EXHIBIT 10.2
STANDARD COMMERCIAL LEASE AGREEMENT Approximately 10,929 Square Feet
(EXISTING BUILDING) '86 --------------------------------
0000 Xxxxxxxxx Xxx
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Xxxxxxxx Xxxx, Xxxxxxxx 00000
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LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by and between Xxxx Xxxxxx Service
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Center Phase IV Associates hereinafter referred to as "Landlord", and CD
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Warehouse, Inc. hereinafter referred to as "Tenant";
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WITNESSETH:
1. Premises and Term. Inconsideration of the obligation of Tenant to pay
rent as herein provided, and in consideration of the other terms, provisions and
covenants hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby takes from Landlord certain premises situated within the County of
Oklahoma, State of Oklahoma, more particularly described on EXHIBIT "A" attached
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hereto and incorporated herein by reference, together with all rights,
privileges, easements, appurtenances, and immunities belonging to or in any way
pertaining to the premises and together with the buildings and other
improvements situated or to be situated upon said premises (said real property,
building and improvements being hereinafter referred to as the "premise").
TO HAVE AND TO HOLD the same for a term commencing on or be fore June 1,
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1997 and ending sixty-three (63) months thereafter. Tenant acknowledges that if
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has inspected and accepts the premises, and specifically the buildings and
improvements comprising the same, in their present condition as suitable for the
purpose for which the premises are leased. Taking of possession by Tenant shall
be deemed conclusively to establish that said buildings and other improvements
are in good and satisfactory condition as of when possession was taken. Tenant
further acknowledges that no representations as to the condition of the
premises, nor promises to alter, remodel or improve the premises have been made
by Landlord, unless such are expressly set forth in this lease. If this lease is
executed before the premises become vacant or otherwise available and ready for
occupancy, or if any present tenant or occupant of the premises holds over, and
Landlord cannot acquire possession of the premises prior to the date above
recited as the commencement date of this lease, Landlord shall not be deemed to
be in default hereunder, and Tenant agrees to accept possession of the premises
at such time as Landlord is able to tender the same, which date shall
thenceforth be deemed the "commencement date"; and Landlord hereby waives
payment of rent covering any period prior to the tendering of possession to
Tenant hereunder. After the commencement date Tenant shall, upon demand, execute
and deliver to Landlord a letter of acceptance of delivery of the premises.
2. Base Rent, Adjustment Thereof and Security Deposit
A. Tenant agrees to pay to Landlord rent for the premises, in advance,
without demand, deduction or set off, for the entire term hereof at the rate
of See attached Exhibit "D", Rent Schedule Dollars ($____________) per month,
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One such monthly installment shall be due and payable on the date hereof and a
like monthly installment shall be due and payable on or before the first day of
each calendar month succeeding the commencement date recited above during the
hereby demised term, except that the rental payment for any fractional calendar
month at the commencement or end of the lease period shall be proprated.
B. In addition, Tenant agrees to deposit with Landlord on the date hereof
the sum of Six Thousand Three Hundred Seventy-Five and 25/100 Dollars
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($6,375.25), which sum shall be held by Landlord, without obligation for
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interest as security for the performance of Tenants covenants and obligations
under this lease, it being expressly understood and agreed that such deposit is
not an advance rental deposit or a measure of Landlord's damages in case of
Tenant's default. Upon the occurrence of any event of default by Tenant,
Landlord may, from time to time, without prejudice to any other remedy provided
herein or provided by law, use such fund to the extent necessary to make good
any arrears of rent or other payments due Landlord hereunder, and any other
damage, injury, expense or liability caused by such event of default; and Tenant
shall pay to Landlord on demand the amount so applied in order to restore the
security deposit to its original amount. Although the security deposit shall be
deemed the property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant at such time after termination of this lease that
all of Tenant's obligations under this lease have been fulfilled.
3. Use. The demised premises shall be used only for the purpose of
receiving, storing, shipping and selling (other than retail) products, materials
and merchandise made and/or distributed by Tenant and for such other lawful
purposes as may be incidental thereto. Outside storage, including without
limitation, trucks and other vehicles and the washing thereof at any time, is
prohibited without Landlord's prior written consent. Tenant shall at its own
cost and expense obtain any and all licenses and permits necessary for any such
use. Tenant shall comply with all governmental laws, ordinances and regulations
applicable to the use of the premises, and shall promptly comply with all
governmental orders and directives for the correction, prevention and abatement
of nuisances, in or upon, or connected with, the premises, all at Tenant's sole
expense. Tenant shall not permit any objectionable or unpleasant odors, smoke,
dust, gas, noise or vibrations to emanate from the premises, nor take any other
action which would constitute a nuisance or would disturb or endanger any other
tenants of the building in which the premises are situated or unreasonably
interfere with their use of their respective premises. Without Landlord's prior
written consent, Tenant shall not receive, store or otherwise handle any
product, material or merchandise which is explosive or highly inflammable.
Tenant will not permit the premises to be used for any purpose or in any manner
(including without limitation any method of storage) which would render the
insurance thereon void or the insurance risk more hazardous or cause the State
Board of Insurance or other insurance authority to disallow any sprinkler
credits. If any increase in the fire and extended coverage insurance premiums
paid by Landlord for the building in which Tenant occupies space is caused by
Tenants use and occupancy of the premises, or if Tenant vacates the premises and
causes an increase in such premiums, then Tenant shall pay as additional rental
the amount of such increase to Landlord.
4. Base Rent Adjustment. The base rent payable under the terms of
subparagraph 2.A. of this lease shall be adjusted upward from time to time in
accordance with the following provisions:
.3313
A. Expense Stop. As used in this lease, (i) the term "Expense Stop" shall
mean the sum of $.3313 per square foot of space in the building and (ii) the
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term "Basic Costs" shall mean all real property taxes, assessments (whether
general or special) and governmental charges of any kind and nature whatsoever,
including, without limitation, assessments due to deed restrictions and/or
owners' associations, which accrue against the building and/or project of which
the premises are a part during the term of this lease and all insurance premiums
Landlord is required to pay or deems necessary to pay, including, without
limitation, public liability insurance and fire and extended coverage insurance
with respect to the building and/or project. Tenant shall during the term of
this lease pay as an adjustment to the base rent, (i.e., the rent payable under
subparagraph 2.A. hereof), an amount (per each square foot of space within the
premises) equal to the excess ("Excess") from time to time of actual Basic Costs
per square foot of space in the building over the Expense Stop. Landlord will
make a good faith estimate of the Excess for each calendar year and the monthly
payment of base rent by Tenant shall be adjusted upward in accordance with such
estimate. By April 1st of each calendar year during the term of this lease and
by April 1st of the year following the calendar year in which this lease
terminates, or as soon thereafter as practical, Landlord shall furnish (upon
written request) to Tenant a statement of Landlord's actual Basic Costs for the
previous calendar year. If for any calendar year additional rent collected under
the terms of this subparagraph 4.A. for the prior year, as a result of
Landlord's estimate of Basic Costs, is in excess of the additional rent actually
due from Tenant hereunder during such prior year, then Landlord shall credit to
Tenant's rental obligations any overpayment (or if Tenant has no further
financial obligations under this lease, then Landlord shall refund the
overpayment). Likewise, Tenant shall pay to Landlord, on demand, any
underpayment with respect to the prior year. Any payment to be made pursuant to
this subparagraph 4.A. with respect to the calendar year in which this lease
commences or terminates shall be prorated if this lease is not enforced during
the full calendar year. If at any time during the term of this lease, the
present method of taxation shall be changed so that in lieu of the whole or any
part of any taxes, assessments or governmental charges levied, assessed or
imposed on real estate and the improvements thereon, there shall be levied,
assessed or imposed on Landlord a capital levy or other tax directly on the
rents received therefrom and/or a franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rents for the building
and/or project of which the premises are a part, and all such taxes,
assessments, levies or charges, or the part thereof so measured or based, shall
be deemed to be included within the term "real property taxes" for the purposes
hereof.
