LEASE CONTRACT
This Lease Contract (the "Lease") is made and entered into as of May 1,
2005, by and between Gur Parsaad Properties, Ltd., a Texas limited partnership
(hereinafter called "Lessor"), and CCI Telecom, Inc., a Nevada corporation
("CCI") and Charys Holding Company, Inc., a Delaware corporation ("Charys") (CCI
and Charys being hereinafter collectively called "Lessee").
WITNESSETH:
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In consideration of the mutual covenants as set forth herein, Lessor and
Lessee hereby agree as follows:
1. LEASED PREMISES.
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Lessor hereby leases to Lessee and Lessee hereby leases from Lessor that
certain approximately 12,180 square foot single story building, and an
approximately 14,241 square foot warehouse, more commonly collectively known as
00000 Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000 (hereinafter called "Building"),
together with the premises more particularly described on Exhibit A, together
with all additional improvements located thereon (hereinafter collectively
called "Leased Premises").
2. LEASE TERM.
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Subject to and upon the conditions as set forth herein, this Lease shall
continue in force for a term (the "Lease Term") of ten (10) years (120 months)
commencing on May 1, 2005 (the "Commencement Date") and shall terminate on April
30, 2015 (the "Termination Date").
3. USE.
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A. The Leased Premises are to be used and occupied by Lessee solely for
the purpose of office, light assembly and storage associated with
business of Lessee or for any other lawful purpose.
B. To the extent such matters are within Lessee's reasonable control,
Lessee agrees not to commit or suffer to be committed on the Leased
Premises any nuisance or other act or thing against public policy or
which violates any law or governmental regulation.
C. Lessee will not use or occupy these Leased Premises for any unlawful
or hazardous purpose; or maintain or permit the maintenance of any
public or private nuisance.
D. Lessee shall comply with the rules and regulations related to the
Leased Premises set forth in Exhibit B.
4. BASE RENTAL OVER THE LEASE TERM HEREOF.
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A. Lessee hereby agrees to pay without demand, deduction, abatement or
set off a base annual rental ("Base Annual Rental") equal to Two
Hundred Nineteen Thousand Nine Hundred Ninety-Six and No/100 Dollars
($219,996.00), payable in twelve (12) equal monthly installments of
Eighteen Thousand Three Hundred Thirty-Three and No/100 Dollars
($18,333.00). Such Base Annual Rental shall be due and payable on the
first day of each calendar month during the term of this Lease and
Lessee hereby agrees to so pay such rent to Lessor at Lessor's address
as provided herein (or such other address as may be designated by
Lessor in writing from time to time) monthly in advance without
demand. If the term of this Lease Agreement as heretofore established
commences on other than the first day of a month or ends on other than
the last day of a month, then the installment of Base Annual Rental
for such partial calendar month shall be prorated and the installment
so prorated shall be paid in advance. All installments of Base Annual
Rental more than five (5) days past due shall bear interest at twelve
percent (12%) per annum until paid, commencing on the sixth day after
the installment is due and payable.
B. Lessee hereby agrees to pay without demand, deduction, abatement or
set off additional annual rent ("Additional Rent") equal to Twelve
Thousand and No/100 Dollars ($12,000.00), payable in twelve (12) equal
monthly installments of One Thousand and No/100 Dollars ($1,000.00),
for the administrative cost of managing the Leased Premises. Such
Additional Rent shall be due and payable on the first day of each
calendar month during the term of this Lease and Lessee hereby agrees
to pay such Additional Rent to Lessor (or Lessor's agent) at Lessor's
address as provided herein (or such other address as may be designated
by Lessor in writing from time to time) monthly in advance without
demand. If the term of this Lease Agreement as heretofore established
commences on other than the first day of a month or ends on other than
the last day of a month, then the installment of Additional Rent for
such partial calendar month shall be prorated and the installment so
prorated shall be paid in advance. All installments of Additional Rent
more than five (5) days past due shall bear interest at twelve percent
(12%) per annum until paid, commencing on the sixth day after the
installment is due and payable.
C. For the purposes hereof, a "Lease Year" shall mean each consecutive
twelve-month period commencing on May 1 and ending on April 30. For
the Lease Years commencing on May 1, 2007 and beyond, Base Annual
Rental for each such Lease Year shall be adjusted by the change in the
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Consumer Price Index from the immediately preceding Lease Year using
the formula as set out herein. At the end of each of the second
through ninth Lease Years of the Lease Term, the Base Annual Rental
for the next succeeding Lease Year shall be increased by the
percentage increase from the Base Consumer Price Index to the Consumer
Price Index, where "Consumer Price Index" is the Consumer Price Index
for the month of April of the just-ended Lease Year, and the "Base
Consumer Price Index" is the Consumer Price Index for April of the
previous Lease Year. The new Base Annual Rental for each year shall be
paid in equal monthly installments. For the avoidance of doubt and by
way of example only, if the Consumer Price Index for April 2006 is
100, and the Consumer Price Index for April 2007 is 105, then the Base
Annual Rental for the Lease Year commencing May 1, 2007 would be
$230,995.80, payable in equal monthly installments of $19,249.65. As
used herein, Consumer Price Index shall mean and refer to that table
in the Consumer Price Index published by the United States Department
of Labor, Bureau of Labor Statistics, now known as the "Consumer Price
Index" for all Urban Consumers (Index 1982-1984=100). In no event
shall the next Lease Year's Base Annual Rental be less than the Base
Annual Rental for the prior Lease Year. Both Lessor and Lessee agree
that commencing in April 2008, if the April Consumer Price Index for
the then-current year has not been determined when May rent is due,
Lessee will pay the monthly installment of Base Annual Rental in the
same amount as the previous month until the April Consumer Price Index
has been determined, and commencing on the next succeeding due date of
a regular monthly installment of Base Annual Rental Lessee shall pay
the newly determined monthly installment amount of Base Annual Rental,
together with the difference between the new amount and the old amount
for months paid prior to the availability of the April Consumer Price
Index.
In the event that a substantial change is made by the Department of
Labor in the method of establishing such Consumer Price Index, then
the Consumer Price Index as utilized herein shall be adjusted to the
figure that would have resulted had no change occurred in the manner
of computing such Consumer Price Index. In the event that such
Consumer Price Index (or a successor substitute index) is no longer
published, a reliable governmental or other nonpartisan publication,
evaluating the information previously used in determining the Consumer
Price Index, shall be used in lieu of such Consumer Price Index.
