LEASE AGREEMENT
STATE OF TEXAS
COUNTY OF El PASO
THIS lEASE AGREEMENT is entered as of the 7th day
of February, 2006, between G 8: K PROPERTIES,
INC., as landlord, and TOTALMED SYSTEMS,
INCORPORATED, as Tenant.
1. lEASED PREMISES. The leased Premises shall consist
of Suite 304, in the building munidpally known as State
National Bank Tower, El Paso, Texas (the "Building").
There are no representations or warranties, including
fitness for intended use or merchantability and the
Premises are leased "as is". By taking possession of
the Premises, Tenant acknowledges and accepts the
Premises "as is"; Tenant acknowledges that these
premises are located on the third (3) floor and that
some of the controls such as the thermostats and others
maybe controls that control adjacent suites' (heating,
air conditioning, and ventilation) and consequently
consideration must be given and granted by the Tenant
if and when requested.
2. TERM. The term of this lease shall commence on
February 15, 2006, (the "Commencement Date") and
terminate on February 28,2009, unless terminated
earlier as hereinafter provided.
3. BASE RENTAl. Tenant hereby agrees to pay a base
annual rental (herein called "Base Rental" and which
sum includes the Initial Basic Cost defined below) in
the sum of $16.200.00, payable, in advance, in monthly
installments of $1,350.00 each, as provic;fed herein.
As all Rental payments are due on the 1st of the month,
Tenant also agrees to pay $675.00 on or before the 15th
day of February, 2006 for the one half month of
February, 2006 and effective March 1, 2006 begin the
first of twelve $1,350.00 monthly installments
furthermore, the Monthly Rental will increase to
$1,417.50 on March 1, 2007 and to $1,488.37 on March 1,
2008. During the term of this lease, the provisions of
paragraph nine (9)(CPI ADUSTMENT) shall not apply.
Tenant shall also pay, as additional rent, all such
other sums of money as shall become due from and
payable by Tenant to Landlord under this lease.
landlord shall have the same remedies for default for
the payment of additional rent as are applicable to
Tenant in the case of a default in the payment of Base
Rental.
4. PERMITTED USE. Tenant shall use and occupy the
leased Premises as office space, and for no other
purpose without prior written consent of landlord.
Tenant shall not use the leased Premises, nor permit
any use, that increases risks covered by insurance or
causes cancellation thereof.
5. SECURITY DEPOSIT. Concurrently with Tenanfs
execution of this lease, Tenant agrees to and shall
deposit $1,350.00 on deposit with the landlord,
without obligation for interest or segregation, as
security for performance of Tenanfs covenants and
obligations under this
lease, it being expressly understood and agreed that
such deposit is not an advance rental deposit or a
measure of landlord's damages in case of Tenanfs
default. Upon the occurrence of any default by Tenant,
landlord may, without prejudice to any other available
remedy, use such fund to make good any rent arrearage
or any other damage, injury, expense or liability
caused by such event of default and Tenant shall pay
the landlord, on demand, the amount so applied in order
to restore the security deposit to its original amount.
If the Premi5e$ are sold and landlord assigns the
deposit to the Purchaser, landlord shall be discharged
from all further liability.
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6. GRANTING CLAUSE. In consideration of the obligation
of Tenant to pay rent and other
charges as herein provided and in consideration of
other terms, covenants and conditions hereof and
subject thereto, Landlord hereby leases to Tenant, and
Tenant hereby takes from Landlord the Leased Premises
as described in Paragraph 1 TO HAVE AND TO HOLD said
premises for the lease term spedfied in Paragraph 2,
all upon the terms and conditions set forth in this
lease.
7. DELIVERY AND POSSESSION. This lease shall not be
rendered void or void able by Landlord's failure or
inability to deliver possession on the commencement
date. If Landlord is unable to deliver possession on
the commencement date, this Lease shall be deemed to
commence on the date Landlord tenders possession.
