Exhibit 10.21
LEASE AGREEMENT
THIS LEASE AGREEMENT (as hereinafter defined, this "Lease") is made
effective as of the lst day of July, 2001 (the "Effective Date"), by and between
RAM Global, Ltd., Texas limited partnership (as hereinafter defined,
"Landlord"), and Salsa Digital Printers, Ltd., a Delaware corporation (as
hereinafter defined, "Tenant").
W I T N E S S E T H:
1. Definitions. When used in this Lease and not otherwise defined, the
following capitalized terms shall have the respective meanings as follows:
"ADA" shall have the meaning set forth in Paragraph 16 of this Lease.
"Affiliate" shall mean, with respect to any person, any other person
controlling, controlled by, or under common control with such person.
"Base Rent" shall have the meaning set forth in Paragraph 5 of this
Lease.
"Buildings" shall mean the buildings located on the real property
described in Exhibit "A" and containing the interior portions of the Premises,
it being acknowledged by the parties that Landlord or others claiming through
Landlord may use the remaining portions of the Buildings.
"Environmental Health and Safety Laws" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Clean Air Act, the Federal Water
Pollution Control Act, the Hazardous Materials Transportation Act, the Safe
Drinking Water Act, the Toxic Substances Control Act, the Medical Waste Tracking
Act, the Occupational Safety and Health Act of 1970, as amended, together with
all other laws (including rules, regulations, codes, injunctions, judgments,
orders, decrees, and rulings thereunder) of federal, state, local, and foreign
governments (and all agencies thereof) concerning pollution or protection of the
environment, public health and safety, or employee health and safety
(specifically including the Occupational Safety and Health Administration), all
as the same now exist or hereafter may be amended.
"Hazardous Materials" shall mean any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any of the Environmental, Health, and Safety Laws, including but not
limited to any admixture or solution thereof, and specifically including but not
limited to waste oil, petroleum and all derivatives thereof or synthetic
substitutes therefor and friable asbestos
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"Landlord" shall mean RAM Global, Ltd., a Texas limited partnership,
together with its successors and permitted assigns.
"Lease" shall mean this Lease Agreement and all written amendments
hereto that hereafter shall be executed and delivered by Landlord and Tenant.
"Premises" shall mean the real property to be leased by Tenant from
Landlord under this Lease, consisting of certain portions of the real property
and improvements located at 4671 Highway 90 West, San Antonio, Texas and more
particularly described in Exhibit "A" hereto, including, without limitation, (a)
approximately 67,183 square feet of manufacturing, warehouse and office space
located within the Buildings and (b) the right to use the exterior portions of
the real property described in Exhibit "A" hereto, including a Proportionate
Share of the parking spaces. The portions of the Buildings to be occupied by
Tenant are described in the drawing of the Buildings attached hereto as Exhibit
"B-l" and Exhibit "B-2".
"Proportionate Share" shall mean, with respect to either Landlord or
Tenant, a share based upon the size of that portion of the Buildings allocated
to such party, it being agreed that:
(a) the Proportionate Share of Tenant shall be that fraction of
the whole of which (1) the numerator is the number of square feet located in the
Buildings and leased by Tenant under this Lease which is 67,183 square feet and
(2) the denominator is the total number of square feet in the Buildings which is
_______________sq. feet and
(b) the share of Landlord shall be the entire balance of the
whole.
"Tenant" shall mean Salsa Digital Printers, Ltd. a Delaware
corporation, the lessee of the Premises under this Lease, and if this Lease
shall be validly assigned, then "Tenant" shall include the Tenant's assignees to
the particular portions of the Premises covered by such assignment.
2. Leasing of Premises. Landlord, for and in consideration of the rents,
covenants, agreements, and stipulations hereinafter mentioned, reserved and
contained, to be paid, kept and performed by Tenant, has leased and rented, and
by these presents does lease and rent, unto said Tenant, and said Tenant hereby
agrees to lease and take upon the terms and conditions which hereinafter appear,
the Premises. Landlord covenants that Tenant, provided it performs all of its
obligations under this Lease, will peaceably and quietly enjoy the Premises
during the Lease term without any disturbance from Landlord, anyone claiming by,
through or under Landlord, or any other party, except as otherwise specifically
provided in this Lease.
3. Term. The term of this Lease shall begin as of July 1, 2001 and shall
continue for sixty (60) consecutive months, terminating on June 30, 2006.
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4. Parking. Landlord agrees the Tenant shall have equal access to all
parking spaces and that all parking spaces shall be unreserved in the portions
of the real property described in Exhibit "A".
5. Rental. For the term of the Lease, Tenant will pay a monthly rental
based on an annual rental of THREE-HUNDRED SIXTY-SEVEN THOUSAND TWO HUNDRED
NINETY-NINE AND 60/100 Dollars ($367,299.60) (the "Base Rent"), making monthly
rental due and payable in the amount of THIRTY-THOUSAND SIX HUNDRED EIGHT AND
30/100 Dollars ($30,608.30). The first payment of such annual rental is to be
made on the 1st day of July, 2001. The parties acknowledge that the Base Rent is
based on an agreed rental amount of five dollars and forty-seven cents ($5.47)
per square foot and a gross square footage of the interior portions of the
Premises of 67,183 square feet. If the actual square footage of the Premises is
more than or less than as set forth above, the annual rental (and monthly
payments) shall be adjusted proportionately.
