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EXHIBIT 10.33
LEASE AGREEMENT
(triple net lease)
STATE OF TEXAS
COUNTY OF XXXXXX
This lease agreement ("Lease"), made and entered into by and between Lakes
Technology Center, Ltd. , hereinafter referred to as "Landlord", and Sharps
Compliance, Inc. , hereinafter referred to as "Tenant", upon the following terms
and conditions:
A G R E E M E N T
1. LEASED PREMISES.
In consideration of the rents reserved and the covenants and agreements
herein contained on the part of Tenant to be observed and performed, Landlord
hereby demises, lets and leases unto Tenant, and Tenant hereby rents from
Landlord, those certain premises consisting of a space containing an area of
approximately 7,274 square feet (hereinafter called the "Leased Premises") and
constituting a part of the office/warehouse building (hereinafter called the
"Building") located at 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx which
Building is located upon the lot, tract or parcel of land more particularly
described on Exhibit "A" attached hereto and made a part hereof for all
purposes. If the Building is in a development containing one or more other
buildings, such buildings together with all related site land, improvements,
parking facilities, common areas, driveways and landscaping, together with the
Building, shall be referred to as the "Project".
The purpose of the site plan attached as Exhibit "B" is to show the
approximate location of the Leased Premises. Landlord reserves the right at any
time to relocate, vary and adjust the size of the various buildings, covenants,
automobile parking areas, and other common areas as shown on said site plan.
The use and occupancy by Tenant of the Leased Premises shall include the use, in
common with others entitled thereto, of the common service areas, loading
facilities, pedestrian walks, automobile driveways and parking areas, all as
shown on the site plan attached hereto as Exhibit "B".
In determining the number of square feet of area of the Leased Premises,
Tenant acknowledges that the Leased Premises includes the usable area, without
deduction for columns or projections, multiplied by a load factor to reflect a
share of certain areas, which may include lobbies, corridors, mechanical,
utility, janitorial, boiler and service rooms and closets, restrooms and other
public, common and service areas of the Building.
2. TERM.
To have and to hold the Leased Premises for a term commencing on August 1,
1998 , ("Commencement Date") and ending on July 31, 2002. However, if for any
reason, Landlord is unable to deliver possession of the Leased Premises on the
Commencement Date, Landlord shall not be liable for any damage caused by the
delay, nor shall this Lease be void or voidable, but, rather, it is agreed that
the Lease term shall commence upon the date Landlord tenders possession of the
Leased Premises to Tenant, and unless Landlord elects otherwise, the expiration
date of the Lease shall be extended by the number of days delayed from the
original Commencement Date as set out above. If this Lease is executed before
the Leased Premises become vacant or otherwise available and ready for
occupancy, or if any present tenant or occupant of the Leased Premises holds
over, and Landlord cannot acquire possession of the Leased Premises prior to the
date above recited as the Commencement Date of this Lease, Landlord shall not be
deemed to be in default hereunder, and Tenant agrees to accept possession of the
Leased Premises at such time as Landlord is able to tender the same, which date
shall thenceforth be deemed the Commencement Date, and Landlord hereby waives
payment of rent covering any period prior to the tendering of possession to
Tenant hereunder.
3. ACCEPTANCE OF LEASED PREMISES.
Tenant acknowledges that Landlord has not made any representations or
warranty with respect to the condition or quality of the Leased Premises or
Building. Tenant has inspected and accepts the Leased Premises and Building in
their present condition as suitable for the purpose for which the Leased
Premises are leased. Taking of possession by Tenant shall be deemed
conclusively to establish that the Leased Premises, Building and common areas
are in good and satisfactory condition as of when possession was taken. Tenant
further acknowledges that no representations as to the repair of the Leased
Premises or Building nor promises to alter, remodel or improve the Leased
Premises or Building have been made by Landlord, unless such are expressly set
forth in this Lease. After the Commencement Date Tenant shall, upon demand,
execute and deliver to Landlord a letter of acceptance of delivery of the Leased
Premises. If the leasehold improvements outlined on Addendum One and Exhibit
"C" attached hereto are not substantially completed by September 1, 1998 as
determined by Landlord's architect and such delay in the substantial completion
date was not caused by Tenant, Tenant shall have the right to cancel this Lease
Agreement only if Tenant provides Landlord written notice of its intent to
cancel this Lease Agreement by September 5, 1998 and only if Tenant pays to
Landlord a lump sum payment of $20,000.00 due along with such notice outlined
above. It is further agreed that Tenant's right to cancel the Lease Agreement is
Tenant's sole and exclusive remedy.
4. BASE RENT AND SECURITY DEPOSIT.
a) Tenant agrees to pay to Landlord rent for the Leased Premises in
advance, without demand, deduction or set off, for the entire term hereof at the
rate of Three Thousand Nine Hundred Twenty Eight and no/100---- per month. One
such monthly installment shall be due and payable on the date hereof and a like
monthly installment shall be due and payable on or before the first day of each
calendar month succeeding the Commencement Date recited above during the hereby
demised term, except that the rental payment for any fractional calendar month
at the commencement or end of the Lease period shall be prorated.
b) In addition, Tenant agrees to deposit with Landlord on the date hereof
the sum of Three Thousand Nine Hundred Twenty Eight and no/100----, which sum
shall be held by Landlord, without obligation for interest, as security for the
performance of Tenant's covenants and obligations under this Lease, it being
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expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of Tenant's default. Upon
the occurrence of any event of default by Tenant, Landlord may, from time to
time, without prejudice to any other remedy provided herein or provided by law,
use such fund to the extent necessary to make good any arrears of rent or other
payments due Landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default; and Tenant shall pay to Landlord on
demand the amount so applied in order to restore the security deposit to its
original amount. Although the security deposit shall be deemed the property of
Landlord any remaining balance of such deposit shall be returned by Landlord to
Tenant at such time after termination of this Lease that all of Tenant's
obligations under this Lease have been fulfilled.
5. TENANT'S PRO RATA SHARE OF BUILDING COSTS
Subject to all of the provisions of this Lease relevant hereto, Tenant
promises and agrees to pay, as additional rent hereunder and as provided herein,
at the office of the Landlord or at such other place designated by Landlord,
without any prior demand therefor and without any deduction or set-off
throughout the term of this Lease, Tenant's Pro Rata Share of certain Building
expenditures made by Landlord, as follows:
(1) Real Estate Taxes, as defined in Article 6;
(2) Common Area Maintenance Costs, as defined in Article 7; and
(3) Building Insurance Costs, as defined in Article 8.
(4) Management Fees, as defined in Article 7.
The amounts due from Tenant as Tenant's Pro Rata Share of Real Estate Taxes,
Common Area Maintenance Costs and Insurance shall be estimated by Landlord for
each calendar year and paid by Tenant in equal installments of one-twelfth
(1/12) of such estimated amount, monthly in advance, upon the first day of each
calendar month provided, however, if the term shall commence upon a day other
than the first day of the calendar month, Tenant shall pay upon the commencement
date of this Lease a portion of Tenant's Pro Rata Share of said expenses
calculated on a per diem basis with respect to the fractional month preceding
the commencement of the first full calendar month of the term of this Lease.
Said amounts shall be adjusted between Landlord and Tenant annually and at the
expiration or earlier termination of this Lease, and payment shall be made to,
or refund made by, Landlord, as the case may be, and Landlord shall receive the
precise amount due as Tenant's Pro Rata Share of the actual cost of said Real
Estate Taxes, Common Area Maintenance Costs and Insurance for the preceding
calendar year or any fractional calendar year.
Tenant will pay Landlord the sum of the following per month, in advance, payable
at the same time and place as the minimum rent is payable, as estimated charges
for Tenant's Pro Rata Share of Real Estate Taxes, Common Area Maintenance Costs
and Insurance Costs:
(1) Real Estate Taxes. . . . . . . . . . . . . . . . . . . . . $ 509.00
(2) Common Area Maintenance Costs. . . . . . . . . . . . . . . $ 472.00
(3) Insurance Costs . . . . . . . . . . . . . . . . . . . . . . $ 175.00
(4) Management Fees . . . . . . . . . . . . . . . . . . . . . . $ 125.00
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Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,281.00
The estimated charges as set out above are subject to changes from time to
time throughout the Lease term. Failure to pay any one or all of Tenant's Pro
Rata Share of Building Costs shall be constitute an event of default hereunder.
6. TAXES
(1) "Tax Year" means the calendar and/or fiscal year basis upon which
taxes and/or special assessments are assessed upon the Building throughout
the term of this Lease.
(2) "Real Estate Taxes" means the amount (in dollars) of taxes and/or
special assessments levied or assessed against the land and improvements of
the Building, said taxes to be either ad valorem taxes or a substitution
therefor which may be designated as appropriate by applicable governing
authorities, in any tax year or fractional part thereof. Excluded are all
estate or death, succession, income or franchise taxes.
