Mississippi-Ridgeland-500 Steed Road at I-55 North Commercial Lease Agreement - Arrowhead Real Estate LLC and Premier Graphics Inc.
COMMERCIAL LEASE AGREEMENT
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THIS COMMERCIAL LEASE AGREEMENT ("Lease") is made and entered into as of
March 1, 1998, by and between ARROWHEAD REAL ESTATE, LLC, a Mississippi limited
liability Company ("Lessor"), and PREMIER GRAPHICS, INC., a Delaware corporation
("Lessee").
1. Term and Premises. Subject to the terms and conditions set forth
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herein, Lessor hereby leases and lets to Lessee, and Lessee leases and accepts
from Lessor, for a term of ten (10) years, commencing on March 1, 1998, and
expiring on February 28, 2008 (the "Term"), that certain real property with a
municipal address of 500 Steed Road at I-55 North, Ridgeland, Mississippi 39158,
and more particularly described in Exhibit A hereto (the "Premises").
2. Basic Rent. Lessee shall pay Lessor, at the address of Lessor
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indicated herein, the annual amounts (the "Basic Rent") set forth below:
Year 1 $ 300,000.00
Year 2 345,000.00
Year 3 390,000.00
Year 4 435,000.00
Year 5 525,000.00
Year 6 555,000.00
Year 7 585,000.00
Year 8 615,000.00
Year 9 645,000.00
Year 10 645,000.00
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Total Payments $5,040,000.00
The Basic Rent each year shall be paid to Lessor in equal monthly installments,
which monthly rental payments shall be paid in advance on the first day of each
calendar month during the term of this Lease. If the Term does not commence on
the first day of a calendar month, Lessee will pay in advance, on the first day
of the Term, a pro rata part of the regular monthly rent installment, based on
the number of days of the Term occurring within the calendar month in which the
Term commences; and the rent installment due on the first day of the last
calendar month occurring during the Term shall be similarly prorated. All
rental payments are to be considered "past due" on the fifteenth (15th) of the
month in which they are due, and if said payment has not been received by the
Lessor by such date there will be a late charge of five percent (5.0%) of the
monthly rental on all such "past due rentals," it being agreed that such is the
reasonable additional expense incurred by Lessor in handling such late payments.
All rental payments and other payments by Lessee to Lessor shall be mailed or
delivered to Lessor at the address of Lessor indicated herein or to such other
person or address in such city as Lessor may direct by written notices to
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Lessee. Lessee hereby waives any and all notices and demands for payment of the
monthly rental payments of Basic Rent due under this Lease to Lessor.
3. Additional Rent. In addition to the payment of Basic Rent, Lessee
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shall pay all of the following costs arising from or related to the Premises,
which costs shall be collectively referred to herein as additional rent
("Additional Rent"):
a. Maintenance of Premises. Lessee shall, at its sole expense, take
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good care of the Premises and any building now or hereafter erected
thereon, both inside and outside, and keep the same and all parts thereof
in good order and condition, suffering no waste or injury, and shall, at
Lessee's sole expense, promptly make all needed repairs, in and to any
building or structure or equipment now or hereafter erected upon the
Premises, including all fixtures, machinery and equipment now or hereafter
belonging to or connected with the Premises or used in their operation.
All such repairs shall be of first class quality sufficient for the proper
maintenance and operation of the Premises. Lessee shall not obstruct or
permit the obstruction of the street or sidewalk and shall keep the
sidewalk and curb adjoining the Premises clean and free of snow and ice.
If Lessee fails to make such repairs or maintenance promptly, or within
fifteen (15) days of occurrence, Lessor may, at its option, make them, and
Lessee shall repay the cost thereof to Lessor on demand. Notwithstanding
anything to the contrary contained herein, Lessor shall be required to make
all repairs to the Premises that are structural in nature, including
repairs to the roof, and to replace any fixtures, machinery and equipment
which cannot be repaired.
c. Maintenance of Common Areas. Lessee shall pay to Lessor, as
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Additional Rent, all costs and expenses of every kind and nature paid or
incurred by Lessor during the term of the Lease (and any renewal term) in
operating, managing, equipping, lighting, repairing, replacing, policing
and maintaining the common parking and ingress and egress areas (herein
"Common Areas") of the Premises (except structural repairs as set forth in
Paragraph 3.a. above). Alternatively, Lessor may require Lessee to perform
(or cause to be performed) such maintenance. Such costs and expenses shall
include, but shall not be limited to: utilities, and lighting the Common
Areas, if any, cleaning costs, expenses of planting, replanting and
replacing flowers, landscaping, water and sewerage charges, premiums for
liability and property damage, and fees for required licenses and permits.
d. Taxes and Utilities.
