EXHIBIT 10.38
LEASE AGREEMENT
ARTICLE I: BASIC TERMS
1.01. Date of Lease: June 1, 1998
1.02. Landlord: Xxxxxxx X. Ranger
Address of 00000 X.X. Xxxxxxx Xxxxx Xx.
Landlord: Xxxxxxxxxxx, XX 00000
1.03. Tenant: Xxxxxxxxxxxx Audio/Visual Solutions
Address of 0000 Xxxxx Xxxxx
Xxxxxx: Xxxxxx, XX 00000
1.04. Property (Include street address, as well as legal description and
approximate square footage):
An approximately 6,100 s.f. portion out of a larger 50,000 s.f. masonry building
situated on part of Block 4/6491, located in Kings Row VI Addition, an Addition
to the City of Dallas, Texas, as recorded in Volume 77199, pp 1034 of the Deed
Records of Dallas County, Texas and known locally as 00000 XXXX XXXXXXX XXXXX,
Xxxxxx, Xxxxx.
1.05. Lease Term: Thirty-six months, beginning on June 1, 1998, and
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ending on May 31, 2001.
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1.06. Rent: $1,906.00
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Dollars ($1,906.00) per month.
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1.07. Security Deposit: $1,906.00
1.08. Permitted Use (see Section 6.01): Officing, warehousing and sales/lease of
audio/visual equipment.
1.09. Principal REALTOR (If none, so state): Xxx Xxxx of Warehouse Properties
Address: 0000 X. Xxxxxxxx Xxxx., #X00
Xxxxxx, XX 00000
1.10. Cooperating REALTOR (If none, so state:) n/a
Address:
1.11. REALTOR'S Commissions (See Article Fourteen):
A. Commissions due to the undersigned Principal REALTOR shall be
calculated and paid in accordance with paragraph (a) or (b) or Section 14.01
(Strike out inapplicable letter).
B. The percentage applicable in Sections 14.01 and 14.02 shall be six
percent (6%).
1.12. Base Year for Taxes (see Section 4.02): 1997
1.13. Party to Receive Payments from Tenant Hereunder:
Landlord/Principal REALTOR (strike one)
1.14. Daily Late Charge (See Section 3.03): After the 5th day, Twenty-Five
Dollars ($25.00) per day.
1.15. Acceptance (see Section 15.13):
The number of days for acceptance shall be seven (7) days.
ARTICLE II.: LEASE AND LEASE TERM
2.01. Lease of Property for Lease Term. Landlord leases the Property to Tenant
and Tenant leases the Property from Landlord for the Lease Term stated in
Section 1.05. As used herein, the "Commencement Date" shall be the date
specified in Section 1.05 for the beginning of the Lease Term, unless advanced
or delayed under any provision of this Lease.
2.02. Delay in Commencement. Landlord shall not be liable to Tenant if Landlord
does not deliver possession of the Property to Tenant on the first date
specified in Section 1.05 above. Landlord's non-delivery of the Property to
Tenant on that date shall not affect this Lease or the obligations of Tenant
under this Lease. However, the Commencement Date shall be delayed until
possession of the Property is delivered to Tenant. The Lease Term shall be
extended for a period equal to the delay in delivery of possession of the
Property to Tenant, plus the number of days necessary to end the Lease Term on
the last day of a month. If Landlord does not deliver possession of the Property
to Tenant within sixty (60) days after the first date specified in Section 1.05
above, Tenant may elect to cancel this Lease by giving written notice to
Landlord within ten (10) days after the 60-day period ends. If Tenant gives such
notice, the Lease shall be cancelled effective as of the date of its execution,
and no party hereto shall have any obligations, one to the other. If Tenant does
not give such notice, Tenant's right to cancel the Lease shall expire and the
Lease Term shall commence upon the delivery of possession of the Property to
Tenant. If delivery of possession of the Property to Tenant is delayed, Landlord
and Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the Commencement Date and expiration date of the Lease.
2.03. Early Occupancy. If Tenant occupies the Property prior to the Commencement
Date, Tenant's occupancy of the Property shall be subject to all of the
provisions of this Lease. Early occupancy of the Property shall not advance the
expiration date of this Lease. Tenant shall pay Base Rent and all other charges
specified in this Lease for the occupancy period.
2.04. Holding Over. Tenant shall vacate the Property upon the expiration or
earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages incurred by Landlord from any delay by
Tenant in vacating the Property. If Tenant does not vacate the Property upon the
expiration or earlier termination of the Lease, Tenant's occupancy of the
Property shall be a "month-to-month" tenancy, subject to all of the terms of
this Lease, applicable to a month-to-month tenancy, subject to all the terms of
this Lease applicable to a month-to-month tenancy, except that the Base Rent
then in effect shall be increased by fifty percent (50%).
ARTICLE III: RENT AND SECURITY DEPOSIT
3.01. Manner of Payment. All sums to become due hereunder by Tenant shall be
made to the party named in Section 1.13 above, at the address stated herein for
such party, unless such address is changed as provided herein. Any and all
payments made to the Principal REALTOR for the account of Landlord shall be
deemed made to Landlord when received by the Principal REALTOR. All sums payable
by Tenant hereunder, whether or not expressly denominated as rent, shall
constitute rent for the purposes of section 502(b)(7) of the Bankruptcy Code.
3.02. Time of Payment. Upon execution hereof, Tenant shall pay the rent for the
first month of the Lease Term. On or before the first day of the second month of
the Lease Term and of each month thereafter, a like monthly installment shall be
due and payable, in advance, without off-set, deduction or prior demand. If the
Lease Term commences or ends during a calendar month, the rent for any
fractional calendar month following the Commencement Date or preceding the end
of the Lease Term shall be prorated by days.
3.03. Late Charges. Tenant's failure to pay sums due hereunder promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, deed of trust or mortgage encumbering
the Property. Therefore, if any sum due hereunder is not received on its due
date, Tenant shall pay the party named in Section 1.13 above a late charge equal
to the sum stated in Section 1.14 above for each day from its due date until
such delinquent sum is received. If any check tendered in payment of any sum due
from Tenant hereunder is returned for any reason, Tenant shall pay a late charge
for each day from said due date until such check is made good. The parties agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment of such returned check.
