1
EXHIBIT 10.58
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into June 17, 1998,
by and between GHT JOINT VENTURE, as landlord, and TEXAS SECURITY CENTRAL, INC.,
as tenant.
ARTICLE 1
Basic Lease Information
The following basic lease information is part of this Lease, but if any
conflict exists between the basic lease information and any other provisions of
this Lease, the other provisions of this Lease will control.
1.1. Landlord: GHT Joint Venture ("Landlord").
1.2. Landlord's Address: 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxx 00000.
1.3. Tenant: Texas Security Central, Inc., a Texas corporation ("Tenant").
1.4. Tenant's Address: 0000 Xxxxxxxxx, Xxxxxx, Xxxxx 00000.
1.5. Lease: This Lease Agreement, including all exhibits and addenda
hereto, as amended or modified from time to time (this "Lease").
1.6. Leased Premises: The front portion of the building (the "Building")
consisting of approximately 6,600 square feet currently occupied by Texas
Security Central, Inc. (the "Leased Premises") and not occupied by Nova Internet
Services, Inc. ("Nova") as of the date hereof commonly known as 0000 Xxxxxxxxx,
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, being more particularly described in Exhibit
A. The Leased Premises include all appurtenances, easements, and rights of way
related thereto.
1.7. Lease Term: An initial term of five (5) years beginning on June 17,
1998, and ending on June 16, 2003 (the "Primary Term"), as the same may be
extended in accordance with Section 3.2 (the "Lease Term").
1.8. Option to Extend: Tenant has one (1) option to extend the Primary Term
for a period of five (5) years by giving written notice to Landlord at least six
(6) months prior to the expiration of the Primary Term in accordance with the
provisions of Section 3.2 and Exhibit B.
1.9. Base Rent: Ten Thousand and No/100 Dollars ($10,000.00) per month,
payable in accordance with Section 4.1.
1.10. Permitted Use: Business offices and/or central station for a
monitoring alarm business and related security services.
2
Section 16.1 contains the definitions of certain capitalized terms used in this
Lease. When used in this Lease, the word "including" shall mean "including
without limitation" and references in this Lease to specific sections refer to
sections of this Lease unless otherwise stated.
ARTICLE 2
Grant of Lease
Subject to and upon the terms, provisions and conditions of this Lease, and
in consideration of the duties, covenants, and obligations of the other set
forth in this Lease, Landlord hereby leases the Leased Premises to Tenant and
Tenant hereby leases the Leased Premises from Landlord for the Lease Term.
ARTICLE 3
Term: Holdover
3.1. Term of Lease. Subject to and upon the terms and conditions set forth
in this Lease, this Lease shall continue in force for the Primary Term. The
Primary Term shall commence on the date specified in Section 1.7 for the
beginning of the Primary Term.
3.2. Option to Extend Term. Tenant shall have one (1) option to extend the
Primary Term for an additional term of five (5) years in accordance with the
provisions of Exhibit B.
3.3. Holding Over. Tenant shall, at the termination of this Lease by lapse
of time or otherwise, surrender immediate possession of the Leased Premises to
Landlord. If Tenant shall fail immediately to surrender possession of the Leased
Premises to Landlord upon termination of this Lease, by lapse of time or
otherwise, Tenant shall pay Landlord as Base Rent for the period of any such
holdover, an amount equal to one and one-half (1-1/2) times the Base Rent in
effect on the termination date, computed on a daily basis for each day of the
holdover period. No holding over by Tenant shall operate to extend this Lease
except as otherwise expressly agreed by the parties in writing. The preceding
provisions of this Section 3.3 shall not be construed as Landlord's consent for
Tenant to hold over.
ARTICLE 4
Rental
4.1. Base Rent. For each month during the Primary Term, Tenant agrees to
pay to Landlord the sum of Ten Thousand and No/100 Dollars ($10,000.00) (the
"Base Rent"). Base Rent shall be payable in advance on the first day of each
calendar month during the Lease Term, commencing on the Commencement Date,
without any prior demand or notice therefor and
2
3
without any deduction or set off or abatement whatsoever, and as a fixed rent.
Base Rent shall be paid at Landlord's address appearing in Section 16.12. If the
Lease Term commences on a day other than the first day of a calendar month, or
if the Lease Term ends on a day other than the last day of a calendar month, the
Base Rent for such month shall be prorated by multiplying the monthly Base Rent
by a fraction, the numerator of which shall be the number of days of the partial
month included in the Lease Term and the denominator of which shall be the total
number of days in the full calendar month.
4.2. Additional Rent. During the Lease Term Tenant agrees to pay to
Landlord as additional rent hereunder ("Additional Rent") such other sums that
Tenant becomes obligated to pay to Landlord under this Lease, whether or not
designated as Additional Rent. Additional Rent shall be payable as and when
provided in this Lease, without any deduction or set off or abatement
whatsoever. Additional Rent shall be paid at Landlord's address appearing in
Section 16.12.
4.3. Interest. Other remedies for nonpayment of Rental notwithstanding, if
the monthly Base Rent payment is not received by Landlord on or before the tenth
(10th) day of the month for which such Base Rent is due, such past due amount
shall bear interest at the rate of ten percent (10%) per annum from the date
past due until paid.
ARTICLE 5
Taxes
5.1. Real Estate Taxes. Landlord shall promptly pay when due all real
estate taxes and assessments assessed, levied, confirmed or imposed on the
Leased Premises during the Lease Term.
5.2. Personal Property Taxes. Tenant shall be liable for all taxes levied
or assessed against personal property, furniture or fixtures placed by Tenant in
or on the Leased Premises.
ARTICLE 6
Insurance
6.1. Casualty Insurance. Landlord shall, at its expense, obtain and keep in
force insurance coverage for the Building. Tenant shall, at its expense, keep
its equipment, furniture, fixtures, and other personal property insured against
fire and other casualties, and agrees that Landlord, unless Landlord is grossly
negligent with respect to such fire or casualty, shall have no liability or
responsibility with respect to such equipment, furniture, or fixtures and its
other property.
