EXHIBIT 10.25
XXXXXXXXXXX COMPANY
COMMERCIAL LEASE AGREEMENT
XX Xxxx Industrial No. 3, Ltd., a Texas limited partnership Landlord
AND
XxxxXxxxxx.xxx, Inc., a Delaware corporation
Tenant
TABLE OF CONTENTS
-----------------
Page No.
--------
1. PREMISES, TERM, AND INITIAL IMPROVEMENTS................................................. 1
----------------------------------------
2. BASE RENT, SECURITY DEPOSIT AND ADDITIONAL RENT.......................................... 1
-----------------------------------------------
3. TAXES.................................................................................... 2
-----
4. LANDLORD'S MAINTENANCE................................................................... 3
----------------------
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.............................................. 3
-------------------------------------------
6. ALTERATIONS.............................................................................. 3
-----------
7. SIGNS.................................................................................... 4
-----
8. UTILITIES................................................................................ 4
---------
9. INSURANCE................................................................................ 4
---------
10. CASUALTY DAMAGE.......................................................................... 5
---------------
11. LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE......................... 5
----------------------------------------------------------------
12. USE...................................................................................... 5
---
13. INSPECTION............................................................................... 6
----------
14. ASSIGNMENT AND SUBLETTING................................................................ 6
-------------------------
15. CONDEMNATION............................................................................. 7
------------
16. SURRENDER OF PREMISES; HOLDING OVER...................................................... 7
-----------------------------------
17. QUIET ENJOYMENT.......................................................................... 8
---------------
18. EVENTS OF DEFAULT........................................................................ 8
-----------------
19. REMEDIES................................................................................. 8
--------
20. LANDLORD'S DEFAULT....................................................................... 9
------------------
21. MORTGAGES................................................................................ 9
---------
22. ENCUMBRANCES............................................................................. 10
------------
23. MISCELLANEOUS............................................................................ 10
-------------
24. NOTICES.................................................................................. 11
-------
25. HAZARDOUS WASTE.......................................................................... 11
---------------
26. LANDLORD'S LIEN.......................................................................... 12
---------------
27. SUBMISSION OF LEASE TO TENANT............................................................ 12
-----------------------------
i
LIST OF DEFINED TERMS
Page No.
30-day Appraisal Period.......................................... A-2
Affiliate........................................................ 10
Annual Operating Expense Statement............................... 2
Base Rent........................................................ 1
Building......................................................... 1
Building's Structure............................................. 3
Claimant......................................................... 9
Commencement Date................................................ 1
Determination.................................................... A-1
Determinations................................................... A-1
Effective Date................................................... B-1
Environmental Law................................................ 11
Event of Default................................................. 8
Fair Market Base Rent............................................ A-1
Final Plans...................................................... B-1
HVAC System...................................................... 3
Hazardous Substances............................................. 12
Indemnified Parties.............................................. 5
Initial Allowance................................................ B-2
Initial Improvements............................................. 1
Issuer........................................................... A-3
L.C.............................................................. A-3
Land............................................................. 1
Landlord......................................................... 1
Landlord's Determination......................................... A-1
Landlord's Mortgagee............................................. 9
Law.............................................................. 10
Laws............................................................. 10
Lease............................................................ 1
Loss............................................................. 5
Mortgage......................................................... 9
Occupancy Date................................................... A-1
Operating Expenses............................................... 2
Permitted Activities............................................. 11
Permitted Materials.............................................. 11
Permitted Transfer............................................... 6
Preliminary Plans................................................ B-1
Premises......................................................... 1
Primary Lease.................................................... 9
Project.......................................................... 1
Proportionate Share.............................................. 1
Punch List....................................................... 7
Renewal Request Notice........................................... A-1
Rent............................................................. 2
Rent Notice...................................................... A-1
Repair Period.................................................... 5
Roof Improvements................................................ A-2
Security Deposit................................................. 1
Substantial Completion........................................... B-2
Taking........................................................... 7
Taxes............................................................ 2
Tenant........................................................... 1
Tenant Parking Improvements...................................... B-1
Tenant's Determination........................................... A-1
Tenant's Notice.................................................. A-1
Tenant Party..................................................... 10
Term............................................................. 1
Termination Fee.................................................. A-3
Termination Option............................................... A-3
Third Appraiser.................................................. A-2
Transfer......................................................... 6
Truck Park....................................................... 2
UCC.............................................................. 12
Vacation Date.................................................... 7
ii
124,950 Square Feet
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
LEASE AGREEMENT
---------------
This Lease Agreement (this "Lease") is entered into by XX Xxxx Industrial
-----
No. 3, Ltd., a Texas limited partnership ("Landlord"), and XxxxXxxxxx.xxx, Inc.,
--------
a Delaware corporation ("Tenant").
------
1. PREMISES, TERM, AND INITIAL IMPROVEMENTS.
----------------------------------------
(a) Landlord leases to Tenant, and Tenant leases from Landlord, the
space depicted on the floor plan attached as Exhibit A-1 (the "Premises"), which
----------- --------
is part of the approximately 249,900 rentable square foot (as defined by
-------
Landlord's architect) building (the "Building") located on the real property
--------
described on Exhibit A (the "Land"), subject to the terms and conditions in this
--------- ----
Lease. If more than one building is now or hereafter on the Land, then all
references to "Building" shall collectively refer to all such buildings unless
the context otherwise requires. The Building and Land together comprise the
"Project". Landlord and Tenant stipulate that, as of the date of this Lease,
--------
the size of the Premises is deemed to be 124,950 rentable square feet, as
-------
defined by Landlord's architect and the size of the Building is 249,900 rentable
-------
square feet as defined by Landlord's architect, and Tenant's "Proportionate
-------------
Share" is 50.00%. The Proportionate Share shall be adjusted if the size of the
----- ------
Premises or the Building (including the addition of new buildings on the Land)
changes.
(b) The Lease term shall be one hundred and twenty (120) months,
----------------------------
beginning on April 1, 2000 (the "Commencement Date"), and ending one hundred and
----------------- ---------------
twenty (120) months thereafter (the "Term", which defined term shall include all
------------ ----
renewals and extensions of the Term); however, if the Commencement Date is not
the first day of a calendar month, then the Term shall end one hundred and
---------------
twenty (120) months after the first day of the first full calendar month of the
------------
Term.
(c) Tenant shall construct in the Premises and Truck Park the
improvements (the "Initial Improvements") described on the plans and
--------------------
specifications referenced on Exhibit B, and, by occupying the Premises, Tenant
---------
shall have accepted the Premises in its condition. Landlord agrees that as of
the Occupancy Date, the Building Structure is in good condition and repair and
conforms to and is in compliance with all applicable codes, and Tenant is not
liable for any latent defects or structural components, including but not
limited to the walls, roof, or foundation of the Building Structure, the
Premises (excluding any Initial Improvements to be performed by Tenant) or the
paving of the Truck Park.
2. BASE RENT, SECURITY DEPOSIT AND ADDITIONAL RENT.
-----------------------------------------------
(a) Tenant shall pay to Landlord "Base Rent", in advance, without
---------
demand, deduction or set off, equal to the following amounts for the following
periods of time:
Time Period Monthly Base Rent
----------- -----------------
Months 1 - 60 $44,877.88
Months 61 - 120 $49,563.50
The first monthly installment, plus the other monthly charges set forth in
Section 2.(c), shall be due on the date hereof; thereafter, monthly installments
of Base Rent shall be due on the first day of each calendar month following the
Commencement Date. If the Term begins on a day other than the first day of a
month or ends on a day other than the last day of a month, the Base Rent and
additional rent for such partial month shall be prorated.
(b) Beginning in month sixty-one (61) of the Lease, Tenant shall
deposit with Landlord on the date hereof $59,309.61 (the "Security Deposit"),
----------------
which shall be held by Landlord to secure Tenant's obligations under this Lease;
however, the Security Deposit is not an advance rental deposit or a measure of
Landlord's damages for an Event of Default (defined below). Landlord may use
any portion of the Security Deposit to satisfy Tenant's unperformed obligations
hereunder where such obligations are unperformed beyond any applicable cure
period, and after written notice to Tenant, without prejudice to any of
Landlord's other remedies. If so used, Tenant shall pay Landlord an amount that
will restore the Security Deposit to its original amount upon receipt of written
request. In connection with any waiver of a Tenant default or modification of
this Lease, Landlord may require that Tenant provide Landlord with an additional
amount to be held as part of the Security Deposit, in no event greater than
twice the then current total monthly rental amount. The Security Deposit shall
be Landlord's property. The unused portion of the Security Deposit will be
returned to Tenant within thirty (30) days after the end of the Term, provided
that Tenant has fully and timely performed its obligations hereunder throughout
the Term.