3.04. Security Deposit. Upon execution hereof, Tenant shall deposit with the
party named in Section 1.13 above a cash Security Deposit in the sum stated in
Section 1.07. Landlord may apply all or part of the Security Deposit to any
unpaid rent or other charges due from Tenant or to cure any other defaults of
Tenant. If Landlord uses any part of the Security Deposit, Tenant shall restore
the Security Deposit to its full amount within ten (10) days after Landlord's
written request. Tenant's failure to do so shall be a material default under
this Lease. No interest shall be paid on the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts
and no trust relationship is created with respect to the Security
Deposit. Upon any termination of this Lease not resulting from Tenant's default,
and after Tenant has vacated the Property in the manner required by this Lease.
Landlord shall refund the unused portion of the Security Deposit to Tenant.
ARTICLE IV.: TAXES
4.01. Payment by Landlord. Landlord shall pay the real estate taxes on the
Property during the Lease Term.
4.02. Payment by Tenant. Tenant shall pay the party named in Section 1.13 above,
as additional rental, the excess, if any, of the real estate taxes for any year
during the Lease Term over the real estate taxes for the base year stated in
Section 1.12. Tenant shall make such payment within fifteen (15) days after
receipt of a statement showing the amount and computation of such increase.
Tenant shall be responsible for the pro-rata portion of such additional rental
for any fractional part of a year preceding the end of the Lease Term, which
prorated sum shall be due and payable upon the termination of this Lease. If the
termination of this Lease occurs before the tax rate is fixed for the particular
year, the proration shall be upon the basis of the tax rate for the preceding
year applied to the latest assessed valuation, and notwithstanding the
termination of this Lease, any difference in the actual real estate taxes for
such year shall be adjusted between the parties upon receipt of written evidence
of the payment thereof.
4.03. Improvements by Tenant. In the event the real estate taxes levied against
the Property for the real estate tax year in which the Lease Term commences are
increased as a result of any alterations, additions or improvements made by
Tenant or by Landlord at the request of Tenant, Tenant shall pay to Landlord
upon demand the amount of such increase. For the purposes of the calculations
under Section 4.02, the amount of the real estate taxes during the real estate
tax year in which the Lease Term commences shall not include any taxes resulting
from any such alterations, additions or improvements made in or to the Property.
Landlord shall obtain from the tax assessor or assessors a written statement of
the total amount of such increase.
4.04. Joint Assessment. If the real estate taxes are assessed against the
Property jointly with other property not constituting a part of the Property,
the real estate taxes for such years shall be equal to the amount bearing the
same proportion to the aggregate assessment that the total square feet of
building area in the Property bears to the total square feet of building area
included in the joint assessment.
4.05. Personal Property Taxes. Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to
Tenant. Tenant shall try to have its personal property taxed separately from the
Property, but if any of Tenant's personal property is taxed with the Property,
Tenant shall pay the taxes for the personal property within fifteen (15) days
after Tenant receives a written statement for such personal property taxes.
ARTICLE V.: INSURANCE AND INDEMNITY
5.01. Casualty Insurance. During the Lease Term, Landlord shall maintain
policies of insurance covering loss of or damage to the Property in such amount
or percentage of replacement value as Landlord or its insurance advisor deems
reasonable in relation to the age, location, type of construction and physical
condition of the Property and the availability of such insurance at reasonable
rates. Such policies shall provide protection against all perils included within
the classification of fire and extended coverage and any other perils which
Landlord deems necessary. Landlord may obtain insurance coverage for Tenant's
fixtures, equipment or building improvements installed by Tenant in or on the
Property. Tenant shall, at Tenant's expense, maintain such primary or additional
insurance on its fixtures, equipment and building improvements as Tenant deems
necessary to protect its interest. Tenant shall not do or permit to be done
anything which invalidates any such insurance polices. Any casualty insurance
which may be carried by Landlord or Tenant shall be for the sole benefit of the
party carrying such insurance and under its sole control.
5.02. Increase in Premiums. Tenant shall not permit any operation or activity to
be conducted or storage or use of any volatile or any other materials on the
Property that would cause suspension or cancellation of any fire and extended
coverage insurance policy carried by Landlord, or increase the premiums
therefor, without the prior written consent of Landlord. If Tenant's use and
occupancy of the Property causes an increase in the premiums for any fire and
extended coverage insurance policy carried by Landlord on the day before Tenant
shall have first gone into possession of the Property under this Lease, Tenant
shall pay, as additional rental, the amount of such increase to Landlord upon
demand and presentation of written evidence of the increase by Landlord.
5.03. Liability Insurance. During the Lease Term, Tenant shall maintain a policy
of comprehensive public liability insurance, at Tenant's expense, insuring
Landlord against liability arising out of the ownership, use, occupancy or
maintenance of the Property. The initial amount of such insurance shall be at
least $1,000,000, and shall be subject to periodic increase based upon
inflation, increased liability awards, recommendation of professional insurance
advisors, and other relevant factors. However, the amount of such insurance
shall not limit Tenant's liability nor relieve Tenant of any obligation
hereunder. The policy shall contain cross-liability endorsements, if applicable,
and shall insure Tenant's performance of the indemnity provisions of Section
5.04. Such policy shall contain a provision which prohibits cancellation or
modification of the policy except upon thirty (30) days' prior written notice to
Landlord. Tenant may discharge its obligations under this Section by naming
Landlord as an additional insured under a policy of comprehensive liability
insurance maintained by Tenant and containing the coverage and provisions
described in this Section. Tenant shall deliver a copy of such policy or
certificate (or a renewal thereof) to Landlord prior to the Commencement Date
and prior to the expiration of any such policy during the Lease Term. If Tenant
fails to maintain such policy, Landlord may elect to maintain such insurance at
Tenant's expense. Tenant shall, at Tenant's expense, maintain such other
liability insurance as Tenant deems necessary to protect Tenant.