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i. Real Property Taxes. Lessee shall pay when due all real
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property taxes upon the Premises accruing with respect to or allocable
to the term hereof. As used herein, the term "real property taxes"
shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Premises
by any authority having the direct or indirect power to tax, including
any city, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district
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thereof, as against any legal or equitable interest of Lessor in the
Premises or in the real property of which the Premises are a part, as
against Lessor's right to rent or other income therefrom, and as
against Lessor's business of leasing the Premises.
ii. Personal Property Taxes.
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(1) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Lessee contained on the Premises or
elsewhere. When possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed
and billed separately from the real property taxes.
(2) If any of Lessee's personal property shall be assessed
with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Lessee's property.
b. Other Taxes. Lessee shall reimburse Lessor for any commercial
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lease tax, sales tax, gross receipts tax, privilege tax, or similar tax,
howsoever denominated, now or hereafter imposed on, measured by, or
assessed against the Basic Rent and Additional Rent (collectively, the
"Rents") paid by Lessor or received by Lessor pursuant to this Lease (or
any tax imposed or assessed in lieu thereof). Lessee shall pay said sums
to Lessor not later than ten (10) days from the date on which Lessee
receives notice from Lessor of the amount due.
c. Utilities. Lessee shall pay for all water, gas, heat, light,
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power, telephone and other utilities and services supplied to the Premises.
d. Insurance.
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i. Fire and Casualty. During the entire term hereof, Lessee
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shall procure and maintain at its sole expense, insurance covering the
Premises, for the full replacement cost thereof, insuring against the
perils of fire, lightening, flood, earthquake, boiler and machinery,
extended coverage, vandalism and malicious mischief, extended by
Special Form Coverage Endorsement to insure against all other risks of
direct physical loss, and business interruption insurance (insuring
Lessor for up to twelve (12) months of Rents), such coverages and
endorsements to be as defined in the standard bureau forms prescribed
by the applicable insurance regulatory authority for the State of
Mississippi for use by insurance companies admitted in Mississippi for
the writing of such insurance on risks located within the state. Such
insurance shall be for the sole benefit of Lessor and under its sole
control. To the extent any mortgage or deed of trust now or hereafter
exists upon the Premises, all such policies shall contain standard
mortgage clauses. Lessee hereby waives, and releases Lessor (its
officers, agents and employees) from, all rights of recovery, claims,
causes of action, and rights of subrogation against them, for any loss
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or damage that may occur by reason of any peril listed above, and
accordingly, all of the foregoing policies of insurance shall be
properly endorsed to prevent the invalidation of their coverages by
reason of such waiver and release.
ii. Liability. Lessee shall, at Lessee's expense, obtain and
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keep in force during the term of this Lease a policy of Commercial
General Liability Insurance (or policy with equivalent coverage)
insuring Lessee and Lessor against any liability arising out of the
use, occupancy or maintenance of the Premises. Such policies shall be
in amounts and with insurance carriers acceptable to Lessor.
iii. Insurance Policies. The insurance companies issuing all
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policies shall be reputable and responsible companies in the insurance
industry, reasonably acceptable to both Lessor and Lessee. Lessee
shall deliver to Lessor copies of policies of liability insurance
required under this subparagraph or certificates evidencing the
existence and amounts of such insurance. No such policy shall be
cancelable or subject to reduction of coverage or other modification
except after thirty (30) days' prior written notice to Lessee. Lessee
shall, at least thirty (30) days prior to the expiration of such
policies, furnish Lessor with renewals or "binders" thereof.
4. Indemnification. Lessee shall indemnify, defend and hold Lessor
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harmless from and against any and all actions, claims, demands, costs (including
reasonable attorney's fees), damages or expenses of any kind which may be
asserted against or incurred by Lessor as the result of any occurrence in or
about the Premises or by reason of Lessee's use or occupancy of the Premises, or
by reason of the failure of Lessee to perform any of its obligations under this
Lease.
5. Quiet Enjoyment. Lessor covenants that if Lessee shall keep and
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perform all of its covenants under this Lease, Lessee shall enjoy quiet,
peaceful and uninterrupted possession of the Premises against all persons.
6. Ingress and Egress. Lessor covenants that Lessee shall enjoy full
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ingress and egress to and from the Premises at all times.
7. Condition of Premises. Lessor shall deliver the Premises to Lessee in
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good condition, clean and free of debris.
