Railyard Lease for Keep Denton Beautiful-5966-Award/Ordinance/PricingORDINANCE NO. 2015 -319
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO A
COMMERCIAL LEASE AGREEMENT AND AN ADDENDUM "A" TO LEASE —
RENEWAL OPTION BYAND BETWEEN KEEP DENTON BEAUTIFUL, INC., A
DEPARTMENT OF THE CITY OF DENTON, TEXAS AND RAIL YARD PARTNERS, LTD.
FOR THE LEASE OF OFFICE SPACE FOR THE KEEP DENTON BEAUTIFUL OFFICES;
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING AN
EFFECTIVE DATE.
WHEREAS, Keep Denton Beautiful, Inc., being a part of the Solid Waste Department of
the City of Denton, Texas, desires to lease office space located at 608 East Hickory, Suite 130,
Denton, Denton County, Texas, as lessee, as set out in the "Commercial Lease Agreement"
which is attached hereto and incorporated herewith by reference, in ordertomore efficiently
discharge their obligations and duties; and
WHEREAS, the lease provides for a primary term of five (5) years, with an option to
renew for an additional five -year period, as set out in the "Addendum "A" to Lease — Renewal
Option" which is alsoattachedhereto and incorporated herewith by reference; and
WHEREAS, the City Council finds that this Commercial Lease Agreement is in the best
interests of the City; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The recitations set forth in the Preamble to this Ordinance are incorporated
herewith, and made a part of this Ordinance.
SECTION 2. The City Manager is hereby authorized and directed to enter into a
Commercial Lease Agreement, and additionally, an Addendum "A" toLease — Renewal Option
on behalf of Keep Denton Beautiful, Inc., with Rail Yard Partners, LTD., Lessor, which will
provide needed office space for the Keep Denton Beautiful, Inc., being a part of the Solid Waste
Department of the City of Denton, Texas; the forms of which Commercial Lease Agreement and
Addendum "A" to Lease — Renewal Option are attached hereto, and are incorporated herewith by
reference.
SECTION 3. The City Manager is authorized to expend such funds and perform such
obligations as requiredby the Commercial Lease Agreement and the Addendum "A" to Lease —
Renewal Option.
SECTION 4. This Ordinance shall become effectiveimmediately upon its passage and
approval.
PASSED AND APPROVED this the 20 day of , 2015.
CHRIS WATTS, MAYO
Signature on File
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By
APPROVJIa" AS TO LEGAL FORM:
ANITA BURGESS, CITYATTORNEY
By. V,
Page 2
Signature on File
Signature on File
Axis Realty Group
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS®
COMMERCIAL LEASE AGREEMENT
between
Rail Yard Partners LTD
Landlord)
and
City of Denton (Keep Denton Beautiful
Tenant)
TABLE OF CONTENTS
Article
1. Defined Terms
2. Lease and Term
3. Rent and Security Deposit
4. Taxes
5. Insurance and Indemnity
6. Use of Premises
7. Property Condition, Maintenance, Repairs and Alterations
8. Damage or Destruction
9. Condemnation
10. Assignment and Subletting
11, Default and Remedies
12, Landlord's Contractual Lien
13, Protection of Lenders
14. Environmental Representations and Indemnity
15. Professional Service Fees
16. Miscellaneous and Additional Provisions
Axis Realty Group, 1517 Centre Place Drive Denton, TX 76205
Phone: 940.891 2947 Fax: 940.891.2948 Alex Payne Keep Denton
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COMMERCIAL LEASE AGREEMENT
Throughout this Lease, complete all blanks and check all boxes that apply. Blanks not
completed and boxes not checked do not apply.]
For good and valuable consideration, the parties to this Commercial Lease Agreement (the "Lease ")
agree as follows:
ARTICLE ONE
DEFINED TERMS
As used in this Lease, the terms set forth in this Article One have the following meanings:
1.01 Effective Date: The last date beneath the signatures of Landlord and Tenant on this Lease.
1.02 Landlord: Rail Yard Partners, LTD
Address: 525 S. Loop 288, Ste. - #
w
105
Denton, TX 76205
Telephone: (940) 382-5003 Fax: (866 498 -1697
Email: bmartino @orisonholdinc s.com _W
1.03 Tenant: City of Denton (Keep Denton Beautiful
Address:
Telephone:
Email:
Fax:
1.04 Premises [include Suite or Unit No., if applicable]: 28330 SF commercial buildin<
Suite 130
A. Building Name: The Rail
B. Street address: 608 E. Hickor y st m
Ste. 130
www- ........
Denton T
in
6- Denton........... County, Texas.
C. Legal description: The property on which the Premises are situated is described as:
and may be more particularly described on the attached Exhibit "A ", Survey or Legal
Description (the "Property "). The term "Property" includes the land described on Exhibit "A ",
and any improvements on the land (including the Premises).
D. Floor Plan or Site Plan: Being a floor area of approximately 2725 ......,., square feet,
or a land area of approximately square feet or approximately .. .... -.IT._. ..........-
acres, and being more particularly shown in outline form on the attached Exhibit "B ", Floor
Plan or Site Plan.
COMMERCIAL LEASE AGREEMENT - Page 2
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E. Tenant's Pro Rata Share: _ 9.61.9
1 %.
1.05 Term: __ 5 years and. ' o _ months beginning on __.. Januar ,
2016 (the "Commencement Date ") and ending on December 31 , 2020 (the
Expiration Date "). Unless the context requires otherwise, references in this Lease to the
Term" include any renewal or extension of this Lease. [See Addendum "A ", Renewal
Options, if applicable].
1.06 Base Rent: Base Rent is due and payable in monthly installments during the Term of this Lease
as set forth in this Section. Base Rent and all other sums due or payable by Tenant to Landlord
under this Lease are collectively referred to in this Lease as the "Rent."
Base Rent Payment Schedule
On or before the first day of each month during the Term of this Lease, Tenant shall pay monthly
installments of Base Rent as follows:
Dates Monthly Base Rent
a I... 00 ; From January 1 I 2016 to December 31 2019 $ 2 725 . .
From January 1, 2019 to December 31 2020 $. 2, 952. 8
From to
From................... ............................... _ to ....... ........ $ .._ r
From
From to
Rent for any Renewal Term is determined pursuant to a separate Addendum, if
applicable, and should not be set forth here.]
1.07 Percentage Rental Rate: .... %. [See Addendum "D ", Percentage Rental and Gross
Sales Reports, if applicable]
1.08 Security Deposit: $?...5....00 _ (due upon execution of this Lease). [See Section 3.041
1.09 Expense Reimbursements:
A. Tenant shall pay Landlord as additional Rent (or pay the charges directly to the service
provider, if applicable) the following expenses (or a portion of the expenses, if applicable) (each
an "Expense Reimbursement" and collectively the "Expense Reimbursements ") that are
incurred by or assessed against the Premises (as each of these terms is defined in this Lease)
check all boxes that apply]:
Real Estate Taxes;
Insurance Premiums;
Common Area Maintenance (CAM) Expenses;
Operating Expenses;
Roof and Structural Maintenance Expenses;
Electricity;
Cable;
Gas;
Internet Access;
COMMERCIAL LEASE AGREEMENT ® Page 3
ONTCAR 2014 ® Form No. 2 (3/2014)
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Water;
Sewer;
Telephone;
Trash Removal; and
All other Utilities.
B. Expense Definitions.
1. Real Estate Taxes. "Real Estate Taxes" means all general real estate taxes, ad
valorem taxes, general and special assessments, parking surcharges, rent taxes, and other
similar governmental charges levied against or applicable to the Property for each calendar year.
2. Insurance Premiums. "Insurance Premiums" means all Landlord's insurance
premiums attributable to the Property, including but not limited to insurance for fire, casualty,
general liability, property damage, medical expenses, extended coverage, and loss of rents
coverage for up to 12 months' Rent.
3. Common Area Maintenance Expenses. "Common Area Maintenance Expenses" or
CAM Expenses" means all costs of maintenance, inspection and repairs of the Common
Areas of the Property, including, but not limited to, those costs for security, lighting, painting,
cleaning, decorations and fixtures, Utilities, ice and snow removal, trash disposal, project signs,
roof repairs, pest control, project promotional expenses, property owners' association dues,
wages and salary costs of maintenance personnel, and other expenses benefiting all the
Property that may be incurred by Landlord, in its discretion, including sales taxes and a
reasonable service charge for the administration thereof. The term "Common Areas" is defined
as that part of the Property intended for the collective use of all tenants including, but not limited
to, the parking areas, driveways, loading areas, landscaping, gutters and downspouts, plumbing,
electrical systems, HVAC systems, roof, exterior walls, sidewalks, malls, promenades (enclosed
or otherwise), meeting rooms, doors, windows, corridors and public rest rooms. CAM Expenses
do not include the cost of capital improvements, the cost of management office equipment and
furnishings, depreciation on Landlord's original investment, the cost of tenant improvements, real
estate brokers' fees, advertising of space for lease, or interest or depreciation on capital
investments.
4. Operating Expenses. "Operating Expenses" means all costs of ownership, building
management, maintenance, repairs and operation of the Property, including but not limited to
roof and structural maintenance, Real Estate Taxes, Insurance Premiums, CAM Expenses,
reasonable management fees, wages and salary costs of building management personnel,
overhead and operational costs of a management office, janitorial, Utilities, and professional
services such as accounting and legal fees. Operating Expenses do not include the cost of
capital improvements, the cost of management office equipment and furnishings, depreciation
on Landlord's original investment, the cost of tenant improvements, real estate brokers' fees,
advertising of space for lease, or interest or depreciation on capital investments.
5. Roof and Structural Maintenance Expenses. "Roof and Structural Maintenance
Expenses" means all costs of maintenance, repair and replacement of the roof, roof deck,
flashings, skylights, foundation, floor slabs, structural components and the structural soundness
of the building in general.
6. Utilities. "Utilities" means charges for electricity, cable, gas, Internet access, water,
sewer, telephone, trash removal, and any other services that are commonly understood to be
utilities, including connection charges.
7. Other Terms. Other terms that are not expressly defined are intended to have the
meanings given those terms in common usage.
COMMERCIAL L - Page
ONTCAR 2014 — Form No. 2 (3/2014)
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C. Expense Reimbursement Limitations. The amount of Tenant's Expense Reimbursement
will be determined by one of the following methods as described and defined below [check
only one].
Base Year Adjustment;
Expense Stop Adjustment;
Pro Rata Adjustment;
Fixed Amounts; or
Net Lease.
D. Expense Reimbursement Limitation Definitions.
1. Base Year Adjustment. If "Base Year Adjustment" has been checked above, Tenant
shall pay to Landlord as additional Rent Tenant's Pro Rata Share of increases in the
applicable expenses (those checked in Section 1.09.A. above) for the Property for any
calendar year during the Term or during any Extension of this Lease, over such amounts
paid by Landlord for the Base Year,,,,,,,,,, mm, ................ ..._ (
the "Base Year ").
2. Expense Stop Adjustment. If "Expense Stop Adjustment" has been checked above,
Tenant shall pay to Landlord as additional Rent Tenant's Pro Rata Share of increases in
the applicable expenses (those checked in Section 1.09.A. above), for the Property for
any calendar year during the Term or during any Extension of this Lease, over
per square foot of floor area (as set forth in Section 1.04D) per
year.
3. Pro Rata Adjustment. If "Pro Rata Adjustment" has been checked above, Tenant shall
pay to Landlord as additional Rent Tenant's Pro Rata Share of the total amount of the
applicable expenses (those checked in Section 1.09.A. above) for every calendar year
during the Term and during any extension of this Lease.
4. Fixed Amounts. If "Fixed Amounts" has been checked above, Tenant shall pay to
Landlord as additional Rent the following monthly amounts (regardless of whether they
have been checked in Section 1.09.A. above) as Tenant's Expense Reimbursements to
Landlord for the following expenses that are incurred by or assessed against the Property:
Real Estate Taxes per month.
Insurance Premiums per month.
CAM Expenses per month.
Operating Expenses per month.
Roof & Structural Maintenance Expenses per month.
Electricity per month.
Cable per month.
Gas w.m...
per month.
Internet Access per month.
Water per month.
Sewer per month.
Telephone per month.
Trash Removal wm,,,._........ -,._
per month.
All Other Utilities m.,,,..,
per month.
5. Net Lease. If "Net Lease" has been checked above, then notwithstanding anything
contained in this Lease to the contrary in Section 6.02, Article Seven or otherwise, Tenant
shall be responsible for paying Tenant's Pro Rata Share of all costs of compliance with
laws, ownership, maintenance, repairs, replacements, operation of the Premises, and
operation of the Property, including but not limited to all costs of Real Estate Taxes,
Insurance Premiums, Common Area Maintenance Expenses, Operating Expenses, Roof
and Structural Maintenance Expenses, and all Utilities (regardless of whether they have
been checked in Section 1.09.A. above).
COMMERCIAL LEASE AGREEMENT - Page
ONTCAR 2014 — Form No. 2 (3/2014)
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E. First Payment. The sum of the Monthly Base Rent for the first month of the Term for which
Base Rent is due (which may be later than the first month of the Term, if there is a free rent
period), and the initial estimated monthly Expense Reimbursement payments (before
adjustments) is set forth below. Upon the execution of this Lease, in addition to the Security
Deposit, Tenant shall pay the first monthly payment in the sum of the amounts set forth
below.
Initial Monthly Base Rent 2, 725.. oo
Real Estate Taxes a. -...-
Insurance Premiums
CAM Expenses emm
Operating p 021.88
Roof & Structural Maintenance Expenses
Electricity
Cable
Gas
Internet Access
Water
Sewer Ww. _ ..
Telephone u.
Trash Removal
All Other Utilities m 6 ........... .....