5.04. Indemnity. Landlord shall not be liable to Tenant or to Tenant's
employees, agents or visitors, or to any other person, whomsoever, for any
injury to persons or damage to property on or about the Property or any adjacent
area owned by Landlord caused by the negligence or misconduct of Tenant, its
employees, subtenants, licensees or concessionaires or any other person entering
the Property under express or implied invitation of Tenant, or arising out of
the use of the property by Tenant and the conduct of its business therein, or
arising out of any breach or default by Tenant in the performance of its
obligations hereunder; and Tenant hereby agrees to indemnify Landlord and hold
it harmless from any loss, expense or claims arising out of such damage or
injury. Tenant shall not be liable for any injury or damage caused by the
negligence or misconduct of Landlord, or its employees or agents, and Landlord
agrees to indemnify Tenant and hold it harmless from any loss, expense or damage
arising out of such damage or injury.
5.05. Waiver of Subrogation. Each party hereto waives any and every claim which
arises or may arise in its favor against the other party hereto during the term
of this Lease or any renewal or extension thereof for any and all loss of, or
damage to, any of its property located within or upon, or constituting a part
of, the Property, which loss or damage is covered by valid and collectible fire
and extended coverage insurance policies, to the extent that such loss or damage
is recoverable under such insurance policies. Such mutual waivers shall be in
addition to, and not in limitation or derogation of, any other waiver or release
contained in this Lease with respect to any loss of, or damage to, property of
the parties hereto. Inasmuch as such mutual waiver will preclude the assignment
of any aforesaid claim by way of subrogation or otherwise to an insurance
company (or any other person), each party hereby 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 such mutual waivers, and to
cause such insurance policies to be properly endorsed, if necessary, to prevent
the invalidation of such insurance coverages by reason of such waivers.
ARTICLE VI.: USE OF PROPERTY
6.01. Permitted Use. Tenant may use the Property only for the permitted use
stated in Section 1.08.
6.02. Compliance with Law. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Property, 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
Property, all at Tenant's sole expense.
6.03. Certificate of Occupancy. Tenant may, prior to the commencement of the
term of this Lease, apply for a Certificate of Occupancy to be issued by the
municipality in which the Property is located, but this Lease shall not be
contingent upon issuance thereof. Nothing herein contained shall obligate
Landlord to install any additional electrical wiring, plumbing or plumbing
fixtures which are not presently existing on the Property, or which have not
been expressly agreed upon by Landlord in writing.
6.04. Signs. Without the prior written consent of Landlord, Tenant shall not
place or affix any signs or other objects upon or to the Property, including but
not limited to the roof or exterior
walls of the building or other improvement thereon, or paint or otherwise deface
said exterior walls. Any signs installed by Tenant shall conform with applicable
laws and deed and other restrictions. Tenant shall remove all signs at the
termination of this Lease and shall repair any damage and close any holes caused
or revealed by such removal.
6.05. Utility Services. Tenant shall pay the cost of all utility services,
including but not limited to initial connection charges, all charges for gas,
water and electricity used on the Property, and for all electric lights, lamps
and tubes.
6.06. Landlord's Access. Landlord and its authorized agents shall have the
right, during normal business hours, to enter the Property (a) to inspect the
general condition and state of repair thereof, (b) to make repairs required or
permitted under this Lease, (c) to show the property to any prospective tenant
or purchaser or (d) for any other reasonable purpose. During the final 150 days
of the lease Term, Landlord and its authorized agents shall have the right to
erect and maintain on or about the Property customary signs advertising the
Property for lease or for sale.
6.07. Quiet Possession. If Tenant pays the rent and complies with all other
terms of this Lease, Tenant may occupy and enjoy the Property for the full Lease
Term, subject to the provisions of this Lease.
6.08. Exemptions from Liability. Landlord shall not be liable for any damage or
injury to the person, business (or any loss of income therefrom), goods, wares,
merchandise or other property of Tenant, Tenant's employees, invitees, customers
or any other person in or about the Property, whether such damage or injury is
caused by or results from: (a) fire, steam, electricity, water, gas or rain; (b)
the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures or any other cause;
(c) conditions arising on or about the Property or upon other portions of any
building of which the Property is a part, or from other sources or places; or
(d) any act or omission of any other tenant of any building of which the
Property is a part. Landlord shall not be liable for any such damage or injury
even though the cause of or the means of repairing such damage or injury are not
accessible to Tenant. The provisions of this Section 6.08 shall not, however,
exempt Landlord from liability for Landlord's gross negligence or willful
misconduct.
ARTICLE VII.: MAINTENANCE, REPAIRS AND ALTERATIONS
7.01. Acceptance of Premises. Tenant acknowledges that it has fully inspected
the Property and accepts the Property in its condition as of the execution of
this Lease as suitable for the purposes for which it is leased. Tenant
acknowledges that, except as stated in the following sentence, neither Landlord
nor an agent of Landlord has made any representation as to the condition of the
Property or the suitability of the Property for Tenant's intended use. Landlord
represents that on the Commencement Date, the plumbing, electrical system and
exterior doors, and any fire protection sprinkler system, heating system, air
conditioning equipment and elevators existing on the date of this Lease, are or
will be in good operating condition.
7.02. Landlord's Obligation to Repair. Subject to the provisions of Article
Eight (Damage or Destruction) and Article Nine (Condemnation) and except for
damage caused by any act or omission of Tenant, Landlord shall keep the
foundation, roof and the structural portions of exterior walls of the
improvements of the Property in good order, condition and repair. However,
Landlord shall not be obligated to maintain or repair windows, doors, plate
glass or the surfaces of walls. In addition, Landlord shall not be obligated to
make any repairs under this Section until a reasonable time after receipt of
written notice from Tenant of the need of such repairs. If any repairs are
required to be made by Landlord, Tenant shall, at Tenant's sole cost and
expense, promptly remove Tenant's fixtures, inventory, equipment and other
Property, to the extent required to enable Landlord to make such repairs.
Landlord's liability hereunder shall be limited to the cost of such repairs or
corrections. Tenant waives the benefit of any present or future law which might
give Tenant the right to repair the Property at Landlord's expense or to
terminate the Lease because of the condition of the Property.