5. SECURITY DEPOSIT.
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The provisions hereof are subject in all respects to Exhibit "C" attached
hereto and made a part hereof as if set forth herein verbatim. Lessee shall
deposit with Lessor simultaneously with the full execution of this Lease, the
amount of One Hundred Nine Thousand Nine Hundred Ninety-eight and No/100 Dollars
($109,998) as a security
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deposit (herein so called). Provided Lessee is not in default in the payment of
Base Annual Rental, Additional Rent or any other charges due Lessor, and further
provided the Leases Premises are surrendered in as good a condition as exists on
the date hereof, reasonable wear and tear excepted, and except as set forth and
described further on Exhibit "C" which provides for a portion of the security
deposit to be earlier returned to Lessee, said security deposit shall be
returned to Lessee within ten (10) days after the expiration or earlier
termination of this Lease. Notwithstanding the foregoing, the full or partial
return by Lessor to Lessee of the security deposit shall at no time be deemed to
constitute a waiver by Lessor of any of Lessee's obligations under this Lease,
or an acknowledgment by Lessor that any such obligations are limited to the
amount, if any, of the security deposit retained by Lessor. If Lessee is in
default or is otherwise indebted to Lessor hereunder or if the Leased Premises
are not left in the condition above-described, or if Lessee has failed or
refused to remove Lessee's personal property from the Leased Premises after the
expiration or earlier termination of this Lease within a reasonable period of
time after Lessor's written request to do so, then the security deposit shall be
applied to the extent available on account of sums due Lessor or the cost of
repairing damages to the Leased Premises or to remove Lessee's personal
property. In the event the funds deposited with Lessor as the security deposit
are applied during the Lease Term on account of sums due Lessor or to the cost
of repairing damages the cost of which is to be borne by Lessee hereunder, the
Lessee shall, within fifteen (15) days after written demand by Lessor, deposit
with the Lessor additional funds to restore the security deposit to its original
amount (or such lesser amount as is applicable after application of the
provisions of Exhibit "C" hereto). In the event of the sale or transfer of
Lessor's interest in the Leased Premises, Lessor shall transfer the security
deposit to such purchaser or transferee and notify Lessee in writing thereof, in
which event such transferee shall be deemed to have fully assumed and be liable
for all obligations of this Lease to be performed by Lessor, including the
return of the security deposit, and thereafter Lessee shall look only to the new
Lessor for the return of the security deposit and Lessor shall thereupon be
released from all liability to Lessee for the return of such security deposit.
Lessee shall not be entitled to any interest on the security deposit, and Lessor
shall not be required to segregate the security deposit and may commingle the
security deposit with other funds of Lessor.
6. RESPONSIBILITIES OF LESSEE AND LESSOR.
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In addition to all other responsibilities of Lessee and Lessor as set forth
in this Lease Agreement, Lessee and Lessor, respectively, shall also have the
following responsibilities at Lessee's expense during the Lease Term.
A. Repair and Maintenance. Lessee accepts the Building and Leased
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Premises and all fixtures, systems, and equipment in their "AS IS"
condition. Lessee shall be responsible for all maintenance, repairs
and replacements necessary to the Building and Leased Premises
including, but not limited to, the roof, foundation and exterior walls
and Building structure and HVAC system(s). Lessee will not damage the
Leased Premises or the Building and will maintain the Leased Premises
in as
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clean, attractive condition and in good repair as exists on the
commencement date of this Lease (reasonable wear and tear, and,
subject to the provisions of Section 7 hereinbelow, casualty and Acts
of God, excepted). Lessee shall be responsible for all janitorial
service to the extent it desires same. Upon termination of the Lease,
Lessee will surrender and deliver the Leased Premises in good order
and repair, excepting ordinary wear and tear, casualty and Acts of
God, free and clear of all debris, materials and equipment. If Lessee
fails to make a repair within thirty (30) days after receipt of
written notice of such failure from Lessor, Lessor may (but shall not
be required to) repair the same and be reimbursed by Lessee for the
reasonable costs so incurred by Lessor. Lessee will promptly give
Lessor written notice of any damage in the Leased Premises.
B. Utilities. Lessee shall be responsible for the cost and payment of all
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utilities provided to the Leased Premises including, but no limited
to, electric, gas, water, heating, lighting and air conditioning.
C. Taxes.
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(1) In addition to the Base Annual Rental, Lessee agrees to pay prior
to delinquency all real estate taxes, assessments, and
governmental charges of any kind or nature on the above described
Leased Premises during the Lease Term. Any partial tax years or
taxes relating to partial Lease Years shall be prorated on a
daily basis based on a 365-day year. Lessor shall furnish Lessee
with the tax statements promptly upon Lessor's receipt thereof.
Lessee further agrees to pay prior to delinquency all taxes
assessed and required to be paid by the reason of the personal
property owned or leased by Lessee and located upon and within
the Leased Premises, and to provide proof of such payment to
Lessor prior to the date upon which any such taxes would become
delinquent.
(2) Lessee may contest assessments and valuations affecting the
Leased Premises, at its sole expense, in connection with which,
Lessor shall provide reasonable cooperation including a power of
attorney for such purposes. Lessor shall promptly upon receipt
thereof forward to Lessee all tax appraisals and valuation
notices received by Lessor pertaining to the Leased Premises.
Lessee may contest any tax, levy, rate or other charge which it
shall be required to pay hereunder. In the event of any such
contest, failure by Lessee to pay the same, prior to delinquency,
shall not constitute a default hereunder, providing, however,
that Lessee (i) prior to the delinquency date of the amount to be
contested, advises Lessor and any mortgagee of the Leased
Premises, the identity of which Lessee has received written
notice, of Lessee's intention to make
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the contest and the grounds therefor, and upon written request of
the Lessor or the mortgagee furnishes Lessor and the mortgagee a
security bond or letter of credit securing 100% of the amount in
contest or other comparable security as is reasonably acceptable
to the Lessor and mortgagee for the amount in contest, together
with any and all late charges, interest, costs and other expenses
which may be assessed against the Leased Premises in the event
the Lessee's contest is unsuccessful, and (ii) upon the final
resolution of such contest shall pay the amount of any such tax,
levy, rate or other charge if and to the extent required,
including any and all penalties, interest, costs and other
charges thereon, in sufficient time to prevent a tax forfeiture,
tax foreclosure or levy upon the Leased Premises. In no event
however, shall the Lessee fail to pay such sums within thirty
days after a final and non-appealable decision is made in the
contest. The decision shall be deemed final and non-appealable if
there shall be no further avenues of appeal or the Lessee shall
fail to perfect an appeal to the proper court or other judicial
body. If Lessee has furnished security to Lessor for the amount
in contest as set forth above, Lessor shall cooperate with Lessee
to allow Lessee to use such security for payment of the tax upon
such final resolution.
7. FIRE OR OTHER CASUALTY.
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A. The parties hereto mutually agree that if at any time during the Lease
Term the Leased Premises or any portion of the Building are partially
destroyed by fire or other casualty covered by the fire and extended
coverage insurance to be carried by Lessee under the terms hereof,
then Lessor shall repair and restore the Leased Premises and the
Building as soon as it is reasonably practicable (but shall commence
same within sixty (60) days complete same in no event more than seven
(7) months after the date of the casualty, subject to force majeure
matters), to substantially the same condition in which the Leased
Premises and the Building were before such damage. Provided, however,
that if Lessor reasonably determines that the Leased Premises are
completely destroyed or so badly damaged that repairs cannot be
commenced within sixty (60) days and completed within seven (7) months
thereafter, then this Lease shall be terminable as the date of the
occurrence of the damage or destruction by either party hereto serving
written notice upon the other. Notwithstanding the foregoing, if the
casualty occurs after the first three (3) months of the Lease term,
and Lessee cannot reasonably use the Premises for the purpose provided
herein, or if Lessor does not commence reconstruction within sixty
(60) days and/or thereafter complete such reconstruction within seven
(7) months after the date of casualty, Lessee at its option may
terminate this Lease by written notice to Lessor. Notwithstanding the
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foregoing, Lessor shall only be obligated to repair the Leased
Premises to the extent of the insurance money available to Lessor for
such repairs.
