EXHIBIT 10.11
TAR TEXAS ASSOCIATION OF REALTORS(R)
COMMERCIAL LEASE
This lease agreement is made and entered into by and between Xxx Xxxxxxx
(Landlord) and Hi-Tech Compressor Company, L.C. (Tenant). Landlord hereby
Leases to Tenant and Tenant hereby leases from Landlord that certain property
with the improvements thereon, containing approximately 24,645 square feet,
hereinafter called the "leased premises", known as County Road 1260 South LEGAL:
a 3.00 acre tract of land located in Xxxxxxx 00, Xxxxx 00, X&X XX Xx. Survey
Addition, City of N/A, Midland County, Texas; or as more particularly described
below or on attached exhibit:
The primary term of this lease shall be 36 months commencing on the 1st day
of April, 1994, and ending on the 31st day of March, 1997, upon the following
terms, conditions, and covenants: see attached Exhibit "B".
1. TAXES. Each year during the term of this lease, Landlord shall pay real
estate taxes assessed against the leased premises.
2. UTILITIES. Tenant shall pay all charges for utility services to the leased
premises except for N/A which shall be paid by the Landlord.
4. RENT. Tenant agrees to and shall pay Landlord at 0000 Xxxxxxxxx Xxxx.,
Xxxxxxx, XX 00000, County of Midland, Texas, or at such other place
Landlord shall designate from time to time in writing, as rent for the
leased premises, the total sum of $135,000.00, payable without demand in
equal monthly payments of $3,750.00 each in advance on or before the 1st
day of each month, commencing on April, 1994, and continuing thereafter
until the total sum shall be paid. Adjustment to the rent, if any, for
rent escalators, for percentage of net rent, or for increases in building
operation costs (including but not limited to insurance, custodial
services, maintenance and utilities) shall be as set forth in an attached
addendum. Rent received after the first day of the month shall be deemed
delinquent. If rent is not received by Landlord by the 5th of each month,
Tenant shall pay a late charge of $25.00 plus a penalty of $10.00 per day
until rent is received in full. Tenant shall pay $35.00 for each returned
check.
5. USE. Tenant shall use the leased premises for the following purpose and no
other: manufacturing.
6. SECURITY DEPOSIT. Tenant shall pay to Landlord a security deposit in the
sum of $ N/A, payable on or before the commencement of this lease for
Tenant's faithful performance hereunder. Refund thereof shall be made upon
performance of this lease agreement by Tenant, minus any assessments or
damages unless Landlord and Tenant provide otherwise in Special Provisions.
7. INSURANCE. Landlord shall pay for fire and extended coverage insurance on
the buildings and other improvements on the leased premises in an amount
not less than $250,000.00, which amount shall be increased yearly in
proportion to the increase in market value of the premises. If Landlord
provides any insurance herein, Tenant shall pay to Landlord, during the
term hereof, the amount of any increase in premiums for the insurance
required over and above such premiums paid during the first year of this
lease. Tenant shall provide public liability and property damage insurance
for its business operations on the leased premises in the amount of
$500,000/300,000 which policy shall cover the Landlord as well as the
Tenant. Said insurance policies required to be provided by Tenant herein
shall name Landlord as an insured and shall be issued by an insurance
company approved by Landlord. Tenant shall provide Landlord with
certificates of insurance evidencing the coverage required herein. Tenant
shall be solely responsible for fire and casualty insurance on Tenant's
property on or about the leased premises. If Tenant does not maintain such
insurance in full force and effect, Landlord may notify Tenant of such
failure and if Tenant does not deliver to Landlord within 15 days after
such notice certification showing all such insurance to be in full force
and effect, Landlord may at his option, take out the necessary insurance to
comply with the provision hereof and pay the premiums on the items
specified in such notice, and Tenant covenants thereupon on demand to
reimburse and pay Landlord any amount so paid or expended in the payment of
the insurance premiums required hereby and specified in the notice, with
interest thereon at the rate of 13 percent per annum from the date of such
payment by Landlord until repaid by Tenant.
8. CONDITION OF PREMISES. Tenant has examined and accepts the leased premises
in its present as is condition as suitable for the purposes for which the
same are leased, and does hereby accept the leased premises regardless of
reasonable deterioration between the date of this lease and the date Tenant
begins occupying the leased premises unless Landlord and Tenant agree to
repairs or refurbishment as noted in Special Provisions. See Exhibit "B".