6.2. Liability Insurance. Tenant shall procure and maintain throughout the
Lease Term a policy or policies of commercial general liability insurance, at
Tenant's expense, insuring
3
4
Tenant and Landlord, as their respective interests may appear, against all
claims, demands or actions arising out of or in connection with (a) the Leased
Premises; (b) the condition of the Leased Premises; (c) Tenant's operations in
and maintenance and use of the Leased Premises; and (d) Tenant's liability
assumed under this Lease. The limits of such policy or policies shall not be
less than One Million and No/100 Dollars ($1,000,000.00) combined single limit
coverage per occurrence for injury to person (including death) and/or property
damage or destruction, including loss of use. Such policy or policies shall be
procured by Tenant from responsible insurance companies reasonably satisfactory
to Landlord. A certificate(s) of such policy, together with receipts for payment
of premiums, shall be delivered to Landlord upon request. All such original and
renewal policies shall provide for at least thirty (30) days' written notice to
Landlord before such policy may be canceled or changed to reduce insurance
coverage provided thereby.
6.3. Waiver of Subrogation. Whenever (a) any loss, cost, damage or expense
resulting from fire, explosion or any other casualty or occurrence is incurred
by either of the parties to this Lease in connection with the Leased Premises,
and (b) such party is then covered (or is required under this Lease to be
covered) in whole or in part by insurance with respect to such loss, cost,
damage or expense, then the party so insured (or required hereunder to be
insured) hereby releases the other party from any liability it may have on
account of such loss, cost, damage or expense to the extent of any amount
coverable by such insurance, and waives any right of subrogation which might
otherwise exist on account thereof, provided that such release of liability and
waiver of the right to subrogation shall not be operative in any case where the
effect thereof is to invalidate such insurance coverage or increase the cost
thereof (provided that in the case of increased cost, the other party shall have
the right, within thirty (30) days following written notice, to pay such
increased costs, thereupon keeping such release and waiver in full force and
effect). Landlord and Tenant agree immediately to give their respective
insurance carriers written notice of this Section and agree to use their
respective best efforts to obtain such a release and waiver of subrogation from
their respective insurance carriers and obtain any special endorsements, if
required by their insurer, to evidence compliance with the aforementioned
waiver.
6.4. Indemnity by Tenant. Except to the extent of injury, death or property
damage caused by the negligence or willful acts or omissions of Landlord or
Landlord's agents, employees, guests, patrons, invitees, or contractors, Tenant
agrees to indemnify and hold harmless Landlord from and against all Claims
arising from any occurrence in, upon, or at the Leased Premises or any part
thereof occasioned by any negligence or willful act or omission of Tenant, or of
Tenant's agents or employees acting within the scope of their employment or
agency relationship with Tenant, or of Tenant's guests, patrons, invitees, or
contractors permitted to be on the Leased Premises by Tenant.
6.5. Indemnity by Landlord. Except to the extent of injury, death or
property damage caused by the negligence or willful acts or omissions of Tenant
or Tenant's agents, employees, guests, patrons, invitees, or contractors,
Landlord agrees to indemnify and hold harmless Tenant from and against all
Claims arising from any occurrence in, upon, or at the Leased Premises or any
part thereof occasioned by any negligence or willful act or omission of
Landlord, or of Landlord's agents or employees acting within the scope of their
employment or agency
4
5
relationship with Landlord, or of Landlord's guests, patrons, invitees, or
contractors permitted to be on the Leased Premises by Landlord.
ARTICLE 7
Utilities
Tenant shall contract with and pay the appropriate suppliers for all water,
gas, electricity, light, heat, telephone, power, and other utilities and
communications services used by Tenant on the Leased Premises during the Lease
Term.
ARTICLE 8
Repairs and Maintenance
8.1. Repairs and Maintenance by Tenant. During the Lease Term Tenant will,
at Tenant's sole cost and expense, keep and maintain the Leased Premises in good
order and condition, and make all needed repairs, restorations, and replacements
to the Leased Premises, including without limitation the heating, ventilating,
air conditioning, mechanical, electrical and plumbing systems, and the fixtures
and appurtenances to the Leased Premises as and when needed to preserve them in
good working order and condition, and regardless of whether the repairs,
restorations, and replacements are ordinary or extraordinary, foreseeable or
unforeseeable, capital or noncapital. In addition, Tenant shall be responsible
for yard maintenance for the Building and providing janitorial and waste removal
and pest control and extermination services for the Leased Premises. Nothing
contained herein shall entitle Tenant to make any repairs, alterations or
additions to the Leased Premises or the Building at Landlord's expense, or to
terminate the Lease based on the physical condition of the Leased Premises or
the Building. All repairs, restorations, and replacements will be in quality and
class equal to the original work or installations. If Tenant fails to make any
repairs, restorations, or replacements as provided by this Lease, Landlord may
make them at the expense of Tenant and such expense will be collectible as
Additional Rent and will be paid by Tenant within fifteen (15) days after
delivery of a statement for such expense. At the termination or expiration of
the term of this Lease, Tenant will deliver the Leased Premises in good repair
and condition, reasonable wear and tear excepted.
8.2. Repairs and Maintenance by Landlord. Landlord shall maintain the
foundation, roof and structural portions of the exterior walls of the Building
in good order, condition and repair, and be responsible for the general
maintenance of the parking lot. Landlord shall not be obligated, however, to
maintain or repair windows, doors, plate glass or the surfaces of walls or the
foundation, roof or structural portions of the exterior walls of the Building to
the extent caused by the negligence of Tenant, its employees, officers, invitees
or agents. All requests for repairs or maintenance that are the responsibility
of Landlord hereunder must be made in writing to Landlord, and Landlord shall
have a reasonable time within which to perform such repairs or maintenance.
Landlord shall not be liable to Tenant for any damage or inconvenience, and
5
6
Tenant shall not be entitled to any damages nor to any abatement or reduction of
Rent by reason of any repairs, alterations or additions made by Landlord under
this Lease.
8.3. Access to Leased Premises. Landlord, its agents, employees, and
contractors may enter the Leased Premises at any time in response to an
emergency, and at reasonable hours to make repairs, restorations, or
replacements which Tenant has failed to make or which Landlord is required to
make; however, all such work will be done as promptly as reasonably possible and
so as to cause as little interference to Tenant as reasonably possible. Tenant
waives any claim on account of any injury or inconvenience to Tenant's business,
interference with Tenant's business, loss of occupancy or quiet enjoyment of the
Leased Premises, or any other loss occasioned by such entry.
