Exhibit 10.05
LEASE AGREEMENT
1. PARTIES. THIS LEASE dated the 6th day of March, 1998, by and between
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx whose record address is 000 Xxxxxxxx Xxxxx,
Xxxxxxxxxxxxxx, XX 00000-0000 hereinafter called Lessor and Colorsmart, Inc.
whose record address is 000 Xxxxx Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxxxxxx, XX 00000,
hereinafter called Lessee,
WITNESSETH:
2. CONSIDERATIONS. In consideration of the rental stated below and their
mutual covenants, Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor the premises described herein.
3. PREMISES. The leased premises, hereinafter called the Premises, are
identified and described as follows: An approximate 4,800 square foot building
located at 000 Xxxxx Xxxxx.
4. TERM. The term of this lease is three (3) years commencing April 1,
1998 and expiring March 31, 2001.
5. BASIC RENTAL. During the full term of this Lease, Lessee shall pay to
Lessor, without notice, demand, reduction, setoff or any defense, a total rental
(the "Annual Rental") consisting of the sum total of the following:
(a) Minimum Rental. Lessee shall pay a minimum rental (the "Minimum
Rental") of Forty-Two Thousand and 00/lOOths Dollars ($42,000.00) payable in
equal monthly installments of Three Thousand Five Hundred and 00/lOOths Dollars
($3,500.00) each in advance on or before the first day of each month. If the
Occupancy Date is a date other than the first day of a calendar month, the
Minimum Rental shall be prorated daily from such date to the first day of the
next calendar month and paid on the Occupancy Date.
(b) Additional Rental. Minimum Rental after the initial twelve (12)
months of the lease term shall be adjusted in an amount equal to the percentage
increase in the Consumer Price Index for "All Urban," compiled by the United
States Department of Labor, Bureau of Labor Statistics, such percentage being
based on a comparison of the Index figure in effect three months prior to the
calendar month in which the lease term commenced with the Index figure for the
ninth (9th) month of the lease term. Such adjustments in rental shall not exceed
4% per year compounded and continue to be made for each successive twelve (12)
month period during the remaining term of this lease (including renewal terms)
in accordance with the percentages based on the Index figure in effect three
months prior to the calendar month in which the lease term commenced and the
Index figure for the ninth (9th) month of each twelve (12) month period. It is
understood and agreed that the Consumer Prices Index to be used for the calendar
month in which the lease term commences is that Index for January 1 1998, which
is three months prior to the calendar month in which the lease term commences,
and is established at 484.2, based on Consumer Prices Index of 1967 equals 100.
In no event shall the adjusted Base Rent ever be less than that for the previous
Lease Year. In all other respects, all of the terms, conditions and covenants
contained herein and any reference to the Lease term shall include the extended
term, if this option if exercised
6. FULL PAYMENT WITHOUT SET-OFF. The total rent due upon each due date
shall be paid in full to Lessor, and no set-off or counterclaims may be deducted
by Lessee from the rentals due. The burden of proof of full payment shall be
upon Lessee. In the event rent is not received by Lessor, by the 10th of the
month a 10% penalty fee will be charged.
7. KIND OF BUSINESS. Lessee shall occupy the premises throughout the full
term of the lease and the principal business to be conducted is printing.
8. ASSIGNMENT AND SUBLETTING. This lease may not be assigned, and the
premises may not be sublet, partially or fully, without prior written consent of
Lessor, which consent shall not be unreasonably withheld. Even in the event of
permitted assignment or subletting, Lessee acknowledges that is shall remain
fully responsible for compliance with all terms of the Lease.
9. LIEN FOR PAYMENT OF RENT. Lessor shall have all of the rights provided
for protection of Landlord's interest under local state law, specifically
including a lien for payment of rental. To enforce such lien, Lessor may take
and keep possession of all of Lessee's property and/or the contents of the
leased premises and may advertise and sell such property at public auction to
satisfy said debt, without any process of law and in bar of redemption, provided
that notice be posted on the premises and written notice be sent by certified
mail to Lessee and any known creditors claiming any interest in such property at
least ten (10) days prior to the sale date.
10. ALTERATIONS. Lessee shall make no alterations, additions, replacements
or improvements to the premises without the express written permission of
Lessor. Any alterations, additions, replacements and improvements made to or
upon the premises during the term of the lease shall immediately become the
property of Lessor and considered a part of the leased premises. Lessee agrees
that should it make any alterations, additions, replacements or improvements to
the premises it will not be acting as agent or servant of Lessor and that it
will promptly pay the cost or expense for same.