9. MAINTENANCE AND REPAIRS. Landlord shall keep the foundation, the exterior
walls (except glass; windows; doors; HVAC, door closure devices; window and
door frames, molding, locks, and hardware; and interior painting or other
treatment of exterior walls), and the roof of the leased premises in good
repair except that Landlord shall not be required to make any repairs
occasioned by the act or negligence of Tenant, its employees, subtenants,
licensees and concessionaires. Tenant is responsible for maintenance of
the common area and common area equipment. If Landlord is responsible for
any such repair and maintenance, Tenant agrees to give Landlord written
notice of needed repairs. Landlord shall make such repairs within a
reasonable time. Tenant shall notify Landlord immediately of any emergency
repairs. Tenant shall keep the leased premises in good, clean condition
and shall at its sole cost and expense, make all needed repairs and
replacements, including replacement of cracked or broken glass, except for
repairs and replacements required to be made by Landlord under this
section. If any repairs required to be made by Tenant hereunder are not
made within ten (10) days after written notice delivered to Tenant by
Landlord, Landlord may at its option make
such repairs without liability to Tenant for any loss or damage which may
result by reason of such repairs, and Tenant shall pay to Landlord upon
demand as additional rent hereunder the cost of such repairs plus interest.
At the termination of this lease, Tenant shall deliver the leased premises
in good order and condition, reasonable wear and tear excepted.
10. ALTERATIONS. All alterations, additions and improvements, except trade
fixtures, installed at expense of Tenant, shall become the property of
Landlord and shall remain upon and be surrendered with the leased premises
as a part thereof on the termination of this lease. Such alterations,
additions, and improvements may only be made with the prior written consent
of Landlord, which consent shall not be unreasonably withheld. If consent
is granted for the making of improvements or alterations to the leased
premises, such improvements and alterations shall not commence until Tenant
has furnished to Landlord a certificate of insurance showing coverage in an
amount satisfactory to Landlord protecting Landlord from liability for
injury to any person and damage to any personal property, on or off the
leased premises, in connection with the making of such improvements or
alterations. No cooling tower, equipment, or structure of any kind shall be
placed on the roof or elsewhere on the leased premises by Tenant without
prior written permission of Landlord. If such permission is granted, such
work or installation shall be done at Tenant's expense and in such a manner
that the roof shall not be damaged thereby. If it becomes necessary to
remove such cooling tower, equipment or structure temporarily, so that
repairs to the roof can be made. Tenant shall promptly remove and reinstall
the cooling tower, equipment or structure at Tenant's expense and repair at
Tenant's expense any damage resulting from such removal or reinstallation.
Upon termination of this lease, Tenant shall remove or cause to be removed
from the roof any such cooling tower, equipment or structure if directed to
do so by Landlord. Tenant shall promptly repair at its expense any damages
resulting from such removal. At the termination of this lease, Tenant shall
deliver the leased premises in good order and condition, natural
deterioration only excepted. Any damage caused by the installation or
removal of trade fixtures shall be repaired at Tenant's expense prior to
the expiration of the lease term. All alterations, improvements, additions,
and repairs made by Tenant shall be made in good and workmanlike manner.
11. COMPLIANCE WITH LAWS AND REGULATIONS. Tenant shall, at its own expense,
comply with all laws, orders, and requirements of all governmental entities
with reference to the use and occupancy of the leased premises. Tenant and
Tenant's agents, employees and invitees shall fully comply with any rules
and regulations governing the use of the buildings or other improvements to
the leased premises as required by Landlord. Landlord may make reasonable
changes in such rules and regulations from time to time as deemed advisable
for the safety, care and cleanliness of the leased premises, provided same
are in writing and are not in conflict with this lease.
12. SEE EXHIBIT "B" paragraph 4.
13. DESTRUCTION. In the event the leased premises is partially damaged or
destroyed or rendered partially unfit for occupancy by fire or other
casualty, Tenant shall give immediate notice to Landlord. Landlord may
repair the damage and restore the leased premises to substantially the same
condition as immediately prior to the occurrence of the casualty. Such
repairs shall be made at Landlord's expense unless due to Tenant's
negligence. Landlord shall allow Tenant a fair reduction of rent during the
time the leased premises are partially unfit for occupancy. If the leased
premises are totally destroyed or deemed by the Landlord to be rendered
unfit for occupancy by fire or other casualty, or if Landlord shall decide
not to repair or rebuild, this lease shall terminate and the rent shall be
paid to the time of such casualty.
