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Exhibit 10.31
COMMERCIAL LEASE AGREEMENT
WITH OPTION TO RENEW
AND RIGHT OF FIRST REFUSAL
THIS COMMERCIAL LEASE AGREEMENT WITH OPTION TO RENEW AND RIGHT OF
FIRST REFUSAL (the "Lease") is entered into on the 2nd day of June, 1999, and
is effective July 1, 1999, by and between XXXXXX INVESTMENTS II, LC, a limited
liability company organized under and by virtue of the laws of the State of
Arkansas, (hereinafter referred to as "Lessor"), and STAFFMARK, INC., a
Delaware corporation, (hereinafter referred to as "Lessee"), wherein the
following mutual covenants and understandings are made and entered into upon
the following terms and conditions:
W-I-T-N-E-S-S-E-T-H
SECTION ONE
SUBJECT OF LEASE
Lessor hereby lets and leases unto Lessee, and Lessee accepts from
Lessor, subject to the terms and conditions contained herein, the property and
improvements located at 234 and 000 Xxxx Xxxxxxx, along with the adjacent
parking lot, Fayetteville, Washington County, Arkansas, said property being
more specifically described in the attached Exhibit "A" which is incorporated
herein by reference (hereinafter referred to as the "Premises"); provided,
however, that the execution of this Lease by and between Lessor and Lessee with
respect to the property at 000 Xxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx, will
immediately terminate that certain lease dated January 15, 1996, by and between
Lessor and Lessee (the "Prior Lease") without any further obligation or
liability by either party with respect to the Prior Lease.
SECTION TWO
TERM
The Premises are hereby leased to Lessee for an initial period of ten
(10) years, commencing at 12:01 a.m. on the 1st day of July, 1999, and ending
at 12:01 a.m. on the 30th day of, June 2009, (hereinafter referred to as the
"Lease Term").
SECTION THREE
RENTAL AMOUNT
The monthly rental payment for the Lease Term shall be payable as set
forth below in advance on the 1st day of each month, with the first payment
being due on or before the date of the signing of this Lease, with the first
month's rent being prorated as of the date the Lease is signed. The Lessee
agrees to pay to Lessor as monthly rental the following amounts for the
following portions of the Lease Term:
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1. Year 1: July 1, 1999 through June 31, 2000 the sum
of $48,791.00 per month;
2. Years 2 - 5: July 1, 2000 through June 30, 2004 the
sum of $58,938.00 per month ($13.58/sq. ft.); and
3. Years 6 - 10: July 1, 2004 through June 30, 2009 the
sum of $65,078.00 per month ($15.00/sq. ft.) 10 year
average = $14.06/sq. ft.
SECTION FOUR
LIENS
Lessee shall not encumber the Premises or any buildings thereon and
shall keep the Premises free and clear of any and all mechanic's, laborer's,
materialmen's, and other liens arising out of or in connection with any work or
labor done, services performed, or materials or appliances used or furnished
for or in connection with any operations of Lessee, any alteration,
improvement, or repairs or additions which Lessee may make or permit or cause
to be made, or any work or construction, by, for, or permitted by Lessee on or
about the Premises, or any obligations of any kind incurred by Lessee, and at
all times promptly and fully to pay and discharge any and all claims on which
any such lien may or could be based, and to indemnify Lessor and all of the
Premises against all such liens and claims of liens and suits or other
proceedings pertaining thereto.
SECTION FIVE
ASSIGNMENT AND SUBLEASE
Lessee shall not assign any rights, duties or privileges under this
Lease, nor allow any other person to occupy or use the Premises (other than
invitees of Lessee who are present at the same time the Lessee are present)
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld. A consent to one assignment, sublease, occupation or use
by any other person or entity shall not be a consent to any subsequent
assignment, sublease, occupation or use by any other person or entity, nor will
such consent release the Lessee from any of Lessee's obligations hereunder. Any
assignment or subletting without the prior written consent of Lessor shall be
void, and shall, at the option of the Lessor, terminate this Lease. Further,
Lessor shall have any and all remedies for such breach as specified in Section
Seventeen, Breach or Default. The terms of this Section shall also apply to
unpermitted assignments as specified in Section 29 Lessee Further Assignment
Restriction.
SECTION SIX
WARRANTIES OF TITLE AND QUIET POSSESSION
Lessor covenants that it has the right to make this Lease, and that
Lessee shall have the quiet and peaceable possession of the Premises during the
Lease Term.
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SECTION SEVEN
WASTE AND NUISANCE PROHIBITED
During the Lease Term and any renewals or extensions, Lessee shall
comply with all laws applicable to Lessee's operation of business on the
Premises, the breach of which might result in any penalty on Lessor or
forfeiture of Lessor's title to the Premises. Lessee shall not commit, or
suffer to be committed, any waste on the Premises or any nuisance.
SECTION EIGHT
LESSOR'S RIGHTS OF ENTRY
Lessee shall permit Lessor or Lessor's agents to enter into and upon
the Premises at all reasonable times during normal business hours, upon prior
reasonable notice, for the purpose of inspecting the same; provided, however,
that Lessor shall not interfere with the privacy rights or treatment of any of
Lessee's patrons while in the Premises, or otherwise disrupt Lessee's business
operations.