B. If the Leased Premise are completely destroyed or so damaged by fire
or other casualty covered by the fire and extended coverage insurance
to be carried by Lessee under the terms hereof that it cannot
reasonably be used by Lessee for the purposes herein provided and this
Lease is not terminated as above provided, then there shall be a total
abatement or rent until the Leased Premises are made usable. In the
event the Leased Premises are partially destroyed or damaged by fire
or other hazard so that the Leased Premises can be only partially used
by Lessee for the purposes herein provided, then there shall be a
partial abatement in the rent corresponding to the time and extent to
which the Leased Premises cannot be used by Lessee.
C. Notwithstanding anything to the contrary contain herein, if the Leased
Premises shall be completely destroyed or damaged by fire or other
casualty resulting from the intentional acts or gross negligence of
Lessee, or the agents or employees of Lessee, then such damage shall
be repaired by and at the expense of Lessee, after application of all
insurance recovered under the direction and supervision of Lessor, and
rent shall continue without abatement.
8. COMPLIANCE WITH LAWS.
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Lessee will comply at its cost with all Federal, state, municipal and other
laws, ordinances, local restrictive covenants, and rules and regulations
applicable to the Leased Premises with respect to the business conducted therein
by Lessee, including, but not limited to, Lessee shall at its cost make any
alteration required by reason of the Americans With Disabilities Act ("ADA").
Lessor shall not be responsible to Lessee for the disruption caused by reason of
any such alterations and there shall be no abatement or reduction in the rentals
by reason of such alterations.
9. IDEMNITY AND HOLD HARMLESS. Lessee covenants that Lessor shall not be
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liable to Lessee or to Lessee's agents, employees, customers or invitees for any
injury to person or damage to property, including consequential loss or damage,
arising out of the use, occupancy or enjoyment of the Leased Premises by Lessee
or any person therein or holding under Lessee. Lessee hereby agrees, as part of
the material consideration for this Lease, to indemnify and save Lessor harmless
from all claims, actions, demands, costs and expenses and liability whatsoever,
including reasonable attorney's fees, on account of any such injury, loss,
damage or liability, and from all liens, claims and demands occurring in, on or
at any portion of the Leased Premises or arising out of the use, occupancy, or
enjoyment of any portion of the Leased Premises or its facilities by Lessee or
anyone holding under Lessee, or any repairs or alterations which Lessee may make
upon the Leased Premises.
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10. ALTERATIONS, ADDITIONS AND IMPROVEMENTS.
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Lessee covenants and agrees not to permit the Leased Premises to be used
for any purpose other than that stated in the Use clause hereof, or make or
allow to be made any alternations or physical additions in or to the Leased
Premises which are in each instance in excess of Ten Thousand and No/100 Dollars
($10,000.00) or make any material alterations to the structural, mechanical or
electrical components serving the Leased Premises without first obtaining the
written consent of Lessor, which written consent shall not be unreasonably
withheld or delayed. Any and all permanent alterations, additions, and
improvements (including without limitation, partitions, wall-to-wall carpeting,
paneling, wall coverings and any other article permanently attached or affixed
to the floor, wall, or ceiling of the Building, but excluding Lessee's
unattached and removable trade fixtures, office supplies, furniture and
equipment) shall immediately upon the installation or construction thereof, or
attachment or affixing thereto, become the property of Lessor, at Lessor's
option, and if costing in excess of $10,000 or constituting a material
alteration, shall (i) be installed in accordance with plans and specifications
approved in advance by Lessor, (ii) be installed strictly in accordance with all
laws and ordinances relating thereto, and (iii) remain upon and be surrendered
with the Leased Premises as a part thereof at the expiration or sooner
termination of this Lease, Lessee hereby waiving all rights to any payment,
credit or compensation therefor. Lessee may remove its removable trade
fixtures, office supplies, furniture, inventory, raw materials and equipment
provided (a) such removal is made prior to the expiration or termination of the
Lease Term; and (b) Lessee promptly repairs all damage caused by such removal in
a good and workmanlike manner using materials of similar quality to those being
repaired prior to the expiration or sooner termination of the Lease Term, and if
Lessee fails to remove the same prior to the expiration or termination of the
Lease Term, such unattached and removable trade fixtures, office supplies,
furniture and equipment, at the election of Lessor, shall automatically become
the property of Lessor, Lessee hereby waiving all right to any payment, credit
or compensation therefor and all rights thereto, unless the failure to remove
such items is subject to an agreement between Lessor and Lessee or is as a
result of Lessor's taking possession of same or denying access to same.
11. ASSIGNMENT AND SUBLETTING.
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A. Lessee shall not assign this Lease or sublease the Leased Premises or
any part thereof or lease, pledge, or hypothecate its leasehold
interest or grant any concession or license within the Leased Premises
or sublease any operating department therein without the prior express
written consent of Lessor, which consent shall not be unreasonably
withheld or delayed, and any attempt to do any of the foregoing
without the prior express written permission of Lessor shall be void
and of no effect. No space shall be listed or offered to any broker
for listing or advertisement, nor shall Lessee advertise for
subletting, without written notice to Lessor. Lessee
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must provide Lessor with a copy of the proposed assignment or sublease
and such other reasonable information, including credit history, as
Lessor might reasonably request concerning the proposed sublessee or
assignee to allow Lessor to make an informed judgment as to the
financial condition (taking into account the provisions of Section 11
B. below), reputation, operations and general desirability of the
proposed sublessee or assignee.
B. In any case where Lessor consents to an assignment or sublease of the
leasehold, the undersigned Lessee will remain liable for the
performance of all the covenants, duties and obligations hereunder
including, without limitation, the obligation to pay all rent and
other sums herein provided to be paid.
C. If this Lease is assigned or if the Leased Premises are subleased
(whether in whole or in part) or in the event of the mortgage, pledge
or hypothecation of the leasehold interest or grant of any concession
or license within the Leased Premises or if the Leased Premises be
occupied in whole or in part by anyone other than Lessee, Lessor may
nevertheless collect rent from the assignee, sublessee, mortgagee,
pledge, party to whom the leasehold interest was hypothecated,
concessionee or licensee or the occupant and apply the next amount
collected to the rent payable hereunder, but no such transaction or
collection of rent or application thereof by Lessor shall be deemed a
waiver of these provisions or a release of Lessee from the further
performance by Lessee of its covenants, duties and other obligations.
D. Notwithstanding anything in this Section 11 or any other provision in
this Lease to the contrary, Lessee shall have the right, without
Lessor's consent, to assign this Lease or sublet all or any part of
the Leased Premises to any parent, subsidiary or affiliate of Lessee
(or either of them) or to any person, firm or corporation which shall
be controlled by, under the control of, or under common control with,
Lessee (or either of them), or to any corporation or entity into which
Lessee (or either of them) may be merged or consolidated or which
purchases all or substantially all of the assets of Lessee (or either
of them) (collectively "Permitted Transferee"), provided Lessee
promptly notifies Lessor of such transfer, and no term, condition,
covenant or provision of this Section 11 shall apply in any manner
whatsoever to the assignment or subletting of all or any part of the
Leased Premises to any Permitted Transferee. Provided further,
however, that Lessee will remain liable for the performance of all the
covenants, duties and obligations hereunder including, without
limitation, the obligation to pay all rent and other sums herein
provided to be paid.