14. TENANT DEFAULT. If Tenant abandons the premises or otherwise defaults in
the performance of any obligations or covenants herein, Landlord may
enforce the performance of this lease in any manner provided by law. This
lease may be terminated at Landlord's discretion if such abandonment or
default continues for a period of 10 days after Landlord notifies Tenant of
such abandonment or default and of Landlord's intention to declare this
lease terminated. Such notice shall be sent by Landlord to Tenant at the
leased premises by certified mail or otherwise. If Tenant has not
completely removed or cured default within the 10 day period, this lease
shall terminate. Thereafter, Landlord or its agents shall have the right,
without further notice or demand, to enter the leased premises and remove
all persons and property without being deemed guilty of trespass and
without waiving any other remedies for arrears of rent or breach of
covenant. Upon abandonment or default by the Tenant, the remaining unpaid
portion of the rental from paragraph 4 herein, shall become due and
payable.
15.
16. SUBORDINATION. Landlord is hereby irrevocably vested with full power and
authority to subordinate this lease to any mortgage, deed of Trust, or
other lien hereafter placed on the demised premised and Tenant agrees on
demand to execute such further instruments subordinating this lease as
Landlord may request, provided such subordination shall be on the express
condition that this lease shall be recognized by the mortgagee, and the
rights of Tenant shall remain in full force and effect during the term of
this lease so long as Tenant shall continue to perform all of the covenants
and conditions of this lease.
17. INDEMNITY. Landlord and its employees and agents shall not be liable to
Tenant or to Tenant's employees, patrons, visitors, invitees, or any other
persons for any injury to any such persons or for any damage to personal
property caused by an act, omission, or neglect of Tenant or Tenant's
agents or of any other tenant of the premises of which the leased premises
is a part. Tenant agrees to indemnify and hold Landlord and its employees
and agents harmless from any and all claims for such injury and damages,
whether the injury occurs on or off the leased premises.
18. SEE EXHIBIT "B" paragraph 5.
19. TENANT BANKRUPTCY. If Tenant becomes bankrupt or makes voluntary
assignment for the benefit of creditors or if a receiver is appointed for
Tenant, Landlord may terminate this lease by giving five (5) days written
notice to Tenant of Landlord's intention to do so.
20. CONDEMNATION. If the whole or any substantial part of the leased premises
is taken for any public or quasi-public use under any governmental law,
ordinance or regulation or by right of eminent domain or should the leased
premises be sold to a condemning authority under threat of condemnation,
this lease shall terminate and the rent shall be abated during the
unexpired portion of the lease effective from the date of the physical
taking of the leased premises.
21. BROKER'S FEE. Commercial Properties of Texas, as Real Estate Broker
(the Broker), has negotiated this lease and Landlord agrees to pay Broker
in Midland County, Texas, upon commencement of this lease, a negotiated fee
of $______ or 3% of the total rental provided for in this lease to be
divided as follows: N/A. In the event this lease is extended, expanded or
renewed, Landlord agrees to pay Broker an additional negotiated fee of $N/A
or N/A% of the total rental for such extension, expansion or renewal
period, payable at the time of commencement of such extension, expansion or
renewal, said fee to be divided as follows: N/A. Tenant warrants that it
has had no dealings with any real estate broker or agents in connection
with the negotiation of this lease excepting only Commercial Properties TX
and it knows of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. If Tenant during the term of
this Lease, or any
extension, expansion or renewal period thereof, or within N/A days of the
expiration of this Lease, or any extension, expansion or renewal period
thereof, purchases the property herein leased, Landlord agrees to pay
Broker, N/A in N/A County, Texas, a negotiated fee of $N/A or N/A% of the
sales price upon closing of the sale of this property.
22. NOTICES. Notices to Tenant shall be by certified mail or other delivery to
the leased premises. Notices to Landlord shall be by certified mail to the
place where rent is payable.
23. DEFAULT BY LANDLORD. In the event of breach by Landlord of any covenant,
warranty, term or obligation of this lease, then Landlord's failure to cure
same or commence a good faith effort to cure same within 10 days after
written notice thereof by Tenant shall be considered a default and shall
entitle Tenant either to terminate this lease or cure the default and make
the necessary repairs and any expense incurred by Tenant shall be
reimbursed by the Landlord after reasonable notice of the repairs and
expenses incurred. If any utility services furnished by Landlord are
interrupted and continue to be interrupted despite the good faith efforts
of Landlord to remedy same, Landlord shall not be liable in any respect for
damages to the person or property of Tenant or Tenant's employees, agents,
or guests, and same shall not be construed as grounds for constructive
eviction or abatement of rent. Landlord shall use reasonable diligence to
repair and remedy such interruption promptly.
