessor and be
promptly paid or delivered to Lessor.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed, without further act or deed,
to have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall upon demand execute and deliver
to Lessor an instrument confirming such assumption.
15. CONDEMNATION. If more than eighty percent (80%) of the Premises are
taken for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof and the taking prevents or materially interferes with the use of the
Premises for the purpose for which they were leased to Lessee, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective on the date of such taking. If less than eighty percent (80%)
of the Premises are taken for any public or quasi-public use under any
governmental law, ordinance or regulation, or by right of eminent domain, or by
private purchase in lieu thereof, this Lease shall not terminate, but the rent
payable hereunder during the unexpired portion of this Lease shall be reduced to
such extent as may be fair and reasonable under all of the circumstances. All
compensation awarded in connection with or as a result of any of the foregoing
proceedings shall be the property of Lessor and Lessee hereby assigns any
interest in any such award to Lessor; provided, however, Lessor shall have no
interest in any award made to Lessee for loss of business or goodwill or for the
taking of Lessee's fixtures and improvements, if a separate award for such items
is made to Lessee.
16. HOLDING OVER. At the termination of this Lease by its expiration or
otherwise, Lessee immediately shall deliver possession to Lessor with all
repairs and maintenance required herein to be performed by Lessee completed. If,
for any reason, Lessee retains possession of the Premises after the expiration
or termination of this Lease, unless the parties hereto otherwise agree in
writing, such possession shall be subject to termination by either Lessor or
Lessee at any time upon not less than thirty (30) days advance written notice,
and all of the other terms and provisions of this Lease shall be applicable
during such period, except that Lessee shall pay Lessor from time to time, upon
demand, as rental for the period of such possession, an amount equal to one
hundred fifty percent (150%) the rent in effect on the termination date,
computed on a daily basis for each day of such period. No holding over by
Lessee, whether with or without consent of Lessor shall operate to extend this
Lease except as otherwise expressly provided. The preceding provisions of this
Paragraph 16 shall not be construed as consent for Lessee to retain possession
of the Premises in the absence of written consent thereto by Lessor.
17. QUIET ENJOYMENT. Lessor covenants that on or before the commencement
date it will have good title to the Premises, free and clear of all liens and
encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental regulations
relating to the use of such property, and easements, restrictions and other
conditions of record. If this Lease is a sublease, then Lessee agrees to take
the Premises subject to the provisions of the prior Leases. Lessor represents
that it has the authority to enter into this Lease and that so long as Lessee
pays all amounts due hereunder and performs all other covenants and agreements
herein set forth, Lessee shall peaceably and quietly have, hold and enjoy the
Premises for the term hereof without hindrance or molestation from Lessor,
subject to the terms and provisions of this Lease.
18. EVENTS OF DEFAULT. The following events (herein individually referred to
as "event of default") each shall be deemed to be events of nonperformance by
Lessee under this Lease:
A. Lessee shall fail to pay any installment of the rent herein reserved
when due, or any other payment or reimbursement to Lessor required herein
when due, and such failure shall continue for a period of five (5) days from
the date such payment was due.
B. The Lessee or any guarantor of the Lessee's obligations hereunder
shall (i) become insolvent; (ii) admit in writing its inability to pay its
debts; (iii) make a general assignment for the benefit of creditors: (iv)
commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as a debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or other similar official for
it or for all or of any substantial part of its property; or (v) take any
action to authorize or in contemplation or any of the actions set forth
above in this Paragraph.
C. Any case, proceeding or other action against the Lessee or any guarantor
of the Lessee's obligations hereunder shall be commenced seeking (i) to have an
order for relief entered against it as debtor or to adjudicate it a bankrupt or
insolvent; (ii) reorganization, arrangement, adjustment, liquidation,
dissolution or composition or it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors; (iii) appointment
or a receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its property, and such case, proceeding or other action
(a) results in the entry of an order for relief against it which it is not fully
stayed within seven (7) business days after the entry thereof or (b) shall
remain undismissed for a period of forty-five (45) days.