(c) Tenant shall pay, as additional rent its Proportionate Share of
all costs incurred in owning, operating and maintaining the Land and Building
and the facilities and services provided for the common use of Tenant and any
other tenants of the Building (collectively, "Operating Expenses"), including
------------------
the following items: (1) Taxes (defined
1
below) and the cost of any tax consultant employed to assist Landlord in
determining the fair tax valuation of the Building and Land; (2) the cost of all
utilities used in the Building which are not billed separately to a tenant of
the Building for above-Building-standard utility consumption; (3) the cost of
"all risk" property and casualty insurance for the Building (including but not
limited to the Premises) with commercially reasonable premiums; (4) the cost of
repairs, replacement, management fees and expenses, landscape maintenance and
replacement, security service (if provided), sewer service (if provided), trash
service (if provided),; (5) the cost of dues, assessments, and other charges
applicable to the Land payable to any property or community owner association
under restrictive covenants or deed restrictions to which the Premises and Truck
Park are subject; and (6) alterations, additions, and improvements made by
Landlord to comply with Law (defined in Section 23(a)). On the same day that
Base Rent is due, Tenant shall pay to Landlord an amount equal to 1/12 of
Landlord's estimate of Tenant's Proportionate Share of annual Operating
Expenses. The initial monthly payments are based upon Landlord's estimate of the
Operating Expenses for the year in question. Within ninety (90) days after the
end of each calendar year, Landlord shall furnish to Tenant a written statement
in reasonable detail reflecting the actual Operating Expenses for the calendar
year (as may be adjusted as provided herein) and calculating the amount due from
Tenant to Landlord or the amount of excess paid by Tenant (the "Annual Operating
----------------
Expense Statement"). If Tenant's total payments in respect of Operating
-----------------
Expenses for any year are less than Tenant's Proportionate Share of Operating
Expenses, Tenant shall pay the difference to Landlord within thirty (30) days
after Landlord's written request therefor; if such payments are more than
Tenant's Proportionate Share of Operating Expenses and Tenant is not in default
of this Lease, Landlord shall refund such amount to Tenant within thirty (30)
days after Landlord prepares such statement. In December of each year of the
Term, Landlord shall estimate the Operating Expenses for the following year and
shall provide coupons to Tenant for each month of the following year which
reflect monthly payments in the amount of 1/12 of the current Base Rent plus
1/12 of the estimated Operating Expenses for the following year. However,
notwithstanding Tenant's obligation to pay its proportionate share of the actual
Operating Expenses for any given calendar year or portion thereof and regardless
of Landlord's estimate of the following year's Operating Expenses, Tenant shall
not be required to escrow on a monthly basis an amount greater than 110% of the
prior year's actual Operating Expenses divided by 12. Operating Expenses shall
not include and no management fee is payable in respect of the following: (A)
any costs for interest, amortization, or other payments on loans to Landlord;
(B) expenses incurred in leasing or procuring tenants; (C) legal expenses other
than those incurred for the general benefit of the Building's tenants; (D)
allowances, concessions, and other costs of renovating or otherwise improving
space for occupants of the Building or vacant space in the Building; (E) federal
income taxes imposed on or measured by the income of Landlord from the operation
of the Building; (F) rents under ground leases; (G) costs incurred in selling,
syndicating, financing, mortgaging, or hypothecating any of Landlord's interests
in the Building; (H) costs recoverable from other tenants or third parties; (I)
capital costs not related to the Building; and (J) all costs paid directly by
Tenant to any third party. There shall be no duplication of costs for
reimbursements in calculating Operating Expenses. The amounts of the initial
monthly Base Rent and Tenant's Proportionate Share of Operating Expenses (and
the part thereof attributable to Taxes) are as follows:
Base Rent (Section 2.(a))............................ $44,877.88
Operating Expenses, excluding Taxes (Section 2.(c)).. $ 2,769.73
Ins. $.026 & OPE's $.24
Taxes (Sections 2.(c) and 3.(a))..................... $ 6,976.38
----------
Total initial monthly payment........................ $54,623.99
==========
(d) Tenant shall also pay, as additional rent billed on an annual
basis, all costs incurred for Taxes and maintenance on the truck parking lot on
the real property described in Exhibit A-2 (the "Truck Park").
----------
(e) If any payment required of Tenant under this Lease is not paid
within five (5) days of when due, Landlord may charge Tenant a fee equal to 5%
of the delinquent payment to reimburse Landlord for its cost and inconvenience
incurred as a consequence of Tenant's delinquency.
(f) All payments and reimbursements required to be made by Tenant
under this Lease shall constitute "Rent" (herein so called).
----
(g) Tenant has the right to audit the Annual Operating Expense
Statement, by written request to Landlord. Not later than thirty (30) days
after Landlord's receipt of such request, Landlord shall make available to
Tenant at Landlord's place of business during normal business hours all relevant
records and documentation substantiating Landlord's calculation. Such audit must
be completed within twelve (12) months following the year being audited. In the
event of a discrepancy between amounts payable and paid, the party owing the
amount shall make payment within thirty (30) days of such determination, and in
the event the amount paid by Tenant exceeds the amount actually payable by five
(5%) or more, Landlord shall pay Tenant's reasonable costs of conducting the
audit, not to exceed $1,000 per occurrence.
3. TAXES.
-----
(a) Landlord shall pay all taxes, assessments and governmental charges
whether federal, state, county, or municipal and whether they are imposed by
taxing or management districts or authorities presently existing or hereafter
created (collectively, "Taxes") that accrue against the Premises and Truck Park,
-----
the Land and the Building. If, during the Term, there is levied, assessed or
imposed on Landlord a capital levy or other tax directly on the rent or a
franchise tax, assessment, levy or charge measured by or based, in whole or in
part, upon rent, then all such taxes, assessments, levies or charges, or the
part thereof so measured or based, shall be included within the term "Taxes".
If the Building is occupied by more than one tenant and the cost of any
improvements constructed in the Premises is disproportionately higher than the
cost of improvements constructed in the premises of other tenants of the
Building, then
2
Landlord may require that Tenant pay the amount of Taxes attributable to such
improvements in addition to its Proportionate Share of other Taxes and shall
provide Tenant with copies of all relevant records and documentation
substantiating Landlord's calculation.
(b) Tenant shall (1) before delinquency pay all taxes levied or
assessed against any personal property, fixtures or alterations placed in the
Premises and Truck Park and (2) upon the written request of Landlord, deliver to
Landlord receipts from the applicable taxing authority or other evidence
acceptable to Landlord to verify that such taxes have been paid. If any such
taxes are levied or assessed against Landlord or Landlord's property and (A)
Landlord pays them or (B) the assessed value of Landlord's property is increased
thereby and Landlord pays the increased taxes, then Tenant shall pay to Landlord
such taxes within ten (10) business days after Landlord's written request
therefor. However, if Tenant informs Landlord in writing that Tenant has a bona
fide dispute with the applicable taxing authority concerning the taxes levied or
assessed Landlord shall not pay the taxes, provided Tenant diligently pursues
such dispute to resolution. In the event that the dispute is preventing the
closing of a sale and purchase or a refinance of the Building and/or Land then
upon written notice form Landlord, Tenant shall immediately place in escrow
funds sufficient to satisfy the taxes payable by Tenant.
4. LANDLORD'S MAINTENANCE.
----------------------
(a) This Lease is intended to be a net lease; accordingly, Landlord's
maintenance obligations are limited to the replacement of the Building's roof
and roof membrane and maintenance and if necessary, the replacement of the
foundation and structural members of the exterior walls (collectively, the
"Building's Structure") and the foundation of the Truck Park; however, Landlord
---------------------
shall not be responsible (1) for any such work until Tenant delivers to Landlord
written notice or Landlord has been otherwise notified of the need therefor or
(2) for alterations to the Building's Structure required by Law after the
Occupancy Date because of Tenant's use of the Premises and Truck Park (which
alterations shall be performed by Tenant). The Building's Structure does not
include skylights, windows, glass or plate glass, doors, special store fronts or
office entries, all of which shall be maintained by Tenant. Landlord's
liability for any defects, repairs, replacement or maintenance for which
Landlord is responsible hereunder shall be limited to the cost (including labor
and materials) of performing such work or replacement.
(b) Additionally, Landlord shall, at Tenant's expense, maintain the
parking areas, driveways, alleys and grounds surrounding the Premises and Truck
Park in a clean and sanitary condition, consistent with the current condition of
the grounds and the Building, normal wear and tear excepted, and consistent with
the operation of a first-class office/warehouse building, including prompt
maintenance, repairs and replacements of (1) any drill or spur tract servicing
the Premises and Truck Park, (2) the exterior of the Building (including
painting as may be reasonably required), (3) sprinkler systems and sewage lines
servicing the Building, and (4) any other items reasonably associated with the
foregoing. Tenant shall promptly notify Landlord of any work required to be
performed under this Section 4.(b), and Landlord shall not be responsible for
performing such work until Tenant delivers to Landlord such notice or Landlord
has been otherwise notified. All costs in performing the work described in this
Section 4.(b) shall be included in Operating Expenses.
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.
-------------------------------------------
(a) Tenant shall maintain all parts of the Premises and Truck Park
(except for maintenance work which Landlord is expressly responsible for under
Section 4.(a)) in good condition and promptly make all necessary repairs and
replacements to the Premises and Truck Park. Tenant shall repair and pay for
any damage caused by a Tenant Party (defined below) or caused by Tenant's
default hereunder.
(b) Tenant shall maintain the hot water equipment and the heating, air
conditioning, and ventilation equipment and system (the "HVAC System") in good
-----------
repair and condition and in accordance with Law and with such equipment
manufacturers' suggested operation/maintenance service program; such obligation
shall include replacement of all equipment necessary to maintain such equipment
and system in good working order. Within thirty (30) days after the
Commencement Date, Tenant shall enter into regularly scheduled preventive
maintenance/service contracts for such equipment, each in compliance with
Landlord's reasonable specifications and otherwise in form and substance and
with a contractor reasonably acceptable to Landlord, and deliver copies thereof
to Landlord. At least fourteen (14) days before the end of the Term, Tenant
shall deliver to Landlord a certificate from an engineer reasonably acceptable
to Landlord certifying that the hot water equipment and the HVAC System are then
in good repair and working order.
6. ALTERATIONS.
-----------
(a) Tenant may, at any time during the term of this Lease, make any
modification within the Premises, including but not limited to construction of
office space, at Tenant's sole cost and expense, provided such modifications are
non-structural in nature, and each such modification project does not cost in
excess of $50,000.00.
(b) Tenant may not make any modifications other than those described
above, without the prior written approval of Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed. The process for obtaining
Landlord approval of such modifications is the same as that set forth in Exhibit
B for the Initial Improvements. Tenant may erect shelves, bins, machinery and
trade fixtures provided that such items (1) do not alter the basic character of
the Premises and Truck Park or the Building; (2) do not overload or damage the
same; and (3) may be removed without damage to the Premises and Truck Park. In
connection with any such alteration, addition, or improvement, Tenant shall pay
to Landlord an administration fee, with such administration fee excluded from
the work outlined in Exhibit B pertaining to the Initial Improvements, on a
sliding scale as a percentage of all costs incurred for such work according to
the table below:
3
Cost of Work Fee Percentage
------------ --------------
$50,000 less than $100,000 5.0%
$100,000 less than $150,000 4.5%
$150,000 less than $200,000 4.0%
$200,000 less than $250,000 3.5%
$250,000 less than $300,000 3.0%
Greater than $300,000 2.5%
(c) In no event shall any modifications result in any increase in
base rent, so long as such modifications are at the sole cost and expense of
Tenant.
(d) All work performed for or on behalf of Tenant in the Premises or
Truck Park (including that relating to the installations, repair, replacement,
or removal of any item) shall be performed in accordance with Law and with
Landlord's specifications and requirements, in a good and workmanlike manner, as
so as not to damage or alter the Building's Structure, the Premises or Truck
Park.
(e) Tenant shall restore the Premises and Truck Park pursuant to and
in accordance with Section 16 of this Lease.