8. PAYMENT OF BASE RENTAL. The Base Rental, together
with any adjustment of rent provided for herein, shall
be due and payable in equal monthly installments on the
first day of each calendar month during the term of
this Lease, beginning on the Commencement Date, and
Tenant hereby agrees to so pay such rent to Landlord at
Landlord's address as provided herein (or such other
address as may be designated by Landlord from time to
time) monthly in advance without demand, counterclaim
or setoff. If the term of this Lease as heretofore
described commences on other than the first day of a
calendar month or terminates on other than the last day
of a calendar month, then the installment or
installments of Base Rental for such month or months
shall be prorated and the installment or installments
so prorated shall be paid in advance.
9. CPI ADJUSTMENT. At the end of the first Lease year
(as hereinafter defined) and every Lease year
thereafter (including any renewal periods) the Base
Rental provided for in Paragraph 3 above shall be
adjusted by adding to Base Rental the "Add-on Factor".
The one (1) year periods are each hereinafter referred
to as an "Adjustment Period". As used herein, the "Add-
on Factor" shall mean the "Add-on Sum" minus "Net Base
Rental"; "Add-on Sum" shall mean a sum determined by
multiplying the "Net Base Rental" by the "Adjustment
Factor"; "Net Base Rental" shall mean the Base Rental
described above minus Initial Basic Cost, and
"Adjustment Factor" shall mean a fraction, the
numerator of which is the "CPI" published immediately
preceding the applicable anniversary date and the
denominator of which is the "CPI" published immediately
preceding the commencement date of the term of this
Lease. "CPI" shall mean the United States Average
(1982-84 '" 100), as published bi-monthly (or if the
same shall no longer be published bi-monthly, on the
most frequent basis available) by the Bureau of Labor
Statistics, U.S. Department of Labor (but if such is
subject to adjustment later, the later adjusted index
shall be used).
The Adjusted Rental shall be the new Base Rental of the
Premises effective as of the first day of the
applicable Adjustment Period. Notwithstanding the
foregoing calculation, the yearly percentage rent
adjustment pursuant to this Paragraph 9 shall in no
event be less than FIVE percent (5%) per year. Tenant
shall continue payment of the Base Rental in effect for
the expiring Adjustment Period until notified by
Landlord of any increase in such Base Rental. Such
notification shall include a memorandum showing the
calculations used by Landlord in determining the new
Base Rental. On the first day of the calendar month
immediately succeeding receipt of such notice, Tenant
shall commence payment of the new Base Rental spedfied
in the notice, and shall also pay to Landlord with
respect to the month(s) already expired, the excess of
the required monthly rentals spedfied in the notice
over the monthly amounts actually paid by Tenant.
9.1 DELINQUENT PAYMENTS AND HANDLING CHARGE. All Rent
and other payments required of Tenant hereunder shall
bear interest from the date due until the date paid at
fifteen percent (15%) per annum. Alternatively,
Landlord may charge Tenant, as additional Rent
hereunder, a fee equal to five percent of the
delinquency payment to reimburse Landlord for its cost
and inconvenience incurred as a consequence of Tenant's
delinquency. In no event, however, shall the charges
permitted under this Section 9.1 or elsewhere in this
Lease, to the extent the same are considered to be
interest under applicable law, exceed the maximum rate
of interest allowable under applicable law.
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10. SPECIFICALLY PROHIBITED USES. Tenant will not (a)
use, occupy or permit the use or occupancy of the
Leased Premises for any purpose or in any manner which
is or may be, directly or indirectly, violative of any
legal requirement, or dangerous to life or pro~rty, or
a public or private nuisance or disruptive or obtrusive
to any other tenant of the Building, (b) keep, or
permit to be kept, any substance in or conduct, or
permit to be conducted, any operation from the Leased
Premises which might emit offensive odors or conditions
into other portions of the Building, or make undue
noise or create undue vibrations, (c) commit or permit
to remain any waste to the Leased Premises, (d) install
or permit to remain any improvements to the Leased
Premises which exceed the structural loads of floors or
walls of the Building, or adversely affect the
mechanical, plumbing or electrical systems of the
Building or affect the structural integrity of the
Building in any way, (e) install any food, soft drink
or other vending machine, or (f) commit, or permit to
be committed, any action or circumstance in or about
the Building which, directly or indirectly, would or
might justify any insurance carrier in canceling or
increasing the premium on the fire and extended
coverage insurance policy maintained by Landlord on the
Building or contents, and if any increase results from
any act of Tenant, then Tenant shall pay such increase
promptly upon demand therefore by landlord.