(3) "Tenant's Pro Rata Share of Real Estate Taxes" means that amount
obtained by multiplying the Real Estate Taxes by a fraction, the numerator
of which is the square foot area of the Leased Premises and the denominator
of which is the gross leasable area of the Building.
(4) "Building" means all of the real estate and the buildings and other
improvements actually constructed thereon, including common areas, as more
specifically shown on the Site Plan attached hereto as Exhibit "B".
LANDLORD'S PAYMENT. Subject to the limitations, conditions and agreements
contained in this Article, Landlord shall pay annually, all Real Estate Taxes.
On or before one hundred eighty (180) days after the end of the Tax Year,
Landlord shall render a statement showing the total of Tenant's Estimated Tax
Payments made in advance during the preceding Tax Year, and the balance, if any,
then due from Tenant. At the time of rendering the statement, Landlord shall
submit to Tenant a true copy of the tax bills. Taxes and/or special assessments
for a fractional year, if any, shall be prorated. Landlord's failure to provide
the statements shall not relieve Tenant of any liability hereunder.
TENANT'S LIABILITY. Tenant promises and agrees to pay Tenant's Estimated
Pro Rata Share of Real Estate Taxes, monthly in advance, on the first day of
each calendar month, in an amount estimated by Landlord as provided above.
ANNUAL ADJUSTMENT. Within ten (10) days after the receipt of Landlord's
statement showing the total amount paid in advance by Tenant and a copy of the
paid tax bills showing the actual taxes paid or to be paid by Landlord, there
shall be an adjustment between Landlord and Tenant. Tenant shall pay to Landlord
on demand the difference between the amount paid by Tenant and the actual amount
due. If the total amount paid by Tenant
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hereunder for any such calendar year shall exceed such actual amount due from
Tenant for such calendar year, the excess shall be credited by Landlord against
any amounts then due and owing by Tenant to Landlord, and any remaining net
surplus shall then be refunded by Landlord to Tenant. Failure of Tenant to pay
Tenant's Pro Rata Share of Real Estate Taxes in the manner and time provided
herein shall constitute an event of default hereunder.
7. COMMON AREA MAINTENANCE.
Landlord agrees to maintain and repair throughout the term hereof the
common areas and facilities of the Building, including, without limitation, the
automobile entrances, exits, driveways, parking areas, pedestrian walks,
landscaped areas, public toilets, meeting rooms, lighting facilities, service
areas and Building signs not otherwise the responsibility of Tenant as set out
in this Lease (said areas hereinafter called the "Common Area"). Landlord's
maintenance and repairs shall include all repairs and replacements and the
supplies and materials therefor, which in Landlord's reasonable judgment are
necessary to preserve the utility of the Common Area and facilities in the
condition same were in at the time of completion, reasonable wear and tear only
excepted.
As used herein, the term "Common Area Maintenance Costs" shall mean all
costs and expenses of every kind paid or incurred during the term of this Lease
in connection with the operation and upkeep of the Common Area and facilities
within the Building, and where necessary, the cost of replacing any of said
common facilities and the cost of policing and protecting same. In addition to
the foregoing, the Common Area Maintenance Costs may include a reserve fund of
ten percent (10%) of the aggregate Common Area Maintenance Costs, which reserve
fund will be put into an escrow account and accrue interest until such time as a
major repair such as resurfacing the parking lot or major concrete drive
replacement, where it shall be applied against such "Major Repair Cost". Also,
in addition to the foregoing, the Common Area Maintenance Costs shall include
but not limited to, maintenance and repair costs, management fees, wages and
fringe benefits payable to employees of Landlord whose duties are connected with
the operation and maintenance of the Building and common areas, all services,
supplies, repairs, replacements or other expenses for maintaining and operating
the Building. Tenant's Pro Rata Share of the Common Area Maintenance Costs means
that amount obtained by multiplying said Costs by a fraction, the numerator of
which is the square foot area of the Leased Premises and the denominator of
which is the gross leasable area of the Building. Tenant promises to pay
Tenant's Pro Rata Share of Common Area Maintenance Costs monthly in advance, on
the first day of each calendar month in an amount estimated by Landlord as
provided above. Landlord's failure to provide the statements shall not relieve
Tenant of any liability hereunder.
ANNUAL ADJUSTMENT. Within ten (10) days after the receipt of Landlord's
statement showing the total amount paid in advance by Tenant and a copy of the
Common Area Maintenance bills showing the actual monies paid or to be paid by
Landlord, there shall be an adjustment between Landlord and Tenant. Tenant shall
pay to Landlord on demand the difference between the amount paid by Tenant and
the actual amount due. If the total amount paid by Tenant hereunder for any
such calendar year shall exceed such actual amount due from Tenant for such
calendar year, the excess shall be credited by Landlord against any amounts then
due and owing by Tenant to Landlord and any remaining net surplus shall then be
refunded by Landlord to Tenant. Failure of Tenant to pay Tenant's Common Area
Maintenance Costs in the manner and time provided herein shall constitute an
event of default hereunder.
8. INSURANCE
TENANT'S LIABILITY INSURANCE. Tenant agrees, at Tenant's sole cost, to
maintain in force during the term of this Lease a policy or policies of
comprehensive public liability insurance, including property damage, written by
one or more responsible insurance companies approved by Landlord (and such
approval shall not be unreasonably withheld) and licensed to do business in
Texas, which insurance companies shall be rated not less than A-13 by Best Guide
Rating, insuring Tenant and naming, as additional named insured, Landlord and
such other person, firms or corporations as are designated by Landlord and
acceptable to said insurance companies, insuring against loss of life, bodily
injury and/or property damage with respect to the Leased Premises and the
business operated by Tenant and any subtenant, licensee, concessionaire or
assignee of Tenant in the Leased Premises or Building, in which the limit of
public liability shall not be less than ONE MILLION AND NO/100 DOLLARS
($1,000,000.00) single limit bodily injury and in which the limit of property
damage liability shall be not less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($500,000.00). Additionally, Tenant shall maintain at Tenant's sole cost,
plate glass insurance on the windows and door or doors of the Leased Premises.
Each such policy shall be noncancellable for any cause without first giving
Landlord thirty (30) days prior written notice. Subject to all of the
foregoing, the insurance coverage required to be furnished by Tenant pursuant to
this Section B may be in a blanket policy covering all of Tenant's operations.
A copy of each such policy, or a certificate of such insurance together with a
receipt showing all premiums paid thereon for at least one (1) year in advance,
shall be delivered to Landlord upon the commencement of the term of this Lease
and annually thereafter upon the first day of each lease year throughout the
term hereof.
LANDLORD'S LIABILITY INSURANCE. Landlord agrees to maintain in force
during the term of this Lease a policy or policies of comprehensive public
liability insurance, including property damage, written by one or more
responsible insurance companies approved by Landlord and licensed to do business
in Texas insuring Landlord against loss of life, bodily injury and/or property
damage with respect to the common areas of the Building and the operation of the
Building, in which the limit of public liability shall be not less than FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) single limit bodily injury and
in which the limit of property damage liability shall be not less than ONE
HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00). In addition, Landlord may
maintain in force such umbrella policy or policies of public liability insurance
as Landlord, in its sole discretion, may deem appropriate.
LANDLORD'S FIRE AND EXTENDED COVERAGE INSURANCE. Landlord agrees to
procure and keep in effect during the term of this Lease a policy or policies of
fire and extended coverage insurance covering the Building, or separate fire
rating division as determined by the State Board of Insurance which includes the
Leased Premises, including rent abatement, vandalism and malicious mischief
coverage, written by an insurance company authorized to do business within the
State of Texas, and in an amount equal to not less than eighty percent (80%) of
the replacement cost of the premises covered. Such insurance shall provide
protection against losses so insured against for the benefit of Landlord and any
first mortgagee of Landlord, subject to the terms and provisions
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of this Lease and any first mortgage; provided, however, that all proceeds
payable by any insurance company under such policy or policies shall be payable
to such mortgagee, if any, and shall be applied in accordance with the terms of
such mortgage; or, if there is no mortgage, the full amount of such proceeds
shall be payable to Landlord, and Tenant shall not be entitled to, and shall
have no interest in, such proceeds or any part thereof. Such policy or policies
shall contain a provision or endorsement with respect to mutual waiver of right
of subrogation. The premium on said insurance shall be paid at lease one (1)
year in advance, and Landlord shall, upon request, furnish Tenant proof of such
insurance.
TENANT'S LIABILITY FOR BUILDING INSURANCE COSTS. At the commencement of the
term of this Lease and within one hundred eighty (180) days after the
commencement of each calendar year (or partial calendar year) thereafter,
Landlord shall furnish Tenant a statement, together with a true copy of the
premium statement, showing the Building Insurance Costs for the calendar year in
which the term commences or the applicable calendar year thereafter and any
deductible amount incurred in any loss. Landlord's failure to provide the
statement shall not relieve Tenant of any liability hereunder. As used herein,
the term "Building Insurance Costs" shall mean the actual premium costs of
public liability and fire and extended coverage insurance, including rent
abatement insurance required by this Lease to be maintained by Landlord and any
deductible incurred in any loss. Tenant's Pro Rata Share of public liability
insurance shall be determined by multiplying the total cost of such insurance by
a fraction, the numerator of which is the square foot area of the Leased
Premises and the denominator of which is the gross leasable area of the
Building. Tenant's Pro Rata Share of fire and extended coverage insurance shall
be determined by multiplying said total cost of such insurance by a fraction,
the numerator of which is the square foot area of the Leased Premises and the
denominator of which is the gross leasable area of the Building. Tenant's Pro
Rata Share of Building Insurance Costs shall be paid as provided above.