7. SIGNS. Tenant shall not place, install or attach any signage,
-----
decorations, advertising media, blinds, draperies, window treatments, bars, or
security installations to the Premises and Truck Park or the Building which
would be visible from the exterior of the Premises without Landlord's prior
written approval, which approval shall not be unreasonably withheld, conditioned
or delayed. Landlord shall provide Tenant with a copy of Landlord's signage
requirements and criteria on or before the Effective Date hereof and Tenant
shall have the right to its pro-rata share of exterior signage on the Premises.
Tenant shall repair, paint, and/or replace any portion of the Premises and Truck
Park or the Building damaged or altered as a result of its signage when it is
removed. Other than changes or modifications included in the Initial
Improvements and reflected on the Final Plans, Tenant shall not (a) make any
changes to the exterior of the Premises and Truck Park or the Building, (b)
install any exterior lights, decorations, balloons, flags, pennants, banners or
paintings, or (c) erect or install any signs, windows or door lettering, decals,
window or storefront stickers, placards, decorations or advertising media of any
type that is visible from the exterior of the Premises and Truck Park without
Landlord's prior written consent which consent shall not be unreasonably
withheld, conditioned or delayed. Landlord shall notify Tenant of whether it
consents to any sign within ten (10) business days after Tenant has provided
detailed, to-scale drawings thereof specifying design, material composition,
color scheme, and method of installation,. If Landlord fails to respond within
said ten (10) business days, the proposed signage shall be deemed approved by
Landlord.
8. UTILITIES. Tenant shall obtain and pay for all water, gas,
----------
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises and Truck Park, together with any taxes,
penalties, surcharges, maintenance charges, and the like pertaining to the
Tenant's use of the Premises and Truck Park. Landlord may, at Tenant's expense,
separately meter and xxxx Tenant directly for its use of any such utility
service, in which case, the amount separately billed to Tenant for Building-
standard utility service shall not be duplicated in Tenant's obligation to pay
additional rent under Section 2.(c) however, Tenant shall be required as part of
its performing the Initial Improvements to obtain and pay all costs to
separately meter any and all electricity and gas utility service required to
service the Premises and Truck Park. Landlord shall not be liable for any
interruption or failure of utility service to the Premises and Truck Park. All
amounts due from Tenant under this Section 8 shall be payable within thirty (30)
days after Landlord's written request therefor.
9. INSURANCE. Tenant shall maintain (a) workers' compensation
---------
insurance (with a waiver of subrogation endorsement reasonably acceptable to
Landlord) and commercial general liability insurance (with contractual liability
endorsement), including personal injury and property damage in the amount of
$1,000,000 per occurrence combined single limit for personal injuries and death
of persons and property damage occurring in or about the Premises and Truck
Park, plus umbrella coverage of at least $2,000,000 per occurrence, (b) fire and
extended coverage insurance covering (1) the replacement cost of all
alterations, additions, partitions and improvements installed in the Premises
and Truck Park by or on behalf of a Tenant Party, (2) the replacement cost of
all of Tenant's personal property in the Premises and Truck Park, and (3)
business interruption in the event of an insured peril damaging the Premises and
Truck Park, and (c) such other insurance as Landlord may reasonably require
after written notice. Such policies shall (A) name Landlord, Landlord's agents,
and their respective Affiliates (defined below), as additional insureds (and as
loss payees on the fire and extended coverage insurance), (B) be issued by an
insurance company with a minimum rating of A10, (C) provide that such insurance
may not be cancelled unless 30-days' prior written notice is first given to
Landlord, (D) certificates in relation thereto be delivered to Landlord by
Tenant before the Commencement Date and at least 15 days before each renewal
thereof, and (E) provide primary coverage to Landlord when any policy issued to
Landlord is similar or duplicate in coverage, in which case Landlord's policy
shall be excess over Tenant's policies.
Landlord shall maintain fire and extended coverage insurance covering the
Building and the Land for the then current full replacement cost of thereof,
with a maximum deductible of $25,000.00, and shall provide Tenant with evidence
of such insurance coverage.
10. CASUALTY DAMAGE. Tenant immediately shall give written notice to
---------------
Landlord of any reasonably visible damage to the Premises and Truck Park or the
Building.
4
(a) If the Premises, the Truck Park or the Building are totally
destroyed by an insured peril, or so damaged by an insured peril that, in
Landlord's reasonable estimation, such estimation to be made and communicated to
Tenant in writing within thirty (30) days of such damage, rebuilding or repairs
cannot be substantially completed within 180 days after the date of Landlord's
actual knowledge of such damage, then either Landlord or (if a Tenant Party did
not cause such damage) Tenant may terminate this Lease by delivering to the
other written notice thereof within 30 days after such damage, in which case,
the rent shall be prorated for the unexpired portion of this Lease, effective
upon the date such damage occurred and any unearned rent refunded to Tenant
within thirty (30) days of Tenant's notice of intent to terminate the Lease.
Time is of the essence with respect to the delivery of such notices.
(b) Subject to Section 10.(c), if this Lease is not terminated under
Section 10.(a), then Landlord shall restore the Premises and Truck Park to
substantially its previous condition, except that Landlord shall not be required
to rebuild, repair or replace any part of the partitions, fixtures, additions
and other improvements or personal property required to be covered by Tenant's
insurance under Section 9. If the Premises and Truck Park are untenantable, in
whole or in part, during the period beginning on the date such damage occurred
and ending on the date of substantial completion of Landlord's repair or
restoration work (the "Repair Period"), then the rent for such period shall be
-------------
reduced to such extent as may be fair and reasonable under the circumstances and
the Term shall be extended by the number of days in the Repair Period.
(c) If the Premises and Truck Park are destroyed or substantially
damaged by any peril not covered by the insurance maintained by Landlord or any
Landlord's Mortgagee (defined below) requires that insurance proceeds be applied
to the indebtedness secured by its Mortgage (defined below) or to the Primary
Lease (defined below) obligations and in either case Landlord elects not to
rebuild or repair, Landlord may terminate this Lease by delivering written
notice of termination to Tenant within 30 days after such destruction or damage
or such requirement is made known by any such Landlord's Mortgagee, Landlord
shall give Tenant written notice immediately upon Landlord becoming aware that
the peril is not covered by Landlord's insurance or that Landlord's Mortgagee
has made such requirement, as applicable, whereupon all rights and obligations
hereunder shall cease and terminate, except for (i) any liabilities of Tenant
which accrued before this Lease is terminated and (ii) Landlord's obligation to
return to Tenant any unearned rent and any Security Deposit.
11. LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE.
----------------------------------------------------------------
(a) Subject to Section 11.(b), Tenant shall indemnify, defend, and
hold harmless Landlord, its successors, assigns, agents, employees, contractors,
partners, directors, officers and affiliates (collectively, the "Indemnified
-----------
Parties") from and against all fines, suits, losses, costs, liabilities, claims,
-------
demands, actions and judgments of every kind or character (1) arising from
Tenant's failure to perform its covenants hereunder, (2) recovered from or
asserted against any of the Indemnified Parties on account of any Loss (defined
below) to the extent that any such Loss may be incident to, arise out of, or be
caused, either proximately or remotely, wholly or in part, by a Tenant Party or
any other person entering upon the Premises and Truck Park under or with a
Tenant Party's express or implied invitation or permission, (3) arising from or
out of the occupancy or use by a Tenant Party or arising from or out of any
occurrence in the Premises and Truck Park, or (4) suffered by, recovered from or
asserted against any of the Indemnified Parties by the employees, agents,
contractors, or invitees of Tenant or its subtenants or assignees. However,
such indemnification of the Indemnified Parties by Tenant shall not be
applicable if such loss, damage, or injury is caused by the gross negligence or
willful misconduct of Landlord or any Indemnified Party.
(b) Landlord shall not be liable to Tenant or those claiming by,
through, or under Tenant for any injury to or death of any person or persons or
the damage to or theft, destruction, loss, or loss of use of any property or
inconvenience (a "Loss") caused by casualty, theft, fire, third parties, or any
----
other matter (including Losses arising through repair or alteration of any part
of the Building, or failure to make repairs, or from any other cause),
regardless of whether the negligence of either party caused such Loss in whole
or in part. Landlord and Tenant each waives any claim it might have against the
other for any damage to or theft, destruction, loss, or loss of use of any
property, to the extent the same is insured against under any insurance policy
maintained by it that covers the Building, the Premises and Truck Park,
Landlord's or Tenant's fixtures, personal property, leasehold improvements, or
business, or is required to be insured against by the waiving party under the
terms hereof, regardless of whether the negligence or fault of the other party
caused such loss and regardless of whether the party elected to self-insure;
however, Landlord's waiver shall not apply to any deductible amounts maintained
by Landlord under its insurance. Each party shall cause its insurance carrier
to endorse all applicable policies waiving the carrier's rights of recovery
under subrogation or otherwise against the other party.
12 USE.
---
(a) The Premises and Truck Park shall be used only for receiving,
storing, shipping and selling products, materials and merchandise made or
distributed by Tenant and for such other lawful purposes as may be incidental
thereto, any such other lawful purpose being subject to Landlord's approval
which shall not be unreasonably withheld or delayed ; however, no retail sales
may be made directly from the Premises to the general public. Tenant shall not
use the Premises and Truck Park to receive, store or handle any product,
material or merchandise that is explosive or highly inflammable or hazardous
excluding Permitted Materials hereinafter defined below. Outside storage is
prohibited. Tenant shall be solely responsible for complying with all Laws
applicable to the use, occupancy, and condition of the Premises and Truck Park.
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
light, noise or vibrations to emanate from the Premises and Truck Park; nor take
any other action that would constitute a nuisance or would disturb, unreasonably
interfere with, or endanger Landlord or any other person; nor permit the
Premises and Truck Park to be used for any purpose or in any manner that would
(1) void the insurance thereon, (2) unreasonably increase the insurance risk,
5
or (3) cause the disallowance of any sprinkler credits, however, Landlord agrees
that Tenant's planned use is not a breach of this provision. Tenant shall pay to
Landlord on demand any increase in the cost of any insurance on the Premises and
Truck Park or the Building incurred by Landlord, which is caused by Tenant's use
of the Premises and Truck Park or because Tenant vacates the Premises and Truck
Park prior to the expiration of this Lease.