12. SUBORDINATION.
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Lessee accepts this Lease subject and subordinate to any mortgage, deed of
trust, or any lien presently existing or hereafter placed up on the Leased
Premises, and to any
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renewals, modifications, consolidations, expansions, additions, and extensions
thereof; provided, however, the aforementioned subordination of this Lease to
any such mortgage, deed of trust or other lien, is expressly conditioned upon
Lessee being granted the right to remain in possession of the Leased Premises
under the terms of this Lease Contract so long as Lessee is not in default of
this Lease Contract beyond any applicable notice and cure period. Lessee agrees
that any such mortgagee and/or beneficiary of any deed of trust, or other lien
of which Lessee has received notice ("Lessor's Mortgagee") shall have the right
at any time, to subordinate such mortgage, deed of trust, or other lien to this
Lease on such terms and subject to such conditions as Lessor's Mortgagee may
deem appropriate in its discretion. Lessee agrees upon demand to execute such
further instruments subordinating this Lease as Lessor or Lessor's Mortgagee may
request and such attornment agreements as any such Lessor's Mortgagee shall
request (if and to the extent such agreements are reasonably acceptable to
Lessee).
Subject to the non-disturbance agreements described in this Paragraph 12,
if the interest of Lessor under this Lease shall be transferred by reason of
foreclosure or other proceedings for enforcement of any first mortgage or deed
of trust on the Leased Premises, Lessee shall be bound to the transferee
(sometimes called the "Purchaser") under the terms, covenants and conditions of
this Lease for the balance of the term remaining, including any extensions or
renewals, with the same force and effect as if the Purchaser were Lessor under
this Lease, and, Lessee agrees to the attorn to the Purchaser, including the
first mortgagee under any such mortgage if it be the Purchaser, as its Lessor.
13. CONDEMNATION AND LOSS OR DAMAGE.
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A. If a substantial portion of the Building or the Leased Premises shall
be taken or condemned for any public purpose, this Lease shall, at the
option of Lessor upon thirty (30) days' prior written notice to
Lessee, forthwith cease and terminate. Additionally, if a substantial
portion of the Building or the Leased Premises is taken under the
power of eminent domain (including any conveyance made in lieu
thereof) or if any taking of the Building or the Leased Premises or
any portion thereof shall materially impair the normal operation of
Lessee's business operations in the Leased Premises, then Lessee shall
have the right to terminate this Lease by giving written notice of
such termination within thirty (30) days after such taking. If any
part of the Leased Premises shall be taken or condemned for any public
purpose and neither Lessor nor Lessee terminates this Lease as
provided herein, this Lease shall be terminated only as to the portion
of the Leased Premises taken or condemned. All proceeds from any
taking or condemnation of the Leased Premises shall belong to and be
paid to Lessor and Lessee hereby assigns to Lessor all of its right,
title and interest in and to any such award (provided, however, Lessee
shall be entitled to pursue a separate award relative to any relevant
condemnation on account of loss of business, for the unamortized value
of any leasehold
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improvements paid for by Lessee, for moving expenses or for the value
of Lessee's leasehold estate).
B. Except to the extent caused by the gross negligence of Lessor or
Lessor's agents or employees, Lessor shall not be liable or
responsible to Lessee for any loss or damage to any property or
persons occasioned by theft, fire, act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition
or order of government body or authority, or any other cause beyond
the control of Lessor.
14. ACCESS BY LESSOR.
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Lessor, its agents, and employees shall have access to and the right to
enter any portion of the Leased Premises in a reasonable manner at all
reasonable hours upon reasonable notice to Lessee, to examine the condition
thereof, to make any repairs or alterations elected or required to be made by
Lessor hereunder or to show the Leased Premises to prospective purchasers or
(during the last Lease Year of the Lease Term only) tenants. Other than access
for emergency repairs, Lessor and its representatives agrees to follow Lessee's
security requirements, including the requirement that visitors be escorted by an
employee of Lessee or security personnel. With respect to any entry into the
Leased Premises under this Paragraph 14, Lessor agrees to use reasonable efforts
to minimize any interference with Lessee's business operations in the Leased
Premises.
Lessee hereby waives any claim for damages for injury or inconvenience to
or interference with Lessee's business, any loss of occupancy or use of the
Leased Premises, and any other loss occasioned by Lessor's reasonable exercise
of the rights granted hereby. Lessor shall at all times have and retain a key
with which to unlock all of the exterior doors in, upon, and about the Leased
Premises, and Lessee shall not change its lock system without providing Lessee a
replacement key or in any other manner prohibit Lessor from entering the Leased
Premises in accordance with the provisions of this Section 14.
15. INTENTIONALLY DELETED.
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16. HOLDING OVER.
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In the event of holding over by Lessee after expiration or termination of
this Lease without the written consent of Lessor, Lessee shall pay as liquidated
damages a monthly rent of 125% of the then current monthly rent for each month
of the entire holdover period. No holding over by Lessee after the Lease Term
shall operate to extend the Lease. In the event of any unauthorized holding
over, Lessee shall indemnify Lessor against all claims for damages by any other
lessee to whom Lessor may have leased all or any part or the Leased Premises
effective upon the termination of this Lease. Any holding over with the consent
of Lessor in writing shall thereafter constitute this Lease a lease from month
to month, which may thereafter be terminated by either party upon ten (10) days
written notice to the other.
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17. ATTORNEY'S FEES.
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In the event either party defaults in the performance of any of the terms,
covenants, agreements or conditions contained in this Lease and the
non-defaulting party places the enforcement of this Lease, or any part thereof,
or the collection of any rent due or to become due hereunder, or recovery of the
possession of the Leased Premises in the hands of an attorney, or files suit
upon the same, the non-defaulting party agrees to pay the reasonable attorney's
fees incurred by the non-defaulting party.
18. LESSOR'S LIABILITY.
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The term "Lessor" shall mean only the owner, for the time being of the
Leased Premises, and in the event of the transfer by such owner of its interest
in the Leased Premises, such owner shall thereupon be released and discharged
from all covenants and obligations of Lessor thereafter accruing, but such
covenants and obligations shall be binding during the Lease Term upon each new
owner for the duration of such owner's ownership. All liability of Lessor for
damages for breach of any covenant, duty or obligation of Lessor hereunder may
be satisfied only out of the interest of Lessor in the Leased Premises
(including any insurance proceeds thereon) and all rents and income payable to
Lessor from its interest in the Leased Premises, the proceeds of sale received
upon execution of such judgment and levied thereon against the right, title and
interest of Lessor in the Leased Premises and out of rents or other income from
such property receivable by Lessor, any insurance proceeds receivable by Lessor,
or out of the consideration received by Lessor from the sale or other
disposition of all or any part of Lessor's right, title and interest in the
Leased Premises.