24. SIGNS. During the last 30 days of this lease, a "For Sale" sign and/or a
"For Lease" sign may be displayed on the leased premises and the leased
premises may be shown at reasonable times to prospective purchasers or
tenants.
25. RIGHT OF ENTRY. Landlord 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, or c) for any other reasonable purpose.
26. WAIVER OF BREACH. The waiver by Landlord of any breach of any provision of
this lease shall not constitute a continuing waiver or a waiver of any
subsequent breach of the same or a different provision of this lease.
27. TIME OF ESSENCE. Time is expressly declared to be of the essence in this
lease.
28. BINDING OF HEIRS AND ASSIGNS. Subject to the provisions of this lease
pertaining to assignment of the Tenant's interest, all provisions of this
lease shall extend to and bind, or inure to the benefit not only of the
parties to this lease but to each and every one of the heirs, executors,
representatives, successors, and assigns of Landlord or Tenant.
29. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies by this lease
agreement are cumulative and the use of any one right or remedy by either
party shall not preclude or waive its right to use any or all other
remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance, or otherwise.
30. TEXAS LAW TO APPLY. This agreement shall be construed under and in
accordance with the laws of the State of Texas.
31. LEGAL CONSTRUCTION. In case any one or more of the provisions contained in
this agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof and this
agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
32. PRIOR AGREEMENTS SUPERCEDED. This agreement constitutes the sole and only
agreement of the parties to this lease and supersedes any prior
understandings or written or oral agreements between the parties respecting
the subject matter of this lease.
33. AMENDMENT. No amendment, modification, or alteration of the terms hereof
shall be binding unless it is in writing, dated subsequent to the date
hereof, and duly executed by the parties.
34. ATTORNEY'S FEES. Any signatory to this lease agreement who is the
prevailing party in any legal proceeding against any other signatory
brought under or with relation to this lease agreement or this transaction
shall be additionally entitled to recover court costs, reasonable attorney
fees, and all other out-of-pocket costs of litigation, including
deposition, travel and witness costs, from the nonprevailing party.
35. SPECIAL PROVISIONS. (This section to include additional factual data not
included above.) Exhibits "A" and "B" are a part of this lease agreement.
EXECUTED this 2nd day of March, 1994.
TENANT or TENANTS LANDLORD
HI-TECH COMPRESSOR COMPANY, L.C. /s/XXX XXXXXXX
/s/XXXXXXX XXXXXXXX
Xxxxxxx Xxxxxxxx, Vice President
REAL ESTATE BROKER REAL ESTATE BROKER
Commercial Properties of TX 325147 ________________________
LICENSE NO. LICENSE NO.
By: Xxxxx Xxx Xxxxxxx By: ___________________
(Note: This form has been prepared by Xxxx & Xxxxx, P.C., attorneys for
the Texas Association of REALTORS (TAR). Xxxx & Xxxxx, P.C. has approved
this form for use by TAR member brokers and salespersons for the purpose of
leasing improved commercial real property for business purposes. This form
has not been drafted for a specific transaction, therefore, the parties are
advised to consult an attorney of their choice before signing.)
EXHIBIT "A"
to
Commercial Lease between Hi-Tech Compressor Company, Tenant
and Xxx Xxxxxxx, Landlord
Tenant will remain in compliance with all state and federal environmental laws
and regulations and Tenant will not place nor permit to be placed, nor generate,
store or dispose of any hazardous waste, toxic substance, asbestos or related
materials ("Hazardous Materials") on the leased premises in violation of
applicable state and federal environmental laws. For the purposes of this lease,
Hazardous Materials shall include, but shall not be limited to, substances
defined as "hazardous substances" or "toxic substances" in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 424
U.S.C. ss.9601, et seq., Hazardous Materials Transportation Act, 49 U.S.C. ss.
1802, et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., or as "hazardous substances," "hazardous waste" or "pollutant or
contaminant" in any other applicable federal, state or local environmental law
or regulation. To the knowledge of Landlord, the leased premises have never been
used for the treatment, storage, recycling, or disposal of any Hazardous
Materials, or to the extent that such use has occurred, such past use was not in
violation of any applicable environmental law or regulation then or now in
existence.