(b) Tenant and its employees and invitees shall have the non-exclusive
right to use, in common with others, any parking areas associated with the
Premises and Truck Park which Landlord has designated for such use, subject to
(1) such reasonable rules and regulations as Landlord may promulgate from time
to time and (2) rights of ingress and egress of other tenants and their
employees, agents and invitees. Landlord shall not be responsible for enforcing
Tenant's parking rights against third parties but shall use reasonable efforts
to coordinate and/or mitigate parking disputes with other tenants that may arise
from time to time. Notwithstanding the foregoing, Landlord agrees not to
enforce rules and regulations, as to this Tenant, in a manner that is more
restrictive than to other tenants in the Building.
13 INSPECTION. Landlord and Landlord's agents and representatives may,
----------
upon twenty-four (24) hour prior notice, enter the Premises and Truck Park
during business hours to inspect the Premises and Truck Park; to make such
repairs as may be required or permitted under this Lease; to perform any
unperformed obligations of Tenant hereunder; and to show the Premises and Truck
Park to prospective purchasers, mortgagees, ground lessors, and (during the last
12 months of the Term) tenants. During the last 12 months of the Term, Landlord
may erect a sign on the Premises and Truck Park indicating that the Premises and
Truck Park are available.
14 ASSIGNMENT AND SUBLETTING.
-------------------------
(a) Tenant shall not, without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned or delayed, (1)
advertise that any portion of the Premises and Truck Park is available for lease
or cause or allow any such advertisement, (2) assign, transfer, or encumber this
Lease or any estate or interest herein, whether directly or by operation of law,
(3) permit any other entity to become Tenant hereunder by merger, consolidation,
or other reorganization, (4) if Tenant is an entity other than a corporation
whose stock is publicly traded, permit the transfer of an ownership interest in
Tenant so as to result in a change in the current control of Tenant, (5) sublet
any portion of the Premises and Truck Park, (6) grant any license, concession,
or other right of occupancy of any portion of the Premises and Truck Park, or
(7) permit the use of the Premises and Truck Park by any parties other than
Tenant (any of the events listed in Sections 14.(a)(2) through 14.(a)(7) being a
"Transfer"). If Tenant requests Landlord's consent to a Transfer, then Tenant
--------
shall provide Landlord with a written description of all terms and conditions of
the proposed Transfer, copies of the proposed documentation, and the following
information about the proposed transferee: name and address; reasonably
satisfactory information about its business and business history; its proposed
use of the Premises and Truck Park; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness and character. Landlord shall reply
to Tenant within ten (10) business days of such receipt by Landlord of such
submission, otherwise Landlord is deemed to have approved the proposed Transfer.
Tenant shall reimburse Landlord for its reasonable attorneys' fees and other
expenses incurred in connection with considering any request for its consent to
a Transfer to a maximum of one thousand and 00/100 ($1,000.00). If Landlord
consents to a proposed Transfer, then the proposed transferee shall deliver to
Landlord a written agreement whereby it expressly assumes the Tenant's
obligations hereunder (however, any transferee of less than all of the space in
the Premises and Truck Park shall be liable only for obligations under this
Lease that are properly allocable to the space subject to the Transfer, and only
to the extent of the rent it has agreed to pay Tenant therefor) and, in the case
of an assignment and subletting, Landlord's consent to a Transfer shall not
release Tenant from performing its obligations under this Lease, but rather
Tenant and its transferee shall be jointly and severally liable therefor.
Landlord's consent to any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. If an Event of Default remains uncured beyond any
applicable cure periods while the Premises and Truck Park or any part thereof
are subject to a Transfer, then Landlord, in addition to its other remedies, may
collect directly from such transferee all rents becoming due to Tenant and apply
such rents against Tenant's rent obligations after written notice from Landlord
to Tenant. Tenant authorizes its transferees to make payments of rent directly
to Landlord upon receipt of notice from Landlord to do so.
(b) Permitted Transfers. Notwithstanding anything to the contrary
herein, Tenant shall be permitted, subject to the limitations concerning the
continuing use of the Premises and Truck Park as provided below, to assign its
rights or sublet portions of the Premises and Truck Park as follows, so long as
any assignee or sublessee shall have a minimum net worth of $500 million and
(the following being deemed a "Permitted Transfer"): (a) any entity resulting
------------------
from a merger or consolidation with Tenant; (b) any subsidiary or affiliate of
Tenant; (c) any sale of common stock through an Initial Public Offering or
subsequent offer or (d) any entity acquiring all or substantially all of the
assets of Tenant. Tenant shall provide Landlord with prior notice of its intent
of any such assignment or sublease. A Permitted Transfer of all or any portion
of the Premises and Truck Park or this Lease shall not release Tenant from
performing its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor.
(c) In the event any such assignment or subletting represents fifty
percent (50%) or more of the Premises or Truck Park and is for the remaining
Term of the Lease, Landlord may, within 30 days after submission of Tenant's
written request for Landlord's consent to a Transfer, cancel this Lease (or, as
to a subletting or assignment, cancel as to the portion of the Premises and
Truck Park proposed to be sublet or assigned) as of the date the proposed
Transfer was to be effective. If Landlord cancels this Lease as to any portion
of the Premises and Truck Park, then this Lease shall cease for such portion of
the Premises and Truck Park and Tenant shall pay to Landlord all rent accrued
through the cancellation date relating to the portion of the Premises and Truck
Park covered by the proposed Transfer. Thereafter, Landlord may lease such
portion of the Premises and Truck Park to the prospective transferee (or to any
other person) without liability to Tenant.
6
(d) Tenant hereby assigns, transfers and conveys seventy-five percent
(75%) of the total consideration received by Tenant under any Transfer, which
are in excess of the rents payable by Tenant under this Lease, less reasonable
costs associated with any tenant improvements, market commissions and reasonable
attorney's fees, and Tenant shall hold such amounts in trust for Landlord and
pay them to Landlord within ten days after receipt.
15 CONDEMNATION. If the Premises and Truck Park are subject to a taking
------------
for any public or quasi-public use by right of eminent domain or private
purchase in lieu thereof (a "Taking"), and the Taking renders the remainder of
------
the Premises and Truck Park untenantable for the purpose for which they were
leased to Tenant, either party may terminate this Lease by delivering to the
other written notice thereof within 30 days after the Taking, in which case rent
shall be prorated for the unexpired portion of the Term, effective on the date
of such Taking and Landlord shall return any unearned rent within thirty (30)
days of termination. If the Premises and Truck Park are subject to a Taking but
the Taking does not render the remainder of the Premises and Truck Park
untenantable for the purpose for which they were leased to Tenant, then neither
party may terminate this Lease, but the rent payable during the unexpired
portion of the Term shall be reduced to such extent as may be fair and
reasonable under the circumstances. If a Taking occurs, all proceeds shall
belong to and be paid to Landlord, and Tenant shall not be entitled to any
portion thereof except that Tenant shall have all rights permitted under the
laws of the State of Texas to appear, claim and prove in proceedings relative to
such Taking (i) the value of any fixtures, furnishings, and other personal
property which are taken but which under the terms of this Lease, Tenant is
permitted to remove at the end of the Term, (ii) the unamortized cost (such
costs having been amortized on a straight line basis over the Term excluding any
renewal terms) of Tenant's leasehold improvements which are taken that Tenant is
not permitted to remove at the end of the Term and which were installed solely
at Tenant's expense (i.e., not made or paid for by Landlord from the
Construction Allowance or otherwise), and (iii) relocation and moving expenses,
but not the value of Tenant's leasehold estate created by this Lease and only so
long as such claims in no way diminish the award Landlord is entitled to from
the condemning authority as provided hereunder.
16 SURRENDER OF PREMISES; HOLDING OVER.
-----------------------------------
(a) No act by Landlord shall be an acceptance of a surrender of the
Premises and Truck Park, and no agreement to accept a surrender of the Premises
and Truck Park shall be valid unless it is in writing and signed by Landlord.
(b) Prior to the date of the expiration of this Lease or when Tenant
notifies Landlord in writing of its intention to vacate the Premises and Truck
Park at lease sixty (60) days before Tenant will vacate the Premises and Truck
Park; such notice shall specify the date on which Tenant intends to vacate the
Premises and Truck Park (such date, the "Vacation Date"), the parties shall
-------------
follow the following process for the surrender of the Premises and Truck Park:
(i) at least thirty (30) days prior to the Vacation Date, Tenant shall arrange
to meet with Landlord for a joint inspection of the Premises and Truck Park;
(ii) during or immediately after such inspection, Landlord and Tenant shall
prepare a list of items of work (the "Punch List") that Tenant must perform on
----------
or before the Vacation Date, such work to be consistent with the parties'
respective maintenance and repair obligations set forth in this Lease, including
but not limited to (1) Tenant delivering to Landlord the Premises and Truck Park
with all improvements located thereon in good repair and condition, reasonable
wear and tear (subject however to Tenant's maintenance obligations) excepted,
and with the HVAC System and hot water equipment, light and light fixtures
(including ballasts), and overhead doors and related equipment in good working
order, (2) deliver to Landlord all keys to the Premises and Truck Park, and (3)
remove all signage placed on the Premises and Truck Park, the Building, or the
Land by or at Tenant's request, and consistent with the provisions of this Lease
concerning the ownership of alterations, modifications, fixtures, trade
fixtures, furniture and; (iii) on or before the Vacation Date, Tenant shall
perform the work set forth in the Punch List; (iv) if Tenant fails to arrange
for such inspection, then Landlord may conduct such inspection in accordance
with the provisions of this Lease, and Landlord's determination of the work
Tenant is required to perform before the Vacation Date shall be conclusive; (v)
if Tenant fails to perform such work by the expiration of the Vacation Date,
then Landlord may perform such work at Tenant's cost, and Tenant shall pay all
costs incurred by Landlord in performing such work within ten (10) days after
Landlord's request therefor.
(c) All work required of Tenant under this Section 16 shall be
coordinated with Landlord and be performed in a good and workmanlike manner, in
accordance with all Laws, and so as not to damage the Building or unreasonably
interfere with other tenants' use of their premises. Tenant shall, at its sole
cost and expense, repair all damage caused by work performed by Tenant pursuant
to the Section 16.
(d) Subject to any specific agreement between the parties to the
contrary, or as otherwise set forth in this Lease, Tenant shall be required to
remove any alterations, additions, or other improvements, including but not
limited to cabling and wiring, from the Premises and Truck Park.
