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EXHIBIT 10.7
[TAR LOGO] [REALTOR LOGO]
TEXAS ASSOCIATION OF REALTORS(R)
COMMERCIAL LEASE
This lease agreement is made and entered into by and between Mercantile
Investment Corp. (Landlord) and Allied Mortgage Capital Corporation (Tenant).
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord that
certain property with the improvements thereon, containing approximately 10,000
square feet, hereinafter called the "leased premises", known as 0000 Xxxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000 (Address), Lot _________, Block _____________,
___________________ Addition, City of Houston, Xxxxxx County, Texas; or as more
particularly described below or on attached exhibit:
The primary term of this lease shall be one year commencing on the 1st day
of June, 1999, and ending at 11:59 p.m. on the 31st day of May, 2000, upon the
following terms, conditions, and covenants:
1. TAXES. Each year during the term of this lease, Landlord shall pay real
estate taxes assessed against the leased premises in an amount equal to the
total real estate taxes assessed against the leased premises in the base year.
Each year during the term of this lease, Tenant shall pay as additional rental,
upon receipt of a statement from Landlord together with tax statements or other
verification from the proper taxing authority, his pro rata share of any
increase in real estate taxes over the base year on the property of which the
leased premises is a part. Any increase in real estate taxes for a fractional
year shall be prorated. The based year shall be 10%.
2. UTILITIES. Tenant shall pay all charges for utility services to the leased
premises except for electricity & water which shall be paid by the Landlord.
3. HOLDING OVER. Failure of Tenant to surrender the leased premises at the
expiration of the lease constitutes a holding over which shall be construed as a
tenancy from month to month at a rental of $______________ per month.
4. RENT. Tenant agrees to and shall pay Landlord at 0000 Xxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxx of Houston, 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 $120,000.00, payable without demand in equal monthly payments of
$10,000.00, each in advance on or before the 5th day of each month, commencing
on June 1, 1999, 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 $5.00 per day until
rent is received in full. Tenant shall pay $25.00 for each returned check.
5. USE. Tenant shall use the leased premises for the following purpose and
no other: Office Space
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6. SECURITY DEPOSIT. Tenant shall pay to Landlord a security deposit in the
sum of $10,000.00, 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. Mercantile Investment Corp. shall pay for fire and extended
coverage insurance on the buildings and other improvements on the leased
premises in an amount not less than $400,000.00, 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 provided public liability and property damage insurance for its business
operations on the leased premises in the amount of $100,000.00, 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 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 at the rate of 10% percent per annum from the date of such payment
by Landlord until repaid by Tenant.
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8. CONDITION OF PREMISES. Tenant has examined and accepts the leased premises
in its present 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.
9. MAINTENANCE AND REPAIRS. Landlord shall keep the foundation, the exterior
walls (except glass; windows; doors; door closure devices; window and door
frames, molding, and hardware; and interior painting or other treatment of
exterior walls), and the roof of the leased premises in good repair except that
the Landlord shall not be required to make any repairs occasioned by the act or
negligence of Tenant, its employees, subtenants, licensees, and concessionaires.
Mercantile Investment Corp. is responsible for the 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,
normal wear and tear excepted. Normal wear and tear means deterioration which
occurs without negligence, carelessness, accident or abuse.
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 of
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 building 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. ASSIGNMENT AND SUBLETTING. Tenant shall not assign this lease nor sublet
the leased premises or any interest therein without first obtaining the written
consent of Landlord. An assignment or subletting without the written consent of
Landlord shall be void and shall, at the option of Landlord, terminate this
lease.
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 for 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 AND REMOVAL OF ABANDONED PROPERTY. 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 Tenant's last known address by certified mail. 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 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. For purposes of this section, Tenant is presumed to have abandoned
the premises if goods, equipment, or other property, in an amount substantial
enough to indicate a probable
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intent to abandon the premises, is being or has been removed from the premises
and the removal is not within the normal course of Tenant's business. Landlord
shall have the right to store any property of Tenant that remains on premises
that are abandoned; and, in addition to Landlord's other rights, Landlord may
dispose of the stored property if Tenant does not claim the property within 60
days after the date the property is stored, provided Landlord delivers by
certified mail to Tenant at Tenant's last known address a notice stating that
Landlord may dispose of Tenant's property if Tenant does not claim the property
within 60 days after the date the property is stored.
15. INTERRUPTION OF UTILITIES. Landlord or Landlord's agent may not interrupt or
cause the interruption of utility service paid directly to the utility company
by Tenant unless interruption results from bona fide repairs, construction, or
an emergency. 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.
16. EXCLUSION OF TENANT. Landlord may not intentionally prevent Tenant from
entering the leased premises except by judicial process unless the exclusion
results from: (a) bona fide repairs, construction, or an emergency; (b) removing
the contents of premises abandoned by Tenant; or (c) changing the door locks of
Tenant in the event Tenant is delinquent in paying at least part of the rent. If
Landlord or Landlord's agent changes the door lock of Tenant, in the event
Tenant is delinquent in paying rent, Landlord or Landlord's agent must place a
written notice on Tenant's front door stating the name and address or telephone
number of the individual or company from which the new key may be obtained. The
new key is required to be provided only during Tenant's regular business hours.