7.03. Tenant's Obligation to Repair. Subject to the provisions of the last
sentence of Section 7.01, the preceding Section 7.02, Article Eight (Damage or
Destruction) and Article Nine (Condemnation), Tenant shall, at all times, keep
that portion of the Property not required to be maintained by Landlord in good
order, condition and repair including but not limited to repairs (including all
necessary replacements) of the windows, plate glass, doors, heating system, air
conditioning equipment, fire protection sprinkler system, elevators, interior
and exterior plumbing and the interior of the building in general, and including
care of landscaping and regular mowing of grass and maintenance of any paving
and railroad siding. In addition, Tenant shall, at Tenant's expense, repair any
damage to the roof, foundation or structural portions of exterior walls caused
by Tenant's acts or omissions. If Tenant fails to maintain and repair the
property as required by this Section, Landlord may, on ten (10) days' prior
written notice, enter the Property and perform such maintenance or repair on
behalf of Tenant, except that no notice shall be required in case of emergency,
and Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
7.04. Alterations, Additions and Improvements. Tenant shall not create any
openings in the roof or exterior walls, or make any alterations, additions or
improvements to the Property without the prior written consent of Landlord.
Consent for nonstructural alterations, additions or improvements shall not be
unreasonably withheld by Landlord. Tenant shall have the right to erect or
install shelves, bins, machinery, air conditioning or heating equipment and
trade fixtures, provided that Tenant complies with all applicable governmental
laws, ordinances and regulations. At the expiration or termination of this
Lease, Tenant shall, subject to the restrictions of Section 7.05 below, have the
right to remove such items so installed by it, provided Tenant is not in default
at the time of such removal and provided further that Tenant shall, at the time
of removal of such items, repair in a good and workmanlike manner any damage
caused by installation or removal thereof. Tenant shall pay for all costs
incurred or arising out of alterations, additions or improvements in or to the
Property and shall not permit a mechanic's or materialman's lien to be asserted
against the Property. Upon request by Landlord, Tenant shall deliver to Landlord
proof of payment reasonably satisfactory to Landlord of all costs incurred or
arising out of any such alterations, additions or improvements.
7.05. Condition upon Termination. Upon the termination of the Lease, Tenant
shall surrender the Property to Landlord, broom clean and in the same condition
as received except for ordinary wear and tear which Tenant was not otherwise
obligated to remedy under any provision of the Lease. However, Tenant shall not
be obligated to repair any damage which Landlord is required to repair under
Article Eight (Damage or Destruction). In addition, Landlord may require Tenant
to remove any alterations, additions or improvements (whether or not made with
Landlord's consent) prior to the termination of the Lease and to restore the
Property to its prior condition, all at Tenant's expense. All alterations,
additions and improvements which Landlord has not required Tenant to remove
shall become Landlord's property and shall be surrendered to Landlord upon the
termination of the Lease. In no event, however, shall Tenant remove any of the
following materials or equipment without Landlord's prior written consent: any
power wiring or power panels; lighting or lighting fixtures; wall coverings;
drapes, blinds or other window coverings; carpets or other floor coverings;
heaters, air conditioners or any other heating or air conditioning equipment;
fencing or security gates; or other similar building operating equipment and
decorations.
ARTICLE VIII.: DAMAGE OR DESTRUCTION
8.01. Notice. If the building or other improvements situated on the Property
should be damaged or destroyed by fire, tornado or other casualty, Tenant shall
immediately give written notice thereof to Landlord.
8.02 Partial Damage. If the building or other improvements situated on the
Property should be damaged by fire, tornado or other casualty but not to such an
extent that rebuilding or repairs cannot reasonably be completed within 120 days
from the date Landlord receives written notification by Tenant of the happening
of the damage, this Lease shall not terminate, but Landlord shall, at its sole
cost and risk, proceed forthwith and use reasonable diligence to rebuild or
repair such building and other improvements on the Property (other than
leasehold improvements made by Tenant or any assignee, subtenant or other
occupant of the Property) to substantially the condition in which they existed
prior to such damage; provided, however, if the casualty occurs during the final
18 months of the Lease Term, Landlord shall not be required to rebuild or repair
such damage unless Tenant shall exercise its renewal option (if any is contained
herein) within fifteen (15) days after the date of receipt by Landlord of the
notification of the occurrence of the damage. If Tenant does not elect to
exercise its renewal option or if there is no renewal option contained herein or
previously unexercised at such time, this Lease shall terminate at the option of
the Landlord and rent shall be abated for the unexpired portion of this Lease,
effective from the date of actual receipt by Landlord of the written
notification of the damage. If the building and other improvements are to be
rebuilt or repaired and are untenantable in whole or in part following such
damage, the rent payable hereunder during the period in which they are
untenantable shall be adjusted equitably.
8.03. Substantial or Total Destruction. If the building or other improvements
situated on the Property should be substantially or totally destroyed by fire,
tornado or other casualty, or so damaged that rebuilding or repairs cannot
reasonably be completed within 120 days from the date Landlord receives written
notification by Tenant of the happening of the damage, this Lease
shall terminate at the option of Landlord and rent shall be abated for the
unexpired portion of this Lease, effective from the date of receipt by Landlord
of such written notification. If this Lease is not terminated, the building and
the improvements shall be rebuilt or repaired and rent abated to the extent
provided under Section 8.02.
ARTICLE IX. CONDEMNATION
If, during the term of this Lease or any extension or renewal thereof, all or a
substantial part of the Property should be taken for any public or quasi-public
use under any governmental law, ordinance or regulation or by right of eminent
domain, or should be sold to the condemning authority under threat of
condemnation, this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective from the date of taking of the
Property by the condemning authority. If less than a substantial part of the
demised premises is taken for public or quasi-public use under any governmental
law, ordinance or regulation, or by right of eminent domain, or is sold to the
condemning authority under threat of condemnation, Landlord, at its option, may
by written notice terminate this Lease or shall forthwith at its sole expense
restore and reconstruct the buildings and improvements (other than leasehold
improvements made by Tenant or any assignee, subtenant or other occupant of the
Property) situated on the Property in order to make the same reasonably
tenantable and suitable for the use for which the Property is leased as defined
in Section 6.01. The rent payable hereunder during the unexpired portion of this
Lease shall be adjusted equitably. Landlord and Tenant shall each be entitled to
receive and retain such separate awards and portions of lump sum awards as may
be allocated to their respective interests in any condemnation proceedings. The
termination of this Lease shall not affect the rights of the respective parties
to such awards.
