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Exhibit 10.3
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-QUANTUM LLC, an Oklahoma limited liability company (the
" Tenant ").
WITNESSETH :
WHEREAS, the Landlord owns certain real property and
improvements situated thereon physically located on South Thomas
Road in Oklahoma City, Oklahoma County, Oklahoma, consisting of
2.3674 acres, more or less, 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, 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.
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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 $1,518.89 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.
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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, if any, 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
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