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However, trade fixtures, machinery and equipment installed by Lessee
solely for use in its business shall remain the property of Lessee and may be
removed at the expiration of the lease, provided the lease shall not then be in
default, and provided the premises be returned to Lessor in the condition as
provided in Paragraph 11 herein.
11. DELIVERY AT END OF LEASE. Upon termination of the lease, by expiration
of term, or otherwise, Lessee shall redeliver to Lessor the premises in good
order and condition, cleared of all goods and broom cleaned, and shall make good
all damages to the premises, ordinary wear and tear excepted, and shall remain
liable for holdover rent until the premises shall be returned in such order to
Lessor.
12. LAWFUL USE. Lessee covenants and agrees that it will observe and
comply with all laws, orders, rules and regulations of any governmental
authority relating to the demised premises, and will not permit same to be used
for illegal purposes nor permit any nuisance to be created or maintained
thereon.
13. CLEANLINESS. Lessee shall keep the leased premises and adjacent
grounds, including parking lot, in a good, clean, and sanitary condition and
appearance, free from dirt, filth, waste, oiled rags or any flammable, dangerous
or detrimental material, also from noxious or objectionable odors. If same are
not maintained in this manner, Lessor may, upon giving ten (10) days written
notice to Lessee during which time Lessee fails to correct the matter of which
Lessor complains, take the corrective action, and the cost of same shall be born
by Lessee, which Lessee agrees to pay upon receipt of the xxxx for same from
Lessor.
14. HOLDOVER. Should Lessee hold over the term hereby created, and with
the consent of Lessor, Lessee shall become a tenant from month to month at the
monthly rental payable hereunder for the prior month, and otherwise upon the
covenants and conditions in this lease contained, and shall continue to be such
tenant until thirty (30) days after either party hereto serves upon the other
written notice of intention to terminate such monthly tenancy. Should such
termination occur on any day other than the last day of any rental month, any
unearned prepaid rental shall, immediately following surrender of the demised
premises by Lessee, be refunded to him.
15. UTILITIES. All heat, water, electric current, gas, garbage, or special
fees, metering charges, security fees, or utility charges of any nature used on
the leased premises shall be paid for by Lessee.
16. SIGNS. Unless otherwise agreed in this lease, Lessee shall not affix
or attach any signs on the premises without consent in writing from Lessor,
except that Lessee may use the monument sign in front of the building.
17. IMPROVEMENTS TO BE MADE, AND DELIVERY OF PREMISES. If Lessor is to
make any improvements prior to Lessee's occupancy, a separate Schedule "A" shall
be attached and initialed by each part setting out the agreed improvements; in
such event, Lessor shall proceed diligently to made such improvements and Lessee
acknowledges that the premises shall be acceptable when such improvements are
made. If no Schedule "A" is attached, Lessee shall be deemed to have accepted
the premises in their existing condition.
18. UPKEEP OF PREMISES. Lessor shall, at its own cost and expense,
maintain in good repair the roof, foundations and exterior walls (not including
doors, windows and floors); however Lessor shall not be obligated to make any
repairs of those portions of the premises that it is obligated to maintain
unless it shall be notified in writing by lessee, and Lessor shall then have a
reasonable period of time to make such repairs; provided, however that Lessee
and not Lessor shall be responsible for making any such repairs occasioned by
the acts of Lessee, its employees, or invitees. Lessor shall not be liable for
any damage or loss occasioned by Lessor's failure to repair portions of the
premises which it had covenanted to maintain unless it shall have failed to
repair the defect within a reasonable time following written demand of Lessee to
make the repair.
Lessee shall at its own expense keep and maintain in good repair the
entire leased premises, other than those portions for which Lessor shall be
responsible as set out above, including interior walls, floors, ceilings, ducts,
utilities, air conditioning, heating, lighting, plate glass, plumbing, and
electric wiring, and also including any parking, landscaped or other area
exclusively used by Lessee. Upon receiving notice of any defect that is the
responsibility of Lessee to maintain, Lessee agrees to proceed diligently to
make repairs. Lessee shall be responsible for all lawn care and landscape
maintenance.
19. FIRE CLAUSE. In case the said premises shall be so damaged by fire or
other cause as to be rendered untenantable, Lessor shall have thirty (30) days
from date of said casualty to determine the extent of repairs to be done and the
time required to perform them. If the damage is such that repairs can be
completed within ninety (90) days from commencement of said repairs, Lessor
agrees to make such repairs promptly and to allow Lessee an abatement in rent
for such time as the building remains untenantable. Lessor shall commence
repairs within thirty (30) days from date of said casualty. If necessary repairs
cannot be made within ninety (90) days from the date of commencement of such
repairs, this lease shall terminate as of the date the premises were rendered
untenantable. In the event of partial loss, the rent shall be abated by a
portion equal to the area rendered unfit for use against the total area. Should
less than 180 days remain before the expiration of the term of this lease and
repairs cannot be completed within 90 day; from the date of casualty, then
Lessor shall have the right to terminate this lease.