11. HAZARDS. Tenant shall not, without Landlord's prior
written consent, place anything within the Leased
Premises, or perform any act or omission whatsoever
which shall invalidate any insurance policy carried on
the Leased Premises. All property kept, stored or
maintained on the premises by Tenant shall be at
Tenant's sole risk.
12. MAINTENANCE AND REPAIR OF PREMISES. Tenant shall,
during the term of this Lease, maintain the Leased
Premises in a condition fit for its intended use,
reasonable wear and tear excepted, and will make all
necessary repairs and maintenance. Landlord shall
provide, at its sole cost and expense, janitorial
service which Landlord deems necessary and reasonable.
12.1 TENANTS ADDITIONAL OBLIGATIONS. In addition to
Tenant's obligations pursuant to
Paragraph 12, which obligations are not to be limited
by this Paragraph, Tenant shall not allow any person
on the premises with its permission to destroy,
deface, damage, impair, or remove any part of the
Leased Premises or appurtenances thereto. Tenant shall
advise Landlord in writing of all repairs or
maintenance which are necessary.
13. ALTERATIONS. No alternation, addition, or
improvement to the Leased Premises shall be made by
the Tenant without written consent of the Landlord.
Any alteration, addition or improvement made by the
Tenant after such consent shall have been given, and
any fixtures, will belong to Landlord without
compensation to Tenant at the expiration or
termination of this Lease. Tenant hereby agrees to
indemnify and hold Landlord harmless from any claims
that may be made against Landlord or the Leased
Premises arising from such alterations, additions,
improvements, and fixtures. No alteration may be made
that would conflict with any existing provision of any
real estate mortgage on the Leased Premises.
13.1 REMOVAL. All alterations, additions,
improvements and fixtures which may be made or
installed by either party upon the Leased Premises
shall remain upon and be surrendered with the Leased
Premises and become the Property of Landlord at the
termination of this
Lease, unless Landlord requests their removal in
which event Tenant shall promptly remove the same and
restore the Leased Premises to the original condition
at Tenant's expen$e.
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13.2 NO LIENS. Tenant shall permit no liens or
encumbrances to attach to the leased Premises in
connection with work or materials furnished on behalf
of Tenant. If any such liens do attach, Tenant will do
all acts necessary to discharge such liens within
thirty (30) days; or if Tenant desires to contest said
liens, then Tenant will deposit with Landlord an
adequate and reasonable security to insure the payment
of the lien claims. In the event Tenant fails to pay
any lien claims when due, or fails to deposit the
security with the landlord, the landlord will have the
right to expend all sums necessary to discharge the
lien claims and TenClnt will pay within thirty (30)
days after written demand all sums expended by landlord
in discharging any liens including attorney's fees and
costs. Tenant's delay in payment of such amounts when
due will incur an additional late charge computed at
the rate of fifteen percent (15%) per annum until paid.
13.3 RIGHT OF ENTRY AND INSPECTION. Tenant will permit
landlord or Landlord's duly
authorized agent, employee or representative, to
enter upon the leased Premises at all reasonable
times for the purpose, in Landlord's sole discretion,
of inspecting same or of making such repairs as it
deems necessary for the safety and preservation of
the premises. Any such repairs, however, will not be
deemed to be a waiver of Tenant's obligations as set
forth in Paragraph 12 and 12.1.
