Exhibit 10.18
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into as of the 7th day of April,
1994
BY AND BETWEEN HUTCH REALTY, L.L.C.,
"Lessor"
AND PETROGLYPH OPERATING COMPANY, INC.,
"Tenant"
1. Property Leased
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Lessor, in consideration of the covenants and the agreements contained in
this Lease and the timely payment of rents as set out below, does hereby lease
to the Tenant the following property:
That certain office building, parking lot and surrounding grassy area
located on the eastern portion of the real property commonly known as 0000 Xxxxx
Xxxxxxx 00, Xxxxxxxxxx, Xxxxxx (see area outlined in survey attached hereto as
Ex. A)
together with all improvements thereon (hereinafter called the "Premises"), upon
the conditions and covenants set forth below.
2. Term
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(a) Original Term. This Lease shall continue for a term of two (2)
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years, commencing on May 7, 1994, and ending on May 6th, 1996.
(b) Renewal Term. Provided that Tenant has complied with the terms
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and provisions of this Lease throughout the original term and any prior Renewal
Terms, Tenant shall have the option to renew the term of this lease for an
additional period of one year ("Renewal Term") upon the same terms and
conditions contained herein applicable to the original term except that rent
will be determined as provided below. To exercise this option to renew, Tenant
shall give Lessor written notice of its exercise of such option not later than
sixty (60) days prior to the end of the original term hereof or any renewal
term. As used herein, the "term" of this Lease shall refer, collectively, to
the original term and all Renewal Terms.
3. Rent
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(a) Original Term. The Tenant shall pay rent during the original term
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hereof of $2,000 per month, payable in advance on the first-day of each month.
In the event the term of this Lease commences on a day other than the first day
of a calendar month, the monthly rental for the first month shall be prorated,
based on the number of days of occupancy, and the rent for the fractional
beginning month shall be paid at the commencement of the term hereof. All rents
shall be paid to Lessor at 000 X. Xxxx, Xxxxxx, Xxxxxx, or such other place as
Lessor may from time to time designate.
(b) Renewal Term Rent. The monthly rent during [each] Renewal Term,
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in the event of the renewal of this Lease, shall be an adjusted rent determined
by multiplying the monthly rent set out immediately above by a fraction, the
denominator of which is the cost of living index for the month in which this
Lease was executed, and the numerator of which is the cost of living index for
the third month prior to the commencement of the Renewal Term for which rent is
being calculated; provided, that the adjustment of rent shall be not less than
the rent for the original term of this Lease. The cost of living index referred
to herein is the Consumer Price Index for Urban Wage-Earners and Clerical
Workers, United States, All Items, as revised 1964 (1967 = 100 base) maintained
by the U.S. Bureau of Labor Statistics or, in the event such index is no longer
maintained, such other then current index as is generally used for the same
purposes and will yield a result approximating that of the index described.
(c) Security Deposit. Tenant shall deposit with Lessor upon the
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execution of this Lease the sum of $2,000 to be held by Lessor, without
liability for interest, as security for the faithful performance by Tenant of
all of the terms, covenants, and conditions of this Lease. If Tenant fails to
perform any covenant of this Lease, Lessor may appropriate and apply all or any
portion of the deposit for payment of any sum due Lessor under this Lease or to
compensate Lessor for loss or damage sustained due to a breach by Tenant of this
Lease, all without prejudice to or constituting a waiver of Lessor's other
rights and remedies. If Tenant complies with all terms and conditions of this
Lease, the deposit shall be returned to Tenant at the end of the term of this
Lease.
4. Use of the Premises
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Tenant shall use the Premises for general office use and for no other
purpose without Lessor's prior written consent. In Tenant's use of the
Premises, Tenant will not permit any waste to be committed thereon; will not do
or permit anything to be done on or about the Premises causing any objectionable
noise or odor to be emitted from the Premises or in any way tending to create a
nuisance; and shall comply with all applicable laws, ordinances, rules and
regulations.