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20. WAIVER OF SUBROGATION. Lessor and Lessee agree, provided that such
agreement does not invalidate or prejudice any policy of insurance, that, in the
event the leased premises or the fixtures, leasehold improvements, furniture,
equipment, or merchandise therein, are damaged or destroyed by fire or other
casualty which is covered by insurance of either the Lessor or the Lessee, the
rights of either party, if any, against the other, or against the employees,
agents, or licensees of any party with respect to such damage or destruction and
with respect to any loss resulting therefrom, including the interruption of the
business of any party, are hereby waived to the extent of the coverage of said
insurance. Lessor and Lessee agree further that all policies of fire, extended
coverage, business interruption, all risk or other insurance covering the leased
premises, or the contents, fixtures, equipment and improvements thereon, shall,
if obtainable, contain a clause or endorsement providing in substance that the
insurance shall not be prejudiced by virtue of this waiver. Any additional
premiums on account thereof shall be paid by the party benefited.
21. CONDEMNATION. In the event of Lessor's receipt of notice of a
condemning authority's intention to take by eminent domain a substantial part of
the property on which the leased premises are situated, either party may at any
time thereafter, by notice in writing effective on the date of taking or six
months after the date of service of the notice, whichever shall be earlier,
terminate this lease. In the event of termination of this lease, Lessee shall
have the right to remove all of his property and contents but shall have no
right to any part of the condemnation settlement or award, except for reasonable
moving expenses if specifically set aside for tenant relocation by the
condemning authority.
22. REAL ESTATE TAXES. Lessee shall pay as additional rent any real estate
taxes or any special assessments imposed by reason of improvements made to the
leased premises by or for the benefit of Lessee. Lessee shall also pay as
additional rent 100% of the real estate taxes and special assessments imposed
upon the entire premises of which the leased premises are a part. Lessee agrees
that if during the term of this lease a capital levy or other tax be levied,
assessed or imposed on the rents received by Lessor from the rents reserved
herein or any part thereof then Lessee will pay same when due; except, however,
should said tax upon rents be substituted partially or wholly for real estate
taxes, then Lessee shall only pay that portion which is in excess of the real
estate taxes for the leased premises. Payment under this clause shall be due
within ten (10) days of delivery of notice thereof to Lessee.
23. INSURANCE. Lessee shall pay as additional rent 100% of Lessor's
insurance premium for the building in which the leased premises are located.
Lessee agrees to promptly comply with and execute all rules, orders and
regulations of the Fire Underwriters Association for the prevention of fires, at
Lessee's own cost and expense. Lessee agrees to pay as additional rent the
amount of insurance premiums for the entire premises, promptly when due. Payment
under this clause shall be due within ten (10) days of delivery of notice
thereof to Lessee.
24. DEFAULT BY THE LESSEE. In the event Lessee fails to pay the rent as
herein stipulated, or fails to comply with any of the terms and conditions of
this lease, then Lessor may continue the lease and recover damages for such
failure, or unless Lessee corrects or remedies any such failure or default
within thirty (30) days or such other time limitation as may be specifically
provided for elsewhere in this lease, after Lessor has mailed written notice of
same to Lessee, except that only ten (10) days notice shall be required with
respect to failure to pay rent, then Lessor may elect to declare this lease
forfeited and terminated and at the end in all respects, and may, thereupon
enter and take possession of said premises for said breach and rerent the same
to such Lessee as in the discretion of Lessor may be deemed suitable and proper.
Should, through no fault of Lessee, the default be unable to be cured within
said thirty (30) day period, Lessee shall have an additional reasonable time in
which to cure said default. Should Lessor declare this lease terminated and
forfeited as aforesaid, then Lessee agrees to surrender peaceful possession of
same, and Lessor may re-enter with or without legal process.
25. LESSOR'S RIGHT OF ENTRY. Lessor, and its agents or other
representatives, shall have the right to enter into and upon the leased premises
or any part thereof at all reasonable hours for the purpose of examining the
same or making repairs or alterations which may be necessary for the safety and
preservation thereof. Lessee agrees at any time within three (3) calendar months
before the expiration of this lease to allow Lessor to enter upon the premises
and to affix upon any suitable part thereof a notice for reletting same, and
that Lessee will not remove same and will permit all persons authorized by
Lessor to view said premises at reasonable times.