8.4. Termination of Lease. At the termination of this Lease, Tenant shall
deliver the Leased Premises "broom clean" to Landlord in the same good order and
condition as existed at the commencement date of this Lease, ordinary wear and
tear and natural deterioration excepted.
ARTICLE 9
Alterations, Additions, and Improvements
9.1. Alterations and Improvements. Tenant will not make any structural
alterations, additions or improvements to the Leased Premises without the prior
written consent of Landlord. Tenant will have the right at a times to make any
nonstructural alterations, additions or improvements, and to erect or install
shelves, office supplies, movable office furniture, equipment, computers and
computer terminals, and trade fixtures, and will have the right to remove such
items so installed at the expiration or termination of the term of this Lease,
provided (a) Tenant is not in default in the timely performance of any material
obligation or covenant under this Lease, (b) such removal is made prior to the
termination or expiration of the term of this Lease as extended, and (c) Tenant
promptly repairs all damage to the Leased Premises caused by such removal. All
other property at the Leased Premises and any alteration or addition to the
Leased Premises and any other articles attached or affixed to the floor, wall,
or ceiling of the Leased Premises will become the property of Landlord at the
termination of this Lease, without payment or compensation therefor.
9.2. Construction Work. All construction work approved by Landlord to be
done by Tenant upon the Leased Premises will be performed in good and
workmanlike manner, in compliance with all Governmental Requirements.
9.3. Liens. Tenant will pay or cause to be paid all costs and charges for
work done by it or caused to he done by it, in or to the Leased Premises, and
for all materials furnished for or in connection with such work. Tenant will
indemnify Landlord against and hold Landlord harmless from all liabilities,
liens, claims, and demands on account of such work. If any such lien is filed
against the Leased Premises, Tenant will cause such lien to be discharged of
record within ten (10) days after the filing of such lien. Tenant has no
authority to subject Landlord's right, title or interest in the Building or the
Leased Premises to any lien.
6
7
ARTICLE 10
Damage
10.1. Notice to Landlord. If the Leased Premises are damaged or destroyed
by fire, tornado, or other casualty, Tenant shall give immediate written notice
of the damage or destruction to Landlord, including a description of the damage
and, as far as known to Tenant, the cause of the damage.
10.2. Total Damage or Destruction. If the Leased Premises should be totally
destroyed or so substantially damaged by fire, tornado, or other casualty that
the Leased Premises cannot be repaired or restored within a period of one
hundred eighty (180) days after the destruction or damage, Landlord shall have
the option, by giving written notice to Tenant within thirty (30) days after the
destruction or damage occurs to terminate this Lease, in which case Tenant shall
vacate the Leased Premises as promptly as possible, and Rental shall be abated
for the unexpired portion of this Lease, effective as of the date of occurrence
of such casualty. If Landlord fails to exercise its option to terminate this
Lease, Landlord shall proceed with reasonable diligence to repair and restore
the Leased Premises to substantially the same condition in which it existed
prior to such damage. If the Leased Premises are untenantable in whole or in
part prior to or during such repair and restoration, the Rental payable
hereunder during the period in which the Leased Premises are untenantable shall
be reduced to such extent as may be fair and reasonable under all of the
circumstances.
10.3. Partial Damage or Destruction. If the Leased Premises should be
damaged by fire, tornado, or other casualty and can be repaired or restored
within one hundred and eighty (180) days, neither Landlord nor Tenant shall have
the option to terminate this Lease and Landlord shall, to the extent of
insurance proceeds received, then proceed with reasonable diligence to rebuild
and repair the Leased Premises to substantially the same condition in which the
Leased Premises existed prior to such damage so as to continue to be UL
certified. If the Leased Premises are untenantable in whole or in part prior to
or during such repair and restoration, the Rental payable hereunder during the
period in which the Leased Premises are untenantable shall be reduced to such
extent as may be fair and reasonable under all of the circumstances. If such
damage occurs during the last year of the Primary Term or any Extension, either
Landlord or Tenant may terminate this Lease by delivering written notice of
termination to the other.
10.4. Proceeds Unavailable. Notwithstanding anything herein to the
contrary, if the holder of any indebtedness secured by a mortgage or deed of
trust covering the Leased Premises requires that the insurance proceeds be
applied to such indebtedness or if the insurance proceeds are insufficient to
rebuild and repair the Leased Premises to substantially the same condition in
which they existed prior to such damage, then Landlord or Tenant may elect to
terminate this Lease, or if neither Landlord or Tenant elect to terminate this
Lease, Landlord may elect to rebuild and repair the Leased Premises, subject to
the execution by Tenant and Landlord prior to such work of an amendment to this
Lease fairly and equitably adjusting the Rental payable
7
8
hereunder to reflect the expenses incurred by Landlord to rebuild or repair the
Leased Premises, and the loss of any part of the Leased Premises that is not
rebuilt by Landlord.
ARTICLE 11
Condemnation
11.1. Complete Condemnation. If the Leased Premises shall be appropriated
completely under the power of eminent domain, this Lease shall terminate and the
Rental shall be abated during the unexpired portion of this Lease effective on
the date physical possession is taken by the condemning authority or title vests
in the condemning authority, whichever occurs first.
11.2. Partial Condemnation. If only a portion of the Leased Premises shall
be so appropriated, but the remainder of the Leased Premises is not suitable for
the use then being made thereof or the appropriation would prevent or materially
interfere with the use of the Leased Premises for the purpose for which they are
then being used or prevent or materially interfere with Tenant's business
operations at the Leased Premises, either Landlord or Tenant shall have the
right to terminate this Lease as of the date of appropriation by giving written
notice to the other and this Lease shall terminate and the Rental payable under
this Lease shall be abated for the unexpired portion of this Lease effective on
the date physical possession is taken by the condemning authority or title vests
in the condemning authority, whichever occurs first. If neither Landlord nor
Tenant elects to so terminate this Lease or if only a portion of the Leased
Premises shall be so appropriated but not to the extent that the remainder of
the Leased Premises is unsuitable for the use then being made thereof, this
Lease shall continue but the Rental payable hereunder during the unexpired
portion of this Lease will be reduced, pro rata, based upon the portion of the
Leased Premises taken by the condemning authority. If such appropriation occurs
during the last year of the Primary Term or any Extension, either Landlord or
Tenant may terminate this Lease by delivering written notice of termination to
the other.