Total 746.88
Complete the amount of the first Base Rent payment to be due, as well as estimated
amounts of any other monthly payments that start at the beginning of the Term of this
Lease. Put N/A or strike through the rest. Any estimated amounts are subject to
adjustment pursuant to other provisions of this Lease. If any expense payments are not
due at the beginning of the Term, they may begin later in the Term pursuant to other
provisions of this Lease.]
F. Expense Reimbursement Payments. Tenant agrees to pay any end -of -year lump sum
Expense Reimbursement within 30 days after receiving an invoice from Landlord. Any time
during the Term, Landlord may direct Tenant to pay monthly an estimated portion of the
projected future Expense Reimbursement amount. Any such payment directed by Landlord
will be due and payable monthly on the same day that the Base Rent is due. Landlord may,
at Landlord's option and to the extent allowed by applicable law, impose a Late Charge on
any Expense Reimbursement payments that are not actually received by Landlord on or
before the due date, in the amount and manner set forth in Section 3.03 of this Lease. Any
Expense Reimbursements relating to partial calendar years will be prorated accordingly. If
Tenant's Pro Rata Share is not expressed in Section 1.04.E of this Lease, then Tenant's Pro
Rata Share of such Expense Reimbursements will be based on the square footage of
useable area contained in the Premises in proportion to the square footage of useable
building area of the Property. Tenant may audit or examine those items of expense in
Landlord's records that relate to Tenant's obligations under this Lease. Landlord shall
promptly refund to Tenant any overpayment that is established by an audit or examination. If
the audit or examination reveals an error of more than 5% over the figures billed to Tenant,
Landlord shall pay the reasonable cost of the audit or examination.
G. Gross -Up Provisions. [Check this only if applicable.] If the Property is a multi- tenant
building and is not fully occupied during the Base Year or any portion of the Term, an
adjustment will be made in computing the variable costs for the Base Year and each
applicable calendar year of the Term. Variable costs will include only those items of expense
that vary directly proportionately to the occupancy of the Property. Variable costs that are
included in the CAM Expenses, Operating Expenses and Utilities will be increased
proportionately to the amounts that, in Landlord's reasonable judgment, would have been
incurred had 95% of the useable area of the Property been occupied during those years.
COMMERCIAL Page ,;
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1.10 Permitted Use: General office
See Section 6.01]
1.11 Party to whom Tenant is to deliver payments under this Lease is the Landlord, unless one of
the following boxes is checked, in which case Tenant shall deliver payments to: Principal
Broker, or Other [Set forth name and address, if other than Landlord or Principal Broker]:
1.12 Principal Broker: Axis Reatly Group , is
acting as the agent for Landlord exclusively, unless one of the following boxes is checked, in
which case Principal Broker is acting as: the agent for Tenant exclusively, or an
intermediary.
Principal Broker's Address: 1,517 Centre Place Dry Ste.µ 250
Denton, TX 76205
Telephone (940) 891mm 2947 ...... Fax (940) 891 -2948 .
mm
z Email: alex @axisrealtyw ba.mmm
1.13 Cooperating Broker: ,m ................. m
Scott Brown Commercial , p 9
is acting as the agent for Tenant exclusively, unless one of the following boxes is checked, in
which case Cooperating Broker is acting as: the agent for Landlord exclusively, or an
intermediary..
Cooperating Brokers Address; 114 400 d....a......l ....las Drive
Denton, TX 76205
Telephone:. _.. .................. Fax:
Email:. .....m.m...
1.14 The Professional Service Fee (the "Fee "):
A. The percentages applicable in Section 15.01 and Section 15.02 to leases will be -%
of the Base Rent to Principal Broker and % of the Base Rent to Cooperating Broker.
If the Fee is based on an amount per square foot, that amount is $ ,,.........._ ._ 6_........_w,_.
per
square foot to Principal Broker and $ , m,. _ ..... per square foot to Cooperating
Broker. The Fee will be paid in the manner described in Subsection 15.01 A (half on execution
and half on the Commencement Date), unless this box is checked, in which case the Fee
will be paid in the manner described in Subsection 15.01 B (monthly).
B. The percentages applicable in Section 15.03 in the event of a sale will be % to
Principal Broker and % to Cooperating Broker,
1.15 Disclosure of Dual Capacity as Broker and Principal. [Complete if applicable]
A. ,_
y..... ...., ....
is a licensed Texas real estate broker and is
acting in a dual capacity as broker for Landlord and as a principal in this transaction, as he or
she may be Landlord (or one of the owners of Landlord).
B. ..........._ is a licensed Texas real estate broker and is
acting in a dual capacity as broker for Tenant and as a principal in this transaction, as he or she
may be Tenant (or one of the owners of Tenant).
1.16 Exhibits and Addenda. Any exhibit or addendum attached to this Lease (as indicated by the
boxes checked below) is incorporated as a part of this Lease. Any term not specifically defined
in an Addendum will have the same meaning given to it in the body of this Lease.
Exhibit "A" Survey and /or Legal Description of the Property
Exhibit "B" Floor Plan and /or Site Plan
Exhibit "C" Information About Brokerage Services
Exhibit "D" Other Landlord's scope, of Work
R a Pa LEASE
2014 - Form o 0
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Y Addendum "A"
Addendum "B"
Addendum "C"
Addendum "D"
Addendum "E"
Addendum "F"
Addendum "G"
Addendum "H"
Addendum "I"
Addendum "J"
Addendum "K"
Renewal Options
Construction of Improvements by Landlord
Construction of Improvements by Tenant
Percentage Rental and Gross Sales Reports
Right of First Refusal for Additional Space
Guaranty
Rules and Regulations
Rooftop Lease
Parking
Additional Provisions Addendum
Other _ ............... .... .
ARTICLE TWO
LEASE AND TERM
2.01 Lease of Premises for Term. Landlord leases the Premises to Tenant and Tenant leases the
Premises from Landlord for the Term stated in Section 1.05. The Commencement Date is the date
specified in Section 1.05, unless advanced or delayed under any provision of this Lease.
2.02 Delays in Commencement. Landlord will not be liable to Tenant if Landlord does not deliver
possession of the Premises to Tenant on the Commencement Date specified in Section 1.05 above.
Landlord's non - delivery of possession of the Premises to Tenant on the Commencement Date will not
affect this Lease or the obligations of Tenant under this Lease. However, the Commencement Date
will be delayed until possession of the Premises is delivered to Tenant. The Term will be extended for
a period equal to the delay in delivery of possession of the Premises to Tenant, plus the number of
days necessary for the Term to expire on the last day of a month. If Landlord does not deliver
possession of the Premises to Tenant within 60 days after the Commencement Date specified in
Section 1.05, Tenant may cancel this Lease by giving a written notice to Landlord at any time after the
60 -day period ends, but before Landlord actually delivers possession of the Premises to Tenant. If
Tenant gives such notice, this Lease will be canceled effective as of the date of its execution, any
prepaid amounts will be reimbursed to Tenant, and no party will have any rights or obligations under
this Lease. If Tenant does not give such notice within the time specified, Tenant will have no right to
cancel this Lease, and the Term will commence upon the delivery of possession of the Premises to
Tenant. If delivery of possession of the Premises to Tenant is delayed, Landlord and Tenant shall,
upon such delivery, execute an amendment to this Lease setting forth the revised Commencement
Date and Expiration Date of the Term.
2.03 Early Occupancy. If Tenant occupies the Premises before the Commencement Date, Tenant's
occupancy of the Premises will be subject to all of the provisions of this Lease. Early occupancy of the
Premises will not advance the Expiration Date. Unless otherwise provided in this Lease, Tenant shall
pay Base Rent and all other charges specified in this Lease for the period of occupancy.
2.04 Holding Over. Tenant shall vacate the Premises immediately upon the expiration of the Term or
earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against
all damages incurred by Landlord as a result of any delay by Tenant in vacating the Premises. If
Tenant does not vacate the Premises upon the expiration of the Term or earlier termination of this
Lease, Tenant's occupancy of the Premises will be a day -to -day tenancy, subject to all of the terms of
this Lease, except that the Base Rent during the holdover period will be increased to an amount that is
one - and - one -half (11/2) times the Base Rent in effect on the expiration or termination of this Lease,
computed on a daily basis for each day of the holdover period, plus all additional sums due under this
Lease. This Section will not be construed as Landlord's consent for Tenant to hold over or to extend
this Lease.
COMMERCIAL LEASE AGREEMENT - Page 6
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ARTICLE THREE
RENT AND SECURITY DEPOSIT
3.01 Manner of Payment. Tenant shall pay the Rent to Landlord at the address set forth in Section
1.02, unless another person is designated in Section 1.11, or to any other party or address Landlord
may designate in any written notice delivered to Tenant. Landlord may designate, in a written notice
delivered to Tenant, the party authorized to receive Rent and act on behalf of Landlord to enforce this
Lease. Any such authorization will remain in effect until it is revoked by Landlord in a subsequent
written notice delivered to Tenant. Any payments made to a third party designated by Landlord will be
deemed made to Landlord when received by the designated third party. All sums payable by Tenant
under this Lease, whether or not expressly denominated as Rent, will constitute rent for the purposes
of Section 502(b)(6) of the Bankruptcy Code and for all other purposes.
3.02 Time of Payment. Upon execution of this Lease, Tenant shall pay the installment of Base Rent
for the first month of the Term for which Base Rent is due (which may be later than the first month of
the Term, if there is a free rent period). On or before the first day of the next month and each month
thereafter, the installment of Base Rent and other sums due under this Lease will be due and payable,
in advance, without off -set, deduction or prior demand. Tenant shall cause payments to be properly
mailed or otherwise delivered so as to be actually received (and not merely deposited in the mail) by
Landlord (or the party identified in Section 1.11, or any other third party designated by Landlord) on or
before the due date. If the Term commences or ends on a day other than the first or last day of a
calendar month, the rent for any partial calendar month following the Commencement Date or
preceding the end of the Term will be prorated. Tenant shall pay any such prorated portion for a
partial calendar month at the beginning of the Term on the Commencement Date. Tenant shall pay
any such prorated portion for a partial calendar month at the end of the Term on the first day of that
calendar month.
3.03 Late Charges. Tenant's failure to promptly pay sums due under this Lease may cause Landlord
to incur unanticipated costs. The exact amount of those costs is impractical or extremely difficult to
ascertain. The costs may include, but are not limited to, processing and accounting charges and late
charges that may be imposed on Landlord by any ground lease or deed of trust encumbering the
Premises. Payments due to Landlord under this Lease are not an extension of credit. Therefore, if
any payment under this Lease is not actually received on or before the due date (and not merely
deposited in the mail), Landlord may, at Landlord's option and to the extent allowed by applicable law,
impose a Late Charge on any late payments in an amount equal to 10% of the amount of the past due
payment (the "Late Charge ") after the payment is more than five days past due. A Late Charge may
be imposed only once on each past due payment. Any Late Charge will be in addition to Landlord's
other remedies for nonpayment of Rent. If any check tendered by Tenant under this Lease is
dishonored for any reason, Tenant shall pay to Landlord a dishonored check fee of $30.00, plus (at
Landlord's option) a Late Charge as provided above until Good Funds (defined below) are received by
Landlord. The parties agree that any Late Charge and dishonored check fee represent a fair and
reasonable estimate of the costs Landlord will incur by reason of the late payment or dishonored
check. If there are any Late Charges, dishonored check fees, installments of Base Rent, and any
other unpaid charges or reimbursements due to Landlord, then Landlord may apply any payments
received from Tenant to any amounts due in any order Landlord may choose. Notwithstanding the
foregoing, Landlord will not impose a Late Charge as to the first late payment in any calendar year,
unless Tenant fails to pay the late payment to Landlord within three business days after the delivery of
a written notice from Landlord to Tenant demanding the late payment be paid. However, Landlord may
impose a Late Charge without advance notice to Tenant on any subsequent late payment in the same
calendar year.
3.04 Security Deposit. Upon execution of this Lease, in addition to the installment of Base Rent due
under Section 3.02, and in addition to any other amounts that are due from Tenant upon the execution
of this Lease, Tenant shall deliver to Landlord a Security Deposit in the amount stated in Section 1.08.
Landlord may apply all or part of the Security Deposit to any unpaid Rent, and damages and charges
for which Tenant is legally liable under this Lease, and damages and charges that result from a breach
of this Lease, including but not limited to, the cost to cure Tenant's failure to comply with Section 7.05
and any other provision that requires Tenant to leave the Premises in a certain condition upon the
expiration or termination of this Lease. If Landlord uses any part of the Security Deposit, Tenant shall
COMMERCIAL LEASE AGREEMENT - Page 9
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restore the Security Deposit to its full amount within 10 days after Landlord's written demand.
Tenant's failure to restore the full amount of the Security Deposit within the time specified will be a
default under this Lease. No interest will be paid on the Security Deposit. Landlord will 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. After the expiration of this Lease, Landlord shall refund
the unused portion of the Security Deposit, if any, to Tenant within 60 days after the date Tenant
surrenders possession of the Premises and provides a written notice to Landlord of Tenant's
forwarding address for the purpose of refunding the Security Deposit. The provisions of this Section
will survive the expiration or termination of this Lease.
3.05 Good Funds Payments. If any two or more payments by check from Tenant to Landlord for
Rent are dishonored and returned unpaid, thereafter Landlord may, at Landlord's option, by the
delivery of a written notice to Tenant, require that all future payments of Rent for the remaining Term
of this Lease must be made by cash, certified check, cashier's check, official bank check, money
order, wire transfer or automatic electronic funds transfer ( "Good Funds "), and that the delivery of
Tenant's personal or corporate check will no longer constitute payment of Rent under this Lease. Any
acceptance by Landlord of a payment for Rent by Tenant's personal or corporate check thereafter will
not be construed as a waiver of Landlord's right to insist upon payment by Good Funds as set forth in
this Section.