14. UTILITIES AND SERVICES BY LANDLORD. Landlord shall
be solely responsible for, and promptly pay prior to
delinquency, all charges for gas, electridty, sewer,
water, or other utility installed, used or consumed in
the leased Premises, except telephone service, which
shall be the responsibility of the Tenant.
Notwithstanding the foregoing, Tenant shalt pay for all
electridty consumed through any individual electrical
meter(s) or submeter(s) serving Tenant's office space.
Service through individual electrical meters which
exclusively serve Tenant's office space shall be in the
name of Tenant. In addition to the utilities provided
herein, landlord, in its sote discretion, shall furnish
to Tenant the following services:
(a) air conditioning and heating as reasonably required
for comfortable use and occupancy under normal
conditions from 8:00 a.m. to 5:00 p.m. on Monday
through Friday and on Saturday from 8:00 a.m. to 1:00
p.m. (but not on New Year's Day, Memorial Day, July
4th, Labor Day, Thanksgiving or Christmas) so long as
these times and dates comply with present and future
governmental laws or guidelines;
(b) water for drinking, lavatory, toilet purposes, and
sanitary sewer in common areas or other areas
determined by Landlord;
(c) janitorial and cleaning services,
as needed, for the building;
(d) electridty for standard office equipment
and building standard lighting;
(e) trash collection services
(dumpsters or garbage cans);
(f) pest control services as needed in the
reasonable judgment of Landlord;
(g) landscaping and parking lot
maintenance services;
(h) repair and maintenance which landlord deems
necessary and reasonable;
(i) elevator
service.
14.1 EXTRA ELECTRICITY. There shall be no electridty
charges for typewriters, wordprocessor, dictating
equipment, adding machines, desk top calculators,
lamps, or other standard 19 volt office equipment.
However, Tenant shall pay Landlord monthly, as ~iUed,
for charges which are separately metered or which
Landlord may reasonably compute for electridty
utilized by Tenant for any equipment operated off a
220 volt line, or other electrical service not
standard for the building.
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14.2 EXTRA HEATING OR AIR CONDITIONING. If Tenant
requests air conditioning or J1eating
after hours as set forth in Paragraph 14 (a), landlord
may charge Tenant the same extra hourly fee per square
foot charged for after-hour air conditioning or
heating as charged to other tenants in the Building.
14.3 UTILITY INTERRUPTION. landlord shall not be
liable for any interruption or failure whatsoever in
utility services, and shall be held harmless from
any liability for all such charges.
15. PARKING AND USE OF COMMON AREA
AND FACILITIES.
15.1 COMMON AREA. All parking areas, access roads, and
other fadlities furnished, made available or
maintained by landlord in or near the Building,
provided by landlord for the general use in common of
tenants and their customers in the building (all
herein coll~tively called the "Common Area") shall at
all times be subject to the exclusive control and
management of landlord, and landlord shall have the
right, from time to time, to es~ablish, modify and
enforce reasonable rules and regulations with respect
to the Common Area. landlord shall have the right from
time to time, to perform any acts in the Common Area
or promulgate any rules which landlord, in its sole
discretion, deems advisable for the XXxx thereof by
Tenants and their customers.
15.2 USE OF COMMON AREA. Tenant and Tenant's business
invitees, employees and
customers shall have the nonexclusive rights, in common
with landlord and all others to whom landlord has
granted to or may hereafter grant rights, to use the
Common Area, subject to such reasonable regulations as
landlord may from time to time impose and the rights of
landlord set forth above. Tenant shall pay landlord,
upon demand, $9.00 for each day on which a car of
Tenant or a concessionaire, employee or agent of Tenant
is parked outside any area designated by the parking
areas adjacent to the Building for Tenant's employees,
agents and concessionaires. Tenant authorizes landlord
to cause any such car to be towed from the Building and
Tenant shall reimburse landlord for the cost thereof
upon demand, and otherwise indemnify and hold landlord
harmless with respect thereto. Tenant shall abide by
all reasonable rules and regulations established by
landlord and delivered to Tenant, and cause its
concessionaires, officers, employees, agents,
customers, and invitees to abide thereby. landlord may
at any time close temporarily all or any part of the
Common Area to make repairs or changes to prevent the
acquisition of the public rights therein, to discourage
non-customer parking, or for any other reasonable
purpose. Tenant shall furnish landlord license numbers
and descriptions of cars used by Tenant and its
concessionaires, officers and employees. Tenant shall
not interfere with the other Tenant's rights to use any
part of the Common Area.