ANNUAL ADJUSTMENT. Within ten (10) days after the receipt of Landlord's
statement showing the total amount paid in advance by Tenant and a copy of the
insurance bills showing the actual monies paid or to be paid by Landlord, there
shall be an adjustment between Landlord and Tenant. Tenant shall pay to
Landlord on demand the difference between the amount paid by Tenant and the
actual amount due. If the total amount paid by Tenant hereunder for any such
calendar year shall exceed such actual amount due from Tenant for such calendar
year, the excess shall be credited by Landlord against any amounts then due and
owing by Tenant to Landlord and any remaining net surplus shall then be refunded
by Landlord to Tenant. Failure of Tenant to pay Tenant's Insurance Costs in
the manner and time provided herein shall constitute an event of default
hereunder.
MUTUAL WAIVER OF SUBROGATION. Notwithstanding any provision in this Lease
to the contrary, Landlord and Tenant each hereby waive any and all rights of
recovery, claim, action or cause of action, against the other, its officers,
employees or agents, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Building or any improvements
thereto, or any personal property of such party therein, by reason of fire, the
elements, or any other cause is insured against under the terms of standard fire
and extended coverage general liability insurance policies, regardless of cause
or origin, including negligence of the other party hereto, its officers,
employees or agents, and each covenants that no insurer shall hold any right of
subrogation against such other party.
9. USE.
The Leased Premises shall be used only for the purpose of receiving,
storing, shipping and selling (other than retail) products, materials and
merchandise made and/or distributed by Tenant and for such other lawful purposes
as may be incidental thereto. Outside storage, including, without limitation,
trucks and other vehicles, is prohibited without Landlord's prior written
consent. Tenant shall at its own costs and expense obtain any and all licenses
and permits necessary for any such use. Tenant shall comply with all
governmental orders and directives for the correction, prevention and abatement
of nuisances in or upon, or connected with, the Leased Premises all at Tenant's
sole expense. Tenant shall not permit any objectionable or unpleasant odors,
smoke, dust, gas, noise or vibrations to emanate from the Leased Premises, nor
take any other action which would constitute a nuisance or would disturb or
endanger any other tenants of the Building or Project or unreasonably interfere
with the use of their respective premises. Without Landlord's prior written
consent, Tenant shall not receive, store or otherwise handle any product,
material or merchandise which is explosive or highly inflammable. Tenant will
not permit the Leased Premises to be used for any purpose or in any manner
(including, without limitation, any method of storage) which would render the
insurance thereon void or the insurance risk more hazardous or cause the State
Board of Insurance or other insurance authority to disallow any sprinkler
credits. Landlord will not construct any structures or make any improvements to
the common areas that would adversely affect the ingress and egress to the
leased premises and the visability of the leased premises.
10. LANDLORD'S REPAIRS.
Landlord shall at its expense maintain only the roof, foundation and the
structural soundness of the exterior walls of the Building in good repair,
reasonable wear and tear excepted. Tenant shall repair and pay for any damage
caused by Tenant, or Tenant's employees agents or invitee, or caused by Tenant's
default hereunder. The term "walls" as used herein shall not include windows,
glass or plate glass, doors, special store fronts or office entries. Tenant
shall immediately give Landlord written notice of defect or need for repairs,
after which Landlord shall have reasonable opportunity to repair same or cure
such defect. Landlord's liability with respect to any defects, repairs or
maintenance for which Landlord is responsible under any of the provisions of
this Lease shall be limited to the cost of such repairs or maintenance or the
curing of such defect.
11. TENANT'S REPAIRS
a) Tenant shall at its own cost and expenses keep and maintain all parts
of the Leased Premises (except those for which Landlord is expressly responsible
under the terms of this Lease) in good condition, promptly making all necessary
repairs and replacements, including but not limited to, windows, glass, plate
glass doors, any special office entry, interior walls and finish work, floors
and floor covering, downspout, gutters, heating and air conditioning systems,
lighting, electrical systems, dock boards, truck doors, door bumpers, paving,
plumbing lines, equipment, and fixtures, termite and pest extermination, regular
removal of trash and debris, including rail spur areas, keeping the theses
areas, parking areas, driveways, alleys and the whole of the
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Leased Premises in a clean and sanitary condition, and maintaining any spur
track serving the Leased Premises (Tenant agrees to sign a joint maintenance
agreement with the railroad company servicing the Leased Premises, if requested
by the railroad company). Tenant shall not be obligated to repair any damage
caused by fire, tornado or other casualty covered by the insurance to be
maintained by Landlord except with respect to tornado or hurricane damage.
b) Tenant shall not damage any demising wall or disturb the integrity and
support provided by any demising wall and shall, at its sole cost and expense,
promptly repair any damage or injury to any demising wall caused by Tenant or
its employees, agents or invitee.
c) In the event the Leased Premises constitute a portion of a multiple
occupancy building. Tenant and its employees, customers and licensees shall
have the exclusive right to use the parking areas, if any, as may be designated
by Landlord in writing, subject to such reasonable rules and regulations as
Landlord may from time to time prescribe and subject to rights of ingress and
egress of other tenants. Landlord shall not be responsible for enforcing
Tenant's [exclusive parking rights] against any third parties. Further, in
multiple occupancy buildings, Landlord shall perform the paving and landscape
maintenance, and reserves the right to perform exterior painting and common
sewage line plumbing which are otherwise Tenant's obligations under subparagraph
(a) above with respect to such items, and Tenant shall be liable for its
proportionate share (as defined in subparagraph (a) above) of the cost and
expense of the care for the grounds around the Building, including but not
limited to the mowing of grass, care of shrubs, general landscaping, maintenance
of parking areas, driveways, and alleys, exterior repainting and common sewage
line plumbing; provided, however, that Landlord shall have the right to require
Tenant to pay such other reasonable proportion of said mowing, shrub care and
general landscaping costs as may be determined by Landlord in its sole
discretion; and further provided that if Tenant or any other particular tenant
of the Building can be clearly identified as being responsible for obstructions
or stoppage of the common sanitary sewage line, then Tenant, if Tenant is
responsible, or such other responsible tenant, shall pay the entire cost
thereof, upon demand, as additional rent. Tenant shall pay its share,
determined as aforesaid, of such costs and expenses in the event Landlord elects
to perform or caused to be performed such work which sum shall be due and
payable ten (10) days after receipt of a statement thereafter.
d) In the event the Leased Premises constitute a portion of a multiple
occupancy building, Landlord shall have the right to coordinate any repairs and
other maintenance of any rail tracks serving or to serve the Building, and if
Tenant uses the rail tracks, Tenant shall reimburse Landlord from time to time
upon demand, as additional rent, for a share of the costs of the repairs and
maintenance and any other sums specified in any agreement to which Landlord is a
party respecting the tracks, such share to be a fraction, the numerator of which
is the space contained in the Leased Premises, and the denominator of which is
the entire space occupied by rail users in the Building which sum shall be due
and payable ten (10) days after receipt of a statement thereafter.
e) Tenant shall, at its own costs and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
for servicing all hot water, heating and air conditioning systems and equipment
within the Leased Premises. The maintenance contractor and the contract must be
approved by Landlord and such approval shall not be unreasonably withheld. The
service contract must include all services suggested by the equipment
manufacturer within the operation/maintenance manual and must become effective
(and a copy thereof delivered to Landlord) within thirty (30) days of the date
Tenant takes possession of the Leased Premises.
