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LEASE AGREEMENT

Lease Agreement

LEASE AGREEMENT 

     
 | Document Parties: DAC TECHNOLOGIES GROUP INTERNATIONAL INC | Robert V. Teague Trust You are currently viewing:
This Lease Agreement involves

DAC TECHNOLOGIES GROUP INTERNATIONAL INC | Robert V. Teague Trust

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Title: LEASE AGREEMENT
Date: 4/2/2007
Industry: Personal and Household Prods.     Sector: Consumer/Non-Cyclical

LEASE AGREEMENT 

     
, Parties: dac technologies group international inc , robert v. teague trust
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Exhibit 10.1.1

LEASE AGREEMENT

     THIS LEASE AGREEMENT is made and entered into as of the date set forth below between Robert V. Teague Trust and/or Assigns, hereafter referred to as “Landlord” and DAC Technology Group International, Inc., hereafter collectively referred to as “Tenant”:

W I T N E S S E T H:

     1. LEASED PREMISES: In consideration of the rents, terms, provisions, and covenants of this Lease, Landlord hereby leases, lets and demises to Tenant the following described premises (referred to as “leased premises” or “premises” and containing approximately 102,175 square feet) situated at 3700 Old Shackleford Road, Little Rock, Arkansas (sometimes referred to as “the building,” “the project” or “the premises”). The statement of square footage contained in this Lease is made for reference purposes only and is not a part of this agreement. Tenant states that it is not relying on any Landlord representations relating to square foot measurements.

     2. LEASE COMMENCEMENT: Subject to and upon the conditions set forth below, the term of this Lease shall commence on November 15, 2006, (the “commencement date”) and shall terminate November 14,2010 (48)  months thereafter. Upon one hundred and twenty (120) days prior written notice. Tenant shall have the option to renew this lease for one period of four (4) years.

     3. RENT & RENT COMMENCEMENT: (a) Tenant agrees to pay, as an initial base rental during the term of this Lease, the sum of Nine Thousand Three Hundred Sixty-Six and 08/100              ($9,366.08) per month, which amount shall be payable to Landlord at the address shown below on the first day of each month without abatement, deduction or setoff. Monthly installment shall be due and payable on or before the first day of each calendar month succeeding the commencement date during the demised term; provided, that if the commencement date should be a date other than the first day of a calendar month, the monthly rental set forth above shall be prorated to the end of that calendar month, and all succeeding installments of rent shall be payable on or before the first day of each succeeding calendar month during the demised term. Tenant shall pay, as additional rental, all other sums due under this Lease.

     (b) The monthly rental installments provided hereinabove shall be increased annually by five cents ($.05) per square foot according to the rent schedule below.

 

 

 

 

 

Year 1

 

$112,393

 

($1.10/SF)

Year 2

 

$117,501

 

($1.15/SF)

Year 3

 

3122,610

 

($1.20/SF)

Year 4

 

$127,719

 

($1.25/SF)

 

 

 

 

 

First Option Period

 

 

 

 

Year 5

 

$132,828

 

($1.30/SF)

Year 6

 

$137,936

 

(S1.35/SF)

Year 7

 

$143,045

 

(S1.40/SF)

Year 5

 

$148,154

 

($1.45/SF)

      (c) During the final three (3) months Year 8, if an acceptable lease renewal has not been reached, Tenant shall have a first right of refusal to lease the premises. If Landlord receives an acceptable offer within the 3-month time period to lease from another party, Landlord must give prompt notice to Tenant and Tenant shall have forty-eight (48) hours from such notice to match the offer. Tenant’s first right to lease shall expire ten (10) days following the end of Year 4, or ten days following Year 8 if extended.

 


 

In addition, Tenant shall have the right of first offer to purchase the property throughout the term of the lease and any extensions. Should Landlord decide to place the property on the market for sale, Tenant shall have the first right to purchase the property for forty-eight (48) hours after written notice from Landlord. Tenant’s right of first offer shall expire immediately at the end of Year 8.

