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EXHIBIT (6)(3)(ii)
RE/MAX NORTH CENTRAL
[REALTOR LOGO] [EQUAL HOUSING
OPPORTUNITY LOGO]
[RE/MAX LOGO]
MODIFICATION OF LEASE AGREEMENT
WHEREAS, JERSEY INVESTMENTS, INC., ROYCE & XXXX XXXXX, as Landlord, and GLOBAL
ELECTION SYSTEMS, INC, XXXXXX X. XXX XXXX-PRESIDENT Tenants, entered into that
certain Lease dated MARCH 4, 1997, of the following described property:
0000 XXXXXXX XXXX, XXXXXXXX, XXXXX 00000
XXXXXX XXXXXX
13,050 SQUARE FOOT BUILDING
WHEREAS, the parties to said Lease mutually desire to modify said Lease as set
forth hereinafter.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, each of the undersigned parties for himself, his respective
heirs, successors, legal representatives, and assigns agree as follows:
THE FINISH OUT FOR 0000 XXXXXXX XXXX, XXXXXXXX, XXXXX, HAS BEEN INCREASED FROM
$150,000.00 TO $189,708.00. THIS INCREASE WILL RESULT IN THE RENT CHANGING FROM
$8.00 PER SQUARE FOOT TO $8.45 PER SQUARE FOOT. THE MONTHLY RENT WILL BE
$9,189.37. THE TOTAL BASE RENT WILL BE $551,362.00 FOR THE FIVE YEAR TERM OF
THE LEASE. JERSEY INVESTMENTS HAS AGREED TO SERVICE THE HVAC FOR THIS FIVE YEAR
LEASE PERIOD AT NO EXPENSE TO GLOBAL ELECTION SYSTEMS INC.
Except as expressly modified by this Modification Agreement, all of the other
terms, provisions, conditions, and covenants set forth in the said original
Lease shall remain in full force and effect and this Modification Agreement
shall not be construed as a novation of said Lease.
LANDLORD: TENANT:
/s/ [ILLEGIBLE] /s/ XXXXXX X. XXX XXXX
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JERSEY INVESTMENTS, INC. GLOBAL ELECTION SYSTEMS, INC
/s/ XXXX XXXXX PRESIDENT
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ROYCE & XXXX XXXXX XXXXXX X. XXX XXXX-PRESIDENT
Date of Execution: May 20, 1997 Date of Execution: May 13, 1997
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RE/MAX NORTH CENTRAL
[REALTOR LOGO] [EQUAL HOUSING
OPPORTUNITY LOGO]
COMMERCIAL LEASE AGREEMENT
TABLE OF CONTENTS
Article Page
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1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Lease and Lease Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Rent and Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Insurance and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Use of Demised Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Property Condition: Maintenance, Repairs and Alterations . . . . . . . . . . . . . . . . . . 4
8. Damage or Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
9. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Assignment and Subletting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
11. Default and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
12. Landlord's Contractual Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
13. Protection of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
14. Professional Service Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
15. Environmental Representations and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 7
16. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
17. Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
An Exhibit or Exhibits may be attached to this Lease which shall be made a part
of this Lease for all purposes [check all boxes which apply]:
EXHIBITS TO LEASE
[X] EXHIBIT A Floor Plan/Site Plan [X] EXHIBIT E Guarantee
[X] EXHIBIT B Legal Description of Property [X] EXHIBIT F Expense Reimbursement
[X] EXHIBIT C Renewal Options [ ] EXHIBIT G Percentage Rental/Gross Sales Reports
[ ] Exhibit D Right of First Refusal for [X] EXHIBIT H Construction of Improvements
Additional Space [ ] EXHIBIT I N/A
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ARTICLE ONE: DEFINED TERMS
As used in this Lease, the following terms set forth in this Article One shall
have the respective meanings set forth hereinbelow:
1.01. DATE OF LEASE: MARCH 4, , 1997
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1.02. LANDLORD: JERSEY INVESTMENTS, INC. ROYCE & XXXX XXXXX
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Address of Landlord: 000 XXXXXXXX XX. XXXXX 000 XXXXX, XXXXX 00000
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Telephone: 000-000-0000 OR 000-000-0000
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1.03. TENANT: GLOBAL ELECTION SYSTEMS INC.
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Address of Tenant: 0000 XXXXXXX XX. XXXXXXXXXXX, XXX XXXXXX 00000
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Telephone: 0-000-000-0000
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1.04. PREMISES:
A. Street address (including county): 0000 XXXXXXX XX. XXXXXXXX, XXXXX 00000 COLLIN COUNTY
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B. Floor or site plan: Being a floor area of approximately 13,050 square feet and being approximately
90 by 145 feet (measured to the exterior of outside walls and to the center of the interior walls,
and being more particularly shown in outline on the floor/site plan attached hereto as Exhibit A.
(The aforementioned street address and the floor or site plan shall be collectively referred to
herein as the "Demised Premises".)
C. Legal description: The legal description of the property on which the floor/site plan is situated
is more particularly described in Exhibit B attached hereto (the "Property").
1.05. LEASE TERM: FIVE(5) years and N/A months beginning on the 1 day of JUNE, 1997, and ending on the 31
day of MAY, 2002.
1.06. BASE RENT: $522,000.00 total Base Rent for the Lease Term payable in monthly installments of $8,700.00
per month in advance.
1.07. SECURITY DEPOSIT: $8,700.00
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1.08. PERMITTED USE: [See Section 6.01] GENERAL OFFICE, WAREHOUSE, ASSEMBLY WORK
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N/A
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1.09. PRINCIPAL BROKER: [If none, so state] RE/MAX NORTH CENTRAL
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Address: 000 Xxxxx Xxxxxxx Xxxxx. 101
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1.10. COOPERATING BROKER: [If none, so state] XXX XXXXXX
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Address: 000 X. XXXX XXXX. XXXXX 000 XXXXX, XXXXX 00000 2
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1.11. PROFESSIONAL SERVICE FEES: [See Article 14]
A. Payments due to the Principal Broker shall be calculated and paid in accordance with paragraph [ ] A
or [X] B of Section 14.01. [Check applicable paragraph]
B. The percentage applicable for leases in Sections 14.01 and 14.02 shall be SIX AND THREE FOURTHS
percent (6.75%) and the percentage applicable in Section 14.02 in the event of a sale shall be FIVE
percent (5.00%).
1.12 HOLDOVER RENT: [See Section 2.04] $8,700 per month in advance.
1.13 DAILY LATE CHARGE: [See Section 3.03] THIRTY Dollars ($30.00) per day.
Rent not paid by the 10th of the month shall be subject to late charge of $30/day from the 1st of the month
until paid.
1.14 ACCEPTANCE: [See Section 16.13] The number of days for acceptance of this offer to lease shall be TEN days.
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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 the
Landlord for the Lease Term stated in Section 1.05. As used herein, the
"Commencement Date" shall be the date specified in Section 1.05 for the
beginning of the Lease Term, unless advanced or delayed under any provision of
this Lease.