D. Lessee shall (i) vacate all or a substantial portion or the Premises or
(ii) fail to continuously operate its business at the Premises for the permitted
use set forth herein, whether or not Lessee is in default of the rental payments
due under this Lease.
E. Lessee shall fail to discharge any lien placed upon the Premises in
violation of Paragraph 21 hereof within twenty (20) days after any such lien or
encumbrance is filed against the Premises.
FORM 87
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F. Lessee shall fail to comply with any term, provision or covenant of this
Lease (other than those listed in this Paragraph 18), and shall not cure such
failure within twenty (20) days after written notice thereof to Lessee.
19. REMEDIES.
A. Upon each occurrence of an event of default, Lessor shall have the option
to pursue any one or more of the following remedies without any notice or
demand:
(1) Terminate this Lease; and/or
(2) Enter upon and take possession of the Premises without terminating
this Lease; and/or
(3) Alter all locks and other security devices at the Premises with or
without terminating this Lease, and pursue, at Lessor's option, one or more
remedies pursuant to this Lease, Lessee hereby specifically waiving any
state or federal law to the contrary;
and in any such event Lessee immediately shall surrender the Premises to Lessor,
and if Lessee fails so to do, Lessor, without waiving any other remedy it may
have, may enter upon and take possession of the Premises and expel or remove
Lessee and any other person who may be occupying such Premises or any part
thereof, without being liable for prosecution or any claim of damages therefor.
B. If Lessor terminates this Lease, at Lessor's option, Lessee shall be
liable for and shall pay to Lessor, the sum of all rental and other payments
owed to Lessor hereunder accrued to the date of such termination, plus, as
liquidated damages, an amount equal to (1) the present value of the total rental
and other payments owed hereunder for the remaining portion of the Lease term,
calculated as if such term expired on the date set forth in Paragraph 1, less
(2) the then present fair market rental value of the Premises for such period,
which because of the difficulty of ascertaining such value, Lessor and Lessee
stipulate and agree, shall in no event be deemed to exceed seventy-five percent
(75%) of the rental amount set forth in Paragraph 2 above.
C. If Lessor repossesses the Premises without terminating the Lease, Lessee,
at Lessor's option, shall be liable for and shall pay Lessor on demand all
rental and other payments owed to Lessor hereunder, accrued to the date of such
repossession, plus all amounts required to be paid by Lessee to Lessor until the
date of expiration of the term as stated in paragraph 1, diminished by all
amounts received by Lessor through reletting the Premises during such remaining
term (but only to the extent of the rent herein reserved). Actions to collect
amounts due by Lessee to Lessor under this subparagraph may be brought from time
to time, on one or more occasions, without the necessity of Lessor's waiting
until expiration of the Lease term.
D. Upon an event of default, in addition to any sum provided to be paid
herein, Lessee also shall be liable for and shall pay to Lessor (i) brokers'
fees incurred by Lessor in connection with reletting the whole or any part of
the Premises; (ii) the costs of removing and storing Lessee's or other
occupant's property; (iii) the costs repairing, altering, remodeling or
otherwise putting the Premises into condition acceptable to a new Lessee or
Lessees; and (iv) all reasonable expenses incurred by Lessor in enforcing or
defending Lessor's rights and/or remedies. If either party hereto institute any
action or proceeding to enforce any provision hereof by reason of any alleged
breach of any provision of this Lease, the prevailing party shall be entitled to
receive from the losing party all reasonable attorneys' fees and all court costs
in connection with such proceeding.
E. In the event Lessee fails to make any payment due hereunder when payment
is due, to help defray the additional cost to Lessor for processing such late
payments, Lessee shall pay to Lessor on demand a late charge in an amount equal
to five percent (5%) of such installment; and the failure to pay such amount
within ten (10) days after demand therefor shall be an additional event of
default hereunder. The provision for such late charge shall be in addition to
all of Lessor's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Lessor's remedies in any manner.