(e) If Tenant fails to vacate the Premises and Truck Park at the end
of the Term, then Tenant shall be a tenant at will and Tenant shall pay, in
addition to the other rent due hereunder, a daily base rental equal to one
hundred and fifty percent (150%) of the daily Base Rent payable during the last
month of the Term. Additionally, Tenant shall defend, indemnify, and hold
harmless Landlord from any damage, liability and expense (including attorneys'
fees and expenses) incurred because of such holding over. No payments of money
by Tenant to Landlord after the Term shall reinstate, continue or extend the
Term, and no extension of this Term shall be valid unless it is in writing and
signed by Landlord and Tenant.
7
17 QUIET ENJOYMENT. Provided an Event of Default has not occurred under
---------------
this Lease, Tenant shall peaceably and quietly hold and enjoy the Premises and
Truck Park for the Term, without hindrance from Landlord or any party claiming
by, through, or under Landlord, but not otherwise.
18 EVENTS OF DEFAULT. Each of the following events shall constitute an
------------------
"Event of Default" under this Lease:
----------------
(a) Tenant fails to pay any rent when due or any payment or
reimbursement required under any other lease with Landlord when due, and in
either case such failure continues for a period of five (5) days after written
notice that such payment was due.
(b) The filing of a petition by or against Tenant or any guarantor of
Tenant's obligations hereunder (1) in any bankruptcy or other insolvency
proceeding; (2) seeking any relief under any debtor relief Law; (3) for the
appointment of a liquidator, receiver, trustee, custodian, or similar official
for all or substantially all of Tenant's property or for Tenant's interest in
this Lease; or (4) for reorganization or modification of Tenant's capital
structure (however, if any such petition is filed against Tenant, then the
filing of such petition shall not constitute an Event of Default, unless it is
not dismissed within 45 days after the filing thereof).
(c) Tenant fails to discharge or bond over any lien placed upon the
Premises and Truck Park in violation of Section 22 within five (5) days after
written notice of any such lien or encumbrance is filed against the Premises
and Truck Park.
(d) Tenant fails to comply with any term, provision or covenant of
this Lease (other than those listed in this Section 18), and such failure
continues for twenty (20) days after written notice thereof to Tenant. With
respect to a failure of a non-monetary term, provision, or covenant, if such
failure cannot be cured with such twenty (20) day period and Tenant begins to
cure such failure within such twenty (20) day period and thereafter diligently
pursues such cure to completion, such failure shall not be an Event of Default.
19 REMEDIES.
--------
(a) Upon any Event of Default, Landlord may, at the expiration of all
applicable cure periods and written notice to Tenant, in addition to all other
rights and remedies afforded Landlord hereunder or by Law, take any of the
following actions:
(1) Terminate this Lease by giving Tenant written notice thereof,
in which event, Tenant shall pay to Landlord the sum of (A) all rent
accrued hereunder through the date of termination, (B) all amounts due
under Section 19.(b), and (C) an amount equal to (i) the total rent that
Tenant would have been required to pay for the remainder of the Term
discounted to present value at a per annum rate equal to the "Prime Rate"
as published on the date this Lease is terminated by The Wall Street
Journal, Southwest Edition, in its listing of "Money Rates", minus (ii) the
then present fair rental value of the Premises and Truck Park for such
period, similarly discounted; or
(2) Terminate Tenant's right to possess the Premises and Truck
Park without terminating this Lease by giving written notice thereof to
Tenant, in which event Tenant shall pay to Landlord (A) all rent and other
amounts accrued hereunder to the date of termination of possession, (B) all
amounts due from time to time under Section 19.(b), and (C) all rent and
other sums required hereunder to be paid by Tenant during the remainder of
the Term, diminished by any net sums thereafter received by Landlord
through reletting the Premises and Truck Park during such period; however,
Landlord shall not be obligated to relet the Premises and Truck Park and
shall not be liable for, nor shall Tenant's obligations hereunder be
diminished because of, Landlord's failure to relet the Premises and Truck
Park or to collect rent due for a reletting. Tenant shall not be entitled
to the excess of any consideration obtained by reletting over the rent due
hereunder. Reentry by Landlord in the Premises and Truck Park shall not
affect Tenant's obligations hereunder for the unexpired Term; rather,
Landlord may, from time to time, bring action against Tenant to collect
amounts due by Tenant, without the necessity of Landlord's waiting until
the expiration of the Term. Unless Landlord delivers written notice to
Tenant expressly stating that it has elected to terminate this Lease, all
actions taken by Landlord to exclude or dispossess Tenant of the Premises
and Truck Park shall be deemed to be taken under this Section 19.(a)(2).
If Landlord elects to proceed under this Section 19.(a)(2), it may at any
time elect to terminate this Lease under Section 19.(a)(1).
Additionally, without notice, Landlord may alter locks or other security devices
at the Premises and Truck Park to deprive Tenant of access thereto, and Landlord
shall not be required to provide a new key or right of access to Tenant.
(b) Tenant shall pay to Landlord all costs incurred by Landlord
(including court costs and reasonable attorneys' fees and expenses) in (1)
obtaining possession of the Premises and Truck Park, (2) removing and storing
Tenant's or any other occupant's property, (3) repairing, restoring, altering,
remodeling, or otherwise putting the Premises and Truck Park into condition
acceptable to a new tenant, (4) if Tenant is dispossessed of the Premises and
Truck Park and this Lease is not terminated, reletting all or any part of the
Premises and Truck Park (including brokerage commissions, cost of tenant finish
work, and other costs incidental to such reletting), (5) performing Tenant's
obligations which Tenant failed to perform, and (6) enforcing, or advising
Landlord of, its rights, remedies, and recourses. Landlord's acceptance of rent
following an Event of Default shall not waive Landlord's rights regarding such
Event of Default. Landlord's receipt of rent with knowledge of any default by
Tenant hereunder shall not be a waiver of such default, and no
8
waiver by Landlord of any provision of this Lease shall be deemed to have been
made unless set forth in writing and signed by Landlord. No waiver by Landlord
of any violation or breach of any of the terms contained herein shall waive
Landlord's rights regarding any future violation of such term or violation of
any other term. If Landlord repossesses the Premises and Truck Park pursuant to
the authority herein granted, then Landlord shall have the right to (A) keep in
place and use or (B) remove and store, at Tenant's expense, all of the
furniture, fixtures, equipment and other property in the Premises and Truck
Park, including that which is owned by or leased to Tenant at all times before
any foreclosure thereon by Landlord or repossession thereof by any lessor
thereof or third party having a lien thereon. Landlord may relinquish possession
of all or any portion of such furniture, fixtures, equipment and other property
to any person (a "Claimant") who presents to Landlord a copy of any
--------
instrument represented by Claimant to have been executed by Tenant (or any
predecessor of Tenant) granting Claimant the right under various circumstances
to take possession of such furniture, fixtures, equipment or other property,
without the necessity on the part of Landlord to inquire into the authenticity
or legality of the instrument. Landlord may, at its option and without
prejudice to or waiver of any rights it may have, (i) escort Tenant to the
Premises and Truck Park to retrieve any personal belongings of Tenant and/or its
employees not covered by the Landlord's statutory lien or the security interest
described in Section 26 or (ii) obtain a list from Tenant of the personal
property of Tenant and/or its employees that is not covered by the Landlord's
statutory lien or the security interest described in Section 26, and make such
property available to Tenant and/or Tenant's employees; however, Tenant first
shall pay in cash all costs and estimated expenses to be incurred in connection
with the removal of such property and making it available. The rights of
Landlord herein stated are in addition to any and all other rights that Landlord
has or may hereafter have at law or in equity, and Tenant agrees that the rights
herein granted Landlord are commercially reasonable.
(c) Notwithstanding any provision of this Section 19 to the contrary,
Landlord shall take reasonable steps to mitigate its damages.
20 LANDLORD'S DEFAULT.
------------------
(a) Notice and Cure. If Landlord should fail to perform or observe
----------------
any covenant, term, provision or condition of this Lease and such default should
continue beyond a period of ten (10) days as to a monetary default or thirty
(30) days (or such longer period as is reasonably necessary to remedy such
default, provided Landlord shall diligently pursue such remedy until such
default is cured) as to a non-monetary default, after in each instance written
notice thereof is given by Tenant to Landlord and Landlord's Mortgagee, then, in
any such event Tenant shall have the right (but no obligation) to cure the
default, and Landlord shall reimburse Tenant for all reasonable sums expended in
so curing said default. Tenant specifically agrees that Landlord's Mortgagee
may enter the Premises upon reasonable notice to Tenant to cure any such default
and that the cure of any default by Landlord's Mortgagee shall be deemed a cure
by Landlord under this Lease.
(b) Set-off. If Tenant obtains a judgment against Landlord or any
--------
assignee for any default by Landlord under this Lease and (i) Tenant provided
Landlord's Mortgagee notice and opportunity to cure as described in Section
20(a) above, (ii) said judgment is final and all rights of appeal have been
exercised or have expired, and (iii) such judgment remains unsatisfied upon
thirty (30) days written notice thereof to Landlord's Mortgagee, Tenant may set
off such judgment against Rent.
21 MORTGAGES.
---------
(a) This Lease shall be subordinate to any deed of trust, mortgage or
other security instrument (a "Mortgage"), and any ground lease, master lease, or
--------
primary lease (a "Primary Lease") that now or hereafter covers any portion of
-------------
the Premises and Truck Park (the mortgagee under any Mortgage or the lessor
under any Primary Lease is referred to herein as "Landlord's Mortgagee"), and to
--------------------
increases, renewals, modifications, consolidations, replacements, and extensions
thereof. However, any Landlord's Mortgagee may elect to subordinate its
Mortgage or Primary Lease (as the case may be) to this Lease by delivering
written notice thereof to Tenant. The provisions of this Section 21 shall be
self-operative, and no further instrument shall be required to effect such
subordination; however, Tenant shall from time to time within ten days after
request therefor, execute any instruments that may be required by any Landlord's
Mortgagee to evidence the subordination of this Lease to any such Mortgage or
Primary Lease. If Tenant fails to execute the same within such ten-day period,
Tenant is deemed to have agreed to the terms therein.
(b) Tenant shall attorn to any party succeeding to Landlord's interest
in the Premises and Truck Park, whether by purchase, foreclosure, deed in lieu
of foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements confirming such attornment as
such party may reasonably request. Tenant shall not seek to enforce any remedy
it may have for any default on the part of Landlord without first giving written
notice by certified mail, return receipt requested, specifying the default in
reasonable detail to any Landlord's Mortgagee whose address has been given to
Tenant, pursuant to the Notice provisions, and affording such Landlord's
Mortgagee a reasonable opportunity to perform Landlord's obligations hereunder,
as provided in Section 20 (a) above.
