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EXHIBIT 10.7
COMMERCIAL LEASE AGREEMENT
TABLE OF CONTENTS EXHIBITS AND ADDENDA. Any exhibit or addendum attached to
Article this Lease is incorporated as a part of this Lease for all
1 Defined Terms purposes. Any term not specifically defined in the Addenda
2 Lease and Lease Term shall have the same meanings given to it in the body of this
3. Rent and Security Deposit Lease. To the extent any provisions in the body of this
4. Taxes Lease conflict with the Addenda, the Addenda shall control.
5. Insurance and Indemnity
6. Use of Demised Premises [Check all boxes which apply. Boxes not checked do not apply.]
7. Property Condition, Maintenance, Repairs and Alterations
8. Damage of Destruction Exhibit A Expense Reimbursement
9. Condemnation [X] Exhibit B Survey and/or Legal Description of the Property
10. Assignment and Subletting
11. Default and Remedies [X] Addendum A Expense Reimbursement
12. Landlord's Contractual Lien [X] Addendum B Renewal Options
13. Protection of Lenders Addendum C Right of First Refusal for additional Space
14. Environmental Representations and Indemnity Addendum D Percentage Rental
15. Professional Service Fees Addendum E Guarantee
16. Miscellaneous Addendum F Construction of Improvements
17. additional Provisions Addendum G Rules and Regulations
Addendum H Other
IN CONSIDERATION of all agreements set forth in this Lease, the parties agree as
follows:
ARTICLE ONE: DEFINED TERMS. As used in this Commercial Lease Agreement (the
"Lease"), the terms set forth in this Article One have the following respective
meanings:
ARTICLE ONE: DEFINED TERMS. As used in this Commercial Lease Agreement (the
"Lease"), the terms set forth in this Article One have the following respective
meanings:
1.01. EFFECTIVE DATE: The last date set forth by the signatures of Landlord and
Tenant on page 10 below.
1.02 LANDLORD: The Sigma Joint Venture
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Address: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Telephone (▇▇▇) ▇▇▇-▇▇▇▇
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1.03. TENANT: Performance Printing Corporation L.L.C.
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Address: 3012 Fairmount
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Dallas Texas Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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1.04 DEMISED PREMISES:
A. Street Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇
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Dallas in Dallas County, Texas
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B. Floor Plan or Site Plan: Being a floor area of approximately 75,870
square feet and being approximately __________ feet by ____________ feet
(measured) to the exterior of outside walls and to the center of the interior
walls) and being more particularly shown in outline form on Exhibit A, FLOOR
PLAN OR SITE PLAN.
C. Legal description: The property on which the Demised Premises is situated
(the "Property") is more particularly described as:
________________________________________________________________________________
or is described in Exhibit B, SURVEY AND/OR LEGAL DESCRIPTION.
D. Tenant's pro rata share of the Property is 100% [See Addendum A, if
applicable]
1.05 LEASE TERM: on 05/01/97 years and 0 months beginning on 05/01/97 If ready
(the "Commencement Date") and ending on 04/30/2002 (the "Expiration Date")
subject to extension as herein provided.
1.06 BASE RENT: $1,138,050.00 total Base Rent for the Lease Term payable in
monthly installments of $ 18,967.50 per month in advance. (The total
amount of Rent is defined in Section 3.01.)
1.07 PERCENTAGE RENTAL RATE: N/A % [See Addendum 1] (applicable)
1.08 SECURITY DEPOSIT: $18,067.50 (due upon execution of this Lease).) [See
Section] 3.04]
1.09 PERMITTED USE: Receiving, storing, shipping, and selling products,
materials and merchandise made and/or distributed by Tenant, and for all
other lawful purposes approved in writing by landlord in advance. [See
Section 6.01]
1.10 Party to whom Tenant is to deliver payments under this Lease [check one];
[ ] Landlord
1.11 PRINCIPAL BROKER: ▇▇▇▇▇▇ ▇▇▇▇ Co. acting as agent for [check one for
Landlord exclusively, or the Tenant exclusively, x both Landlord and
Tenant as dual agent Principal Brokers Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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1.12. COOPERATING BROKER:
acting as agent for (check one): [ ] the Landlord exclusively, [ ] the Tenant
exclusively, [ ] both Landlord and Tenant as dual agent Cooperating brokers
Address:
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Telephone:
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Fax:
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1.13. THE FEE: The Professional Service Fee as set forth in (check one):
[ ] Paragraph A, or [ ] Paragraph B of Section 15.01
A. The percentage applicable for leases in Sections 15.01 and 15.03 shall
be N/A percent ( %)
B. The percentage applicable in Sections 15.04 in the event of a sale
shall be N/A percent ( %)
1.14. ACCEPTANCE: The number of days for acceptance of this offer is 10 days
(See Section 16.14)
ARTICLE TWO: LEASE AND LEASE TERM
2.01. LEASE OF DEMISED PREMISES FOR LEASE TERM. Landlord leases the Demised
Premises to Tenant and Tenant leases the Demised Premises from Landlord for the
Lease Term stated in Section 1.05. The commencement Date is the date specified
in Section 1.05, unless advanced or delayed under any provision of this Lease.
2.02. EARLY OCCUPANCY. Landlord hereby authorizes Tenant to occupy the Demised
Premises and to commence making Tenant's Improvements (as herein defined) on
4-15-97 (not until closing). If Tenant occupies the Demised Premises prior to
the Commencement Date, Tenant's occupancy of the Demised Premises shall be
subject to all of the provisions of this Lease. Early occupancy of the Demised
Premises shall not advance the Expiration Date. Notwithstanding anything to the
contrary contained herein, Tenant's occupancy prior to the Commencement Date
shall be rent free and Tenant's first installment of Base Rent shall be due on
5-1-97.
2.03. HOLDING OVER. Tenant shall vacate the Demised Premises immediately upon
the expiration of the Lease Term or earlier termination of this Lease. Tenant
shall reimburse Landlord for and indemnify Landlord against all damages incurred
by Landlord as a result of any delay by Tenant in vacating the Demised Premises.
If Tenant does not vacate the Demised Premises upon the expiration of the Lease
or earlier termination of this Lease, Tenant's occupancy of the Demised Premises
shall be a day-to-day tenancy, subject to all of the terms of this Lease, except
that the Base Rent during the holdover period shall be increased to an amount
which is one-and-one half times the Base Rent in effect on the expiration or
termination of this Lease, computed on a daily basis for each day of the
holdover period, plus all additional sums due under this Lease. Tenant agrees to
vacate and deliver the Demised Premises to Landlord upon receipt of notice from
Landlord to vacate. This paragraph shall not be construed as Landlord's consent
for Tenant to hold over or to extend this Lease.
ARTICLE THREE: RENT AND SECURITY DEPOSIT
3.01. MANNER OF PAYMENT. All sums payable under this Lease by Tenant (the
"Rent") shall be made to the Landlord at the address designated in Section
1.02. Unless another person is designated in Section 1.10, or to any other
party or address as Landlord may designate in writing. Any and all payments made
to a designated third party for the account of the Landlord shall be deemed made
to Landlord when received by the designated their party. All sums payable by
Tenant under this Lease, whether or not expressly denominated as rent, shall
constitute rent for purposes of Section 5.02(b)(6) of the Bankruptcy Code and
for all other purposes. The Base Rent is the minimum rent for the Demised
Premises and is subject to the terms and conditions contained in this Lease,
together with the attached Addenda, if any.
3.02. TIME OF PAYMENT. Upon execution of this Lease, Tenant shall pay the
installment of Base Rent for the first month of the Lease Term. On or before the
first day of the second month of the Lease Term and of each month thereafter,
the installment of Base Rent and other sums due under this Lease shall be due
and payable, in advance, without off-set, deduction or prior demand unless
otherwise provided herein. Notwithstanding anything to the contrary obtained
herein, in the event Landlord fails to provide the services required here under
or otherwise breaches its obligations under this Lease, Tenant may, at its
option perform such obligations and withhold or offset the cost thereof,
together with interest thereon at the rate of 12% per annum, from the Rent due
hereunder. If the Lease Term commences or ends on a day other than the first or
last day of a calendar month, the rent for any fractional calendar month
following the Commencement Date or preceding the end of the Lease Term shall be
prorated by days.
3.03 SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount state in Section 1.08. Landlord
may apply all or part of the Security Deposit to any unpaid Rent or other
charges due from Tenant or to cure any other defaults of Tenant. No interest
will be paid on the Security Deposit. Landlord will not be required to keep the
Security Deposit separate from its other accounts. Upon any termination of this
Lease not resulting from Tenant's default, and after Tenant has vacated the
property and cleaned and restored the Demised Premises in the manner required by
this Lease, Landlord shall refund the unused portion of the Security Deposit to
Tenant within thirty days after the Expiration Date or thirty days after Tenant
fully complies with the conditions of termination as required in Section 7.05.
3.04. GOOD FUNDS PAYMENT. If, for any reason whatsoever, any two or more
payments by check from Tenant to Landlord for Rent are dishonored and returned
unpaid, thereafter Landlord may, at Landlord's sole option, upon written notice
to Tenant, require that all future payments of Rent for the remaining term of
the Lease must be made by cash, certified check, cashiers check, or money order
("Good Funds" and that the delivery of Tenant's personal or corporate check will
no longer constitute payment of Rent under this Lease. Any acceptance by
Landlord of a payment for Rent by Tenant's personal or corporate check
thereafter shall not be construed as a waiver of Landlord's right to insist upon
payment of Good Funds as set forth herein.
