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EXHIBIT 10.9
LEASE AGREEMENT
This Lease Agreement is made and entered into at Columbia,
Tennessee, on this, the _____ day of February, 1998, by and between Bertrand L.
Taylor, hereinafter referred to as LANDLORD, and Office Master of Texas, Inc.,
hereinafter referred to as TENANT, both of which expressions shall include the
respective successors, heirs, assigns and personal representatives of the
parties.
W I T N E S S E T H:
WHEREAS, LANDLORD desires to lease to TENANT, the premises
hereinafter described, and the parties have agreed upon the terms and conditions
of the Lease Agreement, which terms and conditions are set forth hereinafter.
NOW, THEREFORE, for and in consideration of the mutual advantages
to the respective parties, the parties agree as follows:
1. PREMISES: LANDLORD hereby lets and leases to TENANT the
premises described on the attached Schedules A and B:
2. TERM: This Lease is for a period of ten (10) years and six (6)
days beginning on the 1st day of February, 1998, and ending on the 31st day of
January, 2008.
3. RENT: TENANT covenants and agrees to pay, without demand to
LANDLORD at 100 Overbrook Court, Columbia, Tennessee, or such other place as
LANDLORD may from time to time designate, as rent for the Leased Premises during
the term of this Lease the sum of $3,553,930.80 payable at the initial rate of
$29,616.09 per month commencing on February 1, 1998, and on the first day of
each month thereafter. If not paid within five (5) days after the due date, said
rental shall bear interest at the Base Rate of First Farmers & Merchants
National Bank plus two (2%) percent. The rent shall be adjusted by LANDLORD on
February 1, 1999, and every twelve (12) months thereafter. The lease rate is
based upon a valuation of the property and the capitalized value of the
equipment listed on Schedule A hereto (an aggregate value of $2,342,936) of
$2,342,956.00 amortized over 10 years from the
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effective date of this Lease at an interest rate equal to the Base Rate of First
Farmers & Merchants National Bank, Columbia, Tennessee. Said rate is defined as
that rate set by First Farmers & Merchants National Bank from time to time as
such Bank's Base Rate and is currently 8.95%. The annual rent shall be
recalculated on the first day of each new twelve-month period of the term of
this Lease using the remaining unamortized value of the property and the capital
equipment shown on Schedule A over the remaining term of this Lease using the
then effective Base Rate.
4. IMPROVEMENTS AND ALTERATIONS: TENANT shall have the right
during the continuance of this Lease to make improvements and alterations on the
Leased Premises as may be proper and necessary for the conduct of TENANT'S
business; provided, however, that TENANT obtains the written consent of LANDLORD
for any alterations or improvements, which consent will not be unreasonably
withheld. At the sole option of LANDLORD, any such improvements and alterations
shall become the property of LANDLORD at the termination of this Lease. If
LANDLORD elects not to take such improvements, TENANT agrees to restore the
premises to their condition at the time of the beginning of this Lease.
Except as otherwise provided, furnishings and trade fixtures
installed on the Leased Premises by TENANT and paid for by TENANT, including,
without limitation, any cranes and crane ways and any other fixtures installed
by TENANT (other than the capitalized equipment shown on Schedule A which shall
deemed to be the property of LANDLORD) shall remain the property of TENANT and
may be removed upon the termination of this Lease, provided: a) that any of such
as are fixed to the Leased Premises and require severance may be removed only if
TENANT shall repair any damage caused by such removal to restore the Leased
Premises in substantially the same condition as that when rented; and b) that
TENANT shall have fully performed all of the covenants and agreements to be
performed under the provisions of this Lease. It is further agreed that TENANT
shall return the Leased Premises in as good a condition as that on the initial
date of the term of the lease including repainting, repairing and cleaning up of
the Leased Premises.
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5. HOLD HARMLESS, PUBLIC LIABILITY AND INSURANCE: TENANT will
indemnify LANDLORD and hold LANDLORD harmless against all claims, demands and
judgments for loss, damage or injury to property or person, which shall result
or occur by reason of the use and/or occupancy of the Leased Premises, other
than a loss, damage or injury to property or person which occurred prior to the
commencement of the term of this Lease or a loss, damage or injury arising from
a condition of the leased premises, or circumstance or event affecting the
leased premises prior to the commencement of the Lease, as to which LANDLORD
indemnified and holds harmless TENANT to the same extent as TENANT'S
indemnification of LANDLORD herein provided. Each such indemnification shall
include the costs and attorney's fees incurred by LANDLORD or TENANT, as the
case may be, in defending any such claims, demands and judgments. In furtherance
of this agreement, but in no way limited thereby, TENANT shall obtain casualty
insurance for full value and liability insurance insuring this indemnification
in an amount not less than $5,000,000.00 (combined single limit) with LANDLORD
being named as an additional insured under said policy. TENANT shall pay the
costs of such insurance and provide evidence of such insurance to LANDLORD
within ten (10) days from the execution of this Lease. All personal property of
any kind that may at any time be used, left or placed on the premises during the
term of this Lease shall be at the sole risk of the TENANT.