     (d) On the date of execution of this Lease by Tenant, there shall be due and payable by Tenant a security deposit (“Security Deposit”) in an amount of Ten Thousand and NO/100 Dollars ($10,000.00) to be held for the performance by Tenant of Tenant’s covenants and obligations under this Lease, it being expressly understood that the deposit shall not be considered an advance payment of rental or a measure of Landlord’s damage in case of default by Tenant. Upon the occurrence of any event of default by Tenant or breach by Tenant of Tenant’s covenants under this Lease, Landlord may, from time to time, without prejudice to any other remedy, use the security deposit to the extent necessary to make good any arrears of rent and/or any damage, injury, expense or liability caused to Landlord by the event of default or breach of covenant, any remaining balance of the security deposit to be returned by Landlord to Tenant upon termination of this Lease. If Landlord so uses any portion of the Security Deposit, then it will restore the Security Deposit to its original amount within five (5) days after written demand from Landlord. Landlord will not be required to keep the Security Deposit separate from its own funds and Tenant will not be entitled to interest on the Security Deposit.

     (e) All of the terms and provisions of the Lease will be effective as of the date of Lease execution with the exception of the obligation to pay rent. The obligation to pay rent shall commence on the date (“Rent Commencement Date”) which is the earlier of the following dates: (a) the date on which Tenant opens the Premises for business with the public; or (b) no later than January 1, 2007. Tenant shall have access to the building upon Lease execution to begin moving and complete its improvements, but shall immediately be responsible for all utility costs.

     (f) If any increase in the fire insurance premiums paid by Landlord for the building in which Tenant occupies space is caused by Tenant’s use of the leased premises, or if Tenant vacates the leased premises and causes an increase in such premiums, then Tenant shall pay as additional rental the amount of such increase to Landlord.

     (g) Other remedies for nonpayment of rent notwithstanding, if the monthly rental payment is not received by Landlord on or before the tenth (10th) day of the month for which rent is due, or if any other payment due Landlord by Tenant is not received by Landlord on or before the tenth day of the month next following the month in which Tenant was invoiced, Landlord will incur unanticipated costs, the exact amount of which are impractical or extremely difficult to ascertain, and a service charge of ten percent (10%) of such past due amount shall become due and payable in addition to such amounts owed under this Lease. Any installment of rent which is not paid on or before the tenth (10th) day of the month for which rent is due shall also bear interest at the highest rate permitted by law from the due date until paid.

     (h) Tenant shall not be responsible for payment of any real estate taxes or property insurance, except if Tenant’s (1) improvements increase the taxes or (2) use increases insurance premiums.

     4. SIGNS: Tenant shall have the right to erect a sign in good taste only on the front face of the Tenant’s premises in the building, subject to all applicable laws, deed restrictions and regulations. The composition and location of such sign shall be: (a) in compliance with all municipal, city, and state codes, and (b) installed by a licensed contractor. No signs or other objects shall be erected which are attached to the roof of the building and no signs shall be attached to the building or canopy at right angles suspended by guy wires, but shall be attached flush in a safe and secure manner. All such signs erected shall advertise Tenant’s business only and no revenue producing advertising shall be erected on the leased premises without specific written permission of Landlord. Tenant shall not paint any signs directly on the walls of the building or otherwise deface, damage or overload the building. Tenant shall have the right to place an additional sign at the Old Shackleford entrance gate; provided, however, that the sign shall be subject to the approval of Landlord. No other signs (mobile or stationary) shall be displayed on the leased premises

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without the prior written consent of Landlord. Tenant shall remove all signs at the termination of this Lease at Tenant’s sole risk and expense and shall in a workmanlike manner properly repair any damage and close any holes caused by the removal of Tenant’s signs.