19. DEFAULT BY LESSEE.
--------------------
If Lessee shall default in the payment of any sum to be paid by Lessee
under this Lease and such monetary default shall continue for five (5) days
after written notice to Lessee, or Lessee shall default in the performance of
any of the other such covenants or conditions which Lessee is required to
observe and to perform, and such non-monetary default shall continue for thirty
(30) days after written notice to Lessee (provided, however, in the case of any
such default which cannot reasonably be cured within thirty (30) days but which
is curable, Lessee may cure such default within such additional period as may be
reasonably required, as long as Lessee has promptly commenced such cure and
thereafter diligently prosecutes such cure to completion), or if the interest of
Lessee under this lease or any other property of Lessee shall be levied on under
execution, attachment, or other legal process, or if a petition is filed or
other action taken by or against Lessee in connection with a voluntary or
involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or similar laws, or if any petition shall be filed by or against
Lessee to delay, reduce or modify Lessee's debts or if any petition shall be
filed or other action taken to reorganize, modify, wind-up, liquidate, or
dissolve Lessee's capital structure if Lessee be a corporation, partnership or
other entity, or if Lessee be
12
declared insolvent according to law, or if assignment or Lessee's property shall
be made for the benefit of creditors, or if a receiver, trustee, liquidator,
assignee, custodian, sequestrator (or similar official) is appointed for Lessee
or its property, then Lessor may treat the occurrence of any one or more of the
forgoing events as a breach of this Lease (provided that no such levy,
execution, legal process or petition filed against Lessee shall constitute a
breach of this Lessee unless and until same has not been removed or vacated or
stayed within sixty (60) days from the date of its creation, service or filing)
and thereupon, Lessor at its option, may have any one or more of the following
described remedies in addition to all other rights and remedies provided herein
or at law or in equity, all of which shall be cumulative, but in no event shall
Lessor fail to provide Lessee ten (10) days' written notice prior to resort to
any such remedies:
A. Lessor may terminate this Lease and forthwith repossess the Leased
Premises, find, expel, or remove Lessee or any other person who my be
occupying the Leased Premises, by lawful force if necessary, without
being liable for prosecution or any claim of damages therefor, the
same being waived by Lessee, and Lessee agrees to pay to Lessor, on
demand, and Lessor shall be entitled to recover forthwith, as liquated
damages, a sum of money equal to the total of (i) the cost of
recovering the Leased Premises (including reasonable attorneys' fees
and court costs), (ii) the unpaid rent earned and other sums due
Lessor at the time of termination, plus interest thereon at twelve
percent (12%) per annum, (iii) the then present value of the balance
of the rent for the remainder of the Lease Term (had such Lease not
been terminated) less the then present value of the then fair rental
value of the Leased Premises for such period and (iv) any other sum of
money and damages owed by Lessee to Lessor, including the costs
incurred by Lessor in removing and storing, Lessee's or other
occupant's property, restoring the Leased Premises as required hereby,
and broker's fees incurred by Lessor in connection with reletting the
whole or any part of the Leased Premises.
X. Xxxxxx may terminate Lessee's right of possession (but not the Lease)
and expel or remove Lessee or any other person who may be occupying
the Leased Premises, by lawful force if necessary, without being
liable for prosecution or any claim of damages therefor, the same
being waived by Lessee, or may repossess the Leased Premises by
forcible entry or detainer suit or otherwise, without demand or notice
of any kind to Lessee, other than notice required by law without
terminating this Lease, in which event Lessor my relet the same or any
part thereof either in Lessor's name or otherwise, for a term or
terms, which as Lessor's option, may be less than or exceed the
balance of the Lease Term, and for such rent and upon such other terms
as shall be satisfactory to Lessor, and receive the rent therefor and
apply such rent to the rent and other sums due Lessor hereunder,
including costs incurred by Lessor in reletting. Lessor covenants that
from and after an uncured event of default by Lessee, it shall use
commercially reasonable efforts to relet the Leased Premises and to
mitigate its
13
damages. If Lessor shall fail despite commercially reasonable efforts
to relet the Leased Premises, or if the same are relet and a
sufficient sum shall not be realized from such reletting after paying
the following items (which shall be due to Lessor by Lessee): (i) the
unpaid Base Annual Rental and Additional Rent due hereunder earned but
unpaid at the time of reletting plus interest thereon at 12% per
annum, (ii) the cost of recovering possession (including reasonable
attorneys' fees and court costs); and (iii) other than the costs and
expenses of such decorations, repairs, changes, alterations and
additions as are provided by Lessor to any new tenant, all of the
expense of such reletting (including brokers fees, advertising costs,
and costs incurred in removing and storing Lessee's or other occupants
property); to satisfy the rent and other sums provided for in this
Lease to be paid, then Lessee shall pay to Lessor as damages a sum
equal to the amount of the rental reserved in this Lease for such
period or periods less any amounts obtained by Lessor (or which should
have been obtained by Lessor) in reletting the Leased Premises, and
Lessee agrees that Lessor may file suit to recover any sums failing
due under the terms of this subsection from time to time, and that no
delivery or recovery of any portion due Lessor hereunder shall be any
defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Lessor. In no event shall
Lessee be entitled to any excess rent (or rent plus other sums)
obtained by reletting over and above the rent and other sums owed
Lessor under this Lease.
20. LESSOR'S RIGHT TO PERFORM LESSEE'S OBLIGATIONS.
----------------------------------------------------
If Lessee shall fall to perform any one or more of its obligations
hereunder after written notice, within the time herein permitted, Lessor, in
addition to its other rights and remedies hereunder, shall have the right,
without being under any obligation to do so and without thereby waiving such
default, to make payment and/or remedy any default for the account of Lessee
(and enter the Leased Premises for such purpose without being liable for
prosecution of any claim for damages therefor), and thereupon Lessee shall be
obligated to, and hereby agrees to, pay Lessor upon demand, all reasonable
costs, expenses and disbursements incurred by Lessor in taking such remedial
action, plus interest thereon at the rate of twelve percent (12%) per annum,
from the date of demand until paid, plus all reasonable legal expenses incurred
by Lessor, including attorneys' fees and court costs in connection therewith.
If Lessor shall fail to keep or perform any of its obligations under this
Lease in respect to the making of any payment to Lessee or the performance of
any other Lease obligation, and upon the continuance of such failure on Lessor's
part for thirty (30) days (provided such 30-day notice and cure period shall be
decreased, as reasonably required, in cases of emergency) after the delivery to
Lessor of notice of such default from Lessee (or, in the case of any such
failure which cannot reasonably be cured within thirty (30) days but which is
curable and provided such default condition does not create an emergency
situation, within such additional period as may be reasonably required by
14
Lessor to cure such failure, provided Lessor has promptly commenced such cure
and thereafter diligently prosecutes such cure to completion), then Lessor shall
be in default under the terms of this Lease, and Lessee shall be entitled to (i)
cure such default of Lessor by performing the relevant obligations of Lessor on
Lessor's behalf, in which the case Lessor shall reimburse Lessee, promptly upon
receipt of an invoice from Lessee for such costs, for all costs expended by
Lessee in performing such obligations, plus interest thereon accruing from and
after the twentieth (20th) day following Lessor's receipt of such invoice at
twelve percent (12%) per annum until reimbursement thereof by Lessor, and/or
(ii) pursue all other remedies available to Lessee, at law or in equity, as a
result of such default. In the event Lessee proceeds under clause (i)
hereinabove, Lessee shall be entitled to offset the amount of such unreimbursed
costs and interest thereon as provided above against the amounts next due and
payable under the Lease.
21. NONWAIVER.
----------
Failure of either party to declare any default immediately upon occurrence
thereof, or delay in taking any action in connection therewith, shall not waive
such default.
22. INSURANCE BY LESSEE.
----------------------
A. Lessee shall maintain fire and extended coverage insurance insuring
the Building and Leased Premises. Said Insurance shall be maintained
with an insurance company approved by Lessor (not to be unreasonably
withheld) and authorized to do business in the State of Texas, in
amounts which shall reflect the full insurable value thereof but be no
less than $1,250,000 with respect to that certain approximately 12,180
square foot single story building, and $331,000 with respect to that
certain approximately 14,241 square foot warehouse and at the expense
of Lessee, and payment for losses thereunder shall be made solely to
Lessor or its mortgagee(s) to hold in trust for the parties respective
interests to repair the Leased Premises.