F. Exercise by Lessor of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises by Lessor, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Lessor and Lessee. Lessee and Lessor further agree that forbearance by Lessor to
enforce its rights pursuant to the Lease at law or in equity, shall not be a
waiver of Lessor's right to enforce one or more of its rights in connection with
any subsequent default.
G. In the event of termination and/or repossession of the Premises for an
event of default, Lessor shall use reasonable efforts to relet the Premises and
to collect rental after reletting; provided, that, Lessee shall not be entitled
to credit or reimbursement of any proceeds in excess of the rental owed
hereunder. Lessor may relet the whole or any portion of the Premises for any
period, to any Lessee and for any use and purpose.
H. If Lessor fails to perform any of its obligations hereunder within thirty
(30) days after written notice from Lessee specifying such failure, Lessee's
exclusive remedy shall be an action for damages. Unless and until Lessor fails
to so cure any default after such notice, Lessee shall not have any remedy or
cause of action by reason thereof. All obligations of Lessor hereunder will be
construed as covenants, not conditions; and all such obligations will be binding
upon Lessor only during the period of its possession of the Premises and not
thereafter. The term "Lessor" 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, such owner shall thereupon be released and discharged from all
covenants and obligations of the Lessor thereafter accruing, but such covenants
and obligations shall be binding during the Lease term upon each new owner for
the duration of such owner's ownership. Notwithstanding any other provision
hereof, Lessor shall not have any personal liability hereunder. In the event of
any breach or default by Lessor in any term or provision of this Lease, Lessee
agrees to look solely to the equity or interest then owned by Lessor in the
Premises or of the building of which the Premises are a part; however, in no
event, shall any deficiency judgment or any money judgment of any kind be sought
or obtained against any Lessor.
I. If Lessor repossesses the Premises pursuant to the authority herein
granted, then Lessor shall have the right to (i) keep in place and use or (ii)
remove and store all of the furniture, fixtures and equipment at the Premises,
including that which is owned by or leased to Lessee at all times prior to any
foreclosure thereon by Lessor or repossession thereof by any Lessor thereof or
third party having a lien thereon. Lessor also shall have the right to
relinquish possession of all or any portion of such furniture, fixtures,
equipment and other property to any person ("Claimant") who presents to Lessor a
copy of any instrument represented by Claimant to have been executed by Lessee
(or any predecessor of Lessee) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures, equipment or other
property, without the necessity on the part of Lessor to inquire into the
authenticity or legality of said instrument. The rights of Lessor herein stated
shall be in addition to any and all other rights that Lessor has or may
hereafter have at law or in equity; and Lessee stipulates and agrees that the
rights herein granted Lessor are commercially reasonable.
J. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Lessee to or on behalf of Lessor under this Lease, whether or not
expressly denominated as rent, shall constitute rent.
K. This is a contract under which applicable law excuses Lessor from
accepting performance from (or rendering performance to) any person or entity
other than Lessee.
20. MORTGAGES. Lessee accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or any time hereafter constituting a lien or
charge upon the Premises or the improvements situated thereon or the building of
which the Premises are a part, provided, however, that if the mortgagee,
trustee, or holder of any such mortgage or deed of trust elects to have Lessee's
interest in this Lease superior to any such instrument, then by notice to Lessee
from such mortgagee, trustee or holder, this Lease shall be deemed superior to
such lien, whether this Lease was executed before or after said mortgage or deed
of trust. Lessee, at any time
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hereafter on demand, shall execute any instruments, releases or other documents
that may be required by any mortgagee for the purpose of subjecting and
subordinating this Lease to the lien of any such mortgage.