2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant if
Landlord does not deliver possession of the Demised Premises to Tenant on the
first date specified in Section 1.05 above. Landlord's nondelivery of possession
of the Demised Premises to Tenant on that date shall not affect this Lease or
the obligations of Tenant under this Lease. However, the Commencement Date shall
be delayed until possession of the Demised Premises is delivered to Tenant. The
Lease Term shall be extended for a period equal to the delay in delivery of
possession of the Demised Premises to Tenant, plus the number of days necessary
for the Lease Term to expire on the last day of a month. If Landlord does not
deliver possession of the Demised Premises to Tenant within sixty (60) days
after the first date specified in Section 1.05 above, Tenant may elect to cancel
this Lease by giving written notice to Landlord within ten (10) days after the
60-day period ends. If Tenant gives such notice, the Lease shall be cancelled
effective as of the date of its execution, and no party hereto shall have any
obligations, one to the other. If Tenant does not give such notice within the
time specified, Tenant shall have no right to cancel the Lease, and the Lease
Term shall commence upon the delivery of possession of the Demised Premises to
Tenant. If delivery of possession of the Demised Premises to Tenant is delayed,
Landlord and Tenant shall, upon such delivery, execute an amendment to this
Lease setting forth the Commencement Date and expiration date of the Lease Term.
2.03. EARLY OCCUPANCY. 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 of the Lease Term. Unless
provided otherwise herein, Tenant shall pay Base Rent and all other charges
specified in this Lease for the period of occupancy.
2.04. HOLDING OVER. Tenant shall vacate the Demised Premises 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
Term or earlier termination of the Lease, Tenant's occupancy of the Demised
Premises shall be a "month to month" tenancy, subject to all of the terms of
this Lease applicable to a month to month tenancy, except that the Base Rent per
month then in effect shall be the amount designated in Section 1.12.
ARTICLE THREE: RENT AND SECURITY DEPOSIT
3.01. MANNER OF PAYMENT. All sums payable hereunder by Tenant (the "Rent")
shall be made to the Landlord at the address designated in Section 1.02 or to
such other party, or address as Landlord may designate. 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 said designated third party. All sums payable
by Tenant hereunder, whether or not expressly denominated as rent, shall
constitute rent for the purposes of Section 502(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 Exhibits attached hereto, if any.
3.02. TIME OF PAYMENT. Upon execution hereof, Tenant shall pay the
installment of 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 rent and other sums due hereunder shall be due and payable,
in advance, without off-set, deduction or prior demand. 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. LATE CHARGES. Tenant's failure to pay sums due hereunder promptly
may cause Landlord to incur unanticipated costs. The exact amount of such costs
are impractical or extremely difficult to ascertain. Such costs may include, but
are not limited to, processing and accounting charges and late charges which may
be imposed on Landlord by any ground lease, deed of trust or mortgage
encumbering the Demised Premises. Therefore, if any sum due hereunder is not
received when due, Tenant shall pay the Landlord a late charge equal to the
Daily Late Charge for each day after the due date until such delinquent sum is
received. If any check tendered in payment of any sum due from Tenant hereunder
is dishonored for any reason, Tenant shall pay a late charge for each day after
said due date until good funds are received by the Landlord. The parties agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment or such dishonored check.
3.04. SECURITY DEPOSIT. Upon execution hereof, Tenant shall deposit with
Landlord a cash Security Deposit in the sum stated in Section 1.07. 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. If Landlord uses any
part of the Security Deposit, Tenant shall restore the Security Deposit to its
full amount within ten (10) days after Landlord's written demand. Tenant's
failure to restore the full amount of the Security Deposit within the time
specified shall be a default under this Lease. No interest shall be paid on the
Security Deposit. Landlord shall not be required to keep the Security Deposit
separate from its other accounts and no trust relationship is created with
respect to the Security Deposit. Upon any termination of this Lease not
resulting from Tenant's default, and after Tenant has vacated the Demised
Premises in the manner required by this Lease, Landlord shall refund the unused
portion of the Security Deposit to Tenant.
3.05. GOOD FUNDS PAYMENTS. 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 shall be made by cash, cashier's check, or money order and that the
delivery of Tenant's personal or corporate check will no longer constitute
payment of Rent as provided in 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 by good funds
as set forth in this Section 3.05.
ARTICLE FOUR: TAXES
4.01. PAYMENT BY LANDLORD. Landlord shall pay the real estate taxes on the
Demised Premises during the Lease Term, pursuant to the terms and conditions
contained in Exhibit F attached hereto.
4.02. IMPROVEMENTS BY TENANT. In the event the real estate taxes levied
against the Demised Premises for the real estate tax year in which the Lease
Term commences are increased in the current tax year or subsequent tax years 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 such increase and continue to pay such increase during the term of
this Lease. Landlord shall use reasonable efforts to obtain from the tax
assessor or assessors a written statement of the total amount of such increase.
4.03. JOINT ASSESSMENT. If the real estate taxes are assessed against the
Demised Premises jointly with other property not constituting a part of the
Demised Premises, the real estate taxes for such years 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, or any other personal property belonging
to Tenant. Tenant shall use reasonable efforts to have its personal property
taxed separately from the Demised Premises, but if any of Tenant's personal
property is taxed with the Demised Premises, Tenant shall pay the taxes for the
personal property within fifteen (15) days after Tenant receives a written
statement for such 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 Demised Premises in such
amount or percentage of replacement value as Landlord deems reasonable in
relation to the age, location, type of construction and physical condition of
the Demised Premises and the availability of such insurance at reasonable rates.
Such policies shall provide protection against all perils included within the
classification of fire and extended coverage and any other perils which Landlord
deems necessary. Landlord may 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 such primary or additional
insurance on its fixtures, equipment and building improvements as Tenant deems
necessary to protect its interest. Tenant shall not do or permit to be done
anything which invalidates any such insurance policies.
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Any casualty insurance which may be carried by Landlord or Tenant shall be for
the sole benefit of the party carrying such 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 as of the day immediately prior to Tenant's possession of
the Demised Premises under this Lease, Tenant shall pay, as additional rental,
the amount of such increase to Landlord upon demand and presentation of written
evidence of the increase by Landlord.
5.03. LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of comprehensive public liability insurance, at Tenant's expense,
insuring Landlord against liability arising out of the ownership, use,
occupancy, or maintenance of the Demised Premises. The initial amount of such
insurance shall be at least $1,000,000 combined single-limit bodily injury and
property damage, for each occurrence, and shall be subject to periodic increases
based upon such economic factors as Landlord shall determine, in Landlord's
discretion, exercised in good faith. However, the amount of such insurance shall
not limit Tenant's liability nor relieve Tenant of any obligation hereunder.
The policy shall contain cross-liability endorsements, if applicable, and shall
insure Tenant's performance of the indemnity provisions of Section 5.04. Such
policy shall contain a provision which prohibits cancellation or modification of
the policy except upon thirty (30) days' prior written notice to Landlord.
Tenant may discharge its obligations under this Section by naming Landlord as an
additional insured under a policy of comprehensive liability insurance
maintained by Tenant and containing the coverage and provisions described in
this Section. Tenant shall deliver a copy of such policy or certificate (or a
renewal thereof) to Landlord prior to the Commencement Date and prior to the
expiration of any such policy during the Lease Term. If Tenant fails to maintain
such policy, Landlord may elect to maintain such insurance at Tenant's expense.