The monthly rental for each month of this Lease will be due and payable in
advance on the first day of each and every calendar month of this Lease.
6. Utility Bills.
(a) For any utilities that are separately metered, Tenant will pay all
utility bills of all types, including, but not limited to, water and sewer,
natural gas, electricity and sanitary pick up bills for the Premises, or used by
Tenant in connection therewith. If Tenant does not pay same, Landlord may pay
the same, and such payment will be added to the next due monthly installment of
rental of the Premises.
(b) For any utilities that are not separately metered, Tenant will pay
to Landlord Tenant's Proportionate Share of utility costs no later than the date
such utility costs are due and payable to the utility provider. If Landlord does
not then pay same, Tenant may pay such utility costs, and Tenant's rent will be
abated by such amount so paid by Tenant.
7. Ad Valorem Taxes.
(a) Tenant shall pay as additional rent its Proportionate Share of any
and all ad valorem real estate taxes assessed and levied against the real
property described in Exhibit "A" to this Lease and the improvements thereto
with respect to the period covered by the term of this Lease. Tenant's
proportionate share shall be payable to Landlord no later than the date such
taxes may be paid without penalty or interest.
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(b) Tenant shall pay its fair share of any special assessment imposed
upon the Property, it being agreed that Tenant's fair share shall be based on
both (1) Tenant's Proportionate Share of the Buildings, and (2) the ratio of the
then remaining term of this Lease to the useful life of the improvement to which
the special assessment pertains. Tenant's fair share shall be payable to
Landlord no later than the date such taxes may be paid without penalty or
interest.
(c) Tenant will pay timely any and all ad valorem taxes assessed
against the personal property of Tenant located on the Premises, during the
entire term thereof.
(d) Tenant shall have the right, at Tenant's sole expense, to appeal
any and all taxes applicable to the Premises and Landlord agrees that Landlord
will cooperate with Tenant reasonably and sign all documents reasonably required
in connection with any such appeal. Provided that an appeal or protest of a tax
assessment will operate to suspend the collection of assessed taxes and the
enforcement of the lien for the assessed tax, Tenant may delay payment of any
portion of such taxes which are the subject of an appeal or protest until the
resolution of such appeal or protest, in which event Tenant shall be solely
responsible for the payment of any penalties, interest, or additional taxes
which result from such delay. Notwithstanding the foregoing, Tenant shall not
permit the filing of a tax lien against the Premises.
8. Insurance.
(a) Landlord will carry "All Risk" Insurance Coverage on the demised
Premises in an amount not less than the full insurable value. The term "full
insurable value" will mean the actual replacement cost, excluding foundation and
excavation costs, as reasonably determined by Landlord. Such policies will name
Tenant as a named additional insured. Tenant will reimburse Landlord for
Tenant's Proportionate Share of the "All Risk" Insurance Coverage no later than
the date the premium on the coverage is due and payable to the insurance
carrier. If Landlord fails in its obligations to obtain or maintain said
insurance, Tenant may, at its option, either (1) make the requisite payments for
Landlord's insurance and have its rent abated by said amount, or (2) obtain its
own insurance, for which Landlord will be liable to Tenant for Landlord's
Proportionate Share of the costs thereof.
(b) Tenant will carry at Tenant's own expense insurance coverage on
all equipment, fixtures and appliances. Landlord acknowledges that consistent
with the practices of Tenant's ultimate parent entity, certain perils that
are insured by many businesses are self-insured by Tenant up to the parent
entity's prescribed excess insurance attachment point.
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(c) Landlord and Tenant waive all rights to recover against each other
or against any other Tenant or occupant of the Buildings, or against the
officers, directors, shareholders, partners, joint venturers, employees, agents,
customers, invitees, or business visitors of each other or of any other Tenant
or occupant of the Buildings, for any loss or damage arising from any cause
covered by any insurance required to be carried by each of them pursuant to this
Paragraph or any other insurance actually carried by each of them. Landlord and
Tenant will cause their respective insurers to issue appropriate waiver of
subrogation rights endorsements to all policies of insurance carried in
connection with the Buildings or the Premises or the contents of either of them
to the extent such waivers are available.
9. Maintenance and Repairs by Tenant. Landlord warrants as of the Effective
Date that the Premises are structurally sound. Except as set forth in Paragraph
10, Tenant will, at its own expense, keep and maintain the interior of the
Premises, including all systems pertaining to electrical, lighting, and HVAC;
provided, however, if the HVAC system serves both Landlord and Tenant, Landlord
shall be responsible for its maintenance and repair, and Tenant shall reimburse
Landlord for Tenant's Proportionate Share of the costs of said repair no later
than the date the cost of the maintenance and repairs is due and payable by
Landlord (but in any event not earlier than fifteen days after notice from
Landlord). It is the intent of the parties that Tenant will only be required to
make repairs or replacements which are not structural in nature.