SECTION NINE
UTILITIES AND COSTS
Lessee shall fully and promptly pay all water, electricity, gas,
telephone service, and other public utilities furnished to the Premises
throughout the Lease Term, including any renewals or extensions, hereof. In
addition, Lessee shall pay for any and all costs and expenses of every kind
associated with the operation of Lessee's business on the Premises.
SECTION TEN
TRADE FIXTURES
All trade fixtures installed by Lessee or acquired by Lessee
independently of this Lease shall remain the Lessee's property and may be
removed by Lessee at the expiration or termination of this Lease; provided,
however, that Lessee shall restore the Premises and repair any damage thereto
caused by such removal.
SECTION ELEVEN
LESSEE'S MAINTENANCE AND REPAIR OF PREMISES
Lessee has inspected the Premises, and acknowledges by signing
hereinafter that the Premises are now in a tenantable condition. Lessee, at
Lessee's expense, shall keep the Premises in good order, condition and repair,
ordinary wear and tear excepted, and shall promptly make all repairs and
replacements of every kind and nature, to the Premises, including, without
limitation, repairs to the building walls or roof and normal maintenance on the
heating and air conditioning and plumbing. In the event that Lessee fails to
promptly and properly make all repairs and replacements to the Premises, of
every kind and nature, as required herein Lessor may do so, at Lessor's sole
option, in which event the cost of said repairs and replacements paid by Lessor
shall become immediately due and payable by Lessee to Lessor, with such amounts
bearing interest at the maximum lawful rate.
Lessee shall take good care in the use of the Premises and Lessee
shall not alter, repair, modify, or construct additions or improvements or
change the Premises without the prior written consent of Lessor;
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provided, however, that Lessor's written consent will not be unreasonably
withheld. Lessee, at Lessee's expense, may make any additions, modifications,
and repairs which are needed to comply with any licensing requirements, health
and safety regulations, or other requirements or regulations associated with
Lessee's use and occupancy of the Premises. Any alterations, improvements and
changes the Lessee may desire or need shall be done at the expense of Lessee
and shall become the property of Lessor and remain on the Premises.
Lessee shall, at the termination of this Lease, surrender the Premises
to Lessor in as good condition and repair as reasonable and proper use thereof
will permit, ordinary wear and tear, damage or destruction by fire, flood,
storm, civil commotion, or other unavoidable cause or Acts of God excepted.
Lessor shall not be responsible for any additions, replacements or repairs
except those which Lessor may specifically assume in writing.
SECTION TWELVE
SIGNS
No sign, picture, advertisement, or notice, except existing signs and
those displayed on the glass of the doors or windows, shall be displayed on any
part of the outside of said building or on or about the Premises hereby demised
without the prior written consent of the Lessor, (which consent shall not be
unreasonably withheld) or without compliance, with all applicable laws,
ordinances and regulations of the appropriate governmental authority. The
Lessor may only remove the same without notice to the Lessee and at Lessee's
expense if Lessor did not provide its prior written consent to sign, picture,
advertisement or notice in question, or if Lessee failed to comply with all
applicable laws, ordinances and regulations of the appropriate governmental
authority. Upon termination of this Lease, Lessee will remove any sign,
advertisement or notice painted on or affixed to the Premises, and return the
place it occupied to the condition which existed as of the date this Lease
takes effect.
SECTION THIRTEEN
TAXES
Lessee shall pay all ad valorem real property taxes and assessments
due to improvement districts or governmental bodies which may be levied,
assessed or charged against the Premises. Should Lessee fail to timely pay all
taxes and assessments due hereunder, Lessor may do so at Lessor's sole option,
in which event the amount of said taxes or assessments, along with all
interest, penalties and related costs (including attorney's fees) paid by
Lessor shall become immediately due and payable by Lessee to Lessor, bearing
interest at the maximum lawful rate. Lessee shall also be responsible for
assessing and paying the personal property taxes on any personal property of
Lessee located on or about the Premises and for all license, privilege and
occupation taxes levied, assessed or charged against the Lessee on account of
the operation of the business on the Premises. Lessee shall provide written
evidence of payment of said taxes to Lessor as soon as practicable following
payment, but in no event later than thirty (30) days from said payment.
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SECTION FOURTEEN
INSURANCE
Lessee shall, at Lessee's expense, at all times during the Lease Term
and any renewals or extensions hereof, maintain in force a policy or policies
of insurance, written by one or more responsible insurance carriers acceptable
to Lessor, which will insure Lessor and Lessee against liability for injury to
or death of persons or loss or damage to property occurring in or about the
Premises. The limits of liability coverage under such insurance shall not be
less than $2,000,000.00 per person, $4,000,000.00 per occurrence, and
$4,000,000.00 coverage for property damage, with Lessor named insured in such
policies.