17. LIEN. Landlord is granted an express contractual lien, in addition to any
lien provided by Law, and a security interest in all property of Tenant found on
the leased premises to secure the compliance by Tenant with all terms of this
lease.
18. 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 premises 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.
19. 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 an injury to any such persons or for 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.
20. SIGNS. Tenant shall not post or paint any signs at, on, or about the leased
premises or paint the exterior walls of the building except with the prior
written consent of the Landlord. Landlord shall have the right to remove any
sign or signs in order to maintain the leased premises or to make any repairs or
alterations thereto.
21. 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.
22. 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 or 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.
23. HAZARDOUS MATERIALS. Landlord warrants and represents that the Property does
not contain "Hazardous Materials", as that phrase is defined herein. For
purposes of this provision, the phrase "Hazardous Materials" shall mean and
include any toxic contaminated or other hazardous materials including, without
limitation, asbestos, PCB, transformers, underground storage containers,
materials containing any radioactive substances, petroleum base products,
paints, solvents, lead, cyanide, DDT, acids, pesticides, ammonium compounds, and
any other substance forming a component part of the improvements which has
heretofore or may in the future be determined to contain toxic wastes, hazardous
materials, or undesireable substances injurious to the health of occupants
living or working in or around the subject Property. Landlord acknowledges that
current and future federal, state, and local laws and regulations may require
the clean up of any such Hazardous Materials at the expense of those persons who
in the past, present, or future may have had or continue to have any interest in
the Property including, but not limited to, current, past, and future owners and
users, including tenants, of the Property. The cost and expense of such clean up
may be substantial. Landlord further acknowledges that the real estate Brokers
and their agents involved in the negotiation of this transaction have no
expertise with respect to any such Hazardous Materials. Landlord acknowledges
and agrees that Landlord shall look solely to experts and professionals selected
by Landlord to advise Landlord with respect to the condition of the Property and
shall not hold the real estate Brokers or their agents responsible for any
Hazardous Materials condition or problem relating to the Property. Landlord
hereby agrees to indemnify, defend, and hold the real estate Brokers and their
agents participating in this transaction harmless of and from any and all
liability, claim, debt, damage, cost, or expense, including reasonable
attorneys' fees, related to or arising out of or in any way connected to
Hazardous Materials and/or toxic wastes and/or any other undesirable substances
affecting the Property.
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24. BROKER'S FEE. N/A. Broker and _____________________________ Co-Broker, as
Real Estate Broker (the Broker), has negotiated this lease and Landlord agrees
to pay Broker in N/A County, Texas, upon commencement of this lease, a
negotiated fee of $ N/A or N/A% 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 N/A 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.
25. NOTICES. Notices to Tenant shall be by certified mail or other delivery to
the leased premises or to Tenant's last known address. Notices to Landlord shall
be by certified mail to the place where rent is payable.
26. 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.
27. 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.
28. 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.
29. 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.
30. TIME OF ESSENCE. Time is expressly declared to be of the essence in this
lease.
31. 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 of Tenant.
32. 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.
33. TEXAS LAW TO APPLY. This agreement shall be construed under and in
accordance with the laws of the State of Texas.
34. 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.
35. PRIOR AGREEMENTS SUPERSEDED. 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.
36. 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.
37. 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.
38. SPECIAL PROVISIONS. (This section to include additional factual data not
included above.)
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THE TEXAS ASSOCIATION OF REALTORS AND THE ________________________________
DO NOT FIX, CONTROL, RECOMMEND, SUGGEST OR MAINTAIN COMMISSION RATES OR FEES
FOR SERVICES TO BE RENDERED BY THEIR MEMBERS OR THE DIVISION OF COMMISSIONS OR
FEES BETWEEN COOPERATING PARTICIPANTS OR BETWEEN PARTICIPANTS AND
NON-PARTICIPANTS. THE AMOUNT OF COMPENSATION AND THE CONTRACT TERMS HEREIN ARE
NOT PRESCRIBED BY LAW AND ARE SUBJECT TO NEGOTIATION BETWEEN BROKER AND
SUBLESSOR.
THIS IS A LEGAL DOCUMENT, READ IT CAREFULLY. IF YOU DO NOT UNDERSTAND THE
EFFECT OF ANY PART OF THIS AGREEMENT, SEEK COMPETENT LEGAL ADVICE.
EXECUTED this 1st day of June, 1999
/s/ XXX X. XXXXX /s/ XXXXX X. XXXXX, XX.
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TENANT OR TENANTS SIGNATURE(S) LANDLORD SIGNATURE
ALLIED MORTGAGE CAPITAL CORPORATION MERCANTILE INVESTMENT CORPORATION
0000 Xxxxxxxx, Xxxxx 000 0000 Xxxxxxxx, Xxxxx 000
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Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
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000-000-0000 000-000-0000
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TELEPHONE TELEPHONE
N/A
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BROKER SIGNATURE
[Note: This form is furnished by the Texas Association of REALTORS(R) for the
convenience of its members.]
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