ARTICLE FOUR
TAXES
4.01 Payment by Landlord. Landlord shall pay the real estate taxes on the Premises during the
Term, subject to reimbursement by Tenant pursuant to any other provision in this Lease.
4.02 Improvements by Tenant. If the real estate taxes levied against the Premises for the year in
which the Term commences are increased as a result of any additions or improvements made by
Tenant, or by Landlord at Tenant's request, Tenant shall pay to Landlord upon demand the amount of
the increase and continue to pay the increase during the Term. Landlord shall use reasonable efforts
to obtain from the tax assessor a written statement of the amount of the increase due to such
additions or improvements.
4.03 Joint Assessment. If the real estate taxes are assessed against the Premises jointly with other
property that is not part of the Premises, the real estate taxes applicable to the Premises will be equal
to the amount bearing the same proportion to the aggregate assessment that the total square feet of
building area in the Premises bears to the total square feet of building area included in the joint
assessment. If there are no improvements on the Property or the other property, then land area will
be used instead of building area for the calculation of the proportional assessment. If there are
improvements on one of the jointly assessed properties but not on the other property, then the
calculation of the proportional assessment must be done in a reasonable manner.
4.04 Personal Property Taxes. Tenant shall pay all taxes assessed against trade fixtures,
furnishings, equipment, inventory, products, or any other personal property belonging to Tenant.
Tenant shall use reasonable efforts to have Tenant's property taxed separately from the Premises. If
any of Tenant's property is taxed with the Premises, Tenant shall pay the taxes for Tenant's property
to Landlord within 15 days after Tenant receives a written statement from Landlord for the property
taxes.
4.05 Waiver of Right to Protest Taxes. Unless otherwise provided in this Lease: (i) Landlord retains
the right to protest the tax assessment of the Property, and Tenant waives the right to protest; and (ii)
Tenant waives Landlord's obligation to provide Tenant with a notice of the tax valuation of the
Property.
ARTICLE FIVE
INSURANCE AND INDEMNITY
5.01 Property Insurance. During the Term, Landlord shall maintain insurance policies covering
damage to the Premises in an amount or percentage of replacement value as Landlord deems
reasonable in relation to the age, location, type of construction and physical condition of the Premises
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and the availability of insurance at reasonable rates. The policies will provide protection against risks
and causes of loss that Landlord reasonably deems necessary. Landlord may, at Landlord's option,
obtain insurance coverage for Tenant's fixtures, equipment and improvements in or on the Premises.
Promptly after the receipt of a written request from Tenant, Landlord shall provide a certificate of
insurance showing the insurance coverage then in effect. Tenant shall, at Tenant's expense, obtain
and maintain insurance on Tenant's fixtures, equipment and improvements in or on the Premises as
Tenant reasonably deems necessary to protect Tenant's interest. Any property insurance carried by
Landlord or Tenant will be for the sole benefit of the party carrying the insurance and under its sole
control.
5.02 Increases in Premiums. Tenant shall not conduct or permit any operation or activity, or store
or use any materials, in or around the Premises that would cause suspension or cancellation of any
insurance policy carried by Landlord. If Tenant's use or occupancy of the Premises causes Landlord's
insurance premiums to increase, then Tenant shall pay to Landlord, as additional Rent, the amount of
the increase within 10 days after Landlord delivers written evidence of the increase to Tenant.
5.03 Liability Insurance. During the Term, Tenant shall maintain a commercial general liability
insurance policy, at Tenant's expense, insuring Tenant against liability arising out of the use or
occupancy of the Premises, and naming Landlord as an additional insured. The initial amounts of the
insurance must be at least $1,000,000 or, if the following blank is completed $ w,.,......m
9 p General for Each Occurrence, 2,000,000 or, if the following blank is completed $ ......., -_, .
Aggregate per policy year, and $10,000 for Medical Expense. If Tenant's liability insurance coverage
is less than $5,000,000, and if this box ® is checked, then Tenant must also maintain a commercial
liability umbrella policy in amount to provide a combination of liability insurance coverage to equal a
5,000,000 total limit. The coverage amounts will be subject to periodic increases as Landlord may
reasonably determine from time to time. The amounts of the insurance will not limit Tenant's liability
or relieve Tenant of any obligation under this Lease. The policies must contain cross - liability
endorsements and must insure Tenant's performance of the indemnity provisions of Section 5.04.
The policies must contain a provision that prohibits cancellation or modification of the policy except
upon 30 days' prior written notice to Landlord. Tenant shall deliver a copy of the policy or certificate of
insurance to Landlord before the Commencement Date and before the expiration of the policy during
the Term. If Tenant fails to maintain the policy, Landlord may elect to maintain the insurance at
Tenant's expense.
5.04 Indemnity. Landlord will not be liable to Tenant or to Tenant's employees, agents, invitees or
visitors, or to any other person, for any injury to persons or damage to property on or about the
Premises or any adjacent area owned by Landlord caused by the negligence or misconduct of Tenant,
Tenant's employees, subtenants, agents, licensees or concessionaires or any other person entering
the Premises under express or implied invitation of Tenant, or arising out of the use of the Premises
by Tenant and the conduct of Tenant's business, or arising out of any breach or default by Tenant in
the performance of Tenant's obligations under this Lease. Tenant hereby agrees to defend, indemnify
and hold Landlord harmless from any loss, expense or claims arising out of such damage or injury.
Tenant will not be liable for any injury or damage caused by the negligence or misconduct of Landlord,
or Landlord's employees or agents, and Landlord agrees to indemnify and hold Tenant harmless from
any loss, expense or damage arising out of such damage or injury.
5.05 Waiver of Subrogation. Each party to this Lease waives any and every claim that arises or may
arise in its favor against the other party during the Term of this Lease for any and all loss of, or
damage to, any of its property located within or upon, or constituting a part of, the Premises, to the
extent the loss or damage is covered by and recoverable under valid and collectible insurance
policies. These mutual waivers are 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. Inasmuch as these mutual waivers will preclude the assignment of any such claim by way of
subrogation to an insurance company (or any other person), each party agrees to immediately give to
each insurance company that has issued an insurance policy to such party written notice of the terms
of such mutual waivers, and to cause the policies to be endorsed to prevent the invalidation of the
insurance coverage by reason of these waivers.
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ARTICLE SIX
USE OF PREMISES
6.01 Permitted Use. Tenant may use the Premises only for the Permitted Use stated in Section 1.10.
Tenant acknowledges that: (i) the current use of the Premises or the improvements located on the
Premises, or both, may not conform to city ordinances or restrictive covenants with respect to the
permitted use, zoning, height limitations, setback requirements, minimum parking requirements,
coverage ratio of improvements to land area, and other matters that may have a significant impact
upon the Tenant's intended use of the Premises; (ii) Tenant has independently investigated and
verified to Tenant's satisfaction the extent of any limitations or non - conforming uses of the Premises;
and (iii) Tenant is not relying upon any representations of Landlord or the Brokers with respect to any
such matters.
6.02 Compliance with Laws. Tenant shall comply with all governmental laws, ordinances and
regulations applicable to the use of the Premises, and will promptly comply with all governmental
orders and directives for the correction, prevention and abatement of nuisances and other activities in
or upon, or connected with the Premises, all at Tenant's sole expense, including any expense or cost
resulting from the construction or installation of fixtures and improvements or other accommodations
for handicapped or disabled persons required for compliance with governmental laws and regulations,
including but not limited to the Texas Architectural Barriers Act (the "TABA ") and the Americans with
Disabilities Act (the "ADA "). To the extent any alterations to the Premises are required by the TABA,
the ADA or other applicable laws or regulations, Tenant shall bear the expense of the alterations. To
the extent any alterations to areas of the Property outside the Premises are required by the TABA, the
ADA or other applicable laws or regulations (for "path of travel" requirements or otherwise), Landlord
shall bear the expense of the alterations.
6.03 Certificate of Occupancy. If required, Tenant shall apply for Certificate of Occupancy from the
municipality in which the Property is located before the Commencement Date, and obtain a Certificate
of Occupancy before Tenant occupies the Premises. If Tenant is unable to obtain a Certificate of
Occupancy after making an application and diligently pursuing it, then Tenant may terminate this
Lease by delivering a written notice to Landlord, unless either Landlord or Tenant is willing and able to
cure the defects that prevented the issuance of the Certificate of Occupancy. Either Landlord or
Tenant may cure any such defects, at their own expense, including any repairs, replacements, or
installations of any items that are not presently existing on the Premises, but neither of them have any
obligation to do so (unless another provision of this Lease states otherwise). If Tenant delivers a
written termination notice to Landlord under this Section, and then any defects are cured and a
Certificate of Occupancy is issued within 15 days after Tenant delivered the notice, then this Lease
will remain in force. If this Lease is terminated because Landlord and Tenant cannot get a Certificate
of Occupancy, then Landlord will return to Tenant any prepaid rent and any Security Deposit, and the
parties will have no further obligations under this Lease. References in this Lease to a "Certificate of
Occupancy" mean a Certificate of Occupancy sufficient to allow the Tenant to occupy the Premises
for the Permitted Use.
6.04 Signs. Without the prior written consent of Landlord, Tenant may not place any signs,
ornaments or other objects on the Premises or the Property, including but not limited to the roof or
exterior of the building or other improvements on the Property, or paint or otherwise decorate or
deface the exterior of the building or other improvements on the Property. Any signs installed by
Tenant must conform to applicable laws, deed restrictions, and other applicable requirements. Tenant
must remove all signs, decorations and ornaments at the expiration or termination of this Lease, and
must repair any damage and close any holes caused by installation or removal.
6.05 Utility Services. Unless otherwise provided in this Lease, Tenant shall pay the cost of all
Utilities used for the Premises, and the cost of replacing light bulbs and tubes. Unless otherwise
required by law, Landlord is the party entitled to designate utility and telecommunication service
providers to the Property and the Premises. Landlord may, at Landlord's option, allow Tenant to
select the provider. If Tenant selects the provider, any access or alterations to the Property or the
Premises necessary for the Utilities may be made only with Landlord's prior consent, which Landlord
will not unreasonably withhold or delay. If Landlord incurs any utility or connection charges that
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Tenant is responsible to pay and Landlord pays the charges, Tenant shall reimburse Landlord
immediately upon receipt of a written notice from Landlord stating the amount of the charges.
6.06 Landlord's Access. Landlord and Landlord's agents will have the right to, upon reasonable
advance notice, and without unreasonably interfering with Tenant's business, enter the Premises: (a)
to inspect the general condition and state of repair of the Premises, (b) to make repairs required or
permitted under this Lease, (c) to show the Premises or the Property to any prospective tenant or
purchaser, and (d) for any other reasonable purpose. If Tenant changes the locks on the Premises,
Tenant must provide Landlord with a copy of each separate key upon Landlord's request. During the
last 150 days of the Term, Landlord and Landlord's agents may erect signs on or about the Premises
advertising the Premises for lease or for sale.
6.07 Possession. If Tenant pays the Rent, properly maintains the Premises, and complies with all
other terms of this Lease, Tenant may occupy and enjoy the Premises for the full Term, subject to the
provisions of this Lease.
6.08 Exemptions from Liability. Landlord will not be liable for any damage to the business (including
any loss of income), goods, inventory, furnishings, fixtures, equipment, merchandise or other property
of Tenant, Tenant's employees, invitees or customers, or for any injury to Tenant or Tenant's
employees, invitees, customers or any other person in or about the Premises, whether the damage or
injury is caused by or results from: (a) fire, steam, electricity, water, gas or wind; (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 Premises or other portions
of the Property, or from other sources or places; or (d) any act or omission of any other occupant of
the Property. The provisions of this Section will not, however, exempt Landlord from liability for
Landlord's gross negligence or willful misconduct.
ARTICLE SEVEN
PROPERTY CONDITION, MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 Property Condition. Except as disclosed in writing by Landlord to Tenant before the execution
of this Lease, to the best of Landlord's actual knowledge: (i) the Premises have no known latent
structural or construction defects of a material nature; and (ii) none of the improvements to the
Premises have been constructed with materials known to be a potential health hazard to occupants of
the Premises. Unless otherwise expressly set forth in this Lease, Landlord represents that on the
Commencement Date (and for a period of 30 days thereafter): (a) the fixtures and equipment serving
the Premises are in good operating condition, including the plumbing, electrical and lighting systems,
any fire protection sprinkler system, the HVAC (defined below) systems and equipment, the roof,
skylights, doors, overhead doors, windows, dock levelers and elevators; and (b) the interior of the
Premises is in good condition. Tenant will have a period of 30 days after the Commencement Date to
inspect the Premises and notify Landlord in writing of any defects and maintenance, repairs or
replacements required to the above named fixtures, equipment and interior. Within a reasonable
period of time after the timely receipt of any such written notice from Tenant, Landlord shall, at
Landlord's expense, correct the defects and perform the maintenance, repairs and replacements.
7.02 Acceptance of Premises. Tenant has inspected, or has had an opportunity to inspect, the
Premises, before the execution of this Lease. Tenant has determined that the Premises may be used
for the Permitted Use. Subject to the provisions in Section 7.01, and any other express obligations of
Landlord in this Lease to construct any improvements, make repairs, or correct defects, Tenant agrees
to accept the Premises in "AS IS" condition and with all faults (other than latent defects). To the
extent permitted by applicable law, Tenant waives any implied warranties of Landlord as to the quality
or condition of the Premises or the Property, or as to the fitness or suitability of the Premises or the
Property for any particular use.
