EXHIBIT 10.10
SUBLEASE AGREEMENT
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This Sublease Agreement ("Sublease Agreement") is dated this ____ day of
February, 1999, between XXXX GRAPHICS, INC., A TEXAS CORPORATION ("Sublessor")
and GARDEN ESCAPE, INC., a Delaware corporation ("Sublessee").
WHEREAS, Sublessor has leased the property located at 0000 Xxxxx Xxxxxx,
Xxxxxx, Xxxxx 00000, including a building containing approximately 48,000 square
feet, more or less, said property being more particularly described in Exhibit
"A" attached hereto and made a part hereof (the "Premises") and Sublessee
desires to sublease a portion of the building from Sublessor, which portion
comprises approximately 26,625 square feet, more or less, and is more
particularly shown on the floor plan attached hereto as Exhibit "B" and made a
part hereof (the "Subpremises");
NOW, THEREFORE, in consideration of the rent reserved herein, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged and confessed, Sublessor
has sublet and by these presents, does hereby sublet the Subpremises to
Sublessee, and Sublessee does hereby sublease the Subpremises from Sublessor,
subject to all of the following terms and provisions:
1. Assumption of rights and duties Under Lease Agreement. Sublessee
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acknowledges and agrees that Sublessee is taking possession of the Subpremises
subject to the Lease agreement dated January 1, 1995, between Xxxxxxx X. Xxxx as
Lessor ("Lessor") and Xxxx Graphics, Inc. as Lessee, a copy of said lease being
attached hereto marked Exhibit "C" and made a part hereof (the "Lease
Agreement"). Except as may be inconsistent with the terms hereof, Sublessee
shall have all of the rights of Lessee under the Lease Agreement insofar as they
relate to the Subpremises and Sublessee agrees to assume, be bound by and timely
perform all of the covenants, duties and obligations of Lessee contained in the
Lease Agreement as they relate to the Subpremises arising from and after the
commencement date (other than the payment of rent, as this Sublease Agreement
sets forth Sublessee's obligation in that regard or any other provision which is
noted as not applicable to Sublessee herein). Except as may be inconsistent
with the terms hereof, all of the terms, covenants and conditions of the Lease
Agreement shall be applicable to this Sublease Agreement with the same force and
effect as if Sublessor was the lessor under the Lease Agreement and Sublessee
was the lessee thereunder. Lessor must approve this Sublease before it becomes
effective by agreeing to the terms set forth above the signature line for the
Lessor in this Sublease Agreement.
2. Rent. Sublessee agrees to pay Sublessor rent in monthly installments
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of $11,715.00 (being $.44 monthly per square foot) during the Sublease Term, as
same may be adjusted during any Extended Term (the "Rent"), commencing on the
commencement date, with the Rent to be paid in advance on or before the first
(1st) day of each calendar month during the Sublease Term. The first month's
rent shall be reduced by fifty percent (50%) to $5,857.50 as Sublessor's
concession to Sublessee to assist Sublessee in their relocation to the
Subpremises. If the commencement date is a date other than the first day of a
calendar month, there shall be due and payable on said commencement date a
prorated amount of rent to Sublessor for the balance of the calendar month
during which said commencement date shall fall, with such prorated rent to be
calculated based upon that portion of the rent for a full month as herein
provided which the
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number of days from said commencement date to the end of the calendar month
during which said commencement date shall fall bears to the total number of days
in such calendar month.
3. Security Deposit. Sublessee agrees to deposit with Sublessor on the
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effective date hereof the sum of $11,715.00 (equal to one month's rent) which
sum shall be held by Sublessor, without obligation for interest, as security for
the performance of Sublessee's covenants and obligations under this Sublease
Agreement, it being expressly understood and agreed that such deposit is not an
advance rental deposit or a measure of Sublessor's damages in case of
Sublessee's default. Upon the occurrence of any event of default by Sublessee,
Sublessor may, from time to time, without prejudice to any other remedy provided
herein or provided by law, use such funds to the extent necessary to make good
any arrears of rent and any other damage, injury, clean-up cost, expenses, or
liability caused by such uncured event of default; and Sublessee shall pay to
Sublessor on written demand the amount so applied in order to restore the
security deposit to its original amount. If there is no event of default by
Sublessee in existence, any remaining balance of such deposit shall be returned
by Sublessor to Sublessee no later than thirty (30) days after the termination
or expiration of this Sublease Agreement.
4. Term of Sublease; Occupancy Of Subpremises. The term of this Sublease
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Agreement shall commence on the earlier of (a) April 10, 1999, or (b) the date
Sublessee occupies the Subpremises, other than the portion of the Subpremises
Sublessor is allowing Sublessee to occupy immediately as set forth herein (the
"commencement date"), and shall end at midnight thirty-eight (38) months after
the commencement date ("Sublease Term"). Sublessor will allow Sublessee to take
possession of the North end ("L") space of the Subpremises (comprising
approximately 2,000 - 3,000 square feet of the Subpremises as shown on Exhibit
"B" attached hereto and made a part hereof) on the effective date of this
Sublease Agreement. Sublessor agrees to vacate the remainder of the Subpremises
no later than March 8, 1999, which is the date the parties contemplate the
Sublessee will commence its finish-out activities on the Subpremises.
5. Utilities. Sublessee will be responsible for securing and placing in
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Sublessee's name all utilities to the entire Premises starting on March 8, 1999,
and Sublessee will be responsible for paying for all utilities to the Premises
from such date, including, but not limited to, gas, electric, water and
wastewater. Sublessor and Sublessee acknowledge and agree that Sublessor will
remain in possession of a portion of the Premises, which portion of the Premises
needs only electric lighting to serve Sublessor's needs (no water, heating, air-
conditioning or gas services are needed by Sublessor). As a consequence,
Sublessor and Sublessee shall mutually agree on Sublessor's fair share of the
electric xxxx that Sublessee receives considering Sublessor's lighting needs and
the portion of the Premises being used by Sublessor, and Sublessor shall timely
pay such fair share of the prorated electric xxxx to Sublessee. If Sublessor
uses gas, water, wastewater, heating or air conditioning at any time in the
future, the parties shall negotiate in good faith Sublessor's fair and equitable
portion of such bills.
6. Operating Expenses; Proration. Sublessor and Sublessee acknowledge that
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this is a "triple net" sublease, and that in addition to the Rent payments
described herein, Sublessee shall be responsible for timely paying all real
estate taxes due on the Subpremises, the Sublessor's cost of insurance, and
certain amounts being paid for common area maintenance (collectively "Triple Net
Expenses"), provided, however, that Triple Net Expenses shall not include any
items of a capital nature or properly chargeable to a capital account under
generally accepted accounting
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principles, depreciation of the building and related components and debt service
payments. Sublessee shall also pay to Sublessor the sum of $.08 per square foot
per month (being $.0625 for 1999 real estate taxes and $.0175 for the current
insurance costs and common area maintenance costs) in advance on the first day
of each calendar month during the Sublease Term as an estimated payment of
Triple Net Expenses. If the commencement date is a date other than the first day
of a calendar month, there shall be due and payable on said commencement date a
prorated amount of such payment to Sublessor for the balance of the calendar
month during which said commencement date shall fall, with such prorated payment
to be calculated based upon that portion of such payment for a full month as
herein provided which the number of days from said commencenient date to the end
of the calendar month during which said commencement date shall fall bears to
the total number of days in such calendar month. At the end of each calendar
year, upon receipt of the actual amount of Triple Net Expenses from the
Sublessor in writing, Sublessee will pay to Sublessor the additional amounts due
within thirty (30) days if Sublessee's monthly Triple Net Expenses payments have
been insufficient to cover all of the Triple Net Expenses, or, Sublessor will
refund to Sublessee any such amounts overpaid by Sublessee within thirty (30)
days. For purposes of determining prorata portions of all Triple Net Expenses
and other items payable under this Sublease Agreement, Sublessor and Sublessee
agree that the Premises contain a total of 48,000 square feet of space, and the
Subpremises contain a total of 26,625 square feet of space. Based on those
figures, Sublessor's prorata portion is 44.54% and Sublessee's prorata portion
is 55.46%. Sublessee may dispute the claimed amount of Triple Net Expenses by
Sublessor within 30 days after Sublessor's written notice of the claimed Triple
Net Expenses is given to Sublessee. If Sublessee does dispute the amount of
Triple Net Expenses, Sublessee shall nonetheless promptly pay the Sublessor the
Triple Net Expenses in full, until the actual amount of Triple Net Expenses is
finally determined as set forth below. If the dispute in the actual amount of
the Triple Net Expenses is not amicably settled between Sublessor and Sublessee
within 30 days after Sublessee's notice to Sublessor, either party may require
that during the 15 days after the expiration of such 30 day period, the disputed
item or items be referred to a reputable independent certified public
accountant, which certified public accountant must be mutually agreed to by the
parties, and the decision of such certified public accountant shall be
conclusive and binding upon Sublessor and Sublessee. The expenses involved in
such determination shall be borne by the party against whom a decision is
rendered, provided that (a) if more than one item or number of items is
disputed, then the expenses shall be apportioned according to monetary value of
the items decided against each party, and (b) Sublessee shall pay all such
expenses if the monetary value of the items decided is different by an amount of
less than 5% from the original amount claimed by Sublessor. Sublessor shall
reimburse Sublessee any overage paid within five business days after final
determination of the Triple Net Expenses.