B. Lessee, at its expense, shall maintain a policy or policies of
comprehensive general liability insurance with the premiums thereon
fully paid in advance issued by and binding upon a solvent insurance
company related "A-" (A-minus) or better by Best, such insurance to
afford minimum protection of not less than $1,000,000.00 in respect of
personal injury or death to any one person and not less than
$1,000,000.00 in the event of bodily injury or death to any number of
persons in any one occurrence, and with limits of not less than
$300,000.00 for property damage in any one occurrence, with overlying
umbrella liability insurance coverage of not less than $1,000,000.00.
Such policy or policies of public liability insurance shall contain a
landlord's protective liability endorsement in favor of Lessor.
15
C. The policy or policies of insurance to be maintained by Lessee shall
name Lessor and Lessor's Mortgagee (if any) as additionally insured
parties and shall contain an endorsement that such polices cannot be
materially amended or modified as to Lessor without fifteen (15) days
prior written notice. Lessee shall deliver duplicate original policies
or certificates of insurance in form satisfactory to Lessor not less
than fifteen (15) days prior to the expiration of old policies.
D. In no event shall Lessor be entitled to insurance proceeds for loss or
damage to Lessee's personal property or fixtures.
23. WAIVER OF SUBROGATION RIGHTS.
--------------------------------
Anything in this Lease to the contrary notwithstanding, Lessor and Lessee
each hereby waives any and all rights of recovery, claim, action or cause of
action against the other, its agents, officers, or employees, for any loss or
damage that may occur to the Leased Premises, or any improvements thereto, or
said Building of which the Leased Premises are a part, or any improvements
thereto, or any personal property of such party therein, by reason of fire, the
elements, or any other cause which is insured against or required to be insured
against under the terms of standard fire and extended coverage insurance
policies that may be maintained by the parties hereunder, regardless of cause or
origin including negligence of the other party hereto, its agents, officers or
employees, and covenants that no insurer or any other third party shall hold any
right of recovery by way of subrogation or assignment or otherwise against such
other party. In the event that the inclusion of these waiver of subrogation
provisions causes either Lessor or Lessee to sustain any increase in its fire
and extended coverage insurance premium the party incurring such increase (being
herein referred to as the "First Party"), shall give notice of the fact and
amount of such increase (along with reasonable written supporting data as to
such fact and amount) to the other party (herein referred to as "Second Party")
whereupon the following shall apply: (i) within thirty (30) days following
Second Party's receipt from First Party of the aforesaid notice (and supporting
data), Second Party shall pay First Party the amount of such increase; or (ii)
if Second Party, at its election, does not choose to pay First Party the amount
of such increase, then Second Party shall be deemed to have waived the benefit
of the preceeding waiver of subrogation provisions (whereupon Second Party need
not pay First Party the amount of such increase).
24. LESSOR'S MORTGAGEE.
--------------------
A. If the Building and/or Leased Premises are at any time subject to a
mortgage and/or mortgage and deed of trust, then in any instance in
which Lessee gives notice to Lessor alleging default by Lessor
hereunder, Lessee will also simultaneously give a copy of such notice
to Lessor's Mortgagee (provided Lessor or Lessor's Mortgagee shall
have advised Lessee of the name and address of Lessor's Mortgagee) and
each Lessor's Mortgagee shall have the right (but not the obligation)
to cure or remedy such default during the period that is permitted to
Lessor hereunder, and Lessee will
16
accept such curative or remedial action taken by Lessor's Mortgagee
with the same effect as if such had been taken by Lessor.
B. If, in connection with obtaining financing for the Building, Lessor's
Mortgagee requests reasonable modifications hereto as a condition to
the furnishing of such financing, Lessee shall not unreasonably
withhold or delay its consent thereto, provided that such
modifications do not increase Lessee's obligations hereunder, or
decrease Lessee's benefits or the quiet enjoyment of the Lease
Premises by Lessee for any use permitted hereunder, or result in any
additional expenditure by Lessee.
25. ESTOPPEL.
---------
The parties shall, at such time or times as the other party may request,
sign a certificate stating whether this Lease is in full force and effect;
whether any amendments or modifications exist; whether there are any defaults
hereunder; and such other information and agreements as may be reasonably
requested.
26. NOTICE.
-------
Any notice which may or shall be given under the terms of this Lease shall,
unless otherwise provided herein, be in writing and shall be either delivered by
hand or sent by United States Registered or Certified Mail, postage prepaid, to
the applicable address shown below, and if for Lessee, to the Leased Premises in
addition to the address shown below (if different than the Leased Premises).
Such addresses may be changed from time to time by either party by giving
written notice as provided above. Notice shall be deemed given when delivered
(if delivered by hand) or when postmarked (if sent by mail).
LESSEE: c/o CCI Telecom, Inc.
00000 Xxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn.: President
With copy to: Xxx X. Sandoloski
Xxxxxxxx Tuggey Pauerstein Xxxxxxxxx
000 Xxxx Xxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
LESSOR: Gur Parsaad Properties, Ltd.
Gur Parsaad Management, LLC
0000 Xxxxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: X.X. Xxxxx
17
27. SEVERABILITY.
-------------
This Lease shall be construed in accordance with the laws of the State of
Texas. If any clause or provision of this Lease is illegal, invalid, or
unenforceable, under present or future laws effective during the term hereof,
then it is the intention of the parties hereto that the remainder or this Lease
shall not be affected thereby.
28. SIGNS.
------
Lessor hereby grants permission to Lessee to continue to display the signs
existing as the date of this Lease (although same may be changed if and to the
extent such signs do not currently reflect Lessee's name and/or logo).
29. QUIET ENJOYMENT.
-----------------
Lessee, on paying the Base Annual Rental, and any Additional Rental, and
performing the covenants herein agreed to be by it performed, shall and may
peaceably and quietly have, hold and enjoy the Leased Premises for the Lease
Term without interference by Lessor or any party acting by, through or under
Lessor.
30. ENTIRE AGREEMENT AND BINDING EFFECT.
----------------------------------------
This Lease, together with all addenda or exhibits thereto, constitute the
entire agreement between Lessor and Lessee relating to Lessee's occupancy of the
Leased Premises; no prior written or prior or contemporaneous oral promises or
representations with respect to such subject matter shall be binding. Paragraph
captions herein are for convenience only, and neither limit nor amplify the
provisions of this Lease. The provisions of this Lease shall be binding upon
and inure to the benefits of the successors and assigns of the parties, but this
provision shall in not way alter the restriction herein in connection with
assignment and subletting by Lessee.
31. ALTERATION.
-----------
This Lease may not be altered, changed or amended, except by an instrument
in writing signed by both parties hereto.
32. HAZARDOUS MATERIAL.
--------------------
Lessee shall not cause or permit any Hazardous Substance (defined below) to
be used, stored, generated, or disposed of on, in or about the Building or the
Leased Premises by Lessee, Lessee's agents and employees, in any manner not
permitted by applicable law, without first obtaining Lessor's written consent.