7.03 Maintenance and Repairs. Landlord will not be required to perform any maintenance or
repairs, or management services, in the Premises, except as otherwise provided in this Lease.
Tenant will be fully responsible, at Tenant's expense, for all maintenance and repairs, and
management services, other than those that are expressly set forth in this Lease as Landlord's
responsibility.
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A. Landlord's Obligations.
1) 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 roof, skylights, foundation, structural components and the structural portions of exterior
walls of the Premises in good order, condition and repair. Landlord will not be obligated to
maintain or repair windows, doors, overhead doors, plate glass or the surfaces of walls. In
addition, Landlord will not be obligated to make any repairs under this Section until a reasonable
time after receipt of written notice from Tenant of the need for repairs. If any repairs are required
to be made by Landlord, Tenant shall, at Tenant's sole cost and expense, promptly remove
Tenant's furnishings, fixtures, inventory, equipment and other property, to the extent required to
enable Landlord to make repairs. Landlord's liability under this Section will be limited to the cost
of those repairs or corrections. Tenant waives the benefit of any present or future law that might
give Tenant the right to repair the Premises at Landlord's expense or to terminate this Lease
because of the condition.
2) All repairs, maintenance, management and other services to be performed by Landlord or
Landlord's agents involve the exercise of professional judgment by service providers, and
Tenant expressly waives any claims against Landlord for breach of warranty arising from the
performance of those services.
B. Tenant's Obligations. Subject to the provisions of Section 7.01, Section 7.03A, Article Eight
Damage or Destruction) and Article Nine (Condemnation), Tenant shall, at all times, keep all
other portions of the Premises in good order, condition and repair (except for normal wear and
tear), including, but not limited to, maintenance, repairs and all necessary replacements of the
windows, plate glass, doors, overhead doors, HVAC equipment, electrical and lighting systems,
fire protection sprinkler system, dock levelers, elevators, interior and exterior plumbing, the
interior and exterior of the Premises in general, pest control and extermination, down spouts,
gutters, paving, railroad siding, care of landscaping and regular mowing of grass. In addition,
Tenant shall, at Tenant's expense, repair any damage to any portion of the Property, including
the roof, skylights, foundation, or structural components and exterior walls of the Premises,
caused by Tenant's acts or omissions. If Tenant fails to maintain and repair the Property as
required by this Section, Landlord may, on 10 days' prior written notice, enter the Premises and
perform the maintenance or repair on behalf of Tenant, except that no notice is required in case
of emergency, and Tenant shall reimburse Landlord immediately upon demand for all costs
incurred in performing the maintenance or repair, plus a reasonable service charge.
C. HVAC Service. This Section pertains to the heating, ventilation and air - conditioning ( "HVAC ")
systems and equipment that service the Premises. [Check one box only.]
1) Landlord is obligated to provide the HVAC services to the Premises only during the
operating hours of the Property (as described below).
2) Landlord will provide the HVAC services to the Premises during the operating hours of
the Property (as described below) for no additional charge and will, at Tenant's request,
provide HVAC services to the Premises during other hours for an additional charge of
6,_ .................m, per hour. Tenant will pay Landlord the charges under this paragraph
promptly after receipt of Landlord's invoice. Hourly charges are charged on a half -hour
basis. Any partial hour will be rounded up to the next half hour. Tenant will comply with
Landlord's procedures to make a request to provide the additional HVAC services in
advance.
3) Tenant will pay for the HVAC services under this Lease. For any HVAC system that
services only the Premises, Tenant shall, at Tenant's own cost and expense; enter into a
regularly scheduled preventative maintenance and service contract for all such HVAC
systems and equipment during the Term. If Tenant fails to enter into such a service contract
acceptable to Landlord, Landlord may do so on Tenant's behalf and Tenant agrees to pay
Landlord the cost and expense thereof, plus a reasonable service charge, periodically upon
demand.
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D. Operating Hours of the Property. The operating hours of the Property are the times
reasonably determined by Landlord unless they are specified here. [specify the operating
hours of the Property including the days of the week, and whether Saturdays, Sundays
and holidays are included]:
E. Cleaning. Tenant must keep the Premises clean and sanitary and promptly dispose of all trash
in appropriate receptacles. Tenant will provide, at Tenant's expense, janitorial services to the
Premises, unless this box is checked, in which case Landlord will provide janitorial services to
the Premises that are customary for the property type. Tenant will maintain, at Tenant's
expense, any grease trap on the Property that Tenant uses, including but not limited to periodic
emptying and cleaning, as well as making any modification to the grease trap that may be
necessary to comply with any applicable law.
7.04 Alterations, Additions and Improvements. Tenant may not create any openings in the roof
or exterior walls without the prior written consent of Landlord. Tenant may not make any alterations,
additions or improvements to the Premises ( "Alterations ") without the prior written consent of
Landlord. However, Tenant is not required to obtain the Landlord's prior written consent for
non - structural Alterations that do not cost more than $5,000 and that do not modify or affect the roof,
plumbing, HVAC systems or electrical systems. Consent for non - structural Alterations in excess of
5,000 or that modify or affect plumbing, HVAC systems or electrical systems will not be unreasonably
withheld, conditioned or delayed by Landlord. Tenant may erect or install trade fixtures, shelves, bins,
machinery, HVAC systems, and refrigeration equipment, provided that Tenant complies with all
applicable governmental laws, ordinances, codes, and regulations. At the expiration or termination of
this Lease, Tenant may, subject to the restrictions of Section 7.05, remove items installed by Tenant,
provided Tenant is not in default at the time of the removal and Tenant repairs, in a good and
workmanlike manner, any damage caused by the installation or removal. Tenant shall pay for all costs
incurred or arising out of Alterations and will not permit any mechanic's or materialman's lien to be
filed against the Premises or the Property. Upon request by Landlord, Tenant shall deliver to Landlord
proof of payment, reasonably satisfactory to Landlord, of all costs incurred in connection with any
Alterations.
7.05 Condition upon Termination. Upon the expiration or termination of this Lease, Tenant shall
surrender the Premises to Landlord broom clean and in the same condition as received, except for
normal wear and tear and any damage caused by a casualty that Tenant is not otherwise obligated to
repair under any provision of this Lease. Tenant will not be obligated to repair any damage that
Landlord is required to repair under Article Seven (Property Condition) or Article Eight (Damage or
Destruction). In addition, Landlord may require Tenant to remove any Alterations before the expiration
or termination of this Lease and to restore the Premises to their prior condition, all at Tenant's
expense. However, Tenant will not be required to remove any Alterations that were made with
Landlord's consent or that were otherwise permitted under the terms of this Lease. All Alterations that
Tenant does not remove will become Landlord's property upon the expiration or termination of this
Lease. In no event may Tenant remove any of the following items without Landlord's prior written
consent: (i) electrical wiring or power panels; (ii) lighting or lighting fixtures; (iii) wall coverings, drapes,
blinds or other window coverings; (iv) carpets or other floor coverings; (v) HVAC equipment; (vi)
plumbing equipment; (vii) fencing or gates; or (viii) any fixtures, equipment or other items that, if
removed, would affect the operation or the appearance of the Property. However, Tenant may
remove Tenant's trade fixtures, equipment used in Tenant's business, and personal property. The
provisions of this Section will survive the expiration or termination of this Lease.
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ARTICLE EIGHT
DAMAGE OR DESTRUCTION
8.01 Notice. If any buildings or other improvements situated on the Property are damaged or
destroyed by fire, flood, windstorm, tornado or other casualty, Tenant shall immediately give written
notice of the damage or destruction to Landlord.
8.02 Partial Damage. If the Premises are damaged by fire, tornado or other casualty, and rebuilding
and repairs can be completed within 120 days after the date Landlord receives written notification from
Tenant of the occurrence of the damage, then this Lease will not terminate, but Landlord shai'l proceed
with reasonable diligence to rebuild and repair the Premises (other than leasehold improvements
made by Tenant or any assignee, subtenant or other occupant of the Premises) to substantially the
condition they were in before the damage. To the extent the Premises cannot be occUpied (in whole
or in part) after the casualty, the Rent payable under this Lease during the period the Premises cannot
be fully occupied will be adjusted equitably.
If the casualty occurs during the last 18 months of the Term, Landlord will not be required to rebuild or
repair the damage unless Tenant exercises Tenant's renewal option (if any) within 15 days after the
date Landlord receives written notification of the occurrence of the damage. If the casualty occurs
during the last 18 months of the Term and Tenant does not so exercise Tenant's renewal option, or if
there is no renewal option in this Lease, Landlord may, at Landlord's option, terminate this Lease by
delivering a written termination notice to Tenant, in which case the Rent will be abated for the
unexpired portion of the Term, effective on the date Landlord received written notification of the
damage.
8.03 Substantial or Total Destruction. If the Premises are substantially or totally destroyed by fire,
tornado, or other casualty, or so damaged that rebuilding and repairs cannot reasonably be completed
within 120 days after the date Landlord receives written notification from Tenant of the occurrence of
the damage, either Landlord or Tenant may terminate this Lease by promptly delivering a written
termination notice to the other party, in which event the monthly installments of Rent will be abated for
the unexpired portion of the Term, effective on the date of the damage or destruction. If neither party
promptly terminates this Lease, Landlord shall proceed with reasonable diligence to rebuild and repair
the Premises (except that Tenant shall rebuild and repair Tenant's fixtures and improvements in the
Premises). To the extent the Premises cannot be occupied (in whole or in part) after the casualty, the
Rent payable under this Lease during the period the Premises cannot be fully occupied will be
adjusted equitably.
ARTICLE NINE
CONDEMNATION
If, during the Term, all or a substantial part of the Premises are taken for any public or quasi - public
use under any governmental law, ordinance or regulation or by right of eminent domain, or are
conveyed to the condemning authority under threat of condemnation, this Lease will terminate and the
monthly installments of Rent will be abated during the unexpired portion of the Term, effective on the
date of the taking. If less than a substantial part of the Premises is taken for public or quasi - public use
under any governmental law, ordinance or regulation, or by right of eminent domain, or is conveyed to
the condemning authority under threat of condemnation, Landlord shall promptly, at Landlord's
expense, restore and reconstruct the Premises (other than leasehold improvements made by Tenant
or any assignee, subtenant or other occupant of the Premises) in order to make the Premises
reasonably suitable for the Permitted Use. The Rent payable under this Lease during the unexpired
portion of the Term will be adjusted equitably. If there is a taking of the Property that has a material,
adverse effect on the operation of Tenant's business in the Premises, then the Rent will be adjusted
equitably. Landlord and Tenant will 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
proceeding. The termination of this Lease will not affect the rights of the parties to those awards.
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ARTICLE TEN
ASSIGNMENT AND SUBLETTING
Tenant may not assign this Lease or sublet the Premises or any portion thereof, without the prior
written consent of Landlord, which consent will not be unreasonably withheld or delayed. Any
assignment or subletting will be expressly subject to all terms and provisions of this Lease, including
the provisions of Section 6.01 pertaining to the use of the Premises. In the event of any assignment
or subletting, Tenant will remain fully liable for the full performance of all of Tenant's obligations under
this Lease. Tenant may not assign Tenant's rights under this Lease or sublet the Premises without
first obtaining a written agreement from the assignee or sublessee whereby the assignee or sublessee
agrees to assume the obligations of Tenant under this Lease and to be bound by the terms of this
Lease. If a Default occurs while the Premises is assigned or sublet, Landlord may, at Landlord's
option, in addition to any other remedies provided in this Lease or by law, collect directly from the
assignee or subtenant all rents becoming due under the terms of the assignment or subletting and
apply the rents against any sums due to Landlord under this Lease. No direct collection by Landlord
from any assignee or subtenant will release Tenant from Tenant's obligations under this Lease.
ARTICLE ELEVEN
DEFAULT AND REMEDIES
11.01 Default. Each of the following events is a default under this Lease (a "Default "):
A. Failure of Tenant to pay any installment of the Rent or other sum payable to Landlord under
this Lease on the date that it is due, and the continuance of that failure for a period of five
days after Landlord delivers written notice of the failure to Tenant. This clause will not be
construed to permit or allow a delay in paying Rent beyond the due date and will not affect
Landlord's right to impose a Late Charge as permitted in Section 3.03;
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 the continuance of that failure for a period
of 30 days after Landlord delivers written notice of the failure to Tenant;
C. Failure of Tenant or any guarantor of Tenant's obligations under this Lease to pay its debts
as they become due or an admission in writing of inability to pay its debts, or the making of
a general assignment for the benefit of creditors;
D. The commencement by Tenant or any guarantor of Tenant's obligations under this Lease of
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 a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of its property;
E. The commencement of any case, proceeding or other action against Tenant or any
guarantor of Tenant's obligations under this Lease 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 a receiver, trustee,
custodian or other similar official for it or for all or any substantial part of its property, and
Tenant or any guarantor: (i) fails to obtain a dismissal of such case, proceeding, or other
action within 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
that is not fully stayed within seven business days after the entry thereof; and
F. Vacancy or abandonment by Tenant of any substantial portion of the Premises or cessation
of the use of the Premises for the purpose leased, and the continuance of that vacancy,
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abandonment or cessation for a period of 30 days after Landlord delivers a written notice to
Tenant.
11.02 Remedies. Upon the occurrence of any Default listed in Section 11.01, Landlord may pursue
any one or more of the following remedies without any prior notice or demand.
A. Landlord may terminate this Lease, in which event Tenant shall immediately surrender the
Premises to Landlord. If Tenant fails to surrender the Premises, Landlord may, without
prejudice to any other remedy that Landlord may have for possession of the Premises or
Rent in arrears, enter upon and take possession of the Premises and expel Tenant and any
other person who may be occupying the Premises or any part thereof, without being liable
for any claim for damages due to the termination of this Lease or termination of possession.