7. Sublessee's proposed use of Subpremises. Sublessee understands and
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acknowledges that the Lease Agreement has restrictions regarding the permitted
use of the Premises. Sublessee represents that the Sublessee's proposed use of
the Subpremises is as follows:
Use as warehouse and/or office space and all uses related or incident to
the foregoing, including distribution.
Sublessee will not operate any other kind of business on the Subpremises or use
the Subpremises for any other kind of purpose, except as may otherwise be
expressly permitted in this Sublease Agreement.
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8. Sublessor's obligations and representations. Sublessor shall continue
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to pay Rent and all other amounts due under the Lease Agreement and perform all
the other obligations of lessee with respect to the Lease Agreement as they
become due and/or performable, which payments and obligations shall be paid and
performed in full not later than the time at which they are respectively due.
Sublessor shall immediately forward each and every payment received from
Sublessee, dollar for dollar, whether for rent or other obligation hereunder,
directly to the Landlord as a payment under the Lease Agreement but only to the
extent of required payments under the Lease Agreement. Sublessor shall
immediately notify Sublessee of any default or event of default or notice of
default or event of default (or event, which with the passage of time could
become a default or event of default) under the Lease Agreement. In the event
there is a default in any payment or performance by Sublessor under the Lease
Agreement which is not timely cured by Sublessor, then Sublessee may correct
said default or defaults by payment or performance thereof, and the amount of
any funds expended by Sublessee as are reasonably necessary to correct any such
uncured default shall be considered a payment under this Sublease Agreement and
any payment so made and reasonable expenses incurred and paid in connection
therewith (including reasonable attorney's fees) shall be credited and applied
to the payments and amounts due hereunder as if directly paid thereunder, and
from that date on, any and all amounts due under the Lease Agreement may, at
Sublessee's discretion, be paid directly to the Landlord, with all other amounts
due under this Sublease Agreement to still be paid by Sublessee directly to
Sublessor. Sublessor represents that the Lease Agreement is in full force and
effect, that no event of default exists thereunder, and that no other event
exists, which with the passage of time or giving of notice, could become an
event of default.
9. Parking. Sublessee shall be entitled to use 150 parking spaces on the
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Premises on a non-exclusive basis without any further payment. The primary lot
that Sublessee will be entitled to use for such parking is located directly east
of the southeast xxxxx of the building (on the north side of the access drive to
Shoal Creek Boulevard from the south side of the building), and secondary lots
for such parking are located on the paved area on the north side of the
warehouse and in the area directly south of the primary lot on the south side of
the access drive to Shoal Creek Boulevard.
10. Sublessor's construction of new dock area on Premises and Sublessor's
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continued use of Subpremises. Sublessor and Sublessee acknowledge and agree
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that Sublessor's subleasing of the Subpremises to Sublessee will not leave
Sublessor with a dock, overhead door and truck apron necessary to provide access
to the remaining portion of the Premises that Sublessor will continue to occupy.
Sublessor intends to commence to construct such dock, overhead door and truck
apron promptly after this Sublease Agreement is fully executed by the parties.
Sublessee agrees to allow Sublessor to use the dock, overhead door and truck
apron located on the north end of the Subpremises and reasonable access across
the Subpremises to the remaining part of the Premises until Sublessor completes
the construction of Sublessor's dock, overhead door and truck apron so long as
Sublessor does not unreasonably interfere with Sublessee's use of the
Subpremises. Sublessor and Sublessee agree to abide by each other's reasonable
rules and regulations regarding security, safety and confidentiality, and
Sublessee agrees to provide Sublessor with reasonable access, including keys and
access codes, to the spaces described in this paragraph. Sublessor discloses to
Sublessee that Sublessor's intended location for its new dock, overhead door and
truck is set forth on Exhibit "B" attached hereto and made a part hereof.
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11. Sublessor's removal of personal property; Sublessee's use of
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Sublessor's scale. Sublessor agrees to remove from the Subpremises the box
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crusher, pallet wrapper and any rolling stock currently located on the
Subpremises no later than March 8, 1999. Sublessor and Sublessee agree that the
scale built into the floor of the Subpremises shall remain on the Subpremises
and Sublessee, shall be allowed to use the scale; provided, however, Sublessee
agrees to maintain the scale in the same working condition as of the effective
date hereof during the Sublease Term and Sublessee agrees to leave the scale in
same working condition as of the effective date hereof at the expiration or
termination of this Sublease Agreement.
12. Finish-out construction; Alterations and Improvements; Condition of
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Subpremises; Limited warranty as to HVAC; Planting of Garden; Signage.
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Sublessor and Sublessee agree and acknowledge that Sublessor shall not be
required to do any renovation, remodeling, alteration, improvement or
refurbishing of the Subpremises in connection with this Sublease Agreement,
except that Sublessor shall be responsible for securely partitioning the
Subpremises from the remaining portion of the Premises which will continue to be
occupied by Sublessor promptly after Sublessor's completion of the new dock
area, overhead door and truck apron as contemplated in paragraph 10 above.
However, Sublessee, at Sublessee's sole cost and expense, intends to construct
improvements and/or remodel the Subpremises (the "finish-out"). As to the
finish-out and any other renovation, remodeling alteration, improvement or
refurbishing of the Subpremises, Sublessee, must first secure the prior written
consent of Sublessor and Lessor as to the finish-out and any other proposed
renovation, remodeling, alteration, improvement or refurbishing including the
design, location and plans and specifications relating to same. Sublessee
agrees to accept possession of the Subpremises, including any security system,
in its "AS-IS CONDITION" and "WITH ALL DEFECTS", with the exception that
Sublessor will give Sublessee a limited warranty that the heating, air-
conditioning and ventilation systems used in connection with the Subpremises
will remain in good working order for a period of ninety (90) days from the
commencement date. Sublessor acknowledges that Sublessee desires to plant an
outdoor garden on the Premises for the use and enjoyment of Sublessee and
Sublessee's employees, and in connection with such garden, Sublessee must secure
the prior written consent of Sublessor as to the design and location of the
garden to be planted. Sublessee acknowledges and agrees that Sublessee will not
be allowed to construct or operate a dog run on the Subpremises. Sublessor
acknowledges and agrees that Sublessee shall be allowed to construct one large
lighted sign on the west side of the building to be visible from North MoPac
Expressway; provided, however, Sublessee must secure the prior written consent
of Sublessor as to the design, location and size of such sign, which consent
shall not be unreasonably withheld. Sublessor acknowledges that Sublessee and
its employees shall be entitled to have dogs in the Subpremises as long as such
dogs do not create a nuisance to Sublessor and adjacent property owners and
their respective employees, agents, guests and invitees.
13. Renewal Options. Provided Sublessee is not in default under this
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Sublease Agreement, Sublessee shall have the right to extend the Sublease Term
for two (2) additional two (2) year terms (collectively, the "Extended Terms")
under the following terms and conditions (the First Renewal Option and the
Second Renewal Option described below are collectively referred to as the
"Renewal Options"):
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a. First Renewal Option: Sublessee shall have the option to extend the
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Sublease Term for an additional two (2) year period by giving Sublessor written
notice as provided herein (the "First Extended Term"). If Sublessee is in
default under this Sublease Agreement on the expiration date of the Sublease
Term, this Sublease Agreement and the First Renewal Option shall be deemed to be
terminated and of no further force and effect and any remaining options shall be
null and void. In the event this Sublease Agreement has not been terminated and
Sublessee exercises this First Renewal Option, the First Extended Term shall
commence on the day following the expiration date of the Sublease Term.
b. Second Renewal Option: Sublessee shall have the option to extend the
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First Extended Term for an additional two (2) year period by giving Sublessor
written notice as provided herein (the "Second Extended Term") under the
following additional terms and provisions: (i) Sublessee shall have no right to
exercise the Second Renewal Option if the First Renewal Option has not been
exercised by Sublessee, (ii) Sublessee shall have no right to exercise the
Second Renewal Option in the event Sublessor determines in writing that
Sublessor will need the Subleased Premises for its own purposes (Sublessor shall
notify Sublessee no later than 150 days prior to the expiration of the First
Extended Term if Sublessor will need the Subleased Premises), (iii) if Sublessee
is in default under this Sublease Agreement on the expiration date of the First
Extended Term or if Sublessee receives the notice from Sublessor described in
(ii) above, this Sublease Agreement and the Second Renewal Option shall be
deemed to be terminated and of no further force and effect. In the event this
Sublease Agreement has not been terminated and Sublessee exercises this Second
Renewal Option, the Second Extended Term shall begin on the day following the
expiration date of the First Extended Term.
c. Exercise of Renewal Options: Sublessee must exercise the Renewal
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Options by giving written notice to Sublessor of the exercise of the Renewal
Options not later than 180 days prior to the expiration of the Sublease Term, in
the case of the First Renewal Option, and not later than 180 days prior to the
expiration of the First Extended Term, in the case of the Second Renewal Option.