3.05. LATE PAYMENT. In the event the monthly Rent payment is not received by
Landlord on or before the fifth (5th) day of the month such Rent is due, or if
any other payment due Landlord by Tenant is not received by Landlord on or
before the fifth (5th) day following Landlord's written notice to Tenant that
the payment is past due, a service charge of five percent (5%) of such past due
amount shall become due and payable on addition to such amount owned under this
Lease. No written notice from Landlord shall be made or required in the event
monthly Rent is not timely paid by Tenant, to impose the service charges
referenced above.
ARTICLE FOUR: TAXES
4.01. PAYMENT BY LANDLORD. Landlord shall pay the real estate taxes on the
Demised Premises during the Lease Term.
4.02. IMPROVEMENTS BY TENANT. If the real taxes levied against the Demised
Premises for the real estate tax year in which the Lease Term commences are
increased as a result of any alterations, additions or improvements made by
Tenant or by Landlord at the request of Tenant. Tenant shall pay to Landlord
upon demand the amount of the increase and continue to pay the increase during
the Lease Term. Landlord shall use reasonable efforts to obtain from the tax
assessor or assessors a written statement of the total amount of the increase.
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4.03. JOINT ASSESSMENT. If the real estate taxes are assessed against the
Demised Premises jointly and other property not constituting a part of the
Demised Premises, the real estate taxes applicable to the Demised Premises shall
be equal to the amount bearing the same proportion to the aggregate assessment
that the total square feet of building area in the Demised Premises bears to the
total square feet of building area included in the joint assessment.
4.04. PERSONAL PROPERTY TAXES. Tenant shall pay all taxes assessed against trade
fixtures, furnishings, equipment, inventory, products, or any other personal
property belonging to Tenant. Tenant shall use reasonable efforts to have
Tenant's personal property taxed separately from the Demised Premises. If any of
Tenant's personal property is taxed with the Demised Premises, Tenant shall pay
the taxes for the personal property to Landlord within fifteen (15) days after
Tenant receives a written statement from Landlord for the personal property
taxes.
ARTICLE FIVE: INSURANCE AND INDEMNITY
5.01. CASUALTY INSURANCE. During the Lease Term, Landlord shall maintain
policies of insurance covering loss of or damage to the Demises Premises in an
amount or percentage of replacement value as Tenant deems reasonable in relation
to the age, location, type of construction and physical condition of the Demised
Premises and the availability of insurance at reasonable rates. The policies
shall provide protection against all perils included within the classification
of fire and extended coverage. Landlord may, at Landlord's option, obtain
insurance coverage for Tenant's fixtures, equipment or building improvements
installed by Tenant in or on the Demised Premises. Tenant shall, at Tenant's
expense, maintain insurance on its fixtures, equipment and building improvements
as Tenant deems necessary to protect Tenant's interest. Tenant shall not do or
permit to be done anything which invalidates any insurance policies. Any
casualty insurance carried by Landlord or Tenant shall be for the sole benefit
of the party carrying the insurance and under its sole control.
5.02. INCREASE IN PREMIUMS. Tenant shall not permit any operation or activity to
be conducted, or storage or use of any volatile or any other materials, on or
about the Demised Premises that would cause suspension or cancellation of any
fire and extended coverage insurance policy carried by Landlord, or increase the
premiums therefor, without the prior written consent of Landlord. If Tenant's
use and occupancy of the Demised Premises causes an increase in the premiums for
any fire and extended coverage insurance policy carried by Landlord, Tenant
shall pay to Landlord, as additional rental, the amount of the increase within
ten days after demand and presentation by Landlord of written evidence of the
increase.
5.03. LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
commercial general liability policy of insurance, at Tenant's expense, insuring
Landlord against liability arising out of the ownership, use, occupancy, or
maintenance of the Demised Premises. The initial amounts of the insurance must
be at least: $500,000 for Each Occurrence, $1,000,000 General Aggregate per
policy year, $100,000 Property Damage for the Demised Premises, and $10,000
Medical Expense; The policies must contain cross-liability endorsements, if
applicable. The policies must contain a provision which prohibits cancellation
or modification of the policy except upon thirty (30) days prior written notice
to Landlord. Tenant may discharge Tenant's obligations under this Section by
naming Landlord as an additional insured under a comprehensive policy of
commercial general liability insurance maintained by Tenant and containing the
coverage and provisions described in this Section. Tenant shall deliver a copy
of the policy or certificate (or a renewal) to Landlord prior to the
Commencement Date and prior to the expiration of the policy during the Lease
Term. If Tenant fails to maintain the policy, Landlord may elect to maintain the
insurance at Tenant's expense. Tenant may, at Tenant's expense, maintain other
liability insurance as Tenant deems necessary to protect Tenant.
5.04. INDEMNITY. Landlord shall not be liable to Tenant or to Tenant's
employees, agents, invitees or visitors, or to any other person, for any injury
to persons or damage to property on or about the Demised Premises or any
adjacent area owned Landlord caused by the negligence or misconduct of Tenant,
Tenant's employees, subtenant's, agents, licensees or concessionaires or any
other person entering the Demised Premises under express or implied invitation
of Tenant, or arising out of the use by Tenant and the conduct of Tenant's
business, or arising out of any breach or default by Tenant in the performance
of Tenant's obligations under this Lease; and Tenant hereby agrees to indemnity
and hold Landlord harmless from any loss, expense or claims arising out of such
damage or injury except and to the extent any such claim, injury or damage or
damage is caused by the negligent act omission or misconduct of Landlord, or
Landlord's employees or agents, and Landlord agrees to indemnify and hold Tenant
harmless from any loss, expense or damage arising out of such damage or injury.
5.05. COMPARATIVE NEGLIGENCE. Tenant and Landlord hereby unconditionally and
irrevocably agree to indemnify, defend and hold each other and their officers,
agents, directors, subsidiaries, partners, employees, licensees and counsel
harmless, to the extent of each party's comparative negligence, if any, from and
against any and all loss, liability, demand, damage, judgment, suit, claim,
deficiency, interest, fee, charge cost or expense (including, without
limitation, interest, court costs and penalties, reasonable attorneys fees and
disbursements and amounts paid in settlement, or liabilities resulting from any
change in federal, state or local law or regulation or interpretation of this
Lease) of whatever nature, on a comparative negligence basis, even when caused
in part by Landlord's or Tenant's negligence or the joint or concurring
negligence of Landlord, Tenant, and any other person or entity, which may result
or to which Landlord or Tenant and/or any of their officers, agents, directors,
employees, subsidiaries, partners, licensees and counsel may sustain, suffer,
incur or become subject to in connection with or arising in any way whatsoever
out of the leasing, operation, promotion, management, maintenance, repair, use
or occupation of the Demised Premises, or any other activity of whatever nature
in connection therewith, or arising out of or by reason of any investigation,
litigation or other proceedings brought or threatened, arising out of or based
upon the leasing, operation, promotion, management, maintenance, repair, use or
occupancy of the Demised Premises, or any other activity on the Demised
Premises. This provision shall survive the expiration or termination of this
Lease.
5.06. WAIVER OF SUBROGATION. Each party to this Lease waives any and every claim
which arises or may arise in its favor against the other party during the term
of this Lease or any renewal or extension of this Lease for any and all loss of,
or damage to, any of its property located within or upon, or constituting a part
of, the Demised Premises, which loss or damage is covered valid and collectible
fire and extended coverage insurance policies, to the extent that such loss or
damage is recoverable under such insurance policies. These mutual waivers shall
be in addition to, and not in limitation or derogation of, any other waiver or
release contained in this Lease with respect to any loss of, or damage to,
property of the parties. Inasmuch as these mutual waivers will preclude the
assignment of any aforesaid claim by way of subrogation or otherwise to an
insurance company (or any other person), each party hereby agrees to give
immediately to each insurance company (which has issued to such party policies
of fire and extended coverage insurance) written notice of the terms of such
mutual waivers, and to cause such insurance policies to be properly endorsed to
prevent the invalidation of the insurance coverage by reason of these waivers.
ARTICLE SIX: USE OF DEMISED PREMISES
6.01. PERMITTED USE. Tenant may use the Demised Premises only for the Permitted
Use stated in Section 1.09. The parties to this Lease acknowledge that the
current use of the Demised Premises or the improvements located on the Demised
Premises, or both, may or may not conform to the city zoning ordinance with
respect to the permitted use, height, setback requirements, minimum parking
requirements, coverage ratio of improvements to total area of land, and other
matters which may have a significant economic impact upon the Tenant's intended
use of the Demised Premises. Tenant acknowledges that Tenant has or will
independently investigate and verify to Tenant's satisfaction the extent of any
limitations or non-conforming uses of the Demised Premises. Tenant further
acknowledges that Tenant is not relying upon any warranties or representations
of Landlord or the Brokers who are participating in the negotiation of this
Lease concerning the Permitted Use of the Demised Premises, or with respect to
any uses of the improvements located on the Demised Premises.
6.02. COMPLIANCE WITH LAW. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Demised Premises, and
shall promptly comply with all governmental orders and directives for the
correction, prevention and abatement of nuisances and other activities in or
upon, or connected with Demised Premises, all at Tenant's sole expense including
any expense or cost
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resulting from the construction or installation of fixtures and improvements or
other accommodations for handicapped or disabled persons required for compliance
with governmental laws and regulations, including but not limited to the Texas
Architectural Barriers Act (Article 9102 and any successor statute and the
Americans with Disabilities Act (the "ADA"). To the extent any alterations to
the Demised Premises are required by the ADA or other applicable laws or
regulations, Tenant shall bear the expense of the alterations. To the extent any
alterations to areas of the Property outside the Demised Premises are required
by Title III of the ADA or other applicable laws or regulations (for "path of
travel" requirements or otherwise), Landlord shall bear the expense of the
alterations.