10. Repairs by Landlord. Landlord agrees to maintain and keep in good
repair the roof, exterior walls, structural supports (including foundations),
exterior doors of any and all buildings located on the Premises, and all water
or sewer pipes located underground or in the slab, sidewalks, parking lots,
driveways and other vehicular access and maneuvering areas and all common or
public areas in the Buildings or at the Premises. Landlord will also be
responsible for any repairs or replacements which are structural in nature,
which are extraordinary or capital in nature, which will increase the value of
the Premises subsequent to the end of the then term, and any other repairs not
expressly delegated to Tenant in this Lease. Landlord will also promptly clean
up and dispose of any Hazardous Materials found on, in or under any portion of
the Premises, remediate the Premises to comply with any and all environmental
laws applicable thereto, and pay for all clean up and disposal costs at no cost
to Tenant, unless directly caused by Tenant, its employees, agents or
contractors.
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11. Heat, Ventilation and Air-Conditioning. Landlord, at its expense, shall
furnish heat, ventilation and air-conditioning to the Premises as may be
reasonably required as Landlord shall determine in its reasonable judgment
(except as otherwise provided in the Lease and except for any special
requirements of Tenant arising from its particular use of the Premises) during
Business Hours of Business Days. "Business Hours" shall mean 8:00 a.m. to 6:00
p.m. "Business Days" shall mean all weekdays, and Saturday from 8:00 a.m. to
2:00 p.m., except days observed by the Federal or the state government as legal
holidays.
12. Access. Tenant shall have access to the Premises twenty-four hours a
day, seven days a week.
13. Destruction of or Damage to the Premises. If the Premises are totally
destroyed by storm, fire, lightning, earthquake or other casualty, this Lease
will terminate as of the date of such destruction, and rental will be accounted
for as between Landlord and Tenant as of that date. If the Premises are damaged
but not wholly destroyed by any of such casualties, rental will abate in such
proportion as use of the Premises has been destroyed, and Landlord will restore
the Premises to substantially the same condition as before the damage as
speedily as practicable, whereupon full rental will recommence; however, if the
damage will be so extensive the same cannot be reasonably repaired and restored
within sixty (60) days from the date of the casualty, then either Landlord or
Tenant may cancel this Lease by giving written notice to the other party within
thirty (30) days from, the date of such casualty. In such event, rental will be
apportioned and paid up to the date of such casualty.
14. Modifications and Alterations to the Premises. No modifications,
alterations, or improvements to the Buildings or openings cut through the roof
are allowed without the prior written consent of Landlord, which consent will
not be unreasonably withheld or delayed.
15. Removal of Fixtures. Tenant may (if not in default hereunder) prior to
the expiration of this Lease, or any renewal or extension thereof, remove all
personal property, fixtures and equipment which Tenant has placed in the
Premises, provided that during such removal Tenant will make all reasonable
repairs necessary to return the Premises to its original condition, reasonable
wear and tear excepted.
16. Return of the Premises. Tenant agrees to return the Premises to
Landlord at the expiration or prior termination of this Lease in same condition
and repair, reasonable wear and tear, damage by storm, fire, lightning,
earthquake or other casualty alone excepted.
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17. Condemnation.
(a) If the whole of the Premises, or such portion thereof as will make
the Premises unusable for the purpose herein leased, shall be condemned by any
legally constituted authority for any public use or purpose or if Landlord shall
sell the Premises under threat of condemnation, then in either such case the
term of this Lease will end at the time when possession thereof is taken by
public authorities, and rental will be accounted for as between Landlord and
Tenant as of that date. Such termination, however, will be without prejudice to
the rights of Landlord to recover compensation and damage caused by condemnation
from the condemnor or the rights of Tenant to recover from the condemnor
compensation for its costs of relocation (including for any business
disadvantage or increased rent resulting from such relocation) and for the
unamortized value of leasehold improvements made by Tenant. It is further
understood and agreed that neither Tenant nor Landlord will have any rights in
any award made to the other by any condemning authority.
(b) If there is a partial taking of the Premises by condemnation and
if it is not so extensive as to render the remaining portion (after
restorations) unsuitable for the business of Tenant, then this Lease will
continue in effect and Landlord, upon receipt of the award in condemnation, will
expeditiously commence and complete all necessary repairs and restorations to
the Premises so as to constitute the portion of the Buildings not taken a
complete architectural unit and restore the Premises as nearly as practicable to
its prior condition; provided, however, that such work does not exceed the scope
of the original construction, and Landlord will not be under any duty to expend
amounts in excess of the award received by Landlord. Rent, taxes and other
charges payable by Tenant will equitably abate while Landlord's repairs and
restorations are in process. If a partial taking consists only of a street
widening or utility easement which, at Tenant's reasonable judgment, is
determined not to materially affect Tenant's use of the Premises, this Lease
will continue in full force and effect without abatement of rent, taxes or other
charges.