11.3. Separate Awards. Landlord and Tenant shall each be entitled to
receive and retain such separate awards and portions of lump sum awards as may
be allocated to their respective interests in any condemnation proceedings. If
there is any lump sum award as to which there is no allocation between the
interests of Landlord and Tenant in any condemnation proceedings, then Landlord
shall be entitled to receive the entire lump sum award. Termination of this
Lease shall not affect the rights of the respective parties to such awards.
11.4. Mortgage. Notwithstanding the foregoing, if any mortgage or deed of
trust affecting the Leased Premises shall require application of condemnation
awards to the indebtedness secured thereby, so long as Tenant shall receive any
award to which Tenant is entitled under Section 11.3, such mortgage or deed of
trust shall govern, and any condemnation proceeds in excess of such indebtedness
shall be administered in accordance with this Article 11.
8
9
ARTICLE 12
Use of Leased Premises, Compliance with
Governmental Requirements: Environmental Matters
12.1. Use of Leased Premises. Tenant shall use the Leased Premises for
business offices and/or central station for a monitoring alarm business and
related security services. Tenant shall not (a) commit, or allow to be
committed, any waste in or upon the Leased Premises, (b) maintain, commit or
permit the maintenance or commission of any nuisance on the Leased Premises, or
(c) do or permit anything to be done in or about the Leased Premises that will
in any way increase the existing rate of any of insurance on the Leased Premises
or cause cancellation of such insurance.
12.2. Tenant's Compliance with Governmental Requirements. Tenant shall not
use or occupy, or permit the use or occupancy of, any portion of the Leased
Premises in violation of any Governmental Requirements. Tenant, at Tenant's
expense, shall comply and pay for compliance with all Governmental Requirements
relating to the use and occupancy of, and business conducted on, the Leased
Premises by Tenant.
12.3. Tenant's Representations, Warranties and Covenants as to
Environmental Matters. Tenant represents and warrants to and covenants with
Landlord that:
(a) Tenant will not use, place, hold, store, locate, dispose of or
release any Hazardous Substances on, under or at the Leased Premises except
in strict compliance with all Governmental Requirements, and will not use
any part of the Leased Premises for the disposal, storage, treatment,
processing or other handling of Hazardous Substances except in strict
compliance with all Governmental Requirements. Landlord acknowledges that
Tenant will have diesel fuel and certain solvents on the Leased Premises in
connection with its generator.
(b) Tenant shall promptly give Landlord written notice of any
investigation, claim, demand, lawsuit, or other action by any Governmental
Authority or private party involving the Leased Premises and any Hazardous
Substance or Environmental Law of which Tenant has actual knowledge. If
Tenant learns, or is notified by any Governmental Authority, that any
removal or other remediation of any Hazardous Substance affecting the
Leased Premises is necessary as a direct or indirect result of, the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from, the Leased Premises of any Hazardous Substances
resulting from Tenant's activities, acts or omissions after the effective
date of this Lease, Tenant shall promptly take all necessary Remedial
Actions in accordance with Environmental Laws.
(c) Tenant shall defend, indemnify, and hold harmless Landlord from
and against any and all Claims of any `and every kind whatsoever which may
now or in the future be paid, incurred, or suffered by or asserted against
Landlord by any Governmental Authority or third party for, with respect to,
or as a direct or indirect result of, the presence on, or the escape,
seepage, leakage, spillage, discharge, emission or release
9
10
from, the Leased Premises of any Hazardous Substances resulting from
Tenant's activities, acts or omissions after the effective date of this
Lease or the activities, acts or omissions of Tenant's employees, agents,
contractors, or invitees after the effective date of this Lease.
All representations, warranties, covenants and agreements contained in this
Section shall survive the termination of this Lease, the termination or
expiration of the Lease Term, and any assignment or subletting of the Leased
Premises.
ARTICLE 13
Assignment or Sublease
Tenant agrees not to assign, transfer, or mortgage this Lease or any right
or interest herein, or sublet the Leased Premises or any part thereof, without
the prior written consent of Landlord which consent may not be unreasonably
withheld if no Event of Default exists and if Tenant remains fully liable
hereunder notwithstanding such assignment or subletting. Landlord shall have the
right to transfer and assign, in whole or in part, Landlord's rights and
obligations with respect to the Leased Premises.
ARTICLE 14
Default
14.1. Tenant's Default. Each of the following shall be an event of default
by Tenant (an "Event of Default"):
(a) If Tenant fails to pay within five (5) days of when due any
installment of Rental due hereunder.
(b) If Tenant fails to comply with any material term, provision, or
covenant of this Lease, other than the payment of Rental, and does not cure
such failure within thirty (30) days after receipt by Tenant from Landlord
of written notice thereof (or such longer period as is reasonably necessary
to cure such failure provided Tenant shall continuously and diligently
pursue such cure at all times until such failure is cured, or in the event
of an emergency, such shorter period as is warranted by the nature of the
emergency).
(c) If Tenant files a petition under any section or chapter of the
federal Bankruptcy Code, as amended, or under any similar law or statute of
the United States or any state thereof; or if an order of relief is entered
against Tenant in a proceeding filed against Tenant thereunder.
10
11
(d) If a receiver or trustee is appointed for all or substantially
all of the assets of Tenant and such receivership is not terminated or
stayed for a period of ninety (90) days after such appointment.
(e) If Tenant makes an assignment of substantially all of its assets
for the benefit of creditors.