6. UTILITIES AND TAXES: TENANT shall pay all state and city real
property taxes assessed against the premises during the term of this Lease.
TENANT shall further pay any charges for electricity, water, gas, sewage, heat,
telephone or other utilities which may be used, rendered, or supplied upon or in
connection with the Leased Premises.
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7. TOTAL OR PARTIAL DESTRUCTION OF PREMISES: Should the building
on which the leased premises are located be totally or substantially destroyed
by fire, explosion, tornado, acts of God, or any unforeseen cause over which
TENANT has no control, so that such leased premises are unfit for the conduct of
TENANT'S business, the LANDLORD may, at his option, repair such damage or
LANDLORD shall have the right, by giving notice to TENANT, to terminate this
lease, said termination to be effective upon receipt of the notice, and all
rents and other charges shall be adjusted to the date of such destruction. If,
however, such damage is only partial, and TENANT'S business is only temporarily
closed or inconvenienced, then LANDLORD may promptly repair such damage and,
during the time from the occurrence of such damage until the premises are
restored, TENANT shall be liable only for such as the proportionate part of the
premises which are usable shall bear to the whole of the same, and upon
restoration of such improvements, the rent herein provided for shall be restored
and shall be payable as herein provided.
8. TRANSFER OF LEASE: TENANT may not assign or sublet the
Premises, either in whole or in part, without the prior written consent of
LANDLORD; provided that (i) TENANT may freely assign or sublet the leased
premises to any affiliate of TENANT (Aaffiliate being defined in Rule 405
promulgated under the Securities Act of 1933, as amended), and (ii) TENANT may
assign or sublet the leased premises to any person who acquires all or
substantially all of the capital stock or assets of TENANT with the prior
written consent of LANDLORD, which consent shall not be unreasonably withheld.
Unless LANDLORD shall have consented in writing to the release of TENANT from
liability for the payment of rent upon an assignment or sublease (which consent
shall not be unreasonably withheld), any assignment or sublease shall contain a
provision that TENANT is not released from liability and that Assignee or
Sublessee shall assume and hold LANDLORD harmless for any liability to Somervell
County, Texas, under an agreement between it and LANDLORD dated April, 1997.
Consent to one assignment or subletting will not be deemed a consent to any
other. In the event of any assignment or subletting, TENANT shall remain fully
responsible under this Lease.
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9. USE OF PREMISES: The premises shall be used only for the
manufacturing of mobile offices or other modular building structures or
components and related purposes. TENANT will not at any time use or occupy the
Premises in violation of laws, ordinances, or regulations of any government or
agency having jurisdiction or in violation of LANDLORD's insurance contract(s)
or in any manner creating a nuisance.
10. RESPONSIBILITY FOR REPAIRS AND MAINTENANCE: TENANT shall be
responsible for all repairs to all portions of the leased premises; provided,
however, LANDLORD shall be responsible for repairs resulting from defective
construction of the building. TENANT has inspected the premises and accepts them
in the present condition as is. TENANT shall keep the premises, including
without limitation, interior walls, floors, ceilings and light fixtures, clean
and in good repair at all times. TENANT will promptly replace all glass broken
during the said term with glass of the same quality.
11. RIGHT OF ENTRY: LANDLORD may at reasonable times and with
reasonable notice to TENANT enter the Premises to inspect them and make any
repairs required by Section 10 that TENANT has failed to make, and during the
one hundred eighty (180) days preceding the expiration of this Lease, may show
the Premises to persons who may wish to lease same, provided TENANT'S occupancy
is not interfered with. If LANDLORD makes any repairs required to be made by
TENANT under Section 10, TENANT shall pay LANDLORD as additional rent a sum
equal to the amounts expended by LANDLORD plus interest thereon at the Base Rate
of First Farmers & Merchants National Bank plus two (2%) percent within ten (10)
days after LANDLORD presents TENANT with a statement setting forth the repairs
made and the amounts expended.