12. TENANT IMPROVEMENTS AND ALTERATIONS
Tenant shall not make any alterations, additions or improvements to the
Leased Premises (including but not limited to roof and wall penetrations) or
Building without the prior written consent of Landlord, and such consent shall
not be unreasonably withheld. All Tenant alterations, additions and/or
improvements shall comply with insurance requirements and with all applicable
laws, ordinances, and regulations. Additionally, all Tenant alterations,
additions and/or improvements shall be in accordance with Landlord's
specifications. All Tenant alterations, additions and/or improvements shall be
constructed in a good and workmanlike manner. All plans and specifications for
Tenant's alterations, additions and/or improvements shall be submitted to
Landlord for Landlord's written approval. Tenant agrees that Landlord may
monitor all phases of Tenant's construction. Tenant shall reimburse Landlord
for Landlord's reasonable expenses for reviewing plans and documents and in
monitoring construction. Landlord's review of plans and monitoring construction
shall be solely for Landlord's own benefit and shall impose no duty or
obligation on Landlord to confirm that the plans and specifications and/or
construction comply with applicable laws, codes, rules, or regulations. At
Landlord's request, Tenant shall obtain payment and performance bonds approved
by Landlord, for any Tenant construction which bonds shall be delivered to
Landlord prior to commencement of construction. Upon completion of Tenant's
construction, Tenant shall deliver to Landlord sworn statements setting forth
the names of all contractors and subcontractors who performed work along with
final lien waivers from such contractors and subcontractors. Tenant may,
without the consent of Landlord, but at its own cost and expense and in a good
workmanlike manner, erect such shelves, bins, machinery, and trade fixtures as
it may deem advisable, without altering the basic character of the Building or
improvements and without overloading or damaging such Building or improvements,
and in each case complying with all applicable governmental laws, ordinances,
regulations and other requirements. All alterations, additions, improvements
and partitions erected by Tenant shall be and remain the property of Tenant
during the term of this Lease and Tenant shall, unless Landlord otherwise elects
as hereinafter provided, remove all alterations, additions, improvements and
partitions erected by Tenant and restore the Leased Premises to its original
condition by the date of termination of this Lease or upon earlier vacating of
the Leased Premises; provided, however, that if Landlord so elects prior to
termination of this Lease or upon earlier vacating of the Leased Premises, such
alterations, additions, improvements and partitions shall become the property
of Landlord as of the date of termination of this Lease or upon earlier vacating
of the Leased Premises and shall be delivered up to the Landlord with the Leased
Premises. All shelves, bins, machinery and trade fixtures installed by Tenant
may be removed by Tenant prior to the termination of this Lease if Tenant so
elects, and shall be removed by the date of termination of this Lease or upon
earlier vacating of the Leased Premises if required shall be accomplished in a
good workmanlike manner so as not to damage the primary structure or structural
qualities of the buildings and other improvements situated on the Leased
Premises.
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13. SIGNS
Tenant shall have the right to install signs upon the Leased Premises only
when first approved in writing by Landlord and subject to any applicable
governmental laws, ordinances, regulations, Landlord's or other architectural
controls, and other requirements. Tenant shall remove all such signs by the
termination of this Lease. Such installations and removals shall be made in
such manner as to avoid injury or defacement of the Building and other
improvements, and Tenant shall repair any injury or defacement, including,
without limitation, discoloration, caused by such installation and/or removal.
14. INSPECTION
Landlord and Landlord's agents and representatives shall have the right to
enter and inspect the Leased Premises and Building at any reasonable time, and
subject to advance notice to Tenant, during business hours, for the purpose of
ascertaining the condition of the Leased Premises or in order to made such
repairs as may be required or permitted to be made by Landlord under the terms
of this Lease. During the period that is six (6) months prior to the end of the
term hereof, Landlord and Landlord's agents and representatives shall have the
right to enter the Leased Premises at any reasonable time during business hours
for the purpose of showing the Leased Premises and shall have the right to erect
on the Leased Premises a suitable sign indicating the Leased Premises are
available. Tenant shall give written notice to Landlord at least thirty (30)
days prior to vacating the Leased Premises and shall arrange to meet with
Landlord for a joint inspection of the Leased Premises prior to vacating. In
the event of Tenant's failure to give such notice or arrange to meet with
Landlord for a joint inspection of the Leased Premises prior to vacating,
Landlord's inspection at or after Tenant's vacating the Leased Premises shall be
conclusively deemed correct for purposes of determining Tenant's responsibility
for repairs and restoration.
15. UTILITIES
Landlord agrees to provide at Landlord's cost water, electricity and
telephone service connections into the Leased Premises; but Tenant shall pay for
all water, gas, heat, light, power, telephone, sewer, sprinkler charges and
other utilities and services used on or from the Leased Premises, together with
any taxes, penalties, surcharges or the like pertaining thereto and any
maintenance changes for utilities, as well as shall furnish all electric light
bulbs and tubes. If any such services are not separately metered to Tenant,
Tenant shall pay Tenant's reasonable proportion, as determined by Landlord, of
all charges jointly metered with other premises. Landlord shall in no event be
liable for any interruption or failure of utility services on the Leased
Premises.
16. ASSIGNMENT AND SUBLETTING
a) Tenant will not assign this Lease, or allow same to be assigned by
operation of law or otherwise, or sublet the Leased Premises or any part thereof
without the prior written consent of Landlord, and such consent shall not be
unreasonably withheld. Notwithstanding any permitted assignment or subletting.
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent herein specified and for compliance with all
of its other obligations under the terms, provisions and covenants of this
Lease. If the Leased Premises or any part thereof are then assigned or sublet,
Landlord, in addition to any other remedies herein provided or provided by law,
may at its option collect directly from such assignee or subtenant all rents
becoming due to Tenant under such assignment or sublease and apply such rent
against any sums due to Landlord from Tenant hereunder, and no such collection
shall be construed to constitute a novation or a release of Tenant from the
further performance of Tenant's obligations hereunder. For purpose of this Lease
and transfer of more than fifty percent (50%) of the beneficial interest in
Tenant or of the control of Tenant (if Tenant is a partnership, corporation,
limited liability, company, trust, or other type of business, organization or
entity) shall constitute an assignment of this Lease.
b) If Tenant shall propose to sublet or assign this Lease, it shall so
notify Landlord in writing not less than thirty (30) days prior to the date of
the proposed assignment or subletting. The notice shall set forth the name of
the proposed subtenant or assignee, the term, use, rental rate and other
particulars of the proposed subletting or assignment, including without
limitation, proof satisfactory to Landlord that the proposed subtenant or
assignee is financially responsible and will immediately occupy and hereafter
use the entire Leased Premises (or any sublet portion thereof) for the remaining
term of this Lease (or for the entire term of the sublease, if shorter).
d) Landlord agrees to approve any assignment by Tenant to any corporation
succeeding to substantially all the business and assets of Tenant by merger,
consolidation, purchase of assets or otherwise, or the any assignment or
subletting to a corporation which is an affiliate of tenant. In other cases,
provided that there is no event of default on the part of Tenant (or
circumstances which, with the passing of time, giving of notices, or both, would
constitute an event of default, Landlord agrees not to unreasonably withhold
approval of any proposed subletting or assignment as to which Landlord declines
its rights
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of cancellation hereunder provided the proposed transaction is consummated
within thirty (30) days after Landlord's approval, is upon the same terms and
conditions disclosed to Landlord in Tenant's notice, and the assignment or
subletting is with another financially responsible party whose use of the Leased
Premises will not depreciate the value of the Leased Premises, or the value of
the property adjacent thereto, or will not be extra hazardous with reference to
the risk of fire or other hazards, and shall not result in any additional
environmental risk for the Project. Any assignment or subletting without
Landlord's approval, where required hereunder, shall be void and of no effect.
e) Landlord shall have the right to transfer and assign, in whole or in
part, any of its rights under this Lease, and in the Building or Project
referred to herein; and to the extent that such assignee assumes Landlord's
obligations hereunder, Landlord shall by virtue of such assignment be released
from such obligation.
17. FIRE AND CASUALTY DAMAGE
a) If the Building should be damaged or destroyed by fire, tornado or
other casualty, Tenant shall give immediate written notice thereof to Landlord.
b) If the Building should be totally destroyed by fire, tornado or other
casualty, or if they should be so damaged, thereby that rebuilding or repairs
cannot in Landlord's estimation be completed within two hundred (200) days after
the date upon which Landlord is notified by Tenant of such damage, this Lease
shall terminate and the rent shall be abated during the unexpired portion of
this Lease, effective upon the date of the occurrence of such damage.
c) If the Building should be damaged by any peril covered by the insurance
to be provided by Landlord this Lease, but only to such extent that rebuilding
or repairs can in Landlord's estimation be completed within two hundred (200)
days after the date upon which Landlord is notified by Tenant of such damage,
this Lease shall not terminate, and Landlord shall at its sole costs and expense
thereupon proceed with reasonable diligence to rebuild and repair the Building
to substantially the condition in which it existed prior to such damage, except
that Landlord shall not be required to rebuild, repair or replace any part of
the partitions, fixtures, additions and other improvements which may have been
placed in, on or about the Leased Premises by Tenant. If the Leased Premises
are untenantable, the rent owed by Tenant shall not be abated but shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances. In the event that Landlord shall fail to complete such repairs
and rebuilding within two hundred (200) days after the date upon which Landlord
is notified by Tenant of such damage, Tenant may at its option terminate this
Lease by delivering written notice of termination to Landlord within ten (10)
days after expiration of such two hundred (200) day period as Tenant's exclusive
remedy, whereupon all rights and obligations hereunder shall cease and
terminate. Failure by Tenant to timely terminate this Lease as set forth in the
preceding sentence shall be deemed a waiver by Tenant of its right to do so.
d) Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Leased Premises requires that the insurance proceeds be applied to such
indebtedness, than Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon all rights and
obligations hereunder shall cease and terminate.