8. Assignment and Subletting. The Premises shall be used for commercial
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printing, distribution and related activities, and for no other purpose without
the written consent of the Lessor. Further, Lessee will not assign or sublet
all or part of this Lease without the prior written consent of Lessor, which
consent shall not be unreasonably withheld.
9. Legal Use and Violations; Insurance Coverage. Lessee will not occupy,
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or use or permit any portion of the Premises to be occupied or used, for any
business or purpose which is unlawful in part or in whole or deemed to be extra
hazardous, or permit anything to be done which will in any way increase the rate
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of fire insurance on said building and/or its contents; and in the event that by
reason of acts of Lessee, there shall be any increase in rate of the insurance
on the building or its contents created by Lessee's acts or conduct of business,
then Lessee hereby agrees to pay such increase.
10. Compliance with Laws and Regulations. Lessee shall keep and maintain
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the Premises in a clean and neat condition, and shall comply with all state,
federal, county and municipal laws, ordinances, orders, rules and regulations,
including, but not limited to, all environmental laws and regulations, with
reference to use, conditions or occupancy of the Premises.
11. Entry for Repairs and Inspection. Lessee shall permit Lessor and its
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officers, agents or representatives, the right to enter into and upon any and
all parts of the Premises at all reasonable hours to inspect same or clean or
make repairs or alterations or additions as Lessor may deem necessary or
desirable. Lessee shall not be entitled to any abatement or reduction of rent
by reason thereof.
12. Condemnation. If the Premises or any portion thereof are taken under
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the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called "Condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs. If more than ten percent (10%) of
the floor area of any building on the Premises, or more than twenty-five percent
(25%) of the land of the Premises which is not occupied by any building, is
taken by Condemnation, Lessee may, at Lessee's option, to be exercised in
writing within ten (10) days after Lessor has given Lessee written notice of
such taking (or in the absence of such notice, within ten (10) days after the
condemning authority has taken possession) terminate this Lease as of the date
the condemning authority takes such possession. If Lessee does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent shall be reduced in the proportion that the floor area of the building or
the area of unimproved land taken bears to the total floor area of the building
or land, whichever the case may be. Any award for the taking of all or any part
of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss of or damage to
Lessee's trade fixtures and removable personal property. In the event that this
Lease is not terminated by reason of such Condemnation, Lessor shall to the
extent of the award received by Lessor in connection with such condemnation,
repair any damage to the Premises caused by such Condemnation; provided,
however, that if such Condemnation has taken more than fifty percent (50%) of
the total floor area of the buildings on the Premises, Lessor may, at Lessor's
option, to be exercised in writing within ten (10) days after Lessor has given
Lessee written notice of such taking (or in the absence of such notice, within
ten (10) days after the condemning authority has taken possession) terminate
this Lease as of the date the condemning authority takes such possession.
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13. Holding Over. Any holding after the expiration of this Lease shall
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constitute a month-to-month tenancy, and Lessee shall be subject to all of the
terms, covenants and conditions of this Lease during such holdover period.
14. Damage or Destruction. Should the current building upon the Premises
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be totally destroyed by fire or other casualty, or so damaged thereby that
rebuilding or repairs cannot be completed within thirty (30) days from date of
the fire or casualty, this Lease shall terminate, and Lessee shall be allowed a
total abatement of the rent from the date of occurrence of such damage or
destruction. However, if the damage is such that rebuilding or repairs can be
completed within thirty (30) days, the Lessor covenants and agrees to make such
repairs within thirty (30) days and to allow Lessee an abatement of the rent for
such time as the building is untenantable, in proportion to the floor space
rendered untenable, and the Lessee covenants and agrees that the terms of this
Lease shall not be otherwise affected thereby.
15. Events of Default; Remedies.
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a. Default by Lessee. The occurrence of any one or more of the
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following events shall constitute a default and breach of this Lease
by Lessee:
i. The abandonment of the Premises by Lessee.
ii. The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due
for a period of ten (10) days.
iii. The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or
performed by Lessee, other than described in clause (i) and (ii)
above, which failure then continues for a period of fifteen (15) days
after written notice thereof from Lessor to Lessee; provided, however,
that if the nature of Lessee's default is such that more than fifteen
(15) days are reasonably required for its cure, then Lessee shall not
be deemed to be in default if Lessee commences such cure within said
fifteen (15) day period and thereafter diligently prosecutes such cure
to completion.
iv. The making by Lessee of any general arrangement or
assignment for the benefit of creditors, or the appointment of a
trustee or receiver to take possession of substantially all of
Lessee's assets or of Lessee's interest in this Lease, where
possession is not restored to Lessee within thirty (30) days.
