Exhibit 10.5
LEASE AGREEMENT
THIS LEASE AGREEMENT (the “
Lease ”) is entered into and made effective as of the
1 st day of July, 2006 (the “
Effective Date ”), by and between CALIBER DEVELOPMENT
COMPANY LLC, a Delaware limited liability company (the “
Landlord ”), and DIAMONDBACK PUMPING SERVICE, L.P., a
Texas limited partnership (the “ Tenant
”).
WITNESSETH
:
WHEREAS, the Landlord owns certain
real property and improvements situated thereon physically located
in Johnson County, Texas, and more particularly described in
Exhibit “A” attached to and made a part of this Lease
(the “ Property ”); and
WHEREAS, the Landlord desires to
lease to the Tenant, and the Tenants desires to lease from the
Landlord, a portion of the Property subject to the terms and
conditions described in this Lease.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth in this Lease, and
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Landlord and the Tenant agree as
follows:
1. LEASE . The Landlord
hereby leases to the Tenant, and the Tenant hereby leases from the
Landlord, the Property, subject to the terms and conditions
described in this Lease. So long as the Tenant is not in default
under this Lease, the Landlord covenants that the Tenant shall
peacefully and quietly have, hold and enjoy the Property during the
Term.
2. TERM . The initial
term of this Lease shall be for a period of ten (10) years
commencing from the Effective Date (the “ Initial Term
”) unless earlier terminated in accordance with the terms and
conditions described in this Lease.
2.1 Extension Term . The
Tenant shall have the right to extend the Initial Term for up to
one (1) additional Five (5) year period (an “
Extension Term ” and collectively with the Initial
Term and extension term being collectively referred to as the
“ Term ”) following the expiration of the
Initial Term by providing the Landlord with written notice of the
exercise of such right at least thirty (30) days prior to the
expiration of the Initial Term. In the event the Tenant does not
exercise its right to the Extension Term, then this Lease shall
expire effective as of the expiration date of the Initial
Term.
2.2 Terms and Conditions
. All terms and conditions in this Lease shall remain in force
and effect during the Term unless otherwise agreed to in writing
between the Landlord and the Tenant.
3. RENT . In exchange
for the leasehold rights and interests in and to the Property
granted to the Tenant under this Lease, the Tenant agrees to pay to
the Landlord rent in the monthly amount of $4,333.33 for the
Property (the “ Rent ”) during the Term. The
Rent shall be paid on a monthly basis in advance by the first day
of each month during the Term. Payment of the Rent shall be made to
the Landlord at 14313 N. May Ave, Suite 100, Oklahoma City,
Oklahoma 73134, or such other place as the Landlord may designate
in writing.
3.1 Rental Increase Following
Landlord Funded Improvement . Immediately following the
completion of additional improvements in accordance with the plans
and
specifications approved by the
parties, if any, Tenant agrees to pay Landlord an increased rental
amount established by the Landlord. Said increase shall be based on
the actual cost of improvements requested by the Tenant and paid by
the Landlord.
4. DEPOSITS . No deposit
of any kind will be required in connection with this
Lease.
5. TITLE . No right,
title or interest in or to the Property or the Property shall pass
to or otherwise be acquired by the Tenant other than the rights
described in this Lease.
6. USE OF PROPERTY
. During the Term, the Tenant shall not use the Property for
any illegal purposes or in violation of any applicable laws or
regulations of any governmental body or authority. The Tenant shall
not commit or cause any waste, or allow any waste to be committed
or caused, on the Property or violate any laws with respect to the
Property. Further, the Tenant shall operate its business in a way
to conform to all applicable health and safety
standards.
7. ANIMALS . Except for
guide, signal or service dogs in use by a blind, deaf or physically
handicapped person or a watch dog used by the Tenant, no animals
shall be allowed, even temporarily, anywhere in or on the Property
without the Landlord’s prior written consent, which consent
may be withheld, conditioned or delayed at the Landlord’s
discretion.
8. UTILITIES AND SERVICES
. The Tenant shall be solely obligated and responsible for,
and shall timely pay, all charges for utilities to the Property
including, but not limited to, the following: water, garbage, gas,
electricity, telephone, cable, fuel, light, power, sewer and any
other utility or service.
9. TAXES . During the
Term, the Tenant shall be solely obligated and responsible to
timely pay all taxes, assessments and charges against or involving
the Property and the Tenant’s personal property on the
Property, and upon payment shall provide a copy of the receipt or
other proof of payment to Landlord.
10. ACCESS . During the
Term, the Tenant shall allow the Landlord and its employees, agents
and representatives access to the Property at all reasonable times
for the purpose of inspecting the Property and any other purpose
not inconsistent with this Lease.
11. ALTERATIONS . The
Tenant shall not make any material alterations, additions,
installations, repairs or improvements to the Property without the
prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Any permitted
material alterations shall be performed in a good and workmanlike
quality and condition, and all costs and expenses shall be the sole
obligation of, and shall be timely paid by, the Tenant, unless
otherwise agreed to in writing. Any such permitted alterations
shall be in compliance with all applicable city, state and federal
ordinances, regulations and codes and shall comply with all
applicable health and safety requirements. If during the Term, an
ordinance, regulation, code provision or other requirement
applicable to the Property changes so as to require any additional
expenditure in order to achieve compliance, such expenditure shall
be paid for by the Tenant. The Tenant shall obtain any and all
necessary permits for any such permitted alterations prior to
commencing the same. Upon completion, the same shall be inspected,
as
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appropriate or as required, by the appropriate
officials. Any deficiencies and/or violations identified or noted
by such officials shall be repaired, replaced and/or remedied by
the Tenant at the Tenant’s sole expense and in the time frame
required by such official related to such deficiency or violation
or otherwise within a reasonable time frame. Any such permitted
alterations made to the Property shall remain the sole property of
the Landlord upon the expiration or termination of this Lease, and
the Tenant shall not be entitled to reimbursement or offset for the
same; provided, that the Tenant shall have the right to remove its
fixtures and other property within a reasonable time following the
expiration or termination of this Lease, provided they can be
removed without damage to the property. Any damage caused must be
repaired by the Tenant. In the event that any liens or other
encumbrances are filed against the Property related to or arising
from any such permitted alteration, the Tenant shall be solely
obligated and responsible for, and shall pay all costs including
attorneys fees and costs, associated with the immediate removal of
such lien or encumbrance.