The Renewal Options will be effective only if exercised in accordance with these
provisions, and the failure of Sublessee to give written notice of the exercise
of a Renewal Option as provided herein shall be deemed conclusively to be an
election by Sublessee to waive such Renewal Options whereupon the Renewal
Options shall expire, terminate and be of no further force and effect.
Sublessee shall have no other right to renew this Sublease Agreement unless
subsequently agreed to in writing by Sublessor. If Sublessee timely exercises
the Second Renewal Option, Sublessor shall take all actions necessary to timely
and effectively exercise the Option to Extend Lease as described in Section 1.02
of the Lease Agreement.
d. Rent Escalation during Extended Terms: Sublessor and Sublessee
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acknowledge and agree that Rent will be increased in the event any one or more
of the Renewal Options is exercised by Sublessee. Sublessee shall pay Rent
during the Extended Terms as follows:
First Extended Term: $ 12er Square Foot Monthly Rent Annual Rent
Year 1 $.49 $13,046.25 $156,555.00
Year 2 $.49 $13,046.25 $156,555.00
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Second Extended Term: $ per Square Foot Monthly Rent Annual Rent
Year 1 $.53 $14,111.25 $169,335.00
Year 2 $.53 $14,111.25 $169,335.00
e. Alterations or improvements in connection with Renewal Options.
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Sublessor shall not be obligated to make any alterations or improvements to the
Subpremesises in connection with any Renewal Options that may be exercised by
Sublessee.
14. Sublessor's rights and privileges. Sublessor shall have the same
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rights and privileges reserved by the Lessor in the Lease Agreement, including
but not limited to, the following:
a. The right to approve all matters in the Lease Agreement that require
the consent of the Lessor, including, but not limited to, uses of the
Subpremises, insurance companies, subletting, assignments, encumbrances,
transfers, any additions, alterations or improvements to the Subpremises and
signage (which matters also require the prior written consent of the Lessor);
b. The right to receive the same notices the Lessor is entitled to
receive as set forth in the Lease Agreement;
c. The right to enter the Subpremises for repairs, replacement,
maintenance, inspection and other purposes as set forth in the Lease Agreement;
d. Rights of the Lessor upon a default as set forth in the Lease
Agreement; and
e. A landlords lien and security interest in all personal property of
Sublessee presently, or which may hereafter be situated, on the Subpremises, to
secure (1) payment of all rent or other sums of money coming due hereunder from
Sublessee, (2) all obligations that Sublessee is assuming or undertaking as set
forth in this Sublease Agreement, including those obligations Sublessee will
have as a lessee under the Lease Agreement. Sublessor acknowledges that this
lien and security interest is subordinate to all existing security interests in
such personal property and further that it shall be subordinate to all purchase
Money security interests granted by Sublessee hereafter. Sublessor agrees to
execute such documents as are necessary to evidence this subordination upon
commercially reasonably terms.
15. Indemnification. Sublessee shall indemnify and hold Sublessor and
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Lessor, and their respective agents, employees, contractors, guests and
invitees, harmless from and against any and all damages, losses, costs, fees,
expenses, demands, claims, debts, liabilities, suits and actions, including all
court costs and attorney's fees incurred by Sublessor and/or Lessor, arising out
of the use or occupancy of the Subpremises by the Sublessee or caused by the
actions or omissions to act of Sublessee and/or Sublessee's agents, employees,
contractors, guests and invitees or arising out of a violation of applicable law
by Sublessee with respect to the Subpremises. Sublessor shall indemnify and hold
Sublessee and Sublessee's agents, employees, contractors, guests and invitees,
harmless from and against any and all damages, losses, costs, fees, expenses,
demands, claims, debts, liabilities, suits and actions, including all court
costs and attorney's fees incurred by Sublessee and/or Lessor, arising out of
the use or occupancy of the Subpremises prior to the date Sublessee occupies all
or part of the Subpremises or caused by the actions or omissions to act of
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Sublessor and/or Sublessor's agents employees, contractors, guests and invitees
or arising out of a violation of applicable law by Sublessor with respect to the
Subpremises.
16. Removal of Sublessee's property at expiration or termination of Lease
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Agreement. At the expiration or termination of this Sublease Agreement,
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Sublessee agrees to promptly remove all of its signage (including any outdoor
signs), equipment, office items, furnishings, and other personal property (other
than the equipment and items that will remain the property of Sublessor pursuant
to the terms of this Sublease Agreement) and leave the Subpremises in good and
"broom-clean" condition, and in the original condition the Subpremises were in
on the date Sublessee occupies all or part of the Subpremises, except for the
improvements to the Subpremises Sublessee is allowed by Sublessor to make as
provided herein and except for normal wear and tear.
17. Moving into and out of the Subpremises. Sublessee shall use extreme
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care in moving its personal property into and out of the Subpremises, and shall
use padding and other prudent precautions to avoid damage to the Subpremises.
18. Assignments; encumbrances, etc. Sublessee shall not assign, transfer,
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mortgage, pledge, hypothecate or encumber this Sublease or any interest herein
or sublet the Subpremises or any part thereof or permit the use of the
Subpremises by any party other than Sublessee, without the prior written consent
of Sublessor and Lessor which consent shall not be unreasonably withheld.
Sublessee shall not allow any liens to attach to the Subpremises or Premises,
and shall immediately secure the release of any and all such Hens.
19. Lessor's consent to sublease agreement. Lessor is executing this
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document in the spaces provided below to reflect Lessors consent and approval to
the sublease of the Subpremises from Sublessor to Sublessee.
20. Broker Commissions. The Xxx Xxx Company ("Cox") has served as broker
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for and represented only Sublessee in connection with this Sublease Agreement.
NAI/Commercial Industrial Properties Company ("CIP") has served as broker for
and represented only Sublessor in connection with this Sublease Agreement. Upon
execution of this Sublease Agreement and the occurrence of the commencement date
(as defined in Section 4), Sublessor will pay Cox a commission equal to 4% of
the triple net rents (approximately $17,572.50) and CIP a commission equal to 2%
of the triple net rents (approximately $8,786.25) in full satisfaction of all
commissions due with respect to this Sublease Agreement. It is specifically
provided, however, that as to any Renewal Options that are exercised as provided
herein, Sublessor will pay Cox a commission equal to 2% of the triple net rents
and CIP a commission equal to 2% of the triple net rents, with such payment
being due on the first day of the applicable Extended Term. In addition, in the
event Sublessor leases additional space in the building ("Expansion Space"') to
Sublessee during the Sublease Term or any Extended Term, Sublessor will pay Cox
a commission equal to 4% of the triple net rents and CIP a commission equal to
2% of the triple net rents, with such payment being due on the first day
Sublessee moves into the Expansion Space. It is specifically provided, however,
that commissions due as to Renewal Options or Expansion Space will not be owed
by Sublessor to any entity which does not represent their respective party at
the time the commission is due and payable. Sublessor indemnifies and holds
Sublessee harmless from and against any and all liability and cost which
Sublessee may suffer in connection with any real estate
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broker seeking any commission, fee or payment in connection with the Sublease
Agreement. Sublessor and Sublessee represent that they have not used any other
real estate agents, real estate brokers or other third party in connection with
this transaction nor have they entered into any agreement, verbal or written,
with any other real estate agent, real estate broker or other third party for
the payment of any commission, fee or payment in connection with this
transaction. Sublessor and Sublessee agree to indemnify and hold each other
harmless from the payment of any commission, fee or payment of any such other
agent, broker or other third party claiming by, through or under the
indemnifying party for a fee, commission or payment by reason of this
transaction.
21. Miscellaneous Provisions.
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a. Attorney's Fees. In the event that either party brings suit for the
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breach of this Sublease Agreement or of any condition, representation, covenant
or agreement contained herein, the prevailing party shall be entitled to recover
all reasonable attorney's fees, costs and expenses incurred by the prevailing
party in connection therewith from the non-prevailing party.
b. Notices. All notices, demands and requests required or permitted to
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be made or given hereunder shall be in writing and addressed to the party to
whom the notice is to be delivered and shall be deemed to have been properly
delivered and received (1) as of the date of actual delivery to the addresses
set forth below if personally delivered, or (2) upon deposit in a regularly
maintained receptacle for the United States mail, certified mail, return receipt
requested and postage prepaid, or upon deposit with an overnight delivery system
with all costs prepaid. All such notices, demands and requests shall be
addressed as follows:
SUBLESSOR: SUBLESSEE
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Xxxx Graphics, Inc. Garden Escape, Inc.