14.2. Landlord's Remedies. Upon the occurrence of an Event of Default,
Landlord may, at Landlord's option, without further notice or demand of any kind
to Tenant or any person, do any one or more of the following:
(a) Landlord may, but shall not be obligated to, cure such Event of
Default on behalf of and at the expense of Tenant and do all necessary work
and make all necessary payments in connection therewith. Any and all
reasonable costs and expenses (including attorneys' fees) incurred by
Landlord in effecting compliance with Tenant's obligations under this Lease
shall be due and payable by Tenant to Landlord as Additional Rent on the
first day of the month following the month in which Tenant receives
Landlord's invoice for the same.
(b) Landlord may terminate this Lease by giving written notice of
termination to Tenant, in which event Tenant shall immediately surrender
the Leased Premises to Landlord and Rental shall xxxxx effective as of the
date of termination.
(c) Landlord may enter upon and take possession of the Leased
Premises and expel or remove Tenant and any other person who may be
occupying the Leased Premises or any part thereof, with or without having
terminated the Lease.
If Landlord repossesses the Leased Premises without terminating this Lease, then
Tenant shall pay to Landlord all Rental and other indebtedness accrued to the
date of such repossession, plus Rental and other sums required to be paid by
Tenant during the remainder of the Lease Term, diminished by any net sums
thereafter received by Landlord through reletting the Leased Premises during
said period. Re-entry by Landlord shall not affect the obligations of Tenant for
the unexpired Lease Term. In the event that Landlord is successful in reletting
the Leased Premises at a rental in excess of that agreed to be paid by Tenant
pursuant to the terms of this Lease, Landlord and Tenant agree that Tenant shall
not be entitled to any such excess Rental. Actions to collect amounts due by
Tenant may be brought on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Lease Term. Upon termination or
repossession of the Leased Premises for an Event of Default, Landlord shall use
reasonable efforts to relet or attempt to relet the Leased Premises, or any
portion thereof, and to collect rent after reletting. In the event of reletting,
Landlord may relet the whole or any portion of the Leased Premises for any
period, to any tenant, and for any use and purpose.
14.3. Rights and Remedies Cumulative. The rights and remedies provided by
this Lease are cumulative and the use of any one right or remedy by Landlord
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 Landlord may
have by Governmental Requirement or otherwise. All such
11
12
rights and remedies may be exercised and enforced concurrently and whenever, and
as often, as occasion for their exercise arises.
14.4. Waiver of Default or Remedy. Failure of Landlord to declare an Event
of Default immediately upon its occurrence, or delay in taking any action in
connection with an Event of Default, shall not be waiver of the Event of
Default. Landlord shall have the right to declare the Event of Default at any
time and take such action as is lawful or authorized under this Lease. Failure
by Landlord to enforce one or more of its remedies upon an Event of Default
shall not be construed as a waiver of the Event of Default or of any other
violation or breach of any of the terms contained in this Lease. No waiver of
any Event of Default or violation or breach of any of the terms, provisions and
covenants contained in this Lease will be deemed or construed to constitute a
waiver of any other violation or breach of any the terms, provisions and
covenants of this Lease.
ARTICLE 15
Subordination and Nondisturbance: Estoppel Certificates
15.1. Subordination. Tenant accepts this Lease subject and subordinate to
any recorded mortgage, deed of trust or other lien presently existing or
hereafter to exist with respect to the Leased Premises. Landlord is hereby
irrevocably vested with full power and authority to subordinate Tenant's
interest under this Lease to any mortgage, deed of trust or other lien hereafter
placed on the Leased Premises, and Tenant agrees upon demand to execute such
additional instruments subordinating this Lease as Landlord or the holder of any
such mortgage, deed of trust, or lien may require. If the interests of Landlord
under this Lease shall be transferred by reason of foreclosure or other
proceedings for enforcement of any mortgage on the Leased Premises, Tenant shall
be bound to the transferee (sometimes called the "Purchaser") under the terms
and conditions of this Lease for the balance of the remaining Lease Term with
the same force and effect as if the Purchaser were Landlord under this Lease.
Tenant further agrees to attorn to the Purchaser, including the mortgagee under
any such mortgage if it be the Purchaser, as its Landlord. Such attornment shall
be effective without the execution of any further instruments upon the Purchaser
succeeding to the interest of Landlord under this Lease. The respective rights
and obligations of Tenant and the Purchaser upon the attornment, to the extent
of the then remaining balance of the term of this Lease, and any extensions and
renewals, shall be and are the same as those set forth in this Lease. Each such
holder of any mortgage, deed of trust, or lien, and each such Purchaser, shall
be a third-party beneficiary of the provisions of this Section.
15.2. Estoppel Certificates. Tenant agrees to execute and deliver at any
time and from time to time, within ten (10) days after receiving a written
request from Landlord, an instrument or certificate regarding the status of this
Lease, consisting of statements, if true, or an explanation if not true, (a)
that this Lease is in full force and effect, (b) the date of the commencement of
the Lease Term, (c) the nature of any amendments or modifications to this Lease,
(d) the date through which Rentals have been paid, (e) the date on which the
next payment of Rental is due under the terms of the Lease, (f) that Tenant
claims no present charge, lien, or claim of offset against the Rental, (g) that
no default, or state of facts which with the passage of time or the
12
13
giving of notice or both will constitute a default, exists on the part of either
Landlord or Tenant, and (h) such other information as may be reasonably
requested for the benefit of Landlord, any prospective purchaser or any current
or prospective mortgagee of all or any portion of the Leased Premises.
ARTICLE 16
Miscellaneous
16.1. Definitions. For the purposes of this Lease, unless the context
otherwise specifies or requires, the following terms shall have the meaning
herein specified:
"Claims" means any and all claims, demands, suits, actions, damages,
penalties, judgments, liabilities, losses, costs and expenses (including
attorneys' fees, accountants' fees, court costs and interest) of any kind
or nature arising, or alleged to have arisen, as a result of injury to or
death of any person or damage to or loss of any property.
"Environmental Law" means any Governmental Requirement pertaining to
health, industrial hygiene, or the environmental conditions on, under, or
about the Leased Premises, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. ss.9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act, 42 U.S.C.
ss.6901, et seq. ("RCRA"), the Clean Water Act, 33 U.S.C. ss.1251 et seq.