Tenant shall pay to Landlord on demand the amount of all Rent and loss and damage
Landlord may suffer by reason of the termination or inability to relet the Premises up to the
date of termination, in addition to any other liabilities that survive the termination of this
Lease.
B. Landlord may enter upon and take possession of the Premises, without terminating this
Lease and without being liable for any claim for damages due to termination of possession,
and expel Tenant and any other person who may be occupying the Premises or any part
thereof. Landlord may relet the Premises and receive rent from the new occupant. 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 the deficiency,
professional service fees, reasonable attorneys' fees, court costs, remodeling expenses
and other costs of reletting will be subtracted from the amount of rent received from the new
occupant.
C. Landlord may enter upon the Premises, without terminating this Lease and without being
liable for any claim for damages due to such entry, and do whatever Tenant is obligated to
do under the terms of this Lease. Tenant agrees to pay Landlord on demand for expenses
that Landlord incurs in performing Tenant's obligations under this Lease, together with
interest thereon at the rate of 12% per annum from the date spent until paid.
D. Landlord may sue Tenant for damages for breach of this Lease after Tenant's Default and
abandonment of the Premises, or after Landlord terminates Tenant's possession and
Tenant vacates the Premises, in which case the measure of damages is the sum of: (i) the
unpaid Rent up to the date of the abandonment or vacancy, plus (ii) the difference between
the Rent for the remainder of the Term after abandonment or vacancy, and the fair market
rental value of this Lease for the remainder of the Term after abandonment or vacancy,
such difference to be discounted to present value at a rate equal to the rate of interest that
is allowed by law in the State of Texas when the parties to a contract have not agreed on
any particular rate of interest (or, in the absence of such law, at the rate of 6% per annum).
Neither the enforcement or collection by Landlord of those amounts nor the payment by
Tenant of those amounts will constitute a waiver by Landlord of any breach, existing or in
the future, of any of the terms or provisions of this Lease by Tenant or a waiver of any rights
or remedies that the Landlord may have with respect to any breach.
E. In addition to the foregoing remedies, Landlord may change or modify the locks on the
Premises if Tenant fails to pay the Rent when due. Landlord will not be obligated to provide
another key to Tenant or allow Tenant to regain entry to the Premises unless and until
Tenant pays Landlord all Rent that is delinquent. Tenant agrees that Landlord will not be
liable for any damages resulting to the Tenant from the lockout. When Landlord changes or
modifies the locks, Landlord or Landlord's agent shall post a written notice in accordance
with Section 93.002 of the Texas Property Code, or its successor statute. Tenant may be
subject to legal liability if Tenant or Tenant's representative tampers with any lock after the
locks have been changed or modified.
F. No re -entry or taking possession of the Premises by Landlord will be construed as an
election to terminate this Lease, unless a written notice of that intention is given to Tenant.
Notwithstanding any re- entry, taking possession or reletting, Landlord may, at any time
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thereafter, elect to terminate this Lease for a previous Default. Pursuit of any of the
foregoing remedies will not preclude pursuit of any other remedies provided by law, nor will
pursuit of any remedy provided in this Lease constitute a forfeiture or waiver of any Rent
due to Landlord under this Lease or of any damages accruing to Landlord by reason of the
violation of any of the provisions in this Lease. Failure of Landlord to declare any Default
immediately upon its occurrence, or failure to enforce one or more of Landlord's remedies,
or forbearance by Landlord to enforce one or more of Landlord's remedies upon a Default,
will not be deemed to constitute a waiver of any of Landlord's remedies for any Default.
Pursuit of any one of the remedies will not preclude pursuit by Landlord of any of the other
remedies provided in this Lease. The loss or damage that Landlord may suffer by reason of
a Default by Tenant under this Lease, or the deficiency from any reletting, will include the
expense of taking possession and any repairs performed by Landlord after a Default by
Tenant. If Landlord terminates this Lease at any time for any Default, in addition to other
Landlord's remedies, Landlord may recover from Tenant all damages Landlord may incur by
reason of the Default, including the cost of recovering the Premises and the Rent then
remaining unpaid.
G. Nothing in this Lease will be construed as imposing any duty upon Landlord to relet the
Premises. Landlord will have no duty to mitigate Landlord's damages except as required by
applicable law. Any duty imposed by law on Landlord to mitigate damages after a Default
by Tenant will be satisfied if Landlord undertakes to lease the Premises to another tenant (a
Substitute Tenant ") in accordance with the following criteria:
1) Landlord will have no obligation to solicit or entertain negotiations with any other
prospective tenant for the Premises until Landlord obtains full possession of the Premises
including, without limitation, the final and unappealable legal right to relet the Premises free
of any claim of Tenant;
2) Landlord will not be obligated to lease or show the Premises on a priority basis, or offer
the Premises to a prospective tenant when other space in the Property suitable for the
prospective tenant's use is (or soon will be) available;
3) Landlord will not be obligated to lease the Premises to a Substitute Tenant for an
amount less than the current fair market rent then prevailing for similar uses in comparable
buildings in the same market area as the Property, nor will Landlord be obligated to enter
into a new lease under other terms and conditions that are unacceptable to Landlord under
Landlord's then current leasing policies for comparable space in the Property;
4) Landlord will not be obligated to enter into a lease with a Substitute Tenant whose use
would:
i) violate any restriction, covenant, or requirement contained in the lease of another
tenant of the Property;
ii) adversely affect the reputation of the Property; or
iii) be incompatible with other uses of the Property.
5) Landlord will not be obligated to enter into a lease with a Substitute Tenant that does
not have, in Landlord's reasonable opinion, sufficient financial resources to pay the Rent
under the new lease and operate the Premises in a first class manner; and
6) Landlord will not be required to spend any amount of money to alter, remodel, or
otherwise make the Premises suitable for use by a proposed Substitute Tenant unless:
i) Tenant pays any such sum to Landlord in advance of Landlord's execution of a
lease with the Substitute Tenant (which payment will not be in lieu of any damages or other
sums to which Landlord may be entitled as a result of Tenant's Default under this Lease); or
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ii) Landlord, in Landlord's reasonable discretion, determines that any such
expenditure is financially justified in connection with entering into a lease with the Substitute
Tenant.
H. No right or remedy of Landlord is intended to be exclusive of any other right or remedy, and
each and every right and remedy will be cumulative and in addition to any other right or
remedy now or hereafter existing under this Lease, at law, in equity or by statute. Landlord
will not be liable for any damages resulting to Tenant from any right or remedy
exercised by Landlord, regardless of the cause, even if it is caused by the sole, joint
or concurrent negligence of Landlord.
11.03 Notice of Default. Tenant shall give written notice of any failure by Landlord to perform any of
Landlord's obligations under this Lease to Landlord and to any ground lessor, mortgagee or
beneficiary under any deed of trust encumbering the Premises whose name and address have been
furnished to Tenant in writing. Landlord will not be in default under this Lease unless Landlord (or the
ground lessor, mortgagee or beneficiary) fails to cure the nonperformance within 30 days after receipt
of Tenant's notice. However, if the nonperformance reasonably requires more than 30 days to cure,
Landlord will not be in default if the cure is commenced within the 30 -day period and is 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 Premises, or the leasehold estate under a ground
lease of the Premises, 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 title or estate. Any Landlord
who transfers its title, estate or other interest is relieved of all liability with respect to the obligations of
Landlord under this Lease accruing on or after the date of the transfer, and Tenant agrees to
recognize the transferee as Landlord under this Lease. However, each Landlord shall deliver to its
transferee the Security Deposit held by Landlord, to the extent the Security Deposit has not then been
applied under the terms of this Lease.
ARTICLE TWELVE
LANDLORD'S CONTRACTUAL 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 under this Lease from Tenant,
upon all inventory, goods, wares, equipment, fixtures, furniture and all other personal property of
Tenant situated in or on the Premises, together with the proceeds from the sale thereof. Tenant may
not remove such property without the consent of Landlord until all Rent in arrears and other sums then
due to Landlord under this Lease have been paid. Upon the occurrence of a Default, Landlord may, in
addition to any other remedies provided in this Lease or by law, enter upon the Premises and take
possession of any and all goods, wares, equipment, fixtures, furniture and other personal property of
Tenant situated in or on the Premises without liability for trespass or conversion, and sell the property
at public or private sales, with or without having the 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 the sale will be deemed sufficient if given in the manner prescribed in this Lease at least 10
days before the time of the sale. Any public sale made under this Article will be deemed to have been
conducted in a commercially reasonable manner if held on the Premises 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 the county where the Premises is
located 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
pursuant to this Article, less any and all expenses connected with the taking of possession, holding
and selling of the property (including reasonable attorneys' fees and expenses), will be applied as a
credit against the indebtedness secured by the security interest granted in this Article. Any surplus
will be paid to Tenant or as otherwise required by law, and Tenant shall promptly pay any deficiencies.
Landlord is authorized to file a financing statement to perfect the security interest of Landlord in the
aforementioned property and proceeds thereof under the provisions of the Texas Business and
Commerce Code in effect in the State of Texas. Provided Tenant is not in default under any of the
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terms of this Lease, upon written request by Tenant, Landlord shall deliver a written subordination of
Landlord's statutory and contractual liens to any liens and security interests securing any institutional
third party financing of Tenant. Landlord shall not unreasonably withhold or delay the delivery of
Landlord's written subordination.
ARTICLE THIRTEEN
PROTECTION OF LENDERS
13.01 Subordination and Attornment. Landlord may subordinate this Lease to any future ground
Lease, deed of trust or mortgage encumbering the Premises, and advances made on the security
thereof and any renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Landlord's right to subordinate is subject to Landlord providing Tenant
with a written Subordination, Non - disturbance and Attornment Agreement from the ground lessor,
beneficiary or mortgagee wherein Tenant's right to peaceable possession of the Premises during the
Term will not be disturbed if Tenant pays the Rent and performs all of Tenant's obligations under this
Lease and is not otherwise in default, in which case Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Premises and recognize the transferee or successor as
Landlord under this Lease. Tenant's rights under this Lease are subordinate to any existing ground
lease, deed of trust or mortgage encumbering the Premises. However, if any ground lessor,
beneficiary or mortgagee elects to have this Lease be superior to its ground lease, deed of trust or
mortgage and gives Tenant written notice thereof, then this Lease will be deemed superior to the
ground lease, deed of trust or mortgage whether this Lease is dated prior or subsequent to the date of
the ground lease, deed of trust or mortgage or the date of recording thereof.
13.02 Signing of Documents. Tenant shall sign and deliver any document that may be requested to
evidence any attornment or subordination, or any agreement to attorn or subordinate, as long as the
document is consistent with the provisions of Section 13.01. If Tenant fails to do so within 10 days
after a written request, Tenant hereby irrevocably appoints Landlord as Tenant's attorney -in -fact to
execute and deliver the attornment or subordination document.
13.03 Estoppel Certificates.
A. Upon Landlord's written request, Tenant shall execute and deliver to Landlord a written
statement (an "Estoppel Certificate ") certifying:
1) whether Tenant is an assignee or subtenant;
2) the Expiration Date of this Lease;
3) the number of renewal options under this Lease, if any, and the total period of time
covered by the renewal options;
4) that none of the terms or provisions of this Lease have been changed since the original
execution of this Lease, except as shown on any attached amendments or modifications;
5) that no default exists under the terms of this Lease by either Landlord or Tenant;
6) that Tenant has no claim against Landlord under this Lease and has no defense or right
of offset against collection of Rent or other charges accruing under this Lease;
7) the amount and payment date of the last payment of Rent, the period of time covered by
that payment, and the amount of any rental payments made in advance;
8) the amount of any Security Deposit and other deposits, if any; and
9) the identity and address of any guarantor of this Lease.
Tenant shall deliver the statement to Landlord within 10 days after Landlord's request.
Landlord may forward any such statement to any prospective purchaser or lender of the
Premises. The purchaser or lender may rely conclusively upon the statement as true and
correct.
B. If Tenant does not deliver the Estoppel Certificate to Landlord within the 10 -day period,
Landlord, and any prospective purchaser or lender, may conclusively presume and rely
upon the following facts: (1) that the terms and provisions of this Lease have not been
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changed except as otherwise represented by Landlord (2) that this Lease has not been
terminated except as otherwise represented by Landlord; (3) that not more than one
monthly installment of Base Rent and other charges have been paid in advance; (4) there
are no claims against Landlord nor any defenses or rights of offset against collection of
Rent; and (5) that Landlord is not in default under this Lease. In such event, Tenant will be
estopped from denying the truth of the presumed facts.
C. Also, if Tenant does not deliver the Estoppel Certificate to Landlord within the 10 -day
period, Landlord may deliver a written notice to Tenant stating that Tenant must deliver an
Estoppel Certificate under this Section within five days after Tenant receives the notice. If
Tenant does not deliver an Estoppel Certificate to Landlord within five days after Tenant
receives the notice, then Tenant's failure to deliver an Estoppel Certificate will constitute a
Default under this Lease, notwithstanding any longer period of time under Section 11.01
that Tenant would otherwise be allowed to cure a failure before the failure would become a
Default.
13.04 Tenant's Financial Condition. Within 10 days after a written request from Landlord, but not
more than two times in any calendar year, Tenant shall deliver to Landlord 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 the lender to facilitate the financing or refinancing of the Premises.
Tenant represents to Landlord that each financial statement is a true, complete, and accurate
statement as of the date of the statement. All financial statements will be confidential and will be used
only for the purposes set forth in this Lease.