B. Common Area Maintenance (CAM). As used in this lease, the term "CAM
Expenses" shall mean all direct and indirect costs and expenses in each calendar
year of owning, operating, maintaining, repairing and managing the building
and/or project of which the premises are a part, including, without limitation,
all costs incurred by Landlord for common area maintenance and utilities,
landscaping, exterior lighting, common water, periodic sweeping of the truck
courts, security, sprinkler head replacement, interior sprinkler maintenance and
service, tax service, fire line inspection and maintenance, sewer line
cleanouts, and rail maintenance, if any. The term "CAM Expenses" does not
include any capital costs for major roof or major parking lot replacement, nor
does if include repairs, restoration or other work occasioned by fire, windstorm
or other casualty to the extent of net insurance proceeds received by Landlord
with respect thereto, income and franchise taxes of Landlord, expenses incurred
in leasing to or procuring of tenants, leasing commissions, advertising
expenses, expenses for the renovating of space for new tenants, interest or
principle payments on any mortgage or other indebtedness of Landlord, or
depreciation allowance or expense. Tenant shall during the term of this lease
pay as additional rent (i.e., the rent payable under subparagraph 2.A. hereof)
an amount equal to the product of the CAM Expenses for each calendar year during
the term of this lease times a fraction, the numerator of which is the number of
square feet in the space contained in the premises and the denominator of which
is the number of square feet in the entire space contained in the building
(25.75%). The CAM Expense for the first calendar year is $267.12/month.
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Landlord will make a good faith estimate of Tenant's share of such additional
rent for each calendar year and the monthly payment of CAM Expense by Tenant
shall be adjusted in accordance with such estimate By April 1st of each calendar
year during the term of this lease and by April 1st of the year following the
year in which the term of this lease terminates, or as soon thereafter as
practical. Landlord shall furnish to Tenant a statement of CAM Expenses for the
previous calendar year. If for any calendar year additional rent collected under
the terms of this subparagraph 4.B. for the prior year, as a result of
Landlord's estimate of CAM Expenses, is in excess of the additional rent
actually due from Tenant hereunder during such prior year, then Landlord shall
credit to Tenant's rental obligations any overpayment (or if Tenant has no
further financial obligations under this lease, then Landlord shall refund the
overpayment) Likewise, Tenant shall pay to Landlord, on demand, any underpayment
with respect to the prior year. Any payment to be made pursuant to this
subparagraph 4.B with respect to the calendar year in which this lease commences
or terminates shall be prorated if this lease is not enforced during the full
calendar year. In no event will Tenant's proportionate share increase by more
than 15% per year.
C. Tenant's Examination of Records Tenant at its own expense shall have the
right to no more frequently than once per calendar year, following prior written
notice to Landlord, to examine Landlord's books and records relating to Basic
Costs and CAM Expenses, during normal business hours only, and at a time agreed
upon by the Landlord and Tenant; or at Landlord's sole discretion, Landlord will
provide an audit prepared by an independent certified public accountant.
5. Landlord's Repairs. Landlord shall at its expense maintain only the
roof, foundation and the structural soundness of the exterior walls of the
building in good repair, reasonable wear and tear excepted. Tenant shall repair
and pay for any damage caused by Tenant, or Tenant's employees, agents or
invitees, or caused by Tenant's default hereunder. The term "walls" as used
herein shall not include windows, glass or plate glass, doors, special store
fronts or, office entrys. Tenant shall immediately give Landlord written notice
of defect or need for repairs, after which Landlord shall have reasonable
opportunity to repair same or cure such defect. Landlord's liability with
respect to any defects, repairs or maintenance for which Landlord is responsible
under any of the provisions of this lease shall be limited to the cost of such
repairs or maintenance or the curing of such defect.
6. Tenant's Repairs and Other Covenants of Care and Treatment of Premises.
A. Tenant shall at its own cost and expense keep and maintain all parts of
the premises (except those for which Landlord is expressly responsible under the
terms of this lease) in good condition, promptly making all necessary repairs
and replacements, including, but not limited to, windows, glass and plate
glass, doors, any special office entry, interior walls and finish work, doors
and floor covering, downspouts, gutters, heating and air conditioning systems,
dock boards, truck doors, dock bumpers, plumbing work and fixtures, termite and
pest extermination and regular removal of interior trash and debris, keeping the
whole of the premises in a clean and sanitary condition. Tenant shall not be
obligated to repair any damage to Landlord's property caused by fire, tornado or
other casualty covered by the insurance to be maintained by Landlord pursuant to
subparagraph 12(A) below, except that Tenant shall be obligated to repair all
damage to Tenant's property and all wind damage to glass, except with respect to
tornado or hurricane damage.
B. Tenant shalt not damage any demising wall or disturb the integrity and
support provided by any demising wall and shall, at its sole cost and expense,
promptly repair any damage or injury to any demising wall caused by Tenant or
its employees, agents, customers, invitees, and/or licensees.
C. In the event the premises constitute a portion of a multiple occupancy
building. Tenant and its employees, agents, customers, invitees and/or licensees
shall have the nonexclusive right to use the parking areas, if any, as may be
designated by Landlord in writing, subject to such reasonable rules and
regulations as Landlord may from time to time prescribe and subject to rights of
ingress and egress of other tenants. Landlord shall not be responsible for
enforcing any exclusive parking rights which may be granted to Tenant.
D. Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventative maintenance/service contract with a maintenance
contractor for servicing all hot water, heating and air conditioning systems and
equipment within the premises. The maintenance contractor and the contract must
be approved by Landlord. The service contract must include all services
suggested by the equipment manufacturer within the operation/maintenance manual
and must become effective (and a copy thereof delivered to Landlord) within
thirty (30) days of the date Tenant takes possession of the premises.
E. Tenant agrees that no washing of any type (other than reasonable
restroom or kitchen washing) will take place in the demised premises, including
the truck apron and parking areas.