ARTICLE X.: ASSIGNMENT AND SUBLETTING
Tenant shall not, without the prior written consent of Landlord, assign
this Lease or sublet the Property or any portion thereof. Any assignment or
subletting shall be expressly subject to all terms and provisions of this Lease,
including the provisions of Section 6.01 pertaining to the use of the Property.
In the event of any assignment or subletting, Tenant shall remain fully liable
for the full performance of all Tenant's obligations under this Lease. Tenant
shall not assign its rights hereunder or sublet the Property without first
obtaining a written agreement from the assignee or sublessee whereby the
assignee or sublessee agrees to be bound by the terms of this Lease. No such
assignment or subletting shall constitute a novation. In the event of the
occurrence of an event of default while the Property is assigned or sublet,
Landlord, in addition to any other remedies provided herein or by law, may at
Landlord's option, collect directly from such assignee or subtenant all rents
becoming due under such assignment or subletting and apply such rent against any
sums due to Landlord hereunder. No direct collection by Landlord from any such
assignee or subtenant shall release Tenant from the performance of its
obligations hereunder.
ARTICLE XI.: DEFAULT AND REMEDIES
11.01. Default. The following events shall be deemed to be events of default
under this Lease:
(a) Failure of Tenant to pay any installment of the rent or other sum
payable to Landlord hereunder on the date that same is due and such failure
shall continue for a period of ten (10) days;
(b) Failure of Tenant to comply with any term, condition or covenant of
this Lease, other than the payment of rent or other sum of money, and such
failure shall not be cured within thirty (30) days after written notice thereof
to Tenant;
(c) Tenant or any guarantor of Tenant's obligations hereunder shall
generally not pay its debts as they become due or shall admit in writing its
inability to pay its debts, or shall make a general assignment for the benefit
of creditors.
(d) Tenant or any guarantor of Tenant's obligations hereunder shall
commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking appointment of receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property;
(e) Any case, proceeding or other action against Tenant or any guarantor
of Tenant's obligations hereunder shall be commenced seeking to have an order
for relief entered against it as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and Tenant (i) fails
to obtain a dismissal of such case, proceeding, or other action within sixty
(60) days of its commencement or (ii) converts the case from one chapter of the
Federal Bankruptcy Code to another chapter or (iii) is the subject of an Order
of Relief which is not fully stayed within seven business days after the entry
thereof.
(f) Abandonment by Tenant of any substantial portion of the Property or
cessation of the use of the Property for the purpose leased.
11.02. Remedies. Upon the occurrence of any of the events of default listed in
Section 11.01, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:
(a) Terminate this Lease, in which event Tenant shall immediately surrender
the Property to Landlord. If Tenant fails to so surrender such premises,
Landlord may, without prejudice to any other remedy which it may have for
possession of the Property or arrearages in rent, enter upon and take possession
of the Property 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, Tenant shall pay
to Landlord on demand the amount of all loss and damage which Landlord may
suffer by reason of such termination, whether through inability to relet the
Property on satisfactory terms or otherwise;
(b) Enter upon and take possession of the Property, by force if necessary,
without terminating
this Lease and without being liable for the prosecution or for any claim for
damages therefor, and expel or remove Tenant and any other person who may be
occupying such premises or any part thereof. Landlord may relet the Property and
receive the rent therefor. Tenant agrees to pay to Landlord monthly or on demand
from time to time any deficiency that may arise by reason of any such reletting.
In determining the amount of such deficiency, the brokerage commission,
attorneys' fees, remodeling expenses and other costs of reletting shall be
subtracted from the amount of rent received under such reletting;
(c) Enter upon the Property, by force, if necessary, without terminating this
Lease and without being liable for prosecution or for any claim for damages
therefor, and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to pay Landlord on demand for expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this Lease,
together with interest thereon at the rate of twelve percent (12%) per annum
from the date expended until paid. Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by negligence of Landlord
or otherwise.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages accruing to
Landlord by reason of the violation of any of the terms, conditions and
covenants herein contained.
11.03. Notice of Default. Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Lease to Landlord and to
any ground lessor, mortgagee or beneficiary under any deed of trust encumbering
the Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure, Landlord
shall not be in default if such cure is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
11.04. Limitation of Landlord's Liability. As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title to the
Property or the leasehold estate under a ground lease of the Property at the
time in question. Each Landlord is obligated to perform the obligations of
Landlord under this Lease only during the time such Landlord owns such interest
or title. Any Landlord who transfers its title or interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer. However, each Landlord shall deliver
to is transferee all funds previously paid by Tenant if such funds have not yet
been applied under the terms of this Lease.
ARTICLE XII.: LANDLORD'S LIEN
In addition to the statutory Landlord's lien, Tenant hereby grants to
Landlord a security interest to secure payment of all rent and other sums of
money becoming due hereunder from Tenant, upon all goods, wares, equipment,
fixtures, furniture and other personal property of Tenant situated in or upon
the Property, together with the proceeds from the sale or lease thereof. Such
property shall not be removed without the consent of Landlord until all
arrearages in rent
and other sums of money then due to Landlord hereunder shall first have been
paid and discharged. Upon the occurrence of an event of default, Landlord may,
in addition to any other remedies provided herein or by law, enter upon the
Property and take possession of any and all goods, wares, equipment, fixtures,
furniture and other personal property of Tenant situated on the Property without
liability for trespass or conversion, and sell the same at public or private
sale, with or without having such property at the sale, after giving Tenant
reasonable notice of the time and place of any such sale. Unless otherwise
required by law, notice to Tenant of such sale shall be deemed sufficient if
given in the manner prescribed in this Lease at least ten (10) days before the
time of the sale. Any public sale made under this Article shall be deemed to
have been conducted in a commercially reasonable manner if held on the Property
or where the property is located, after the time, place and method of sale and a
general description of the types of property to be sold have been advertised in
a daily newspaper published in Dallas County, Texas, for five consecutive days
before the date of the sale. Landlord or its assigns may purchase at a public
sale and, unless prohibited by law, at a private sale. The proceeds from any
disposition dealt with in this Article, less any and all expenses connected with
the taking of possession, holding and selling of the property (including
reasonable attorneys' fees and legal expenses), shall be applied as a credit
against the indebtedness secured by the security interest granted herein. Any
surplus shall be paid to Tenant or as otherwise required by law; Tenant shall
pay any deficiencies forthwith. Upon request by Landlord, Tenant agrees to
execute and deliver to Landlord a financing statement in form sufficient to
perfect the security interest of Landlord in the aforementioned property and
proceeds thereof under the provisions of the Uniform Commercial Code in force in
the State of Texas. The statutory lien for rent is expressly reserved; the
security interest herein granted is in addition and supplementary thereto.