6.03. CERTIFICATE OF OCCUPANCY. If required Tenant shall obtain a Certificate of
Occupancy from the municipality in which the Property is located prior to
occupancy of the Demised Premises. Tenant may apply for a Certificate of
Occupancy prior to the Commencement Date and, if Tenant is unable to obtain a
Certificate of Occupancy, Tenant shall have the right to terminate this Lease by
written notice to Landlord if Landlord or Tenant is unwilling or unable to cure
the defects which prevented the issuance of the Certificate of Occupancy.
Landlord may, but has no obligation to, cure any such defects, including any
repairs, installations, or replacements of any items which are not presently
existing on the Demised Premises, or which have not been expressly agreed upon
by Landlord in writing.
6.04. SIGNS. Without the prior written consent of Landlord which consent shall
not be unreasonably withheld or delayed. Tenant may not place any signs,
ornaments or other objects upon the Demised Premises or on the Property,
including but not limited to the roof or exterior of the building or other
improvements on the Property, or paint or otherwise decorate or defect the
exterior of the building. Any signs installed by Tenant must conform with
applicable laws, deed restrictions on the Property, and other applicable
requirements. Tenant must remove all signs, decorations and ornaments at the
expiration or termination of this Lease and must repair any damage and close any
holes caused by the removal.
6.05. UTILITY SERVICES. Tenant shall pay the cost of all utility services,
including but not limited to initial connection charges, all charges for gas,
water, sewerage, storm water disposal, communications and electricity used on
the Demised Premises, and for replacing all electric lights lamps and
tubes.
6.06. LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the right to,
during normal business hours and upon reasonable advance notice, and without
unreasonably interfering with Tenant s business, enter the Demised Premises (a)
to inspect the general condition and state of repair of the Demised Premises,
(b) to make repairs required or permitted under this Lease and (e) to show the
Demised Premises or the Property to any prospective tenant or purchaser (during
the last 90 days of the Lease Term or applicable Renewal term only). If Tenant
changes the locks on the Demised Premises, Tenant must provide Landlord with a
copy of each separate key. During the Lease Term, Landlord and Landlord's agents
shall not erect on or about the Demised Premises signs advertising the Demised
Premises for lease or for sale without the prior written consent of Tenant while
consent may be withheld in Tenant's sole discretion
6.07. POSSESSION. If Tenant pays the rent, properly maintains the Demised
Premises, and complies with all other terms of this Lease, Tenant may occupy and
enjoy the Demised Premises for the full Lease Term, subject to the provisions of
this Lease.6.06. Exemptions from Liability. Except and to the extent caused by
Landlord's negligent act or omission, Landlord shall not be liable for any
damage or injury to the persons, business (or any loss of income), goods,
inventory, furnishings, fixtures, equipment, merchandise or other property of
Tenant, Tenant's employees, invitees, customers or any other person in or about
the Demised Premises, whether the damage or injury is caused by or results from:
(a) fire, steam. electricity, water, gas or wind; (b) the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures or any other cause; (c) conditions arising
on or about the Demised Premises or upon other portions of any building of which
the Demised Premises is a part, or from other sources or places: or (d) any act
or omission of any other tenant of any building on the Property Landlord shall
not be liable for any damage or injury even though the cause of or the means of
repairing the damage or injury are not accessible to Tenant.
ARTICLE SEVEN: PROPERTY CONDITION, MAINTENANCE, REPAIRS AND ALTERATIONS
7.01. PROPERTY CONDITION. Except as disclosed in writing by Landlord to Tenant
contemporaneously with the execution of this Lease, to the best of Landlord's
actual knowledge the Demised Premises has no known latent structural defects,
construction defects of a material nature, and to the best of Landlord's actual
knowledge none of the improvements has been constructed with materials known to
be a potential health hazard to occupants of the Demised Premises Tenant
acknowledges that neither the Principal Broker nor any Cooperating Broker has
made any warranty or representation to Tenant with respect to the condition of
the Demised Premises, and that Tenant is relying exclusively upon Tenant's own
investigations and the representations of Landlord, if any, with respect to the
condition of the Demised Premises. Landlord and Tenant agree to hold the Brokers
harmless of and from any and all damages, claims, costs and expenses of every
kind and character resulting from or related to Landlord's furnishing to the
Brokers any false, incorrect or inaccurate information with respect to the
Demised Premises, or Landlord's concealing any material information with respect
to the condition of the Demised Premises. Other than as expressly set forth in
this Lease. Landlord represents that on the Commencement Date (and for a period
of thirty (30) days thereafter) the building fixtures and equipment, plumbing
and plumbing fixtures, electrical and lighting system, any fire protection
sprinkler system, ventilating equipment, roof, skylights, doors, overhead doors,
windows, dock levelers, elevators, and the interior of the Demised Premises in
general are in good operating condition. Landlord represents and warrants that
the HVAC system shall be in good working condition for a period of twelve (12)
months following the Commencement Date. Landlord shall, at Landlord s expense,
make all required repairs during such 12-month period. Tenant shall have a
period of thirty (30) days following the Commencement Date in which to inspect
the Demised Premises and to notify Landlord in writing of any defects and
maintenance, repairs or replacements required to the above named equipment,
fixtures, systems and interior. Within a reasonable period of time after the
timely receipt of any such written notice from Tenant, Landlord shall, at
Landlord expense, correct the defects and perform the maintenance, repairs and
replacements.
7.02. ACCEPTANCE OF DEMISED PREMISES. Subject to the provisions in Section 7.01
and Section 7.03 below, Tenant acknowledges that (a) a full and complete
inspection of the Demised Premises and adjacent common areas has been made and
Landlord has fully and adequately disclosed the existence of any defects which
would interfere with Tenant's use of the Demised Premises for their intended
commercial purpose, and (b) as a result of such inspection and disclosure,
Tenant has taken possession of the Demised Premises and accepts the Demised
Premises in its "As Is" condition.
7.03. MAINTENANCE AND REPAIR. Except as otherwise provided in this Lease,
Landlord shall be under no obligation to perform any repair, maintenance or
management service the Demised Premises or adjacent common areas.
A. Landlord's Obligation.
(1) Subject to the provisions of Article Eight (Damage or Destruction) and
Article Nine (Condemnation) and except for damage causes by any act or omission
of Tenant, Landlord shall keep the roof, skylight, foundation, structural
components and the structural portions of exterior walls of the Demised Premises
in good order, condition and repair. Landlord shall not be obligated to maintain
or repair windows, doors, overhead doors, plate glass or the surfaces of walls.
In addition, if any repairs are required to be made by Landlord, Tenant shall,
at Tenant's sole cost and expense, promptly remove Tenant's furnishings,
fixtures, inventory, equipment and other property, to the extent required to
enable Landlord to make repairs. Landlord's liability under this Section shall
be limited to the cost of those repairs or corrections.
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(2) Notwithstanding anything to the contrary contained herein, Landlord, at
Landlord's expense, shall on or before the Commencement Date (i) replace the
roof where necessary so as to cause the roof to be water tight and in good
repair; (ii) install, in a good and workmanlike manner, 80 tons of new air
conditioning units in the production area; (iii) if said 80 tons are not
sufficient to keep the production area at least 25 degrees cooler than the
outside temperature throughout 1997, install all additional tonnage as required
to meet such temperatures (but not in excess of twenty additional tons); and
(iv) place the existing HVAC, plumbing and electrical systems in good working
order. Landlord shall warrant that the HVAC system in the Office be in good
repair for twelve months following the Commencement Date.
B. Tenant's Obligation.
(1) Tenant, at its sole cost, shall maintain the grounds and exterior
landscaping. Tenant may, but shall not be obligated to (i) maintain the HVAC
system after the Landlord's 12-month warranty period; and (ii) maintain the
parking and driveway surfaces. Tenant may, at Tenant's option and expense, add
additional HVAC units (the "additional Units") at any time. Upon termination of
the Lease, by expiration or otherwise. Tenant may remove the additional Units
but in the event of such removal, shall cause the area where such additional
Units were located to be repaired, as much as is reasonably possible, to its
original condition.
(2) Subject to the provisions of Section 7.01 Section 7.03. Article Eight
(Damage or Destruction) and Article Nine (Condemnation). and Section 7.03(B)(3).
Tenant shall at all times, keep all other portions of the Demised Premises in
good order, condition and repair, ordinary wear and tear excepted. Tenant shall,
at Tenant's expense repair; any damage to any portion of the Property,
including, the roof skylights foundation, or structural components and exterior
walls of the Demised Premises, caused by Tenant's acts or omissions. ,If Tenant
fails to maintain and repair the Property as required by this Section Landlord
may, on ten (10) days prior written notice enter the Demised Premises and
perform the maintenance or repair on behalf of Tenant, except that no notice is
required in case of emergency and Tenant shall reimburse Landlord immediately
upon demand for all costs incurred in performing the maintenance or repair, plus
a reasonable service charge.
7.04. ALTERATIONS ADDITIONS AND IMPROVEMENTS. Tenant shall not create any
openings in the roof or exterior walls or make any alterations, additions or
improvements to the Demised Premises without the prior written consent of
Landlord. Consent for structural and non-structural alterations, additions or
improvements shall not be unreasonably withheld by Landlord. Landlord hereby
agrees that Tenant may alter the office area of the Demised Premises at Tenant's
expense in such manner as Tenant shall require ("Tenant Improvements )
Notwithstanding anything to the contrary contained herein. Tenant shall not be
obligated to remove the Tenant Improvements or restore the office area to its
previous condition upon termination of this Lease. Tenant may erect or install
trade fixtures, shelves, bins, machinery, heating, ventilating and air
conditioning equipment, and provided that Tenant complies with all applicable
governmental laws ordinances, codes, and regulations. At the expiration or
termination of this lease Tenant shall subject to the restrictions of Section
7.05 below have the right to remove items installed by Tenant, provided Tenant
is not in default at the time of the removal and provided further that Tenant
shall at the time of removal of the items, repair in a good and workmanlike
manner any damage caused by the installation or removal. Tenant shall pay for
all costs incurred or arising out of alterations, additions or improvements in
or to the Demised Premises and shall not permit any mechanics or materialmans
lien to be filed against the Demised Premises or the Property. Upon request by
Landlord Tenant shall deliver to Landlord proof of payment reasonably
satisfactory to Landlord of all costs incurred or arising out of any
alterations, additions or improvements.