("MA"), the Clean Air Act, 42 U.S.C. ss.7401 et seq. ("CAA"), the Federal
Water Pollution Control Act, 33 U.S.C. ss.1251 et seq. and any
corresponding state Governmental Requirements.
"Governmental Authority" means any and all applicable courts, boards,
agencies, commissions, offices, or authorities of any nature whatsoever for
any governmental unit (federal, state, county, district, municipal, city,
or otherwise), whether now or hereafter in existence.
"Governmental Requirements" means any and all present and future
judicial decisions, statutes, rulings, rules, regulations, permits,
certificates, or ordinances of any Governmental Authority in any way
applicable to Landlord, Tenant, the conduct of Tenant's business, or the
Leased Premises.
"Hazardous Substance" means any substance, product, waste, or other
material which is or becomes listed, regulated, or addressed as being a
toxic, hazardous, polluting, or similarly harmful substance under any
Environmental Law, including (i) any substance included within the
definition of "hazardous waste" pursuant to Section 1004 of RCRA; (ii) any
substance included within the definition of "hazardous substance" pursuant
to Section 101 of CERCLA; (iii) any substance included within the
definition of "hazardous substance" (or similar term) pursuant to any
applicable state Governmental Requirement; (iv) asbestos; (v)
polychlorinated biphenyls; (vi) petroleum products; (vii) underground
storage tanks, whether empty, filled or partially filled with any
substance; (viii) any radioactive materials, urea formaldehyde foam
insulation, radon; and (ix) any other
13
14
chemical, material or substance the presence of or exposure to which is
prohibited, limited or regulated by any Governmental Authority on the
basis that such chemical, material or substance is toxic, hazardous or
harmful to human health or the environment or which by any Governmental
Requirements requires special handling or notification of any Governmental
Authority in its use, collection, storage, treatment, or disposal.
"Remedial Action" means any investigation, site monitoring,
containment, cleanup, removal, restoration, or other work of any kind or
nature reasonably necessary or desirable under any applicable Environmental
Law in connection with the current or future presence, suspected presence,
release, or suspected release of a Hazardous Substance in or into the air,
soil, ground water, surface water, or soil vapor at, on, about, under, or
within the Leased Premises or any part thereof.
"Rental" means Base Rent plus all Additional Rent payable under this
Lease.
16.2. Brokers. Neither Landlord nor Tenant has been represented by a real
estate broker or agent in connection with the negotiation of this Lease and
neither Landlord nor Tenant knows of any broker or agent who is entitled to a
commission in connection with this Lease. Landlord agrees to indemnify and hold
harmless Tenant from and against any and all claims for commissions of any
broker or similar parties claiming under Landlord in connection with this Lease,
and Tenant agrees to indemnify and hold harmless Landlord from and against any
and all claims for commissions of any broker or similar parties claiming under
Tenant in connection with this Lease.
16.3. Sign. Tenant shall have the right to place signs on the exterior of
the Building and at such other locations as Landlord and Tenant may agree upon.
Such signs shall conform in all respects to applicable Governmental
Requirements, and shall be subject to the approval of Landlord, which approval
shall not be unreasonably withheld.
16.4. Quiet Enjoyment. Landlord covenants that Landlord now has good title
to the Leased Premises, free and clear of all liens and encumbrances, excepting
only the lien for current real estate taxes not yet due, such recorded mortgage
or mortgages as presently exist, zoning ordinances and other building and fire
ordinances and Governmental Regulations relating to the use of the Leased
Premises, and casements, restrictions and other conditions of record. Landlord
represents and warrants that Landlord has full fight to execute and perform this
Lease and to grant the estate demised and that Tenant, upon paying the Rental
required and performing Tenant's other covenants and agreements under this
Lease, will peaceably and quietly have, hold and enjoy the Leased Premises for
the Lease Term, subject to the terms and conditions of this Lease.
16.5. Landlord's Lien. Landlord shall have, at all times, a valid security
interest to secure payment of all Rentals and other sums of money becoming due
under this Lease from Tenant, and to secure payment of any damages or loss that
Landlord may suffer by reason of the breach by Tenant of any covenant,
agreement, or condition contained in this Lease, upon all goods, wares,
equipment, fixtures, furniture, and other personal property of Tenant which is
now on the Leased Premises or which is placed on the Leased Premises at some
later date, and all
14
15
proceeds thereof. Such property shall not be removed from the Leased Premises
without the consent of Landlord until all arrearages in Rentals and all other
sums of money then due to Landlord under this Lease have been paid and
discharged, and all the covenants, agreements, and conditions of this Lease have
been fully complied with and performed by Tenant. Upon the occurrence of an
Event of Default, Landlord may, in addition to any other remedies provided in
this Lease or by law, after giving reasonable notice of Landlord's intent to
take possession and giving an opportunity for hearing on the issue, enter upon
the Leased- Premises and take possession of any and all goods, wares, equipment,
fixtures, furniture, and other personal property of the Tenant situated on the
Leased Premises, without liability for trespass or conversion, and sell the same
at public or private sale, with or without having such property at the sale,
after giving Tenant reasonable notice of the time and place of any public sale
or of the time after which any private sale is to be made. Landlord or its
assigns may purchase any items to be sold at such a sale unless they are
prohibited from doing so by law. Unless otherwise provided by law, and without
intending to exclude any other manner or giving Tenant reasonable notice, the
requirement of reasonable notice shall be met if such notice is given at lease
ten (10) days before the time of sale. The proceeds from any such disposition,
less any and all expenses connected with the taking of possession, holding and
selling of the property (including reasonable attorneys' fees and expenses)
shall be applied as a credit against the indebtedness secured by the security
interest granted in this Section 16.5. Any surplus shall be paid to Tenant or as
otherwise required by law; and Tenant shall pay any deficiencies immediately.
Upon request by Landlord, Tenant agrees to execute and deliver to Landlord a
financing statement in a form sufficient to perfect the security interest of
Landlord in the aforementioned property and proceeds under the provisions of the
Uniform Commercial Code in force in the State of Texas. The statutory lien for
rent is not waived, the security interest granted in this Section 16.5 being in
addition, and supplementary, to that lien.