18. CONDEMNATION
a) If the whole or any substantial part of the Leased Premises should be
taken from any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof and the taking would prevent or materially interfere with the use of the
Leased Premises for the purposes for which they are being used, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective when the physical taking of the Leased Premises shall occur.
b) If part of the Leased Premises shall be taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain, or by private purchase in lieu thereof, and this Lease
is not terminated as provided in the subparagraph above, this Lease shall not
terminate but the rent payable hereunder during the unexpired portion of this
Lease shall be reduced to such extent as may be fair and reasonable under all of
the circumstances.
c) In the event of any such taking or private purchase in lieu thereof,
Landlord and Tenant shall each be entitled to receive and retain such separate
awards and/or portions of lump sum awards as may be allocated to their
respective interests in any condemnation proceedings.
19. HOLDING OVER
Tenant agrees that at the termination of this Lease by lapse of time or
otherwise, yield up immediate possession to Landlord. If Tenant holds over
after the expiration or termination of this Lease, unless the parties hereto
otherwise agree in writing on the terms of such holding over, the hold over
tenancy shall be subject to termination by Landlord at any time upon not less
than five (5) days advance written notice, or by Tenant at any time upon not
less than thirty (30) days advance written notice. During the hold over, all of
the other terms and provisions of this Lease shall be applicable during that
period, except that Tenant shall pay Landlord from time to time upon demand, as
rental for the period of any holdover, an amount equal to two (2) times the rent
in effect on the termination date, computed on a daily basis for each day of the
hold over period. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
provided. The preceding provisions of this paragraph shall not be construed as
Landlord's consent for Tenant to hold over.
20. QUIET ENJOYMENT
Landlord covenants that it now has, or will acquire before Tenant takes
possession of the Leased Premises, good title to the Leased Premises, free and
clear of all liens and encumbrances, excepting only the lien for current taxes
not yet due, such mortgage or mortgages as are permitted by the terms of this
Lease,
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zoning ordinances and other building and fire ordinances and governmental
regulations relating to the use of such property, and easements, restrictions
and other conditions of record. In the event this Lease is a sublease, then
Tenant agrees to take the Leased Premises subject to the provisions of the prior
leases. Landlord represents and warrants that it has full right and authority
to enter into this Lease and that Tenant, upon paying the rentals herein set
forth and performing its other covenants and agreements herein set forth, shall
peaceably and quietly have, hold and enjoy the Leased Premises for the term
hereof without hindrance or molestation from Landlord, subject to the terms and
provisions of this Lease.
21. TENANT'S EVENTS OF DEFAULT
The following events shall be deemed to be events of default by Tenant
under this Lease:
a) Tenant shall fail to pay any installment of the rent herein reserved
when due, or any payment with respect to Tenant's pro rata share of Building
Costs hereunder when due, or any other payment or reimbursement to Landlord
required herein when, due, and such failure shall continue for a period of five
(5) days from the date such payment was due.
b) Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
c) Tenant shall be adjudged bankrupt or insolvent in proceedings filed
against Tenant.
d) A receiver or trustee shall be appointed for all or substantially all
of the assets of Tenant.
e) Tenant shall desert or vacate any substantial portion of the Leased
Premises.
f) Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than the foregoing in this Paragraph), and shall not cure such
failure within twenty (20) days after written notice thereof to Tenant.
22. LANDLORD'S REMEDIES
Upon the occurrence of any such events of default described in Paragraph 19
hereof, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:
a) Terminate this Lease, or terminate Tenant's rights to possession of the
Leased Premises under this Lease (but not the Lease, itself ), and in either
event Landlord shall have the right to immediate possession of the Leased
Premises and may reenter the Leased Premises, change the locks and remove all
persons and property therefrom using all force necessary for this purpose
without being guilty in any manner of trespass or otherwise; and any and all
damages to Tenant, or persons holding under Tenant, by reason of such re-entry
are hereby expressly waived; and any such termination or re-entry on the part of
Landlord shall be without prejudice to any remedy available to Landlord for
arrears of rent, breach of contract, damages or otherwise, nor shall the
termination of this Lease or of Tenant's rights of possession under this Lease
by Landlord acting under this subsection be deemed in any manner to relieve
Tenant from the obligation to pay the rent and all other amounts due or to
become due as provided in this Lease for and during the entire unexpired portion
then remaining of the Lease term. In the event of termination of this Lease or
of Tenant's rights of possession under this Lease by Landlord as provided in
this subparagraph, Landlord shall have the further right (but not the
obligation) to relet the Leased Premises upon such terms, conditions and
covenants as are deemed proper by Landlord for the account of Tenant, and in
such event, Tenant shall pay to Landlord all costs of renovating and altering
the Leased Premises for a new tenant or tenants in addition to all brokerage
and/or legal fees incurred in connection therewith. Landlord shall credit
Tenant only for such amounts as are actually received from such reletting during
the then remaining Lease term. Alternatively, at the election of Landlord,
Tenant covenants and agrees to pay as damages to Landlord, upon any such
termination by Landlord of this Lease or of Tenant's rights of possession under
this Lease, such sum as at the time of such termination equals the amount of the
excess, if any, of the then present value of all the rent which would have been
due and payable hereunder during the remainder of the full Lease term (had
Tenant kept and performed all agreements and covenants of Tenant set forth in
this Lease) over and above the then present rental value of the Leased Premises
for said remainder of the Lease term. For purposes of present value
calculations, Landlord and Tenant stipulate and agree to a discount rate of six
(6) percent per annum.
b) Without terminating this Lease, to enter upon the Leased Premises and
without being guilty in any manner of trespass or otherwise and without
liability for any damage to Tenant or persons holding under Tenant by reason of
such re-entry, all of which are hereby expressly waived, and to do or perform
whatever Tenant is obligated hereunder to do or perform under the terms of this
Lease; and Tenant shall reimburse Landlord on demand for any expenses or other
sums which Landlord may incur or expend plus fifteen percent (15% ) thereof to
cover Landlord's overhead and administrative cost, pursuant to this
subparagraph, and Landlord shall not be liable for any damages resulting to
Tenant from such action, whether caused by the negligence of Landlord or
otherwise; provided, however, nothing in this subsection shall be deemed an
obligation or undertaking by Landlord to remedy any such defaults of Tenant.
c) Without waiving such event of default, apply all or any part of the
security deposit to cure the event of default or to any damages suffered as a
result of the event of default to the extent of the amount of damages suffered.
Tenant shall reimburse Landlord for the amount of such depletion of the security
deposit on demand.
d) In addition to any of the remedies noted above or hereinafter, Landlord
is entitled and authorized to enter upon and take possession of the Leased
Premises and remove any property that may be found within the Leased Premises.
Landlord shall have the right to change any and all locks and other security
devices restricting access to the Leased Premises. To the extent permitted by
law, Tenant hereby waives: (i) any notices of Landlord's intent to re-enter or
re-take possession of the Leased Premises; (ii) any notice provided by statute
or otherwise of such re-entry or repossession or changing of locks; (iii) any
claim or cause of action, whether based on trespass, conversion, or otherwise,
against Landlord or Landlord's agents, employees, officers, or contractors for
any damages caused by the alteration of any locks or re-entry or repossession by
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Landlord, whether or not caused by the negligence of Landlord or otherwise; and
(iv) any right of redemption, re-entry, or repossession of Tenant and any notice
of legal proceeding for re-entry, including actions for forcible detainer and
entry.
Provided that Landlord has not terminated the Lease in writing or
permanently excluded Tenant from the Leased Premises, Landlord shall not be
obligated to provide a new key to Tenant except during Landlord's normal
business hours, and only after the following: (1) Tenant cures all events of
default existing at the time of lock-out, including payment of late charges and
reasonable expenses of lock-out (which shall include the cost of security
services and removal of old locks and installation of new locks), and (2) Tenant
has provided Landlord additional security or further assurances of Tenant's
future performance of all Tenant's obligations arising under the Lease, such
security or assurances to be satisfactory to Landlord in the exercise of
Landlord's sole and absolute discretion, which security may include, but is not
limited to, a requirement that the security deposit be increased to an amount
equal to three (3) months rent. Such lock-out should not be deemed to be a
termination of the Lease unless Landlord gives a written notice of termination
to Tenant. It is agreed that if Tenant abandons or vacates the Leased Premises,
Landlord may take such steps as Landlord deems necessary, appropriate, or
desirable to protect the Leased Premises and the property therein from
deterioration, including but not limited to, the lock-out of Tenant as described
herein.
In the event Tenant fails to pay any installment of rent or any
reimbursement, additional rental, or any other payment hereunder as and when
such payment is due, to help defray the additional cost to Landlord for
processing such late payments Tenant shall pay to Landlord on demand a late
charge in an amount equal to five percent (5%) of such installment,
reimbursement, additional rental or any other payment and the failure to pay
such late charge within ten (10) days after demand therefor shall be an event of
default hereunder. The provision for such late charge shall be in addition to
all of Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner.