     5. USAGE: Tenant warrants and represents to Landlord that the leased premises shall be used and occupied only for the purposes of office and warehouse and no other purpose. Tenant shall occupy the leased premises, conduct its business and control its agents, employees, invitees and visitors in such a way as is lawful, reputable and will not create any nuisance or otherwise interfere with, annoy or disturb any other tenant in its normal business operations or Landlord in its management of the building. Tenant shall not commit, or suffer to be committed, any waste on the leased premises.

     6. INSURANCE: Tenant shall not permit the leased premises to be used in any way which would be extra hazardous on account of fire or otherwise which would in any way increase or render void the fire insurance on leasehold improvements or contents in the building belonging to other tenants in the building. If at any time during the term of this Lease the State Board of Insurance or other insurance authority disallows any of Landlord’s sprinkler credits or imposes an additional penalty or surcharge in Landlord’s insurance premiums because of Tenant’s original or subsequent placement or use of storage racks or bins, method of storage or nature of Tenant’s inventory or any other act of Tenant, Tenant agrees to pay as additional rental the increase (between fire walls) in Landlord’s insurance premiums. Tenant shall, during the entire term hereof, keep in full force and effect a policy of public liability with respect to the leased premises, and the business operated by Tenant and any assignees or subtenants of Tenant in the premises in which the limits of public liability for personal and bodily injury shall be not less than $1,000,000 single limit and in which the property damage liability shall be not less than $100,000. The policy shall name both Landlord and Tenant as insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the Landlord thirty (30) days prior written notice. The insurance shall be carried with companies reasonably satisfactory to Landlord and a copy of the policy or a certificate of insurance shall be delivered to Landlord. Tenant acknowledges that it is solely responsible for maintaining insurance on its personal property, fixtures, improvements and alterations, now or hereinafter made to the leased premises or the building.

     7. UTILITY SERVICE: Landlord shall provide the normal utility service connections into the leased premises. Tenant shall pay the cost of all utility services, including, but not limited to, initial connection charges, all charges for gas, water and electricity used on the leased premises, and for all electric light lamps or tubes. However, in a multi-occupancy building, Landlord may provide water to the leased premises, in which case Tenant agrees to pay to Landlord Tenant’s Share of the cost of such water unless Tenant’s usage of the leased premises exceeds normal domestic water consumption, in which event the cost shall be estimated as appropriate for such excess consumption. Tenant shall pay all costs caused by Tenant introducing excessive pollutants or solids other than ordinary human waste into the sanitary sewer system, including permits, fees and charges levied by any governmental subdivision for any such pollutants or solids. Tenant shall be responsible for the installation and maintenance of any dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand traps, grease traps or similar devices as may be required by any governmental subdivision for Tenant’s use of the sanitary sewer system. If the leased premises are in a multi-occupancy building, Tenant shall pay all surcharges levied due to Tenant’s use of sanitary sewer or waste removal services insofar as such surcharges affect Landlord or other tenants in the building. Landlord” shall not be required to pay for any utility services, supplies or upkeep in connection with the leased premises. Tenant’s share of utilities shall be determined by a mutually acceptable electrical engineer or Landlord, at its option, may elect to separate the utilities.

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     8. REPAIRS AND MAINTENANCE: (a) Unless otherwise expressly provided herein, Landlord shall not be required to make any improvements, replacement or repairs of any kind or character to the leased premises during the term of this Lease except such repairs as are set forth in this subparagraph. Landlord shall maintain the lawn and other landscaping, exterior painting, the roof, foundation, parking areas, and the structural soundness of the exterior walls (excluding all windows, window glass, plate glass and all doors) of the building in good repair and condition. Tenant shall repair and pay for any damage caused by the negligence or default of Tenant or Tenant’s agents and employees. Tenant shall immediately give written notice to Landlord of the need for repairs, which repairs shall be made by Landlord beginning not more than fifteen (15) days after written notice by Tenant. All requests for repairs or maintenance that are the responsibility of Landlord pursuant to any provision of this Lease must be made in writing to Landlord at the address set forth below.