Tenant shall, at Tenant's expense, maintain such 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 whomsoever, for
any injury to persons or damage to property on or about the Demised Premises or
any adjacent area owned by Landlord caused by the negligence or misconduct of
Tenant, its employees, subtenants, licensees or concessionaires or any other
person entering the Demised Premises under express or implied invitation of
Tenant, or arising out of the use of the Demised Premises by Tenant and the
conduct of its business therein, or arising out of any breach or default by
Tenant in the performance of its obligations hereunder; and Tenant hereby agrees
to indemnify and hold Landlord harmless from any loss, expense or claims arising
out of such damage or injury. Tenant shall not be liable for any injury or
damage caused by the negligence or misconduct of Landlord, or its 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 hereby unconditionally and
irrevocably agrees to indemnify, defend and hold Landlord and Landlord's
officers, agents, directors, subsidiaries, partners, employees, licensees and
counsel harmless, to the extent of Tenant's comparative negligence, if any, from
and against any and all loss, liability, demand, damage, judgement, suit, claim,
deficiency, interest, fee, charge, cost or expense (including, without
limitation, interest, court costs and penalties, attorney's fees and
disbursements and amounts paid in settlement, or liabilities resulting from any
change in federal, state or local law or regulation or interpretation hereof) of
whatever nature, on a comparative negligence basis. This provision shall survive
the termination of this Lease.
5.06. WAIVER OF SUBROGATION. Each party hereto waives any and every claim
which arises or may arise in its favor against the other party hereto during the
term of this Lease or any renewal or extension thereof 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 by valid and
collectible fire and extended coverage insurance policies, to the extent that
such loss or damage is recoverable under such insurance policies. Such mutual
waivers shall be in addition to, and not in limitation or derogation of, any
other waiver or release contained in this Lease with respect to any loss of, or
damage to, property of the parties hereto. Inasmuch as such mutual waivers will
preclude the assignment of any aforesaid claim by way of subrogation or
otherwise to an insurance company (or any other person), each party hereby
agrees immediately to give to each insurance company which has issued 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, if necessary, to prevent the invalidation of such insurance
coverages by reason of such 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 1.08.
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 the Demised Premises, all at Tenant's sole expense,
including any expense or cost resulting from the compliance with improvements
for handicapped or disabled persons mandated by governmental regulations.
Landlord warrants that, as of the making of this Lease, the building is in
conformance in all respects.
6.03. See Exhibit H attached hereto.
6.04. SIGNS. Without the prior written consent, which consent shall not
be unreasonably withheld, of Landlord, Tenant shall not place or affix any signs
or other object upon or to the Demised Premises, including but not limited to
the roof or exterior walls of the building or other improvements thereon, or
paint or otherwise deface said exterior walls. Any signs installed by Tenant
shall conform with applicable laws and deed and other restrictions. Tenant shall
remove all signs at the termination of this Lease and shall repair any damage
and close any holes caused or revealed by such removal.
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 all electric lights, lamps and tubes.
6.06. LANDLORD'S ACCESS. Landlord and its authorized agents shall have the
right, during normal business hours, to enter the Demised Premises (a) to
inspect the general condition and state of repair thereof, (b) to make repairs
required or permitted under this Lease, (c) to show the Demised Premises or the
Property to any prospective tenant or purchaser, or (d) for any other reasonable
purpose. During the final one hundred fifty (150) days of the Lease Term,
Landlord and its authorized agents shall have the right to erect and maintain on
or about the Demised Premises customary signs advertising the Demised Premises
for lease or for sale. Such access shall not be inconsistent with tenants' right
to quiet enjoyment.
6.07. QUIET POSSESSION. If Tenant pays the rent 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.
6.08. EXEMPTIONS FROM LIABILITY. Landlord shall not be liable for any
damage or injury to the person, business (or any loss of income therefrom),
goods, wares, merchandise or other property of Tenant, Tenant's employees,
invitees, customers or any other person in or about the
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Demised Premises, whether such damage or injury is caused by or results from:
(a) fire, steam, electricity, water, gas or rain; (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 of which the Demised Premises is
a part. Landlord shall not be liable for any such damage or injury even though
the cause of or the means of repairing such damage or injury are not accessible
to Tenant. The provisions of this Section 6.08 shall not, however, exempt
Landlord from liability for Landlord's gross negligence or willful misconduct.
ARTICLE SEVEN: PROPERTY CONDITION, MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 [OMITTED]
7.02 [OMITTED]
7.03. OBLIGATION TO REPAIR. Except as otherwise provided herein, Landlord
shall be under no obligation to perform any repair maintenance or management
service in the Demised Premises or adjacent common areas. Tenant shall be fully
responsible, at its expense, for all repair, maintenance and management services
other than those which are expressly assumed by Landlord. Landlord shall be
responsible for all repairs or replacement of leasehold improvements for the
first 12 months of the lease term if the repair or replacement is subject to
contractor, subcontractor or manufacturer's warranty.
A. LANDLORD'S OBLIGATION TO REPAIR.
(1) Subject to the provisions of Article Eight (Damage or
Destruction) and Article Nine (Condemnation) and except for damage
caused by any act or omission of Tenant, Landlord shall keep the
foundation, roof and the structural portions of exterior walls of the
improvements of the Demised Premises in good order, condition and
repair. Landlord shall not be obligated to maintain or repair windows,
doors, plate glass or the surfaces of walls. In addition, Landlord
shall not be obligated to make any repairs under this Section until a
reasonable time after receipt of written notice from Tenant of the
need of such repairs. If any repairs are required to be made by
Landlord, Tenant shall, at Tenant's sole cost and expense, promptly
remove Tenant's fixtures, inventory, equipment and other property, to
the extent required to enable Landlord to make such repairs.
Landlord's liability hereunder shall be limited to the cost of such
repairs or corrections.
(2) Landlord and Tenant expressly agree that all repair,
maintenance management and other services to he performed by Landlord
or Landlord's agents exclusively consist of the exercise of
professional judgement by such service providers.
B. TENANT'S OBLIGATION TO REPAIR. Subject to the provisions of the
last sentence of Section 7.01, the preceding Section 7.03.A, Article Eight
(Damage or Destruction) and Article Nine (Condemnation), Tenant shall, at
all times, keep all other portions of the Demised Premises in good order,
condition and repair, including but not limited to repairs (including all
necessary replacements) of the windows, plate glass, doors, heating system,
air conditioning equipment, electrical and lighting system, fire protection
sprinkler system, dock levelers, elevators, interior and exterior plumbing
and the interior of the building in general. In addition, Tenant shall, at
Tenant's expense, repair any damage to any portion of the Property,
including the roof, foundation, or structural portions of 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 such maintenance or repair on behalf of Tenant, except that no
notice shall be required in case of emergency, and Tenant shall reimburse
Landlord for all costs incurred in performing such maintenance or repair
immediately on demand.
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 nonstructural alterations, additions or improvements shall
not be unreasonably withheld by Landlord. Tenant shall have the right to erect
or install shelves, bins, machinery, air conditioning or heating equipment and
trade fixtures, 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 such items so installed by it, provided Tenant is not
in default at the time of such removal and provided further that Tenant shall,
at the time of removal of such items, repair in a good and workmanlike manner
any damage caused by installation or removal thereof. 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 a mechanic's or materialman's lien to
be filed against the Demised Premises. 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 such alterations, additions or
improvements.
7.05. CONDITION UPON TERMINATION. Upon the 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 was
not otherwise obligated to remedy under any provision of the Lease. Tenant shall
not be obligated to repair any damage which Landlord is required to repair under
Article Eight (Damage or Destruction). In addition, Landlord may require Tenant
to remove any alterations, additions or improvements (whether or not made with
Landlord's consent) prior to the termination of the Lease and to restore the
Demised Premises 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 termination of the Lease. In no event, however, shall Tenant remove any
of the following materials or equipment without Landlord's prior written
consent: any power wiring or power panels; lighting or lighting fixtures; wall
coverings; drapes, blinds or other window coverings; carpets or other floor
coverings; heaters, air conditioning or any other heating or air conditioning
equipment; fencing or security gates; or other similar building operating
equipment and decorations.