Pursuit of any of the forgoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, provisions and covenants herein
contained. No act or thing done by the Landlord or its agents during the term
hereby granted shall be deemed a termination of this Lease or an acceptance of
the surrender of the Leased Premises, and no agreement to terminate this Lease
or accept a surrender of the Leased Premises shall be valid unless in writing
signed by Landlord. No waiver by Landlord of any violation or breach of any of
the terms, provisions and covenants herein contained. Landlord's acceptance of
the payment of rental or other payments hereunder after the occurrence of an
event of default shall not be construed as a waiver of such default, unless
Landlord so notifies Tenant in writing. Forbearance by Landlord to enforce one
or more of the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default or of Landlord's
right to enforce any such remedies with respect to such default or any
subsequent default. If, on account of any breach or default by Tenant in
Tenant's obligations under the terms and conditions of this Lease, it shall
become necessary or appropriate for Landlord to employ or consult with any
attorney concerning or to enforce of defend any of Landlord's rights or remedies
hereunder, Tenant agrees to pay any reasonable attorney's fees so incurred.
All sums due and owing by Tenant to Landlord under this Lease shall bear
interest from the date due until paid at the lesser of (a) the maximum
non-usurious rate permitted by law or (b) the greater of (i) two percent (2%)
above the "prime rate" per annum of Texas Commerce Bank National Association or
its successor in effect on said due date or (ii) eighteen percent (18%) per
annum. In either case, such interest to be compounded daily; provided, however,
in no event shall the rate of interests hereunder exceed the maximum
non-usurious rate of interest (hereinafter called the "Maximum Rate") permitted
by the applicable laws of the State of Texas or the United States of America,
whichever shall permit the higher non-usurious rate, and as to which Tenant
could not successfully assert a claim or defense of usury. To the extent that
the Maximum Rate is determined by reference to the laws of the State of Texas,
the Maximum Rate shall be the indicated rate ceiling (as defined and described
in Texas Revised Civil Statutes, Article 5069-1.04, as amended at the applicable
time in effect.
23. LANDLORD'S LIEN
Any statutory lien for rent is not hereby waived, the express contractual
lien herein granted being in addition and supplementary thereto.
24. SUBORDINATION
This Lease and all rights of Tenant hereunder are subject and subordinate
(i) to any mortgage or deed of trust, blanket or otherwise, which does now or
may hereafter affect the Building (and which may also affect other properties)
and (ii) to any and all increases, renewals, modifications, consolidations,
replacements and extensions of any such mortgage or deed of trust. This
provision is hereby declared by Landlord and Tenant to be self-operative and no
further instruments shall be required to effect such subordination of this
Lease. Tenant shall, however, upon demand at any time or times execute,
acknowledge and deliver to Landlord any and all instruments and certificates
that may be necessary or proper to more effectively subordinate this Lease and
all rights of Tenant hereunder to any such mortgage or deed of trust or to
confirm or evidence such subordination. In the event Tenant shall fail or
neglect to execute, acknowledge and deliver any subordination agreement or
certificate, Landlord in addition to any other remedies it may have, as the
agent and attorney in fact of Tenant, execute, acknowledge and deliver the same
and Tenant hereby irrevocably nominates, constitutes
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and appoints Landlord Tenant's proper and legal agent and attorney in fact for
such purposes. Such power of attorney shall not terminate on disability of the
principal. Tenant covenants and agrees, in the event any proceedings are
brought for the foreclosure of any such mortgage or if the Building is sold to
any purchaser, to attorn to and recognize such purchaser as the Landlord under
this Lease. Tenant agrees to execute and deliver at any time and from time to
time, upon the request of Landlord or of any holder(s) of any of the
indebtedness or other obligations secured by any of the mortgages or deeds of
trust be necessary or appropriate in any such foreclosure proceeding or
otherwise to evidence such attornment. Tenant hereby irrevocably appoints
Landlord and the holders of the indebtedness or other obligations secured by the
aforesaid mortgages and/or deeds of trust jointly and severally the agent and
attorney shall not terminate on disability of the principal. Tenant further
waives the provisions of any statute or rule of law, now or hereafter in
effect, which may give or purport to give Tenant any right or election to
terminate or otherwise adversely affect this Lease and the obligation of Tenant
hereunder in the event any such foreclosure proceedings is brought or trustee's
sale occurs and agrees that this Lease shall not be affected in any way
whatsoever by any such foreclosure proceeding or trustee's sale unless the
holder(s) of the indebtedness or other obligations secured by said mortgages
and/or deeds of trust shall declare otherwise. In the event Landlord places a
mortgage, deed of trust or otherwise on the building or project, Landlord shall
provide Tenant a non-disturbance agreement in a form reasonably satisfactory to
Landlord, Tenant and Landlord's creditor.
25. LANDLORD'S DEFAULT
Landlord shall only be deemed to be in default on the terms of the Lease in
the event Landlord shall violate, neglect, or fail to observe, keep or perform
any covenant or agreement which is not observed, kept, or performed by Landlord
within thirty (30) days after the receipt by Landlord of Tenant's written notice
of such breach which notice shall specifically set out the breach. Landlord
shall not be considered in default so long as Landlord commences to cure the
breach in a diligent and prudent manner and is allowed such additional time as
reasonably necessary to correct the breach. Notwithstanding any provisions to
the contrary contained in this Lease, no personal liability of any kind or
character whatsoever shall attach or at any time hereafter attach under any
conditions to Landlord or any subsidiary, affiliate or partner of Landlord or
their respective officers, directors, stockholders, or employees for payments of
any amounts due under this Lease or for the performance of any obligation under
this Lease. The exclusive remedies of Tenant for failure of Landlord to perform
any of its obligations under this Lease shall be to proceed against the interest
of Landlord in and to the Leased Premises it being understood that in no event
shall a judgment for any deficiency or monetary claim be sought, obtained or
enforced against Landlord or any subsidiary, affiliate or partner of Landlord or
their respective officers, directors, stockholders or employees. In no event
shall Landlord be liable for any consequential, special, punitive or exemplary
damages.
26. MECHANIC'S LIENS
Tenant shall have no authority, express or implied, to create or place any
lien or encumbrance of any kind or nature whatsoever upon, or in any manner to
bind, the interest of Landlord in the Leased Premises or to charge the rentals
payable hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any construction
or repairs, and each such claim shall affect and each such lien shall attach to,
if it all, only the leasehold interest granted to Tenant by this instrument.
Tenant covenants and agrees that it will pay or cause to be paid all sums
legally due and payable by it on account of any labor performed or materials
furnished in connection with any work performed on the Leased Premises on which
any lien is or can be validly and legally asserted against its leasehold
interest in the Leased Premises or the improvements thereon and that it will
indemnify, defend and save and hold Landlord harmless from any and all loss,
cost or expense based on or arising out of asserted claims or liens against the
leasehold estate or against the right, title and interest of the Landlord in the
Leased Premises or under the terms of this Lease.
27. NOTICES
Each provision of this instrument or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to the sending,
mailing or delivery of any notice or the making of any payment by Landlord to
Tenant or with reference to the sending, mailing or delivery of any notice or
the making of any payment by Tenant to Landlord shall be deemed to be complied
with when and if the following steps are taken:
a) All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address hereinbelow set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith. Tenant's obligation to pay rent and
any other amounts to Landlord under the terms of this Lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Landlord.
b) All payments required to be made by Landlord to Tenant hereunder shall
be payable to Tenant at the address hereinbelow set forth, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith.
c) Any notice or document required or permitted to be delivered hereunder
shall be deemed to be delivered whether actually received or not, when deposited
in the United States Mail, postage prepaid, Certified or Registered Mail,
addressed to the parties hereto at the respective addresses set out below, or at
such other address as they have heretofore specified by written notice delivered
in accordance herewith:
Landlord: Tenant:
--------- -------
Lakes Technology Center, Ltd. Sharps Compliance, Inc.
c/o Transwestern Property Company 0000 Xxxxx Xxxxx
0000 Xxxxxxxxx Xxx #000 Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
If and when included within the term "Landlord", as used in this instrument,
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice
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specifying some individual at some specific address for their receipt of notices
and payments to Landlord; if and when included within the term "Tenant" as used
in this instrument, there are more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of such a
notice specifying some individual at some specific address within the
continental United States for the receipt of notices and payments to Tenant.
All parties included within the terms "Landlord" and "Tenant", respectively,
shall be bound by notices given in accordance with the provisions of this
paragraph to the same effect as if each had received such notice.