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18. Governmental Orders. Tenant agrees, at its own expense and solely in
relation to those portions of the Premises which Tenant is required to maintain
or repair under Paragraph 9, to promptly comply with all requirements of any
legally constituted public authority made necessary by reason of Tenant's
specific manner of use of said Premises. Notwithstanding the foregoing, the
Tenant will not be liable for: (a) repairs, alterations, replacements or
retrofitting required by the accessibility or path of travel requirements set
forth in Title III of the Americans With Disabilities Act of 1990, 42 USC
'SS' 12101, et seq. and regulations and guidelines promulgated thereunder, as
amended from time to time (collectively referred to as "ADA"); (b) repairs,
alterations or replacements required to comply with federal, state or local
indoor air quality laws, rules or regulations (separate and apart from any such
laws, rules or regulations that are specific to Tenant's industry); or (c)
repairs, alterations or replacements described in Paragraph 10. Landlord agrees
to promptly comply with any other governmental or regulatory requirements if not
made necessary by reason of Tenant's occupancy of the Premises or relating to
those portions of the Premises which Landlord is required to maintain or repair
under Paragraph 10.
19. Assignment. Tenant may assign this Lease or sublet all or part of the
Premises to (a) any Affiliate of Tenant, and (b) any entity that is not an
Affiliate of Tenant that succeeds to the entire business of Tenant through
purchase, merger, consolidation or reorganization. Any other subletting of all
or any portion of the Premises or assignment in whole or in part of this
Lease shall be prohibited without the prior written consent of Landlord, which
shall not be withheld or delayed unreasonably. Subtenants or assignees will
become liable directly to Landlord for all obligations of Tenant hereunder,
without relieving Tenant's liability.
20. Mortgagee's Rights. Tenant's rights will be subject to any bona fide
mortgage or deed to secure debt which is now, or may hereafter be, placed upon
the Premises by Landlord, and Tenant agrees, at Landlord's cost, to execute and
deliver such documentation as may be reasonably required by any such mortgagee
to effect any subordination. Provided, however, as a condition to such
subordination, Landlord must secure from each mortgagee a nondisturbance
agreement acceptable to Tenant providing that in the event of a foreclosure the
mortgagee will recognize the validity of this Lease and, provided that Tenant
is not in default, will not disturb Tenant's possession or its rights under this
Lease. Landlord and Tenant specifically approve the form of Subordination,
Nondisturbance and Attornment Agreement attached hereto as Exhibit "C".
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21. Use of the Premises. The Tenant may use the Premises for the
manufacturing and sale of digital printers and ink or the manufacture and sale
of other related products, warehousing, training, storage, demonstration and
related office purposes, and for engaging in the digital printer and ink and
related products businesses. The Premises will not be used for any illegal
purposes, nor in any manner to create any nuisance or trespass; nor in any
manner to vitiate the insurance, based on the above purposes for which the
Premises are leased.
22. Signs. Tenant will have the right to erect at Tenant's sole expense
signage at the entrance to and upon the Premises, including but not limited to a
customary trade sign identifying the business of Tenant. The erection of signage
by Tenant will be subject to and in conformity with all applicable laws, zoning
ordinances and building restrictions or covenants of record. On or before
termination of this Lease, Tenant will remove the signage thus erected, and will
repair any damage or disfigurement, caused by such removal. All signage proposed
by Tenant shall be subject to Landlord's review and approval, which approval
shall not be unreasonably withheld, conditioned or delayed.
Tenant shall have the exclusive right to use the two (2) faces of the
billboard sign currently located on the real property described in Exhibit "A"
at no additional rental cost to Tenant: provided that, (i) Tenant may use the
sign only for promotion of Tenant's business; (ii) Tenant shall not assign or
sublet its right to use the sign; and (iii) Tenant, at Tenant's cost and expense
shall: (A) provide for all required permitting of the sign, (B) maintain and
repair the sign, including its supporting structure, (C) provide for all sign
faces for the sign, (D) maintain the area under and immediately surrounding the
sign, and (E) if the sign is illuminated, pay the cost of electricity for
illuminating the sign.
28. Right of First Refusal. Provided Tenant is not in default of this
Lease, if during the term of this Lease the portion of the Buildings not
included in the Premises (the "Additional Premises") becomes available, Tenant
shall have a right of first refusal to lease the Additional Premises on terms as
mutually agreed between Landlord and Tenant. Landlord shall notify Tenant in
writing as soon as Landlord knows the Additional Premises, or any portion
thereof, is or will become available. Landlord and Tenant shall then negotiate
in good faith the terms of a lease for the Additional Premises or the available
portion thereof. If Landlord and Tenant are unable to reach agreement on the
terms of a lease within 30 days of Landlord's notice to Tenant, Tenant's right
as to the Additional Premises, or the available portion thereof, shall
terminate and be of no further force or effect; provided that, if Landlord's
notice is for less than the entire Additional Premises, Tenant's option as to
any remaining portion of the Additional Premises shall continue in accordance
with this Section 23. If Tenant leases the entire Additional Premises as
provided in this Section 23, Tenant may terminate this Lease as to the
portion of the Premises indicated on Exhibit "B-2" of this Lease.
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24. Entry for Carding, etc. Landlord may card the Premises "For Rent" no
more than 90 days from the end of the term of this Lease. Landlord may enter the
Premises at reasonable hours during the term of this Lease to exhibit the same
to prospective purchasers and to make repairs required of Landlord under the
terms hereof, such entry to be made without unnecessary disturbance to Tenant.