21. MECHANIC'S LIENS. Lessee has no authority, express or implied, to create
or place any lien or encumbrance of any kind or nature whatsoever upon, or in
any manner to bind the interest of Lessor or Lessee in the Premises or to charge
the rentals payable hereunder for any claim in favor of any person dealing with
Lessee, including those who may furnish materials or perform labor for any
construction or repairs. Lessee covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Lessor harmless from any and all loss,
cost or expense based on or arising out of asserted claims or liens against the
leasehold estate or against the right, title and interest of the Lessor in the
Premises or under the terms of this Lease. Lessee agrees to give Lessor
immediate written notice of the placing of any lien or encumbrance against the
Premises.
22. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
describe the scope or intent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.
B. In the event the Premises constitute a portion of a multiple occupancy
building, Lessee's "proportionate share", as used in this Lease, shall mean a
fraction, the numerator of which is the space contained in the Premises and the
denominator of which is the entire space contained in the building.
C. The terms, provisions and covenants and conditions contained in this
Lease shall run with the land and shall apply to, inure to the benefit of, and
be binding upon, the parties hereto and upon their respective heirs, executors,
personal representatives, legal representatives, successors and assigns, except
as otherwise herein expressly provided. Lessor shall have the right to transfer
and assign, in whole or in part, its rights and obligations in the building and
property that are the subject of this Lease. Each party agrees to furnish to the
other, promptly upon demand, a corporate resolution, proof of due authorization
by partners, or other appropriate documentation evidencing the due authorization
of such party to enter into this Lease.
▇. ▇▇▇▇▇▇ and Lessee shall not be held responsible for delays in the
performance of its obligations hereunder when caused by material shortages, acts
of God or labor disputes.
E. Lessee agrees, from time to time, within ten (10) days after request of
Lessor, to deliver to Lessor, or Lessor's designee, a Certificate of Occupancy
and an estoppel certificate stating that this Lease is in full force and effect,
the date to which rent has been paid, the unexpired term of this Lease and such
other factual matters pertaining to this Lease as may be requested by Lessor. It
is understood and agreed that Lessee's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Lessor's execution
of this Lease.
F. This Lease constitutes the entire understanding and agreement of the
Lessor and Lessee with respect to the subject matter of this Lease, and contains
all of the covenants and agreements of Lessor and Lessee with respect thereto.
Lessor and Lessee each acknowledge that no representations, inducements,
promises or agreements, oral or written, have been made by Lessor or Lessee, or
anyone acting on behalf of Lessor or Lessee, which are not contained herein, and
any prior agreements, promises, negotiations, or representations not expressly
set forth in this Lease are of no force or effect. This Lease may not be
altered, changed or amended except by an instrument in writing signed by both
parties hereto.
G. All obligations of Lessee hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof, including without
limitation, all payment obligations with respect to taxes and insurance and all
obligations concerning the condition and repair of the Premises. Upon the
expiration or earlier termination of the term hereof, and prior to Lessee
vacating the Premises, Lessee shall pay to Lessor any amount reasonably
estimated by Lessor as necessary to put the Premises, including without
limitation, all heating and air conditioning systems and equipment therein, in
good condition and repair, reasonable wear and tear excluded. Lessee shall also,
prior to vacating the Premises, pay to Lessor the amount, as estimated by
Lessor, of Lessee's obligation hereunder for real estate taxes and insurance
premiums for the year in which the Lease expires or terminates. All such amounts
shall be used and held by Lessor for payment of such obligations of Lessee
hereunder, with Lessee being liable for any additional costs therefor upon
demand by Lessor, or with any excess to be returned to Lessee after all such
obligations have been determined and satisfied as the case may be. Any security
deposit held by Lessor shall be credited against the amount due from Lessee
under this Paragraph 22G.
H. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added, as a
part of this Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
I. All references in this Lease to "the date hereof" or similar references
shall be deemed to refer to the last date, in point of time, on which all
parties hereto have executed this Lease.