7.05. CONDITION UPON TERMINATION. Upon the expiration or termination of this
Lease, Tenant shall surrender the Demised Premises to Landlord broom clean and
in the same condition as received except for ordinary wear and tear which Tenant
is not otherwise obligated to remedy under any provision of this Lease.
Notwithstanding anything to the contrary contained herein Tenant shall not be
obligated to repair the HVAC (roof, plumbing or systems parking and driveway
surfaces or any damage which Landlord is required to repair under Article Seven
(Property Condition) or Article Eight (Damage or Destruction). In addition
except as otherwise provided herein, Landlord may require Tenant to remove any
alterations additions or improvements (whether or not made with Landlord's
consent) prior to the expiration or termination of this Lease and to restore the
Demised Premises near as is reasonably possible to its prior condition all at
Tenant's expense. All alterations additions and improvements which Landlord has
not required Tenant to remove shall become Landlord's property and shall be
surrendered to Landlord upon the expiration or termination of this Lease. In no
event however, shall Tenant remove or be required to remove any of the following
materials or equipment without Landlord prior written consent: (i) any
electrical wiring or power panels; (ii) lighting or lighting fixtures: (iii)
wall coverings, drapes blinds or other window coverings: (iv) carpets or other
floor coverings: (v) heating ventilating, or air conditioning equipment
(provided, however Tenant may remove such equipment so long as Tenant restores
the Demised Premises as near as reasonably possible to its prior condition):
(vi) fencing or security gates; or (vii) any other fixtures equipment or items
which, if removed would affect the operation or the exterior appearance of the
Property.
ARTICLE EIGHT: DAMAGE OR DESTRUCTION
8.01. NOTICE. If any buildings or other improvements situated on Property are
damaged or destroyed by fire, flood, windstorm, tornado or other casualty,
Tenant shall immediately give written notice of the damage or destruction to
Landlord.
8.02. PARTIAL DAMAGE. If the building or other improvements situated on the
Demised Premises are damaged by fire, tornado, or other casualty but not to such
an extent that rebuilding or repairs cannot reasonably by completed within one
hundred twenty (120) days from the date Landlord receives written notification
by Tenant of the occurrence of the damage, this Lease shall not terminate, but
Landlord shall proceed with reasonable diligence to rebuild or repair the
building and other improvements on the Demised Premises (other than leasehold
improvements made by Tenant or any assignee, subtenant or other occupant of the
Demised Premises) to substantially the condition in which they existed prior to
the damage and complete such repairs within 120 days following the date of such
casualty. If the casualty occurs during the final eighteen (18) months of the
Lease Term, Landlord shall not be required to rebuild or repair the damage
unless Tenant exercises Tenant's renewal option (if any) within fifteen (15)
days after the date of receipt by Landlord of the notification of the occurrence
of the damage. If Tenant does not exercise its renewal option, or days after the
date of receipt by Landlord of the notification of the occurrence of the damage.
If Tenant does not exercise its renewal option, or if there is no renewal option
contained in this Lease, Landlord may, at Landlord's option, terminate this
Lease by promptly delivering a written termination notice to Tenant, in which
event the Rent shall be abated for the unexpired portion of the Lease Term,
effective from the date of receipt by Landlord of the written notification of
the damage. To the extent the Demised Premises cannot by occupied (in whole or
in part) following the casualty, the Rent payable under this Lease during the
period in which the Demised Premises cannot by fully occupied shall by adjusted
equitably.
8.03. SUBSTANTIAL OR TOTAL DESTRUCTION. If the building or other improvements
situated on the Demised Premises are substantially or totally destroyed by fire,
tornado, or other casualty, or so damaged that rebuilding or repairs cannot
reasonably be completed within one hundred twenty (120) days from the date
Landlord receives written notification by Tenant of the occurrence of the
damage, wither Landlord or Tenant may terminate this Lease by promptly
delivering a written termination notice to the other party, in which event the
monthly installments of Rent shall be abated for the unexpired portion of the
Lease Term, effective from the date of the damage or destruction. If neither
party promptly terminates this Lease. Landlord shall proceed with reasonable
diligence to rebuild and repair the building and other improvements (except that
Tenant shall rebuild and repair Tenant's fixtures and improvements in the
Demised Premises). To the extent the Demised Premises cannot be occupied (in
while or in part) following the casualty, the Rent payable under this Lease
during the period in which the Demised Premises cannot be fully occupied shall
be adjusted equitably.
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ARTICLE NINE: CONDEMNATION
If during the Lease Term or any extension thereof, all or a substantial part of
the Demised Premises are taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain, or are
conveyed to the condemning authority under threat of condemnation, this Lease
shall terminate and the monthly installments of Rent shall be abated during the
unexpired portion of the Lease Term effective from the date of the taking. If
less than a substantial part of the Demised Premises is taken for public or
quasi-public use under any governmental law, ordinance or regulation or by right
of eminent domain, or is conveyed to the condemning authority under threat of
condemnation, Landlord, at its option, may by written notice terminate this
Lease. If Landlord does not terminate this Lease Landlord shall promptly, at
Landlord's expense, restore and reconstruct the building and improvements (other
than leasehold improvements made by Tenant or any assignee, subtenant or other
occupant of the Demised Premises) situated on the Demised Premises in order to
make the same reasonably tenantable and suitable for the use for which the
Demised Premises is leased as defined in Section 6.01. The monthly installments
of Rent payable under this Lease during the unexpired portion of the Lease Term
shall be adjusted equitably. Landlord and Tenant shall each be entitled to
receive and retain such separate awards and portion of lump sum awards as may be
allocated to their respective interests in any condemnation proceeding. The
termination of this Lease shall not affect the rights of the parties to such
awards.
ARTICLE TEN: ASSIGNMENT AND SUBLETTING
Tenant may, with the prior written consent of Landlord, written consent shall
not be unreasonably withheld or delayed, assign this Lease or sublet the Demised
Premises or any portion thereof. Any assignment or subletting shall be expressly
subject to all terms and provisions of this Lease, including the provisions of
Section 6.01 pertaining to the use of the Demised Premises. In the event of any
assignment or subletting, Tenant shall remain fully liable for the full
performance of all Tenant's obligation under this Lease. Tenant shall not assign
its right under the Lease or sublet the Demised Premises without first obtaining
a written agreement from the assignee or sublessee whereby the assignee or
sublessee agrees to assume the obligations of Tenant under this Lease and to be
bound by the terms of this Lease. If an event of default occurs while the
Demised Premises of assigned sublet, Landlord may, at Landlord's option, in
addition to any other remedies provided in this Lease or by law, collect
directly from the assignee or subtenant all rents becoming due under the terms
of the assignment or subletting and apply the rent against any sums due the
Landlord under this Lease. No direct collection by Landlord from any assignee or
subtenant will release Tenant from Tenant's obligation under this Lease.
ARTICLE ELEVEN: DEFAULT AND REMEDIES
11.01. DEFAULT EACH OF THE FOLLOWING EVENTS IS AN EVENT OF DEFAULT UNDER THIS
LEASE:
A. Failure of Tenant to pay any installment of the Rent or other sum
payable to Landlord under this Lease on the date that it is due and the
continuance of that failure for a period of ten (10) days after Landlord
delivers written notice of the failure to Tenant. This clause shall not be
construed to permit or allow a delay in paying Rent beyond the due date.
B. Failure of Tenant to comply with any term, condition or covenant of
this Lease, other that the payment of Rent or other sum of money and the
continuance of that failure for a period of thirty (30) days after Landlord
delivers written notice of the failure to Tenant, provided, however if such
failure cannot be cured within thirty (30) days, there shall be no event of
default so long as Tenant commences the cure within such 30-day period and
diligently proceeds toward the completion thereof.
C. Failure of Tenant or any guarantor of Tenant's obligations under this
lease to pay its debts as they become due or an admission in w rising of
inability to pay its debts. or the making of a general assignment for the
benefit of creditors;
D. The commencement by Tenant or any guarantor of Tenant's obligations
under this Lease of any case. proceeding or other action 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 any substantial part of its property; and
E. The commencement of any case, proceeding or other action against
Tenant or any guarantor of Tenants under this Lease seeking to have an order for
relief entered against it as debtor, 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 any substantial part of its property, and Tenant or any
guarantor (i) fails to obtain a dismissal of such case, proceeding, or other
action within sixty (60) days of its commencement; or (ii) converts the case
from one chapter of the Federal Bankruptcy Code to another chapter; or (iii) is
the subject of an order of relief which is not fully stayed v. within seven (7)
business days after the entry thereof.
11.02. REMEDIES. Upon the occurrence of any of the events of default listed in
Section 11.01, Landlord shall have the option to pursue any one or more of the
following remedies without any prior notice or demand.
A. Terminate this Lease, in which event Tenant shall immediately
surrender the Demised Premises to Landlord. If Tenant fails to so surrender the
Demised Premises, Landlord may, without prejudice to any other remedy which it
may have for possession of the Demised Premises or Rent in arrears, enter upon
and take possession of the Demised Premises and expel or remove Tenant and any
other person who may be occupying the Demised Premises or any part thereof, by
force if necessary, without being liable for prosecution or any claim for
damages. Tenant shall pay Landlord on demand the amount of all loss and damage
which Landlord may suffer by reason of the termination, whether through
inability to relet the Demised Premises on satisfactory terms or otherwise.