Landlord may card the real property described on Exhibit "A" "For Sale" or any
portion of the real property other than the Premises "For Rent" at any time.
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25. Indemnity.
(a) Landlord agrees to indemnify and save harmless Tenant and its
parents, subsidiaries, Affiliates, directors, officers, employees, agents,
servants, attorneys and representatives from any and all claims, causes of
action, damages, fines, judgments, penalties, costs (including environmental
clean-up costs and response costs), liabilities, expenses or losses (including
without limitation, reasonable attorneys' fees and expenses of litigation)
arising during or after the Lease term: (1) as a result of any violation by
Landlord or prior owners or occupants of the Premises of any applicable federal,
state or local environmental laws or regulations, as now or hereinafter in
effect, regulating, relating to or imposing liability or imposing standards of
conduct concerning any Hazardous Materials; or (2) as a result of the presence,
disturbance, discharge, release, removal or cleanup of Hazardous Materials or as
a result of environmental contamination or other similar conditions which
existed prior to commencement of the Lease term; or (3) as a result of any
violation of the accessibility or path of travel requirements imposed by ADA; or
(4) as a result of any of Landlord's representations and warranties being
untrue. These indemnities will survive the expiration, cancellation or
termination of the Lease. Notwithstanding the foregoing, Landlord's indemnities
shall not apply or extend to claims arising from or caused by Tenant.
(b) Tenant agrees to indemnify and save harmless Landlord and its
parents, subsidiaries. Affiliates, directors, officers, employees, agents,
servants, attorneys and representatives from any and all claims, causes of
action, damages, fines, judgments, penalties, costs (including environmental
clean-up costs and response costs), liabilities, expenses or losses (including
without limitation, reasonable attorneys' fees and expenses of litigation)
arising during or after the Lease term: (1) as a result of any violation by
Tenant of any applicable federal, state or local environmental laws or
regulations, as now or hereinafter in effect, regulating, relating to or
imposing liability or imposing standards of conduct concerning any Hazardous
Materials; or (2) as a result of the presence, disturbance, discharge, release,
removal or cleanup of Hazardous Materials or as a result of environmental
contamination or other similar conditions which existed after commencement of
the Lease term and which was caused by or brought onto the Premises by Tenant or
Tenant's agents, contractors, employees, licensees and invitees; or (3) as a
result of any violation by Tenant of the accessibility or path of travel
requirements imposed by ADA; or (4) as a result of any of Tenant's
representations and warranties being untrue. These indemnities will survive the
expiration, cancellation or termination of the Lease; provided, however, that
Tenant will not be liable for the acts of Landlord or of any other tenants of
said property.
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26. Default of Tenant.
(a) It shall be a default by Tenant if: (1) the rent herein required
is not paid at the time and place when and where due and Tenant fails to pay
said rent within ten (10) days after written demand from Landlord; or (2) Tenant
fails to comply with any material term, provision, condition, or covenant of
this Lease, other than the payment of rent, and will not cure such failure
within thirty (30) days after notice to Tenant of such failure to comply or such
additional time period as may reasonably be necessary to effect a cure of the
default provided that Tenant commences and diligently pursues a cure of the
default; or (3) Tenant causes any lien to be placed against the Premises and
does not cure the same within thirty (30) days after notice from Landlord to
Tenant demanding cure.
(b) Upon any default by Tenant referenced in Subparagraph (a) above,
Landlord may, in addition to, and not in limitation of any other remedy
permitted by law or by this Lease:
(1) terminate this Lease, in which case Tenant shall (A)
immediately surrender the Premises to Landlord, and (B) indemnify Landlord for
all loss and damage that Landlord may suffer by reason of such termination,
whether through inability to relet the Premises, or through decrease in rent, or
otherwise; or
(2) acting as Tenant's agent, without terminating this Lease, may
terminate Tenant's right of possession, and, at Landlord's option, enter upon
and rent the Premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Landlord deems
proper, in which case Tenant will be liable to Landlord for the deficiency, if
any, between Tenant's rent hereunder and the price obtained by Landlord on
reletting.
Pursuit of any of the foregoing remedies will not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law. In any
case, Landlord will use reasonable efforts to mitigate Tenant's damages. Any
notice in this provision may be given by Landlord or its attorney. No
termination of this Lease prior to the normal ending thereof, by lapse of time
or otherwise, will affect Landlord's right to collect rent for the period prior
to the termination thereof.
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27. Default of Landlord. It shall be a default by Landlord if Landlord
fails to comply with any material term, provision, condition or covenant of this
Lease and will not cure such failure within thirty (30) days after notice to
Landlord of such failure to comply or such additional time period as may
reasonably be necessary to effect a cure of the default provided that Landlord
commence and diligently pursues a cure of the default. Upon any default by
Landlord, Tenant may, at its option, elect to: (a) terminate this Lease upon
thirty (30) days written notice to Landlord; (b) bring an action to require
specific performance of Landlord's obligations; (c) provide Landlord with an
additional period of time within which to effect that cure; (d) commence such
cure itself, and Tenant may either, at its option, offset any expenses it incurs
in effecting such cure against the rent and other charges due and payable by
Tenant hereunder, or require that Landlord immediately reimburse Tenant for its
expenses; provided, however, in the event of an emergency, Tenant may
immediately effect a cure of Landlord's failure should Landlord fail to act
immediately to do so, without the requirement of any notice by Tenant to
Landlord; and/or (e) pursue any other remedies provided herein or provided by
law.