28. MISCELLANEOUS
a) Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.
b) The terms, provisions and covenants and conditions contained in this
Lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, legal representatives, successors and
permitted assigns, except as otherwise herein expressly provided. Each party
agrees to furnish to the other, promptly upon demand, a corporate resolution,
proof of due authorization by partners, or other appropriate documentation
evidencing the due authorization of such party to enter into this Lease.
c) The captions inserted in this Lease are for convenience only and in no
way define, limit or otherwise describe the scope or intent of this Lease, or
any provision hereof, or in any way affect the interpretation of this Lease.
d) Tenant agrees from time to time within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, the date to
which rent has been paid, the unexpired term of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. It is
understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this Lease.
e) This Lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.
f) All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof, including, without
limitation, all payments obligations with respect to taxes and insurance and all
obligations concerning the condition of the Leased Premises. Upon the
expiration or earlier termination of the term hereof, and prior to Tenant
vacating the Leased Premises, Tenant shall pay to Landlord any amount reasonably
estimated by Landlord as necessary to put the Leased Premises, including without
limitation all heating and air conditioning systems and equipment therein, in
good condition and working order. Tenant shall also, prior to vacating the
Leased Premises, pay to Landlord the amount, as estimated by Landlord, of
Tenant's obligation hereunder for Tenant's pro rata share of Building Costs for
the year in which the Lease expires or terminates. All such amounts shall be
used and held by Landlord for payment of such obligations of Tenant hereunder,
with Tenant being liable for any additional costs therefor upon demand by
Landlord, or with any excess to be returned to Tenant after all such obligations
have been determined and satisfied, as the case may be. Any security deposit
held by Landlord shall be credited against the amount payable by Tenant under
this Paragraph.
g) If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added as a
part of this Lease contract a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
h) Because the Leased Premises are on the open market and are presently
being shown, this Lease shall be treated as an offer with the Leased Premises
being subject to prior lease and such offer to withdrawal or non-acceptance by
Landlord or to other use of the Leased Premises without notice, and this Lease
shall not be valid or binding unless and until accepted by Landlord in writing.
i) All referenced in this Lease to "the date hereof" or similar referenced
shall be deemed to refer to the last date, in point of time, on which all
parties hereto have executed this Lease.
j) It is expressly stipulated and agreed that none of the obligations to
be undertaken by Landlord hereunder shall constitute any form of warranty,
express or implied, all such obligations being contractual covenants of
performance. Without limiting the generality of the foregoing, THERE IS NO
WARRANTY AS TO SUITABILITY, HABITABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE GIVEN IN CONNECTION WITH THIS LEASE. This disclaimer of
express and implied warranties and the provisions of Paragraph 8 under which
Tenant assumes responsibility for repairs, are provisions bargained for by the
parties entering into this Lease. Were warranties undertaken by the Landlord
hereunder or were the Landlord agrees to perform repairs beyond that
contemplated to be performed by Landlord hereunder, the economics of this Lease
would have been affected and it would require an increase in Minimum Rent from
that payable hereunder.
29. EXHIBITS AND ATTACHMENT
All Exhibits, attachments, riders and addenda referred to in this Lease are
incorporated in this Lease and made a part hereof for all intents and purposes.
30. TENANT'S INDEMNITY
Tenant covenants and agrees to indemnify and hold Landlord harmless from
and against any and all costs, liability or expense arising out of any claims of
any person or persons, or imposed by reason of any violation of law or ordinance
on account of any occurrence in, upon or at the Leased Premises, or resulting
from the
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occupancy or use thereof by Tenant or by any person or persons holding
thereunder, or by reason of the use or misuse of the parking area of any other
common facility in the Building by Tenant or by any person or persons holding or
using the Leased Premises, or any part thereof, under Tenant, including, without
limitation, Tenant's customers, invitees, agents, contractors, employees,
servants, subtenants, assignees, licensees or concessionaires.
31. HAZARDOUS MATERIALS
a) Tenant shall not, without Landlord's prior written consent, cause or
permit any Hazardous Materials (hereinafter defined) to be stored, used or
disposed of in or about the Leased Premises or Project by Tenant, its agents,
employees, contractors or invitees, nor shall the use which Tenant makes of the
Leased Premises result in any Hazardous Materials Contamination (hereinafter
defined). For purposes of this Lease, the following terms shall have the
meanings herein specified:
(1) "Hazardous Materials" shall mean (i) any "hazardous waste" as defined
by the Resource Conservation and Recovery Act of 1976 (42 U.S.C.A. Sections
6901 et seq.), as amended from time to time, and regulations promulgated
thereunder ("RCRA"); (ii) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C.A. Sections 9601 et seq.), as amended from time to time, and
regulations promulgated thereunder ("CERCLA") ; (iii) any hazardous
substances as defined by the Texas Natural Resource Conservation Commission
("TNRCC"); (iv) asbestos, polychlorinated biphenyls or other substances
specifically regulated under the Toxic Substances Control Act
(15 U.S.C. Sections 2601 et seq.), as amended from time to time, and
regulations promulgated thereunder ("TSCA"); (v) pesticides specifically
regulated under the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C.A. Sections 135 et seq.), as amended from time to time, and
regulations promulgated thereunder ("FIFRA"); (vi) storage tanks, whether
or not underground and whether empty, filled or partially filled with any
substance; (vii) the presence of oil, petroleum products, and their
by-products; (viii) any substance the presence of which in or about the
Property is prohibited by any governmental authority or which is hereafter
classified by any governmental authority as a hazardous or toxic waste,
material, substance or similar phraseology; and (ix) any other substance
which by any governmental authority requires special handling or
notification of any governmental authority in its collection, storage,
treatment, or disposal.
(2) "Hazardous Materials Contamination" shall mean the spillage, leakage,
emission or disposal of Hazardous Materials (whether presently existing or
hereafter occurring) in or about the buildings, facilities, soil,
groundwater, air or other elements in or about the Property or any other
property as a result of Hazardous Materials at any time emanating from the
Leased Premises.
b) Notwithstanding the foregoing, Tenant shall be permitted to store, use
and dispose of deminimis amounts of Hazardous Materials which are incidental to
Tenant's business so long as such amounts does not increase the Landlord's
insurance or change the occupancy class of the Building. Such Hazardous
Materials and all containers therefore, shall be stored, used and disposed of in
a manner that complies with all federal, state and local laws or regulations
applicable to such Hazardous Materials. Tenant shall be liable for all costs
and expenses related to the storage, use and disposal of such deminimis amounts
of Hazardous Materials incidental to Tenant's business and shall indemnify,
defend and hold Landlord harmless from any claims or liabilities relating
thereto.
c) At the commencement of each "Lease Year" (the term "Lease Year" as used
in this Lease shall mean any twelve (12) month period beginning with the
Commencement Date and each twelve (12) month period beginning on any anniversary
date thereof), Tenant shall disclose to Landlord the names and approximate
amounts of all Hazardous Materials which Tenant intends to store, use or dispose
of in or about the Leased Premises in the coming Lease Year. In addition, at
the commencement of each Lease Year (beginning with the second Lease Year),
Tenant shall disclose to Landlord the names and amounts of all Hazardous
Materials that to Tenant's knowledge were actually stored, used or disposed of
in or about the Leased Premises, if such materials were not previously
identified to Landlord at the commencement of the previous Lease Years.
d) Tenant shall give written notice to Landlord immediately upon Tenant's
acquiring knowledge of the presence of any Hazardous Materials in or about the
Leased Premises (subject to the provisions of paragraph b. hereof) or of any
Hazardous Materials Contamination with a full description thereof. Landlord
shall have the right, but not the obligation, without in any way limiting
Landlord's other rights and remedies under the Lease, to enter onto the Leased
Premises or to take such other actions as it deems necessary or advisable to
cleanup, remove, resolve or minimize the impact of, or otherwise deal with, any
Hazardous Materials or Hazardous Materials Contamination on the Project
following receipt of any notice from any person or entity asserting the
existence of any Hazardous Materials or Hazardous Materials Contamination
pertaining to the Leased Premises or any part of the Project which, if true,
could result in an order, suit, imposition of a lien on the Project, or other
action and/or which, in Landlord's sole opinion, could jeopardize Landlord's
security under the Lease.
e) TENANT HEREBY AGREES THAT TENANT SHALL DEFEND, INDEMNIFY AND HOLD
HARMLESS LANDLORD, ITS AGENTS AND EMPLOYEES FROM AND AGAINST ANY CLAIMS,
DEMANDS, PENALTIES, FINES, LIABILITIES, SETTLEMENTS, DAMAGES, COSTS OR EXPENSES
(INCLUDING WITHOUT LIMITATION, ATTORNEYS' AND CONSULTANTS' FEES, COURT COSTS AND
LITIGATION EXPENSES) OF WHATEVER KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR
OTHERWISE, ARISING OUT OF OR IN ANY WAY RELATED TO (A) THE PRESENCE, DISPOSAL,
RELEASE OR THREATENED RELEASE AND SUBSEQUENT REMEDIATION OF ANY HAZARDOUS
MATERIALS OR ANY HAZARDOUS MATERIALS CONTAMINATION FROM THE LEASED PREMISES; (B)
ANY PERSONAL INJURY (INCLUDING WRONGFUL DEATH) OR PROPERTY DAMAGE (REAL OR
PERSONAL) ARISING OUT OF OR RELATED TO SUCH HAZARDOUS MATERIALS OR HAZARDOUS
MATERIALS CONTAMINATION; OR (C) THE APPLICABILITY OF ANY LAWS RELATING TO
HAZARDOUS MATERIALS ON THE LEASED PREMISES OR CAUSED BY TENANT. THE PROVISIONS
OF THIS PARAGRAPH E. SHALL BE IN ADDITION TO ANY OTHER OBLIGATIONS AND
LIABILITIES TENANT MAY HAVE TO LANDLORD AT LAW OR IN EQUITY AND SHALL SURVIVE
THE EXPIRATION OF THIS LEASE OR THE TERMINATION THEREOF.