If Hazardous Substances are used, stored, generated, or disposed of on, in or
about the Building or the Leased Premises, in any manner not permitted by
applicable law, or if the Building or Leased Premises becomes contaminated in
any manner as a result of the activities of Lessee, its agents or employees,
Lessee shall indemnify, defend and hold harmless Lessor (and its
18
agent and employees) from any and all claims, damages, fines, judgment,
penalties, costs, liabilities, or losses (including, without limitation, a
decrease in the value of the Leased Premises), or damages caused by loss or
restriction of rentable or usable space, including, without limitation, any and
all costs incurred because of any investigation of the site or any cleanup,
removal, or restoration mandated by federal, state, or local agency or
political subdivision. If Lessee causes or permits the presence of any
Hazardous Substance in the Building or Leased Premises, in any manner not
permitted by applicable law, that results in contamination, Lessee shall
promptly, at its sole expense, take any and all necessary actions to return the
Building and/or Leased Premises to the condition existing prior to the presence
of any such Hazardous Substance. Lessee shall first obtain Lessor's approval
for any such remedial action.
Lessee shall also comply with requirements of all governmental regulations
and ordinances regarding the use and storage of Hazardous Substances. Lessee
shall promptly notify Lessor in writing of (i) any enforcement, clean-up,
removal or other governmental action instituted or threatened with regard to
Hazardous Substances involving the Building, (ii) any claim made or threatened
related to damage from Hazardous Substances at the Building and (iii) any
reports made to any environmental agency in connection with any Hazardous
Substances at or removed from the Building.
As used herein, "Hazardous Substance" means any substance that is toxic,
ignitable, reactive, or corrosive and is regulated by any local government, the
State of Texas, or the United States Government, including any and all material
or substances that are defined as "Hazardous Waste", "Extremely Hazardous
Waste", or a "Hazardous Substance" pursuant to state, federal, or local law.
"Hazardous Substance" includes but is not restricted to asbestos,
polychlorinated biphenyl ("PCB"), petroleum and petroleum products.
33. ARBITRATION.
------------
Any controversy or claim arising out of or relating to this Lease or with
regard to its interpretation or breach, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Unless required otherwise by state law, the parties hereto agree to
arbitrate their differences in San Antonio, Bexar County, Texas. The parties
agree further that: (a) an Arbitrator may render an interim ruling, including
injunctive relief, and (b) all claims or any type by either party, including
defenses, are included in the jurisdiction or Arbitration (except for suits
relating to whether a matter is barred by applicable statutes of limitation).
Either party may send written notice to (i) the other party and (ii) the
Regional office of American Arbitration Association invoking the binding
arbitration provisions hereof. Each party has ten (10) days from the date of
mailing by the American Arbitration Association of a written list of proposed
arbitrators, within which to return the written list of proposed arbitrators
with their choices of arbitrators, to the American Arbitration Association. The
arbitrator selected by Lessor and the arbitrator selected by Lessee shall both
select a third arbitrator. The parties further consent to the jurisdiction of
any appropriate court to enforce the provisions hereof and/or to confirm any
award rendered
19
by the panel or arbitrators. Any costs or other expenses, including attorneys
fees and costs incurred by the successful party, arising out of or occurring
because of the arbitration proceeding, shall be assessed against the
unsuccessful party.
34. INTEREST.
---------
Any amount not paid by Lessee to Lessor when due hereunder shall bear
interest at the rate of twelve percent (12%) per annum, from the sixth (6th) day
after the due date until paid, unless otherwise specifically provided herein,
but the payment of such interest shall not excuse or cure any such failure by
Lessee under this Lease.
35. TIME OF ESSENCE.
------------------
Time is of the essence with respect to the performance of every provision
of this Lease in which time of performance is a factor.
36. GOVERNING JURISDICTION.
------------------------
This Lease shall in all respects be governed by the laws of the State of
Texas.
37. MEMORANDUM OF LEASE.
----------------------
If requested by Lessee, Lessor shall execute a recordable Memorandum of
Lease or Short Form Lease, prepared at Lessee's expense, specifying the exact
term of this Lease and such other terms as the parties shall mutually determine,
including the Option to Purchase set forth in Section 40 hereinbelow, and Lessee
is hereby authorized to record such Memorandum of Lease or Short Form Lease in
the applicable public registry.
38. BROKERAGE.
----------
Lessor and Lessee represent and warrant each to the other that they have
not dealt with any broker(s) or any other person claiming any entitlement to any
commission in connection with this transaction. Lessor and Lessee agree to
indemnify and save each other harmless from and against any and all claims,
suits, liabilities, costs, judgments, and expenses, including reasonable
attorney's fees, for any leasing commissions or other commissions, fees, charges
or payments resulting from or arising out of their respective actions in
connection with this Lease.
39. TERMINATION OF EXISTING LEASE.
---------------------------------
The existing Lease covering the Leased Premises by and between CCI
Associates, Ltd., as landlord, and Contemporary Constructors, Inc. (a
wholly-owned subsidiary of CCI), as tenant, dated as of January 1, 1997, as
amended, is terminated and superceded by this Lease Contract.
40. LESSEE'S OPTION TO PURCHASE.
20
A. Lessor, for and in consideration of the sum of Ten Dollars ($10.00),
the receipt and sufficiency of which is hereby conclusively
acknowledged and confessed, and other good and valuable consideration,
including the performance of the obligations and undertakings of
Lessee in this Lease Contract, does hereby grant and sell to Lessee,
pursuant to the terms and conditions hereinafter set forth, the sole
and exclusive option (the "Option") to purchase the entire Leased
Premises more particularly described on Exhibit "A" attached hereto
and incorporated herein for all purposes (the "Option Property").
B. In the event Lessee elects to exercise its Option, the purchase price
to be paid to Lessor by Lessee for the Option Property shall be the
sum of (a) the greater of (i) Fair Market Value (as hereinafter
defined) or (ii) $2,200,000, compounded annually as of each
anniversary date of this Lease Contract (and prorated for any partial
Lease Year) from the date hereof through the closing date of the
purchase by Lessee at a rate of 5.7 percent, plus (b) an amount equal
to ten (10) monthly installments of Base Annual Rental, based upon the
amount of such Base Annual Rental monthly installments as is effective
upon the date that Lessee exercises its Option. Such purchase price
shall be payable in all cash at closing.
a. For the purposes hereof, "Fair Market Value" shall be an
amount determined (i) by mutual agreement by Lessee and
Lessor, or (ii) in the event that the parties cannot agree
in writing on the Fair Market Value of the Option Property
within thirty (30) days of Lessee's notice of exercise of
its Option, by an independent qualified MAI appraiser
selected by mutual agreement of Lessee and Lessor; provided,
however, if the parties cannot agree upon one independent
qualified MAI appraiser to determine the Fair Market Value
of the Option Property, then each party shall select one
independent qualified MAI appraiser and the two independent
qualified MAI appraisers so selected shall select a third
independent qualified MAI appraiser and the Fair Market
Value of the Option Property shall be determined by taking
the average of the two closest appraisals rendered by the
three independent qualified MAI appraisers. The
determination of the Fair Market Value of the Option
Property shall exclude any value resulting from this Lease
Contract and shall be binding on each party. The fees of the
independent qualified MAI appraiser(s) selected hereunder
shall be borne equally by Lessee and Lessor. This Lease
Contract, including the obligation to pay monthly
installments of Base Annual Rental and Additional Rent,
shall remain in effect until the closing of the option
purchase.