ARTICLE EIGHT: DAMAGE OR DESTRUCTION
8.01. NOTICE. If the building or other improvements situated on the
Demised Premises should be damaged or destroyed by fire, tornado or other
casualty, Tenant shall immediately give written notice thereof 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 be completed within
one hundred twenty (120) days from the date Landlord receives written
notification by Tenant of the happening of the damage, this Lease shall not
terminate, but Landlord shall, at its sole cost and risk, proceed forthwith and
use reasonable diligence to rebuild or repair such 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 such damage;
provided, however, if the casualty occurs during the final eighteen (18) months
of the Lease Term, Landlord shall not be required to rebuild or repair such
damage unless Tenant shall exercise its renewal option (if any is contained
herein) within fifteen (15) days after the date of receipt by Landlord of the
notification of the occurrence of the damage. If Tenant does not elect to
exercise its renewal option or if there is no renewal option contained herein or
previously unexercised at such time, this Lease shall terminate at the option of
Landlord and the Rent shall be abated for the unexpired portion of this Lease,
effective from the date of actual receipt by Landlord of the written
notification of the damage. If the building and other improvements are to be
rebuilt or repaired and are untenantable in whole or in part following such
damage, the monthly installments of Rent payable hereunder during the period in
which they are untenantable shall be adjusted equitably.
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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 happening of
the damage, this Lease shall terminate at the option of either Landlord or
Tenant and monthly installments of Rent shall be abated for the unexpired
portion of this Lease, effective from the date of receipt by Landlord or Tenant
of such written notification. If this Lease is not terminated, the building and
the improvements shall be rebuilt or repaired and monthly installments of Rent
abated to the extent provided under Section 8.02.
ARTICLE NINE: CONDEMNATION
[Omitted]
ARTICLE TEN: ASSIGNMENT AND SUBLETTING
Tenant shall not, without the prior written consent of Landlord, 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 obligations under
this Lease. Tenant shall not assign its rights hereunder 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 hereunder and to be bound by the terms of this Lease. No such assignment
or subletting shall constitute a novation. In the event of an occurrence of an
event of default while the Demised Premises is assigned or sublet, Landlord, in
addition to any other remedies provided herein or by law, may at Landlord's
option, collect directly from such assignee or subtenant all rents becoming due
under such assignment or subletting and apply such rent against any sums due to
Landlord hereunder. No direct collection by Landlord from any such assignee or
subtenant shall release Tenant from the performance of its obligations
hereunder. All such consent of the Landlord shall not be unreasonably withheld.
ARTICLE ELEVEN: DEFAULT AND REMEDIES
11.01. DEFAULT. Each of the following events shall be an event of default
under this Lease:
A. Failure of Tenant to pay any installment of the Rent or other sum
payable to Landlord hereunder on the date that same is due and such
failure shall continue for a period of ten (10) days;
B. Failure of Tenant to comply with any term, condition or covenant of
this Lease, other than the payment of Base Rent or other sum of money, and
such failure shall not be cured within thirty (30) days after written
notice thereof to Tenant;
C . Tenant shall generally fail to pay its debts as they become due or
shall admit in writing its inability to pay its debts, or shall make a
general assignment for the benefit of creditors;
D. Tenant shall commence 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;
E. Any case, proceeding or other action against Tenant shall be
commenced 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 (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 within seven
(7) business days after the entry thereof; and
F. Abandonment by Tenant of any substantial portion of the Demised
Premises or cessation of the use of the Demised Premises for the purpose
leased.
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 whatsoever:
A. Terminate this Lease, in which event Tenant shall immediately
surrender the Demised Premises to Landlord. If Tenant fails to so
surrender the Demised Premises, Landlord may, without prejudice to any
other remedy which it may have for possession of the Demised Premises or
arrearages in Rent, enter upon and take possession of the Demised Premises
and expel or remove Tenant and any other person who may be occupying the
Demised Premises or any part thereof, by force if necessary, without being
liable for prosecution or any claim for damages therefor. Tenant shall pay
to Landlord on demand the amount of all loss and damage which Landlord may
suffer by reason of such termination, whether through inability to relet
the Demised Premises on satisfactory terms or otherwise.
B. Enter upon and take possession of the Demised Premises, by force if
necessary, without terminating this Lease and without being liable for
prosecution or for any claim for damages therefor, and expel or remove
Tenant and any other person who may be occupying 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 such deficiency, the professional
service fees, attorneys' fees, remodeling expenses and other costs of
reletting shall be subtracted from the amount of rent received under such
reletting.
C. Enter upon the Demised Premises, by force if necessary, without
terminating this Lease and without being liable for prosecution or for any
claim for damages therefor, and do whatever Tenant is obligated to do
under the terms of this Lease. Tenant agrees to pay Landlord on demand for
expenses which Landlord may incur in 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.
D. In addition to the foregoing remedies, Landlord shall have the right
to change or modify the locks on the Demised Premises in the event 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 Demised Premises unless and until Tenant pays Landlord all
Rent which is delinquent. Tenant agrees that Landlord shall not be liable
for any damages resulting to the Tenant from the lockout. At such time
that Landlord changes or modified the lock, Landlord shall post a "Notice
of Change of Locks" on the front of the Demised Premises. Such Notice
shall state the following:
(1) That Tenant's monthly installment of Rent is delinquent, and
therefore, under authority of Section 11.02D of Tenant's Lease, the
Landlord has exercised its contractual right to change or modify
Tenant's door locks;
(2) That the Notice has been posted on the Tenant's front door by a
representative of Landlord and that Tenant should make arrangements to
pay the delinquent installment of Rent when Tenant picks up the key;
and
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(3) That the failure of the 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 the Tenant to legal liability.
E. 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 such 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 of the
other remedies provided by law, nor shall pursuit of any remedy herein
provided constitute a forfeiture or waiver of any monthly installment of
Rent due to Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, provisions and covenants
herein contained. Forbearance by Landlord to enforce one or more of the
remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of any other violation or default. 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. Should Landlord terminate
this Lease at any time for any default, in addition to any other remedy
Landlord may have, Landlord may recover from Tenant all damages Landlord
may incur by reason of such default, including the cost of recovering the
Demised Premises and the cost of the rental then remaining unpaid.
11.03. NOTICE OF DEFAULT. Tenant shall give written notice of any failure
by Landlord to perform any of its 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 unless
Landlord (or such ground lessor, mortgagee or beneficiary) fails to cure such
nonperformance within thirty (30) days after receipt of Tenant's notice.
However, if such nonperformance reasonably requires more than thirty (30) days
to cure, Landlord shall not be in default if such cure is commenced within such
30-day period and thereafter diligently pursued to completion.
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 after the date of transfer. 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 if this Lease.
ARTICLE TWELVE: LANDLORD'S CONTRACTUAL LIEN
In addition to the statutory Landlord's lien, Tenant hereby grants to
Landlord a security interest to secure payment of all Rent and other sums of
money becoming due hereunder from Tenant, upon all goods, wares, equipment,
fixtures, furniture and other personal property of Tenant situated in or upon
the Demised Premises, together with the proceeds from the sale or lease thereof.
