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EXHIBIT 10.6
CB XXXXXXX XXXXX
SUBLEASE
CB Xxxxxxx Xxxxx, Inc.
Brokerage and Management
Licensed Real Estate Broker
1. PARTIES.
This Sublease, dated August 31, 1999, is made between A & M Warehouses,
Inc. (Sublessor), and 000.XXX, Inc. (Suble
2. MASTER LEASE.
Sublessor is the lessee under a written lease dated November 24, 1998,
wherein INVESCO Realty Advisors leased to Sublessor the real property
located in the City of Portland, County of Multnomah State of Oregon,
described as an approximate 523,000 square foot warehouse building
located at # No. Xxxxxx Boulevard ("Master Lease"). Said lease has been
amended by the following amendments said leases and amendments are
herein collectively referred to as the "Master Lease" and are attached
hereto as Exhibit "A".
3. PREMISES.
Sublessor hereby subleases to Sublessee on the terms and conditions set
forth in this Sublease the following portion of the Master Premises
("Premises"): Approximately 210,000 square feet located in the northwest
corner of the premises as depicted on Exhibit A-1 and A-2 ("Master
Premises").
4. WARRANTY BY SUBLESSOR.
Sublessor warrants and represents to Sublessee that the Master Lease has
not been amended or modified except as expressly set forth herein, that
Sublessor is not now, and as of the commencement of the Term hereof will
not be, in default or breach of any of the provisions of the Master
Lease, and that Sublessor has no knowledge of any claim by Lessor that
Sublessor is in default or breach of any of the provisions of the Master
Lease.
5. TERM.
The Term of this Sublease shall commence on September 27, 1999,
("Commencement Date"), or when Lessor consents to this Sublease (if such
consent is required under the Master Lease), whichever shall last occur,
and end on March 31, 2001 ("Termination Date"), unless otherwise sooner
terminated in accordance with the provisions of this Sublease. In the
event the Term commences on a date other than the Commencement Date,
Sublessor and Sublessee shall execute a memorandum setting forth the
actual date of commencement of the Term. Possession of the Premises
("Possession") shall be delivered to Sublessee on the commencement of
the Term. If for any reason Sublessor does not deliver Possession to
Sublessee on the commencement of the Term, Sublessor shall not be
subject to any liability for such failure, the Termination Date shall
not be extended by the delay, and the validity of this Sublease shall
not be impaired, but rent shall xxxxx until delivery of Possession.
Notwithstanding the foregoing, if Sublessor has not delivered Possession
to Sublessee within thirty (30) days after the Commencement Date, then
at any time thereafter and before delivery of Possession, Sublessee may
give written notice to Sublessor of Sublessee intention to cancel this
Sublease. Said notice shall set forth an effective date for such
cancellation which shall be at least ten (10) days after delivery of
said notice to Sublessor. If Sublessor delivers Possession to Sublessee
on or before such effective date, this Sublease shall remain in full
force and effect. If Sublessor fails to deliver Possession to Sublessee
on or before such effective date, this Sublease shall be canceled, in
which case all consideration previously paid by Sublessee to Sublessor
on account of this Sublease shall be returned to Sublessee, this
Sublease shall thereafter be of no further force or effect, and
Sublessor shall have no further
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liability to Sublessee on account of such delay or cancellation. If
Sublessor permits Sublessee to take Possession prior to the commencement
of the Term, such early Possession shall not advance the Termination
Date and shall be subject to the provisions of this Sublease, including
without limitation the payment of rent.
6. RENT.
6.1 Minimum Rent. Sublessee shall pay to Sublessor as minimum rent,
without deduction, set off, notice, or demand, at 0000 X Xxxxxx XX
Xxxxxx, XX 00000 or at such other place as Sublessor shall designate
from time to time by notice to Sublessee. If the Term begins or ends on
a day other than the first or last day of a month, the rent for the
partial months shall be pro rated on a per diem basis. Additional
provisions:
SEE RENT SCHEDULE PER ADDENDUM A.
6.2 Operating Costs. If the Master Lease requires Sublessor to pay to
Lessor all or a portion of the expenses of operating the building and/or
project of which the Premises are a part ("Operating Costs"), including
but not limited to taxes, utilities, or insurance, then Sublessee shall
pay to Sublessor as additional rent forty and two tenths percent (40.2%)
of the amounts payable by Sublessor for Operating Costs incurred during
the Term. Such provides for the payment by Sublessor of Operating Costs
on the basis of an estimate thereof, then as and when adjustments
between estimated and actual Operating Costs are made under the Master
Lease, the obligations of Sublessor and Sublessee hereunder shall be
adjusted in a like manner; and if any such adjustment shall occur after
the expiration or earlier termination of the Term, then the obligations
of Sublessor and Sublessee under this Subsection 6.2 shall survive such
expiration or termination. Sublessor shall, upon request by Sublessee,
furnish Sublessee with copies of all statements submitted by Lessor of
actual or estimated Operating Costs during the Term.