(c) Notwithstanding any such attornment or subordination of a Mortgage
or Primary Lease to this Lease, the Landlord's Mortgagee shall not be liable for
any acts of any previous landlord, shall not be obligated to install the Initial
Improvements, and shall not be bound by any amendment, dated and effective after
the date Tenant received notice of such Landlord's Mortgagee, to which it did
not consent in writing nor any payment of rent made more than one month in
advance.
(d) Tenant's obligations hereunder are conditional upon all parties
hereto entering into a Subordination, Attornment, and Non-Disturbance Agreement,
substantially in the form attached herewith as Exhibit "C".
9
22 ENCUMBRANCES. Tenant has no authority, express or implied, to create
------------
or place any lien or encumbrance of any kind or nature whatsoever upon, or in
any manner to bind Landlord's property or the interest of Landlord or Tenant in
the Premises and Truck Park or to charge the rent for any claim in favor of any
person dealing with Tenant, including those who may furnish materials or perform
labor for any construction or repairs. Tenant shall pay or cause to be paid all
sums due for any labor performed or materials furnished in connection with any
work performed on the Premises and Truck Park by or at the request of Tenant. If
Tenant becomes aware, Tenant shall give Landlord immediate written notice of the
placing of any lien or encumbrance against the Premises and Truck Park.
23 MISCELLANEOUS.
-------------
(a) Words of any gender used in this Lease shall include any other
gender, and words in the singular shall include the plural, unless the context
otherwise requires. The captions inserted in this Lease are for convenience
only and in no way affect the interpretation of this Lease. The following terms
shall have the following meanings: "Laws" shall mean all federal, state, and
----
local laws, rules, and regulations; all court orders, governmental directives,
and governmental orders; and all restrictive covenants affecting the Property,
and "Law" shall mean any of the foregoing; "Affiliate" shall mean any person or
--- ---------
entity which, directly or indirectly, controls, is controlled by, or is under
common control with the party in question; and "Tenant Party" shall include
------------
Tenant, any assignees claiming by, through, or under Tenant, any subtenants
claiming by, through, or under Tenant, and any of their respective agents,
contractors, employees, and invitees.
(b) Landlord may transfer and assign, in whole or in part, its rights
and obligations in the Building and property that are the subject to this Lease
and in the case of a transfer of all of Landlord's rights and obligations
Landlord shall have no further liability hereunder.
(c) Whenever a period of time is herein prescribed for action to be
taken by either party, that party shall not be liable or responsible for, and
there shall be excluded from the computation for any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations, or restrictions, or any other causes of any kind
whatsoever which are beyond the control of that party.
(d) Tenant shall, from time to time (but not more often than
annually), within ten days after request of Landlord, deliver to Landlord, or
Landlord's designee, a certificate of occupancy for the Premises and Truck Park,
the most recently produced financial statements customarily prepared for public
companies for itself and, evidence reasonably satisfactory to Landlord that
Tenant has performed its obligations under this Lease (including evidence of the
payment of the Security Deposit), and an estoppel certificate stating that this
Lease is in full effect, the date to which rent has been paid, the unexpired
Term and such other factual matters pertaining to this Lease as may be requested
by Landlord. Tenant's obligation to furnish the above-described items in a
timely fashion is a material inducement for Landlord's execution of this Lease.
If Tenant fails to execute any such estoppel certificate within such ten-day
period, Tenant will have deemed to have agreed to the statements therein.
(e) This Lease constitutes the entire agreement of the Landlord and
Tenant with respect to the subject matter of this Lease, and contains all of the
covenants and agreements of Landlord and Tenant with respect thereto. Landlord
and Tenant each acknowledge that no representations, inducements, promises or
agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations not expressly set
forth in this Lease are of no effect. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto.
(f) All obligations of Tenant hereunder not fully performed by the end
of the Term shall survive, including, without limitation, all payment
obligations with respect to Taxes and insurance and all obligations concerning
the condition and repair of the Premises and Truck Park. Upon the end of the
Term and before Tenant vacates the Premises and Truck Park, Tenant shall pay to
Landlord any amount reasonably estimated by Landlord as necessary to put the
Premises and Truck Park in good condition and repair, reasonable wear and tear
excluded. Tenant shall also, prior to vacating the Premises and Truck Park, pay
to Landlord the pro rated amount, as estimated by Landlord, of Tenant's
obligation hereunder for Operating Expenses for the year in which the Term ends.
All such amounts shall be used and held by Landlord for payment of such
obligations of Tenant hereunder, with Tenant being liable for any additional
costs therefor upon demand by Landlord or with any excess to be returned to
Tenant after all such obligations have been determined and satisfied as the case
may be. Any Security Deposit held by Landlord may be credited against the
amount due by Tenant under this Section 23.(f).
(g) If any provision of this Lease is illegal, invalid or
unenforceable, then the remainder of this Lease shall not be affected thereby,
and in lieu of each such provision, there shall be added, as reasonably and
mutually determined by Landlord and Tenant, as a part of this Lease, a provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.
(h) All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this Lease.
(i) Landlord and Tenant each warrant to the other that it has not
dealt with any broker or agent in connection with this Lease. Tenant and
Landlord shall each indemnify the other against all costs, attorneys' fees, and
other liabilities for commissions or other compensation claimed by any broker or
agent claiming the same by, through, or under the indemnifying party.
10
(j) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying an individual at a specific address within the continental United
States for the receipt of notices and payments to Tenant. All parties included
within the terms "Landlord" and "Tenant," respectively, shall be bound by
notices given in accordance with the provisions of Section 24 to the same effect
as if each had received such notice.
(k) The terms and conditions of this Lease are confidential and either
party shall not disclose the terms of this Lease to any third party except as
may be required by law, lender or purchaser requirements, or to enforce its
rights hereunder.
(l) Tenant shall pay interest on all past-due rent from the date due
until paid at the maximum lawful rate. In no event, however, shall the charges
permitted under this Section 23.(l) or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of interest.
(m) All addenda, exhibits, memoranda and schedules attached hereto and
referred to herein are incorporated herein by reference. Any addendum, exhibit,
memorandum or schedule to this Lease not attached hereto at the time of
signature, may be attached at a later time, however any such addendum, exhibit,
memorandum or schedule must be agreed to in form and content and in writing by
Landlord and Tenant prior to attachment.
(n) Attorneys' Fees. In the event of the filing of any legal action
---------------
or proceeding brought by either party against the other arising out of this
Lease, the prevailing party shall be entitled to recover reasonable attorneys'
fees and costs incurred in such action (including, without limitation, all costs
of appeal) and such amount shall be included in any judgment rendered in such
proceeding.
24 NOTICES. Each provision of this instrument or of any applicable Laws
-------
and other requirements with reference to the sending, mailing or delivering of
notice or the making of any payment hereunder shall be deemed to be complied
with when and if the following steps are taken:
(a) All rent shall be payable to Landlord at the address for Landlord
set forth below or at such other address as Landlord may specify from time to
time by written notice delivered in accordance herewith. Tenant's obligation to
pay rent shall not be deemed satisfied until such rent has been actually
received by Landlord, provided Tenant has received written notice of Landlord's
then present location.
(b) All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address set forth below, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith. Landlord's obligation
to pay Tenant any amount owing hereunder shall not be deemed satisfied until
such payment is actually received by Tenant.
(c) Any written notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered upon the earlier to occur of
(1) tender of delivery (in the case of a hand-delivered notice), (2) deposit in
the United States Mail, postage prepaid, Certified Mail, or (3) receipt by
facsimile transmission, in each case, addressed to the parties hereto at the
respective addresses set out below, or at such other address as they have
theretofore specified by written notice delivered in accordance herewith. If
Landlord has attempted to deliver notice to Tenant at Tenant's address reflected
on Landlord's books but such notice was returned or acceptance thereof was
refused, then Landlord may deliver such notice to the Tenant's office at the
Premises and Truck Park, which notice shall be deemed delivered to Tenant upon
the posting thereof.
25 HAZARDOUS WASTE. The term "Hazardous Substances," as used in this
--------------- --------------------
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the removal of which is required or the use of which is
restricted, prohibited or penalized by any "Environmental Law," which term shall
-----------------
mean any Law relating to health, pollution, or protection of the environment.
Tenant hereby agrees that (a) no activity will be conducted on the Premises and
Truck Park that will produce any Hazardous Substances, except for such
activities that are part of the ordinary course of Tenant's business activities
(the "Permitted Activities") provided such Permitted Activities are conducted
--------------------
in accordance with all Environmental Laws and have been approved in advance in
writing by Landlord; (b) the Premises and Truck Park will not be used in any
manner for the storage of any Hazardous Substances except for any temporary
storage of such materials that are used in the ordinary course of Tenant's
business (the "Permitted Materials") provided such Permitted Materials are
-------------------
properly stored in a manner and location satisfying all Environmental Laws and
approved in advance in writing by Landlord; (c) no portion of the Premises and
Truck Park will be used as a landfill or a dump; (d) Tenant will not install any
underground tanks of any type; (e) Tenant will not allow any surface or
subsurface conditions to exist or come into existence that constitute, or with
the passage of time may constitute a public or private nuisance; and (f) Tenant
will not permit any Hazardous Substances to be brought onto the Premises and
Truck Park, except for the Permitted Materials, and if so brought or found
located thereon, the same shall be immediately removed by Tenant, with proper
disposal, and all required cleanup procedures shall be diligently undertaken
pursuant to all Environmental Laws. If at any time during or after the Term, the
Premises and Truck Park are found to be so contaminated or subject to such
conditions, Tenant shall defend, indemnify and hold Landlord harmless from all
claims, demands, actions, liabilities, costs, expenses, damages and obligations
of any nature arising from or as a result of the use of the Premises and Truck
Park by Tenant and Tenant, or a Tenant Party, caused such conditions. Unless
expressly identified on an addendum to this Lease, as of the date hereof there
are no "Permitted Activities" or "Permitted Materials" for purposes of the
foregoing provision and none shall exist unless and until
approved in writing by the Landlord. Landlord may enter the Premises and Truck
Park and conduct environmental inspections and tests therein as it may require
from time to time, provided that Landlord shall use reasonable efforts to
11
minimize the interference with Tenant's business. Such inspections and tests
shall be conducted at Landlord's expense, unless they reveal the presence of
Hazardous Substances (other than Permitted Materials) or that Tenant has not
complied with the requirements set forth in this Section 25, in which case
Tenant shall reimburse Landlord for the cost thereof within ten days after
Landlord's request therefor.