Such property shall not be removed without the consent of Landlord until all
arrearages in Rent and other sums of money then due to Landlord hereunder shall
first have been paid and discharged. Upon the occurrence of an event of default,
Landlord may, in addition to any other remedies provided herein or by law, enter
upon the Demised Premises and take possession of any and all goods, wares,
equipment, fixtures, furniture and other personal property of Tenant situated on
the Demised Premises without liability for trespass or conversion, and sell the
same at public or private sale, with or without having such property at the
sale, after giving Tenant reasonable notice of the time and place of any such
sale. Unless otherwise required by law, notice to Tenant of any such sale shall
be deemed sufficient if given in the manner prescribed in this Lease at least
ten (10) days before the time of the sale. Any public sale made under this
Article shall be deemed to have been conducted in a commercially reasonable
manner if held on the Demised Premises or where the property is located, after
the time, place and method of sale and a general description of the types of
property to be sold have been advertised in a daily newspaper published in the
county where the Demised Premises is located for five (5) consecutive days
before the date of the sale. Landlord or its assigns may purchase at a public
sale and, unless prohibited by law, at a private sale. The proceeds from any
disposition dealt with in this Article, less any and all expenses connected
with the taking of possession, holding and selling of the property (including
reasonable attorney's fees and legal expenses), shall be applied as a credit
against the indebtedness secured by the security interest granted herein. Any
surplus shall be paid to Tenant or as otherwise required by law; Tenant shall
pay any deficiencies forthwith. Upon request by Landlord, Tenant agrees to
execute and deliver to Landlord a financing statement in form sufficient to
perfect the security interest of Landlord in the aforementioned property and
proceeds thereof under the provisions of the Business and Commerce Code in
force in the State of Texas. The statutory lien for rent is expressly reserved;
the security interest herein granted is in addition and supplementary thereto.
Notwithstanding anything to the contrary, provided Tenant is not in default
under any of the terms of this Lease, Tenant may request Landlord to
subordinate its statutory and contractual landlord's lien to any institutional
third party financing of Tenant incurred for the purpose of securing inventory,
fixtures or equipment used in the Demised Premises. Approval by Landlord of
Tenant's request for this subordination will not be unreasonably withheld by
Landlord.
ARTICLE THIRTEEN: PROTECTION OF LENDERS
13.01. SUBORDINATION. 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 future subordination is subject
to Landlord's providing Tenant with a written Subordination, Nondisturbance and
Attornment Agreement from any such ground lessor, beneficiary or mortgagee
wherein Tenant's right to peacable 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. 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 written notice
thereof to Tenant, this Lease shall be deemed superior to such ground lease,
deed of trust or mortgage whether this Lease is dated prior or subsequent to the
date of said ground lease, deed of trust or mortgage or the date of recording
thereof. Tenant's rights under this Lease, unless specifically modified at the
time this Lease is executed, are subordinated to any existing ground lease, deed
of trust or mortgage encumbering the Demised Premises.
13.02. ATTORNMENT. If Landlord's interest in the Demised Premises is
transferred voluntarily or involuntarily to any ground lessor, beneficiary under
a deed of trust, mortgagee or purchaser at a foreclosure sale, Tenant shall
attorn to the transferee of or successor to Landlord's interest in the Demised
Premises and recognize such transferee or successor as Landlord under this
Lease.
13.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any instruments
or documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so. If Tenant fails to do so within ten (10)
days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
13.04. 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 changed, 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 such payment; and
(iv) that Landlord is not in default under this Lease (or, if Landlord is
claimed to be in default, stating why). Tenant shall deliver such statement
to Landlord within ten (10) days after Landlord's request. Any such
statement by Tenant may be furnished by Landlord to any prospective
purchaser or lender of the Demised Premises. Such purchaser or lender may
rely exclusively upon such statement as true and correct.
B. If Tenant does not deliver such statement to Landlord within
such 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 more
than one monthly installment of Base Rent or other charges have been paid
in advance; and (iv) that Landlord is not in default under the Lease. In
such event, Tenant shall be estopped from denying the truth of such facts.
13.05. [OMITTED]
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ARTICLE FOURTEEN: PROFESSIONAL SERVICE FEES
14.01. AMOUNT AND MANNER OF PAYMENT OF SERVICE FEES. Fees due to the
Principal Broker shall be calculated and paid in accordance with Article 1.11 as
follows:
A. Landlord agrees to pay to the Principal Broker a fee for negotiating
this Lease equal to the percentage stated in Section 1.11B of each monthly
Rent payment at the time such payment is due.
B. Landlord agrees to pay to the Principal Broker a fee for negotiating
this Lease equal to the percentage stated in Section 1.11B of the total Rent
to become due to Landlord during the term of this Lease. Said fees shall be
payable to the Principal Broker on the date of the execution of this Lease.
14.02. PAYMENTS ON RENEWAL, EXPANSION OR PURCHASE. If during the term of
this Lease (as the same may be renewed or extended) or within ten (10) years
from the date hereof, whichever shall be the greater period of time, Tenant, its
successors or assigns, shall (a) exercise any right or option to renew or extend
the term of this Lease (whether contained in this Lease or in any amendment,
supplement or other agreement pertaining hereto) or enter into a new lease or
rental agreement with Landlord covering the Demised Premises, or (b) enter 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 date of this Lease, Landlord
shall pay to the Principal Broker an additional fee covering the full period of
such renewal, extension, lease, expansion or other rental agreement which shall
be due on the date of exercise, in the case of the exercise of an option, or the
execution, in the case of a lease or other agreement. Such fees shall be
computed under Section 14.01A or 14.01B above (whichever has been made
applicable under Section 1.11A), as if a new lease had been made for such a
period of time. In the event Tenant, its 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 agreement
upon which an additional fee would be due under the above provisions) or, in the
absence of any purchase option or exercise thereof, purchases the Demised
Premises within ten (10) years from the date hereof, Landlord shall pay to the
Principal Broker a sales fee in cash equal to the percentage stated in Section
1.11B of the purchase price, payable at closing. Upon closing of the sale, all
lease fees shall terminate if the lease fees are payable monthly.
14.03. LANDLORD'S LIABILITY. If this Lease is negotiated by Principal
Broker in cooperation with another Broker, Landlord shall be liable for payment
of all Professional Service Fees to Principal Broker only, whereupon Landlord
shall be protected from any claims from the Cooperating Broker.
14.04. JOINT LIABILITY OF TENANT. If Tenant enters into any new lease,
extension, renewal, expansion, or other agreement to rent, occupy, or purchase
any property described in the preceding Section 14.02 within the time specified
in such preceding Section, such agreement must be handled by and through the
Principal Broker, otherwise Tenant shall be jointly and severally liable with
Landlord for any payments due or to become due to the Principal Broker.
14.05. SALE. In the event of a sale of the Demised Premises or the
assignment of this Lease by Landlord, Landlord shall obtain from the purchaser
or assignee an Assumption Agreement in recordable form whereby such purchaser or
assignee agrees to pay the Principal Broker all professional service fees
payable under this Lease and shall deliver a fully executed 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 of such counterpart of said
Assumption Agreement. Landlord shall not transfer, convey, or sell the Demised
Premises or assign this Lease without first obtaining from the purchaser or
assignee such Assumption Agreement. The form of such Assumption Agreement shall
be furnished to the Principal Broker at the time Landlord enters into any
contract for the sale of the Demised Premises or assignment of this Lease.