28. Warranties of Landlord. Landlord warrants that:
(a) Landlord owns the Premises in fee simple and has the right to
enter into this Lease. The Premises are free from liens and encumbrances, except
for utility easements, unviolated restrictive covenants which do not materially
adversely affect Tenant's intended use of the Premises, and other title matters
to which the conveyance of the Premises by Landlord to Tenant was subject,
including a mortgage for which the mortgagee, Landlord and Tenant have executed
a subordination, nondisturbance and attornment agreement. The Premises have
legal, direct, pedestrian and vehicular access to and from and abuts one or more
publicly dedicated roads;
(b) Except for the corrective environmental work provided by the Asset
Purchase Agreement between Landlord and Arlon Signtech, Ltd., to Landlord's
knowledge the Premises are in compliance with all Environmental, Health and
Safety Laws.
(c) Except for the citations that Landlord has separately disclosed to
Tenant, Landlord has not received a citation from any regulatory agency for
noncompliance with Environmental, Health and Safety Laws. Landlord alone shall
be responsible for fines, penalties, and all other damages arising out of any
such citation with respect to occurrences or conditions at the Premises prior to
the date hereof and for any such items in the portions of the Buildings other
than the Premises or resulting from Landlord's use of such land at any time
subsequent to the date hereof.
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29. Holding Over. If Tenant remains in possession of the Premises more than
30 days after notice of termination provided by Landlord or Tenant with
Landlord's acquiescence, Tenant shall continue to be a month to month tenant on
the terms that were in effect immediately prior to the notice of termination. If
Tenant remains in possession of the Premises more than 30 days after notice of
termination by Landlord or Tenant without Land1ord's acquiescence, Tenant will
be a tenant-at-sufferance at 150% of the rental rate in effect immediately prior
to the notice of termination. In neither case shall there be deemed to be a
renewal of this Lease (other than to a month-to-month basis, as stated above) by
operation of law.
30. Notices. Any notice given pursuant to this Lease will be in writing and
sent by certified mail to:
If to Landlord:
RAM Global, Ltd.
7887 Broadway, No. 406
San Antonio, Texas 78209
Attn: Mr. Kartar Gandy
Copy to: Deven N. Dixon, P.C.
Law Office, Trinity Plaza II
745 East Mulberry Street, Suite 870
San Antonio, TX 78212
If to Tenant:
Salsa Digital Printers, Ltd.
4671 Highway 90 West
San Antonio, Texas 78237
Attn: Mr. Rick Clarke
Copy to:
NUR Macroprinters
12 Abba Hillel Silver Street
P.O. Box 1281
Lod, Israel 71111
Attn: Mr. Hilel Kramer
31. Construction of Lease Terms. Irrespective of which party was
responsible for the preparation and drafting of this Lease, the terms of this
Lease will not be construed more strictly against such party than against any
other party.
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32. Waiver of Rights. No failure of Landlord to exercise any power given
Landlord hereunder, or to insist upon strict compliance by Tenant with its
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof will constitute a waiver of Landlord's right to demand exact
compliance with the terms hereof.
33. Rights Cumulative. All rights, powers and privileges conferred
hereunder upon the parties hereto will be cumulative but not restrictive to
those given by law.
34. Time of Essence. Time is of the essence of this Lease.
35. Entire Agreement. This Lease contains the entire agreement of the
parties hereto, and no representations, inducements, promises or agreements,
oral or otherwise, between the parties, not embodied herein, will be of any
force or effect.
36. Severability and Governing Law. If any term, covenant or condition of
this Lease or the application thereof to any person, entity or circumstance
will, to any extent, be invalid or unenforceable, the remainder of this Lease,
or the application of such term, covenant, or condition to persons, entities or
circumstances other than those which or to which sued may be held invalid or
unenforceable, will not be affected thereby, and each term, covenant or
condition of this Lease will be valid and enforceable to the fullest extent
permitted by law. This Lease shall be governed by and construed in accordance
with the law of the state in which the Premises are located.
37. Brokerage. Each of Landlord and Tenant warrants to the other that no
commissions are payable or due to any broker or finder in connection with this
Lease and each of Landlord and Tenant agrees to indemnify, defend and hold the
other harmless from and against any commissions or fees or claims for
commissions or fees arising under the indemnifying party, which indemnification
will expressly survive the termination of this Lease.
38. Intentionally Omitted.
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IN WITNESS WHEREOF, the parties herein have executed this Lease as of the
Effective Date.