16. Remedies. In the event of any such default or breach by Lessee,
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Lessor may at any time thereafter, after written notice to Lessee as provided
above, and without limiting Lessor in the exercise of any right or remedy which
Lessor may have by reason of such default or breach:
a. Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Lessee shall
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immediately surrender possession of the Premises to Lessor. In such event,
Lessor shall be entitled accelerate all rent due hereunder and to recover
from Lessee all damages incurred by Lessor by reason of Lessee's default
including, but not limited to, the amount by which the unpaid rent for the
balance of the Term exceeds the amount of rent received by Lessor from
another Lessee for the same period.
b. Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee has abandoned the Premises.
In such event, Lessor shall be entitled to enforce all of Lessor's rights
and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
17. Alterations and Additions.
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a. Lessee shall not, without Lessor's prior written consent, make any
alterations, improvements, additions, or utility installations in, on or
about the Premises, except for non-structural alterations not exceeding
$10,000 in cumulative costs during the Term of this Lease. In any event,
whether or not in excess of $10,000 in cumulative cost, Lessee shall make
no change or alteration to the exterior of the buildings on the Premises
without Lessor's prior written consent. As used in this Paragraph 17, the
term "utility installation" shall mean carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures,
space heaters, air conditioning, plumbing, and fencing. Lessor may require
that Lessee remove any or all of said alterations, improvements, additions
or utility installations at the expiration of the Term, and restore the
Premises to their prior condition. Should Lessee make any alterations,
improvements, additions or utility installations without the prior approval
of Lessor, Lessor may require that Lessee remove any or all of the same at
any time.
b. Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use
in the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. If Lessee
shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend itself and Lessor
against the same and shall pay and satisfy any such adverse judgment that
may be rendered thereon before the enforcement thereof against the Lessor
or the Premises, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount
equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises free from the effect of
such lien or claim.
c. Unless Lessor requires their removal, as set forth in Paragraph
17.a., all alterations, improvements, additions and utility installations
(except utility installations which constitute trade fixtures of Lessee),
which may be made on the Premises, shall become the property of Lessor and
remain upon and be surrendered with the Premises at the expiration of the
term. Notwithstanding the provisions of this Paragraph 17.c., Lessee's
machinery and equipment, other than that which is affixed to the Premises
so that it cannot be removed without material damage to the Premises, shall
remain the property of Lessee and may be removed by Lessee.
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18. Waiver. Failure of either party to declare any default immediately
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upon occurrence thereof or delay in taking any action in connection therewith
shall not waive such default, but either party shall have the right to declare
any such default at any time and take such action as might be lawful or
authorized hereunder, either in law or in equity.
19. Use of Office Space. Throughout the term of this Lease, H. Henry
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Hederman, H. Henry Hederman, Jr. and Zach Hederman shall have the right to use
the office space that they currently occupy at no charge. It is hereby
acknowledged by Lessor and Lessee that the items of personal property identified
on Exhibit B attached hereto are the property of H. Henry Hederman, H. Henry
Hederman, Jr. and Zach Hederman, and that such individuals shall have the right
to remove such property from the Premises at any time.
20. Rights of Mortgages. This Lease, and all rights of Lessee hereunder,
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are and shall be subject and subordinate to all mortgages, which may now or
hereafter affect the Premises, or any portion thereof, whether or not such
mortgages shall also cover portion thereof, whether or not such mortgages shall
also cover other lands and/or buildings and/or leases, to each and every advance
made or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements and extension of such mortgages and all
consolidations of such mortgages. This Section shall be self-operative and no
further instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that the holder of any such mortgage or any of their respective
successors in interest may reasonably request to evidence such subordination.
Any mortgage to which this Lease is, at the time referred to, subject and
subordinate, is herein called a "Superior Mortgage" and the holder of a Superior
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Mortgage is herein called the "Superior Mortgage".