B. Enter upon and take possessions of the Demised Premises, by force if
necessary, without terminating this lease and without being liable for
prosecution or for any claim for damages, and expel or remove Tenant and any
other person who may be occupying the Demised Premises or any part thereof.
Landlord may relet the Demised Premises and receive the rent therefor. Tenant
agrees to pay to Landlord monthly or on demand from time to time any deficiency
that may arise by reason of any such reletting. In determining the amount of the
deficiency. the professional service fees, reasonable attorneys fees, court
costs, and other reasonable costs of reletting shall be subtracted from the
amount of rent received under the reletting.
C. Enter upon the Demised Premises, by force if necessary, without
terminating this Lease and without being liable for prosecution or for any claim
for damages, and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to pay Landlord on demand for expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this lease,
together with interest thereon at the rate of twelve percent (12%) per annum
from the date expended until paid. Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by negligence of Landlord
or otherwise.
D. Accelerate and declare the Rent for the entire Lease Term, and all
other amounts due under this Lease, at once due and payable, and proceed by
attachment, suit or otherwise, to collect all amounts in the same manner as if
all such amounts due or to become due during the entire Lease Term were payable
in advance by the terms of this Lease, and neither the enforcement or collection
by landlord of such amount not the payment by Tenant of such amounts shall
constitute a waiver by Landlord of any breach, existing or in the future. of any
of the terms or provisions of this Lease by Tenant or a waiver of any fights or
remedies which the Landlord may have with respect to any such breach.
E. In addition to the foregoing remedies shall have the right to change
or modify the locks on the Demised Premises in the event
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Tenant fails to pay the monthly installment of Rent when due. Landlord shall not
be obligated to provide another key to Tenant or allow Tenant to regain entry to
the Demises unless and until Tenant pays landlord all Rent, and other charges,
costs or fees incurred in pursuit of collection of Rent which is delinquent.
Tenant agrees Landlord shall not be liable for any damages resulting from the
lockout. At such time that Landlord changes or modifies the lock, Landlord shall
post a "Notice of Change of Locks" on the front of the Demised Premises. Such
Notice shall state that:
(1) Tenant's monthly installment of Rent is delinquent. and therefore,
under authority of Section 11.02.E of Tenant's Lease, the Landlord has
exercised its contractual right to change or modify Tenant's door
locks;
(2) The Notice has been posted on the Tenant's front door by a
representative of Landlord and Tenant should make arrangements with the
representative to pay the delinquent installments of Rent when Tenant
picks up the key, and
(3) The Failure of Tenant to comply with the provisions of the Lease
and the Notice and/or tampering with or changing the door lock(s) by
Tenant may subject Tenant to legal liability.
F. No re-entry or taking possession of the Demised Premises by Landlord
shall be construed as an election to terminate this Lease, unless a written
notice of that intention is given to Tenant. Notwithstanding any such reletting
or re-entry or taking possession, Landlord may, at any time, thereafter elect to
terminate this Lease for a previous default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any other remedies provided by law, nor
shall pursuit of any remedy provided in this Lease constitute a forfeiture or
waiver of any monthly installment of Rent due to Landlord under this Lease or of
any damages accruing to Landlord by reason of the violation of any of its terms,
provisions and covenants contained in this Lease. Failure of Landlord to declare
any default immediately upon its occurrence, or failure to enforce one or more
of Landlord's remedies, or forbearance by Landlord to enforce one or more of
Landlord's remedies upon an event of default shall not or construed to
constitute a waiver of any violation or breach of the terms of this Lease.
Pursuit of any one of the above remedies shall not preclude pursuit by Landlord
of any of the other remedies provided in this Lease. The loss or damage that
landlord may suffer by reason of termination of this Lease or the deficiency
from any reletting as provided for above shall include the expense of
repossession and any repairs or remodeling undertaken by Landlord following
possession. If Landlord terminates this Lease at any time for any default, in
addition to other remedies Landlord may have, Landlord may recover from Tenant
all (actual but not consequential) damages landlord may incur by reason of the
default, including the cost of recovering the Demised Premises and the cost of
the Rent then remaining unpaid.
11.03. NOTICE OF DEFAULT. Tenant shall give written notice (in non-emergency
circumstances) of any failure by Landlord to perform any of Landlord's
obligations under this Lease to Landlord and to any ground Lessor, mortgagee or
beneficiary under any deed of trust encumbering the Demised Premises whose name
and address have been furnished to Tenant in writing. Landlord shall not be in
default under this Lease (in non-emergency circumstances) unless Landlord (or
such ground lessor, mortgagee or beneficiary) fails to cure the nonperformance
within thirty (30) days after receipt of Tenant's notice. However, if the
nonperformance reasonably requires more than thirty (30) days to cure. Landlord
shall not be in default if the cure is commenced within the 30-day period and is
thereafter diligently pursued to completion. Landlord shall exercise due
diligence to cure any defaults (in emergency circumstances) as soon as is
reasonably possible after Landlord becomes aware of such default.
11.04. LIMITATION OF LANDLORD'S LIABILITY. As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title to the
Demised Premises or the leasehold estate under a ground lease of the Demised
Premises at the time in question. Each Landlord is obligated to perform the
obligations of Landlord under this Lease only during the time such Landlord owns
such interest or title. Any Landlord who transfers its title or interest is
relieved of all liability with respect to the obligations of Landlord under this
Lease accruing on or alter the date of transfer, and Tenant agrees to recognize
the transferee as Landlord under this Lease. However, each Landlord shall
deliver to its transferee the Security Deposit held by Landlord if such Security
Deposit has not then been applied under the terms of this Lease.
ARTICLE TWELVE: PROTECTION OF LENDERS
12.01. SUBORDINATION AND ATTORNMENT. Landlord represents and warrants that there
is no existing deeds of trust or mortgage encumbering the Demised Premises
Landlord shall have the right to subordinate this Lease to any future ground
Lease, deed of trust or mortgage encumbering the Demised Premises, and advances
made on the security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded. Landlord's right
to obtain such a subordination is subject to Landlord's providing Tenant with a
written Subordination, Nondisturbance and Attornment Agreement from the ground
lessor, beneficiary or mortgagee (in form reasonably acceptable to Tenant)
wherein Tenant's fight to peaceable possession of the Demised Premises during
the Lease Term shall not be disturbed if Tenant pays the Rent and performs all
of Tenant's obligations under this Lease and is not otherwise in default, in
which case Tenant shall attorn to the transferee of or successor to Landlord's
interest in the Demised Premises and recognize the transferee or successor as
Landlord under this Lease. If any ground lessor, beneficiary or mortgagee elects
to have this Lease superior to the lien of its ground lease, deed of trust or
mortgage and gives Tenant written notice thereof this Lease shall be deemed
superior to the ground lease, deed of trust or mortgage whether this Lease is
dated prior or subsequent the date of the ground lease, deed of trust or
mortgage or the date of recording thereof.
12.02. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any instruments or
documents reasonably necessary or appropriate evidence any attornment or
subordination or any agreement to attorn or subordinate. If Tenant fails to do
so within ten (10) days alter written request. Tenant hereby makes, constitutes
and irrevocably appoints Landlord, or any transferee or successor of Landlord,
the attorney-in-fact of Tenant execute and deliver the attornment or
subordination document or agreement. Upon request from Tenant, Landlord shall
sign and deliver such documents as may be reasonably requested by Tenant or any
third party, stating that Tenant's equipment and inventory (including but not
limited to material, supplies, finished products, presses, photographic
equipment, displays, electronic devices, material moving equipment, tools,
furniture, lilts. and similar equipment now or hereafter being used by Tenant)
are not encumbered by or subject to any liens arising in favor of Landlord as a
result of this Lease, and authorizing reasonable access to the Demised Premises
by other lienholders to permit removal of that portion of Tenant's equipment and
inventory on which they hold liens.
12.03. ESTOPPEL CERTIFICATES.
A. Upon Landlord's written request Tenant shall execute acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this lease have been changed (or if they have been change,
stating how they have been changed): (ii) that this Lease has not been canceled
or terminated (iii) the last date of payment of the Base Rent and other charges
and the time period covered by that payment: and (iv) that Landlord is not in
default under this lease (or it landlord is claimed to be in default, stating
why). Tenant shall deliver the statement to Landlord within ten (10) days after
Landlord's request. Landlord may forward any such statement to any prospective
purchase or lender of the Demised Premises. The purchaser or lender may rely
conclusively upon the statement as true and correct.
B. If Tenant does not deliver the written statement to Landlord within
the 10-day period Landlord, and; any prospective purchaser or lender may
conclusively presume and rely upon the following facts (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord (ii) that this Lease has not been canceled or terminated except as
otherwise represented by Landlord: (iii) that not snore than one monthly
installment of Base Rent or other charges have been paid in advance; and (iv)
that Landlord is not in default under this Lease. In such event Tenant shall be
estopped from denying the truth of the presumed facts.
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12.04. TENANT'S FINANCIAL CONDITION. Within ten days after written written
request from Landlord Tenant shall deliver to Landlord statements as are
reasonably required by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant, in addition, Tenant shall deliver
to any lender designated by Landlord any financial statements required by the
lender to facilitate the financing or refinancing of the Demised Premises.
Tenant represents and warrants to Landlord that each financial statement is a
true complete, and accurate statement in all material respects as of the date of
the statement. All financial statements shall be confidential and shall be used
only for the purposes set forth in this Lease.