ARTICLE FOURTEEN
ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
14.01 Tenant's Compliance with Environmental Laws. Tenant, at Tenant's expense, shall comply
with all laws, rules, orders, ordinances, directions, regulations and requirements of Federal, State,
county and municipal authorities pertaining to Tenant's use of the Property and with the recorded
covenants, conditions and restrictions, regardless of when they become effective, including, without
limitation, all applicable Federal, State and local laws, regulations or ordinances pertaining to air and
water quality, Hazardous Materials (as defined in Section 14.05), waste disposal, air emissions and
other environmental matters, all zoning and other land use matters, and with any direction of any
public officer or officers, pursuant to law, which impose any duty upon Landlord or Tenant with respect
to the use or occupancy of the Property.
14.02 Tenant's Indemnification. Tenant shall not cause or permit any Hazardous Materials to be
brought upon, kept or used in or about the Property by Tenant, or Tenant's agents, employees,
contractors or invitees without the prior written consent of Landlord. If the presence of Hazardous
Materials on the Property caused or permitted by Tenant results in contamination of the Property or
any other property, or if contamination of the Property or any other property by Hazardous Materials
otherwise occurs for which Tenant is legally liable to Landlord for damage resulting therefrom, then
Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value
of the Property, damages for the loss or restriction on use of rentable or unusable space or of any
amenity or appurtenance of the Property, damages arising from any adverse impact on marketing of
building space or land area, sums paid in settlement of claims, reasonable attorneys' fees, court costs,
consultant fees and expert fees) that arise during or after the Term as a result of the contamination.
This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any clean -up, remedial work, removal or restoration work
required by any Federal, State or local government agency because of Hazardous Materials present in
the soil or ground water on or under the Property. Without limiting the foregoing, if the presence of any
Hazardous Materials on the Property (or any other property) caused or permitted by Tenant results in
any contamination of the Property, Tenant shall promptly take all actions at Tenant's sole expense as
are necessary to return the Property to the condition existing prior to the introduction of any such
Hazardous Materials, provided that Landlord's approval of such actions is first obtained.
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14.03 Landlord's Representations. Landlord represents, to the best of Landlord's actual knowledge,
that: (i) any handling, transportation, storage, treatment or usage of Hazardous Materials that has
occurred on the Property to date has been in compliance with all applicable Federal, State, and local
laws, regulations and ordinances; and (ii) no leak, spill, release, discharge, emission or disposal of
Hazardous Materials has occurred on the Property to date and that the soil or groundwater on or
under the Property is free of Hazardous Materials as of the Commencement Date, unless expressly
disclosed by Landlord to Tenant in writing.
14.04 Landlord's Indemnification. Landlord hereby indemnifies, defends and holds Tenant harmless
from any claims, judgments, damages, penalties, fines, costs, liabilities, (including sums paid in
settlements of claims) or loss, including, without limitation, reasonable attorneys' fees, court costs,
consultant fees, and expert fees, which arise during or after the Term of this Lease from or in
connection with the presence or suspected presence of Hazardous Materials in the soil or
groundwater on or under the Property, unless the Hazardous Material is released by Tenant or is
present as a result of the negligence or willful conduct of Tenant. Without limiting the generality of the
foregoing, the indemnification provided by this Section will specifically cover costs incurred in
connection with any investigation of site conditions or any clean -up, remedial work, removal or
restoration work required by any Federal, State or local governmental authority.
14.05 Definition. For purposes of this Lease, the term "Hazardous Materials" means any one or
more pollutant, toxic substance, hazardous waste, hazardous material, hazardous substance, solvent
or oil as defined in or pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, the Clean Water Act, as amended, the Water Pollution Control Act, as
amended, the Solid Waste Disposal Act, as amended, or any other Federal, State or local
environmental law, regulation, ordinance, or rule, whether existing as of the date of this Lease or
subsequently enacted.
14.06 Survival. The representations and indemnities contained in this Article Fourteen will survive the
expiration or termination of this Lease.
ARTICLE FIFTEEN
PROFESSIONAL SERVICE FEES
15.01 Amount and Manner of Payment. Professional service Fees due to the Principal Broker and
Cooperating Broker (together, the "Brokers ") will be calculated and paid as follows:
A. Lump Sum. Unless the box for Section 15.01B is checked in Section 1.14A, then Landlord
agrees to pay to each of the Brokers a lump sum professional service Fee for negotiating
this Lease, plus any applicable sales taxes, equal to: (i) the percentages stated in Section
1.14A of the total Base Rent to become due to Landlord during the Term, if the blanks for
percentages are completed; or (ii) the amounts per square foot in the Premises stated in
Section 1.14A, if the blanks for amounts per square foot are completed. The Fees will be
paid to the Brokers (i) one -half on the date of final execution of this Lease, and (ii) the
balance on the Commencement Date of this Lease.
B. Monthly. If the box for this Section 15.01B is checked in _Section 1.14A, then Landlord
agrees to pay to each of the Brokers a monthly professional service Fee for negotiating this
Lease, plus any applicable sales taxes, equal to the percentages stated in aection 1.14A of
each monthly Base Rent payment at the time the payment is due.
15.02 Payments on Renewal, Expansion or New Lease. Subject to the termination date stated in
this Section below, if Tenant or Tenant's successors or assigns: (a) exercises any right or option to
renew or extend the Term (whether contained in this Lease or in any amendment to this Lease) or
enters into a new lease covering the Premises, a portion of the Premises, or the Premises and
additional space; or (b) enters into any new lease, expansion or other rental agreement as to any
premises located on or constituting all or part of any real property owned by Landlord adjacent to the
Property, then Landlord shall pay to each of the Brokers an additional Fee covering the full period of
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the renewal, extension, new lease, expansion or other rental agreement. The additional Fees will be
due on the date of exercise of a renewal option, or the date of execution in the case of a new lease,
expansion or other agreement. The additional Fees will be computed and paid under Section 15.01A
or Section 15.01B above (whichever has been made applicable under Section 1.14), as if a new lease
had been made for such period of time. The Brokers' right to receive these additional Fees will
terminate on the date that is 10 years after the expiration of the Term of this Lease, as amended or
extended.
15.03 Payments on Sale. Subject to the termination date stated in this Section below, if Tenant or
Tenant's successors or assigns, purchases the Premises pursuant to a purchase option contained in
this Lease (or in any amendment to this Lease or any other agreement) or otherwise purchases the
Premises, the Property or any portion of either the Premises or the Property, then Landlord shall pay
to each of the Brokers a Fee equal to the percentages stated in Section 1.148 of the purchase price,
payable in Good Funds at the closing. Upon the closing of a sale to Tenant, any monthly lease Fees
will terminate upon payment of the Fee on the sale. The Brokers' right to receive the Fees set forth in
this Section 15.03 will terminate on the date that is 10 years after the expiration of the Term of this
Lease, as amended or extended.
15.04 Other Brokers. Both Landlord and Tenant represent to the other party that they have had no
dealings with any person, firm or agent in the negotiation of this Lease other than the Broker(s) named
in this Lease, and no other broker, agent, person, firm or entity other than the Broker(s) is entitled to
any commission or fee in connection with this Lease.
15.05 Landlord's Liability. Landlord will be liable for payment of all Fees solely to the Brokers, and
Landlord will not be obligated to pay any claims by any undisclosed broker. The Principal Broker may
pay a portion of the Fee to any Cooperating Broker pursuant to a separate agreement between the
Brokers.
15.05 Joint Liability of Tenant. If Tenant enters into any new lease, extension, renewal, expansion,
or other agreement to rent, occupy, or purchase any property described in Section I .02 or Section
15,_Q within the time specified in those Sections, the negotiations must be communicated through the
Principal Broker (which may be done through the Cooperating Broker), otherwise Tenant will be jointly
and severally liable with Landlord for any payments due or to become due to the Principal Broker.
15.07 Assumption on Sale. In the event of a sale or other transfer of the Premises by Landlord,
Landlord shall assign this Lease to the purchaser or other transferee, and obtain from the purchaser or
other transferee an Assumption Agreement in recordable form whereby the purchaser or other
transferee agrees to pay the Brokers all Fees payable under this Lease. Landlord shall deliver a fully
executed original counterpart of the Assumption Agreement to each of the Brokers upon the closing of
the sale or other transfer of the Premises. Landlord will be released from personal liability for
subsequent payments of Fees payable under this Lease only upon the delivery of the Assumption
Agreement to the Brokers.
15.08 Termination. Landlord and Tenant agree that the Brokers are third party beneficiaries of this
Lease with respect to the Fees, and that no change may he made by Landlord or Tenant as to the
time of payment, amount of payment or the conditions for payment of the Fees without the written
consent of the Brokers. The termination of this L..ease by the mutual agreement of Landlord and
Tenant will not affect the right of the Brokers to continue to receive the Fees agreed to be paid Lander
this Lease, just as if Tenant had continued to occupy the Premises and had paid the Rent during the
entire Term. Amendment or termination of this Lease under Article Eight (Damage or Destruction) and
Article Nine (Condemnation) will not amend or terminate the Brokers' right to collect the Fees.
15.09 Intermediary Relationship.
A. If either of the Brokers has indicated in Section 1.12 or Section 1.13 or otherwise that they
are acting as an intermediary, then Landlord and Tenant consent to the intermediary
relationship, authorize such Broker or Brokers to act as an intermediary between Landlord
and Tenant in connection with this Lease, and acknowledge that the source of any
expected compensation to the Brokers will be Landlord, and the Brokers may also be paid a
fee by Tenant. A broker, and any broker or salesperson appointed to communicate
COMMERCIAL LEASE AGREEMENT - Page 24
ONTCAR 2014 — Form No. 2 (3/2014)
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with and carry out instructions of one party, who acts as an intermediary is required
to act fairly and impartially, and may not:
1) disclose to Tenant that Landlord will accept a rent less than the asking rent,
unless otherwise instructed in a separate writing by Landlord;
2) disclose to Landlord that Tenant will pay a rent greater than the rental submitted
in a written offer to Landlord, unless otherwise instructed in a separate writing by
Tenant;
3) disclose any confidential information, or any information a party specifically
instructs the real estate broker or salesperson in writing not to disclose, unless:
a) the broker or salesperson is otherwise instructed in a separate writing by the
respective party;
b) the broker or salesperson is required to disclose the information by the
Texas Real Estate License Act or a court order; or
c) the information materially relates to the condition of the property;
4) treat a party to the transaction dishonestly; or
5) violate the Texas Real Estate License Act.
B. Appointments. Each Broker is authorized to appoint, by providing written notice to the
parties, one or more license holders associated with the Broker to communicate with and
carry out instructions of one party, and one or more other license holders associated with
the Broker to communicate with and carry out instructions of the other party. An appointed
license holder may provide opinions and advice during negotiations to the party to whom
the license holder is appointed.
ARTICLE SIXTEEN
MISCELLANEOUS AND ADDITIONAL PROVISIONS
16.01 Disclosure. Landlord and Tenant understand that a real estate broker is not an expert in
matters of law, tax, financing, surveying, hazardous materials, engineering, construction, safety,
zoning, land planning, architecture, the TABA, or the ADA. The Brokers hereby advise Tenant to seek
expert assistance on such matters. Brokers do not investigate a property's compliance with building
codes, governmental ordinances, statutes and laws that relate to the use or condition of a property
and its construction, or that relate to its acquisition. If the Brokers provide names of consultants or
sources for advice or assistance, Tenant acknowledges that the Brokers do not warrant the services
of the advisors or their products and cannot warrant the suitability of property to be acquired or leased.
Furthermore, the Brokers do not warrant that the Landlord will disclose any or all property defects,
although the Brokers will disclose to Tenant any actual knowledge possessed by Brokers regarding
defects of the Premises and the Property. In this regard, Tenant agrees to make all necessary and
appropriate inquiries and to use diligence in investigating the Premises and the Property before
signing this Lease. Tenant acknowledges and agrees that neither the Principal Broker nor any
Cooperating Broker has made any representation to Tenant with respect to the condition of the
Premises, and that Tenant is relying exclusively upon Tenant's own investigations and the
representations of Landlord, if any, with respect to the condition of the Premises. Landlord and
Tenant agree to hold the Brokers harmless from any and all damages, claims, costs and expenses
resulting from or related to Landlord's furnishing to the Brokers any inaccurate information with respect
to the Premises, or Landlord's concealing any material information with respect to the Premises.
Landlord and Tenant hereby agree to indemnify and defend the Brokers against any and all liabilities,
claims, debts, damages, costs, or expenses, including but not limited to reasonable attorneys' fees
and court costs, related to or arising out of or in any way connected to (a) representations concerning
matters properly the subject of advice by experts„ or (b) any dispute directly between Landlord and
Tenant regarding this Lease. In addition, to the extent permitted by applicable law, the Brokers'
COMMERCIAL LEAS T - Page
NTCAR 2014 — Form No. 2 (3/2014)
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liability for errors, omissions, or negligence is limited to the return of the Fee, if any, paid to the
Brokers pursuant to this Lease.
16.02 Force Majeure. If performance by Landlord of any term, condition or covenant in this Lease is
delayed or prevented by any Act of God, strike, lockout, shortage of 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 the term, condition or covenant will be extended for a period equal to the
period Landlord is so delayed or prevented.
16.03 Interpretation. The captions of the Articles or Sections of this Lease are to assist the parties in
reading this Lease and are not part of the terms or provisions of this Lease. Whenever required by the
context of this Lease, the singular will include the plural and the plural will include the singular, and the
masculine, feminine and neuter genders will each include the other.
16.04 Waivers. Any waivers of any provisions of this Lease must be in writing and signed by the
waiving party. Landlord's delay or failure to enforce any provisions of this Lease or Landlord's
acceptance of late installments of Rent will not be a waiver and will not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No statement on a check
from Tenant or in a letter accompanying a check will be binding on Landlord. Landlord may, with or
without notice to Tenant, negotiate, cash, or endorse the check without being bound to the conditions
of any such statement.