0000 Xxxxx Xxxxx Xxxx. 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxx Attn: Xxxxx X'Xxxxx
with a copy to: with a copy to:
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Xxxxxx & Xxxxxxx, P.C. Reinhart, Boerner, Van Deuren,
711 San Antonio Street Xxxxxx & Xxxxxxxxxx
Xxxxxx, Xxxxx 00000 0000 X. Xxxxx Xxxxxx
Attn: Xxxxxx X. Xxxxxxx Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx XxXxxxxxxx
Either party may change the address to which notices are to be sent by giving
five (5) days prior written notice to the other party.
c. Authority. Each party represents and warrants to the other party that
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such party and the individual executing this Sublease Agreement on such party's
behalf have been granted the full legal right, power and authority to execute
this Sublease Agreement through all necessary corporate or other action and that
all formal requirements necessary or required by any law, rule or regulation
regarding its corporate existence (as applicable) have been fulfilled. The
parties shall present to each other all reasonable evidence of such authority
which may be reasonably
9
requested in connection with this Sublease Agreement, including (if applicable)
a certified corporate resolution authorizing the applicable party to enter into
this Sublease Agreement and authorizing the officer signing this Sublease
Agreement on behalf of said party to execute same and bind the applicable party
to this Sublease Agreement.
d. Date of Deadlines. In the event that any of the deadlines set forth
-----------------
herein end on a Saturday, Sunday or legal holiday, such deadline shall
automatically be extended to the next day which is not a Saturday, Sunday or
legal holiday.
e. Texas Law to Apply. This Sublease Agreement and the rights and
------------------
obligations of the parties hereunder are performable in Xxxxxx County, Texas,
and shall be governed by and interpreted, construed and enforced in accordance
with the laws of the State of Texas. Venue shall lie in Xxxxxx County, Texas.
f. Parties Bound. This Sublease Agreement shall be binding upon and inure
-------------
to the benefit of the parties of this Sublease Agreement and their respective
heirs, executors, administrators, legal representatives, successors and assigns
(only as permitted herein).
g. Paragraph Headings. The paragraph headings or other headings contained
------------------
in this Sublease Agreement are for convenience only and shall not enlarge or
limit the scope or meaning of the substance of this Sublease Agreement.
h. Time of the Essence. Time is of the essence of this Sublease
-------------------
Agreement.
i. Gender. Words of any gender used in this Sublease Agreement shall be
------
held and construed to include any other gender, and words in the singular shall
be held to include the plural and vice versa unless the context requires
otherwise.
j. Legal Construction. Every provision in this Sublease Agreement is
------------------
intended to be severable. In the event any one or more of the provisions
contained in this Sublease Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Sublease
Agreement, and this Sublease Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained in this Sublease
Agreement.
k. No Waiver. The failure of any party to insist upon strict performance
---------
of a covenant, duty or obligation hereunder, irrespective of the length of time
for which such failure continues, shall not be a waiver of such party's right to
demand strict compliance in the future. No consent or waiver, express or
implied, to or of any breach or default in the performance of any covenant, duty
or obligation hereunder shall constitute a consent or waiver to or of any other
breach or default in the performance of the same or any other covenant, duty or
obligation hereunder.
l. Capitalized Terms. All capitalized terms used but not defined herein
-----------------
shall have the meanings assigned to such terms in the Lease Agreement.
10
m. Counterparts. This Sublease Agreement may be executed in one or more
------------
counterparts, each of which counterparts shall be deemed to be an original and
all of which shall constitute one and the same document.
n. Entire Agreement. This Sublease Agreement and the exhibits hereto set
----------------
forth the entire agreement between the parties, and no other statement,
agreement or understanding, oral or written, or amendment or modification to
this Sublease Agreement, will be recognized or enforced unless the same shall be
in writing and signed by all parties subsequent to the effective date hereof
This Sublease Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof. THIS SUBLEASE
AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
o. NOTICE AS TO DISCLAIMER OF WARRANTIES. SUBLESSOR HAS NOT MADE AND DOES
-------------------------------------
NOT MAKE ANY REPRESENTATIONS AS TO THE PHYSICAL CONDITION OF THE SUBPREMISES, OR
ANY OTHER MATTER AFFECTING OR RELATED TO THE SUBPREMISES. SUBLESSEE EXPRESSLY
AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW AND EXCEPT AS TO THE LIMITED
WARRANTY GIVEN BY SUBLESSOR TO SUBLESSEE WITH REGARD TO HVAC AND THE
REPRESENTATIONS AND WARRANTIES MADE AT PARAGRAPH 21 (P) BELOW, THE SUBPREMISES
AND ANY PERSONAL PROPERTY LOCATED THEREON ARE ACCEPTED BY SUBLESSEE "AS-IS" AND
"WITH ALL FAULTS", AND SUBLESSOR EXPRESSLY DISCLAIMS, AND SUBLESSEE ACKNOWLEDGES
AND ACCEPTS THAT SUBLESSOR HAS DISCLAIMED, ANY AND ALL REPRESENTATIONS,
WARRANTIES OR GUARANTIES OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED,
CONCERNING THE SUBPREMISES AND ANY PERSONAL PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE VALUE, CONDITION, MERCHANTABILITY, HABITABILITY, MARKETABILITY,
PROFITABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, OF THE
SUBPREMISES AND THE PERSONAL PROPERTY. SUBLESSEE REPRESENTS THAT SUBLESSEE HAS
MADE ALL INSPECTIONS OF THE SUBPREMISES AND PERSONAL PROPERTY TO DETERMINE ITS
VALUE AND CONDITION DEEMED NECESSARY OR APPROPRIATE BY SUBLESSEE, INCLUDING,
WITHOUT LIMITATION, THE PHYSICAL AND OPERATING CONDITION OF THE SUBPREMISES AND
PERSONAL PROPERTY.
p. Environmental representations, warranties and indemnities.
---------------------------------------------------------
(i) Sublessor Representations and Warranties. Sublessor represents to
----------------------------------------
Sublessee that to the best of Sublessor's actual knowledge and belief, Sublessor
has no reports, studies or other information in its possession relating to the
presence or suspected presence of any Hazardous Material (as hereinafter
defined) on the Premises, but that Sublessor will promptly following its receipt
thereof, furnish to Sublessee full, accurate and complete copies of any such
reports, studies and other information hereafter obtained by Sublessor.
Sublessor represents and
11
warrants to Sublessee that to the best of Sublessor's actual knowledge and
belief that (i) during Sublessor's possession of the Premises, any handling,
transportation, storage, treatment or usage of Hazardous Material that has
occurred on the Premises has been in compliance with all applicable federal,
state and local laws, regulations and ordinances, (ii) during Sublessor's
possession of the Subpremises, no leak, spill, release, discharge, emission or
disposal of any Hazardous Material has occurred on the Premises, (iii) the
Premises is free of any Hazardous Material as of the effective date of this
Sublease Agreement and (iv) there are no underground storage tanks located on
the Premises. "Hazardous Material" means any substance, material or waste which
is reasonably considered to pose an actual or potential threat to the health or
safety of persons entering the Premises and which is regulated as "hazardous",
"toxic" or which is under any similar designation by any local, state or federal
authority.
(ii) Indemnity by Sublessor. Sublessor hereby agrees to indemnify,
----------------------
defend and hold Sublessee harmless from any and all loss, cost, damage and
expense that arises before, during or after the Sublease Term as a result of (a)
the presence or suspected presence at any time after Sublessor took possession
of the Premises of any Hazardous Material in or on the Premises, regardless
(except as set forth below) of the source of such Hazardous Material, (b) the
installation at any time after Sublessor took possession of the Premises of any
underground storage tank on the Premises, or (c) the inaccuracy of any of the
representations and warranties made by Sublessor. The costs covered by the
Sublessor's indemnification include, without limitation, costs incurred in the
investigation of site conditions, reasonable fees of attorneys, engineers and
other consultants, costs and expenses incurred by Sublessee in exercising any of
its rights hereunder and any damages suffered as a result of any termination of
this Sublease Agreement in accordance with this Section. Excluded from the
Sublessor's indemnification shall be any loss, cost, damage or expense resulting
from the presence of any Hazardous Material or underground storage tank
introduced onto the Premises by a person or entity who is being indemnified
hereunder or their employees, agents, contractors, guests or invitees. This
indemnity shall survive the expiration or earlier termination of this Sublease
Agreement.
(iii) Sublessee Representations and Warranties. Sublessee represents
----------------------------------------
to Sublessor that (a) Sublessee will promptly notify Sublessor of the presence
or suspected presence at any time of any Hazardous Material in or on the
Subpremises or Premises of which Sublessee becomes aware, including any leak,
spill, release, discharge, emission or disposal of any Hazardous Material, and
(b) during Sublessee's possession of the Subpremises, any handling,
transportation, storage, treatment or usage of Hazardous Material will be in
compliance with all applicable federal, state and local laws, regulations and
ordinances.