5. Utilities
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Tenant acknowledges that there are common electric and gas meters for all
of the buildings shown on the survey attached as Exhibit A and that all of such
buildings utilize water
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from a common well. Tenant shall pay to Lessor 45% of the total cost for gas
and 10% of the total cost for electricity on a monthly basis within 5 days of
being notified by Lessor of the amount owed by it. Tenant shall pay 60% of the
cost of repair, maintenance and replacement of the water well and attendant
plumbing and piping necessitated for the supply of water to the common property.
6. Inspection
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It shall be lawful for Lessor and Lessor's agents and representatives, at
any reasonable time, to enter into and upon the Premises for the purpose of
examining the condition thereof or for any other lawful purpose.
7. Repair and Maintenance
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Tenant, at Tenant's sole expense, shall keep and maintain the Premises in a
neat, clean, and sightly condition at all times, and shall maintain the Premises
and improvements thereon (including all sidewalks, parking lots, grounds,
equipment, wiring, plumbing, floors, glass, heating, air conditioning, and
mechanical), other than the roof and structural walls of such improvements, in a
good state of repair, and at the end of the term hereof shall deliver the
Premises to Lessor "broom clean" and in their present condition and state of
repair, ordinary wear and tear and damage by fire, and other hazards to the
extent covered by insurance, excepted. In this regard, Tenant shall maintain
all heating, air conditioning and other machinery and equipment on the Premises
in good working order and make such repairs and replacements as may be necessary
to keep the same in good working order. Lessor, at Lessor's sole expense, shall
maintain and keep in a good state of repair the roof and structural walls of
such improvements unless damage thereto is caused by the fault or negligence of
Tenant or Tenant's agents or employees, under which circumstances the expense
thereof, to the extent the same is not covered by the proceeds of insurance as
required in this Lease, shall be borne by Tenant.
8. Alterations
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Tenant agrees that Tenant will make no alterations or additions to the
Premises without the prior written consent of Lessor. Any such alternations or
additions will, in any event, be done at the sole cost and expense of Tenant.
Lessor's consent for alterations shall not be unreasonably withheld, but may
contain conditions, including, without limitation, requirements concerning the
quality and compatibility of alterations, evidence of financial responsibility
or bonding of Tenant and the contractor, and restoration of the Premises at
Tenant's expense upon the termination of this Lease. Lessor may withhold
consent for any addition at Lessor's sole and uncontrolled discretion. Unless
Tenant is required to restore the premises as a condition to Lessor's consent to
any alteration, all alterations made to the Premises during the term of this
Lease will remain as a part of the Premises and Tenant will have no further
interest in such alterations or additions at the conclusion of this Lease.
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9. Trade Fixtures
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All trade fixtures installed by Tenant in connection with its use of the
Premises shall remain the property of Tenant and may be removed by Tenant at any
time during the term of this Lease or at the expiration hereof. Any damage
caused by such removal, however, shall be repaired by Tenant at Tenant's sole
cost and expense.
10. Liens
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Tenant shall not permit any liens to come into existence against the
Premises by reason of any repairs or alterations or other activities conducted
by Tenant. In the event of any breach of this covenant and the incurring of any
expense by Lessor to remove such liens, Lessor shall in addition to any other
remedies or rights provided herein, be entitled to recover any costs or expenses
incurred in removing such liens.
11. Taxes and Special Assessments
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As a part of the consideration of this Lease, Tenant agrees to pay all ad
valorem taxes and all special assessments or other lawful impositions or public
charges of any kind and nature which now or hereafter may be levied, assessed,
or imposed upon the Premises (or any personal property located thereon) during
the term hereof at such time that none of such taxes, special assessments,
impositions, or charges shall become delinquent. In this regard, the taxes,
annual installments of special assessments, or other impositions or charges
shall be prorated for the year in which the term of this Lease commences as of
the date of the commencement of this Lease; and for the year in which this Lease
terminates, as of the date of such termination. Tenant agrees to furnish to
Lessor original receipts evidencing payment of all such taxes, assessments,
impositions, or charges at least fifteen (15) days prior to the date the same
become delinquent.