16.05 Severability. A determination by a court of competent jurisdiction that any provision of this
Lease is invalid or unenforceable will not invalidate the remainder of that provision or any other
provision of this Lease, which will remain in full force and effect.
16.06 Joint and Several Liability. All parties signing this Lease as Tenant will be jointly and severally
liable for all obligations of Tenant. Tenant will be responsible for the conduct, acts and omissions of
Tenant's agents, employees, customers, contractors, invitees, agents, successors or others using the
Premises with Tenant's express or implied permission.
16.07 Amendments or Modifications. This Lease is the only agreement between the parties
pertaining to the lease of the Premises and no other agreements are effective unless made a part of
this Lease. All amendments to this Lease must be in writing and signed by all parties.
16.08 Notices. All notices and other communisations required or permitted under this Lease must be
in writing and will be deemed delivered, whether actually received or not, on the earlier of: (i) actual
receipt if delivered in person of, by messenger with evidence of delivery; or (ii) receipt of an electronic
facsimile transmission ( "Fax ") with confirmation of dei very; or (iii) upon deposit in the United States
Mail as required below. Notices may be transmitted by Fax to the Fax telephone riumbers specified in
Article One of this Lease, if any. Notices delivered by mail must be deposited in the U.S. Postal
Service, certified mail, return receipt requested, postage prepaid, and properly addressed to the
intended recipient as set forth in Article One. Notices sent by any, other means will be deemed
delivered when actually received, with proof of delivery. After possession of the Premises by Tenant,
Tenant's address for notice purposes will be the address of the Premises unless Tenant notifies
Landlord in writing of a different address to be used for that purpose. Any party may change its
address for notice by delivering written notice of its new address to all other parties in the manner set
forth above. Copies of all notices should also be delivered to the Brokers, but failure to notify the
Brokers will not cause an otherwise properly delivered notice to be ineffective. Also, copies of all
notices must also be delivered to the following persons [if the blanks have been completed]:
Copies of notices to Landlord are to be delivered to:
Rail Yard Partners, LTD
Address: 525 S. Loop 288 Ste. # 105
Denton, TX 76205,
Telephone: , _ ............... Fax:
Email:
COMMERCIAL LEASE AGREEMENT - Page 26
NTCAR 2014 - Form No. 2 (3/2014)
Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 wmmLzls coix .om Keep Benton
Copies of notices to Tenant are to be delivered to:
Citv of Denton
Address: 215 E. McKinney Street .m
Denton, TX 7620 .
Telephone (,9,40) 349 -8200 Fax:
Email:
Landlord also consents to receive any notices by e-mail. [Check the box, if applicable.]
Tenant also consents to receive any notices by e-mail. [Check the box, if applicable.]
16.09 Attorneys' Fees. If, on account of any breach or default by any party to this Lease in its
obligations to any other party to this Lease (including, but not limited to, the Brokers), it becomes
necessary for a party to employ an attorney to enforce or defend any of its rights or remedies under
this Lease, the non - prevailing party agrees to pay the prevailing party its reasonable attorneys' fees
and court costs, if any, whether or not suit is instituted in connection with the enforcement or defense.
16.10 Venue. All obligations under this Lease, including, but not limited to, the payment of Fees to the
Brokers, will be performed and payable in the county in which the Property is located. The laws of the
State of Texas will govern this Lease.
16.11 Survival. All obligations of any party to this Lease that are not fulfilled at the expiration or the
termination of this Lease will survive such expiration or termination as continuing obligations of the
party.
16.12 Binding Effect. This Lease will inure to the benefit of, and be binding upon, each of the parties
to this Lease and their respective heirs, representatives, successors and assigns. However, Landlord
will not have any obligation to Tenant's successors or assigns unless the rights or interests of the
successors or assigns are acquired in accordance with the terms of this Lease.
16.13 Right to Claim a Lien. If a commission agreement or other agreement to pay Fees to the
Brokers is not included in this Lease, then be advised that pursuant to Chapter 62 of the Texas
Property Code, each Broker hereby discloses the Broker's right to claim a lien based on a separate
written commission agreement or other agreement to pay Fees to the Broker, and this disclosure is
incorporated in the commission agreement or other agreement to pay Fees.
16.14 Patriot Act Representation. Landlord and Tenant each represent to the other that: (1) its
property interests are not blocked by Executive Order No. 13224, 66 Fed. Reg. 49079; (2) it is not a
person listed on the Specially Designated Nationals and Blocked Persons list of the Office of Foreign
Assets Control of the United States Department of the Treasury; and (3) it is not acting for or on behalf
of any person on that list.
16.15 Counterparts. This Lease may be executed in a number of identical counterparts, and all
counterparts will be construed together as one agreement.
16.16 Offer. The execution of this Lease by the first party to do so constitutes an offer to lease the
Premises. Unless this Lease is signed by the other party and a fully executed copy is delivered to the
first party by the earlier of this date ................._.. or the date that is 10 days after the
date of execution by the first party, such offer to lease will be deemed automatically withdrawn. Any
acceptance of an offer that has been withdrawn will only be effective if the party that withdrew the offer
subsequently agrees to the acceptance either in writing or by course of conduct.
COMMERCIAL LEASE AGREEMENT - Page 27
NTCAR 2014 - Form No. 2 (3/2014)
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16.17 Additional Provisions. Landlord and Tenant agree bu any provisions set forth on the attached
Addenda (if any) and the following additional provisions (if anv :
ONTCAR 2014 - Form No. 2 (3/2014)
Produced with zIpFormO by z!pLoglx 18070 FiftGen Mile Road, Fraser. MIchigan 48026 mMoLzWjg2jL= Keep Denton
Signature on File
Signature on File
Signature on File
Axis Realty Group
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS®
ADDENDUM "A" TO LEASE
RENEWAL OPTIONS
Address of the Premises: 608 E. Hickory St , Ste. 130, Den., tones Tx
1. Option to Extend the Term. Landlord grants to Tenant 1 option(s)
each an "Option ") to extend the Term for an additional term of 60 months each
the "Extension "), on the same terms, conditions and covenants set forth in this Lease, except as
provided below. Each Option may be exercised only by written notice delivered to the Landlord no
earlier than One Hundred Eighty ( 180 ) days before, and
no later than ( 90 ) days before, the
expiration of the Term or the preceding Extension of the Term, whichever is applicable. If Tenant fails
to deliver to Landlord a written notice of the exercise of an Option within the prescribed time period,
such Option and any succeeding Options will lapse, and there will be no further right to extend the
Term. Each Option may only be exercised by Tenant on the express condition that, at the time of the
exercise, Tenant is not in default under any of the provisions of this Lease. The Options are personal
to Tenant and may not be exercised by an assignee or subtenant without Landlord's written consent.
2. Calculation of Rent. The Base Rent during the Extension(s) will be determined by one of the
following methods [check one]:
A. Fair Market Rental. The Base Rent during the Extension will be the Fair Market Rental
determined as follows:
a. The "Fair Market Rental" of the Premises means 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
Premises comparable to the Premises if the property were exposed for lease on the open market
for a reasonable period of time, and taking into account the term of the Extension, the amount of
improvements made by Tenant at its expense, the creditworthiness of the Tenant, and all of the
purposes for which the property may be used and not just the use proposed to be made of the
Premises by Tenant. Upon proper written notice by Tenant to Landlord of Tenant's intention to
elect to exercise the renewal Option, Landlord shall, within 20 days thereafter, notify Tenant
in writing of Landlord's proposed Fair Market Rental amount, and Tenant shall thereupon notify
Landlord of Tenant's acceptance or rejection of Landlord's proposed amount. Failure of Tenant to
reject Landlord's Fair Market Rental amount within 15 days after receipt of Landlord's notice
will be deemed Tenant's acceptance of Landlord's proposed Fair Market Rental amount.
b. If Landlord and Tenant have not been able to agree on the Fair Market Rental amount within
40 days following the exercise of the Option, the Fair Market Rental for the Extension will be
determined by the following appraisal process. Landlord and Tenant shall endeavor in good faith
to select a single Appraiser. The term "Appraiser" means a State Certified Real Estate Appraiser
licensed by the State of Texas to value commercial property. If Landlord and Tenant are able to
agree upon and select a single Appraiser, that Appraiser will determine the Fair Market Rental for
the Extension.
If Landlord and Tenant are unable to agree upon a single Appraiser within 10 days after the
end of the 40 -day period, each will then appoint one Appraiser by written notice to the other, given
within 7 days after the end of the 40 -day period. Within five business days after the two
Appraisers are appointed, the two Appraisers will appoint a third Appraiser. If either Landlord or
Tenant fails to appoint its Appraiser within the prescribed time period, the single Appraiser
appointed will determine the Fair Market Rental amount of the Premises. Each party will bear the
cost of the appraiser appointed by it and the parties will share equally the cost of the third
appraiser. The Fair Market Rental of the Premises will be the average of two of the three
appraisals that are closest in amount, and the third appraisal will be disregarded.
ADDS "" TO LEASE — Page 1
TCAR 2014 — Form No. 2 (3/2014)
Axis Realty Group, 1517 Centre Place Drive Denton, TX 76205
Phone: 940.891.2947 Fax: 940.891.2948 Alex Payne Keep Denton
Produced with zipForm@ by zipLogix 18070 Fitteen Mile Road, Fraser, Michigan 48026 www.zi®Loaix.urn
c. In no event will the Base Rent be reduced for any Extension, regardless of the Fair Market
Rental determined by any appraisal. If the Fair Market Rental is not determined before the
commencement of the Extension, then Tenant shall continue to pay to Landlord the Base Rent
applicable to the Premises immediately before the Extension until the Fair Market Rental amount
is determined, and when it is determined, Tenant shall pay to Landlord the difference between the
Base Rent actually paid by Tenant to Landlord and the new Base Rent.
B. Consumer Price Index Adjustment. The monthly Base Rent during the Extension will be
determined by multiplying the monthly installment of Base Rent during the last month of the Term by a
fraction determined as follows:
a. The numerator will be the Latest Index that means either [check one]:
1) the Index published for the nearest calendar month preceding the first day of the
Extension, or
2) the Index for the month of
Extension.
preceding the first day of the
b. The denominator will be the Initial Index that means either [check one]:
1) the Index published for the nearest calendar month preceding the Commencement
Date, or
2) the Index for the month of
Date.
preceding the Commencement
If no blanks are filled in above, the choice (1) including the phrase the nearest calendar
month preceding" will apply. If the Index is not yet published for the nearest calendar month
preceding the applicable date, then "the nearest calendar month" means the first month
preceding the applicable date for which the Index is published].
c. The Index means the Consumer Price Index (CPI) for All Urban Consumers (All Items) U.S.
City Average (unless this box is checked in which case the CPI for the Dallas /Fort Worth
Consolidated Metropolitan Statistical Area will be used) published by the U. S. Department of
Labor, Bureau of Labor Statistics (Base Index of 1982 -84 =100). If the Index is discontinued or
revised, the new index or computation that replaces the Index will be used in order to obtain
substantially the same result as would have been obtained if it had not been discontinued or
revised. If such computation would reduce the Rent for the particular Extension, it will be
disregarded, and the Rent during the immediately preceding period will apply instead.
x C. Fixed Rental Adjustments. The monthly installments of Base Rent during the Extension(s) will
be increased beginning on the following dates to these amounts:
Date: .Tanua,ry 1, 2021 Amount: $ ,x,..179 7 ..._,...
Date: January. 1,.,--2022 Amount: $ -3,214 , 54
Date January y 1,, 202 Amount: $ 3,,372-78 _..._ . ..... _...
Date: JanuarV 1, 2024 Amount: $ 1,4711-96 .
ADDENDUM "A" TO LEASE - Page 2
NTCAR 2014 - Form No. 2 (3/14)
I-roduced with zipForm@ 18070 .w Road, 48026 , .p Denton
Axis Realty Group
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS®
ADDENDUM "B" TO LEASE
CONSTRUCTION OF IMPROVEMENTS BY LANDLORD
Address of the Premises: 608 E ....., 4.ckor y St., ste 130 , Denton, Tx ,
1. Plans. Landlord agrees to construct (or complete) improvements to the Premises in
accordance with plans.and specifications (the "Plans ") to be promptly prepared by Landlord and
delivered to Tenant. If Tenant does not respond: to the request for approval of the Plans within five
days after Tenant's receipt of the Plans, Tenant will be deemed to have approved the Plans. Upon
approval by Tenant, two or more sets of the Plans will be signed by both parties, with one signed set .
retained by each party. Changes to the Plans may be made only by written amendments signed by
both parties.
2. Construction of Improvements. Upon approval of the Plans and the cost of construction,
Landlord shall promptly begin construction and pursue the construction to its completion with
reasonable diligence and in a good and workmanlike manner.
3. Estimated Completion Date. It is estimated by Landlord that the improvements specified in
the Plans will be completed by December 31, 2015 (the "Estimated Completion Date ").
Notice of Completion.. Landlord shall deliver a written notice to Tenant that the improvements
have been completed in accordance with the Plans, specifying the date (the "Date of Completion ")
the improvements were completed, within two days after the Date of Completion. Tenant shall there
promptly inspect the improvements, and if they have in fact been completed in accordance with the
Plans„ then the Term will begird upon tine Date of Completion or on the Commencement Date,
whichever is later.
5. Objections. If Tenant reasonably determines that the improvements have not been completed
in accordance with the Plans, Tenant may deliver a written notice to Landlord specifying the
incomplete items. If Tenant does not, within 10 days after Landlord's notice of completion, deliver such
a written notice to Landlord, then Tenant will be deemed to have approved the improvements as
constructed, and the Date of Completion stated in Landlord's notice will be the Date of Completion. If
the improvements have not in fact been completed in accordance with the Plans, and Tenant has
delivered to Landlord a written notice specifying the incomplete items, then Landlord shall promptly
proceed to finish the incomplete items, and the Term will begin upon the date the items are In fact
complete.