26. DAMAGES AND ACCIDENTS. Lessee agrees to hold harmless and indemnify
Lessor from and against any liability or loss, including counsel fees incurred
in good faith by the Lessor, arising out of any cause associated with Lessee's
business or use of the premises. In addition, Lessee agrees to provide public
liability insurance naming Lessor as additional insured to protect Lessor from
risks customarily covered by such insurance, in amounts not less than $500,000
per person and $500,000 per accident, and $100,000 for damage to property.
Lessee also shall carry contents coverage on its contents with a waiver of
subrogation clause as to Lessor.
27. NON-WAIVER. Failure of Lessor to declare any default immediately upon
occurrence thereof or delay in taking any action in connection therewith shall
not waive such default, but Lessor shall have the right to declare any such
default at any time; no waiver of any default shall alter Lessee's obligations
under the lease, with respect to any other existing or subsequent default.
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28. BANKRUPTCY OR INSOLVENCY OF LESSEE. In the event of the filing of any
petition for bankruptcy or receivership relating to the Lessee, unless dismissed
in twenty-one (21) days, or in the event of any assignment of Lessee's assets
for the benefit of creditors, then Lessor shall have the right on thirty (30)
days notice to terminate this lease irrespective of whether rental payments
shall then be in default.
29. ATTORNEY'S FEES AND INTEREST. In the event it becomes necessary for
Lessor to employ an attorney to enforce collection of the rents agreed to be
paid, or to enforce compliance with any of the covenants and agreements herein
contained, Lessee shall be liable for reasonable attorney's fees, costs and
expenses incurred by Lessor, and in addition, shall be liable for interest at
ten percent (10%) per annum on the sum determined to be due by reason of breach
of this lease, such interest to run from the date of breach of the lease.
30. QUIET POSSESSION. In consideration of the covenants and agreements
herewith contained, Lessor agrees to warrant and defend Lessee in the quiet and
peaceful posession of the said premises during the term of this lease.
31. ENTIRETY OF UNDERSTANDING IN WRITTEN LEASE. It is agreed that the
entire understanding between the parties is set out in the lease and any riders
which are hereto annexed, that this lease supersedes and voids all prior
proposals, letters and agreements, oral or written, and that no modification or
alteration of the lease shall be effective unless evidenced by an instrument in
writing signed by both parties. The law of the state where the lease premises
are situated shall apply.
32. COMMISSION. This lease has been negotiated through the agency of RCM
Realty, Inc., Agent for Lessor, and in consideration of the services rendered to
Lessor by said Agent, Lessor, its successors or assigns, agrees to pay said
Agent, its successors or assigns a leasing commission of four percent (4%) on
all rentals due under this lease, renewals, holdovers, or extensions of it. Said
leasing commission is to be deducted from the monthly rents as collected by
Lessor. Should Lessee purchase the demised property during the term of this
lease, renewal, extension, or holdover occupancy, Agent shall be entitled to a
sales commission of six percent (6%) of the sales price, to be paid by the
Lessor at the time of closing.
33. SECURITY DEPOSIT. Lessee has paid to Lessor, upon signing this Lease,
a sum (the deposit) equal to one (1) month's minimum rental as security for
Lessee's performance of all obligations hereunder. The deposit may be held by
Lessor in such a manner as it shall elect and Lessor shall be entitled to any
interest which accrues on the deposit. In the event of a default by Lessee,
Lessor may, at its option, apply all or any part of the deposit to cure the
default, and thereupon Lessee shall immediately redeposit with Lessor the amount
so applied in order that Lessor will always have the full deposit on hand during
the term of this Lease. Upon the termination of this Lease, provided that Lessee
is not in default hereunder, Lessor shall refund to Lessee any of the remaining
balance of the deposit subject to final adjustments for payment of any rental
required by this Lease. If the Premises are sold, Lessor shall have the right to
transfer the deposit to the new owner, and upon the new owner's express
assumption of the obligations for the deposit required by this Lease. Lessor
shall thereupon be released from all liability for such deposit, and Lessee
thereafter shall look only to the new owner for such deposit. The terms shall
apply to every transfer of the deposit.
34. OPTION TO RENEW. Provided Lessee is not in default, Lessee shall have
one (1) option to renew this Lease for a three (3) year period. Lessee must
provide 180 day advanced written notice of its desire to exercise option. All
terms and conditions of the existing Lease shall remain in place during the
option term. Minimum rental shall be increased as provided in Paragraph 5(b)
herein.
LESSEE: LESSOR:
COLORSMART, INC. XXXXXXX X. XXXX & XXXXX X. XXXX
By: /s/ [ILLEGIBLE] By: /s/ Xxxxxxx X. Xxxx
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Title: President By: /s/ Xxxxx X. Xxxx
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