7. Alterations. Tenant shall not make any alterations, additions or
improvements to the premises (including but not limited to roof and wall
penetrations) without the prior written consent of Landlord. Tenant may, without
the consent of Landlord, but at its own cost and expense and in a good
workmanlike manner erect such shelves, bins, machinery and trade fixtures as it
may deem advisable, without altering the basic character of the building or
improvements and without overloading or damaging such building or improvements,
and in each case complying with all applicable governmental laws, ordinances,
regulations and other requirements. All alterations, additions, improvements and
partitions erected by Tenant shall be and remain the property of Tenant during
the term of this lease and Tenant shall, unless Landlord otherwise elects as
hereinafter provided, remove all alterations, additions, improvements and
partitions erected by Tenant and restore the premises to their original
condition by the date of termination of this lease or upon earlier vacating of
the premises; provided, however, that if Landlord so elects prior to termination
of this lease or upon earlier vacating of the premises, such alterations,
additions, improvements and partitions shall become the property of Landlord as
of the date of termination of this lease or upon earlier vacating of the
premises and shall be delivered up to the Landlord with the premises. All
shelves, bins, machinery and trade fixtures installed by Tenant may be removed
by Tenant prior to the termination of this lease if Tenant so elects, and shall
be removed by the date of termination of this lease or upon earlier vacating of
the premises if required by Landlord; upon any such removal Tenant shall restore
the premises to their original condition. All such removals and restoration
shall be accomplished in a good workmanlike manner so as not to damage the
primary structure or structural qualities of the buildings and other
improvements situated on the premises.
8. Signs. Tenant shall have the right to install signs upon the premises
only when first approved in writing by Landlord and subject to any applicable
governmental laws, ordinances, regulations and other requirements. Tenant shall
remove all such signs by the termination of this lease. Such installations and
removals shall be made in such manner as to avoid injury or defacement of the
building and other improvements, and Tenant shall repair any injury or
defacement, including without limitation discoloration, caused by such
installation and/or removal. *Two side by side, 4' x 8', off white sign panels
will be available for Tenant's signage.
9. Inspection. Landlord and Landlord's agents and representatives shall
have the right to enter and inspect the premises at any reasonable time during
business hours, for the purpose of ascertaining the condition of the premises or
in order to make such repairs as may be required or permitted to be made by
Landlord under the terms of this lease. During the period that is six (6) months
prior to the end of the term hereof, Landlord and Landlord's agents and
representatives shall have the right to enter the premises at any reasonable
time during business hours for the purpose of showing the premises and shall
have the right to erect on the premises a suitable sign indicating the premises
are available. Tenant shall give written notice to Landlord at least thirty (30)
days prior to vacating the premises and shall arrange to meet with Landlord for
a joint inspection of the premises prior to vacating. In the event of Tenant's
failure to give such notice or arrange such joint inspection, Landlords
inspection at or after Tenant's vacating the premises shall be conclusively
deemed correct for purposes of determining Tenant's responsibility for repairs
and restoration.
10. Utilities. Landlord agrees to provide at its cost (standard as deemed
by landlord) water, electricity and telephone service connections into the
premises, but Tenant shall pay for all water, gas, heat, light, power,
telephone, sewer, sprinkler charges and other utilities and services used on or
from premises, together with any taxes, penalities, surcharges or the like
pertaining thereto and any maintenance charges for utilities and shall furnish
all electric light bulbs and tubes. If any such services are not separately
metered to Tenant, Tenant shall pay a reasonable proportion as determined by
Landlord of all charges jointly metered with other premices. Landlord shall in
no event be liable for any interruption of failure of utility services on the
premises.
11. Assignment and Subletting. Tenant shall not have the right to assign,
sublet, transfer or encumber this lease, or any interest therein, without prior
written consent of Landlord. Any attempted assignment, subletting, transfer or
encumbrance by Tenant in violation of the terms and covenants of this Paragraph
shall be void. All cash or other proceeds of any assignment, such proceeds as
exceed the rentals called for hereunder in the case of a subletting and all cash
or other proceeds of any other transfer of Tenant's interest in this lease shall
be paid to Landlord, whether such assignment, subletting or other transfer is
consented to by Landlord or not, unless Landlord agrees to the contrary in
writing, and Tenant hereby assigns all rights it might have or ever acquire in
any such proceeds to Landlord. Any assignment, subletting or other transfer of
Tenant's interest in this lease shall be for an amount equal to the then fair
market value of such interest. These covenants shall run with the land and shall
bind Tenant and Tenant's heirs, executors, administrators, personal
representatives, representatives in an bankruptcy proceeding, successors, and
assigns. Any assignee, sublessee or transferee of Tenant's interest in this
lease (all such assignees, sublessees and transferees being hereinafter referred
to as "successor"), by assuming Tenant's obligations hereunder shall assume
liability to Landlord for all amounts paid to persons other than Landlord by
such successors in contravention of this Paragraph. No assignment, subletting or
other transfer, whether consented to by Landlord or not, shall relieve Tenant of
its liability hereunder. Upon the occurrence of an "event of default" as
hereinafter defined, if the premises or any part thereof are then assigned or
sublet, Landlord, in addition to any other remedies herein provided, or provided
by law, may at its option collect directly from such assignee or subtenant all
rents becoming due to Tenant under such assignment or sublease and apply such
rent against any sums due to Landlord from Tenant hereunder, and no such
collection shall be construed to constitute a novation or a release of Tenant
from the further performance of Tenant's obligations hereunder.
12. Fire and Casualty Damage.
A. Landlord agrees to maintain standard fire and extended coverage
insurance covering the building of which the premises are a part in an amount
not less than 80% (or such greater percentage as may be necessary to comply with
the provisions of any co-insurance clauses of the policy) of the "replacement
cost" thereof as such term is defined in the Replacement Cost Endorsement to be
attached thereto, insuring against the perils of Fire, Lightning and Extended
Coverage, such coverages and endorsements to be as defined, provided and limited
in the standard bureau forms prescribed by the insurance regulatory authority
for the State in which the premises are situated for use by insurance companies
admitted in such state for the writing of such insurance on risks located within
such state. Subject to the provisions of subparagraphs 12(C), 12(D) and 12(E)
below, such insurance shall be for the sole benefit of Landlord and under its
sole control.
B. If the buildings situated upon the premises should be damaged or
destroyed by fire, tornado or other casualty, Tenant shall give immediate
written notice thereof to Landlord.
C. If the buildings situated upon the premises should be totally destroyed
by fire, tornado or other casualty, or if they should be so damaged thereby that
rebuilding or repairs cannot in Landlord's estimation be completed with two
hundred (200) days after the date upon which Landlord is notified by Tenant of
such damage, this lease shall terminate and the rent shall be abated during the
unexpired portion of this lease, effective upon the date of the occurrence of
such damage.
D. If the buildings situated upon the premises should be damaged by any
peril covered by the insurance to be provided by Landlord under subparagraph
12(A) above, but only to such extent that rebuilding or repairs can in
Landlord's estimation be completed within one hundred fifty (150) after the
date upon which Landlord is notified by Tenant of such damage, this lease shall
not terminate, and Landlord shall at its sole cost and expense thereupon proceed
with reasonable diligence to rebuild and repair such buildings to substantially
the condition in which they existed one prior to such damage, except that
Landlord shall not be required to rebuild, repair or replace any part of the
partitions, fixtures, additions and other hundred improvements which may have
been placed in, on or about the premises by Tenant If the premises are
untenantable in whole or in part following fifty such damage, the rent payable
hereunder during the period in which they are untenantable shall be reduced to
such extent as may be fair and reasonable under all of the circumstances. In the
event that Landlord should fail to complete such repairs and rebuilding within
one hundred fifty (150) days after the date upon which Landlord is notified by
Tenant of such damage, Tenant may at its option terminate this lease by
delivering written notice of termination to Landlord as Tenant's exclusive
remedy, whereupon all rights and obligations hereunder shall cease and
terminate.
E. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.
F. Anything in this lease to the contrary notwithstanding, Landlord and
Tenant hereby waive and release each other of and from any and all rights of
recovery, claim, action or cause of action, against each other, their agents,
officers and employees, for any loss or damage that may occur to the premises,
improvements to the building of which the premises are a part, or personal
property (building contents) within the building, by reason of fire or the
elements regardless of cause or origin, including negligence of Landlord or
Tenant and their agents, officers and employees, but only to the extent of the
insurance proceeds payable under the policies of insurance covering the
property. Because this subparagraph will preclude the assignment of any claim
mentioned in if by way of subrogation (or otherwise) to an insurance company (or
any other person), each party to this lease agrees immediately to give to each
insurance company which has issued to it policies of fire and extended coverage
insurance, written notice of the terms of the mutual waivers contained in this
subparagraph, and to have the insurance policies property endorsed, if
necessary, to prevent the invalidation of the insurance coverages by reason of
the mutual waivers contained in this subparagraph.
13. Liability. Landlord shall not be liable to Tenant or Tenant's
employees, agents, patrons or visitors, or to any other person whomsoever, for
any injury to person or damage to property on or about the premises, resulting
from and/or caused in part or whole by the negligence or misconduct of Tenant,
its agents, servants or employees, or of any other person entering upon the
premises, or caused by the buildings and improvements located on the premises
becoming out of repair, or caused by leakage of gas, oil, water or steam or by
electricity emanating from the premises, or due to any cause whatsoever, and
Tenant hereby convenants and agrees that it will at all times indemnify and hold
safe and harmless the property, the Landlord (including without limitation the
trustee and beneficiaries if Landlord is a trust). Landlord's agents and
employees from any loss, liability, claims, suits, costs, expenses, including
without limitation attorney's fees and damages, both real and alleged, arising
out of any such damage or injury; except injury to persons or damage to property
the sole cause of which is the negligence of Landlord or the failure of Landlord
to repair any part of the premises which Landlord is obligated to repair and
maintain hereunder within a reasonable time after the receipt of written notice
from Tenant of needed repairs. Tenant shall procure and maintain throughout the
term of this lease a policy or policies of Insurance, at its sole cost and
expense, insuring both Landlord and Tenant against all claims, demands or
actions arising out of or in connection with: (i) the premises; (ii) the
condition of the premises; (iii) Tenant's operations in and maintenance and use
of the premises; and (iv) Tenants liability assumed under this lease, the limits
of such policy or policies to be in the amount of not less than $1,000,000 per
occurrence in respect of injury to persons (including death), and in the amount
of not less than $500,000 per occurrence in respect of property damage or
destruction, including loss of use thereof. All such policies shall be procured
by Tenant from responsible insurance companies satisfactory to Landlord.
Certified copies of such policies, together with receipt evidencing payment of
premiums therefor, shall be delivered to Landlord prior to the commencement date
of this lease. Not less than fifteen (15) days prior to the expiration date of
any such policies, certified copies of the renewals thereof bearing notations
evidencing the payment of renewal premiums shall be delivered to Landlord. Such
policies shall further provide that not less than thirty (30) days written
notice shall be given to Landlord before such policy may be cancelled or changed
to reduce insurance provided thereby.
14. Condemnation.
A. If the whole or any substantial part as determined by Landlord of the
premises should be taken for any public or quasi-public use under governmental
law, ordinance or regulation, or by right of eminent domain, or by private
purchase in lieu thereof and the taking would prevent or materially interfere
with the use of the premises for the purpose for which they are being used, as
determined by Landlord this lease shall terminate and the rent shall be abated
during the unexpired portion of this lease, effective when the physical taking
of said premises shall occur.
B. If part of the premises shall be taken for any public or quasi-public
use under any governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this lease is not terminated
as provided in the subparagraph above, this lease shall not terminate but the
rent payable hereunder during the unexpired portion of this lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances.
C. In the event of any such taking or private purchase in lieu thereof,
Landlord and Tenant shall each be entitled to receive and retain such separate
awards and/or portion of lump sum awards as may be allocated to their respective
interests in any condemnation proceedings.
15. Holding Over. Tenant will, at the termination of this lease by lapse
of time or otherwise, yield up immediate possession to Landlord. If Landlord
agrees in writing that Tenant may hold over after the expiration or termination
of this lease, unless the parties hereto otherwise agree in writing on the terms
of such holding over, the hold over tenancy shall be subject to termination by
Landlord at any time upon not less than five (5) days advance written notice, or
by Tenant at any time upon not less than thirty (30) days advance written
notice, and all of the other terms and provisions of this lease shall be
applicable during that period, except that Tenant shall pay Landlord from time
to time upon demand, as rental for the period of any hold over, an amount equal
to double the rent in effect on the termination date, computed on a daily basis
for each day of the hold over period. No holding over by Tenant, whether with or
without consent of Landlord, shall operate to extend this lease except as
otherwise expressly provided. The preceding provisions of this Paragraph 15
shall not be construed consent for Tenant to hold over.
16. Quiet Enjoyment. Landlord covenants that it now has, or will acquire
before Tenant takes possession of the premises, good title to the premises, free
and clear of all liens and encumbrances, excepting only the lien for current
taxes not yet due, such mortgage or mortgages as are permitted by the terms of
this lease, zoning ordinances and other building and fire ordinances and
governmental regulations relating to the use of such property, and easements,
restriction and other conditions of record. In the event this lease is a
sublease, then Tenant agrees to take the premises subject to the provisions of
the prior leases. Landlord represents and warrants that it has full right and
authority to enter into this tease
17. Events of Default. The following events shall be deemed to be events
of default by Tenant under this lease.
(a) Tenant shall fail to pay any installment of the rent herein
reserved when due, or any payment, with respect to operating expenses
hereunder when due, or any other payment or reimbursement to Landlord
required herein when due, and such failure shall continue for a period of
five (5) days from the date such payment was due.
(b) Tenant shall become insolvent, or shall make a transfer in fraud
of creditors, or shall make an assignment for the benefit of creditors.
(c) Tenant shall file a petition under any section or chapter of the
National Bankruptcy Code, as amended, or under any similar law or statute
of the United States thereof; or an order for relief shall be entered
against Tenant in an proceedings filed against Tenant thereunder.
(d) A receiver or trustee shall be appointed for all of the assets of
Tenant.
(e) Tenant shall generally not pay its debts as such debts become due.
(f) Tenant shall vacate all or a substantial portion of the premises,
whether or not Tenant is in default of the rental payments due under this
lease.
(g) Tenant shall fail to discharge any lien placed upon the premises
in violation of Paragraph 21 hereof with twenty (20) days after any such
lien or encumbrance is filed against the premises.
(h) Tenant shall fail to comply with any term, provision or covenant
of this lease (other than the foregoing in this Paragraph 17), and shall
not cure such failure within twenty (20) days after written notice thereof
to Tenant.