12. INSURANCE . During
the Term, the Tenant shall, at its sole cost and expense, procure
and maintain: (i) fire and extended coverage insurance
covering the Property in an amount sufficient to replace any
improvements situated thereon; (ii) commercial or
comprehensive general liability insurance covering the Property in
an amount of not less than One Million Dollars ($1,000,000.00) and
covering for personal property damage and personal injury in an
amount of not less than One Million Dollars ($1,000,000.00); and
(iii) worker’s compensation insurance as required under
the laws of the State of Oklahoma, which policies shall be in a
form and issued by a company reasonably acceptable to the Landlord.
Such insurance must be written on an “occurrence” as
opposed to a “claims made” basis. Within ten
(10) days after the Effective Date, and within thirty
(30) days of the renewal date of such policy, the Tenant shall
furnish to the Landlord a certificate of the insurer showing such
insurance to be in force and showing the Landlord as an additional
named insured on such policy and having a loss payable clause to
both the Landlord and the Tenant. Such certificate must also
evidence the issuer’s agreement to provide the Landlord with
written notice at least thirty (30) days in advance of any
cancellation, termination, amendment or modification to such
insurance.
13. ASSIGNMENT . The
Tenant shall not sell, pledge or otherwise encumber or grant a lien
upon or against the Property or any interest in this Lease, and the
Tenant shall not sublease all or any portion of the Property or
assign any of its rights, or delegate any of its duties,
obligations or responsibilities, under this Lease without the
Landlord’s prior written consent, which consent may be
withheld, conditioned or delayed at the Landlord’s sole
discretion; provided, that the Tenant shall have the right to
sublease all or part of the Property to any of its related entities
or affiliates. Consent by the Landlord to any assignment or
sublease shall not be deemed to be a consent to any subsequent
assignment or sublease. Any encumbrance, assignment, sublease or
transfer without the prior written consent of Landlord, whether
voluntarily, by operation or law or otherwise, is void. The Tenant
agrees that the Landlord may assign, sell or encumber all or any
part of this Lease and the payments hereunder, and upon written
notice, the Tenant shall unconditionally pay to such assignee all
Rent and other sums due under or to become due under this
Lease.
14. SUBORDINATION . The
Tenant accepts this Lease subject and subordinate to any mortgage
presently existing or hereafter arising upon any of the Property
and to any renewal, extension or refinancing thereof, and the
Tenant agrees that any such mortgagee or lien holder
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shall have the right at any time to subordinate
such mortgage or other lien to this Lease on such terms and subject
to such conditions as such mortgagee may deem appropriate in its
discretion. The provisions of the foregoing sentence shall be
self-operative and no further instrument of subordination shall be
required. The Landlord is hereby irrevocably vested with full power
and authority to subordinate this Lease to any mortgage or other
lien now existing or hereafter placed upon all or any part of the
Property, and the Tenant agrees within twenty (20) days after
demand to execute and deliver any instrument subordinating this
Lease or attorning to the holder of any such liens as the Landlord
may request; provided, that the mortgagee agrees not to disturb the
Tenant’s rights under this Lease. In the event the Tenant
should fail to execute any subordination or other agreement
promptly as requested, the Tenant hereby irrevocably appoints and
constitutes the Landlord as its attorney-in-fact to execute such
instrument in the Tenant’s name, which power is coupled with
an interest and is irrevocable. The Tenant agrees to execute and
deliver any certificate or statement certifying that (i) this
Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as so
modified), (ii) the expiration date of this Lease,
(iii) the dates to which Rent and other charges payable under
this Lease have been paid, (iv) the Tenant has accepted
possession of the Property and that any improvements required by
the terms of this Lease to be made by the Landlord have been
completed to the satisfaction of the Tenant, (v) no Rent has
been paid more than thirty (30) days in advance of its due
date, (vi) the Landlord is not in default hereunder (or if
Tenant alleges a default stating the nature of such alleged
default) and (vii) such other matters as the Landlord or any
mortgagee or lien holder shall reasonably require.
15. CASUALTY AND CONDEMNATION
. If during the Term, the Property is materially damaged or
destroyed by fire, wind, tornado or other casualty or of any actual
or threatened condemnation or eminent domain by any entity or
authority having such powers so as to render the Property
unsuitable for occupancy, this Lease may be terminated by the
Tenant upon written notice to the Landlord. Upon such termination,
the Rent shall be prorated to the date of such casualty or taking.
If the Property is only partially damaged or destroyed, the
Landlord shall repair, replace and reconstruct the Property to the
condition of the Property immediately preceding such casualty or
taking, and Rent during such repair shall be abated on a
proportionate basis. In the event of any such casualty or taking,
all awards or payments related to or arising from such casualty or
taking shall be the sole property of the Landlord, except that the
Tenant shall be entitled to any award or payment made for
reasonable damages to personal property owned by the Tenant, moving
expenses and loss of the Tenant’s business.
16. MAINTENANCE AND REPAIRS
. The Tenant shall be solely obligated and responsible for:
(i) maintaining and repairing any and all parts of
the