ARTICLE THIRTEEN ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
13.01. TENANT'S COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant, at Tenant's expense,
shall comply with all laws, rules, orders, ordinances directions, regulations
and requirements of Federal, State, county and municipal authorities pertaining
to Tenant's use of the Property and the recorded covenants, conditions and
restrictions, regardless of when they become effective, including, without
limitation, all applicable Federal, State and local laws, regulations or
ordinances pertaining to air and water quality. Hazardous Materials (as defined
in Section 14.05). waste disposal. air emissions and other environmental
matters, and with any direction of any public officer or officers, pursuant to
law. which impose any duty upon Landlord Tenant with respect to the use or
occupancy of the Property.
13.02. TENANT'S INDEMNIFICATION. Tenant shall not cause or permit any Hazardous
Materials to be brought upon, kept or used in or about the Property by Tenant,
its agents, employees. contractors or invitees except in the ordinary course of
Tenant's business and incompliance with applicable law without the prior written
consent of Landlord Tenant reaches the obligations stated in the preceding
Section or sentence, or in the presence of Hazardous Materials on the Property
caused or permitted by Tenant results in contamination of the Property or any
other property. or if contamination of the Property or any other property by
Hazardous Materials otherwise occurs for which Tenant is legally liable,
Landlord for damage resulting therefrom, then Tenant shall indemnify, defend and
hold Landlord harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses (including, without limitation, reasonable
attorneys fees, court costs. consultant ices and expert fees, which arise during
or after the Lease Term as a result of the contamination. This indemnification
of Landlord by Tenant includes without limitation costs incurred in connection
with any investigation of site conditions or any clean-up, remedial work,
removal or restoration work required by any Federal, State or local governmental
agency because of Hazardous Materials present in the soil or ground water on or
under the Property Without limiting the foregoing, if the presence of any
Hazardous Materials on the Property (or any other property) caused or permitted
by Tenant results in any contamination of the Property, Tenant shall promptly
take all actions at Tenant's sole expense as are required by applicable
governmental authorities with respect to the removal or remediation of such
Hazardous Materials, provided that Landlord's approval of such actions is first
obtained the foregoing indemnity shall survive the expiration or termination of
this Lease for a period of six (6) months.
13.03. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents and
warrants, to the best of Landlord's actual knowledge, that: (i) any handling,
transportation, storage, treatment or usage of Hazardous Materials that has
occurred on the Property to date has been in compliance with all applicable
Federal, State, and local laws, regulations and ordinances; and (ii) no leak
spill, release, discharge, emission or disposal of hazardous Materials has
occurred on the Property to date and that the soil or groundwater on or under
the Property is free of Hazardous Materials as of the Commencement Date unless
expressly disclosed by Landlord to Tenant in writing.
13.04. LANDLORD'S INDEMNIFICATION. Landlord hereby indemnifies, defends and
holds Tenant harmless from any claims, judgements, damages, penalties, fines,
costs, liabilities, (including sums paid in settlements of claims) or loss,
including, without limitation, attorneys fees, court costs, consultant fees. and
expert fees. which arise during or after the term of this Lease from or in
connection with the presence or suspected presence of Hazardous Materials in the
soil or groundwater on or under the Property, unless the Hazardous Material is
released by Tenant or is present solely as a result of the negligence or willful
conduct of Tenant, without limiting the generality of the foregoing, the
indemnification provided by this Section 13.04 shall specifically cover costs
incurred in connection with any investigation of site conditions or any
clean-up, remedial work, removal or restoration work required by any Federal,
State or local governmental authority.
13.05. DEFINITION. For purposes of this Lease, the term "Hazardous Materials"
means any one or more pollutants, toxic substance, hazardous waste, hazardous
material, hazardous substance, solvent or oil as defined in or pursuant to the
Resource Conservation and Recovery Act, as amended, the Comprehensive
Environment Responses, Compensation and Liability Act, as amended. the Federal
Clean Water Act, as amended, or any other Federal, State or local environmental
law, regulation, ordinance, or rule, whether existing as of the date of this
Lease or subsequent enacted.
13.06. SURVIVAL. The representations and indemnities contained in this Article
13 shall survive the expiration or termination of this Lease for a period of six
(6) months.
ARTICLE FOURTEEN: PROFESSIONAL SERVICE FEES
14.01. AMOUNT AND MANNER OF PAYMENT. Professional service fees due to the
Principal Broker shall be calculated and paid as follows:
A. Landlord agrees to pay to the Principal Broker a monthly professional service
fee (the "Fee") for negotiating this Lease, plus any applicable sales taxes
equal to the percentage stated in Section 1.13.A of each monthly Rent payment at
the time the payment is due.
B. Landlord agrees to pay to the Principal Broker a lump sum professional
service fee (the "Fee") for negotiating this Lease, plus any applicable sales
taxes, equal to the percentage stated in Section 1.12A of the total Rent to
become due to Landlord during the Lease Term. The Fee shall be paid to the
Principal Broker (i) one-half on the date of final execution of this Lease, and
(ii) the balance on the Commencement Date of this Lease.
14.02. OTHER BROKERS. Both Landlord and Tenant represent and warrant to the
other party that they have had no dealings with any person. firm or agent in the
negotiation of this Lease other than the Broker(s) named in this Lease. and no
other broker, agent, person, firm or entity other than the Broker(s) is entitled
to any commission or fee in connection with this Lease.
14.03 PAYMENTS ON RENEWAL, EXPANSION, EXTENSION OR NEW LEASE. If during the
Lease Term (as may be renewed or extended) or within ten (10) years from the
Commencement Date, whichever is the greater period of time, Tenant, Tenant's
successors or assigns: (a) exercises any right or option to renew or extend the
Lease Term (whether contained in this Lease or in any amendment, supplement or
other agreement pertaining to this Lease) or enters into a new lease or rental
agreement with Landlord covering the Demised Premises: or (b) enters into any
lease, extension, renewal, expansion or other rental agreement with Landlord
demising to Tenant any premises located on or constituting all or part of any
tract or parcel of real property adjoining, adjacent to or contiguous to the
Demised Premises and owned by Landlord on the Commencement Date, Landlord shall
pay to the Principal Broker an additional Fee covering the full period of the
renewal, extension, lease, expansion or other rental agreement which shall be
due on the date of exercise of a renewal option, or the date of execution in the
case of an extension, new lease, expansion or other agreement. The additional
Fee shall be computed under Section 14.01.A or 14.01.B above (whichever has been
made applicable under Section 1.13) as if a new lease had been made for such
period of time.
14.04. PAYMENTS OF SALE. If Tenant, Tenant's successors or assigns, purchases
the Demised Premises at any time, pursuant to a purchase option contained in
this Lease (or any lease, extension, renewal, expansion or other rental
agrement) or, in the absence of any purchase option
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or exercise thereof, purchases the Demised Premises within ten (10) years from
the Commencement Date, Landlord shall pay to the Principal Broker a (there was
nothing after this to type to end the sentence)
14.05. LANDLORD'S LIABILITY. II this Lease as negotiated by Principal Broker in
cooperation with another Landlord shall be liable payment of all Professional
Service Fees to Principal Broker only, whereupon Landlord shall be protected
from any claims from a Cooperating Broker. The Principal Broker may pay a
portion of the Fee to any Cooperating Broker pursuant to a separate agreement
between the Brokers.
14.06. ASSUMPTION ON SALE. In the event of a sale of the Demised Premises or the
assignment of this Lease by Landlord, and Landlord shall obtain from the
purchaser or assignee an Assumption Agreement in recordable form whereby the
purchaser or assignee agrees to pay the Principal Broker all Professional
Service Fees payable under this Lease and shall deliver a fully executed
original counterpart thereof to Principal Broker on the date of closing of the
sale of the Demised Premises or assignment of this Lease. Landlord shall be
released from personal liability for subsequent payments only upon the delivery
to Principal Broker of that counterpart of the Assumption Agreement.
14.07. TERMINATION. The termination of this Lease by the mutual agreement of
Landlord and Tenant after the Commencement Date shall not affect the right of
the Principal Broker to continue to receive the Fees agreed to be paid under
this Lease, just as if Tenant had continued to occupy the Demised Premises and
had paid the Rent during the entire Lease Term. Termination of this lease under
Article Eight or Article Nine shall not terminate the Principal Broker right to
collect the Fees.
14.08. DUAL AGENCY. If either Principal Broker and/or Cooperating Broker
(together, the "Brokers") has indicated in Sections 1.11 and 1.12 that they are
representing both Landlord and Tenant, then Landlord and Tenant hereby consent
to the dual agency, authorize the applicable Broker(s) to represent more than
one party to this Lease, and acknowledge that the source of any expected
compensation other Brokers will be Landlord, and the Brokers may also be paid a
fee by the Tenant If the Broker(s) arc acting in a dual agency capacity, the
Broker(s) shall
(1) Not disclose to Tenant that Landlord will accept a rent less
than the asking rent unless otherwise instructed in a separate writing by
Landlords:
(2) Not disclose to Landlord that Tenant will pay a rent greater than
the rental submitted in a written offer to Landlord unless otherwise instructed
in a separate writing by Tenant:
(3) Not disclose any confidential information, or any information a party
specifically instructs the broker(s) in writing not to disclose, unless
otherwise instructed in a separate writing by the respective party or required
to disclose such information by law;
(4) Treat all parties to the transaction honestly and impartially so as not to
favor one party or work to the disadvantage of any, party
ARTICLE FIFTEEN: MISCELLANEOUS
15.01. DISCLOSURE. Landlord and Tenant understand that a real estate broker is
qualified to advise on matters concerning real estate and is not expert in
matters of law, tax, financing, surveying, hazardous materials, engineering,
construction, safety, zoning, land planning, architecture or the ADA The Brokers
hereby advise Tenant to seek expert assistance on such matters. Brokers do not
investigate a property's compliance with building codes governmental ordinances,
statutes and laws that relate to the use or condition of a property and its
construction, or that relate to its acquisition. If Brokers provide names of
consultants or sources for advice or assistance, Tenant acknowledges that the
Brokers do not warrant the services of the advisors or their products and cannot
warrant the suitability of property to be acquired or leased. Furthermore, the
Brokers do not warrant that the Landlord will disclose any or all property
defects, although the Brokers will disclose to Tenant any actual knowledge
possessed by Brokers regarding defects of the Demised Premises and the Property.