18. Remedies.
A. Upon the occurrence of any such events of default described in Paragraph 17
hereof, Landlord shall have the option to pursue any one
(a) Terminate this lease, in which event Tenant shall immediately
surrender the premises to Landlord, and if Tenant fails so to do, Landlord
may, without prejudice to any other remedy which it may have for possession
or arrearage in rent, enter upon and take possession of the premises and
expel or remove Tenant and any other person who may be occupying such
premises or any part thereof, by force if necessary, without being liable
for prosecution or any claim of damages therefor.
(b) Enter upon and take possession of the premises and expel or remove
Tenant and any other person who may be occupying such premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, and relet the premises and receive the rent
therefor.
(c) Enter upon the premises, by force if necessary, without being liable
for prosecution or any claim for damages therefor, and do whatever Tenant
is obligated to do under the terms of this lease; and Tenant agrees to
reimburse Landlord on demand for any expenses which Landlord may incur in
thus effecting compliance with Tenant's obligations under this lease, and
Tenant further agrees that Landlord shall not be liable for any damages
resulting to the Tenant from such action, whether caused by the negligence
of Landlord or otherwise.
(d) Alter all locks and other security devices at the premises without
terminating this lease.
In the event Landlord may elect to regain possession of the premises by a
forcible detain proceeding, Tenant hereby specifically waives any statutory
notice which may be required prior to any such proceeding, and agrees that
Landlord's execution of this lease is, in part, consideration for this waiver.
In the event Tenant fails to pay any installment of rent hereunder as and when
such installment is due, to help defray the additional cost to Landlord for
processing such late payments Tenant shall pay to Landlord on demand a late
charge in an amount equal to five percent (5%) of such installment, and the
failure to pay such amount within ten (10) days after demand therefor shall be
an event of default hereunder. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as liquidated damages or as limiting Landlord's remedies
in any manner.
B. Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be in acceptance of surrender of the
premises by Tenant, whether by agreement or by operation of law, if being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. No such alteration of locks or other security devices and
no removal or other exercise of dominion by Landlord over the property of Tenant
or others at the premises shall be deemed unauthorized or constitute a
conversion, Tenant hereby consenting, after any event of default, to the
aforesaid exercise of dominion over Tenant's property within the premises. All
claims for damages by reason of such re-entry and/or repossession and/or
alteration of locks or other security devices are hereby waived, as are all
claims for damages by reason of any distress warrant, forcible detain
proceedings, sequestration proceedings or other legal process. Tenant agrees
that any re-entry by Landlord may be pursuant to judgment obtained in forcible
detainer proceedings or other legal proceedings or without the necessity for any
legal proceedings, as Landlord may elect, and Landlord shall not be liable in
trespass or otherwise.
C. In the event Landlord elects to terminate the lease by reason of an
event of default, then notwithstanding such termination, Tenant shall be liable
for and shall pay to Landlord, at the address specified for notice to Landlord
herein, the sum of all rental and other indebtedness accrued to date of such
termination, plus, as damages, an amount equal to the difference between (i) the
total rental hereunder for the remaining portion of the lease term (had such
term not been terminated by Landlord prior to the date of expiration stated in
Paragraph 1) and (ii) the then present value of the then fair rental values of
the premises for such period.
D. In the event that Landlord elects to repossess the premises without
terminating the lease, then Tenant shall be liable for and shall pay to
Landlord, at the address specified for notice to Landlord herein, all rental and
other indebtedness accrued to the date of such repossession, plus rental
required to be paid by Tenant to Landlord during the remainder of the lease term
until the date of expiration of the term as stated in Paragraph 1 diminished by
any net sums thereafter received by Landlord through reletting the premises
during said period (after deducting expenses incurred by Landlord as provided in
subparagraph 17(E) below). In no event shall Tenant be entitled to any excess of
any rental obtained by reletting over and above the rental herein reserved.
Actions to collect amounts due by Tenant to Landlord under this subparagraph may
be brought from time to time, on one or more occasions, without the necessity of
Landlord's waiting until expiration of the lease term.
E. In case of any event of default or breach by Tenant, or threatened or
anticipatory breach or default, Tenant shall also be liable for and shall pay to
Landlord, at the address specified for notice to Landlord herein, in addition to
any sum provided to be paid above, brokers' fees incurred by Landlord in
connection with reletting the whole or any part of the premises; the costs of
removing and storing Tenant's or other occupant's property; the costs of
repairing, altering, remodeling or otherwise putting the premises into condition
acceptable to a new tenant or tenants; and all reasonable expenses incurred by
Landlord in enforcing or defending Landlord's rights and/or remedies including
reasonable attorney's fees which shall be not less than fifteen percent (15%) of
all sums then owing by Tenant to Landlord whether suit is actually filed or not.
F. In the event of termination or repossession of the premises for an
event of default, Landlord shall not have any obligation to relet or to attempt
to relet the premises, or any portion thereof, or to collect rental after
reletting; and in the event of reletting, Landlord may relet the whole or any
portion of the premises for any period to any tenant and for any use and
purpose.
G. If Tenant should fail to make any payment or cure any default hereunder
within the time herein permitted, Landlord, without being under any obligation
to do so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account of Tenant (and enter the premises for
such purpose), and thereupon Tenant shall be obligated to, and hereby agrees, to
pay Landlord, upon demand, all costs, expenses and disbursements (including
reasonable attorney's fees) incurred by Landlord in taking such remedial action.
H. In the event of any default by Landlord, Tenant's exclusive remedy shall
be an action for damages (Tenant hereby waiving the benefit of any laws granting
it a lien upon the property of Landlord and/or upon rent due Landlord), but
prior to any such action Tenant will give Landlord written notice specifying
such default with particularity, and Landlord shall thereupon have thirty days
in which to cure any such default. Unless and until Landlord fails to so cure
any default after such notice, Tenant shall not have any remedy or cause of
action by reason thereof. All obligations of Landlord hereunder will be
construed as covenants, not conditions; and all such obligations will be binding
upon Landlord only during the period of its possession of the premises and not
thereafter. The term "Landlord" shall mean only the owner, for the time being of
the premises, and in the event of the transfer by such owner of its interest in
the premises, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the lease term upon each new
owner for the duration of such owner's ownership. Notwithstanding any other
provision hereof, Landlord shall not have any personal liability hereunder. In
the event of any breach or default by Landlord in any term or provision of this
lease, Tenant agrees to look solely to the equity or interest then owned by
Landlord in the premises; however, in no event, shall any deficiency judgment or
any money judgment of any kind be sought or obtained against any party Landlord.
I. In the event that Landlord shall have taken possession of the premises
pursuant to the authority herein granted then Landlord shall have the right to
keep in place and use all of the furniture, fixtures and equipment at the
premises, including that which is owned by or leased to Tenant at all times
prior to any foreclosure thereon by Landlord or repossession thereof by any
lessor thereof or third party having a lien thereon. Landlord shall also have
the right to remove from the premises (without the necessity of obtaining a
distress warrant, writ of sequestration or other legal process) all or any
portion of such furniture, fixtures, equipment and other property located
thereon and to place same in storage at any premises within the County in which
the premises is located; and in such event, Tenant shall be liable to Landlord
for costs incurred by Landlord in connection with such removal and storage.