12. Hazard Insurance and Destruction of Premises
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Tenant agrees during the term of this Lease that Tenant will procure and
maintain at Tenant's cost and expense policies of insurance on forms and with
companies satisfactory to Lessor, insuring the Premises against loss due to any
damage to plate glass, any betterments or improvements to the premises done by
Tenant and insuring the Premises for its full insurable value against loss by
fire and extended coverage or, at Lessor's election, Lessor shall procure such
insurance and Lessee shall reimburse Lessor for the cost thereof. Such policies
shall name Lessor as a named insured and shall be delivered and deposited with
Lessor, and Lessor shall own all policies and other benefits paid under such
policies. In the event the Premises shall be destroyed or damaged by causes or
casualties covered by such insurance so as to render the same unfit for use and
occupancy for the purposes leased hereunder, Lessor shall have fifteen (15) days
after such damage or destruction to elect in writing whether to rebuild or
repair the damage at Lessor's cost and expense; and if Lessor so elects, then
this Lease shall remain in force and Lessor shall rebuild and repair the
Premises with reasonable dispatch after making such election so as to place the
Premises in as good a condition as they were at the time of destruction; and the
rent shall xxxxx during the time that the Premises are untenantable. If Lessor
does not elect to rebuild or repair within such time, then this Lease shall
terminate as of the date of such destruction or damage, and the Lessee shall
then deliver and surrender the Premises to Lessor.
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In the event the Premises are damaged, but not to the extent to render the same
unfit for use and occupancy for the purposes leased herein, then Lessor shall
repair such damage at Lessor's cost and expense, except that Lessee shall pay
such cost to the extent of any deductible amount under such policies. There
shall be no abatement of rent during the time of repair of such partial damage.
13. Public Liability
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Tenant covenants and agrees to protect and defend Lessor against and
indemnify and save Lessor harmless from any and all claims for injuries to
persons or property in or about the Premises. Tenant further agrees at all
times during the term hereof at Tenant's own expense to maintain, keep in force,
furnish and deliver to Lessor liability insurance policies or properly executed
certificates of insurance on a form and with an insurer satisfactory to Lessor,
insuring both the Lessor and Tenant against all liability for damage to person
or property in or about the Leased Premises; the amount of said liability
insurance shall not be less than $500,000 for injury to one person, $1,000,000
for injuries arising out of any one accident, and $1,000,000 for property damage
or, at Lessor's election, Lessor shall procure such insurance and Lessee shall
reimburse Lessor for the cost thereof. Tenant shall deliver such policies or
properly executed certificates of insurance to Lessor upon execution of this
Lease and thereafter at least ten (10) days prior to expiration of any prior
coverage. In the event Lessor hereafter reasonably believes that the foregoing
policy limits are no longer standard in the industry for businesses of
comparable risk, Lessor may at Lessor's discretion and by notice in writing to
Tenant increase the amount of liability insurance to be maintained at Tenant's
expense.
14. Mutual Releases
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Lessor and Tenant hereby release each other from any claim or liability for
loss or damage caused by fire or other casualty to the extent that such damage
is covered by insurance, and any insurance carriers shall not be entitled to
subrogation against any party to this lease and waiver of subrogation,
irrespective of whether such fire or casualty should be caused by the act or
omission on the part of Lessor or Tenant or their respective agents or
employees; provided, however, that this release shall be valid and binding only
in the event it is recognized and accepted by the hazard insurance companies
under the policies carried pursuant to this Lease. Tenant agrees to use
Tenant's best efforts to obtain the necessary acceptance on any insurance policy
obtained pursuant to this Lease.
15. Condemnation
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If the whole or any part of the Premises or any building which forms a part
thereof shall be condemned or taken under any power of eminent domain by any
municipal, county, state, federal, or other authority, this Lease shall
terminate with respect to the part of the Premises so taken on the day the
possession of that part shall be required by the acquiring authority. In event
any part of said building or more than ninety percent (90%) of the land not
occupied by the building is so taken, then Lessor or Tenant may elect within
thirty (30) days thereafter to terminate this lease by giving written notice
thereof to the other of the exercise of such option.