J. Lessee represents and warrants that it has dealt with no broker, agent or
other person in connection with this transaction or that no broker, agent or
other person brought about this transaction, other than as may be referenced in
a separate written agreement executed by Lessee, and delivered to Lessor, and
Lessee agrees to indemnify and hold Lessor harmless from and against any claims
by any other broker, agent or other person claiming a commission or other form
of compensation by virtue of having dealt with Lessee with regard to this
leasing transaction.
K. If and when included within the term "Lessor", as used in this
instrument, there is more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying some individual at some specific address for the receipt of notices
and payments to Lessor. If and when included within the term "Lessee", as used
in this instrument, there is more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Lessee. All parties
included within the terms "Lessor" and "Lessee", respectively shall be bound by
notices given in accordance with the provisions of Paragraph 25 hereof to the
same effect as if each had received such notice.
24. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivering of notice or the making of any payment by
Lessor to Lessee or with reference to the sending, mailing or delivering of any
notice or the
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making of any payment by Lessee to Lessor shall be deemed to be complied with
when and if the following steps are taken:
(a) All rent and other payments required to be made by Lessee to Lessor
hereunder shall be payable to Lessor at the address for Lessor set forth
below or at such other address as Lessor may specify from time to time by
written notice delivered in accordance herewith. Lessee's obligation to pay
rent and any other amounts to Lessor under the terms of this Lease shall not
be deemed satisfied until such rent and other amounts have been actually
received by Lessor. In addition to base rental due hereunder, all sums of
money and all payments due Lessor hereunder shall be deemed to be additional
rental owed to Lessor.
(b) All payments required to be made by Lessor to Lessee hereunder shall
be payable to Lessee at the address set forth below, or at such other
address within the continental United States as Lessee may specify from time
to time by written notice delivered in accordance herewith.
(c) Any written notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered whether actually received or not
when deposited in the United States Mail, postage prepaid, Certified or
Registered Mail, addressed to the parties hereto at the respective addresses
set out below, or at such other address as they have theretofore specified
by written notice delivered in accordance herewith.
25. ADDITIONAL PROVISIONS. See Exhibit A-C attached hereto and incorporated
by reference herein.
26. LESSOR'S LIEN. Any statutory lien for rent is not hereby waived.
EXECUTED BY LESSOR, this 10th day of May , 1990.
Attest/Witness Post and Paddock Associates, A Texas
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Joint Venture by ▇▇▇▇▇▇▇▇ ▇▇▇▇ Company #102
Title: Marketing Principal By /s/ ▇▇▇▇ SUPER
Title: Partner
ADDRESS:
Post and Paddock Associates
c/o ▇▇▇▇▇▇▇▇ ▇▇▇▇ Company
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
EXECUTED BY LESSEE, this 10th day of May , 1990
Attest/Witness Craftmade International, Inc.
/s/ (ILLEGIBLE) By /s/ ▇▇▇▇▇ ▇. RIDING
Title: ▇▇▇▇▇▇ & ▇▇▇▇ Title: CEO
ADDRESS:
Craftmade International, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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EXECUTED BY LESSOR, this day of May, 1990.