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If any superior Mortgagee or the nominee or designee of any Superior
Mortgagee shall succeed to the rights of Lessor under this Lease, whether
through possession or foreclosure action or delivery of a new lease or deed, or
otherwise, then at the request of such party so succeeding to Lessor's rights
(the "Successor Lessor") and upon such Successor Lessor's written agreement to
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accept Lessee's attornment, Lessee shall attorn to and recognize such Successor
Lessor as Lessee landlord under this Lease and shall promptly execute and
delivery any instrument that such Successor Lessor may reasonably request to
evidence such attornment. Upon such attornment, this Lease shall continue in
full force and effect as a direct lease between the Successor Lessor and Lessee
upon all of the terms, conditions and covenants as set forth in this Lease,
except that the Successor Lessor (unless formerly the landlord under this Lease
or its nominee or designee) shall not be (a) liable in any way to Lessee for any
act or omission, neglect or default on the part of Lessor under this Lease, (b)
responsible for any monies owing by or on deposit with Lessor to the credit of
Lessee, (c) subject to any counterclaim or setoff which theretofore accrued to
Lessee against Lessor, (d) bound by any modification of this Lease subsequent to
such Superior Mortgage, or by any previous prepayment of the Rent or the
Additional Rent for more than one (1) month, which was not approved in writing
by the Superior Mortgagee, (e) liable to the Lessee beyond the Successor
Lessor's interest in the Premises and the rents, income, receipts, revenues,
issues and profits issuing from such Premises, (f) responsible for the
performance of any work to be done by the Lessor under this Lease to render the
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Premisses ready for occupancy by the Lessee, or (g) required to remove any
person occupying the Premises or any part thereof, except if such person claims
by, through or under the Successor Lessor. Lessee agrees at any time and from
time to time to execute a suitable instrument in confirmation of Lessee's
agreement to attorn, as aforesaid.
21. Miscellaneous Terms.
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a. Benefit. This Lease shall inure to the benefit of the parties
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hereto, and their respective successors and assigns.
b. Integration Clause; Modifications. This Lease and its exhibits
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and attachments contain all of the agreements between Lessor and Lessee
relating to the Lease of the Premises, and this instrument may not be
altered, changed or amended except by an instrument in writing signed by
both parties hereto.
c. Pronouns and Gender. When this Lease is executed by more than one
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person, it shall be construed as though Lessee were written "Lessees" and
the words in their number were changed to correspond and pronouns of the
masculine gender, whenever used herein shall include persons of the female
sex, and corporations, partnerships and associates of every kind and
character.
d. Notices and Addresses. All notices, offers, acceptances, waivers,
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and other communications under this Lease shall be in writing, and shall be
deemed to have been both given and received (i) when delivered to the party
in person or, (ii) if mailed, when deposited in the U.S. Mails, by
certified mail, postage prepaid, with return receipt requested, to the
party at the following address:
If to Lessor: Hap Hederman
500 Steed Road
Ridgeland, Mississippi 39158
If to Lessee: Premier Graphics, Inc.
2500 Lamar Avenue
Memphis, TN 38114
or to such other address as any party, by notice to all others, may designate
from time to time.
e. Counterparts. This Lease may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
f. Severability. If any one or more of the provisions contained in
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this Lease shall for any reason be held invalid, illegal or unenforceable
for any reason, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Lease, which shall be construed as if
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such invalid, illegal or unenforceable provision had never been contained
herein. It is the intention of the parties that if any provision of this
Lease is capable of two constructions, one of which would render the
provision void and the other of which would render the provision valid,
then the provision shall have the meaning which renders it valid.
g. No Remedies Exclusive. Unless expressly stated to be exclusive,
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no remedy conferred herein shall be deemed to be exclusive of any other
remedy conferred herein or any other remedy now or hereafter available at
law or equity. All remedies conferred herein, and all remedies now or
hereafter available at law or equity, shall be deemed to be cumulative and
not alternative, and may be enforced concurrently or successively. The
exercise of (or failure to exercise) any one or more remedies shall not
operate as a waiver of, or constitute a bar to, the exercise of any other
remedies.
h. Governing Law. This Lease shall be governed by and construed in
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accordance with the laws of the State of Mississippi.
i. Attorneys' Fees. In the event either party defaults in the
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performance of any of the terms, agreements or conditions contained in this
Lease, and the other party prevails in any legal proceeding against the
defaulting party to enforce this Lease, then the non-defaulting party shall
be additionally entitled to recover court costs and reasonable attorneys'
fees from the defaulting party.
j. Recording. Neither party shall record this Lease without the
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prior written consent of the other. However, either party may, at any
time, elect to record a memorandum of this Lease, which sets forth any
terms hereof except the amount of rents payable hereunder, and upon
request, the other party shall duly execute and acknowledge such a
memorandum.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LESSOR:
ARROWHEAD REAL ESTATE, LLC
By: /s/ Hap Hederman
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Its: Member-Manager
LESSEE:
PREMIER GRAPHICS, INC.
By:/s/ Jim P. Miller
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Its: President
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EXHIBIT "A"
SEE ATTACHED LEGAL DESCRIPTION
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