(iv) Indemnity by Sublessee. Sublessee hereby agrees to indemnify,
----------------------
defend and hold Sublessor harmless from any and all loss, cost, damage and
expense that arises during or after the Sublease Term as a result of (a) the
presence or suspected presence at any time of any Hazardous Material in or on
the Premises or Subpremises introduced onto the Premises by Sublessee or
Sublessee's employees, agents, contractors, guests or invitees, (b) the presence
at any time of any underground storage tank on the Premises or Subpremises
introduced onto the Premises by Sublessee or Sublessee's employees, agents,
contractors, guests or invitees, or (c) the inaccuracy of any of the
representations and warranties made by Sublessee. The costs covered by the
Sublessee's indemnification include, without limitation, costs incurred in the
investigation of site conditions, reasonable fees of attorneys, engineers and
other consultants, costs and expenses
12
incurred by Sublessor in exercising any of its rights hereunder and any damages
suffered as a result of any termination of this Sublease Agreement in accordance
with this Section. Excluded from the Sublessee's indemnification shall be any
loss, cost, damage or expense resulting from the presence of any Hazardous
Material or underground storage tank introduced onto the Premises by a person or
entity who is being indemnified hereunder or their employees, agents,
contractors, guests or invitees. This indemnity shall survive the expiration or
earlier termination of this Sublease Agreement.
q. Modifications to Lease Agreement. Notwithstanding the general
--------------------------------
applicability of the Lease Agreement to this Sublease Agreement in that all of
the terms, covenants and conditions of the Lease Agreement are applicable to
this Sublease Agreement with the same force and effect as if the Sublessor were
the Lessor under the Lease Agreement and Sublessee was the Lessee thereunder, it
is agreed and acknowledged by Sublessor and Sublessee that the following
provisions of the Lease Agreement have no force and effect herein and are
modified as more particularly set forth as follows:
(i) Increase in Rent. Sublessor and Sublessee agree that the rent and
----------------
operating expenses agreed to herein are not subject to change, modification or
revision except as set forth in paragraphs 2, 6 and 13 herein and that Section
2.01(b) of the Lease Agreement providing for a possible increase in monthly
rental to be determined by a possible third-party lender shall have no force and
effect.
(ii) Maintenance and Repair Obligations. Sublessor and Sublessee agree
----------------------------------
that Sections 4.01 and 4.02 of the Lease Agreement with respect to the
Subpremises are deleted and modified as follows:
(a) Sublessor's Repair and Maintenance Obligations. Sublessor shall,
----------------------------------------------
at its expense, maintain in good condition and repair, ordinary wear
and tear excepted, the building structure (other than doors and
windows), the foundation, load bearing walls, the roof, the parking
lot and the landscaped areas (other than the garden to be built and
maintained by Sublessee) surrounding the building and the parking lot
(Sublessee acknowledges that maintenance of the landscaped areas is
an expense that will be passed through to Sublessee on a prorata
basis as part of the Triple Net Expenses).
(b) Sublessee's Repair and Maintenance Obligations. Sublessee shall,
----------------------------------------------
as its expense, at all times during the Sublease Term keep and
maintain in good and sanitary order, condition and repair, ordinary
wear and tear excepted, the mechanical systems (including the
heating, ventilating, air conditioning, plumbing and electrical
systems) serving the Subpremises, as well as the garden described in
q(ii) (b) above and the interior of the Subpremises and all equipment
and fixtures therein, including windows, doors, interior walls,
floors and floor coverings, interior painting and wall coverings.
(iii) Insurance. Notwithstanding Section 9.01 of the Lease Agreement
---------
Sublessor and Sublessee acknowledge and agree that insofar as Sublessee is
paying for insurance costs relative to the Subpremises as a portion of Triple
Net Expenses, Sublessee shall not have any obligation to
13
directly maintain insurance on the building or improvements on the Premises
(Sublessee shall not be relieved of its obligation to maintain liability
insurance as provided in Section 9.02 of the Lease Agreement).
r. Exhibits and Other Provisions. The following Exhibits and/or other
-----------------------------
provisions of this Sublease Agreement are attached hereto and incorporated
herein by reference for all intents and purposes:
Exhibit A: Description of Premises
Exhibit B: Description of Subpremises
Exhibit C: Lease Agreement
EXECUTED on the dates set forth below but to be effective as of the date
set forth above (the "effective date").
"SUBLESSOR"
XXXX GRAPHICS, INC., A TEXAS CORPORATION
By: /s/ Xxxxxxx X. Xxxx Date: February 24, 1999
-----------------------------
Print Name: Xxxxxxx X. Xxxx
---------------------
Title: Chairman
--------------------------
"SUBLESSEE"
GARDEN ESCAPE, INC., a Delaware corporation
By: /s/ Xxxxx X. X'Xxxxx Date: February 24, 1999
-----------------------------
Print Name: Xxxxx X. X'Xxxxx
-------------------
Title: Chief Operating Officer
--------------------------
14
APPROVED AND AGREED BY LESSOR:
Lessor represents that the Lease Agreement is in full force and effect, that no
event of default exists thereunder, and that no other event exists, which with
the passage of time or giving of notice, could become an event of default.
Lessor hereby approves the foregoing Sublease Agreement, agrees to the
Sublessee's proposed use of the Subpremises as set forth in this Sublease
Agreement, and agrees to afford Sublessee all of the rights of Lessee under the
Lease Agreement insofar as they relate to the Subpremises. Lessor agrees to
provide Sublessee with a copy of all notices of default under the Lease
Agreement and the same opportunity to cure such defaults as given to the Lessee
under the Lease Agreement Notwithstanding the terms and provisions of the Lease
Agreement, Lessor hereby agrees that the Sublease Agreement shall govern and
control the relationship of Lessor and Sublessee, and Sublessee shall in no
event be deemed to have assumed the terms of the Lease Agreement except to the
extent that Sublessee has agreed under the Sublease Agreement to perform the
Sublessor's obligations as the Lessee under the Lease Agreement, as more
specifically set forth in the Sublease Agreement, it being understood and agreed
that so long as there is not a direct lease relationship between Sublessee and
Lessor, Sublessee's obligations under the Sublease shall inure only to the
benefit of Sublessor and not Lessor. Should (i) Lessor terminate Sublessor's
right to possession of the Premises in connection with a default by Sublessor
under the Lease Agreement, without terminating the Lease Agreement (ii) Lessor
terminate the Lease Agreement for any reason other than a condemnation or
casualty, or (iii) Sublessor, in bankruptcy, or its trustee in bankruptcy,
rejects the Lease Agreement, then so long as the Sublease Term has not expired
and Sublessee is not in default under the Sublease Agreement the Sublease
---
Agreement shall continue in full force and effect as a direct lease between
Lessor and Sublessee upon the same terms and conditions contained in the
Sublease Agreement, for the balance of the Sublease Term, including, but not
limited to, the extension rights of Sublessee thereunder (the "Direct Lease").
In such event, Sublessee agrees to attorn to Lessor and Lessor hereby agrees
that it will accept such attornment, not disturb Sublessee's possession of the
Subpremises so long as Sublessee is not in default under the Sublease Agreement
and Sublessee performs all obligations required of it under the Direct Lease.
"LESSOR"
/s/ Xxxxxxx X. Xxxx Date: February 24, 1999
-----------------------------
XXXXXXX X. XXXX
15
EXHIBIT "A"
Description of the Premises
2.8635 acres or 124,738 square feet of land, more or less, out of the Xxxxx
Xxxxxxxx Survey Number 17, being all of the XXXXX XXXXXX SECOND SUBDIVISION, a
subdivision in Xxxxxx County, Texas, according to the map or plat thereof
recorded in Volume 87, Page 193C of the Plat Records of Xxxxxx County, Texas,
commonly known as 0000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx 00000.