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If this Lease is not so terminated, the rent shall xxxxx proportionately based
on the fair market value of the Premises before and after the taking as finally
determined by agreement or litigation in the condemnation proceeding.
16. Default by Tenant
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In the event that (i) Tenant shall default in the payment of rent and
Tenant shall continue in default of rent after ten days' written notice by
Lessor to Tenant specifying rent due; or (ii) Tenant shall be in default of any
covenant or condition of this Lease other than payment of rent and shall
continue in default of such covenant or condition after thirty (30) days' notice
in writing by Lessor to Tenant of the existence of such default; or (iii) if any
adjudication of bankruptcy or insolvency be rendered against Tenant or if a
receiver of the assets or business of Tenant shall be appointed or if any sale
or attempted sale of the leasehold interest hereby created shall be made under
or by virtue of any execution or judicial process against Tenant, or if Tenant
dies or is dissolved or the existence of Tenant is otherwise terminated; then,
and upon the occurrence of any such event, Lessor shall, at Lessor's election
and without further notice to Tenant, have the right to cancel this Lease and
have immediate possession of the leased premises, without waiving or
relinquishing any claim for rent or damages then due, and Tenant shall remain
liable as hereinafter provided. In such event Lessor, without prejudice to any
other right or remedy which Lessor may have hereunder or by law, may re-enter
the leased premises either by force or otherwise, or dispossess Tenant, any
legal representative of Tenant or other occupant of the leased premises by
appropriate suit, action or proceeding, and remove Tenant's effects and hold the
leased premises as if this Lease had not been made. Notwithstanding such
termination, and during the full period which would otherwise have constituted
the balance of the term of this Lease, Tenant shall continue to be liable for
the performance of all of the covenants of Tenant under this Lease, including
Tenant's covenant to pay the full amount of rent reserved hereunder, and Lessor
at Lessor's option may rent the leased premises for a term or terms which may
have been the balance of the term hereof, in which event or events Lessor shall
apply any monies collected, FIRST, to the expense of resuming or obtaining
possession of and reletting the leased premises, and SECOND, to the payment of
the rent due and to become due to Lessor hereunder, and Tenant shall be and
remain liable for any deficiency. Should Lessor fail to exercise any remedy
Lessor may have for default against Tenant, such failure shall not be deemed to
be a waiver of Lessor's right to exercise such remedy for such default at a
later time or for subsequent defaults, or otherwise to insist upon strict
compliance with the terms hereof. Without limiting the generality of the
foregoing, Lessor shall be entitled to recover all costs of regaining possession
of the premises and the reletting thereof, including, without limitation,
reasonable attorneys' fees.
17. Assignment and Subletting
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Tenant shall not have the right to assign this Lease in whole or in part or
to sublet the Premises in whole or in part without the prior written consent of
Lessor. Tenant shall remain liable for the rent and the performance of other
obligations of Tenant hereunder irrespective of any assignment or subletting to
which Lessor may consent.
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18. Environmental Issues
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Tenant shall not cause, permit or suffer any hazardous or toxic material,
substance or waste which is subject to applicable federal, state or local law or
regulation to be brought upon, treated, kept, stored, disposed of, discharged,
released, produced, manufactured, generated, refined or used upon, about or
beneath the Premises or any portion thereof by Tenant, its agents, employees,
contractors, tenants or invitees, or any other person.
19. Surrender
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Tenant will, at the end of the term hereof, peacefully surrender the
Premises to Lessor in good repair. In the event Tenant for any reason shall
hold over after the expiration of this Lease with the express or implied consent
of Lessor, such holding over shall not be deemed to operate as a renewal or
extension of this Lease, but shall only create a tenancy from month to month
which shall be on the same terms and conditions except (i) the Lease may be
terminated at will at any time by either party upon thirty (30) days' written
notice and, (ii) unless otherwise agreed in writing, the monthly rent during any
such period of holding over shall be 150 percent of the monthly rent being paid
immediately prior to such holding over.