16. INDEMNITY AND PUBLIC LIABILITY INSURANCE.
16.1 INDEMNITY. Tenant agrees to indemnify and hold
landlord harmless against any and all liabilities,
damages, claims, suits, cost (including court costs and
attorneys fees for the defense thereof) arising from
Tenant's, or Tenant's employees, agents,
representatives, use of the leased Premises or from any
breach on the part of Tenant of any condition of this
lease, or from any act or negligence or misconduct of
Tenant, its agents, contractors, employees, sub lessee,
concessionaires or licensees in or about the leased
Premises, or of any other person entering the leased
Premises under the express or implied invitation of
Tenant, or arising out of any breach or default by
Tenant in the performance of its obligations hereunder
or resulting from any other cause. In case of any
action or proceeding brought against landlord by reason
of any such claim, Tenant, upon notice from landlord,
covenants to defend such action or proceeding brought
against landlord by reason of such claim.
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16.2 PUBLIC LIABILITY INSURANCE. Tenant shall take out
and keep in force and effect
during the term hereof, at Tenant's expense, public
liability and property damage ins\Jrance with limits
of liability not less than $1,000,000.00 per
occurrence insuring against any and aU liability of
the insured with respect to personal injury or death,
arising out of the maintenance, use or occupancy of
the premises, and in an amount of not less than
$1,000,000.00 in the general aggregate for bodily
injury and property damage, all in companies and with
policies in form satisfactory to Landlord. Said
policies shall name both Tenant and Landlord as
insured as their respective interest may appear.
16.3 PLATE GLASS. Tenant, during the term of this
Lease, shall carry full coverage insurance on all
plate glass in the Leased Premises and cause the
same to be replaced if chipped, cracked or broken.
16.4 PERSONAL PROPERTY. Tenant shall be solely
responsible for paying the cost of insurance covering
Tenant's personal property or the personal property
of Tenant's agents, employees, or sublessee. Personal
property and trade fixtures shall remain property of
Tenant. All other fixtures, improvement, alterations
(permitted herein) or additions shall become property
of Landlord. All property of Tenant in the premises
are kept there etween the parties or their
successors in interest or between the parties and such
purchaser, at Purchaser's option, to have assumed and
agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease.
27.17 LIABILITY LIMITATION. Tenant spedfically agrees
to look solely to Landlord's interest in the Property
for the recovery of any judgment from Landlord, it
being agreed that Landlord shall never be personally
liable for any such judgment. The provision contained
in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have
to obtain injunctive relief against Landlord or
Landlord's successors in interest, or any other action
not involving the personal liability of Landlord or
Landlord to respond in monetary damages from assets
other than Landlord's interest in the Property or any
suit or action in connection with enforcement or
collection of amounts which may become owing or payable
under or on account of insurance maintained by
Landlord.
27.18 LIMITATIONS OF LIABILITY. The obligations of
Landlord under this Lease do not constitute personal
obligations of the individual partners, trustees,
directors, officer!; or shareholders of Landlord or
any of their personal assets for satisfaction of any
liability in respect to this Lease.
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27.19 MODIFICATION FOR LENDER. If, in connection with
obtaining construction, interim or permanent financing
for the Building, the lender shall request reasonable
modifications in thi~ Lease as a condition of such
financing, Tenant will not unreasonably withhold, delay
or defer its consent thereto, provided that such
modifications do not increase the obligations of Tenant
hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's rights hereunder.