26. LANDLORD'S LIEN. Landlord agrees to delete Paragraph 26, Landlord's
---------------
Lien, but reserves any statutory lien for rent in Landlord's favor as well as
remedies provided by law and all rights and remedies under the Uniform
Commercial Code of the State in which the Building is located (the "UCC"),
---
provided Landlord timely and fully complies with the UCC and Landlord will only
exercise its remedies when an Event of Default has occurred.
27. SUBMISSION OF LEASE TO TENANT. Submission of this instrument for
-----------------------------
examination or signature by Tenant does not constitute an offer by Landlord nor
a reservation of or an option for lease, and it is not effective as a lease or
otherwise until it has been fully executed and delivered by both Landlord and
Tenant.
TENANT ACKNOWLEDGES THAT (1) IT HAS INSPECTED AND ACCEPTS THE PREMISES IN
AN "AS IS, WHERE IS" CONDITION, (2) THE BUILDINGS AND IMPROVEMENTS COMPRISING
THE SAME ARE SUITABLE FOR THE PURPOSE FOR WHICH THE PREMISES ARE LEASED AND
LANDLORD HAS MADE NO WARRANTY, REPRESENTATION, COVENANT, OR AGREEMENT WITH
RESPECT TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
PREMISES, (3) THE PREMISES ARE IN GOOD AND SATISFACTORY CONDITION, (4) NO
REPRESENTATIONS AS TO THE REPAIR OF THE PREMISES, NOR PROMISES TO ALTER, REMODEL
OR IMPROVE THE PREMISES HAVE BEEN MADE BY LANDLORD (UNLESS AND EXCEPT AS MAY BE
SET FORTH IN EXHIBIT B ATTACHED TO THIS LEASE, IF ONE SHALL BE ATTACHED, OR AS
---------
IS OTHERWISE EXPRESSLY SET FORTH IN THIS LEASE), AND (5) THERE ARE NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED, IMPLIED OR STATUTORY, THAT EXTEND
BEYOND THE DESCRIPTION OF THE PREMISES.
Executed by Tenant on December 15, 1999.
TENANT:
XxxxXxxxxx.xxx, Inc., a Delaware corporation
--------------------------------------------
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: V.P. Operations
--------------------------------------
Address: Attn: Legal Department
00000 XX Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
------------
And a copy to: XxxxXxxxxx.xxx
Attn: Operations Department
00000 XX Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
Executed by Landlord on December 17, 1999.
LANDLORD:
XX Xxxx Industrial No. 3, Ltd., a Texas limited partnership
-----------------------------------------------------------
By: 1BCO, Inc., sole general partner
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------------
Name: Xx. Xxxx X. Xxxxxx
-----------------------------------------------
Title: Senior Vice President
-----------------------------------------------
Address: Xxxxxxxxxxx Property Services, Inc.
-------------------------------------
0000 Xxxx Xxxxxx, Xxxxx 0000 Xxxx
-------------------------------------
Xxxxxx, XX 00000
----------------
Telephone: 214/000-0000
----------------
Fax: 214/754-1754
----------------
12
Additional Provisions
28. EARLY OCCUPANCY. Landlord shall cooperate with Tenant in providing Tenant
----------------
access to the Premises no later than two (2) business days following the
Effective Date (the "Occupancy Date") for the purpose of allowing Tenant to
--------------
install Initial Improvements, trade fixtures, refrigeration, conveyor and
racking systems. However, Tenant's access to the Premises shall not impede
Landlord's ability to complete any improvements required of Landlord
hereunder. In the event Landlord's ability to complete Landlord's
improvement obligations are impeded, Landlord has the right, but not the
obligation, to deny Tenant further access to the Premises until Landlord's
improvements are completed. In the event Tenant begins utilizing the
Premises and/or Truck Park for the purposes of operating its business from
the Premises and/or Truck Park, the Tenant shall begin paying its
proportionate share of the operating expenses as outlined in
paragraph 2 (c).
29. OPTION TO RENEW.
----------------
(a) Provided that an Event of Default has not occurred, and Tenant's
right to possession of the Premises is not terminated and Tenant has not
assigned any of its interest in this Lease or Sublet more than fifty
percent (50%) of the Premises for the remaining Term of the Lease (other
than Permitted Transfers), then Tenant shall have the right and option to
extend the original term of this Lease for two (2) further terms of sixty
---
(60) months. Such extension of the original term shall be on the same
terms, covenants and conditions as provided for in the original term except
for this Paragraph and except that the Base Rent during the extended term
shall be at the fair market base rent then in effect on equivalent
properties, of equivalent size, in equivalent areas, with the length of the
extended term, applicable base years (expenses stops) for purposes of
determining additional rent, the value of rent concessions, build-out
allowances and the credit standing of tenant to be taken into account, (the
"Fair Market Base Rent"). Tenant shall deliver written notice to Landlord
---------------------
of Tenant's intent to exercise the Renewal Option granted herein (each, a
"Renewal Request Notice") no later than twelve (12) months prior to the
----------------------
expiration of the original term of this Lease. Tenant shall have no further
renewal options unless expressly granted by Landlord in writing.
(b) In the event Tenant fails to deliver the Renewal Request Notice
within the time period set forth above, time being of the essence with
respect to Tenant's exercise thereof, Tenant's right to extend the term
hereof shall automatically terminate, be null and void, and be of no
further force and effect.
(c) Promptly after delivery to Landlord of Tenant's Renewal Request
Notice, Landlord and Tenant shall endeavor to agree upon the Fair Market
Base Rent applicable to the Renewal Term. If Landlord and Tenant mutually
agree in writing upon the Fair Market Base Rent within thirty (30) days
after written exercise by Tenant of this renewal option, Landlord shall
lease the Premises to Tenant during the Renewal Term in their then-current,
as-is condition, and Landlord shall not provide to Tenant any allowances
(e.g. Moving Allowance, Construction Allowance, and the like) or other
tenant inducements. If Landlord and Tenant do not agree upon the Fair
Market Base Rent applicable to the Renewal Term within thirty (30) days
after Landlord's receipt of the Renewal Request Notice, then Landlord shall
deliver written notice to Tenant with thirty (30) days thereafter (the
"Rent Notice") of Landlord's Determination of the Fair Market Base Rent
-----------
applicable to the Renewal Term ("Landlord's Determination"), which
------------------------
determination shall be binding on Landlord in the event such Fair Market
Base Rent is determined by appraisal pursuant to Subsection (d) herein.
Tenant shall deliver written notice to Landlord ("Tenant's Notice"), within
---------------
thirty (30) days after Tenant's receipt of the Rent Notice, whether Tenant
accepts or disputes Landlord's Determination, and if Tenant disputes
Landlord's Determination, Tenant's Notice shall set forth Tenant's
determination of the renewal term Fair Market Base Rent in question
("Tenant's Determination"), which determination shall be binding on Tenant
------------------------
in the event such renewal term Fair Market Base Rent is determined by
appraisal pursuant to Subsection (d) herein. Landlord's Determination and
Tenant's Determination are each hereinafter referred to as a
("Determination") and are collectively hereinafter referred to as the
--------------
("Determinations"). If Tenant fails to give Tenant's Notice within such
----------------
thirty (30) day period, then Tenant shall be deemed to have accepted
Landlord's Determination.
If Tenant timely disputes Landlord's Determination, then the renewal term
Fair Market Base Rent in question shall be established by Appraisal in
accordance with the procedures set forth in Subsection (d) herein. If, for
any reason, the Fair Market Base Rent applicable to the Renewal Term is not
finally determined on or prior to the commencement of such renewal term,
then (i) pending such final determination, Tenant shall be entitled to
continue its occupancy of the Premises and shall pay initially base rent
for the Renewal Term at the Base Rent Rate in effect during the last month
of the original term as specified in Paragraph 2.a., (ii) upon such final
determination, the Base Rent for the Renewal Term shall be as provided
above, and (iii) in the event that such final determination results in a
Base Rent rate different higher than the rate paid by Tenant during such
Renewal Term, a retroactive adjustment in Base Rent shall be made and
Tenant shall pay Landlord the appropriate payment within ten (ten) days of
Landlord's demand.
To the extent that the appraisers determine Fair Market Base Rent for any
Renewal Term by reference to other transactions, they shall consider the
terms and conditions of such other transactions and if such other
transactions have different terms and conditions (e.g., shorter or longer
term, free rent, different escalation formulae or renewal options), the
Fair Market Base Rent at issue shall be determined by the appraisers by
making appropriate adjustment to the base rent of such other transactions.
A-1
(d) In the event that renewal term Fair Market Base Rent is to be
determined by appraisal, said appraisal shall be conducted in accordance
with the following procedures:
(1) Within twenty (20) days after Landlord delivers written notice to
appraise to Tenant, Landlord and Tenant shall each select a Real
Estate Appraiser, who shall be a member of the American Institute
of Real Estate Appraisers, and who shall have at least five (5)
years appraisal experience with respect to commercial and
industrial rental properties in Dallas, Texas. If one of the
parties hereto fails to appoint an appraiser within the time
period prescribed, then the single appraiser appointed shall be
the sole appraiser and shall determine the Fair Market Base Rent
at issue. If two appraisers are appointed, they shall have
thirty (30) days from the date the second appraiser is appointed
(the "30-Day Appraisal Period") within which to agree upon the
-----------------------
Fair Market Base Rent at issue. The appraiser(s) shall be
advised that the determination of the Fair Market Base Rent at
issue shall be governed by the definitions of same set forth in
this Lease and the requirement that each appraiser select the
determination (as between Landlord's Determination and Tenant's
Determination), which, in his/her opinion, more accurately
reflects the Fair Market Base Rent. The Determination selected
by the two appraisers as the Fair Market Base Rent at issue shall
be binding on Landlord and Tenant.
(2) If the two appraisers appointed by the parties hereto do not
concur in such selection as aforesaid within the 30-day Appraisal
Period, then said appraisers shall, within ten (10) days after
the expiration of the 30-day Appraisal Period, select a third
appraiser (the "Third Appraiser"). The Third Appraiser must meet
---------------
the qualifications set forth in subparagraph (1) above, and shall
be a person who has not previously acted in any capacity for
either Landlord or Tenant.