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12. LANDLORD'S REMEDIES ON DEFAULT: If default is made in the
payment of said rent, or any part thereof, or in the observance or performance
of any of the terms, conditions or agreements herein contained, LANDLORD shall
have the following remedies:
a) Within ten (10) days after any due date of the payment of rent
or within ten (10) days after LANDLORD gives written notice to TENANT of
TENANT'S material default or breach in the observance or performance of
the terms, conditions or agreements herein contained, or if such breach
cannot be cured reasonably within such ten (10) day period and TENANT
fails to commence and diligently proceed to cure such breach within a
reasonable time not to exceed thirty (30) days, LANDLORD may sue to
collect any and all sums which may accrue to it by virtue of the
provisions of this Lease, or for any and all damage that may accrue by
virtue of the breach of this Lease or both, TENANT hereby waiving all
demand for rent.
b) Within ten (10) days after any due date of the payment of rent
or within ten (10) days after LANDLORD gives written notice to TENANT of
TENANT'S material default or breach in the observance or performance of
the terms, conditions or agreements herein contained, or if such breach
cannot be cured reasonably within such ten (10) day period and TENANT
fails to commence and diligently proceed to cure such breach within a
reasonable time not to exceed thirty (30) days, LANDLORD may sue to
restrain by injunction any violation or threatened violation of the
covenants, conditions, or provisions of this Lease.
c) Within thirty (30) days after any due date for the payment of
rent or within thirty (30) days after LANDLORD gives written notice to
TENANT of TENANT'S material default or breach in the observance or
performance of the terms, conditions or agreements herein contained,
LANDLORD may, without further notice to TENANT, and without demand for
rent due, re-enter said premises and remove all persons and
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property therefrom, with or without process of law. If TENANT shall
abandon or vacate, or be removed from said premises before the
expiration of the term of this Lease, LANDLORD shall use reasonable
efforts to relet for such rent and upon such terms as he may see fit,
but such reletting shall not relieve the TENANT from its obligations to
pay the rent herein set forth; provided, however, any rents received
under the new lease, less the cost in obtaining a new tenant, shall be
applied toward the satisfaction of said obligation to pay rent.
13. NO WAIVER: The failure of LANDLORD or TENANT to insist upon a
strict performance of any term or condition of this Lease shall not be deemed a
waiver of any right or remedy that LANDLORD or TENANT may have and shall not be
deemed a waiver of any subsequent breach of such term or condition.
14. TERMINATION: If, at the expiration of the term of this Lease,
TENANT shall continue to occupy said premises, such occupancy shall be on a
month to month basis.
15. QUIET ENJOYMENT: LANDLORD hereby covenants and agrees that if
TENANT shall perform all the covenants and agreements herein stipulated, TENANT
shall have at all times during the continuance hereof, the peaceful and quiet
enjoyment and possession of the premises without any manner of hindrance from
LANDLORD.
16. ATTORNEY'S FEES AND COSTS: In the event TENANT breaches any
of the covenants and agreements herein stipulated, TENANT agrees to pay
reasonable attorney's fees and all costs incurred by LANDLORD arising out of
said breach. In the event LANDLORD breaches any of the covenants and agreements
herein stipulated, LANDLORD agrees to pay reasonable attorney=s fees and all
costs incurred by TENANT arising out of said breach.
17. WAIVER OF SUBROGATION AGREEMENT: It is agreed that the
LANDLORD and the TENANT, each, hereby waive their respective rights of
subrogation as to the other party of all liabilities, expenses, losses, and any
other damages incurred by
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either party and covered under any fire, extended coverage, or other policy of
insurance purchased by either of them on the property or contents located
therein, to the extent that such liabilities are covered by insurance. This
waiver is made voluntarily and with full knowledge of all rights each party may
have to subrogation of the other parties' claims.
18. HAZARDOUS MATERIAL; INDEMNITY: (a) To the best of his
knowledge, LANDLORD hereby represents and warrants that the leased premises are
in compliance with the laws and regulations governing hazardous substances and
other environmental matters relating to the condition of the leased premises and
the real property on which the leased premises are located. TENANT shall not
cause or permit any Hazardous Material to be brought upon, kept, or used in or
about the premises by TENANT, its agents, employees, contractors or invitees,
without the prior written consent of LANDLORD (which consent LANDLORD shall not
unreasonably withhold as long as TENANT demonstrates to LANDLORD'S reasonable
satisfaction that each hazardous material and the quantities of each such
hazardous material, brought upon, kept or used in or about the premises by
TENANT, are necessary or useful to the permitted uses of the premises as
described in Section 9 of this Lease and will be used, kept and stored in a
manner that complies with all laws regulating any such hazardous material so
brought upon or used or kept in or about the premises). If TENANT breaches the
obligations stated in the preceding sentence, or if the presence of hazardous
material on the premises caused or permitted by TENANT results in contamination
of the premises, or if contamination of the premises by hazardous material
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
premises, damages for loss or restrictions on use of rentable or usable space or
of any amenity of the premises, damages arising from any adverse impact on
marketing of space, and sums paid in settlement of claims, attorney's fees,
consultant fees and expert fees) which arise during or after the lease term as
a result of such contamination.