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32. MITIGATION OF DAMAGES
a) GENERAL DUTY TO MITIGATE. Both Landlord and Tenant shall each use
commercially reasonable efforts to mitigate any damages resulting from a default
of the other party under this Lease.
b) LANDLORD'S DUTY TO MITIGATE DAMAGES. Landlord's obligation to mitigate
damages after a default by Tenant under this Lease shall be satisfied in full if
Landlord undertakes to lease the Leased Premises to another tenant (a
"Substitute Tenant") in accordance with the following criteria:
(i) Landlord shall have no obligation to solicit or entertain
negotiations with any other prospective tenants for the Leased
Premises until Landlord obtains full and complete possession of
the Leased Premises including, without limitation, the final and
unappealable legal right to relet the Leased Premises free of any
claim of Tenant.
(ii) Landlord shall not be obligated to offer the Leased Premises to a
prospective tenant when other premises in the Project suitable
for that prospective tenant's use are (or soon will be)
available.
(iii) Landlord shall not be obligated to lease the Leased Premises to a
Substitute Tenant for a rental less than the current fair market
rental then prevailing for similar office space in comparable
office/warehouse buildings in the same market area as the
Project, nor shall Landlord be obligated to enter into a new
lease under other terms and conditions that are unacceptable to
Landlord under Landlord's then current leasing policies for
comparable space in the Project.
(iv) Landlord shall not be obligated to enter into a lease with any
proposed tenant whose use would:
a. Violate any restriction, covenant, or requirement contained
in the lease of another tenant of the Project;
b. Adversely affect the reputation of the Project; or
c. Be incompatible with the operation of the Project as a
first-class office/warehouse building.
(v) Landlord shall not be obligated to enter into a lease with any
proposed Substitute Tenant which does not have, in Landlord's
reasonable opinion, sufficient financial resources or operating
experience to operate the Leased Premises in a first-class
manner.
(vi) Landlord shall not be required to expend any amount of money to
alter, remodel, or otherwise make the Leased Premises suitable
for uses by a proposed Substitute Tenant unless:
a. Tenant pays any such sum to Landlord in advance of
Landlord's execution of a Substitute Lease with such
Substitute Tenant (which payment shall not be in lieu of any
damages or other sums to which Landlord may be entitled as a
result of Tenant's default under this Lease); or
b. Landlord, in Landlord's sole discretion, determines that any
such expenditure is financially justified in connection with
entering into any such Substitute Lease.
c. EFFECT OF RELEASING. Upon compliance with the above criteria
regarding the releasing of the Leased Premises after a default by Tenant,
Landlord shall be deemed to have fully satisfied Landlord's obligation to
mitigate damages under this Lease and under any law or judicial ruling in effect
on the date of this Lease or at the time of Tenant's default, and Tenant waives
and releases, to the fullest extent legally permissible, any right to assert in
any action by Landlord to enforce the terms of this Lease, any defense,
counterclaim, or rights of set off or recoupment respecting the mitigation of
damages by Landlord, unless and to the extent Landlord maliciously or in bad
faith fails to act in accordance with the requirements of this Paragraph 32.
d. TENANT'S RIGHTS. Tenant's right to seek damages from Landlord as
a result of a default by Landlord under this Lease, shall be conditioned on
Tenant taking all actions reasonably required, under the circumstances, to
minimize any loss or damage to Tenant's property or business, or to any of
Tenant's officers, employees, agents, invitees, or other third parties that may
be caused by any such default of Landlord.
THE PARTIES EXECUTING this Lease represent and warrant that each such party
possesses all lawful rights and authority to enter into this Lease; that there
are no judgments, decrees, or outstanding orders of any court prohibiting the
execution of this Amendment; and that all required approvals, consents and
resolutions necessary to effectuate the terms and provisions of this Lease have
been obtained.
Executed on the dates indicated below. Effective on the latter of the
dates indicated below.
LANDLORD: LAKES TECHNOLOGY CENTER, LTD.
Transwestern Investment Company, L.L.C. as Agent
Attest/Witness By: /s/ XXXX XXXXXXXXX
-------------------------------------------
/s/ Xxxx Xxxxx Xxxxxxxxxx Its: Vice President
------------------------------ -------------------------------------------
Date: 7/1/98
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TENANT: SHARPS COMPLIANCE, INC.
Attest/Witness By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
/s/ [ILLEGIBLE] Its: Director
------------------------------ -------------------------------------------
Date: 6/24/98
-------------------------------------------
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Addendum One to Lease Agreement
by and between
Lakes Technology Center, Ltd.
and
Sharps Compliance, Inc.
1. Landlord shall provide the building standard leasehold improvements
outlined on the architectural plan attached hereto as Exhibit "C". The
building standard leasehold improvements shall include the following:
a. New ceiling tile in the area outlined in yellow on Exhibit "C".
b. Building standard "cut pile" 30 oz. carpet in the areas outlined in
yellow on Exhibit "C". The balance of the office space shall have
"level loop" 26 oz. carpet as indicated in red on Exhibit "C".
c. New building standard paint in existing office areas.
d. All lights and electrical and plumbing systems shall be in good
working order prior to commencement date.
e. The existing heating and air-conditioning systems shall be in good
working condition prior to the commencement date.
f. Three (3) 3' x 9' glass panels shall be provided in three (3) offices
outlined on Exhibit "C".
g. Landlord shall have the right to relocate two (2) existing 3' x 9'
doors at the existing "storage" offices for new offices to be
constructed in the premises.
h. Landlord and Tenant acknowledge that the leasehold improvement cost
preliminary pricing outlined as Exhibit "D" and attached hereto was
prepared as a guideline for the leasehold improvements. Tenant
acknowledges and agrees that the attached construction pricing is not
an allowance and any cost savings shall be retained only by Landlord.
Except as provided herein, Tenant agrees to accept the premises in its "as
is", "where is" condition.
2. While this Lease is in full force and effect, provided that Tenant is not
in default of any of the terms, covenants and conditions thereof, Tenant
shall have the right or option to extend the original term of this Lease
for one further term of sixty (60) months. Such extension or renewal of
the original term shall be on the same terms, covenants and conditions as
provided for in the original term except that the rental during the
extended term shall be at the fair market rental then in effect on
equivalent properties, of equivalent size, in equivalent areas. Notice of
Tenant's intention to exercise the option must be given to Landlord in
writing at least one hundred eighty (180) days prior to the expiration of
the original term of this Lease.
3. Landlord is the owner of the herein demised premises, (outlined in red on
Exhibit "A" attached hereto), as well as the adjacent 7,390 square foot
space (outlined in green on said Exhibit "A"). In the event that the
existing tenant, Lincare, Inc., or its assigns, does not renew the Lease
with Landlord in such adjacent space, it is agreed that, for a term of 48
months from the date hereof, Tenant shall have the right of first refusal
to lease the adjacent space from the Landlord, which Lease shall be at the
same price and on the same terms as contained in any bona fide offer for
the lease of the adjacent space received by Landlord, which Landlord
desires to accept. Upon receipt of such an offer, Landlord shall notify
Tenant thereof, in the manner provided herein for notice, whereupon Tenant
shall have five (5) days after receipt of such notice in which to elect to
exercise Tenant's right of first refusal. In the event Tenant fails to
give Landlord written notice of Tenant's election to lease said adjacent
space within said five (5) day period, Tenant shall have no further right,
title or interest in the said adjacent space and this right of first
refusal shall terminate and be of no further force and effect. If, on the
other hand, Tenant exercises its right of first refusal in the manner
provided above, then the Lease of the said adjacent space shall be
consummated, in accordance with the terms set forth in said bona fide
offer. It is understood and agreed that this right of first refusal shall
become null and void at the expiration from the date hereof of the number
of months recited above.
4. Provided Tenant is not in default of any terms and conditions of the Leas
Agreement, Landlord shall warrant the good working conditions of only the
existing compressors that are a part of the existing heating and
air-conditioning units for a period not to exceed six (6) months from the
commencement date. In consideration for this six (6) month warranty for
compressors, it is agreed and understood that Tenant shall maintain the
heating and air-conditioning units as outlined and required in paragraph
11(e) of the Lease Agreement. After such six (6) month period, Tenant shall
be responsible for all obligations of the existing heating and
air-conditioning systems as outlined in the Lease Agreement.
5. In regard to Paragraph 13 of the Lease Agreement, it is agreed by Landlord
and Tenant that the sign on the leased premises shall be approximately 3' x
6' in size and subject to the terms and conditions of such Paragraph 13.
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