(3) The Third Appraiser shall subscribe and swear to an oath to
fairly and impartially choose the Determination which more
accurately reflects the Fair Market Base Rent, in accordance
herewith. The Third Appraiser shall conduct such hearings as he
deems appropriate (or such hearings as either Landlord or Tenant
shall reasonably request). Within fifteen (15) days after the
Third Appraiser has been appointed, the Third Appraiser shall
select the Determination (as between Landlord's Determination and
Tenant's Determination) which, in his/her opinion, more
accurately reflects the Fair Market Base Rent, and shall notify
Landlord, Tenant and each of the initial Appraisers of such
selection in writing. With respect to Tenant's Renewal Option as
provided in this paragraph, the Fair Market Base Rent set forth
in the final determination selected by the Third Appraiser shall
be the Final Determination of such amounts, which determination
shall be conclusive and binding upon both Landlord and Tenant.
Except as otherwise provided in the Lease, each party hereto shall pay the
fees and expenses of the appraiser selected by such party, and the fees and
expenses of the Third Appraiser shall be borne equally by Landlord and
Tenant.
30. ADDITIONAL ALLOWANCE. Landlord agrees to provide Tenant with an additional
--------------------
allowance of $121,170.26 to be paid to Tenant upon the Commencement Date of
the Lease. Provided that no Event of Default has occurred under this Lease
and Tenant does not exercise its right to terminate set forth in Section 36
below, Landlord agrees to provide Tenant with an additional allowance of
$66,910.73 to be paid to Tenant on the first day of the sixty-first (61)
month of the Lease. Tenant warrants that Landlord shall not be obligated to
pay commissions to any broker or consultant acting on behalf of Tenant for
this Lease, including any renewal terms or expansions related in any way to
this Lease. Tenant shall indemnify Landlord against all costs, attorneys'
fees, and other liabilities for commissions or other compensation claimed
by any broker or agent claiming the same by, through, or under the Tenant.
Landlord shall be responsible for payment of any listing broker's
commission pursuant to a separate agreement.
31. ROOF INSTALLATIONS. Subject to all requirements within Section 6 in the
------------------
Lease, to any applicable governmental ordinances, permits, fees or other
applicable requirements or limitations and subject to any interference
provisions of other leases in the Building, Tenant may utilize a portion of
the roof of the Building immediately over the Premises for the placement of
telecommunications, additional air conditioning and/or similar equipment
(the "Roof Improvements") for use in connection with Tenant's business and
-----------------
use of the Premises and Truck Park such Roof Improvements to be in addition
to the Building Structure modifications detailed in Exhibit B to the Lease.
Prior to the installation Tenant shall submit for Landlord's reasonable
approval detailed plans and specifications for any Roof Improvements.
Landlord shall have the right to reasonably control and/or limit the size
(not to exceed 200 sq.ft. of roof area), location, color, design and
screening (all equipment shall be screened; no equipment shall be higher
than the screen) of the Roof Improvements, the contractor selected by
Tenant to manufacture and install the Roof Improvements, and the method of
installation. Subject to such control by Landlord, Tenant shall be
responsible for all aspects of the Roof Improvements including not by
limitation the cost, design, fabrication, permitting, installation (subject
to Landlord's supervision), operation, maintenance, repair, replacement and
removal thereof, running electrical or other wiring, and providing
electricity to the Roof Improvements.
Tenant shall keep all Roof Improvements operational and in good condition
and repair. Tenant shall, at its expense, remove all Roof Improvements
prior to expiration of the Term (as may be extended) and shall make all
necessary
A-2
repairs to the Building upon such removal. Landlord may require such
removal and repair upon thirty (30) days notice to Tenant in the event of
an Event of Default which is not cured within said thirty day period. If
Tenant fails to remove any Roof Improvements and make all necessary repairs
as required herein, Landlord may do so at Tenant's expense. In such event,
Landlord shall not be liable for any damage to any Roof Improvements, and
may retain, sell, or otherwise dispose of such items without obligation or
liability to Tenant.
Tenant shall indemnify and hold Landlord harmless from and against all
claims, costs, and liabilities of whatever kind or nature relating to the
installation, existence, operation, maintenance, repair, replacement and
removal of any Roof Improvements.
32. PARKING. Landlord grants to Tenant 134 employee parking spaces in the
-------
surface parking area and 90 truck spaces, exclusive of any building loading
areas, as shown on Exhibit AA-1", attached hereto and incorporated herein
by reference.
33. LOADING AREA. Landlord agrees to relocate the existing fire lane, subject
------------
to city approval, to the southern edge of the property line.
34. ELECTRICAL SERVICE. Tenant, at Tenant's sole cost and expense, shall have
------------------
the right to equip the building with 3000 amp, 480 volt, 3 phase electrical
service to the Premises and Truck Park. Tenant, at Tenant's sole cost and
expense, shall have the ability to equip each truck parking space with
208V, 3 phase, 60 Hz @ 30 amp power connection for refrigeration equipment.
35. LOADING DOCKS. Landlord shall provide a minimum of twenty-two (22)
-------------
shipping doors and Tenant shall have the ability to install levelers to the
shipping doors.
36. RIGHT TO TERMINATE. Tenant may, at its option, terminate this Lease in its
------------------
entirety effective as of the last day of the first sixty (60) months of the
Lease Term by delivering written notice of Tenant's intent to terminate to
Landlord no later than one hundred and eighty (180) days prior to the end
of the first sixty (60) months of the Lease Term ("Termination Option").
------------------
Such written notice shall be accompanied by a payment in the amount of
$630,000("Termination Fee"). If Tenant fails to timely deliver its notice
---------------
and if such notice is not accompanied by the Termination Fee, Tenant will
be deemed to have waived such Termination Option and the Lease shall remain
in full force and effect. If there are any uncured defaults by Tenant as of
the date Tenant delivers the written notice and Termination Fee, the
Termination Option shall be void, and the Lease shall remain in full force
and effect. In the event Tenant property exercises its Termination Option
this Lease shall terminate on the last day of the first sixty (60) months
of the lease.
37. LETTER OF CREDIT.
----------------
A. Upon execution of the Lease Agreement by Landlord and Tenant,
Tenant shall deliver to Landlord and executed original irrevocable standby
letter of credit (AL.C.) in the amounts shown below in favor of Landlord,
-----
such L.C. to have a term based on the number of months shown below
beginning with the Effective Date of the Lease.
Amount Months
------ ------
$655,488 1-12
$524,390 13-24
$393,293 25-36
$262,195 37-48
$131,098 49-60
Landlord may drawn upon all or part of the L.C., where an Event of Default
has occurred, and such default remains uncured by Tenant beyond any
applicable cure period, to pay past due rent or other payments due Landlord
under this Lease, and the cost of any other damage, injury, expense or
liability caused by such event of default without prejudice to any other
remedy provided herein or provided by law. Such L.C. shall be issued in a
form and by a National Banking Association (located with the continental
United States of America) (hereinafter the "Issuer"), acceptable to
------
Landlord. With respect to any default occurring during the term of the
Lease, Landlord shall have the right to proceed against the total L.C. at
the sole discretion of Landlord regarding the items and the amounts to be
drawn upon relating to any default by Tenant.
B. Such L.C. shall contain the following terms and conditions:
1. The L.C. shall be deemed to be automatically extended without
amendment from year to year, with renewal occurring annually,
from the date of its issuance or any future expiration date
unless at least 30 days prior to any future expiration date the
bank notifies Landlord, in writing, by certified mail, return
receipt requested, that the issuer intends not to renew the L.C.
for an additional year.
2. In the event the L.C. will not be extended and has or will expire
by its terms and the Lease, by and between Tenant and Landlord,
including any or all extensions or renewals, has not expired,
then Landlord shall be allowed to draft upon Issuer for the full
amount of the L.C.
A-3
3. The L.C. shall be subject to the Uniform Customs and Practices
for Documentary Credits (1983 Revision), International Chamber of
Commerce Publication No. 400".
4. The amount of the L.C. shall be payable at sight to Landlord
within three (3) days of the presentation of the sight draft, in
whole or partial drawings, upon presentation to the Issuer of the
following documents:
a. Landlord's written demand for payment making reference to
the date and number of the L.C.;
b. Landlord's signed certificate that the amount drawn is to
meet any Event of Default, where such default remains
uncured beyond any applicable cure period, as set for in the
Lease by and between Tenant and Landlord; and
c. The original L.C. for endorsement of the amount paid and if
the draft is for the full amount of the L.C. is to be
surrendered to the Issuer.
5. The Issuer shall not have the right to assign the L.C. to any
other person, entity, National Banking Association, or financial
institution without Landlord's prior consent which shall not be
unreasonably withheld.
6. Any presentment by Landlord of the L.C. for the payment shall be
made at a National Banking Association located within the
continental United States of America.
7. The Issuer shall not modify the L.C. without the prior written
consent of the Landlord.
8. Landlord shall have the right to assign and transfer its rights
and interests in the L.C. to any other beneficiary/party
acceptable to Landlord and Landlord will notify Tenant in doing
so.
38. OWNERSHIP AND REMOVAL OF FIXTURES, TRADE FIXTURES, FURNITURE AND PERSONAL
-------------------------------------------------------------------------
PROPERTY.
--------
(i) Tenant retains ownership of, and, so long as monetary default does not
exist, may remove at any time during the term of this Lease (provided
such removal does not result in a final vacation of the Property),
and, subject to any specific agreement between the Landlord and Tenant
to the contrary concerning any particular item, shall remove by the
Vacation Date, all fixtures, trade fixtures, furniture, and personal
property placed in the Premises and Truck Park by Tenant, irrespective
of the extent of the attachment of such fixtures, trade fixtures,
furniture, and personal property to the Premises and Truck Park.
Nothing herein shall be deemed to alter or reduce Tenant's restoration
obligations as set forth in Section 16 of this Lease;
(ii) All items not so removed by the Vacation Date or at such time as
Tenant's right to possession of the Premises or Truck Park is
terminated, shall, at the option of Landlord, be deemed abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise
disposed of by Landlord without notice to Tenant and without any
obligation to account for such items and Tenant shall pay for the
costs incurred by Landlord in connection therewith. Any such
disposition shall not be considered a strict foreclosure or other
exercise of Landlord's rights in respect of the security interest
granted under Section 26.
A-4