EXHIBIT "C"
WAREHOUSE LEASE
XXXXXXX X. XXXX, LESSOR
Xxxx Graphics, Inc., LESSEE
TABLE OF CONTENTS
Page
ARTICLE 1. TERM
(S)1.01 Term of Lease........................... 1
(S)1.02 Option to Extend Term................... 1
(S)1.03 Holdover................................ 2
ARTICLE 2. RENT
(S)2.01 Rent.................................... 2
(S)2.02 Place of Payment........................ 3
(S)2.03 Taxes and Assessments as Additional Rent 3
ARTICLE 3. USE OF PREMISES
(S)3.01 Permitted Use........................... 4
(S)3.02 Waste, Nuisance, or Illegal Uses........ 4
ARTICLE 4. REPAIRS AND MAINTENANCE
(S)4.01 Repairs and Maintenance by Lessee....... 4
(S)4.02 Lessee's Failure to Repair or Maintain.. 4
ARTICLE 5. UTILITIES AND GARBAGE REMOVAL
(S)5.01 Utility Charges......................... 5
(S)5.02 Garbage Removal......................... 5
ARTICLE 6. ALTERATIONS, ADDITIONS AND IMPROVEMENTS
(S)6.01 Consent of Lessor....................... 5
(S)6.02 Property of Lessor...................... 5
ARTICLE 7. TRADE FIXTURES AND SIGNS
(S)7.01 Trade Fixtures.......................... 6
(S)7.02 Signs................................... 6
ARTICLE 8. MECHANICS LIEN............................... 6
ARTICLE 9. INSURANCE AND INDEMNITY
(S)9.01 Property Insurance...................... 7
(S)9.02 Liability Insurance..................... 7
(S)9.03 Remedy for Failure to Provide Insurance. 7
(S)9.04 Hold-Harmless Clause.................... 8
(S)9.05 Waiver of Insured Loss.................. 8
(S)9.06 Subrogation of Insurance................ 9
ARTICLE 10. DAMAGE OR DESTRUCTION OF PREMISES
(S)10.01 Notice to Lessor........................ 9
(S)10.02 Total Destruction....................... 9
(S)10.03 Partial Destruction..................... 10
ARTICLE 11. CONDEMNATION
(S)11.01 Total Condemnation...................... 11
(S)11.02 Partial Condemnation.................... 11
(S)11.03 Condemnation Award...................... 11
ARTICLE 12. DEFAULT
(S)12.01 Default by Lessee....................... 12
(S)12.02 Default by Lessor....................... 12
(S)12.03 Cumulative Remedies..................... 13
(S)12.04 Waiver of Breach........................ 13
ARTICLE 13. INSPECTION BY LESSOR........................ 13
ARTICLE 14. ASSIGNMENT AND SUBLEASE
(S)14.01 Assignment and Subletting by Lessee..... 13
(S)14.02 Assignment by Lessor.................... 14
ARTICLE 15. MISCELLANEOUS
(S)15.01 Notices and Addresses................... 14
(S)15.02 Parties Bound........................... 14
(S)15.03 Texas Law to Apply...................... 15
(S)15.04 Legal Construction...................... 15
(S)15.05 Prior Agreements Superseded............. 15
(S)15.06 Amendment............................... 15
(S)15.07 Rights and Remedies Cumulative.......... 15
(S)16.08 Attorney's Fees and Costs............... 15
(S)15.09 Force Majeure........................... 16
(S)15.10 Time of Essence......................... 16
Execution ........................................ 16
Exhibit "A" ........................................ 17
LEASE
This Lease is made and entered into by and between Xxxxxxx X. Xxxx referred
to in this lease as Lessor, and Xxxx Graphics Inc. referred to in this lease as
Lessee.
In consideration of the mutual covenants and agreements set forth In this
lease, and other good and valuable considerations, Lessor does hereby demise and
lease to Lessee, and Lessee does hereby lease from Lessor, the premises situated
at 0000 Xxxxx Xxxxxx consisting of 48,000 square feet of rentable space located
in Xxxxxx, Xxxxxx County, Texas, and described in the attached field notes
designated "Exhibit A". These premises are referred to in this lease as "the
premises" or "the leased premises."
ARTICLE 1. TERM
Term of Lease
(S)1.01. The term of this lease shall be one hundred and twenty (120)
months, commencing on January 1, 1995, and ending on December 31, 2004, unless
sooner terminated as provided in this lease.
Option to Extend Lease
(S)1.02. Lessee has the right to extend this lease beyond the expiration
date provided in (S)1.01 on the following terms and conditions:
a. Provided Lessee is not in default of this Lease, Lessee may extend the
term of this lease for a three (3) year period, with the extended term to
begin on the day following the expiration date of the lease term specified
in (S)1.01. Provided, however, that if at the date of expiration of the
original term or any extended term, Lessee is in default beyond any grace
period provided in this lease in the performance of any of the terms or
provisions of this lease, the remaining option or options shall be null and
void. All of the terms, covenants, and provisions of this lease shall
apply to all extended lease terms,
1
b. Lessee may exercise each option to extend this lease for each month-to-
month period by giving to Lessor notice of its intention to do so not later
than sixty (60) days prior to the expiration of the lease term, in the case
of the initial option to extend, or the extended lease term, in the case of
Successive options to extend. To constitute effective notice of an
intention to exercise an option under this lease, the notice must be sent
by certified or registered mail or personally delivered to Lessor at the
address provided in (S)15.01 of this lease and must be postmarked no later
than the latest date provided in this section for Lessee's exercise of the
option.
Holdover
(S)1.03. If Lessee holds over and continues in possession of the leased
premises after expiration of the term of this lease or any extension of
that term, Lessee will be deemed to be occupying the premises on the basis
of a month-to-month tenancy, subject to all of the terms and conditions of
this lease.
ARTICLE 2. RENT
Rent
(S)2.01a. Lessee agrees to pay to Lessor the sum of $.27 per square foot
per month ($12,996.00/Mo) on or before the first day of each month as the fixed
rent for the succeeding month. The first month's rent is due on or before
January 1, 1995. If the lease term begins on a day other than the first day of
a month or ends on a day other than the last of the month, then Lessee agrees to
pay a pro-rata portion of the minimum fixed monthly rent described above for the
partial initial and/or final months, prorated on a per diem basis, with payment
for any partial month at the beginning of the term to be paid no later than the
commencement date of the term.
(S)2.01b. Should the Lessor refinance the property during the term of this
lease and its option period, the Lessor may increase the monthly rental rate
charged to Lessee in an
2
amount equal to the difference in the monthly mortgage payment in effect at the
time of execution of this lease and the amount required to be paid monthly by
Lessor under any new mortgage executed by Lessor. The Lessor shall provide
documentation to Lessee of the amount of the increase.
Place of Payment
(S)2.02. Lessee agrees to pay rent as provided in (S)2.01 to Lessor at
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxx, or at such other location or
locations as Lessor and Lessee shall from time to time agree.
Taxes and Assessments as Additional Rent
(S)2.03a. In addition to the fixed rent specified in (S)2.01, Lessee shall
pay the full amount of all real property taxes, special assessments, and
governmental charges of every character imposed on the leased premises during
the term of this lease, including any special assessments imposed on, or
against, the premises for the construction or improvement of public works.
This additional rent shall be payable directly to the entity imposing the
tax, assessment, or charge on the later of (i) that date which the payment is
due or (ii) thirty (30) days following Lessor delivery of the tax xxxx to
Lessee. Lessee shall provide Lessor with a receipt or other evidence of payment
for each such tax, assessment, or charge paid as soon as a receipt or other
evidence is available to Lessee.
(S)2.03b. Lessee may, at its own expense, contest any tax or assessment
for which Lessee is responsible under (S)2.03a. Except as provided in (S)2.03c,
Lessee need not pay the tax, assessment, or charge during the pendency of the
contest.
(S)2.03c. The provisions of (S)2.03b notwithstanding, Lessor may pay or
require Lessee to pay, any tax, assessment, or charge for which Lessee is
responsible under (S)2.03a, pending resolution of Lessee's contest of the tax,
assessment, or charge, if payment is demanded by a
3
holder of a mortgage on the leased premises or if failure to pay will
immediately subject all or part of the leased premises to forfeiture or loss.
ARTICLE 3. USE OF PREMISES
Permitted Use
(S)3.01. Lessee shall operate the leased premises as a
warehouse/office/manufacturing facility continuously during the term of this
agreement and shall use the premises for that purpose and any related
activities, but for no other purpose. Any use must be in compliance with the
City of Austin zoning regulations.
Waste, Nuisance, or Illegal Uses
(S)3.02. Lessee shall not use, or permit the use of, the premises in any
manner that results In waste of the premises or constitutes a nuisance. Nor
shall Lessee use, or permit the use of, the premises for any illegal purpose.
Lessee, at its expense, will comply, and will cause its officers, employees,
agents, and invitees to comply, with all applicable laws and ordinances and with
all applicable rules and regulations of governmental agencies, concerning the
use of the premises.
4
ARTICLE 4. REPAIRS AND MAINTENANCE
Repairs and Maintenance by Lessee
(S)4.01. Lessee shall, throughout the term of this lease and any
extensions of that term, at its own expense and risk, maintain the leased
premises and all improvements on the leased premises in good order and
condition, reasonable wear and tear excepted, including but not limited to
making all repairs and replacements necessary to keep the premises and
improvements in such condition. All maintenance, repairs, and replacements
required by this section must be performed promptly when required and in a
manner that will not cause depreciation in the value of the premises, reasonable
wear and tear excepted.
Lessee's Failure to Repair or Maintain
(S)4.02. In the event Lessee fails to perform its obligation to repair,
replace, or maintain, as set forth in (S)4.01 above, after notice from Lessor of
the need for such repair, replacement, or maintenance and the passage of a
reasonable amount of time for performance after such notice, Lessor may enter
the premises and make such repairs or replacements, or perform such maintenance
or cause such repair or replacements to be made or maintenance to be performed,
at its own expense. Upon Lessor's notice to Lessee of the performance and cost
of any maintenance, repairs, or replacements pursuant to this section, Lessee
must immediately reimburse Lessor for any reasonable costs incurred by Lessor
pursuant to this section, together with interest on any such sum at ten percent
(10%) per annum rate from the date of the notice until the date paid by Lessee
to Lessor.