Landlord shall also have the right to relinquish possession of all or any
portion of such furniture, fixtures, equipment and other property to any person
("Claimant") claiming to be entitled to possession thereof who presents to
Landlord a copy of any instrument represented to Landlord by Claimant to have
been executed by Tenant (or any predecessor of Tenant) granting Claimant the
right under various circumstances to take possession of such furniture,
fixtures, equipment or other property, without the necessity on the part of the
Landlord to inquire into the authenticity of said instrument's copy of Tenant's
or Tenant's predecessor's signature thereon and without the necessity of
Landlord making any nature of investigation or inquiry as to the validity of the
factual or legal basis upon which Claimant purports to act; and Tenant agrees to
indemnify and hold Landlord harmless from all cost, expense, loss, damage and
liability incident to Landlord's relinquishment of possession of all or any
portion of such furniture, fixtures, equipment or other property to Claimant.
The rights of Landlord herein stated shall be in addition to any and all other
rights which Landlord has or may hereafter have at law or in equity; and Tenant
stipulates and agrees that the rights herein granted Landlord are commercially
reasonable.
19. Landlord's Lien. In addition to any statutory lien for rent in
Landlord's favor, Landlord shall have and Tenant hereby grants to Landlord a
continuing security interest for all rentals and other sums of money becoming
due hereunder from Tenant, upon all goods, wares, equipment, fixtures,
furniture, inventory, accounts, contract rights, chattel paper and other
personal property of Tenant situated on the premises, and such property shall
not be removed therefrom without the consent of Landlord until all arrearages in
rent as well as any and all other sums of money then due to Landlord hereunder
shall first have been paid and discharged. In the event of a default under this
lease, Landlord shall have, in addition to any other remedies provided herein or
by law, all rights and remedies under the Uniform Commercial Code, including
without limitation the right to sell the property described in this Paragraph 19
at public or private sale upon five (5) days notice to Tenant. Tenant hereby
agrees to execute such financing statements and other instruments necessary or
desirable in Landlord's discretion to perfect the security interest hereby
created. Any statutory lien for rent is not hereby waived, the express
contractual lien herein granted being in addition and supplementary thereto.
20. Mortgages. Tenant accepts this lease subject and subordinate to any
mortgage(s) and/or deed(s) of trust now or at any time hereafter constituting a
lien or charge upon the premises or the improvements situated thereon, provided,
however, that if the mortgagee, trustee, or holder of any such mortgage or deed
of trust elects to have Tenant's interest in this lease superior to any such
instrument in whole or in part, then by notice to Tenant, from such mortgagee,
trustee or holder, this lease shall be deemed superior to such lien, whether
this lease was executed before or after said mortgage or deed of trust. Tenant
shall at any time hereafter on demand execute any instruments, releases or other
documents which may be required by any mortgagee for the purpose of subjecting
and subordinating this lease or making this lease superior to the lien of any
such mortgage.
21. Mechanic's Liens and Tenant's Personal Property Taxes.
A. Tenant shall have no authority, express or implied, to create or place
any lien or encumbrance of any kind or nature whatsoever upon, or in any manner
to bind, the interest of Landlord or Tenant in the premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
premises on which any lien is or can be validly and legally asserted against its
leasehold interest in the premises or the improvements thereon and that it will
save and hold Landlord harmless from any and all loss, cost or expense based on
or arising out of asserted claims or liens against the leasehold estate or
against the right, title and interest of the Landlord in the premises or under
the terms of this lease. Tenant agrees to give Landlord immediate written notice
of the placing of any lien or encumbrance against the premises.
B. Tenant shall be liable for all taxes levied or assessed against personal
property, furniture or fixtures placed by Tenant in the premises. If any such
taxes for which Tenant is liable are levied or assessed against Landlord or
Landlord's property and if Landlord elects to pay the same or if the assessed
value of Landlord's property is increased by inclusion of personal property,
furniture or fixtures placed by Tenant in the premises, and Landlord elects to
pay the taxes based on such increase, Tenant shall pay to Landlord upon demand
that part of such taxes.
22. Notices. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by Landlord to Tenant or with reference to the sending, mailing or delivery of
any notice or the making of any payment by Tenant to Landlord shall be deemed to
be complied with when and if the following steps are taken:
(a) All rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at the address for Landlord
hereinbelow set forth or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith. Tenant's
obligation to pay rent and any other amounts to Landlord under the terms of
this lease shall not be deemed satisfied until in, such rent and other
amounts have been actually received by Landlord.
(b) All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address hereinbelow set forth, or at such
other address within the continental United States as Tenant may specify
from time to time by written notice delivered in accordance herewith.
(c) With the exception of Paragraph 22(a) above, any notice or document
required or permitted to be delivered hereunder shall be deemed to be
delivered whether actually received or not when deposited in the United
States Mail, postage prepaid, Certified or Registered Mail, addressed to
the parties hereto at the respective addresses set out below, or at such
other address as they have theretofore specified by written notice
delivered in accordance herewith:
LANDLORD: TENANT:
Xxxx Xxxxxx Service Center Phase IV CD Warehouse, Inc.
----------------------------------- ------------------------------
Associates 0000 Xxxxxxxxx Xxx
----------------------------------- ------------------------------
c/o Xxxxxxxx Xxxx MW, Inc. Xxxxxxxx Xxxx, Xxxxxxxx 00000
----------------------------------- ------------------------------
0000 X. X. Xxxxxxxxxx, Xxxxx 0000
-----------------------------------
Xxxxxxxx Xxxx, Xxxxxxxx 00000
-----------------------------------
If and when included within the term "Landlord", as used in this instrument,
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice specifying some
individual at some specific address for the receipt of notices and payments to
Landlord; if and when included within the term "Tenant", as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Tenant. All parties
included within the terms "Landlord" and "Tenant", respectively, shall be bound
by notices given in accordance with the provisions of this paragraph to the same
effect as if each had received such notice.
23. Miscellaneous.
A. Words of any gender used in this lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.
B. The terms, provisions and covenants and conditions contained in this
lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, legal representatives, successors and
permitted assigns, except as otherwise herein expressly provided. Landlord shall
have the right to transfer and assign, in whole or in part, its rights and
obligations in the building and property that are the subject of this lease.
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 of such party to enter into this
lease.
C. The captions inserted 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.
D. Tenant agrees from time to time within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this lease is in full force and effect, the date to
which rent has been paid, the unexpired term of this lease and such other
matters pertaining to this lease as may be requested by Landlord. It is
understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this lease.
E. This lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.
F. All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this lease shall survive the
expiration or earlier termination of the term hereof, including without
limitation all payment obligations with respect to taxes and insurance and all
obligations concerning the condition of the premises. Upon the expiration or
earlier termination of the term hereof, and prior to Tenant vacating the
premises, Tenant shall pay to Landlord any amount reasonably estimated by
Landlord as necessary to put the premises, including without limitation all
heating and air conditioning systems and equipment therein, in good condition
and repair. Tenant shall also, prior to vacating the premises, pay to Landlord
the amount, as estimated by Landlord, of Tenant's obligation hereunder for real
estate taxes and insurance premiums for the year in which the lease expires or
terminates. All such amounts shall be used and held by Landlord for payment of
such obligations of Tenant hereunder, with Tenant being liable for any
additional costs therefor upon demand by Landlord, or with any excess to be
returned to Tenant after all such obligations have been determined and
satisfied, as the case may be. Any security deposit held by Landlord shall be
credited against the amount payable by Tenant under this Paragraph 23(F).