14.06. TERMINATION. The termination of this Lease by the mutual agreement
of Landlord and Tenant, Tenant not being in default hereunder shall not affect
the right of the Principal Broker to continue to receive the monthly
Professional Service Fees agreed to be paid by Landlord under Section 14.01A
above, just as if Tenant had continued to occupy the Demised Premises and had
paid the monthly installments of Base Rent during the remaining term of this
Lease. Termination of this Lease under Article Eight or Article Nine shall not
terminate the right to such monthly Professional Service Fees.
14.07. LIEN. The Principal Broker is hereby granted a lien against the
Demised Premises to secure payment of all Professional Services Fees (including
not only the Professional Service Fees originally payable hereunder but also any
additional Professional Service Fees which may hereafter become payable by
reason of renewals, new leases, rental agreements, sales or otherwise). This
lien is subject to the rights of Tenant under this Lease, but prior and
superior to any liens hereafter created against the Demised Premises, excepting
only liens in favor of institutional lenders and similar regulated financial
institutions securing indebtedness incurred for the purposes of acquiring the
Demised Premises or constructing, repairing, rebuilding or remodeling buildings
and other improvements thereon, to all of which liens the lien hereby created
shall be subordinate and inferior.
ARTICLE FIFTEEN: ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
15.01. 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 with 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
Material (as defined hereinafter), waste disposal, air emissions and other
environmental matters, all zoning and other land use matters, and with any
direction of any public officer or officers, pursuant to law, which shall impose
any duty upon Landlord or Tenant with respect to the use or occupation of the
Property.
15.02. TENANT'S INDEMNIFICATION. Tenant shall not cause or permit any
hazardous material to be brought upon, kept or used in or about the Property by
Tenant, its agents, employees, contractors or invitees without the prior written
consent of Landlord. If Tenant breaches the obligation stated in the preceding
Section or sentence, or if the presence of Hazardous Material 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 Material otherwise occurs for which Tenant is legally liable to
Landlord for damage resulting therefrom, then Tenant shall indemnify, defend and
hold Landlord harmless from any and all claims, judgements, damages, penalties,
fines, costs, liabilities or losses (including, without limitation, diminution
in value of the Property, damages for the loss or restriction on use of rentable
or unusable space or of any amenity or appurtenance of the Property, damages
arising from any adverse impact on marketing of building space or land area,
and sums paid in settlement of claims, attorney's, fees, consultant fees and
expert fees) which arise during or after the Lease Term as a result of such
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 government agency or political subdivision
because of Hazardous Material present in the soil or ground water on or under
the Property. Without limiting the foregoing, if the presence of any Hazardous
Material 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 its sole expense as are necessary to return the Property to the
condition existing prior to the introduction of any such Hazardous Material to
the Property, provided that Landlord's approval of such actions shall first be
obtained. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
15.03. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents
and warrants to the best of Landlord's actual knowledge that any handling,
transportation, storage, treatment or usage of Hazardous Material that has
occurred on the Property to date has been in compliance with all applicable
federal, state, and local laws, regulations and ordinances. Landlord further
represents and warrants that no leak, spill, release, discharge, emission or
disposal of Hazardous Material has occurred on the Property to date and that the
soil or groundwater on or under the Property is free of Hazardous Material as of
the date that the term of this Lease commences unless expressly disclosed by
Landlord to Tenant in writing.
15.04. 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, attorney's fees, 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 Material in the soil or
groundwater on or under the Property, unless Hazardous Material is released by
Tenant or is present solely as a result of the negligence or willful conduct of
Tenant, its officers, employees or agents. Without limiting the generality of
the foregoing, the
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indemnification provided by this Article 15.04 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 agency or political subdivision because of the
presence or suspected presence of Hazardous Material 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,
its officers, employees, or agents.
15.05. DEFINITIONS. For purposes of this Article 15, the term "Hazardous
Material" shall mean any pollutant, toxic substance, hazardous waste, hazardous
material, hazardous substance, or oil as defined in or pursuant to the Resource
Conservation and Recovery Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, the Federal Clean Water
Act, as amended, or any other federal, state or local environmental law,
regulation, ordinance, rule, or bylaw, whether existing as of the date hereof,
previously enforced or subsequently enacted.
15.06. SURVIVAL. The indemnities contained in this Article 15 shall survive
the expiration or earlier termination of this Lease.
15.07. BROKER'S ENVIRONMENTAL DISCLOSURE. Tenant and Landlord further
acknowledge that the Brokers involved in the negotiation of this transaction
have no expertise with respect to any such Hazardous Materials, although said
Brokers will disclose any actual knowledge possessed by them. Tenant and
Landlord shall look solely to experts and professionals, if any, selected by
Tenant or Landlord to advise Tenant or Landlord with respect to the condition of
the Property and shall not hold the Brokers responsible for any Hazardous
Material condition or problem relating to the Property. Both the Landlord and
Tenant hereby agree to indemnify, defend, and hold the Brokers participating in
this transaction harmless of and from any and all liability, claim, debt,
damage, cost, or expense, including reasonable attorneys' fees, related to or
arising out of or in any way connected to Hazardous Materials and/or toxic
wastes and/or any other undesirable substances affecting the Property.
ARTICLE SIXTEEN: MISCELLANEOUS
16.01. FORCES MAJEURE. In the event performance by Landlord 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 government
authority, civil riot, flood, or any other cause not within the control of
Landlord, the period for performance of such term, condition or covenant shall
be extended for a period equal to the period Landlord is so delayed or hindered.
16.02. 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 the
terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. For convenience, each party hereto is referred to in the neuter
gender, but the masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Demised Premises with Tenant's
expressed or implied permission.
16.03. WAIVERS. All waivers must be in writing and signed by the waiving
party. Landlord's failure to enforce any provisions of this Lease or its
acceptance of late installments of Rent shall not be a waiver and shall not
estop 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 such check without being
bound to the conditions of such statement.
16.04. SEVERABILITY. A determination by a court of competent jurisdiction
that any provision of this Lease or any part thereof is invalid or unenforceable
shall not cancel or invalidate the remainder of such provision or this Lease,
which shall remain in full force and effect.
16.05. JOINT AND SEVERAL LIABILITY. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
16.06. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. Thin I-canc is the
only agreement between the parties pertaining to the lease of the Demised
Premises and no other agreements are effective. All amendments to thin Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
16.07. NOTICES. All notices required or permitted under this Lease shall be
in writing and shall be personally delivered or shall be deemed to be delivered,
whether actually received or not, when deposited in the United States mail,
postage pre-paid, registered or certified mail, return receipt requested,
addressed as stated herein. Notices to Tenant shall be delivered to the address
specified in Section 1.03 above, except that, upon Tenant's taking possession
of the Demised Premises, the Demised Premises shall be Tenant's address for
notice purposes. Notices to any other party hereto shall be delivered to the
address specified in Article One as the address for such party. Any party
hereto may change its notice address upon written notice to the other parties.
16.08. ATTORNEYS' FEES. If on account of any breach or default by any party
hereto in its obligations to any other party hereto (including but not limited
to the Principal Broker), it shall become necessary for the nondefaulting party
to employ an attorney to enforce or defend any of its rights or remedies
hereunder, the defaulting party agrees to pay the nondefaulting party its
reasonable attorneys' fees, whether or not suit is instituted in connection
therewith.