27.20 ACCORD AND SATISFACTION. No payment by Tenant or
receipt by Landlord of a lesser amount than the rent
payment herein stipulated shall be deemed to be other
than on account of the rent, nor shall any endorsement
or statement on any check or any letter accompanying
any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to
recover the balance of such rent or pursue any other
remedy provided in this Lease.
27.21 FINANCIAL STATEMENTS. At any time during the term
of this Lease, Tenant shall, upon ten (10) days prior
written notice from Landlord, provide Landlord with a
current financial statement and finandal statements of
the two (2) years prior to the current finandal
statement year. Such statement shall be prepared in
accordance with generally accepted accounting prindples
and if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant.
If Landlord in its sole discretion deems Tenant
financiaUy unstable or unsound, Landlord may terminate
this Lease.
27.22 Landlord reserves the right to move Tenant to a
comparable space elsewhere in the Building upon
thirty (30) days notice and all terms hereof shall
continue in effect. a
27.23 Tenant shall pay any brokers representing
Tenant in connection with this Lease and Landlord
shall pay any brokers representing it.
27.24 Tenant shall not use, store, possess or allow
others to do so, any toxic or hazardous substances
on, in, or about the Leased Premises, Building or
land on which the same are situated.
EXECUTED as of the 7th day
of February, 2006.
TotalMed Systems, Incorporated.
Tenent"
By: Xxxxx X Xxxxxxxx, COO
Its: President
G & K Properties Incorporated
By: Xxxx X. Xxxx
Its: President
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28. GUARANTY. The undersigned Guarantors (herein, so
called, whether one or more, jointly and severally),
for and in consideration of the premises and other good
and valuable consideration paid, the receipt of which
is hereby acknowledged and for the further
consideration of inducing Landlord to make, agree and
execute this Lease, does hereby unconditionally
guarantee to Landlord, its successors, heirs, legal
representatives ancl assigns, during the initial and
extension terms hereof, the full, punctual and prompt
payment of all rental and construction or remodeling
costs as hereinafter set forth, without limitation, and
any other sums due by Tenant to Landlord required under
said Lease, and further agrees to be bound by, perform
and observe each and every covenant and obligation of
Tenant un(ter this Lease, without limitation, with the
same force and effect as if Guarantors were designated
in and had executed this Lease as Tenant hereunder.
This is a guarantee of payment and not a guarantee of
collection. This guarantee shall terminate only upon
payment to Landlord of all rental and other sums
required under this Lease and the performance by Tenant
of all of its obligation hereunder. The obligations of
Guarantors herein shall be extensive with and remain in
effect as long as Tenant's obligations hereunder, and
all extensions and modifications thereof, and shall
continue as long as Tenant shall be liable, and to the
same extent and manner as Tenant.
Guarantors agree that this contract is performable in
El Paso County, Texas, and Guarantors waive the right
to be sued elsewhere. Guarantors further agree that
Landlord may bring suit against the Guarantors
separately without having to contemporaneously or
previously xxx the other Guarantors or exhaust remedies
against Tenant.
Guarantors agree that Landlord and Tenant may without
notice to or consent by Guarantors at any time enter
into codifications, extensions, amendments or other
covenants respecting this Lease, and the Guarantors
will not be released thereby, it being intended that
any joinder, waiver, consent or agreement by Tenant by
its own operation shall be deemed to be a joinder,
consent, waiver or agreement by Guarantors with respect
thereto, and that Guarantors shall continue as
Guarantors with respect to this Lease as so modified,
extended, amended or otherwise affected.
This Guaranty shall be binding upon Guarantors and
their respective heirs, successors, assigns and legal
representatives, and shall inure to the benefit of
Landlord, his successors, heirs, legal representatives
and assigns. The transfer or assignment by Landlord of
the Lease shall operate as a transfer or assignment to
the transferee or assignee of this Guaranty amI all
rights and privileges hereunder. All references herein
to "Landlord" shall mean that Landlord named above and
any subsequent owner of the Leased Premises, and any
interest therein.
(GUARANTOR lS)
(Signature)
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