In this regard, Tenant agrees to make all necessary and appropriate inquiries
and to use diligence in investigating the Demised Premises and the Property
before consummating this Lease. Landlord and Tenant hereby agree to indemnity,
defend, and hold the Brokers harmless of and from any and all liabilities,
claims, debts, damages, costs, or expenses, including but not limited to
reasonable attorneys fees and court costs, related to or arising out of or in
any way connected to representations concerning matters properly the subject of
advice by experts. In addition, to the extent permitted by applicable law, the
Broker's liability for errors or omissions, negligence, or otherwise, is limited
to the return of the Fee, if any, paid to the Brokers pursuant to this
Lease
15.02. FORCE MAJEURE. If performance by Landlord or Tenant of any term,
condition or covenant in this Lease is delayed or prevented by any, Act of God,
strike, lockout, shortage of material or labor, restriction by any governmental
authority, civil riot, flood, or any other cause not within the control of
Landlord or Tenant, as applicable, the period for performance of the term,
condition or covenant shall be extended for a period equal to the period
Landlord or Tenant is so delayed or prevented.
15.03. INTERPRETATION. The captions of the Articles or Sections of this Lease
are to assist the parties in reading this Lease and are not a part of their
terms or provisions of this Lease. Tenant shall be responsible for the conduct,
acts and omissions of Tenant's agents, employees, customers, contractors,
invitees, agents, successors or others using the Demised Premises with Tenant's
expressed or implied permission. Landlord shall be responsible for the conduct,
acts and omissions of Landlord's agents, employees, contractors, and invitees.
Whenever required by the context this Lease, the singular shall include the
plural and the plural shall include the singular, and the masculine, feminine
and neuter genders shall each include the other.
15.04. WAIVERS. All waivers to provisions of this Lease must be in writing and
signed by the waiving party Landlord's delay or failure to enforce any
provisions of this Lease or its acceptance of late installments of Rent shall
not be a waiver and shall not prevent Landlord from enforcing that provision or
any other provision of this Lease in the future. No statement on a payment check
from Tenant or in a letter accompanying a payment check shall be binding on
Landlord. Landlord may, with or without notice to Tenant, negotiate, cash, or
endorse the check without being bound to the conditions of any such
statement.
15.05. SEVERABILITY. A determination by a court of competent jurisdiction that
any provision of this Lease is invalid or unenforceable shall not cancel or
invalidate the remainder of that provision or this Lease, which shall remain in
full force and effect.
15.06. JOINT AND SEVERAL LIABILITY. All parties signing this Lease as Tenant
shall be jointly and severally liable for all obligations of Tenant.
15.07. AMENDMENTS OR MODIFICATIONS. This Lease is the only agreement between the
parties pertaining to the lease of the Demised Premises and no other agreements
are effective unless made a part of this Lease. All amendments to this Lease
must be in writing and signed by all parties. Any other attempted amendment
shall be void.
15.08. NOTICES. All notices and other communications required or permitted under
this Lease must be in writing and shall be deemed delivered, whether actually
received or not, on the earlier of: (i) actual receipt if delivered in person or
by messenger with evidence of delivery; or (ii) receipt of an electronic
facsimile transmission ("Fax"), or (iii) upon deposit in the United States Mail
as required below. Notices may be transmitted by Fax to the Fax telephone
numbers specified in Article One on the first page of this Lease, if any.
Notices delivered by mail must be deposited in the U.S. Postal Service, first
class postage prepaid, and properly addressed to the intended recipient as set
forth in Article One. After possession of the Demised Premises by Tenant,
Tenant's address for notice purposes will be the address of the Demised Premises
unless Tenant notifies Landlord in writing of a different address to be used for
that purpose. Any party may change its address for notice by delivering written
notice of its new address to all other parties in the manner set forth above.
Copies of all notices should also be delivered to the Principal Broker, but
failure to notify the Principal Broker will not cause an otherwise property
delivered notice to be ineffective.
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15.09. ATTORNEYS FEES. If on account of any breach or default by any party to
this Lease, ????? obligations any party to Lease (including but not limited to
the Principal Broker), it becomes necessary for a party to employ an attorney to
enforce or defend any of its fights or remedies under this Lease, the
non-prevailing party agrees to pay the prevailing party its reasonable attorneys
fees and court costs, if any, whether or not suit is instituted in connection
with the enforcement or defense.
15.10. VENUE. All obligations under this Lease, including but not limited to the
payment of Fees to the Principal Broker, shall be performable and payable in the
county in which the Properly is located. The laws of the State of Texas shall
govern this Lease.
15.11. SURVIVAL. All obligations of any party to this Lease which are not
fulfilled at the expiration or the termination of this Lease shall survive such
expiration or termination as continuing obligations of the party.
15.12. BINDING EFFECT. This Lease shall insure to the benefit of, and be binding
upon each of the parties to this Lease and their respective heirs,
representatives, successors and assigns. However, Landlord shall not have any
obligation to Tenant's successors or assigns unless the rights or interests of
the successors or assigns are acquired in accordance with the terms of this
Lease.
15.13. CONSULT AN ATTORNEY. This Lease is an enforceable, legally binding
agreement. Read it carefully The brokers involved in the negotiation of this
Lease cannot give you legal advice. The parties to this Lease acknowledge that
they have been advised by the Brokers to have this Lease reviewed by competent
legal counsel of their choice before signing this Lease. By executing this
Lease, Landlord and Tenant each agree to the provisions, terms, covenants and
conditions contained in this Lease.
15.14. OFFER: The execution of this Lease by the first party to do so
constitutes an offer to lease the Demised Premises. Unless within the number of
days stated in Section 1.14 above after the date of its execution by the first
party to do so, this Lease is signed by the other party and a full executed copy
is delivered to the first party, such offer to lease shall be automatically
withdrawn and terminated.
ARTICLE SIXTEEN: additional PROVISIONS [additional PROVISIONS AS DIRECTED BY THE
PARTIES MAY BE SET FORTH BELOW.]
16.01. TENANT'S CANCELLATION RIGHT: Notwithstanding anything to the contrary
contained herein. Tenant may cancel this lease by written notice to Landlord in
the event Landlord fails to obtain fee simple We to the property described on
Exhibit B on or before April 1 1997. in which event thereafter neither parry
shall have any further rights or obligations hereunder.
LANDLORD: THE SIGMA JOINT VENTURE TENANT: PERFORMANCE PACKAGING
/S/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇/S/ /S/▇▇▇▇ ▇. ▇▇▇▇▇ /S/
--------------------------------- --------------------------------------
By [Signature]: By [Signature]:
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ---------------------------------
Title: Partner Title: President
--------------------------- --------------------------------
Date of Execution: 4/16/97 Date of Execution: 4/10/97
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PRINCIPAL BROKER PRINCIPAL BROKER
/S/▇▇▇▇▇▇ ▇. ▇▇▇▇ /S/ /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ /S/
--------------------------------- --------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Title: President Title: Associate
--------------------------- -----------------------------
Date of Execution: 4/17/97 Date of Execution: 4/17/97
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Copyright Notice: This form is provided for the use of members of the North
Texas Commercial Association of Realtors, Inc permission is hereby granted to
make limited copies of this form for use in a particular Texas real estate
transaction. Contact the NTCAR office to confirm that you are using the current
version of this form
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ADDENDUM A TO LEASE
EXPENSE REIMBURSEMENT
Demised Premises and Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇
[Check all boxes which apply. Boxes not checked do not apply to this Lease.]
1. EXPENSE REIMBURSEMENT. Tenant shall pay the Landlord as additional Rent a
portion of the following expenses (collectively called "Reimbursement"} which
are incurred by or assessed against the Demised Premises [cheek all that are
to apply]:
[X] AD Valorem Taxes;
[X] Insurance Premiums:
Common Area Maintenance (CAM) Expenses;
Operating Expenses:
Roof and Structural Maintenance Expenses.
2. EXPENSE REIMBURSEMENT LIMITATIONS. The amount of Tenant's Reimbursement
shall be determined by one of the following methods as described in Section
4 below [check only one/:
[X] Base Year/Expense Stop Adjustment:
Pro Rata Adjustment:
Fixed Amount Adjustment:
Net Lease Provisions.
3. EXPENSE REIMBURSEMENT PAYMENTS. Tenant agrees to pay any end-of-year lump
sum Reimbursement within thirty (30) days after receiving an invoice from
Landlord. Any time during the Lease Term (or any renewals or extensions)
Landlord may direct Tenant In pay monthly an estimated portion of the
projected future Reimbursement amount. Any such payment directed by
Landlord shall be due and payable monthly on the same day that the Base
Rent is due. Any Reimbursement relating to partial calendar years shall be
prorated accordingly. Tenants Pro Rata Share of such Reimbursements shall
be based on the square footage of usable area contained in the Demised
Premises in proportion to the square footage of usable building area of
the Property. Tenant may audit or examine those items of expense in
Landlords records which relate to Tenants obligations under this Lease.
Landlord shall promptly returned to Tenant any overpayment which is
established by an audit or examination. If the audit or examination reveals
an error of more than five percent (5%) over the figures billed to Tenant.
Landlord shall pay the reasonable cost of the audit or examination.
