Commercial Lease Agreement

EXHIBIT 10.44


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 Phil Phillips, Jr. ("Lessor"), and Premier Graphics, Inc., a Delaware corporation ("Lessee").


1. Term and Premises. Subject to the terms and conditions set forth
----------------- herein, Lessor hereby leases and lets to Lessee, and Lessee leases and accepts from Lessor, for a term of ten (10) years, commencing on the date the warehouse facility is completed and made available to Lessee (the "Commencement Date"), and expiring on the tenth (10th) anniversary of the Commencement Date (the "Term"), that certain real property with a municipal address of 807 Old Missouri Road, Springdale, Arkansas, 72764 and more particularly described in Exhibit A hereto (the "Premises").


2. Basic Rent. During the first five (5) years of the Term, Lessee shall
----------- pay Lessor, at the address of Lessor indicated herein, the sum of Ninety -Seven Thousand Five Hundred and 00/100 Dollars ($97,500.00) per year ($3.25 per square foot) as rent for the Premises (the "Basic Rent"). The Basic Rent shall be paid to Lessor in monthly installments of Eight Thousand One Hundred Twenty-Five and 00/100 Dollars per month ($8,125.00), which monthly rental payments shall be paid in advance on the first day of each calendar month during the term of this Lease. During the second five (5) years of the Term, the Basic Rent shall escalate at the beginning of each year at the rate of five percent (5%) per year. 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 shall 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 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 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
------------------------
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 maintenance
or repairs, in and to any building or structure or equipment now or
hereafter erected upon the Premises, including all fixtures, machinery,
heating, plumbing and electrical systems and other 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,
which shall include repairs to the roof, and load bearing walls unless
caused by Lessee's negligence. Lessee shall immediately report any damage
or malfunction which occurs with respect to the Premises.


(b) Maintenance of Common Areas. Lessee shall pay to Lessor, as
----------------------------
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, 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.


(c) Taxes and Utilities.
--------------------


(i) Real Property Taxes. Lessee shall pay when due all real
--------------------
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
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.


(d) Other Taxes. Lessee shall reimburse Lessor for any commercial
------------
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 to 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.


(e) Utilities. Lessee shall pay for all water, gas, heat, light,
----------
power, telephone and all other utilities and services supplied to the
Premises.


(f) Insurance.
----------


(i) Fire and Casualty. During the entire Term hereof, Lessee
------------------
shall procure and maintain at its (updated every two (2) years) sole
expense, insurance covering the Premises, for the full replacement
cost (updated every two (2) years) thereof, insuring against the
perils of fire, lightning, 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
Arkansas for use by insurance companies admitted in Arkansas 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
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.


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(ii) Liability. Lessee shall, at Lessee's expense, obtain and
----------
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.


(iii) Insurance Policies. The insurance companies issuing all
-------------------
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 Lessor. 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
--------------- harmless from and against any and all actions, claims, demands, costs (including reasonable attorneys' 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
---------------- 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
------------------- ingress and egress to and from the Premises at all times.


7. Condition of Premises. Lessor shall deliver the Premises to Lessee in
---------------------- good condition, clean and free of debris. Lessee acknowledges that it has received the Premises in acceptable condition and accept the Premises in it "AS IS" condition.


8. Assignment and Subletting. The Premises shall be used for storage,
------------------------- 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 th ...