ARTICLE XIII.: PROTECTION OF LENDERS
13.01. Subordination. Landlord shall have the right to subordinate this Lease to
any ground Lease, deed of trust or mortgage encumbering the Property, and
advances made on the security thereof and any renewals, modifications,
consolidations, replacements or extensions thereof, whenever made or recorded.
However, Tenant's right to quiet possession of the Property during the Lease
Term shall not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage and gives written notice thereof to Tenant, this Lease shall be deemed
prior to such ground lease, deed of trust or mortgage whether this Lease is
dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof.
13.02. Attornment. If Landlord's interest in the Property is acquired by any
ground lessor, beneficiary under a deed of trust, mortgagee or purchaser at a
foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Property and recognize such transferee or successor
as Landlord under this Lease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant any right to terminate this
Lease or surrender possession of the Property upon the transfer of Landlord's
interest.
13.03. Signing of Documents. Tenant shall sign and deliver any instruments or
documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so. If Tenant fails to do so within ten (10)
days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
13.04. Estoppel Certificates.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; and (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why). Tenant shall deliver such statement to Landlord within ten (10) days after
Landlord's request. Any such statement by Tenant may be given by Landlord to any
prospective purchaser or encumbrancer of the Property. Such purchaser or
encumberancer may rely conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within such ten
(10) day period, Landlord, and any prospective purchaser or encumbrancer, may be
conclusively presume and rely upon the following facts; (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been canceled or terminated except as
otherwise presented by Landlord; (iii) that not more than one month's Base Rent
or other charges have been paid in advance; and (iv) that Landlord is not in
default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.
13.05. Tenant's Financial Condition. Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord such financial statements as are
reasonably required by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall deliver
to any lender designated by Landlord any financial statements required by such
lender to facilitate the financing or refinancing of the Property. Tenant
represents and warrants to the Landlord that each such financial statement is a
true and accurate statement as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes set
forth herein.
ARTICLE XIV.: REALTORS' COMMISSIONS
14.01. Amount and Manner of Payment of Commissions. Commissions due to the
undersigned Principal REALTOR shall be calculated and paid as follows:
(a) Landlord agrees to pay to the undersigned Principal REALTOR a commission
for negotiating this Lease equal to the percentage stated in Section 1.11B of
each monthly rental payment at the time such rental payment is due.
(b) Landlord agrees to pay to the undersigned Principal REALTOR a commission
for
negotiating this Lease equal to the percentage stated in Section 1.11B of the
total rent to become due to Landlord during the term of this Lease. Said
commission shall be payable to Principal REALTOR on the date of the execution of
this Lease.
14.02. Commissions on Renewal, Expansion or Purchase. If during the term of this
Lease (as the same may be renewed or extended) or within ten (10) years from the
date hereof, whichever shall be the greater period of time, Tenant, its
successors or assigns, shall (a) exercise any right or option to renew or extend
the term of this Lease (whether contained in this Lease or in any amendment,
supplement or other agreement pertaining hereto) or enter into a new lease or
rental agreement with Landlord covering the Property, or (b) enter into any
lease, extension, renewal, expansion or other rental agreement with the Landlord
demising to Tenant any premises located on or constituting all or part of any
tract or parcel of real property adjoining, adjacent to or contiguous to the
Property and owned by Landlord on the date of this Lease, Landlord shall pay to
the Principal REALTOR an additional commission covering the full period of such
renewal, extension, lease, expansion or other rental agreement which shall be
due on the date of exercise, in the case of the exercise of an option, or the
execution, in the case of a lease or other agreement. Such commissions shall be
computed under Section 14.01(a) or 14.01(b) above (whichever has been made
applicable under Section 1.11A), as if a new lease had been made for such period
of time. In the event Tenant, its successors or assigns, should purchase the
Property at any time, pursuant to a purchase option contained in this Lease (or
any lease, extension, renewal, expansion or other rental agreement upon which an
additional commission would be due under the above provisions) or, in the
absence of any purchase option or exercise thereof, should purchase the Property
within ten (10) years from the date hereof, Landlord shall pay to the
undersigned Principal REALTOR a sales commission in cash equal to the percentage
stated in Section 1.11B of the purchase price, payable at closing. Upon closing
of the sale, all lease commissions shall terminate if the lease commissions are
payable monthly.
14.03. Joint Liability of Tenant. Tenant expressly acknowledges and agrees that
if Tenant enters into any new lease, extension, renewal, expansion or other
agreement to rent, occupy or purchase any property described in the preceding
Section 14.02 within the time specified in such preceding Section, such
agreement must be handled by and through the undersigned Principal REALTOR,
otherwise Tenant shall be jointly and severally liable with Landlord for any
commissions due or to become due to Principal REALTOR.
14.04. Sale. In the event of a sale of the Property or the assignment of this
Lease by Landlord, Landlord shall obtain from the purchaser or assignee an
Assumption Agreement in recordable form whereby such purchaser or assignee
agrees to pay the undersigned Principal REALTOR all commissions payable under
this Lease and shall deliver a fully executed counterpart thereof to Principal
REALTOR on the date of closing of the sale of the Property or assignment of this
Lease. Landlord shall be released from personal liability for subsequent
payments of commissions only upon the delivery of such counterpart of said
Assumption Agreement. Landlord expressly agrees that it will not transfer,
convey or sell the Property or assign this Lease without first obtaining from
the purchaser or assignee such Assumption Agreement. The form of such Assumption
Agreement shall be furnished to the Principal REALTOR at the time Landlord
enters into any contract for the sale of the Property or assignment of this
Lease.