Sublessee shall be obligated to pay only its prorata share of those
costs paid by the Sublessor to Lessor as "Expenses" under the master
Lease, and in no event shall Sublessee be obligated to pay to Sublessor
any additional costs, fees or other charges that are not paid by
Sublessor to Master Lessor as "Expenses" under the Master Lease. Within
twenty (20) days of Sublessor's receipt of any statement, including
without limitation the annual accounting statement, received from the
Lessor with respect to Operating Costs, (which costs the Master Lease
Defines as "Expenses"), Sublessor will deliver such statement to
Sublessee. Sublessee shall have the same rights as granted to Sublessor
in the Master Lease to dispute any item or amount included in Operating
Costs, which shall be given by written notice to Sublessor within twenty
(20) days of receipt of the annual accounting statement for such costs.
Notwithstanding any provision to the contrary contained in the Sublease
or in the Master Lease, and regardless of the definition of "Expenses"
in the Master Lease, as between Sublessee and Sublessor under this
Sublease, Sublessee shall not be obligated to pay its own prorata share
of, and Operating Costs hereunder shall not include costs with respect
to any of the following items: (1) repairs, restoration or other work
occasioned by fire, wind or other casualty; (2) income and franchise
taxes of Lessor or Sublessor; (3) expenses incurred in leasing to or
procuring of tenants, leasing commissions, advertising and marketing
expenses and expenses for the renovating of space leased to tenants; (4)
interest or principal payments on any mortgage or other indebtedness or
rent under any ground lease; (5) costs to construct the budding or costs
incurred in order to repair defects in such construction; (6) expenses
incurred in disputes with other tenants or due to Landlord's violation
of any other lease in the building; (7) any penalties, interest or other
charges due to late payment of any sums or due to negligence or wrongful
conduct; (8) any capital cost or expense to the extent that it is paid
or reimbursed from any person (other than as payment for Expenses),
including costs reimbursed by warranty, insurance, service contracts,
condemnation proceeds or otherwise; (10) any cost representing an amount
paid to a person, firm, corporation or other entity related to Lessor
that is in excess of the amount that would have been paid on a arms
length basis in the absence of such relationship; (11) the
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cost of curing any violation of any law, ordinance or regulation or of
remediating any environmental condition (unless caused by Sublessee); or
(12) costs incurred in connection with the sale, financing, refinancing,
selling or change of ownership of the building or any part thereof.
7. SECURITY DEPOSIT.
Sublessee shall deposit with Sublessor upon execution of this Sublease
the sum of Eighty-Seven Thousand Seven Hundred Fifty-Eight and No/100
Dollars ($87,758.00) as security for Sublessee's faithful performance of
Sublessee's obligations hereunder ("Security Deposit"). If Sublessee
fails to pay rent or other charges when due under this Sublease, or
fails to perform any of its other obligations hereunder, Sublessor may
use or apply all or any portion of the Security Deposit for the payment
of any rent or other amount then due hereunder and unpaid, for the
payment of any other sum for which Sublessor may become obligated by
reason for Sublessee default or breach, or for any loss or damage
sustained by Sublessor as a result of Sublessee's default or breach. If
Sublessor so uses any portion of the Security Deposit, Sublessee shall,
within ten (10) days after written demand by Sublessor, restore the
Security Deposit to the full amount originally deposited, and Sublease's
failure to do so shall constitute a default under this Sublease.
Sublessor shall not be required to keep the Security Deposit separate
from its general accounts, and shall have no obligation or liability for
payment of interest on the Security Deposit. In the event Sublessor
assigns its interest in this Sublease, Sublessor shall deliver to its
assignee so much of the Security Deposit as is then held by Sublessor.
Within ten (10) days after the Term has expired, or Sublessee has
vacated the Premises, or any final adjustment pursuant to Subsection 6.2
hereof has been made, whichever shall last occur, and provided Sublessee
is not then in default of any of its obligations hereunder, the Security
Deposit, or so much thereof as had not theretofore been applied by
Sublessor, shall be returned to Sublessee or to the last assignee, if
any, of Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for general office use and
storage of and processing orders for electronics and other consumer
products per applicable Rivergate district zoning, and for no other use
or purpose.
9. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet all or any
part of the Premises without the prior written consent of Sublessor (and
the consent of Lessor, if such is required under the terms of the Master
Lease), which shall not be unreasonably withheld and shall be processed
in accordance with the process in the Master Lease.
10. OTHER PROVISIONS OF SUBLEASE.
All applicable terms and conditions of the Master Lease are incorporated
into and made a part of this Sublease as if Sublessor were the lessor
thereunder, Sublessee thereunder, and the Premises the Master Premises.
With respect to the relationship between the Sublessor and the
Sublessee, this Sublease will govern any conflict that may arise between
the Sublease and the Master Lease. Sublessee assumes and agrees to
perform the lessee obligations under the Master lease during the Term to
the extent that such obligations are applicable to the Premises, except
that the obligation to pay rent to Lessor under the Master lease shall
be considered performed by Sublessee to the extent and in the amount
rent is paid to Sublessor in accordance with Section 6 and Addendum A of
this Sublease. Sublessee shall not commit or suffer any act or omission
that will violate any of the provisions of the Master Lease. Sublessor
shall exercise due diligence in attempting to cause Lessor to perform
its obligations under the Master Lease for the benefit of Sublessee and
shall use diligent efforts to obtain consents of Lessor required under
the Master Lease. If the Master Lease terminates, this Sublease shall
terminate and the parties shall be relieved of any further liability or
obligation under this Sublease, provided however, that if the Master
Lease terminates as a result of a default or breach by Sublessor or
Sublessee under this Sublease and/or the Master Lease, then the
defaulting party shall be liable to the non-defaulting party
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for the damage suffered as a result of such termination. Notwithstanding
the foregoing, if the Master Lease gives Sublessor any right to
terminate the Master Lease in the event of the partial or total damage,
destruction, or condemnation of the Master Premises or the building or
project of which the Master Premises are a part, the exercise of such
right by Sublessor shall not constitute a default or breach hereunder.
Sublessor represents and warrants that the copy of the Master Lease
provided to Sublessee is a true, complete and accurate copy of the
Master Lease, and that Sublessor has the right, title, and authority to
enter into this Sublease and to sublease the Premises to Sublessee,
subject to obtaining the consent to Lessor. Sublessor agrees to keep the
Master Lease I full force and effect throughout the full term of this
Sublease, to perform all of its covenants and obligations thereunder (
(including without limitation the prompt and timely payment of all
amounts payable to it pursuant to the terms of the Master Lease) to
permit or suffer no amendment or modification thereto without the
consent of the Sublessee and to do not act and to make no omission which
might create a default or might occasion or permit the termination
thereof. Sublessor shall not assign its interest under the Master Lease
without written notice of such assignment to Sublessee. Sublessor shall
deliver copies of all notices, including without limitation notices of
default, given to or received from Lessor under the Master Lease, and
Sublessee shall have the right, but not the obligation, to cure any
default by Sublessor under the Master Lease, and to deduct from Rent any
amounts reasonably paid in doing so.
11. ATTORNEYS FEES.
If Sublessor, Sublessee, or Broker shall commence an action against the
other arising out of or in connection with this Sublease, the prevailing
party shall be entitled to recover its costs of suit and reasonable
attorneys fees.
12. AGENCY DISCLOSURE.
Sublessor and Sublessee each warrant that they have dealt with no other
real estate broker in connection with this transaction except CB XXXXXXX
XXXXX, INC., who represents Sublessor and Xxxxxx, Xxxxx & Xxxxxxx, who
represents Sublessee. In the event that CB XXXXXXX XXXXX, INC.
represents both Sublessor and Sublessee, Sublessor and Sublessee hereby
confirm that they were timely advised of the dual representation and
that they consent to the same, and that they do not expect said broker
to disclose to either of them the confidential information of the other
party.
13. COMMISSION.
Upon execution of this Sublease, and consent thereto by Lessor (if such
consent is required under the terms of the Master Lease), Sublessor
shall pay Broker a real estate brokerage commission in accordance with
Sublessor's contract with Broker for the subleasing of the Premises, if
any and otherwise in the amount of Eighty-Six Thousand Six Hundred
Fifty-Two and No/100 Dollars ($86,652.00), for services rendered in
effecting this Sublease. SUBLESSOR IS REPRESENTED BY CB XXXXXXX XXXXX
AND SUBLESSEE IS REPRESENTED BY XXXXXX, XXXXX & XXXXXXX. Broker is
hereby made a third party beneficiary of this Sublease for the purpose
of enforcing its right to said commission. PROVIDED SUBLESSOR AND
SUBLESSEE EXTEND AND/OR EXPAND THE SUBLEASE AGREEMENT, SUBLESSOR SHALL
PAY A LEASING COMMISSION EQUAL TO 5% OF THE AGGREGATE NET CONSIDERATION.