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This indemnification of LANDLORD by TENANT includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, or restoration work required by
any federal, state, or local governmental agency or political subdivision
because of hazardous material present in the soil or groundwater on or under the
premises. Without limiting the foregoing, if the presence of any hazardous
material on the premises caused or permitted by TENANT results in any
contamination of the premises, TENANT shall promptly take all actions at its
sole expense as are necessary to return the premises to the condition existing
prior to the introduction of any such hazardous material to the premises;
provided that LANDLORD'S approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as such actions would not
potentially have any material adverse long-term or short-term effect on the
premises. (b) As used herein, the term "hazardous material" means any hazardous
or toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the State of Texas or the United States Government. The
term "hazardous material" includes, without limitation, any material or
substance that is (i) defined as a "hazardous substance" under Texas law, (ii)
petroleum, (iii) asbestos, (iv) designated as a "hazardous substance" pursuant
to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. 1321), (v)
defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6903), (vi)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.
(42 U.S.C. 9601), or (vii) defined as a "regulated substance" pursuant to
Subchapter IX, Solid Waste Disposal Act (Regulation of Underground Storage
Tanks), 42 U.S.C. 6991 et seq.
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19. RIGHT OF FIRST REFUSAL: In the event LANDLORD shall receive a
bona fide written offer acceptable to LANDLORD from a third party to purchase
the property, then LANDLORD shall by written notice to TENANT enclosing the
details (except names) of such written bona fide offer, offer to TENANT the
right to enter into a contract for the purchase of the property. TENANT shall
have thirty (30) calendar days after mailing of such notice and offer in which
to accept in writing such offer upon such terms and conditions specified
therein. Upon acceptance of such offer by TENANT, LANDLORD and TENANT shall
enter into a contract for the purchase of the property upon the terms and
conditions specified in the notice and offer from LANDLORD to TENANT. Mailing of
notice shall be by overnight courier service. In the event TENANT shall fail to
accept the terms and conditions of sale during such thirty (30) day period,
LANDLORD shall thereafter be free to sell the property upon the terms and
conditions specified in the bona fide written offer made by such third party,
provided that, if the sale of the property upon the terms and conditions
specified in such bona fide written offer by such third party is not consummated
within sixty (60) days after the mailing of the notice to TENANT provided by
this Section 19, the premises may not be sold to any third party unless and
until LANDLORD shall recommence the procedure provided by this Section 19 by
again giving notice to TENANT as provided herein.
20. SEVERABILITY: The provisions of this Lease are severable in
that should any provision be held to be illegal, invalid, or unenforceable by a
court of competent jurisdiction, the legality, validity and enforceability of
the other provisions herein shall not be affected, but they shall remain in full
force and effect.
21. EMINENT DOMAIN: If the whole of the Premises shall be taken
or condemned by any competent authority for any public use or purpose or if such
portion thereof shall be taken or condemned as shall materially change the
character of the Premises so as to prevent TENANT from using them in
substantially
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the same manner as theretofore used, the term hereby granted shall cease on the
day prior to the taking of possession by such authority or the day prior to
vesting of title in such authority, whichever first occurs, and an appropriate
pro rata portion of any rent paid in advance by TENANT shall be refunded.
If a portion of the Premises shall be condemned or taken, and if
such taking does not result in a material alteration in the character of the
Premises so as to prevent TENANT from using them in substantially the same
manner as theretofore used, then this Lease shall continue in effect, and any
damage to the Premises shall be repaired by LANDLORD. After the date taken,
TENANT is required to surrender possession of the portion taken and the rental
payable hereunder shall be reduced in proportion to the decrease in the fair
rental value of the Premises.
If all or a portion of the adjoining parking area shall be
condemned or taken so as to deprive TENANT of necessary parking or so as to in
some other way materially affect the TENANT's ability to conduct its business,
then TENANT may at its option cancel and terminate this Lease upon giving
LANDLORD notice within thirty (30) days of such taking. In the event TENANT
shall elect not to cancel and remain in possession and occupation of the
Premises, however, the terms and conditions of this Lease shall remain in full
force and effect.