     (b) Tenant shall, at its own cost and expense, maintain the interior of the leased premises in good repair and condition, including overhead doors, dock levelers, and heating and interior fans (including all necessary replacements). Tenant shall take good care of all the property and its fixtures. Should Tenant neglect to keep and maintain the leased premises, then Landlord shall have the right, but not the obligation, to have the work done and the cost therefor shall be charged to Tenant as additional rental which shall become payable by Tenant with the payment of the rental next due hereunder.

     (c) Tenant shall not allow any damage to be committed on any portion of the leased premises, and at the termination of this Lease, by lapse of time or otherwise, Tenant shall deliver the leased premises to Landlord in good condition as existed at the commencement date or completion date of this Lease, ordinary wear and tear excepted. The cost and expense of any repairs necessary to restore the condition of the leased premises shall be borne by Tenant, and if Landlord undertakes to restore the leased premises it shall have a right of reimbursement against Tenant.

     (d) Landlord shall not be liable to Tenant, except as expressly provided in this Lease, for any damage, interruption of Tenant’s business or inconvenience, and Tenant shall not be entitled to any abatement or reduction of rent by reason of any repairs, alterations or additions made by Landlord under this Lease.

     9. COMPLIANCE WITH LAWS, RULES AND REGULATIONS: Tenant, at Tenant’s expense, shall comply with all laws, ordinances, orders, rules and regulations of state, federal, municipal or other agencies or bodies having jurisdiction relating to the use, condition and occupancy of the leased premises. Tenant will comply with the rules of the building and/or project adopted by Landlord which are set forth on Exhibit A attached to this Lease and made a part hereof. Landlord shall have the right at all times to change the rules and regulations of the building or to amend them in any reasonable manner as may be deemed advisable for the safety, care and cleanliness, and for the preservation of good order, of the leased premises. All changes and amendments in the rules and regulations of the building will be sent by Landlord to Tenant in writing and shall thereafter be carried out and observed by Tenant.

     10. LANDLORD WORK: Landlord shall complete the work outlined in Exhibit “B.”

     11. ALTERATIONS AND IMPROVEMENTS: Tenant shall be permitted to make alterations and physical additions in or to the leased premises, specifically the proposed new office area, only upon written consent of Landlord, which shall not be unreasonably withheld. Tenant shall submit building plans of the proposed office area and Landlord shall permit Tenant to maintain a break area, which shall include an electric stove. Any alterations, physical additions or improvements to the leased premises made by Tenant shall at’ once become the property of Landlord and shall be surrendered to Landlord upon the termination of this Lease. Landlord, at its option, may require Tenant to remove any physical additions and/or repair any alterations in order to restore the leased premises to the condition existing at the time Tenant took possession, all costs of removal and/or alterations to be borne by Tenant. This clause shall not apply to moveable equipment or furniture owned by Tenant which may be removed by Tenant at the end of

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the term of this Lease if Tenant is not then in default and if such equipment and furniture is not then subject to any other rights, liens and interests of Landlord. Tenant further agrees to construct any alterations or physical additions in strict compliance with all applicable laws, rules, regulations, codes, and ordinances now or hereafter in effect, including without limitations, the Americans with Disabilities Act and lead-base paint requirements.

     12. CONDEMNATION: (a) If, during the term (or any extension or renewal) of this Lease, all or a substantial part of the leased premises are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and the taking would prevent or materially interfere with the use of the leased premises for the purpose for which they are then being used, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease effective on the date physical possession is taken by the condemning authority. Tenant shall have no claim to the condemnation award, less and except any separate award made directly to Tenant as compensation for the Tenant’s leasehold interest.

     (b) In the event a portion of the leased premises shall be taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and this Lease is not terminated as provided in subparagraph (a) above, Landlord may, at Landlord’s sole risk and expense, restore and reconstruct the building and other improvements on the leased premises to the extent necessary to make it reasonably tenantable. The rent payable under this Lease during the unexpired portion of the term shall be adjusted to such an extent as may be fair and reasonable under


 
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