5
ARTICLE 5. UTILITIES AND GARBAGE REMOVAL
Utility Charges
(S)5.01. Lessee shall pay all utility charges for water, electricity,
heat, gas, and telephone service used in and about the leased premises during
the term of the lease, all such charges to be paid by Lessee directly to the
utility company or municipality furnishing the same, before the same shall
become delinquent.
Garbage Removal
(S)5.02. Lessee shall pay for the removal of all garbage and rubbish from
the leased premises during the term of the lease.
ARTICLE 6. ALTERATIONS, ADDITIONS AND IMPROVEMENTS
Consent of Lessor
(S)6.01. Lessee shall not make any alterations, additions, or
improvements to the leased premises without the prior written consent of Lessor.
Consent for nonstructural alterations, additions, or improvements shall not be
unreasonably withheld by Lessor.
Property of Lessor
(S)6.02. All alterations additions, or improvements made by Lessee shall
become the property of Lessor at the termination of this lease. Lessor may,
however, require that Lessee remove any or all alterations, additions, and
improvements installed or made by Lessee, and any other property placed in the
premises by Lessee, upon termination of the lease. In the event that Lessor
requires Lessee to remove such alterations, additions, or improvements, Lessee
shall repair any damage to the premises caused by such removal.
6
ARTICLE 7. TRADE FIXTURES AND SIGNS
Trade Fixtures
(S)7.01. Lessee shall have the right at all times to erect or install
shelves, bins, machinery, or other trade fixtures in, on, or about the leased
premises, provided that Lessee complies with all applicable governmental laws,
ordinances, and regulations regarding such fixtures. Lessee shall have the
right to remove all trade fixtures at the termination of this lease, provided
Lessee is not in default under the lease and that the fixtures will be removable
without structural damage to the premises. Lessee must repair any damage to the
leased premises caused by removal of trade fixtures, and all such repairs must
be completed prior to the termination of the lease. Any trade fixtures that
have not been removed by Lessee at the termination of this lease shall be deemed
abandoned by Lessee and shall automatically become the property of Lessor.
Signs
(S)7.02. Lessee may put appropriate signs on the property provided that
all signage meets the building and sign codes and ordinances of the City of
Austin and Xxxxxx County. All costs for permits, licenses or variances thereto
is to be paid by Lessee. Any sign in excess of 10' x 15' or any lighted sign
must be approved by the Lessor. All costs for the preparation, erection,
maintenance and dismantling of the signs is the responsibility of the Lessee.
At the expiration of the lease and any options, any signs erected by Lessee
shall be removed at the expense of the Lessee.
ARTICLE 8. MECHANIC'S LIEN
(S)8.01. Lessee will not permit any mechanic's lien or liens to be placed
upon the leased premises or upon improvements on the premises. If a mechanic's
lien is filed on the leased premises or on improvements on the leased premises,
Lessee will promptly pay the lien. If default in payment of the lien continues
for thirty (30) days after written notice from Lessor to
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Lessee, Lessor may, at its option, pay the lien or any portion of it without
inquiry as to its validity. Any amounts paid by Lessor to remove a mechanic's
lien caused to be filed against the premises or against improvements on the
premises by Lessee, including expenses and interest, shall be due from Lessee to
Lessor and shall be repaid to Lessor immediately on rendition of written notice.
ARTICLE 9. INSURANCE AND INDEMNITY
Property Insurance
(S)9.01. Lessee shall, at its own expense, during the term of this lease,
keep all building and improvements on the leased premises insured against loss
or damage by fire or theft, with extended coverage it obtainable at a price not
to exceed eighty percent (80%) of the fair market value of the property to be
insured per year, to include direct loss by windstorm, hall, explosion, riot, or
riot attending a strike, civil commotion, aircraft, vehicles, and smoke, in the
aggregate amounts of not less than the full fair insurable value of the
buildings and improvements. The deductible on such insurance shall be in such
amounts as the Lessee may provide for other properties, provided Lessee self
insures for the deductibles. The insurance is to be carried by one or more
insurance companies licensed to do business in Texas and approved by Lessor,
such approval not to be unreasonably withheld. Such policy or policies of
insurance shall name both Lessor and Lessee as named insured. The policies
shall provide that any proceeds for loss or damage to buildings or to
improvements shall be payable solely to Lessor.
Liability Insurance
(S)9.02. Lessee, at its own expense, shall provide and maintain in force
during the term of this lease, liability insurance in the amount of $5,000,000,
covering Lessor as well as Lessee, for any liability for property damage or
personal injury arising as a result of Lessee's occupation or Lessor's ownership
of the leased premises. This insurance is to be carried by
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one or more insurance companies authorized to transact business in Texas and
approved by Lessor.
Remedy for Failure to Provide Insurance
(S)9.03. Lessee shall furnish Lessor with certificates of all insurance
required by this article. If Lessee does not provide such certificates within
thirty (30) days of obtaining possession, or if Lessee allows any insurance
required under this article to lapse, Lessor may, at its option, take out and
pay the premiums on the necessary insurance to comply with Lessee's obligations
under the provisions of this article. Lessor is entitled to reimbursement from
Lessee for all amounts spent by it to procure and maintain such insurance.
Hold-Harmless Clause
(S)9.04a. Lessee agrees to indemnity and Hold Lessor harmless against any
and all claims, demands, damages costs and expenses, including reasonable
attorney's fees for the defense of such claims and demands, arising from the
conduct or management of Lessee's business on the leased premises, or its use of
the leased premises or from any breach on the part of Lessee of any conditions
of this lease, or from any act or negligence of Lessee, its agents, contractors,
employees, subtenants, concessionaires, or licensees in or about the leased
premises except to the extent attributable to the acts of negligence, gross
negligence or willful misconduct of Lessor. In case of any action or proceeding
brought against Lessor by reason of any such claim, Lessee, upon notice from
Lessor, agrees to defend the action or proceeding by counsel acceptable to
Lessor.
(S)9.04x. Xxxxxx agrees to indemnity and hold Lessee harmless against any
and all claims, demands, damages, costs, and expenses, including reasonable
attorney's fees for the defense of such claims and demands, arising from the
conduct or management of Lessor's business on the leased premises, or its use of
the leased premises or from any breach on the part of Lessor of any conditions
of this lease, or from any act or negligence of Lessor, its
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agents, contractors, employees, subtenants, concessionaires, or licensees in or
about the leased premises except to the extent attributable to the acts of
negligence, gross negligence or willful misconduct of Lessee. In case of any
action or proceeding brought against Lessor by reason of any such claim, Lessor,
upon notice from Lessee, agrees to defend the action or proceeding by counsel
acceptable to Lessee.
Waiver of Insurance Loss
(S)9.05. Lessor and Lessee release each other from any claims for loss or
damage to any person or property on the Premises which is caused by or which
results from risks insured against under insurance policies carried by Lessor or
Lessee and in force at the time at any such loss or damage. Provided, however,
the foregoing release shall not apply to losses or property damage in excess of
policy limits or to property losses or damages not covered by insurance due to a
deductible in policy.
Subrogation of Insurance
(S)9.06. Lessor and Lessee shall cause their respective insurance policies
to provide that the insurance company waive all right to recovery by way of
subrogation against either party in connection with any damage covered by the
policy. Neither Lessor nor Lessee shall be liable to the other for any damage
caused by fire or any of the risks insured against under any insurance policy
required by this lease. Provided, however, the foregoing waiver or subrogation
shall not apply to property losses or damages in excess of policy limits or to
losses or damages not covered by insurance due to a deductible in policy.
ARTICLE 10. DAMAGE OR DESTRUCTION OF PREMISES
Notice to Lessor
(S)10.01. If the leased premises or any structures or improvements on the
leased premises should be damaged or destroyed by fire, tornado, or other
casualty, Lessee shall
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give immediate written notice of the damage or destruction to Lessor, including
a description of the damage and, as far as known to Lessee, the cause of the
damage.
Total Destruction
10.02. If the leased premises should be totally destroyed by fire,
tornado, or other casualty not the fault of Lessee or any person in or about the
leased premises with the express or implied consent of Lessee, or if it should
be so damaged by such a cause that rebuilding or repairs cannot be reasonably
completed within sixty (60) working days, this lease shall terminate, and rent
shall be abated for the unexpired portion of this lease, effective as of the
date of written notification as provided in (S)10.01.