16.6. Liability. Notwithstanding anything to the contrary contained herein,
no personal liability of any kind or character whatsoever now or shall at any
time hereafter attach to Landlord or Landlord's partners under any of the terms,
covenants, and conditions contained in this Lease for the payment of any amount
payable under this Lease or for the performance of any obligation under this
Lease. The exclusive remedy of Tenant for the failure of Landlord to perform any
of Landlord's obligations under this Lease will be to proceed against the
interest of Landlord in and to the Leased Premises.
16.7. Landlord's Right of Entry. Landlord and Landlord's agents and
representatives shall have the right to enter the Leased Premises at any
reasonable time during business hours for any reasonable purpose, including the
purpose of showing the Leased Premises to prospective purchasers and lenders'
and to access the telephone lines, switch room and equipment, and, during the
four (4) months prior to the end of the Primary Term or any Extension Term, to
prospective tenants; provided that in so entering the Leased Premises Landlord
and such other persons do not unreasonably interview with or interrupt Tenant's
business operations in the Leased Premises. Tenant shall give written notice to
Landlord at least thirty (30) days prior to vacating the Leased Premises and
shall arrange to meet with Landlord for a joint inspection of the Leased
Premises prior to vacating. In the event of Tenant's failure to arrange such
Joint inspection, Landlord's inspection at or after Tenant's vacating the Leased
Premises shall be
15
16
conclusively deemed correct for purposes of determining Tenant's responsibility
for repairs and restoration.
16.8. Authority. Each party agrees to furnish to the other, promptly upon
demand, a corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization and power of such
party to enter into this Lease.
16.9. Recordation. Neither Landlord nor Tenant shall record this Lease
without the prior written consent of the other.
16.10. Limitation of Warranties. EXCEPT AS OTHERWISE PROVIDED HEREIN OR IN
ANY EXHIBIT OR ADDENDUM HERETO, LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE
ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS OR
SUITABILITY OR OF ANY OTHER KIND. TENANT HAS INSPECTED THE LEASED PREMISES AND
ACCEPTS THE LEASED PREMISES "AS IS."
16.11. Waiver of DTPA. On advice of legal counsel, each of Landlord and
Tenant hereby waives the provisions of Subchapter E, Chapter 17, Title 2, Texas
Business and Commerce Code, ss.17.41 et seq., other than ss.17.555 thereof.
16.12. Notices. All notices, consents, requests, instructions, approvals,
demands and other communications provided for herein shall be validly given,
made or served if in writing and delivered personally by hand, facsimile
transmission (if a facsimile transmission number is specified in this Section
16.12 or is later provided in writing in accordance with this Section 16.12), by
nationally recognized overnight courier service (e.g., Federal Express or United
Parcel Service), or by United States certified or registered first class mail,
postage prepaid and return receipt requested. Each such notice, consent,
request, instruction, approval, demand or other communication shall be effective
(a) if delivered by hand or nationally recognized overnight courier service,
when delivered at the address specified in this Section 16.12; (b) if given by
facsimile transmission, when such facsimile transmission is transmitted to the
facsimile number specified in this Section 16.12 and the appropriate
confirmation is received; and (c) if given by United States certified or
registered first class mail, on the date appearing on the return receipt
therefor. In the event that a party is unable to deliver a notice, request,
demand or other communication due to the inaccuracy of the address and/or
facsimile transmission number provided by the other party pursuant to this
Section 16.12, or the other party's failure to notify the party of a change of
its address and/or facsimile transmission number as specified pursuant to this
Section 16.12, such notice, request, demand or other communication shall be
deemed to be effective upon confirmation by a nationally recognized overnight
courier service of its failure to complete delivery to the other party's address
as set forth in this Section 16.12 (or other address duly given to the party by
the other party in accordance with this Section 16.12).
Addresses and facsimile transmission numbers for notices (unless and until
written notice is given of any other address and/or facsimile transmission
number):
16
17
If to Landlord:
GHT Joint Venture
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
If to Tenant:
Texas Security Central, Inc.
0000 Xxxxxxxxx
Xxxxxx, Xxxxx 00000
Fax: 000-000-0000
Security Associates International, Inc.
Attn: President
0000 X. Xxxxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX. 60005
Any notice of change of address or fax number shall not be effective until
actually received.
16.13. Parties Bound. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where permitted
by this Agreement.
16.14. Applicable Law. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS WHOLLY
NEGOTIATED, EXECUTED, AND PERFORMABLE IN SUCH STATE. ALL OBLIGATIONS PERFORMABLE
BY THE PARTIES HERETO WILL BE DEEMED PERFORMABLE IN DALLAS COUNTY, TEXAS.
16.15. Severability. The provisions of this Lease are severable, and the
invalidity, illegality, or unenforceability of any particular provision of this
Lease shall not affect the other provisions hereof, and this Lease shall be
construed in all respects as if such invalid, illegal, or unenforceable
provisions. were omitted; and it is also the intention of the parties to this
Lease that in lieu of each clause or provision of this Lease that is illegal,
invalid, or unenforceable there be added as a part of this Lease a clause as
similar in terms to such illegal, invalid or unenforceable clause or provision
as may be possible and be legal, valid and enforceable.
16.16. Attorneys' Fees. If any action, at law or in equity, is necessary to
enforce or interpret the terms of this Lease, the prevailing party shall be
entitled to recover its reasonable attorneys' fees, costs and other necessary
disbursements from the losing party in addition to any other relief to which it
may be entitled.
17
18
16.17. Force Majeure. Notwithstanding Section 16.18, whenever a period of
time is prescribed in this Lease for the taking of any action (other than
monetary obligations) by Landlord or Tenant, neither Landlord nor Tenant shall
be liable or responsible for, and there shall be excluded from the computation
of such period of time, any delays due to force majeure, which means acts of
God, strikes, lockouts, material or labor restrictions by any governmental
authority, riots, floods, washouts, sinkholes, explosions, earthquakes, fire,
storms, acts of the public enemy, wars, insurrections, and any other cause not
reasonably within the control of Landlord or Tenant and which by the exercise of
due diligence Landlord or Tenant is unable, wholly or in part, to prevent or
overcome.