6. Substantial Completion. Completion, as used in this AddendUraa, means Substantial
Completion. "Substantial Completion" will be deemed to have occurred when (i) a Certificate of
Occupancy is issued by the local municipal authorities that have jurisdiction over the Premises, and (ii)
the construction is suff iciently complete in accordance with the Plans so that Tenant is able to occupy
the Premises for the Permitted Use, except for minor "punch list " items remaining to be completed.
7. Letter of Acceptance. Upon Substantial Completion of the irnprovernents to the Premises,
Tenant agrees to execute and deliver to Landlord, with a copy to the Principal Broker, a letter (the
Letter of Acceptance ") addressed to Landlord and signed by Tenant (or Tenant's authorized
representative) acknowledging: (i) that construction has been completed in accordance with the Plans;.
ii) acceptance of the improvements (subject to "punch list" items to be completed)„ (Oli) the Date of
Completion, and (iv) the Commencement Date of the Term.
8. Taking of Possession. The taking of possession of the Premises by Tenant will be deemed
to be acknowledgment by Tenant that construction has been completed In accordance with Plans
except for any latent defects and "punch list "' items) and that the Term has begun as of the Date of
Completion, regardless of whether a Certificate of 'Occupancy has been issued or Tenant has
delivered a Letter of Acceptance.
ID 0 • •,,
Axis Realty Group, 1517 Centre Place Drive Denton, TX 76205
Phone: 940.891.2947 Fax: 940.891.2948 Alex Payne Keep Denton
Produced with zipForm@ by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLoaix.cam
g. Failure to Complete. 11 the improvements have not been completed in accordance with the
Flans by the Estimated Completion Date, or by such date as extended by application of Section 16.02
Forte Ma sure Tenant rimy give Landlord a written notice of Tenant's Intention to terminate as of a
certain date specified by Tenant in the notice (the "Termination Date ") if such improvements have not
been completed by fife Termination Date. The notice must be given to Landlord not less than 20 days
before the Termination Date. If the improvements have not been completed by the Termination Data,
then this Lease will terminate, with no further liability of one party to the other, unless the Termination
Date is extended by Tenant in writing. If Landlord is able to cause Substantial Completion of the
improvements to occur before the Termination Date, then this Lease will not terminate.
10. Finish -Out Allowance. Landlord shall pay the cost of construction under this Addendum in an
amount not to exceed $ _,.. .......... ......__. (the "Landlord's Cost "). If an Addendum for
Construction of Improvements by Tenant is also attached to this Lease, then Landlord may also
provide an Allowance (as defined in that Addendum) to be applied to the cost of construction in that
Addendum. Tenant shall pay any costs of construction in excess of the Landlord's Cost and any
Allowance.
ADDENDUM "B" TO LEASE — Page 2
NTCAR 2014 — Form No. 2 (3/2014)
Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLogix.com Keep Denton
Axis Realty Group
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS®
ADDENDUM "G" TO LEASE
RULES AND REGULATIONS
Address of the Premises: 608 E. hickory St._ „_ Ste. 130 Denton Tx
1. Application. Tenant, and Tenant's employees and invitees, shall abide by the following
standards for the mutual safety, cleanliness, care, protection, comfort and convenience of all tenants
and occupants of the Property. These Rules and Regulations apply to all of the Property as defined in
this Lease including, but not limited to, the Premises, the building(s), the parking garages, if any, the
common areas, driveways, and parking lots.
2. Consent Required. Any exception to these Rules and Regulations must first be approved in
writing by Landlord. For purposes of these Rules and Regulations, the term "Landlord” includes the
building manager, the building manager's employees, and any other agent or designee authorized by
Landlord to manage or operate the Property.
3. Rules and Regulations:
a. Tenant may not conduct any auction, "flea market" or "garage sale" on the Premises nor
store any goods or merchandise on the Property except for Tenant's own business use. Food may not
be prepared in the Premises except in small amounts for consumption by Tenant and Tenant's officers
and employees. Vending machines or dispensing machines may not be placed in the Premises
without Landlord's written approval. The Premises may not be used or occupied as sleeping quarters
or for lodging purposes. Animals may not be kept in or about the Property.
b. Tenant shall not obstruct sidewalks, driveways, loading areas, parking areas, corridors,
hallways, vestibules, stairs and other similar areas designated for the collective use of tenants, or use
such areas for Tenant's storage, temporary or otherwise, or for any purpose other than going to and
from the Premises. Tenant shall comply with parking rules and guidelines as may be posted on the
Property from time to time.
c. Tenant shall not make any loud noises, unusual vibrations, unpleasant odors, objectionable
or illegal activities on the Property. Tenant shall not permit the operation of any equipment in the
Premises that annoys other occupants of the Property. Tenant shall not interfere with the possession
of other tenants of the Property.
d. Tenant may not bring any flammable, explosive, toxic, noxious, dangerous or hazardous
materials onto the Property, except in small quantities as needed in Tenant's business and used,
stored, and disposed of in accordance with applicable laws.
e. Installation of security systems, telephone, television and other communication cables,
fixtures and equipment must comply with Section 7.04 of the Lease, except that routine installation
and construction of normal communication devices that do not require any holes in the roof or exterior
walls of the Property do not require the written approval of Landlord.
f. Movement into or out of the building through public entrances, lobbies or corridors that
requires use of a hand truck, dolly or pallet jack to carry freight, furniture, office equipment, supplies
and other large or heavy material, must be limited to the service entrances and freight elevators only
and must be done at times and in a manner so as not to unduly inconvenience other occupants of the
Property. All wheels for such use must have rubber tires and edge guards to prevent damage to the
building. Tenant shall be responsible for and shall pay all costs to repair damages to the building
caused by the movement of materials by Tenant.
Axis Realty Group, 1517 Centre Place Drive Denton, TX 76205
Phone: 940.891.2947 Fax: 940.891.2948 Alex Payne Keep Denton
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g. Requests by Tenant for building services, maintenance and repair must be made in writing
to the office of the building manager designated by Landlord and must be dated. Tenant shall give
prompt written notice to Landlord of any significant damage to or defects in the Premises or the
Property, including plumbing, electrical and mechanical systems, heating, ventilating and air
conditioning systems, roofs, windows, doors, foundation and structural components, regardless of
whose responsibility it is to repair such damage or defects.
h. Tenant shall not change locks or install additional locks on doors without the prior written
consent of Landlord. If Tenant changes locks or installs additional locks on the Property, Tenant shall
provide Landlord with a copy of each separate key to each lock upon Landlord's request. Upon
termination of Tenant's occupancy of the Premises, Tenant must surrender all keys to the Premises
and the Property to Landlord.
i. Harmful liquids, toxic wastes, bulky objects, insoluble substances and other materials that
may cause clogging, stains or damage to plumbing fixtures or systems must not be placed in the
lavatories, water closets, sinks, or drains. Tenant must pay the costs to repair and replace drains,
plumbing fixtures and piping that is required because of damage caused by Tenant.
j. Tenant shall cooperate with Landlord and other occupants of the Property in keeping the
Property and the Premises neat and clean. Nothing may be swept, thrown or left in the corridors,
stairways, elevator shafts, lobbies, loading areas, parking lots or any other common areas on the
Property. All trash and debris must be properly placed in receptacles provided therefor.
k. Landlord may regulate the weight and position of heavy furnishings and equipment on the
floor of the Premises, including safes, groups of filing cabinets, machines, and any other item that may
overload the floor. Tenant shall notify Landlord when heavy items are to be taken into or out of the
building, and the placement and transportation of heavy items may be done only with the prior written
approval of Landlord.
I. No window screens, blinds, draperies, awnings, solar screen films, window ventilators or
other materials visible from the exterior of the Premises may be placed in the Premises without
Landlord's approval. Landlord is entitled to control all lighting that may be visible from the exterior of
the building.
m. No advertisement, sign, notice, handbill, poster or banner may be exhibited, distributed,
painted or affixed on the Property. No directory of tenants is allowed on the Property other than that
provided by Landlord.
n. Tenant agrees to cooperate with and assist Landlord in the prevention of peddling,
canvassing and soliciting on the Property.
o. Tenant accepts any and all liability for damages and injuries to persons and property
resulting from the serving or sales of alcoholic beverages by or on behalf of Tenant on or from the
Property.
p. Any person entering and leaving the building before and after normal working hours, or
building hours if posted by Landlord, whichever applies, may be required to identify himself to security
personnel by signing a list and giving the time of day and destination or location of the applicable
Premises. Normal building business hours are established by Landlord from time to time.
4. Revisions. Landlord reserves the right to revise or rescind any of these Rules and Regulations
and to make additional rules that Landlord may determine are necessary from time to time for the
safety, protection, comfort and convenience of the tenants and visitors of the Property and for the
care, protection and cleanliness of the Property. Revisions and additions will be binding upon the
Tenant as if they had been originally prescribed herein when furnished in writing by Landlord to
Tenant, provided the additions and revisions apply equally to all tenants occupying the Property and
do not impose any substantial cost to Tenant.
5. Enforcement. Any failure or delay by Landlord in enforcing these Rules and Regulations will
not prevent Landlord from enforcing these Rules and Regulations in the future. If any of these Rules
and Regulations is determined to be unenforceable, it will be severed from this Lease without affecting
the remainder of these Rules and Regulations.
ADDENDUM "G" TO LEASE — Page 2
NTCAR 2014 — Form N-0.2 (3/2014)
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Axis Realty Group
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS®
Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.
INFORMATION ABOUT BROKERAGE SERVICES
efore working with a real estate broker, you should
know that the duties of a broker depend on whom the
broker represents. If you are a prospective seller or
landlord (owner) or a prospective buyer or tenant (buyer),
you should know that the broker who lists the property for
sale or lease is the owner's agent. A broker who acts as a
subagent represents the owner in cooperation with the
listing broker. A broker who acts as a buyer's agent
represents the buyer. A broker may act as an intermediary
between the parties if the parties consent in writing. A
broker can assist you in locating a property, preparing a
contract or lease, or obtaining financing without
representing you. A broker is obligated by law to treat you
honestly.
IF THE BROKER REPRESENTS THE OWNER:
The broker becomes the owner's agent by entering into an
agreement with the owner, usually through a written
listing agreement, or by agreeing to act as a subagent by
accepting an offer of subagency from the listing broker. A
subagent may work in a different real estate office. A
listing broker or subagent can assist the buyer but does not
represent the buyer and must place the interests of the
owner first. The buyer should not tell the owner's agent
anything the buyer would not want the owner to know
because an owner's agent must disclose to the owner any
material information known to the agent.
IF THE BROKER REPRESENTS THE BUYER:
The broker be,c;onles the buyer's agent by t,nlering
into all agreement to represent the, buyer, usually
through as written buyer representation agrec tuent. A
buyer's agent can atisisl the owner, but does not
represent the owner and must place they: interests of
the buyer first. "rhe owner should nol tell a buyer's
agent anything the owner would not want the buyer
lo know bec:aause as buyer's agent must clisc:laose tea t:he
buyer any material information known to the agent.
IF THE BROKER ACTS AS AN INTERMEDIARY:
A broker may act as an intermediary between the parties if
the broker complies with The Texas Real Estate License
Act.
The broker must obtain the written consent of each party
to the transaction to act as an intermediary. The written
consent must state who will pay the broker and, in
ctorrspictaeous bold or underlined print, set forth the broker's
obligations as an intermediary, The broker is required to
ucajt etch party honestly in(] fairly and to comply with
The Texas Real Estate l..icense Act. A broker who acts as
an intermediary in a transaction:
1) shall treat all parties honestly;
2) may not disclose that the owner will accept a
price less than the asking price unless authorized in
writing to do so by the owner;
3) may not disclose that the buyer will pay a price
greater than the price submitted in a written offer
unless authorized in writing to do so by the buyer; and
4) may not disclose any confidential information or
any information that a party specifically instructs the
broker in writing not to disclose unless authorized in
writing to disclose the information or required to do
so by The Texas Real Estate License Act or a court
order or if the information materially relates to the
condition of the property.
With the parties' consent, a broker acting as an
intermediary between the parties may appoint a person
who is licensed under The Texas Real Estate License Act
and associated with the broker to communicate with and
carry out instructions of one party, and another person
who is licensed under that Act and associated with the
broker to communicate with and carry out instructions of
the other party.
If you choose to have a broker represent you, you
should enter into a written agreement with the broker that
clearly establishes the broker's obligations and your
crhlifatiaarts. '1`be. ,agreement sliould state how and by whaoin
the broker will be paid. You have the right to choose" the
type, of represeniaalion, of aaoy, you wish to receive. Your
paryinent rof'as fees to a broker, (foes not raccessarily establish
that the broker rcpt- esents you if ycou have any questions
regarding the duties and responsibilities of the broker, you
should resolve those questions before proceeding.
This is not a contract.
The real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee's records.
Axis Reatly Groff_.
Real Estate Broker Company - ......
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Buyer, Seller, Tenant or Landlord
Real Estate Licensee
Alex Payne
Date Buyer, Seller, Tenant or Landlord
Date
Date
Texas Real Estate Brokers and Salesmen are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or a
coon ol, regarding , .........., _ al 512- 465 -3960. I , ustin, Texas 78771 -2188 or call rrnt areal estate licensee, you should contact the TREC at P.O. Box 121 S A _
m_ww_m_mmm,
1996 NTCAR form 15 (1/96) Single page
Axis Realty Group, 1517 Centre Place Drive Denton, TX 76205
Phone: 940 891.2947 Fax: 940.891.2948 Alex Payne Keep Denton
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