G. If any clause or provision of this lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
lease, then and in that event, it is the intention of the parties hereto that
the remainder of this lease shall not be affected thereby, 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 contract a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
H. Because the premises are on the open market and are presently being
shown, this lease shall be treated as an offer with the premises being subject
to prior lease and such otter subject to withdrawal or non-acceptance by
Landlord or to other use of the premises without notice, and this lease shall
not be valid or binding unless and until accepted by Landlord in writing and a
fully executed copy delivered to both parties hereto.
I. All references in this lease to "the date hereof" or similar references
shall be deemed to refer to the last date, in point of time, on which all
parties hereto have executed this lease.
J. Tenant represents and warrants that it has dealt with no broker, agent
or other person in connection with this transaction or that no broker, agent or
other person brought about this transaction, other than Xxxxxxxx Xxxx MW, Inc.
and Xxxxxx X. Xxxxxx Company, and Tenant agrees to indemnify and hold Landlord
harmless from and against any claims by any other broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with Tenant with regard to this leasing transaction.
24. Additional Provisions. Exhibit A (Legal Description); Exhibit B
(Additional Provisions); Exhibit C (Construction); Exhibit C-1 (Landlord's
Improvements); Exhibit D (Rent Schedule); Exhibit E (Option to Renew)
EXECUTED BY LANDLORD, this 17th day of April, 1997.
Xxxx Xxxxxx Service Center Phase IV
Associates by Xxxx-Xxxxx #2, its
managing general partner,
--------------------------------------
Attest/Witness
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------- -----------------------------------
Xxxxxx X. Xxxxxx
Title: Title: Agent
-------------------------------- --------------------------------
EXECUTED BY TENANT, this day of , 1997
------ ---------------------
Attest/Witness CD Warehouse, Inc.
--------------------------------------
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------- -----------------------------------
Title: Title: Executive Vice President
-------------------------------- --------------------------------
EXHIBITS "A" THROUGH "E"
------------------------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
Exhibit "A" - Legal Description
Exhibit "B" - Additional Provisions
Exhibit "C" - Construction
Exhibit "C-1" - Landlord's Improvements
Exhibit "D" - Rent Schedule
Exhibit "E" - Option to Renew
EXHIBIT "A"
-----------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
LEGAL DESCRIPTION
A 42,500 square foot service center complex (comprised of 2 buildings) located
on Lot 2 and Xxx 0, Xxxxx 00, Xxxxxxxxxxx Xx. 0, Xxxxxxxxxxxx Industrial Park,
a part of Section 2, Township 11 North, Range 4 West, Indian Meridian, Oklahoma
City, Oklahoma.
EXHIBIT "B"
-----------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
ADDITIONAL PROVISIONS
24. A. Tenant covenants not to introduce any hazardous or toxic materials
onto the Property without a) first obtaining Landlord's written consent and b)
complying with all applicable federal, state and local laws or ordinances
pertaining to the transportation, storage, use or disposal of such materials,
including but not limited to obtaining proper permits.
If Tenant's transportation, storage, use or disposal of hazardous or toxic
materials on the Property results in 1) contamination of the soil or surface or
ground water or 2) loss or damage to person(s) or property, then Tenant agrees
to respond in accordance with the following paragraph.
Tenant agrees (i) to notify Landlord immediately of any contamination, claim of
contamination, loss or damage, (ii) after consultation and approval by Landlord,
to clean up the contamination at Tenant's cost and in full compliance with all
applicable statutes, regulations and standards, and (iii) to indemnify, defend
and hold Landlord harmless from and against any claims, suits, causes of
action, costs and fees, including attorney's fees, arising from or connected
with any such contamination, claim of contamination, loss or damage. This
provision shall survive termination of this lease.
B. The Tenant agrees that it shall keep and maintain the premises and
the real estate upon which the building is located in compliance with all
applicable state, federal, and local rules, laws, statutes and ordinances
("Laws") and shall make any and all replacements, repairs, modifications or
alterations required from time to time by any such law which may be in effect
as of the date hereof or at anytime in the future during the term of this Lease.
C. This lease shall not be valid or binding unless and until accepted by
Landlord in writing and a fully executed copy is delivered to both parties
hereto.
EXHIBIT "C"
-----------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
CONSTRUCTION
(a) Landlord agrees to furnish or perform those items of construction and
those improvements ("Landlord's Improvements ") as specified in the following
-----------------------
Exhibit "C-l"
(b) If Tenant shall desire any changes, Tenant shall so advise Landlord in
writing and Landlord shall determine whether such changes can be made in a
reasonable and feasible manner. Any and all costs of reviewing any requested
changes, and any and all costs of making any changes to Landlord's Improvements
which Tenant may request and which Landlord may agree to shall be at Tenant's
sole cost and expense and shall be paid to Landlord upon demand and before
execution of the change order. Tenant's share of construction costs shall be
$35,000, with one-half due and payable at the time of lease execution and the
balance due upon the Commencement Date.
(c) Landlord shall proceed with and complete the construction of
Landlord's Improvements within forty-five (45) days of fully lease execution. In
the event construction takes longer than forty-five (45) days and provided that
such delay is not caused by Tenant or its agents or employees, then the
Contractor for the Landlord's Improvements shall pay to Tenant $100.00 per day
for each day of delay. As soon as such improvements have been substantially
completed, Landlord shall notify Tenant in writing of the date that Landlord
Improvements were Substantially Completed. Such date, unless an earlier date is
specified as the Commencement Date in this Lease or otherwise agreed to in
writing between Landlord and Tenant, shall be the "Commencement Date," unless
-----------------
the completion of such improvements was delayed due to Tenant's fault, including
as a result of changes made to such improvements by Tenant, in which case the
Commencement Date shall be the date such improvements would have been completed
but for the delays caused by Tenant. After the Commencement Date Tenant shall,
upon demand, execute and deliver to Landlord a letter of acceptance of delivery
of the Premises.
(d) The failure of Tenant to take possession of or to occupy the Premises
shall not serve to relieve Tenant of obligations arising on the Commencement
Date or delay the payment of rent by Tenant. Subject to applicable ordinances
and building codes governing Tenant's right to occupy or perform in the
Premises, Tenant shall be allowed to install its machinery, equipment, fixtures,
or other personal property on the Premises during the final stages of completion
of construction provided that Tenant does not thereby interfere with the
completion of construction or cause any labor dispute as a result of such
installations, and provided further that Tenant does hereby agree to assume all
risk of loss or damage to such machinery, equipment, fixtures, and other
personal property and to indemnify, defend, and hold Landlord harmless from any
loss or damage to such property, and all liability, loss, or damage arising from
any injury to the Project or the property of Landlord, its contractors,
subcontractors, or materialmen, and any death or personal injury to any person
or persons arising out of such installations, whether or not any such loss,
damage, liability, death, or personal injury was caused by Landlord's
negligence. Delay in putting Tenant in possession of the Premises shall not
serve to extend the term of this Lease or to make Landlord liable for any
damages arising therefrom.
(e) Except for incomplete punch list items, Tenant upon the Commencement
Date, shall have and hold the Premises as the same shall then be without any
liability or obligation on the part of Landlord for making any further
alterations or improvements of any kind in or about the Premises.