Attest/Witness POST AND PADDOCK ASSOCIATES,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ a Texas Joint Venture
Title: Associate By: ▇▇▇▇▇▇ INVESTORS LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ MANAGEMENT LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ ADVISORS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. HARUTY
Vice President
ADDRESS:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
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Rider 1, Paragraph 25. HAZARDOUS WASTE. The term "Hazardous Substances," as
used in this lease shall mean pollutants, contaminants, toxic or hazardous
wastes, or any other substances, the use and/or the removal of which is required
or the use of which is restricted, prohibited or penalized by any "Environmental
Law," which term shall mean any federal, state or local law, ordinance or other
statute of a governmental or quasi-governmental authority relating to pollution
or protection of the environment. Lessee hereby agrees that (i) no activity will
be conducted on the premises that will produce any Hazardous Substance, except
for such activities that are part of the ordinary course of Lessee's business
activities (the "Permitted Activities") provided said Permitted Activities are
conducted in accordance with all Environmental Laws and have been approved in
advance in writing by Lessor; Lessee shall be responsible for obtaining any
required permits and paying any fees and providing any testing required by any
governmental agency; (ii) the premises will not be used in any manner for the
storage of any Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Lessee's business (the
"Permitted Materials") provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the premises will be used as a landfill
or a dump; (iv) Lessee will not install any underground tanks of any type; (v)
Lessee will not allow any surface or subsurface conditions to exist or come into
existence that constitute, or with the passage of time may constitute a public
or private nuisance; (vi) Lessee will not permit any Hazardous Substances to be
brought onto the premises, except for the Permitted Materials described below,
and if so brought or found located thereon, the same shall be immediately
removed, with proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. Lessor or Lessor's
representative shall have the right but not the obligation to enter the premises
for the purpose of inspecting the storage, use and disposal of Permitted
Materials to ensure compliance with all Environmental Laws. Should it be
determined, in Lessor's sole opinion, that said Permitted Materials are being
improperly stored, used, or disposed of, then Lessee shall immediately take such
corrective action as requested by Lessor. Should Lessee fail to take such
corrective action within 24 hours, Lessor shall have the right to perform such
work and Lessee shall promptly reimburse Lessor for any and all costs associated
with said work. If at any time during or after the term of the lease, the
premises is found to be so contaminated or subject to said conditions, Lessee
shall diligently institute proper and thorough cleanup procedures at Lessee's
sole cost, and Lessee agrees to indemnify and hold Lessor harmless from all
claims, demands, actions, liabilities, costs, expenses, damages and obligations
of any nature arising from or as a result of the use of the premises by Lessee.
The foregoing indemnification and the responsibilities of Lessee shall survive
the termination or expiration of this Lease.
Permitted Materials (if none, enter "None"):
None.
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SPECIAL PROVISIONS
EXHIBIT C
25A. Lessor agrees to provide, at its sole cost, up to 7,000 square feet of
air-conditioned office area, one electric water cooler, one additional
overhead door, standard heating and lighting in the warehouse area,
four 220V, 3 phase outlets in warehouse (exact location per Lessee),
one additional restroom in warehouse on north wall (exact location per
Lessee). All finish done per Exhibit B (to be attached and agreed upon
by Lessor and Lessee) and done to ▇▇▇▇▇▇▇▇ ▇▇▇▇ Company
Specifications.
25B. In the event Lessee desires to sublet all or any part of the premises
or assign this Lease, Lessee shall give Lessor written notice at least
sixty (60) days prior to the effective date of the proposed assignment
or subletting, such notice to set forth the name of the proposed
assignee or sublessee, the proposed effective date of the subletting
or assignment and all of the terms and conditions of the sublease or
assignment. Lessor shall have right, within thirty (30) days after
receipt of such notice from either (i) cancel this Lease or (ii)
approve or disapprove the assignment or subletting. If Lessor elects
to terminate this Lease, Lessee shall pay to Lessor all amounts
payable for insurance, reasonable repairs, maintenance, and other
obligations which are the responsibility of Lessee in the Lease, plus
the amount of any Lease Commission obligations for the remainder of
the term. If Lessor elects not to terminate Lease, Lessor shall not
unreasonably withhold approval of the proposed assignment or
subletting. Standards in determining Lessor's reasonableness shall
include credit of the proposed assignee or sublessee, use of the
premises, business reputation and whether the sublessee or assigned
shall directly occupy the premises. Notwithstanding any assignment or
subletting, Lessee shall at all times remain responsible and liable
for the payment of the rent and for compliance with all of Lessee's
other obligations under this Lease. Any consent by Lessor to an
assignment or subletting hereunder shall only pertain to the then
current term or renewal term of the Lease and shall not apply to any
subsequent renewals or extensions. All rights of first renewal on
adjacent space will not be assigned to sublessee.
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