The entire award of damages or compensation for a taking of the
Premises, whether such taking be in whole or in part, shall belong to and be the
property of LANDLORD, except for such compensation as may be made for TENANT's
moving or relocation expenses, TENANT's business interruption losses, and for
the taking of TENANT's trade fixtures, which compensation shall belong to and be
the property of TENANT.
If the Premises shall be taken or condemned by any governmental
authority for temporary use or occupancy, this Lease shall continue in full
force and effect without reduction or abatement of rent, and the rights of the
parties shall be
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unaffected by the other provisions of this Section. In the event of such
temporary taking, the entire award of damages in respect of the Premises shall
belong to TENANT; and LANDLORD assigns TENANT any and all interest it may have
in such award. To the extent TENANT is prevented by such temporary taking or
occupancy from fulfilling its obligations hereunder, TENANT's failure to do so
shall not be deemed a default under this Lease.
22. ESTOPPEL LETTERS: Either party hereto shall, at any time and
from time to time upon not less than ten (10) days prior written notice from the
other execute, acknowledge and deliver to the requesting party a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect), and the dates to which
the rental and other charges are paid in advance, if any, and acknowledging that
there are not, to the certifying party's knowledge, any uncured defaults on the
part of the other party hereunder, and that no event has occurred that, by the
giving of notice or the passage of time or both, would constitute a default, or
specifying such defaults or events if they are claimed. Any such statement
requested by either party may be relied upon by any prospective purchaser or
encumbrancer of [the building or] the Premises. Failure of a party to deliver
such statement within such time shall be conclusive upon such party that this
Lease is in full force and effect, without modification, except as may be
represented by the requesting party, that there are no uncured defaults in the
requesting party's performance, and that not more than one (1) month rental has
been paid in advance.
23. LIENS: Nothing herein contained shall be construed as
authorizing TENANT to incur any mechanic's lien or liens against the Premises
for any work performed, labor, or other material furnished hereunder. If any
lien shall be filed against the interests of LANDLORD or of TENANT in the
Premises or asserted against any rent payable hereunder by reason of work,
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labor, service or materials supplied or claimed to have been supplied on or to
the Premises at the request of, or with the permission of TENANT, or any
claiming under TENANT, TENANT shall, within thirty (30) days after notice of the
filing thereof, or the assertion thereof, against such rents, cause the same to
be discharged of record or effectively prevent the enforcement or foreclosure
thereof against the Premises of such rent by contest payment, deposit, bond,
order of Court or otherwise.
24. GOVERNING LAW: This Lease is governed by the laws of the
State of Tennessee and exclusive jurisdiction for any litigation or arbitration
arising out of same is in Maury County, Tennessee.
25. GENDER AND NUMBER/CAPTIONS: The words "LANDLORD" and
"TENANT", and the pronouns referring thereto, shall be construed singular or
plural, masculine, feminine or neuter as the facts warrant. The captions of the
provisions of this Lease are provided for convenience only and shall not limit
or extend the meaning or terms of any paragraph or section contained herein.
26. ENTIRE AGREEMENT: This Lease contains the entire agreement
between the parties, and any agreement hereafter made shall be ineffective to
change, modify or discharge it in whole or in part unless same is in writing and
signed by the party against whom enforcement of the change, modification or
discharge is sought. This Lease supersedes and voids all prior proposals,
letters, and agreements, oral or written. This Lease shall be interpreted and
construed in accordance with the laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties have set their signatures, in
duplicate, on the day and date first above written.
-----------------------------------
Bertrand L. Taylor
LANDLORD
Office Master of Texas, Inc.
By_________________________________
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STATE OF COLORADO
COUNTY OF ___________
Personally appeared before me, the undersigned, Bertrand L.
Taylor, with whom I am personally acquainted, and who acknowledged that he
executed the within instrument for the purposes therein contained.
WITNESS my hand, at office, this _____ day of February, 1998.
My commission expires:
______________________ ___________________________________
Notary Public
STATE OF COLORADO
COUNTY OF ____________
Personally appeared before me, the undersigned,
____________________________, with whom I am personally acquainted, and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is the ___________________ of
Office Master of Texas, Inc., and is authorized by the makers to execute this
instrument on behalf of the makers.
WITNESS my hand, at office, this _____ day of February, 1998.
My commission expires:
______________________ ______________________________________
Notary Public
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