EXHIBIT "C-1"
-------------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
LANDLORD'S IMPROVEMENTS
Ceilings
--------
1. Repair existing grid.
2. Replace approximately 3,700 square feet of ceiling tile.
3. Install approximately 2,564 square feet of new ceiling in new office area.
Walls
-----
1. Screw joints of existing vinyl sheetrock.
2. Build approximately 530 linear feet of new 9' high wall.
3. Build approximately 28 linear feet of new 9' high (1) side wall.
4. Patch existing walls.
5. Install corner bead on existing O.S. corners.
6. Install wood studs at door openings.
Millwork
--------
1. Patch wood base in one office.
2. Install wood trim at top of new walls in office area.
3. Patch existing wood trim.
4. Install two (2) vanity tops in restroom.
Doors
-----
1. Relocate sixteen (16) existing doors/frames/hardware.
2. Install eight (8) new doors/frames/hardware (to match existing).
Restroom
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1. Install four (4) grab bars in existing restroom.
2. Install toilet partitions.
3. Install five (5) toilet paper and two (2) paper-towel holders.
4. Install two (2) 5'X3' mirrors.
Paint
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1. Tape, bedd and texture new and existing walls in office area.
2. Stain new doors/frames.
3. Watco finish on existing doors/frames.
4. Paint one (1) unit of upper/lower cabinets.
5. Paint all office area walls and top trim (same color).
Floor Covering
--------------
1. Install approximately 600 square yards of 26-ounce polypropylene level loop
carpet.
2. Install approximately 1,440 square feet of standard VCT tile.
3. Install approximately 765 square feet of premium VCT tile.
4. Install approximately 1,580 linear feet of 4" covebase.
Electric
--------
1. Install ten (10) standard duplex outlets.
2. Install twelve (12) back-to-back duplex outlets.
3. Relocate lights as necessary.
4. Install twenty-nine (29) new 2' X 4' lights.
5. Install one (1) new 2' X 2' light.
6. Install nine (9) new exit lights.
7. Install six (6) new emergency lights.
8. Wiring for two (2) roof-top units.
9. Install fourteen (14) single-pole switches.
10. Install three (3) sets of 3-way switches.
11. Combine two 200-amp electrical services.
EXHIBIT "C-1"
(Continued)
HVAC
----
1. Install one (1) 3-ton and one (1) 4-ton gas/electric roof-top units for
additional office area (includes gas lines).
2. Relocate and paint existing grills as required.
Plumbing
--------
1. Install restroom fixtures as shown on plans
2. Install one (1) mop sink.
Miscellaneous
-------------
1. Install one (1) 5-ton gas/electric and one (1) 4-ton gas/electric roof-top
unit for warehouse (includes concentric diffusers).
2. Install fire sprinkler system.
3. Install four (4) 10 LB fire extinguishers
4. Install exterior window in northwest office (match existing).
5. Provide outlet and hook-up for owner-furnished dishwasher.
6. Change six (6) new doors from hollow core to solid core.
7. Install seal kits on three (3) overhead doors.
8. Roof penetrations for roof-top units and plumbing.
EXHIBIT "D"
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED 4-17-97, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
RENT SCHEDULE
Tenant agrees to pay to Landlord rent for the premises, in advance, without
demand, deduction or set off, for the entire term hereof at the rate described
in the following rent schedule:
Period Monthly Monthly Monthly
Rent CAM* Total
On or about 6/1/97 to 8/31/97 $ 0.00 $267.12 $ 267.12
9/1/97 to 8/31/99 $6,375.25 $267.12 $6,642.37
9/1/99 to 8/31/01 $6,830.63 $267.12 $7,097.75
9/1/01 to 8/31/02 $7,286.00 $267.12 $7,553.12
*Estimate
EXHIBIT "E"
-----------
ATTACHED TO AND MADE A PART OF LEASE AGREEMENT
DATED APRIL 17, 1997, BETWEEN
XXXX XXXXXX SERVICE CENTER PHASE IV ASSOCIATES, LANDLORD,
AND CD WAREHOUSE, INC., TENANT
Option to Renew
(a) Provided that as of the time of the giving of the Extension Notice and
the Commencement Date of the Extension Term, (x) Tenant is the Tenant originally
named herein, (y) Tenant actually occupies all of the Premises initially demised
under this Lease and any space added to the Premises, and (z) no Event of
Default exists or would exist but for the passage of time or the giving of
notice, or both; then Tenant shall have the right to extend the Lease Term for
an additional term of one (1) year (such additional term is hereinafter called
the "Extension term"), commencing on the day following the expiration of the
Lease Term (hereinafter referred to as the "Commencement Date of the Extension
Term "). Tenant shall give Landlord notice (hereinafter called die "Extension
Notice") of its election to extend the term of the Lease Term at least four
months, but not more than two (2) months, prior to the scheduled expiration date
of the Lease Term.
(b) The Base Rent payable by Tenant to Landlord during the Extension Term
shall be the greater of (i) the Base Rent applicable to the last year of the
initial Lease term and (ii) the then prevailing market rate for comparable space
in the Project and comparable buildings in the vicinity of the Project, taking
into account the size of the Lease, the length of the renewal term and the
credit of Tenant. The Base Rent shall not be reduced by reason of any costs or
expenses saved by Landlord by reason of Landlord's not having to find a new
tenant for such premises (including, without limitation, brokerage commissions,
costs of improvements, rent concessions or lost rental income during any vacancy
period). In no event shall Base Rent during the Extension Term be less than
$8.00 per square foot per year. In the event Landlord and Tenant fail to reach
an agreement on such rental rate and execute the Amendment (defined below) at
least one (1) month prior to the expiration of the Lease, then Tenant's exercise
of the renewal option shall be deemed withdrawn and the Lease shall terminate on
its original expiration date.
(c) The determination of Base Rent does not reduce the Tenant's obligation
to pay or reimburse Landlord for operating expenses and other reimbursable
items as set forth in the Lease, and Tenant shall reimburse and pay Landlord as
set forth in the Lease with respect to such operating expenses and other items
with respect to the Premises during the Extension Term without regard to any cap
on such expenses set forth in the Lease.
(d) Except for the Base Rent as determined above, Tenant's occupancy of the
Premises during the Extension Term shall be on the same terms and conditions As
are in effect immediately prior to the expiration of the initial Lease Term;
provided, however, Tenant shall have no further right to any allowances, credits
or abatements or any options to expand contract, renew or extend the Lease.
(e) If Tenant does not give the Extension Notice within the period set
forth in paragraph (a) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice.
(f) Landlord shall have no obligation to refurbish or otherwise improve the
Premises for the Extension Term. The Premises shall be tendered on the
Commencement Date of the Extension Term in "as-is" condition.
(g) If the Lease is extended for the Extension Term, then Landlord shall
prepare and Tenant shall execute an amendment to the Lease confirming the
extension of the Lease Term and the other provisions applicable thereto (the
"Amendment").
(h) If Tenant exercises its right to extend the term of the Lease for the
Extension Term pursuant to this Addendum, the Term "Lease Term" as used in the
Lease, shall be construed to include, when practicable, the Extension Term
except as provided in (d) above.