C. This Option shall become effective as of the date hereof and shall
continue in effect until the seventh (7th) anniversary date of this
Lease Contract, at which
21
time it shall terminate. Provided, however, that this option may only
be exercised, if at all, effective on the fifth (5th), sixth (6th), or
seventh (7th) anniversary date of this Lease Contract as set forth
below.
D. This Option may be exercised by Lessee mailing written notice (by
certified mail, return receipt requested) to Lessor at Lessor's
address set forth in Section 26 of this Lease Contract. Such notice
(the "Exercise Notice") shall state that Lessee is exercising its
Option to purchase the Option Property. Upon delivery and receipt of
the Exercise Notice, Lessee and Lessor agree to use their best, good
faith efforts to determine the Fair Market Value as expeditiously as
possible, and thereafter to enter into an Xxxxxxx Money Contract
covering the transaction. Both Lessee and Lessor acknowledge that the
general form and content of the Xxxxxxx Money Contract pursuant to
which Lessor purchased the property from CCI Telecom, Inc. is, with
certain revisions necessary to correctly set forth the terms of the
subject transaction and to provide that Lessee shall pay for the title
policy, tax prorations, and Lessee's reasonable attorneys' fees,
satisfactory for the purchase of the Option Property.
E. In the event that Lessee gives the Exercise Notice at any time prior
to the fifth (5th) anniversary date of this Lease Contract, then the
closing date of the purchase shall be on or about the fifth (5th)
anniversary date of this Lease Contract. In the event that Lessee
gives the Exercise Notice at any time after the fifth (5th)
anniversary date of this Lease Contract but prior to the seventh (7th)
anniversary date of this Lease Contract, then the closing date of the
purchase shall occur on the later of (i) thirty (30) days after the
Exercise Notice is given or (ii) thirty (30) days after the final
determination of Fair Market Value. If Lessee does not deliver an
Exercise Notice to Lessor prior to the seventh (7th) anniversary date
of this Lease Contract, the Option shall become null and void and of
no further force and effect. Time is of the essence of this provision.
F. Lessee shall have no right to assign this Option except to Xxxxxxx X.
Xxxxx ("Xxxxx"). Lessor covenants and agrees that any Exercise Notice
received from Xxxxx shall constitute a valid exercise of the Option
and Lessor shall cooperate with Xxxxx to effect the provisions of this
Section 40 as fully as if Lessee had not assigned the Option to Xxxxx.
G. Notwithstanding any other provision of this Section 40, Lessee shall
have no right to exercise the Option is Lessee is in material default
of its obligations under this Lease Contract at the time of the
Exercise Notice or in the event that this Lease Contract has
terminated. For the purposes of this subsection 40 G., any monetary
default shall be deemed to be a material default hereunder.
41. LESSOR'S REPRESENTATIONS AND WARRANTIES. Lessor hereby represents and
warrants to Lessee that Lessor is a limited partnership duly organized,
22
validly existing and in good standing under the laws of Texas with full
partnership power and authority to carry on its business as it is now being
conducted and to own, operate and lease the Leased Premises. Lessor has full
power and authority to execute, deliver, and perform this Lease Contract and the
other agreements described herein, including without limitation the Option.
EXECUTED in multiple counterparts, together with Exhibits A-C, inclusive,
each of which shall have the force and effect of an original, on the day and
year first written above.
LESSOR: LESSEE:
Gur Parsaad Properties, Ltd. CCI Telecom, Inc.
by and through its General Partner
Gur Parsaad Management, LLC
By: By:
------------------------ ---------------------------
Title: Managing Director Title:
--------------------- ------------------------
CHARYS Holding Company, Inc.
By:
---------------------------
Title:
------------------------
23
EXHIBIT "A"
LEASED PREMISES
LEGAL DESCRIPTION New City Block Xxx 0, Xxxxx 0, Xxx Xxxx Xxxxx 00000,
XXXXXXXXX XXXXXXX SUBDIVISION, in the City of San Antonio, Bexar County, Texas,
according to the plat thereof recorded in Volume 9502, Page 178, Deed and Plat
Records of Bexar County, Texas.
24
EXHIBIT "B"
BUILDING RULES AND REGULATIONS
1. No Lessee shall at any time occupy any part of the Building as sleeping or
lodging quarters.
2. No animals shall be kept in our about the building.
3. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed and any damage
resulting to them from misuse, or the defacing or injury of any part of the
Building shall be borne by Lessee.
4. Lessee shall comply with all local and federal codes and ordinances.
5. Lessee shall at least on an annual basis have the heating, ventilation,
and/or air conditioning system(s) completely checked out and repaired if
necessary. Additionally, the Lessee shall have the filters on said
system(s) changed at least on a quarterly basis, or at such other lesser
frequency as may be recommended by the manufacturer thereof.
6. Lessee shall provide for trash pick-up and removal at its sole cost and
expense.
7. Lessor shall have the right to impose such additional rules and regulations
as in the reasonable judgment of Lessor are necessary for the safety,
protection, care and cleanliness of the Leased Premises, so long as any
such additional rules do not increase Lessee's obligations hereunder or
decrease Lessee's benefits or the quiet enjoyment of the Lease Premises by
Lessee for any use permitted hereunder, or result in any additional
expenditure by Lessee.
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EXHIBIT "C'
PARTIAL RELEASE OF SECURITY DEPOSIT:
Assuming Lessee is in substantial compliance with all of Lessee's material
requirements, obligations and the terms and conditions of this Lease
Contract, Lessor shall return to Lessee within thirty (30) days of the end
of the fifth year of the Lease Term (i.e., on or before May 30, 2010),
Seventy-Three Thousand, Three Hundred Thirty-Two and No/100 Dollars
($73,332.00) ("Partial Release"). The remaining security deposit amount of
Thirty-Six Thousand Six Hundred Sixty-Six and No/100 Dollars ($36,666.00)
shall be the security deposit as defined and set forth in paragraph 5 of
the Lease Agreement for the remainder of the Lease Term.
The Partial Release of the security deposit in the amount set forth above
shall sooner occur at any time after the third year of the Lease Term and
prior to the end of the fifth year of the Lease Term (i.e., between May 1,
2008 and April 30, 2010) upon Lessee demonstrating to the reasonable
satisfaction of Lessor that 1) CCI has maintained a positive net worth of
not less than $2,000,000 for the previous two consecutive fiscal quarters,
2) Charys has maintained a net worth of not less than negative $2,500,000
the previous two consecutive fiscal quarters and is current and compliant
as of the date of the Partial Release with all required and appropriate
Securities and Exchange Commission filings, and 3) Lessee is, upon the date
of the Partial Release, current in lease payments and in substantial
compliance with all material covenants, conditions, requirements and terms
of this Lease Agreement. Lessee shall be deemed to have conclusively
satisfied Lessor as to benchmark 1) above upon submission to Lessor of
CCI's reviewed financial statements prepared in accordance with GAAP and
incorporated by Charys in its audited financial statements, or audited
financial statements of CCI prepared in accordance with GAAP, at the
discretion of Lessee, in either event demonstrating maintenance of the
required net worth.
In no event during the Lease Term and any extension thereof shall the
deposit amount ever be less than Thirty-Six Thousand Six Hundred Sixty-Six
and No/100 Dollars ($36,666.00).
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