14. NOTICES.
All notices and demands which may or are to be required or permitted to
be given by either party to the other hereunder shall be in writing. All
notices and demands by the Sublessor to Sublessee shall be sent by
United States Mail, postage prepaid, or reputable overnight carrier,
addressed to the Sublessee at the Premises, and to the address
hereinbelow, or to such other place as Sublessee may from time to time
designate in a notice to the Sublessor. All notices and demands by the
Sublessee to Sublessor shall be sent by United States Mail, postage
prepaid, addressed to the Sublessor at the address set forth herein, and
to such other person or place as the Sublessor may from time to time
designate in a notice
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to the Sublessee.
To Sublessor: 0000 X Xxxxxx XX, Xxxxxx, XX 00000
To Sublessee: 0000 XX Xxxxxxx, Xxxxxxxx, XX 00000
15. CONSENT BY LESSOR.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY
LESSOR WITHIN 10 DAYS AFTER EXECUTION HEREOF, IF SUCH CONSENT IS
REQUIRED UNDER THE TERMS OF THE MASTER LEASE.
16. COMPLIANCE.
The parties hereto agree to comply with all applicable federal, state
and local law, regulations, codes, ordinances and administrative orders
having jurisdiction over the parties, property or the subject matter of
this Agreement, including, but not limited to, the 1964 Civil Rights Act
and all amendments thereto, the Foreign Investment In Real Property Tax
Act, the Comprehensive Environmental Response Compensation and Liability
Act, and the Americans With Disabilities Act.
Sublessor: A & M Warehouses, Inc. Sublessee: 000.XXX, Inc.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxx X. Xx Xxxxx
-------------------------------- --------------------------------
Xxxx Xxxxxxx
Title: President Title: VP Finance, CFO
----------------------------- -----------------------------
By: By:
-------------------------------- --------------------------------
Date: 9/8/99 Date: 9/10/99
------------------------------ ------------------------------
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
PREMISES The Premises shall consist of approximately 210,000 square
DESCRIPTION: feet, located in the northwest corner of the building as
depicted in Exhibit A-1. The Premises also contains
approximately 3,500 square feet of office area in the corner
of the premises (Exhibit A-2).
SUBLESSOR'S Sublessor shall, at Sublessor's sole expense, provide the
IMPROVEMENTS: following "turn key" improvements to the Premises; which
shall be completed in a good workmanlike manner in
compliance with all laws, on or before the commencement
date.
o construct a standard 12' high cyclone fence demising wall
around the perimeter of the premises as depicted on
Exhibit A-1.
o construct a "secured area" fence per applicable municipal
code in an approximate 12,000 square foot area which is
depicted on Exhibit A-1.
o install two (2) in-floor dock levelors (Xxxxx 6' x 8' -
30,000 lb. capacity or XxXxxxx (MKA) - 25,000 lb.
capacity) at mutually agreed upon location.
o construct an additional restroom facility with two
toilets and a urinal per Exhibit A-2.
o construct a sink and counter area with two electrical
outlets per Exhibit A-2.
On or before the commencement date, Sublessor shall deliver
the Premises in broom clean condition, with all water,
sewer, electrical, gas, HVAC (office), sprinkler (ESFR),
roof (30' clear), dock doors, floors (6" thick), and
standard freeze protection units in good working order and
condition.
EARLY OCCUPANCY: Commencing upon sublease execution, Tenant shall
have temporary occupancy of the Premises without charge for
rent for the purpose of storing product, installing
equipment, phone or data lines. Such early occupancy shall
not interfere with Sublessor's improvements.
SUBLEASE RENT The base monthly rental for the 210,000 SF space shall be
SCHEDULE: $71,400.00 monthly per the following schedule (prorated for
the month in which the Commencement Date occurs, if the
Commencement Date is not the 1st day of the month).
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
Initial Term Rent Schedule
--------------------------
Months 1-12: $71,400/month ($.34/sf), NNN
Months 13-18: $75,600/month ($.36/sf), NNN
Extension Term Rent Schedule
----------------------------
Months 19-22 $71,400/month ($.34/sf), NNN
Months 23-34 $73,500/month ($.35/sf), NNN
Months 35-46 $75,600/month ($.36/sf), NNN
Months 47-58 $77,700/month ($.37/sf), NNN
Months 59-60 $79,800/month ($.38/sf), NNN
The rental stated above is net rental, and it is understood
that as additional rent are all direct expenses (operating
expenses) equal to 40.2% of the operating costs incurred by
the Sublessor throughout the sublease term, subject to the
terms of Section 6.2 of the sublease.