"LANDLORD"
RAM Global, Ltd.
a Texas limited partnership
By: Kartar Gandy
------------------------------
Kartar Gandy
Its: General Partner
"TENANT"
Salsa Digital Printers, Ltd.
a Delaware Corporation
By: Rick Clarke
-----------------------------
Rick Clarke
Its: President
16
EXHIBIT LIST FOR LEASE AGREEMENT
Exhibit "A" Legal Description of Real Property Including the
Premises
Exhibits "B-1" and B-2" Drawings of Buildings Identifying Interior Portions
of Premises Leased by Tenant
Exhibit "C" Approved Form of Subordination, Nondisturbance and
Attornment Agreement
17
EXHIBIT "A"
Real Property
Lot 16, New City Block 8669, SIGNTECH SUBDIVISION, in the City of San Antonio,
Bexar County, Texas, according to plat thereof recorded in Volume 9537, Page 34,
Deed and Plat Records of Bexar County, Texas; together with that Non-Exclusive
Ingress and Egress Easement; along a part of the easterly line granted by
instrument recorded in Volume 4123, Page 522, Bexar County Real Property
Records, which casement is more particularly described as follows:
A parcel of land adjacent to and East of Lot 16, NCB 8669, San Antonio, Texas,
being more particularly described to wit:
Beginning at an iron pin being the Southeast corner of Lot 16 and being the
Southwest corner of this parcel;
Thence, NE 05[d] 56' 39", a distance of 494.05 feet to the Northwest corner
of this parcel;
Thence, SE 84[d] 03' 21", a distance of 6.00 feet to the Northeast corner of
this parcel;
Thence, SW 05[d] 56' 39", a distance of 459.05 feet to the Southeast corner
of this parcel;
Thence, SE 19[d] 17' 47", a distance of 38.69 feet to the Southeast corner of
this parcel;
Thence, NW 84[d] 03' 21", a distance of 22.50 feet to the point of beginning
and containing 3235.00 square feet or 0.767 acres.
EXHIBIT A
EXHIBIT B-1
[Drawing of Property]
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement"), made effective as of the 1st day of July, 2001, between
___________________________(hereinafter called "Mortgagee"), RAM Global, LTD., a
Texas limited partnership (hereinafter called "Landlord") and SALSA DIGITAL
PRINTERS, LTD, a Delaware corporation (hereinafter called "Tenant").
W I T N E S S E T H:
WHEREAS, Mortgagee has made or is about to make a loan to Landlord secured
by a mortgage or deed of trust (hereinafter called the "Mortgage") covering a
parcel of land owned by Landlord and being more particularly described in
Exhibit "A" attached hereto (hereinafter called the "Mortgaged Property"); and
WHEREAS, by a certain lease heretofore entered into between Landlord and
Tenant, or their predecessors in interest, dated effective as of July 1, 2001
(the "Lease"), Tenant leased a portion of the Mortgaged Property (said portion
being hereinafter called the "Leased Premises"); and
WHEREAS, a copy of the Lease has been delivered to Mortgagee, the receipt
of which is hereby acknowledged; and
WHEREAS, Mortgagee is unwilling to make or continue to make the loan to the
Landlord unless the Lease is subordinate to the lien of the Mortgage; and
WHEREAS, the parties hereto desire to effect the subordination of the Lease
to the lien of the Mortgage and to provide for the nondisturbance of Tenant by
Mortgagee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. Approval of Lease. Mortgagee hereby consents to and approves the Lease.
2. Subordination of Lease to Mortgage. Tenant covenants and agrees with
Mortgagee that the Lease is hereby made and shall continue hereafter to be
subject and subordinate to the lien of the Mortgage, (as same may be modified
and extended) subject to the provisions of this Agreement.
EXHIBIT C
3. Effectiveness of Lease. Tenant certifies that the Lease is presently in
full force and effect, or shall be in full force and effect at the time of
delivery of this Agreement.
4. Nondisturbance by Mortgagee. Mortgagee agrees that so long as the Lease
shall be in full force and effect:
(a) Except as required by applicable law governing foreclosures
and/or sales pursuant to power of sale, Tenant shall not be named
or joined as a party defendant or otherwise in any suit, action
or proceeding for the foreclosure of the Mortgage or to enforce
any rights under the Mortgage or the bond or note or other
obligation secured thereby.
(b) Except as otherwise provided in Section 6 below, the possession
by Tenant of the Leased Premises and Tenant's rights and
privileges thereto shall not be disturbed, affected or impaired
by, nor will the Lease or the term thereof be terminated or
otherwise adversely affected and Tenant's occupancy of the Leased
Premises shall not be disturbed by Mortgagee for any reason
whatsoever during the term of the Lease.
5. Mortgagee's Waiver of Rights of Distraint. Mortgagee hereby acknowledges
and agrees that all fixtures and equipment whether owned by Tenant or any
subtenant or leased by Tenant and installed in or on the Leased Premises,
regardless of the manner or mode of attachment, shall be and remain the property
of Tenant and may, subject to the provision of the Lease, be removed by Tenant
at any time. In no event (including a default under the Lease or the Mortgage)
shall Mortgagee have any liens, rights or claims in Tenant's fixtures and
equipment, whether or not all or any part thereof shall be deemed fixtures, and
Mortgagee expressly waives all rights of levy, distraint, or execution with
respect to said fixtures and equipment arising out of the Mortgage.