16.09. VENUE. All obligations hereunder, including but not limited to the
payment of fees to the Principal Broker, shall be performable and payable in the
county in which the Property is located.
16.10. GOVERNING LAW. The laws of the State of Texas shall govern this
Lease.
16.11. SURVIVAL. All obligations of any party hereto not fulfilled at the
expiration or the earlier termination of this Lease shall survive such
expiration or earlier termination as continuing obligations of such party.
16.12. BINDING EFFECT. This Lease shall inure to the benefit of and be
binding upon each of the parties hereto and their respective heirs,
representatives, successors and assigns; provided, however, Landlord shall have
no obligation to Tenant's successors or assigns unless the rights or interests
of such successors or assigns are acquired in accordance with the terms of this
Lease.
16.13. EXECUTION AS 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 fully
executed copy is delivered to the first party, such offer shall be automatically
withdrawn and terminated.
Page 8
10
ARTICLE SEVENTEEN: ADDITIONAL PROVISIONS
Additional provisions may be set forth in the blank space below, and/or an
Exhibit or Exhibits may be attached hereto which shall be made a part of this
Lease for all purposes.
Landlord has agreed to provide Tenant with up to $150,000.00 for Tenant
Improvements on the space. Out of this T.I. allowance, $100,000.00 is
considered as extra allowance and is figured into the rental rate at $1.67/sf
per year. Tenant can "buy down" the rental rate by either using less than the
$100,000.00 or by paying Tenant Improvement dollars. Landlord will get at
least three bids on the improvements.
EFFECTIVE as of the date stated in Section 1.01 above.
BROKERS: LANDLORD:
RE/MAX NORTH CENTRAL JERSEY INVESTMENTS, INC. ROYCE & XXXX XXXXX
----------------------------------- -------------------------------------------
PRINCIPAL BROKER, Member of the
Greater Dallas Association of
REALTORS(R), INC.
By: By:
-------------------------------- ----------------------------------------
Name: XXX X. XXXXXX Name:
------------------------------ --------------------------------------
Address:321 North Central Expwy.101 Title:
--------------------------- -------------------------------------
Mckinney/Texas/75070 Date of Execution by Landlord:
----------------------------------- -------------
-----------------------------------
Telephone: 000-000-0000
-------------------------
License No.:
-----------------------
TENANT:
/S/ XXX XXXXXX GLOBAL ELECTION SYSTEMS INC.
----------------------------------- ------------------------------------------
COOPERATING BROKER
By: By: /s/ XXXXXX X. XXX XXXX
-------------------------------- -------------------------------------------
Name: Name:
------------------------------ --------------------------------------
Address: 000 X.XXXX XXXX. XXXXX 000 Title: President
--------------------------- -------------------------------------
XXXXX, XXXXX 00000 2 Date of Execution by Tenant: 3/13/97
----------------------------------- -------------
-----------------------------------
Telephone:
-------------------------
License No.:
-----------------------
*******************************************************************************
[For voluntary use only by members of the Greater Dallas Association of
REALTORS(R), Inc.]
Page 9
11
RE/MAX NORTH CENTRAL
EXHIBIT C
RENEWAL OPTIONS
PROPERTY ADDRESS OR DESCRIPTION: 0000 XXXXXXX XX. XXXXXXXX, XXXXX 00000
---------------------------------------------
DATE OF LEASE: MARCH 4, 1997
---------------------------------
1. OPTION(S) TO EXTEND TERM
Landlord hereby grants to Tenant TWO option(s) [the "Option(s)"] to extend
the Lease Term for additional term(s) of 5 years each [the "Extension(s)"], on
the same terms, conditions and covenants set forth in the Lease Agreement,
except as provided below. Each Option shall be exercised only by written
notice delivered to the Landlord at least NINETY (90) days before the
expiration of the Lease Term or the preceding Extension of the Lease Term. 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 shall be exercisable by Tenant on the express condition that at the time
of the exercise, and at all times prior to the commencement of such
Extension(s), Tenant shall not be in default under any of the provisions of
this Lease. The foregoing Option(s) are personal to Tenant and may not be
exercised by any assignee or subtenant.
2. CALCULATION OF RENT
The Base Rent during the Extension(s) shall be determined by one of the
following methods: whichever is lower, [INDICATED BY CHECKING THE APPROPRIATE
BOX UPON THE EXECUTION OF THE LEASE AGREEMENT]
[X] (a) Consumer Price Index Adjustment
[X] (b) Fair Rental Value Adjustment
[ ] (c) Fixed Rental Adjustment
A. CONSUMER PRICE INDEX ADJUSTMENT
The monthly rent during the particular Extension shall be determined
by multiplying the monthly installment of Base Rent during the Lease Term
by a fraction determined as follows:
(1) The numerator shall be the latest Index.
(2) The denominator shall be the initial Index.
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.
The Index, as defined herein, shall mean the Consumer Price Index for
Urban Consumers (all items), Dallas/Fort Worth, Texas, area (1984 = 100)
published by the United States Department of Labor, Bureau of Labor
Statistics.
The initial Index shall mean the Index published for the nearest
calendar month preceding the commencement date of the Lease Term. The
latest Index shall mean the Index published for the nearest calendar month
preceding the first day of the Extension.
If a base year other than 1984 is adopted, the Index shall be
converted in accordance with the appropriate conversion factor. If the
Index is discontinued or revised, such other Index or computation with
which it is replaced shall be used in order to obtain substantially the
same result as would have been obtained if it had not been discontinued or
revised.
B. FAIR RENTAL VALUE ADJUSTMENT
The Base Rent shall be increased on the first day of the particular
Extension to the "Fair Rental Value" of the Demised Premises, determined in
the following manner:
(1) If the Landlord and Tenant have not been able to agree on
the Fair Rental Value Adjustment prior to the date the option is
required to be exercised, the rent for the Extension shall be
determined as follows: Within fifteen (15) days following the
exercise of the option, Landlord and Tenant shall endeavor in good
faith to agree upon a single appraiser. If Landlord and Tenant are
unable to agree upon a single appraiser within said fifteen (15) day
period, each shall then, by written notice to the other, given within
ten (10) days after said fifteen (15) day period, appoint one
appraiser. Within ten (10) days after the two appraisers are
appointed, they 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 Rental
Value 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.
(2) The "Fair Rental Value" of the Demised Premises shall mean
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
such property were exposed for lease on the open market for a
reasonable period of time and taking into account all of the purposes
for which such property may be used and not just the use proposed to
be made of the Demised Premises by Tenant. The Fair Rental Value of
the Demised Premises shall be the average of the two of the three
appraisals which are the closest in amount, and the third appraisal
shall be disregarded. In no event shall the rent be reduced by reason
of such computation. If the Fair Rental Value 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 such Extension until the Fair Rental Value 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 hereunder.
C. FIXED ADJUSTMENTS
The Base Rent shall be increased to the following amounts on the
following dates:
Date Amount
N/A N/A
------------------------------------ ------------------------------------
N/A N/A
------------------------------------ ------------------------------------
N/A N/A
------------------------------------ ------------------------------------
N/A N/A
------------------------------------ ------------------------------------
N/A N/A
------------------------------------ ------------------------------------
INITIALS: LANDLORD: INITIALS: TENANT:
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12
RE/MAX NORTH CENTRAL
EXHIBIT F
EXPENSE REIMBURSEMENT
PROPERTY ADDRESS OR DESCRIPTION: 0000 XXXXXXX XX. XXXXXXXX, XXXXX 00000
-------------------------------------------
DATE OF LEASE: MARCH 4, 1997
----------------------
1. EXPENSE REIMBURSEMENT
Tenant shall pay the Landlord, as additional rental hereunder, a portion
of the following expenses, as defined hereafter, incurred, levied or assessed
for or against the Demised Premises: [Check those that are to apply. Boxes not
checked do not apply.]