20. Miscellaneous
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(a) Lessor-Tenant Relationship. Nothing contained herein shall be
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deemed or construed by the parties hereto or any third parties as creating the
relationship of principal and agent or partnership or joint venture between the
parties hereto.
(b) Notices. All notices to be given under this Lease shall be given
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in writing and shall be deemed to be properly served only if personally
delivered or sent postage prepaid, by Registered or Certified Mail with return
receipt requested, to the parties as follows:
To Lessor: Hutch Realty, L.L.C.
000 Xxxx Xxxx
Xxxxxx, Xxxxxx, 00000
To Tenant: Petroglyph Operating Company, Inc.
0000 X. Xxxxxxx 00
Xxxxxxxxxx, Xxxxxx, 00000
or at such other places as either party may hereafter from time to time
designate by notice. Such notice shall be deemed to have been given on the date
when personally delivered or on the date upon which the same is deposited in the
United States mail with postage prepaid.
(c) Headings. The headings contained in this Lease shall be deemed to
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be for the convenience of the parties only and shall not be considered in
construing this Lease.
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(d) Attorneys' Fees. Tenant covenants and agrees to reimburse Lessor
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for any attorneys' fees that it may incur as a direct or indirect result of
Tenant's breach of this Lease.
(e) Acceptance of Premises. Tenant acknowledges (i) that Tenant has
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examined and knows the condition of the Premises; (ii) that no representation or
warranty as to the condition, repair, or fitness thereof for any purpose or as
to the environmental quality thereof or absence of hazardous or toxic materials
or substances thereon has been made by Lessor or Lessor's agent that is not
expressed herein; and (iii) that Tenant accepts the Premises in their present
condition. Lessor shall not be liable for any damage occasioned by or from any
leaks or other defects in the Premises and Lessor shall not be required to
effect any repairs required hereunder until receipt of written notice from
Tenant concerning the need for such repairs.
(f) Indemnification. Tenant shall indemnify, defend and hold harmless
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Lessor from and against any and all claims, loss, liability or damage (including
attorney fees and costs of defence) arising from (i) Tenant's use of the
premises, and from the conduct of Tenant's business, and from any activity,
work, or things done, permitted, or suffered by Tenant in or about the premises
or elsewhere; (ii) any penalty, cleanup, treatment or other remedial work
required by any governmental authority having jurisdiction and related to
contamination of the Premises or its groundwater by any hazardous or toxic
material, substance or waste which is subject to regulation by applicable local
state or federal law or regulation; and (iii) any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any negligence of the Tenant, or any of Tenant's
agents, contractors, or employees. The obligations of Tenant in this paragraph
shall survive indefinitely, notwithstanding the expiration or termination of
this Lease, or the discharge of all other obligations owed by the parties to
each other.
(g) Tenant's Certificates. Tenant shall promptly upon request of
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Lessor, without charge, at any time and from time to time, deliver to Lessor or
any other person specified by Lessor, any modification to this Lease Agreement,
the status of rent, the existence of any setoffs or defenses in favor of Tenant,
and such other matters in connection with this Lease as Lessor may request.
(h) Binding Effect. This Lease shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, personal and legal
representatives, successors, and permitted assigns.
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IN WITNESS WHEREOF, the parties have signed this Lease Agreement effective
the day and year first above written.
HUTCH REALTY, L.L.C.
By
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Name:
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Title:
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LESSOR
PETROGLYPH OPERATING COMPANY, INC.
By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President
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TENANT
GUARANTY
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______________________________, President and major stockholder of Tenant
in the foregoing Lease, in consideration of the execution of said Lease and to
induce the Lessor to enter into the same with Tenant, does hereby guarantee the
performance when due of all obligations contained in said Lease.
Dated ____________________.
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