Partial Destruction
(S)10.03. If the building or other improvements on the leased premises
should be damaged by fire, tornado, or other casualty not the fault of Lessee or
any person in or about the leased premises with the express or implied consent
of Lessee but not to such an extent that rebuilding or repair cannot reasonably
be completed within sixty (60) working days, this lease shall not terminate
except as provided in subsections (a) and (b) of this section.
a. If the partial destruction of the leased premises occurs prior to the
final nine months of the lease term, Lessor shall, at its sole cost and
risk, proceed immediately to rebuild or repair the damaged buildings and
improvements to substantially the condition in which they existed prior to
such damage. If the leased premises are untenantable in whole or in part
following such damage, the rent payable during the period in which they are
untenantable shall be adjusted on a per square toot of roofed building area
based with an equitable adjustment for any additional loss of non-building
area. In the event that Lessor should fail to complete such rebuilding or
repairs within sixty (60) working days from the date of written
notification by Lessee to Lessor of the occurrence
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of the damage, Lessee may terminate this lease by written notification to
Lessor. Upon such notification, all rights and obligations under this lease
shall cease.
b. If partial destruction of the leased premises occurs in the final nine
(9) months of the lease term, Lessor may terminate this lease. If neither
Lessor nor Lessee elect to terminate the lease, Lessor may rebuild or
repair the premises and if the leased premises are untenantable in whole or
in part following such damage, Lessee may elect to terminate the lease or
to continue the lease with the rent for the remainder of the lease period
adjusted equitably.
ARTICLE 11. CONDEMNATION
Total Condemnation
(S)11.01. If during the term of this lease, any part of the leased premise
should be taken for any public or quasi-public use under any governmental law,
ordinance, or regulation, or by right of eminent domain, or should be sold to
the condemning authority under threat of condemnation, this lease shall
terminate, and the rent shall be abated during the unexpired portion of this
lease, effective as of the date of the taking of the premises by the condemning
authority.
Partial Condemnation
(S)11.02. If less than all, but more than twenty percent (20%), of the
leased premises is taken for any public or quasi-public use under any
governmental law, ordinance, or regulation, or by right of eminent domain, or
should be sold to the condemning authority under threat of condemnation, Lessee
may terminate the lease thereafter by giving written notice to Lessor after
possession of the condemned portion is taken by the entity exercising the power
of condemnation.
If the leased premises are partially condemned and Lessee fails to exercise
the option to terminate the lease under this section, or if less than twenty
percent (20%) of the leased
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premises are condemned, this lease shall not terminate, but Lessee may, at its
sole expense, restore and reconstruct the building and other improvements
situated on the leased premises to make them reasonably tenantable and suitable
for the uses for which the premises are leased. The fixed rent payable under
(S)2.01 of this lease shall be adjusted equitably during the unexpired portion
of this lease.
Condemnation Award
(S)11.03. Lessor and Lessee shall each be entitled to receive and retain
such separate awards, and portions of lump sum awards, as may be allocated to
their respective interests in any condemnation proceedings. The termination of
this lease shall not affect the rights of the respective parties to such awards.
ARTICLE 12. DEFAULT
Default By Lessee
(S)12.01. If Lessee shall allow the rent to be in arrears more than five
(5) days after written notice of such delinquency, or shall remain in default
under any other condition of this lease for a period of ten (10) days after
written notice from Lessor, Lessor may, without notice to Lessee, terminate this
lease, or in the alternative, Lessor may reenter and take possession of the
premises and remove all persons and property without being deemed guilty of any
manner of trespass and relet the premises, or any part of the premises, for all
or any part of the remainder of the lease term to a party satisfactory to
Lessor, and at such monthly rental as Lessor may with reasonable diligence be
able to secure. Should Lessor be unable to relet after reasonable efforts to do
so or, should such monthly rental be less than the rental Lessee was obligated
to pay under this lease, Lessee shall pay the expense of reletting plus the
amount of any deficiency in the rent to Lessor.
Default By Lessor
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(S)12.02. If Lessor defaults in the performance of any term, covenant or
condition required to be performed by it under this agreement, Lessee may elect
to do either one of the following:
a. After not less than ten (10) days' written notice to Lessor, Lessee may
remedy such default by any necessary action and, in connection with such
remedy, may pay expenses and employ counsel; all sums expended or
obligations incurred by Lessee in connection with remedying Lessor's
default shall be paid by Lessor to Lessee on demand and, on failure of such
reimbursement, Lessee may, in addition to any other right or remedy that
Lessee may have, deduct these costs and expenses from rent subsequently
becoming due under this lease.
b. Lessee may terminate this lease on giving at least ten (10) days'
written notice to Lessor of such intention. In the event Lessee elects
this option, the lease shall be terminated on the date designated in
Lessee's notice, unless Lessor has cured the default prior to expiration of
the ten day period.
Cumulative Remedies
(S)12.03. All rights and remedies of Lessor and Lessee under this Article
shall be cumulative, and none shall exclude any other right or remedy provided
by law, or by any other provision of this lease. All such rights and remedies
may be exercised and enforced concurrently and whenever, and as often, as
occasion for their exercise arises.
Waiver Of Breach
(S)12.04 A waiver by either Lessor or Lessee of a breach of this lease by
the other party does not constitute a continuing waiver or a waiver of any
subsequent breach of the lease.
ARTICLE 13. INSPECTION BY LESSOR
(S)13.01. Lessee shall permit Lessor and Lessor's agents, representatives,
and employees to enter into and on the leased premises at all reasonable times
for the purpose of
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inspection, maintenance, making repairs or alterations to the premises, or any
other purposes necessary to protect Lessor's interest in the leased premises or
to perform Lessor's duties under this lease.
ARTICLE 14. ASSIGNMENT AND SUBLEASE
Assignment and Subletting by Lessee
(S)14.01. Lessee may not sublet, assign, encumber, or otherwise transfer
this lease, or any right or interest in this lease, or in the leased premises or
the improvements on the leased premises, without the written consent of Lessor.
If Lessee sublets, assigns, encumbers, or otherwise transfers its rights or
interests in this lease or in the leased premises or the improvements on the
leased premises without the written consent of Lessor, Lessor may, at its
option, declare this lease terminated. In the event Lessor consents in writing
to an assignment, sublease, or other transfer of all or any of Lessee's rights
under this lease, the assignee or Sublessee must assume all of Lessee's
obligations under this lease, and Lessee shall remain liable for every
obligation under the lease. Lessor's consent under this section will not be
arbitrarily or unreasonably withheld.
(S)14.02. Lessor may assign or transfer any or all of its interests under
the terms of this lease.
ARTICLE 15. MISCELLANEOUS
Notices and Addresses
(S)15.01. All notices required under this lease must be given by certified
mail or registered mail, addressed to the proper party at the following
addresses:
LESSEE:
Xxxx Graphics, Inc.
P. 0. Xxx 000
Xxxxxx, Xxxxx 00000
LESSOR:
00
Xxxxxxx X. Xxxx
X.X. Xxx 0000-#000
Xxxxxx, XX 00000
(000) 000-0000
Either party may change the address to which notices are to be sent it by giving
the other party notice of the new address in the manner provided in this
section.
Parties Bound
(S)15.02. This agreement shall be binding upon and inure to the benefit
of, the parties to this lease and their respective heirs, executors,
administrators, legal representatives, successors, and assigns when permitted by
this agreement.
Texas Law To Apply
(S)15.03. This agreement shall be construed under, and in accordance with,
the laws of the State of Texas, and all obligations of the parties created by
this lease are performable in Xxxxxx County, Texas.
Legal Construction
(S)15.04. In case any one or more of the provisions contained in this
agreement shall for any reason be held by a court of competent jurisdiction to
be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision of the
agreement, and this agreement shall be construed as if the invalid, illegal, or
unenforceable provision had never been included in the agreement.
Prior Agreements Superseded
(S)15.06 This agreement constitutes the solo and only agreement of the
parties to the agreement and supersedes any prior understandings or written or
oral agreements between the parties respecting the subject matter of this
agreement.
Amendment
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(S)15.06. No amendment, modification or alteration of the terms of this
agreement shall be binding unless it is in writing, dated subsequent to the date
of this agreement, and duly executed by the parties to this agreement.
Rights and Remedies Cumulative
(S)15.07. The rights and remedies provided by this lease agreement are
cumulative, and the use of any one right or remedy by either party shall not
preclude or waive its rights to use any or all other remedies. These rights and
remedies are given in addition to any other rights the parties may have by law,
statute, ordinance, or otherwise.
Attorney's Fees And Costs
(S)15.08. If, as a result of a breach of this agreement by either party,
the other party employs an attorney or attorneys to enforce its rights under
this lease, then the breaching party agrees to pay the other party the
reasonable attorney's fees and costs incurred to enforce the lease.
Force Majeure
(S)16.09. Neither Lessor nor Lessee shall be required to perform any term,
condition, or covenant in this lease so long as performance is delayed or
prevented by force majeure, which shall mean acts of God, strikes, lockouts,
material or labor restrictions by any governmental authority, civil riots,
floods, and any other cause not reasonably within the control of Lessor or
Lessee and which by the exercise of due diligence Lessor or Lessee is unable,
wholly or in part, to prevent or overcome.
Time Of Essence
(S)16.10. Time is of the essence in this agreement.
The undersigned Lessor and Lessee execute this agreement on January 1,
1995, at Xxxxxx, Xxxxxx County, Texas.
LESSEE: LESSOR:
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Xxxx Graphics, Inc. Xxxxxxx X. Xxxx
By /s/ J. Xxxx Xxxxxxxx By /s/ Xxxxxxx X. Xxxx
------------------------------- ------------------------------
Its Treasurer and CFO
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