[X] Ad Valorem Taxes
[X] Insurance Premiums
[ ] Common Area Maintenance Charges (CAM)
[ ] Operating Expenses
(herein collectively called "Reimbursements")
2. EXPENSE REIMBURSEMENT LIMITATIONS
The amount of Tenant's Reimbursement obligation shall be determined by one
of the following methods. [Check only the one applicable box]
[ ] Base Year/Expense Stop Adjustment
[X] Pro Rata Adjustment
[ ] Fixed Amount Adjustment
The calculation for each of said methods is set forth under Section 4 below.
3. EXPENSE REIMBURSEMENT PAYMENTS
Tenant agrees to pay the applicable Reimbursement within thirty (30) days
after receiving an invoice therefor from Landlord. If at any time during the
Lease Term or any renewals or extensions Landlord has reason to believe that
at some time within the immediately succeeding 12-month period Tenant will owe
Landlord a payment pursuant to this provision, Landlord may direct Tenant to
pay monthly an estimated portion of the projected future amount. Tenant agrees
that 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.
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 insurance premiums attributable to the
Property, including, but not limited to, premiums for fire, casualty, and
extended coverage, liability coverage, and loss of rents coverage.
C. COMMON AREA MAINTENANCE CHARGES: All costs of the ownership,
operation, and maintenance of the common area, including, but not limited to,
those costs for security, lighting, painting, cleaning, leasing, inspecting,
and repairing which may be incurred by Landlord, in its discretion, including a
reasonable allowance for Landlord's overhead and management. The term "common
area" is defined as that part of the Property intended for the common use of
all tenants, including, but not limited to, the parking areas, landscaping,
loading areas, sidewalks, malls, promenades (enclosed or otherwise), public
rest rooms, meeting rooms, corridors, and curbs. Common area maintenance shall
not include depreciation on Landlord's original investment, cost of tenant
improvements, real estate broker's fees, and interest or depreciation on capital
investments.
D. OPERATING EXPENSES: All costs of management, operation, and
maintenance of the Property, including, but not limited to, wages, salaries,
janitorial services, maintenance, repairs, and cost of utilities. Operating
expenses shall not include depreciation on Landlord's original investment, cost
of tenant improvements, real estate broker's fees, and interest or depreciation
on capital investments.
E. BASE YEAR/EXPENSE STOP ADJUSTMENT: If the Landlord's ad valorem
taxes, insurance premiums, common area maintenance charges and/or operating
expenses for the Property for any calendar year during the term hereof or during
any extension of this lease increase over (1) such amounts paid by Landlord for
the Base Year N/A, or (2) $N/A per square foot per year [choose one], Tenant
agrees to pay its share of such increase based on the square footage contained
in the Demised Premises in proportion to the square footage of leasable area of
the Property.
F. PRO RATA ADJUSTMENT: Tenant shall pay to Landlord its pro rata
share of the total amount of Landlord's insurance premiums, ad valorem taxes,
for any calendar year during the term hereof and during any extension of this
lease. Tenant's pro rata share of such amount shall be based on the square
footage contained in the Demised Premises in proportion to the square footage of
the leasable area of the Property.
G. FIXED AMOUNT ADJUSTMENT: Tenant shall pay as additional rent the
following monthly amounts as Tenant's Reimbursement to Landlord for the ad
valorem taxes, insurance premiums, common area maintenance charges, and/or
operating expenses assessed or levied against the Property:
Ad Valorem Taxes $N/A per month
------
Insurance Premiums $N/A per month
------
Common Area Maintenance Charges $N/A per month
------
Operating Expenses $N/A per month
------
INITIALS: LANDLORD: INITIALS: TENANT: HVP
------ -----
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13
RE/MAX North Central
EXHIBIT H
CONSTRUCTION OF IMPROVEMENTS
PROPERTY ADDRESS OR DESCRIPTION: 0000 XXXXXXX XX. XXXXXXXX, XXXXX 00000
------------------------------------------
DATE OP LEASE: MARCH 4,1997
-------------------------
1. CONSTRUCTION OF IMPROVEMENTS:
A. Landlord agrees to construct (or complete) a building and other
improvements upon the Demised Premises in accordance with detailed Plans
and Specifications to be prepared forthwith by Landlord and delivered to
Tenant. Upon approval by Tenant, two or more sets of said Plans and
Specifications shall be signed by both parties, with one signed set
retained by Tenant. Changes to said Plans and Specifications thereafter
shall be made only by written addenda signed by both parties.
B. Upon approval of said Plans and Specifications, Landlord shall
forthwith begin construction and pursue same to completion with reasonable
diligence in a good and workmanlike manner.
2. COMPLETION DATE:
A. It is estimated by Landlord that the building and other improvements
shall be completed by June 1, 1997.
B. Landlord shall notify Tenant in writing when construction has been
completed. Tenant shall thereupon inspect the building and other
improvements, and if same have in fact been completed in accordance with
the Plans and Specifications, the Lease Term shall begin upon the date of
completion with Base Rent due and payable as provided in Article Three of
the Lease.
C. If the building and other improvements have not in fact been
completed in accordance with the Plans and Specifications, written
notification of the items deemed incomplete shall be given by Tenant to
Landlord immediately following inspection. Landlord shall forthwith proceed
to finish the incomplete items, and the lease term shall begin upon the
date that such items are in fact complete.
D. Completion, as used herein, shall mean substantial completion.
Substantial completion shall mean at such time as the Landlord obtains a
Certificate of Occupancy issued by the local municipal authorities whose
jurisdiction includes the Demised Premises, and is the stage when the
construction is sufficiently complete in accordance with the Plans and
Specifications that the Tenant can occupy or utilize the Demised Premises
for its intended use, except for minor "punch list" items remaining to be
completed.
3. LETTER OF ACCEPTANCE: Tenant agrees to execute and deliver to Landlord,
with a copy to the Principal Broker, a Letter of Acceptance, addressed to
Landlord and signed by Tenant (or its authorized representative) acknowledging
that construction has been completed in accordance with the Plans and
Specifications and acknowledging the Commencement Date of the Lease Term.
4. TAKING OF POSSESSION: The taking of possession of the Demised Premises
by Tenant shall be deemed conclusively to be acknowledgment by Tenant that
construction has been completed in accordance with Plans and Specifications
(except for latent defects) and that the Lease Term has begun as of the date (of
completion.
5. FAILURE TO COMPLETE: In the event that the building and other
improvements have not been completed in accordance with the Plans and
Specifications by July 1, 1997, or by such date as extended by application of
Section 16.01, Tenant shall have the right and option to terminate this Lease by
giving written notice of Tenant's intention to terminate as of a certain date
not less than fifteen (15) days prior to said certain date. If the building and
other improvements have not been completed by said certain date, the lease
shall, at the option of Tenant, terminate with no further liability of one party
to the other.
INITIALS: LANDLORD: INITIALS: TENANT: HVP
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