In the event Tenant should discover any Hazardous Materials on the leased
premises which could result in a breach of the foregoing covenant, Tenant shall
notify Landlord within three (3) days after such discovery. Tenant shall
dispose of all material amounts of Hazardous Materials generated by the Tenant
only at facilities and/or with carriers that maintain valid governmental permits
under the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901. In the
event of any notice or filing of any complaint or commencement of any
administrative hearing or procedure against the Tenant alleging a violation of
an environmental law or regulation, Tenant shall give notice to Landlord within
five (5) days after Tenant has received notice of such notice or filing.
Breach of this covenant by Tenant shall, at the Landlord's option,
constitute a default hereunder, and shall entitle Landlord to terminate the
lease, to accelerate the rental due hereunder, and collect from Tenant damages
and expenses incurred by Landlord by reason of Tenant's breach of this covenant.
HI-TECH COMPRESSOR COMPANY, L.C. _______________________
/s/XXXXXXX XXXXXXXX, Tenant /s/XXX XXXXXXX, Landlord
Xxxxxxx Xxxxxxxx, Vice President
________________________________ ________________________
__________________, Tenant ______________, Landlord
EXHIBIT "B"
To the lease agreement between Xxx Xxxxxxx "Landlord"
and Hi-Tech Compressor Company "Tenant".
1. Tenant to pay to landlord upon consummation of lease agreement, first and
lasts months rent.
2. Landlord shall complete offices on the first floor of the north office
building (approximately 2,500 s.f.) and bring utilities i.e. electrical, water
and sewage up to the second floor in order for tenant to complete office build
out. Any changes made to the buildings interior or exterior by tenant must be
approved by Landlord. Landlord to repair overhead doors to working condition,
paint exterior metal trim using paint furnished by tenant and also finish out
offices in the south building and using tile flooring in areas as agreed by both
tenant and landlord.
3. Tenant shall build offices as needed and at their expense on the second floor
of the north office building. Tenant shall also install sodium vapor lighting
in the south shop areas as needed by tenant.
4. Tenant shall have the right to sublet the leased premises, with Landlord
approval, not to be unreasonbly withheld.
5. Tenant shall be able to place signage on or about the leased premises but
shall be responsible for removing such signage and returning the area back to
its original state.
6. Tenant shall have two 3 year lease renewal options at the end of each lease
term with the new lease amount being based upon the combined inflation rate
(Consumer Price Index for all urban consumers, U.S. City Average-All Items, as
indexed by the Bureau of Labor Statistics or any legitimate successor) of the
previous 3 year period. Tenant must give a 30 day written notice to Landlord of
their renewal intentions. Tenant shall also have an option to purchase at the
end of each lease term at a then current market value and not less than
$250,000. Market value to be determined by a local M.A.I. Appraiser.
7. Brokerage Fee of 3 percent of the gross lease amount to be paid in full by
Landlord upon consummation of lease agreement.
8. Tenant shall have access to property rent free, beginning March 1, 1994 to
move in and install equipment and make building ready for occupancy.
INITIALS W.S. / T.J.
LEASE EXTENSION AGREEMENT
FOR THE LEASE DATED
MARCH 2, 1994
BETWEEN
XXX XXXXXXX (LANDLORD)
AND
HI-TECH COMPRESSOR COMPANY, L.C. (TENANT)
FOR THE PROPERTY LOCATED AT
COUNTY RD. 0000 XXXXX
XXXXXXX, XXXXX
Pursuant to Item #6 on Exhibit "B" of the lease dated March 2, 1994,
Tenant desires to exercise Tenant's option to renew the above lease, and
Landlord agrees to lease to Tenant for a period of three (3) years, beginning
April 1, 1997 and ending on March 31, 2000. In accordance with this option to
renew, the base rental shall be adjusted according to changes in the Consumer
Price Index resulting in a base monthly rental of $4,053.00 per month for the
three year extension period. All other terms and conditions (except those
provisions that pertain to the initial construction of the Property) of the
lease shall remain the same.
/s/ XXX XXXXXXX /s/ HI-TECH COMPRESSOR COMPANY, L.C.
Landlord Tenant
Xxx Xxxxxxx Hi-Tech Compressor Company, L.C.
By: /s/ XXXXXXX XXXXXXXX
4/10/97 6/5/97
Date Date
CALCULATION OF RENT
FOR THE EXTENSION PERIOD
Consumer Price Index - March 1994 147.2
Consumer Price Index - January 1997 159.1
Increase in CPI 11.9
-----
PERCENTAGE INCREASE IN CPI 11.9/147.2 = 8.084%
RENT ADJUSTMENT $3,750.00 X 1.08084 = $4,053.00