BALLOON PAYMENT: Provided Sublessee vacates the Premises at the
conclusion of the initial term of the sublease, Sublessee
shall pay to Sublessor a balloon payment equal to $29,310.00
which represents an unamortized Tenant Improvement
allowance.
SUBLESSEE'S Sublessee shall be responsible for insuring its own contents
RESPONSIBILITIES and for obtaining liability insurance during the lease term
AND EXPENSES: and shall provide proof of insurance prior to occupancy.
MUTUAL WAIVER OF Anything in this Sublease to the contrary notwithstanding,
SUBROGATION: Sublessor and Sublessee hereby waive and release each other
of and from ant and all rights of recovery, claim, action or
cause of action, against each other, their partners, agents,
officers and employees, for any loss or damage that may
occurs to the Premises, Master Premises or building, or
personal property therein, that is covered by valid and
collectible insurance in effect at the time of such loss or
damage regardless of cause of origin, including negligence
of Sublessor or Sublessee and their partners, agents,
officers and employees. Sublessor and Sublessee agree to
give immediately to their respective insurance companies
which have issued policies of insurance covering any risk of
direct physical loss, written notice of the terms of the
mutual waivers contained in this Section.
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
SUBLEASE Provided Sublessee is not in default of the Sublease
EXPANSION: agreement, Tenant shall have a right to expand into an
additional 100,000 SF of adjacent space as depicted on
Exhibit Al attached hereto. The rate of such expansion space
will be based on an initial shell rate of $.33/sf and
adjusted annually (August) by 3%. Sublessee shall provide
thirty (30) days written notice of their intent to expand,
and Sublessor shall utilize their best efforts to
accommodate such expansion. Sublessee shall be responsible
for any expenses involved with such expansion, such as
relocation of product, moving or adding demising walls, etc.
Also, the parties understand that Sublessor (AMWI) is a
logistics provider and may be able to accommodate an
expansion request by providing mutually beneficial
third-party logistics services.
SUBLEASE Throughout the Sublease term, Sublessee shall have the right
EXTENSION: to extend the sublease for a term equal to five (5) years
from the Commencement Date. The rental rate for such
extension will be adjusted to $.34/sf (NNN) at the time of
extension commencement, and will provide a three percent
(3%) annual increase. Sublessee shall provide five (5) month
written notice of such intent to extend the sublease term.
UTILITIES: In the event utilities serving the Premises are separately
metered, Sublessee shall pay all charges for utilities
consumed by Sublessee in the Premises, as separately
metered, to the applicable utility company. In the event
such utilities are not separately metered, Sublessee shall
pay its proportionate share of such utilities to Sublessor,
as determined based on the number of square feet in the
Premises and taking into account Sublessee's use thereof.
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
CASUALTY AND In the event of fire of other casualty damage to the
CONDEMNATION: Premises or any material portion thereof, that cannot be
repaired of otherwise restored within ninety (90) days of
such damage and that materially and adversely affect
Sublessee's use of the Premises, Sublessee shall have the
right to terminate the Sublease upon written notice to
Sublessor. If this Sublease is not so terminated, Rent due
hereunder shall xxxxx until such time as the Premises is
restored and again useable by Sublessee. In the event of a
condemnation of any material portion of the Premises, such
that the remained of the Premises is not useable by
Sublessee for the use specified in this Sublease, Sublessee
shall have the right to terminate this Sublease upon written
notice to the Sublessor. If this Sublease is not terminated,
Rent shall be adjusted on a pro rata basis based on the
number of square feet in the Premises so condemned.
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
In the event of any conflict between the terms of this Addendum and the
Sublease, the terms of this Addendum shall prevail.
Sublessor: A & M Warehouses, Inc. Sublessee: 000.XXX, Inc.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxx Xx Xxxxx
-------------------------------- -------------------------------
Xxxx Xxxxxxx
Title: President Title: VP Finance CFO
Address: 0000 X Xxxxxx, XX Address: 0000 XX Xxxxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Date: 9/8/99 Date: 9/10/99
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
EXHIBIT A-1
SITE PLAN
[GRAPHIC]
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ADDENDUM TO REAL ESTATE SUBLEASE
DATED SEPTEMBER 8, 1999
BETWEEN 000.XXX, INC., AS SUBLESSEE,
AND A & M WAREHOUSES, INC., AS SUBLESSOR
EXHIBIT A-2
FLOOR PLAN
[GRAPHIC]
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