6. Rights After Foreclosure or Deed in Lieu of Foreclosure. If Mortgagee
shall become the owner of the Mortgaged Property by reason of foreclosure of the
Mortgage or otherwise, or if the Mortgaged Property shall be sold as a result of
any action or proceeding to foreclose the Mortgage or by a deed given in lieu of
foreclosure, the Lease shall continue in full force and effect, without
necessity for executing any new lease, as a direct lease between Tenant, as
Tenant thereunder, and the then owner of the Mortgaged Property, as Landlord
thereunder, upon all of the same terms, covenants and provisions contained in
the Lease, and in such event:
(a) Tenant shall be bound to such new owner under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the option periods, if Tenant elects or has elected to exercise its
options to extend the term) and Tenant hereby agrees to attorn to such new owner
and to recognize such new owner as Landlord under the Lease; and
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(b) if Tenant is not in default under the Lease beyond any applicable
cure period, such new owner shall be bound to Tenant under all of the terms,
covenants and provisions of the Lease for the remainder of the term thereof
(including the option periods, if Tenant elects or has elected to exercise its
options to extend the term) which terms, covenants and provisions such new owner
hereby agrees to assume and perform; provided, however, that Mortgagee or any
successor or assignee of Mortgagee shall not be:
(1) bound by any prepayment of rent for a period of greater than
thirty (30) days, as contemplated by Section 8 of this Agreement, or by any
deposit, rental security, or any other sum paid to any prior landlord under the
Lease including Landlord, unless received and receipted for by Mortgagee or its
successor or assignee;
(2) liable for any act or omission of any prior landlord under
the Lease, including, without limitation, the Landlord, except for any
continuing act or omission of which Mortgagee had notice and failed to cure; or
(3) subject to any offsets or defenses that Tenant may have
against any prior landlord under the Lease, including Landlord, except for any
offsets or defenses related to any continuing act or omission of which Mortgagee
had notice and failed to cure.
7. Rentals After Notice. After notice is given to Tenant by Mortgagee that
the rentals due under the Lease are to be paid to Mortgagee, Tenant shall pay to
Mortgagee all rentals due to Landlord under the Lease. Landlord hereby
expressly authorizes Tenant to make such payments to Mortgagee and releases and
discharges Tenant of and from any liability to Landlord on account of any such
payments. In no event shall Tenant be required to determine whether Mortgagee's
notice was sent under proper circumstances.
8. No Prepayments. Tenant shall not pay any installment of rent more than
thirty (30) days prior to the due date.
9. Notices. Any notices or communications given under this Agreement shall
be in writing and shall be given by registered or certified mail, return receipt
requested, postage prepaid, (a) if to Mortgagee, at the address of Mortgagee as
hereinafter set forth or at such other address as Mortgagee may designate by
written notice to Tenant, or (b) if to Tenant, at the address of Tenant as
hereinafter set forth, or at such other address as Tenant may designate by
written notice Mortgagee.
10. Parties in Interest. This Agreement shall bind and inure to the benefit
of and be enforceable by the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. Entire Agreement; Modifications. This Agreement contains the entire
agreement between the parties and cannot be changed, modified, waived or
canceled except by
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an agreement in writing executed by the party against whom enforcement of such
modification, change, waiver or cancellation is sought.
12. Covenant Running with the Land. This Agreement and the covenants herein
contained are intended to run with and bind all lands affected thereby.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument, for the same effect as if all parties hereto had signed the
same signature page. Any signature page of this Agreement may be detached from
any counterpart of this Agreement without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this Agreement
identical in form hereto but having attached to it one or more additional
signature pages.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
MORTGAGEE
------------------------------
a
-----------------------------
By:
--------------------------
Title:
------------------------
LANDLORD
RAM GLOBAL, LTD.
a Texas limited partnership
By:
--------------------------
Kartar Gandy
Title: General Partner
TENANT
SALSA DIGITAL PRINTERS, LTD.
a Delaware corporation
By:
--------------------------
Title:
------------------------
STATE OF TEXAS 'SS'
COUNTY OF BEXAR 'SS'
Before me, the undersigned authority on this day personally appeared
_____________________________, as ________________________of _________________,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed as the act and deed of said banking association and in the
capacity herein stated.
Witness my hand and official seal this _______ day of July, 2001.
-----------------------------
Notary Public, State of TEXAS
STATE OF 'SS'
------------
COUNTY OF 'SS'
-----------
Before me, the undersigned authority on this day personally appeared Kartar
Gandy, as General Partner of RAM Global, Ltd., a Texas limited partnership,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
therein expressed as the act and deed of said limited partnership and in the
capacity herein stated.
Witness my hand and official seal this _______ day of July, 2001.
-----------------------------
Notary Public, State of
------
STATE OF TEXAS 'SS'
COUNTY OF BEXAR 'SS'
Before me, the undersigned authority on this day personally appeared
____________________, the ______________________ of Salsa Digital Printers,
Ltd., a Delaware corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed
the same for the purposes therein expressed as the act and deed of said
corporation and in the capacity herein stated.
Witness my hand and official seal this _______ day of July, 2001.
-----------------------------
Notary Public, State of TEXAS
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