16.18. Time of Essence. Time is of the essence in the performance of all
the covenants, conditions, and agreements contained in this Lease.
16.19. Captions. The captions used in this Lease are for convenience only
and in no way define, limit or otherwise describe the scope or intent of this
Lease or any provision hereof, or in any way affect the interpretation of this
Lease.
16.20. Counterparts. This Lease may be executed in multiple counterparts,
each of which shall for all purposes be deemed to be an original; but all of
such counterparts together shall constitute but one and the same agreement.
16.21. Survival. All indemnity obligations of Tenant hereunder and all
obligations of Landlord and Tenant hereunder not fully performed as of the
expiration or earlier termination of the Lease Term shall survive the expiration
or earlier termination of the Lease Term, including without limitation all
Tenant's payment obligations with respect to Rental, and all obligations
concerning the physical condition of the Leased Premises.
16.22. Amendment and Modification. No amendment to or modification of this
Lease will be binding upon either party hereto unless such amendment or
modification is reduced to writing, dated, and executed by both parties to this
Lease.
16.23. Entire Agreement. This Lease constitutes and expresses the entire
agreement and understanding between Landlord and Tenant in reference to all of
the matters herein referred to, and all discussions, promises, representations
and understandings relative thereto, if any, between Landlord and Tenant are
merged herein and superseded hereby. The following exhibits are attached to and
incorporated in this Lease:
Exhibit A -- Description of Land and Leased Premises
Exhibit B -- Extension Option
16.24. Parking Spaces. Tenant shall have the right to use the 24 parking
spaces in the parking lot adjacent to the Building accessible from Xxxxxxxxx
Avenue.
16.25. Warranties. To the extent any such warranties allow, Tenant shall be
entitled to use and invoke the remaining warranties available on any equipment
for which Tenant is responsible hereunder.
18
19
16.26. Firewall. Within thirty (30) days of the date of this Lease,
Landlord agrees to build a firewall for the Leased Premises at its cost not to
exceed $5,000 so the Leased Premises will become UL certified.
EXECUTED as of the day, month and year first above written.
LANDLORD
GHT JOINT VENTURE
By: /s/ Xxx X. Xxxxxx
-------------------------
Name:
-----------------------
Title:
-----------------------
TENANT
TEXAS SECURITY CENTRAL, INC.
By: /s/ Xxxxxx X. Xxxx
---------------------------
Xxxxxx Xxxx, Vice President
19
20
EXECUTED as of the day, month and year first above written.
LANDLORD
GHT JOINT VENTURE
By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Name:
-------------------------------
Title:
-------------------------------
TENANT
TEXAS SECURITY CENTRAL, INC.
By:
---------------------------------
Xxxxxx Xxxx, Vice President
20
21
Exhibit B
EXTENSION OPTION
1. Option. Landlord grants to Tenant one (1) option (the "Extension
Option") to extend the Primary Term for an additional term of five (5) years
(the "Extension"), on the same terms, conditions and covenants set forth in this
Lease, except as provided in this Exhibit B. The Extension Option shall be
exercised only by Tenant's giving written notice to Landlord at least six (6)
months before the expiration of the Primary Term. If Tenant fails to deliver to
Landlord written notice of the exercise of the Extension Option within the
prescribed time period, the Extension Option will lapse, and there will be no
further right to extend. The Extension Option shall be exercisable by Tenant on
the express condition that at the time of the exercise, no Event of Default
shall exist and be continuing unremedied. The Extension Option may be exercised
by any permitted assignee of Tenant, but not by any subtenant.
2. Calculation of Base Rent. The Base Rent will be increased on the first
day of the Extension to the fair rental value of the Leased Premises (the "Fair
Rental Value"), determined in the following manner:
(a) The Fair Rental Value shall be the value agreed on by Landlord
and Tenant prior to the date the Extension Option is required to be
exercised, if Landlord and Tenant are able to agree.
(b) If Landlord and Tenant have not been able to agree on the Fair
Rental Value prior to the date the Extension Option is required to be
exercised, the Base Rent for the Extension shall be determined in
accordance with this subparagraph (b). Within fifteen (15) days following
the exercise of the Extension Option, Landlord and Tenant each shall
appoint one appraiser. Within ten (10) days after the two appraisers are
appointed, they will appoint a third appraiser. If either Landlord or
Tenant fails to appoint its appraiser within the prescribed time period,
the single appraiser appointed will determine the Fair Rental Value of the
Leased Premises in accordance with Section 2(c) below and such other
standards used by qualified appraisers in the Dallas-Fort Worth area as may
be appropriate. If the two appointed appraisers fail to agree on the third
appraiser, the third appraiser will be appointed by the then president of
the Greater Dallas Board of Realtors, and all three appraisers will
determine the Fair Rental Value of the Leased Premises in accordance with
Section 2(c) below and such other standards used by qualified appraisers in
the Dallas-Fort Worth area as may be appropriate. Each party will bear the
cost of the appraiser appointed by it and the parties will share equally
the cost of the third appraiser. All appraisers will be qualified to
determine the Fair Rental Value of the Leased Premises.
(c) The "Fair Rental Value" of the Leased Premises shall mean the
price that a ready and willing tenant would pay as of the commencement of
the Extension as monthly base rent to a ready and willing landlord of
property comparable to the Leased Premises if such property were exposed
for lease on the open market for a reasonable period of time and taking
into account the use proposed to be made of the Leased Premises by Tenant.
The Fair Rental Value of the Leased Premises will be the value
B-1
22
determined by the single appraiser if only one appraiser is appointed, or
if three appraisers are appointed, the Fair Market Value will be the
average of the two of the three appraisals which are closest in amount,
with the third appraisal being disregarded. In no event shall the Base Rent
be reduced by reason of such computation. If the Fair Rental Value is not
determined prior to the commencement of the Extension, then Tenant shall
continue to pay to Landlord the Base Rent applicable to the Leased Premises
immediately prior to such Extension until the Fair Rental Value is
determined, and when it is determined, Tenant shall pay to Landlord within
thirty (30) days after receipt of a notice from Landlord the difference
between the Base Rent actually paid by Tenant during the Extension prior to
the determination and the new Base Rent determined hereunder.
B-2