14.05. Lien. The Principal REALTOR is hereby granted a lien against the Property
to secure payment of all commissions (including not only the commission
originally payable hereunder but also any additional commissions which may
hereafter become payable by reason of renewals, new leases, rental agreements,
sales or otherwise). This lien is subject to the rights of Tenant under this
Lease, but prior and superior to any liens hereafter created against the
Property, excepting only liens in favor of banks, insurance companies, building
and loan associations and similar regulated financial institutions security
indebtedness incurred for the purposes of acquiring the Property or
constructing, repairing, rebuilding or remodeling buildings and other
improvements thereon, to all of which liens the lien hereby created shall be
subordinate and inferior.
ARTICLE XV.: MISCELLANEOUS
15.01. Force Majeure. In the event performance by Landlord of any term,
condition or covenant in this Lease is delayed or prevented by any Act of God,
strike, lockout, shortage or material or labor, restriction by any governmental
authority, civil riot, flood, or any other cause not within the control of
Landlord, the period for performance of such term, condition or covenant shall
be extended for a period equal to the period Landlord is so delayed or hindered.
15.02. Interpretation. The captions of the Articles or Sections of this Lease
are to assist the parties in reading this Lease and are not a part of the terms
or provisions of this Lease. Whenever required by the context of this Lease, the
singular shall include the plural and the plural shall include the singular. For
convenience, each party hereto is referred to in the neuter gender, but the
masculine, feminine and neuter genders shall each include the other. In any
provision relating to the conduct, acts or omissions of Tenant, the term
"Tenant" shall include Tenant's agents, employees, contractors, invitees,
successors or others using the Property with Tenant's expressed or implied
permission.
15.03. Waivers. All waivers must be in writing and signed by the waiving party.
Landlord's failure to enforce any provisions of this Lease or its acceptance of
rent shall not be a waiver and shall not prevent Landlord from enforcing that
provision or any other provision of this Lease in the future. No statement on a
payment check from Tenant or in a letter accompanying a payment check shall be
binding on Landlord. Landlord may, with or without notice to Tenant, negotiate
such check without being bound to the conditions of such statement.
15.04. Severability. A determination by a court of competent jurisdiction that
any provision of this Lease or any part thereof is illegal or unenforceable
shall not cancel or invalidate the remainder of such provision or this Lease,
which shall remain in full force and effect.
15.05. Joint and Several Liability. All parties signing this Lease as Tenant
shall be jointly and severally liable for all obligations of Tenant.
15.06. Incorporation of Prior Agreements; Modifications. This Lease is the only
agreement between the parties pertaining to the lease of the Property and no
other agreements are effective. All amendments to this Lease shall be in writing
and signed by all parties. Any other attempted amendment shall be void.
15.07. Notices. All notices required or permitted under this Lease shall be in
writing and shall be personally delivered or shall be deemed to be delivered,
whether actually received or not, when deposited in the United States mail,
postage pre-paid, registered or certified mail, return receipt requested,
addressed as stated herein. Notices to Tenant shall be delivered to the address
specified in Section 1.03 above, except that, upon Tenant's taking possession of
the Property, the Property shall be Tenant's address for notice purposes.
Notices to any other party hereto shall be delivered to the address specified in
Article I as the address for such party. Any party hereto may change its notice
address upon written notice to the other parties.
15.08. Attorneys' Fees. If on account of any breach or default by any party
hereto in its obligations to any other party hereto (including but not limited
to the Principal REALTOR), it shall become necessary for the non-defaulting
party to employ an attorney to enforce or defend any of its rights or remedies
hereunder, the defaulting party agrees to pay the non-defaulting party its
reasonable attorneys' fees, whether or not suit is instituted in connection
therewith.
15.09 Venue. All obligations hereunder, including but not limited to the
payment of commissions to the Principal REALTOR, shall be performable and
payable in Dallas, Dallas County, Texas.
15.10 Governing Law. The laws of the State of Texas shall govern this Lease.
15.11 Survival. All obligations of any party hereto not fulfilled at the
expiration or the earlier termination of this Lease shall survive the expiration
or earlier termination as continuing obligations of such party.
15.12 Binding Effect. This Lease shall inure to the benefit and be binding upon
each of the parties hereto and their heirs, representatives, successors and
assigns; provided, however, Landlord shall have no obligation to Tenant's
successors or assigns unless the rights or interest of such successors or
assigns are acquired in accordance with the terms of this Lease.
15.13 Execution as Offer. The execution of this Lease by the first party to do
so constitutes an offer to lease the Property. Unless within the number of the
days stated in Section 1.15 above from the date of its execution by the first
party to do so, this Lease is accepted by the other party and a fully executed
copy is delivered to the first party, such offer shall be automatically revoked
and terminated.
ARTICLE XVI.: ADDITIONAL PROVISIONS AND RIDERS
Additional provisions may be set forth in the blank space below, and/or a
rider or riders attached hereto. If no additional provisions are to be inserted
in the blank space below. If a rider or riders are to be attached hereto, please
state in the blank space below: "See rider or riders attached," and please have
Landlord and Tenant initial all such riders.
1. Landlord, at Landlord's expense, will carpet offices.
2. Landlord, at Landlord's expense, will paint warehouse walls.
3. Landlord, at Landlord's expense, will paint warehouse floor.
4. Tenant will construct office and install a/c unit at Tenant's expense and
will be required to remove at Tenant's expense upon termination of lease.
5. Rent will remain fixed during the rental period in the case of purchase of
X. Xxxxxxxxxxxx Enterprises, Inc. by some outside buyer. All financial
obligations will transfer in full to the buyer. Landlord reserves the right
to determine the ability of the Buyer to meet all provisions of the Lease.
EXECUTED as of the date stated in Section 1.01 above.
ATTEST: LANDLORD: Xxxxxxx X. Ranger
---------------------
_____________________________________ By: /s/ XXXXXXX RANGER
---------------------
Title: _____________________
Date of Execution by
Landlord:
---------------------------
ATTEST
TENANT: Xxx Xxxxxxxxxxxx
------------------------------------- ---------------------
By: /s/ XXX XXXXXXXXXXXX
---------------------
Title: President
---------------------
Date of Execution by
Tenant:
----------------------------
REALTORS(R)
n/a Xxx Xxxx of Warehouse Properties
------------------------------------- --------------------------------
Cooperating REALTOR(R) Principal REALTOR,
Member of The Greater
Dallas Board of
REALTOR
/s/ XXX XXXX, XX.