4. DEFINITIONS.
A. AD VALOREM TAXES. All general real estate taxes. general and special
assessments parking surcharges. rent taxes. and other similar governmental
charges levied against the Property for each calendar year.
B. INSURANCE PREMIUMS. All Landlord's insurance premiums attributable to
the Property. including hut not limited to insurance for fire casualty. general
liability. property damage, medical expenses. and extended coverage and loss of
rents coverage for six months Rent
C. Common Area Maintenance Charges. Common area maintenance expenses
("CAM") means all costs of maintenance, inspection and repairs of the common
areas of the Property, including but not limited to those costs for security,
lighting, painting, cleaning, decoration and fixtures, utilities, ice and snow
removal, trash disposal, project signs, minor roof defects, pest control,
project promotional expenses, property owners association dues, wages and salary
costs of maintenance personnel, and other expenses benefiting all the Property
which may be incurred by Landlord, in its discretion, including sales taxes and
a reasonable service charge for the administration thereof. The "common area. is
defined as that part of the Property intended for the collective use of all
Tenants including, hut not limited to, the parking areas, driveways, loading
areas, landscaping, gutters and downspouts, plumbing, electrical systems, roof,
exterior walls, sidewalks, malls, promenades (enclosed or otherwise), meeting
rooms, doors, windows, corridors and public rest rooms. CAM does not include
depreciation on Landlord's original investment, cost of tenant improvements,
real estate brokers fees, Landlord's management office and overhead expenses, or
interest or depreciation on capital investments.
D. OPERATING EXPENSES. All costs of ownership, building management,
maintenance, repairs and operation of the Property, including, but not limited
to taxes, insurance, CAM, reasonable management fees, wages and salary costs of
building management personnel, overhead and operational costs of a management
office, janitorial, utilities, and professional services such as accounting and
legal fees. Operating Expenses, not include the capital cost of management
office equipment and furnishings, depreciation on Landlord's original
investment, roof and structural maintenance, the cost of tenant improvements,
real estate brokers fees, advertising, or interest or depreciation on capital
investments.
E. ROOF AND STRUCTURAL MAINTENANCE EXPENSES. All costs of maintenance,
repair and replacement of the roof, roof deck, flashings, skylights, foundation,
floor slabs, structural components and the structural soundness of the building
in general.
F. BASE YEAR/EXPENSE STOP ADJUSTMENT. Tenant shall pay to Landlord as
additional rent Tenants Pro Rata Share of increases in Landlord's Ad Valorem
Taxes. Insurance Premiums. CAM Expenses. Operating Expenses, and/or Roof and
Structural Maintenance Expenses, whichever are applicable, for the Property for
any calendar year during the Lease Term or during any extension of this Lease,
over [check only one]:
[X] (1) Such amounts paid by Landlord for the Base Year 1997, or
(2) $ per square foot per year.
G. PRO RATA ADJUSTMENT. Tenant shall pay to Landlord as additional Rent
Tenant's Pro Rata Share of the total amount of Landlord's Ad Valorem Taxes,
Insurance Premiums, CAM, Operating Expenses, and/or Roof and Structural
Maintenance Expenses, whichever are applicable, for every calendar year during
the Lease Term and during any extension of this Lease.
H. FIXED AMOUNT ADJUSTMENT. Tenant shall pay to Landlord as additional
Rent the following monthly amounts as Tenant's Reimbursement to Landlord for
the applicable expenses which are incurred by or assessed against the
Property:
AD Valorem Taxes $ N/A per month
----------------
Insurance Premiums $ N/A per month
----------------
(CAM) Expenses $ N/A per month
----------------
Operating Expenses $ N/A per month
----------------
Roof and Structural Maintenance Expenses $ N/A per month
----------------
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5. Gross-Up Provisions. [Check this only if applicable.] If the property is a
multi-tenant building and is not fully occupied during the Base year or any
portion of the Lease Term, an adjustment shall be made in computing the
variable costs for each applicable calendar year Variable costs shall include
only those items of expense that vary directly proportionately to the
occupancy of the Property Variable costs which are included in the CAM and
Operation Expenses shall be increased proportionately to the amounts that,
in Landlord's reasonable judgement, would have been incurred had ninety
percent (90%) of the useable area of the Property been occupied during those
years.
Initials: Landlord s/AT/s Tenant s/JW/s
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ADDENDUM B TO LEASE
RENEWAL OPTIONS
1. OPTION TO EXTEND TERM.
Landlord grants to Tenant one (1) option(s) (the "Option") to extend the Lease
Term for additional term of 60 months each (the "Extension") on the same terms
conditions and covenants set forth in this Lease except as provided below. Each
Option may be exercised only by written notice delivered to the Landlord no
earlier than one hundred eighty ( 180 ) days before, and no later than thirty
(30) days before. The expiration of the Lease Term or the preceding Extension of
the Lease Term, whichever is applicable. If Tenant fails to deliver Landlord
written notice of the exercise of an Option within the prescribed time period,
such Option and any succeeding Options shall lapse and there shall be no further
right to extend the Lease Term. Each option may only be exercised Tenant on the
express condition that, at the time of the exercise, tenant is not in default
under any of the provisions of this Lease. The foregoing Option(s) are personal
to Tenant and may not be exercised by and assignee or subtenant without
Landlord's written consent.
2. CALCULATION OF RENT. The Base Rent during the Extension(s) shall be
determined by one of the following methods [check only one]:
A. CONSUMER PRICE INDEX ADJUSTMENT. The monthly Base Rent during the
Extension shall be determined by multiplying the monthly installment of Base
Rent during the last month of the Lease Term by a fraction determined as
follows:
(1) The numerator shall be the Latest Index which means either:
[check one]
(a) the Index published for the nearest calendar month preceding the first
day of the Extension or
(b) the Index for the month of _________________ preceding the Extension.
(2) The denominator shall be the Initial Index which means either:
[check one]
(a) the Index published for the nearest calendar month preceding the
Commencement Date or
(b) the Index for the month of __________________ preceding the
Commencement Date.
[If no blanks are filed in above, the choice (a) which includes the phrase, "the
nearest calendar month preceding," shall apply.]
The Index as defined herein, means the Consumer Price Index for All Urban
Consumers (All Items) for the Dallas/Fort Worth Consolidated Metropolitan
Statistical Area, published by the U.S. Department of Labor, Bureau of Labor
Statistics (base Index of 1982-84 = 100) If the Index is discontinued or
revised, the new index or computation which replaces the Index shall be used in
order to obtain substantially the same result would have been obtained it if had
not been discontinued or revised.
If such computation would reduce the Rent for the particular Extension, it shall
be disregarded, and the Rent during the immediately preceding period shall apply
instead.
B. FAIR MARKET RENTAL VALUE. The Base Rent during the Extension shall be the
Fair Market Rental amount of the Demised Premises determined in the following
manner:
(1) The Fair Market Rental" of the Demised Premises means the price that a
ready and willing tenant would pay as of the commencement of the Extension as
monthly rent to a ready and willing landlord of demised premises comparable to
the Demised Premises if the property were exposed for lease on the open market
for a reasonable period of time, and taking into account the term of the
Extension, the amount of improvements made by Tenant at its expense, the
creditworthiness of the Tenant, and all of the purposes for which the property
may be used and not just the use proposed to be made of the Demised Premises by
Tenant. Upon proper written notice by Tenant to Landlord of Tenant's election to
exercise the renewal Option, Landlord shall within fifteen (15) days thereafter
notify Tenant in writing of Landlord's proposed Fair Market Rental amount and
Tenant shall thereupon notify Landlord of Tenant s acceptance or rejection of
Landlord's proposed amount. Failure of Tenant to reject Landlord's Fair Market
Rental amount within fifteen (15) days after receipt of Landlord's notice shall
be deemed Tenant s acceptance of Landlord's proposed Fair Market Rental amount.
(2) If Landlord and Tenant have not been able to agree on the Fair Market
Rental amount prior to the date the option is required to be exercised the rent
for the Extension shall be determined as follows: Within thirty (30) days
following the exercise of the option, Landlord and Tenant shall endeavor in good
faith to agree upon a single Appraiser (defined below). If Landlord and Tenant
are unable agree upon a single Appraiser within the thirty day period, each
shall then appoint one Appraiser by written notice to the other, given within
ten (10) days after the thirty day period. Within ten (10) days after the two
Appraisers are appointed the two Appraisers shall appoint a third Appraiser. If
either Landlord or Tenant fails to appoint its Appraiser within the prescribed
time period, the single Appraiser appointed shall determine the Fair Market
Rental amount of the Demised Premises Each party shall hear the cost of the
appraiser appointed by it and the parties shall share equally the cost of the
third appraiser. The term "Appraiser" means a State Certified Real Estate
Appraiser licensed by the State of Texas to value commercial property.
(3) The Fair Market Rental Value of the Demised Premises shall be the
average of two of the three appraisals which are closest in amount as described
below, and the third appraisal shall be disregarded. In no event shall the Rent
be reduced by reason of such computation. If the Fair Market Rental is not
determined prior to the commencement of the Extension then Tenant shall continue
to pay to Landlord the Rent applicable to the Demised Premises immediately prior
to the Extension until the Fair Market Rental amount is determined, and when it
is determined, Tenant shall pay to Landlord within ten (10) days after receipt
of such notice the difference between the Rent actually paid by Tenant to
Landlord and the new Rent determined under this Lease.
C. FIXED RENTAL ADJUSTMENTS. The Base Rent shall be increased to the
following amounts on the following dates.
Date Amount
--------------------------------- -------------------------------
--------------------------------- -------------------------------
--------------------------------- -------------------------------
--------------------------------- -------------------------------
s/AT/s Tenant s/JW/s
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