By: ____________________________ By: ------------------------
Xxx Xxxx, Xx.
*NOTE: If this Lease Agreement is negotiated by Principal Realtor in
cooperation with another Realtor, Landlord shall be liable for payment of
all commissions to Principal Realtor only, whereupon it shall be protected
from any claims from said Cooperating Realtor.
OPTION TO EXTEND TERM
LEASE RIDER*
This Rider is attached to and made a part of that certain Lease Agreement
dated June 1, 1998 by and between Xxxxxxx X. Ranger as Landlord, and
Xxxxxxxxxxxx Audio/ Visual Solutions, as Tenant, covering the Property commonly
known as 10523 King Xxxxxxx (the "Property").
A. Option(s) to Extend Term
1. Landlord hereby grants to Tenant one (1) option(x) (the "Option(x)") to
extend the Lease Term for additional term(s) of 3 years each (the
"Extension(s)"), on the same terms, conditions and covenants set forth in the
Lease Agreement, except as provided below. Each Option shall be exercised only
by written notice delivered to the Landlord at least one hundred twenty (120)
days before the expiration of the Lease Term or the preceding Extension of the
Lease Term. If Tenant fails to deliver Landlord written notice of the exercise
of an Option within the prescribed time period, such Option and any succeeding
Options shall lapse, and there shall be no further right to extend the Lease
Term. Each Option shall be exercisable by Tenant on the express condition that
at the time of the exercise, and at all times prior to the commencement of such
Extension(s), Tenant shall not be in default under any of the provisions of this
Lease. The foregoing Option(s) are personal to Tenant and may not be exercised
by any assignee or sub-tenant.
B. Calculation of Rent
The rent during the Extension(s) shall be determined by one of the
following methods (INDICATE YOUR CHOICE BY PUTTING AN "X" IN THE APPROPRIATE
BLANK UPON THE EXECUTION OF THE LEASE AGREEMENT):
1. Consumer Price Index Adjustment ____________________________
2. Fair Rental Value Adjustment X
----------------------------
3. Fixed Rental Adjustment ____________________________
1. Consumer Price Index Adjustment
The monthly rent during the particular Extension shall be determined by
multiplying the monthly rent during the Lease Term by a fraction determined as
follows:
a. The numerator shall be the latest index.
b. The denominator shall be the initial index.
If such computation would reduce the rent for the particular Extension, it
shall be disregarded, and the rent during the immediately preceding period shall
apply instead.
The index shall mean the Consumer Price Index for Urban Consumers (all
items), Dallas-Fort Worth, Texas area (1967 = 100) published by the United
States Department of Labor, Bureau of Labor Statistics.
The initial index shall mean the index published for the nearest calendar
month preceding the commencement date of the Lease Term. The latest index shall
mean the index published for the nearest calendar month preceding the first day
of the Extension.
If a base year other than 1967 is adopted, the index shall be converted in
accordance with the appropriate conversion factor. If the index is discontinued
or revised, such other index or computation with which it is replaced shall be
used in order to obtain substantially the same result as would have been
obtained it if had not been discontinued or revised.
2. Fair Rental Value Adjustment
The rent shall be increased on the first day of the particular Extension to
the "Fair Rental Value" of the Property, determined in the following manner:
a. If the Landlord and Tenant have not been able to agree on the Fair
Rental Value Adjustment prior to the date the option is required to be
exercised, the rent for the Extension shall be determined as follows: Within
fifteen (15) days following the exercise of the option, Landlord and Tenant
shall endeavor in good faith to agree upon a single appraiser. If Landlord and
Tenant are unable to agree upon a single appraiser within said fifteen (15) day
period, each shall then, by written notice to the other, given within ten (10)
days after said fifteen (15) day period, appoint one appraiser. The two
appraisers appointed by Landlord and Tenant shall be required to be first
approved by the then president of the Greater Dallas Board of REALTORS Inc. as
qualified to determine rental applicable to the Property. Within ten (10) days
after the two appraisers are appointed, they shall appoint a third appraiser. If
either Landlord or Tenant fails to appoint its appraiser within the prescribed
time period the single appraiser appointed shall determine the Fair Rental Value
of the Property. If the two appointed appraisers fail to agree on the third
appraiser, he shall be appointed by the then president of the Greater Dallas
Board of Realtors. Each party shall bear the cost of the appraiser appointed by
it and the parties shall share equally the cost of the third appraiser.
b. The "Fair Rental Value" of the Property shall mean the price that
a ready and willing tenant would pay as of the commencement of the Extension as
monthly rent to a ready and willing landlord of Property comparable to the
Property if such property were exposed for lease on the open market for a
reasonable period of time and taking into account all of the purposes for which
such property may be used and not just the use proposed to be made of the
Property by Tenant. The Fair Rental Value of the Property shall be the average
of the two of the three appraisals which are closest in amount, and the third
appraisal shall be disregarded. In no event shall the rent by reduced by reason
of such computation. If the Fair Rental Value is not determined prior to the
commencement of the Extension, then Tenant shall continue to pay to Landlord the
rent applicable to the Property immediately prior to such Extension until the
Fair Rental Value is determined, and when it is determined, Tenant shall pay to
Landlord within ten (10) days after receipt of such notice the difference
between the rent actually paid by Tenant to Landlord and the new rent determined
hereunder.
3. Fixed Adjustments.
The base rent shall be increased to the following amounts on the following
dates:
DATE: AMOUNT:
N/A FIXED FOR 1 YEAR $1,906
----------------------------- -----------------------------
N/A ______________________________
-----------------------------
N/A ______________________________
-----------------------------
INITIALS:
LANDLORD: ____________________
TENANT: BH
----------------------
______
* To be attached to Lease Agreement GDBR-062-10/85, and to be incorporated and
made part thereof if said agreement provides for a building to be construed by
Landlord for Tenants.