In addition, Lessee shall, at Lessee's expense, at all times during
the Lease Term and any renewals or extensions hereof, keep insured all
buildings and improvements on the Premises against all losses or damage by fire
and other casualty, in such amounts (no less than replacement value) and under
such form of policies as shall be acceptable to, or requested by, the Lessor,
with Lessor and Lessee named as insured parties, and with standard Mortgagee
coverage in favor of all persons who may hold mortgages on the Premises. A
certificate of such insurance shall be delivered to Lessor within twenty (20)
business days following execution of this Lease. Lessee shall not do or permit
to be done anything which will make uninsurable the Premises or any part
thereof.
Lessee, during the Lease Term and any renewals or extensions hereof,
shall be responsible for insuring the contents of the Premises, including,
without limitation, all of Lessee's personal property located on the Premises.
Lessee shall provide Lessor with written proof of all of the above
described insurance coverage at all times, and inform Lessor of any lapse,
deficiency or cancellation, or any notices thereof immediately. Should Lessee
fail to keep in effect and pay such insurance as it is, in this Section,
required to be maintained, Lessor may do so, at Lessor's sole option, in which
event the insurance premiums paid by Lessor shall become immediately due and
payable by Lessee to Lessor, with such amounts bearing interest at the maximum
lawful rate.
SECTION FIFTEEN
INDEMNIFICATION OF LESSOR
Notwithstanding the existence of any insurance provided for in this
Lease, Lessee shall indemnify and hold Lessor harmless from and against any and
all claims, damages, causes of action, expenses, costs, and liabilities of any
nature which are asserted against Lessor arising out of any breach of this
Lease by Lessee, Lessee's agents, employees, customers, visitors or licensees,
as a result of Lessee's use or occupancy of the Premises, or as a result of the
negligence or willful misconduct of Lessee, Lessee's agents, employees,
customers, visitors or licensees; provided, however, that Lessee shall not be
responsible for damages, costs, claims, causes of action and liabilities of any
nature arising out of the negligence or willful misconduct of the Lessor,
Lessor's agents, employees and/or visitors.
SECTION SIXTEEN
DAMAGE BY FIRE OR OTHER CASUALTY
During the Lease Term and any renewals or extensions hereof, if the
improvements on the Premises, or any part thereof, be rendered unfit for
occupancy for the purposes for which they are hereby let, from any cause
covered by Lessee's casualty insurance, to an extent repairable within one
hundred and
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eighty (180) days from the date of such damage subject to compliance with the
laws and regulations of applicable governmental authorities, the Lessor will
repair the Premises for the use of the Lessee using said insurance proceeds,
and the Lease shall continue in full force and effect, except that, as the sole
and exclusive remedy of the Lessee, there shall be a proportionate abatement in
the monthly rental payable by the Lessee during the time the Premises are
untenantable or in part untenantable. Any proportionate reduction shall be
based on the extent to which the making of repairs shall interfere with the
business carried on by Lessee on the Premises; provided, however, that if the
repairs cannot be made within the time frame stated above, or if the cost of
replacing or repairing the improvements so damaged upon the Premises equals or
exceeds fifty percent (50%) of the property damage insurance coverage
maintained by Lessee thereon, Lessor may, at its option, terminate this Lease
and in such event, Lessee shall be entitled to a proportionate rebate of the
monthly rental based upon number of days remaining for the month in which the
monthly rental has been paid, and thereafter Lessee shall have no further
liability or obligation to Lessor under this Lease, except those arising prior
to such termination. Otherwise, the Lessor will repair the Premises for the use
of the Lessee using said insurance proceeds as stated herein, and the Lease
shall continue in full force and effect, except that, as the sole and exclusive
remedy of the Lessee, there shall be a proportionate abatement in the rent
payable by the Lessee during the time the Premises are untenantable or in part
untenantable. Lessor shall in no way be liable or responsible for any damage to
any property of the Lessee in or about the Premises by reason of flood, water,
fire, windstorm or other casualty or act of nature.
SECTION SEVENTEEN
BREACH OR DEFAULT
A. Events of Default. Lessee shall have breached this Lease and shall be
considered in default hereunder if, during the Lease Term or any extension or
renewal thereof: (a) the Lessee files a petition in bankruptcy or insolvency or
for reorganization under any bankruptcy act, or makes an assignment for the
benefit of creditors which is not released within thirty (30) days; (b)
involuntary proceedings are instituted against the Lessee under any bankruptcy
act, and such proceedings are not dismissed within thirty (30) days of the
filing thereof; (c) Lessee abandons or vacates said Premises before the end of
the term of this Lease; (d) Lessee suffers the rent to be more than ten (10)
days in arrears with such failure to pay continuing for a period of twenty (20)
days; or (e) Lessee fails to perform or comply with any of the material
covenants, terms, provisions or conditions of this Lease and such failure
continues for a period of ten (10) days following written notice from the
Lessor to Lessee of such failure to materially perform or comply.
B. Remedies in Event of Default. In the event of a default under this Lease
which is continuing and has not been cured in accordance with the prior
paragraph of this Section 17 Breach or Default by Lessee, and subject to the
provisions of subsection X. Xxxxx Period for Unpermitted Assignment Pursuant to
Section 29 below, Lessor shall have the option to declare all remaining monthly
rental payments due hereunder for the balance of the then current Lease Term or
Renewal Term to be immediately due and payable without further notice or
demand, and the same shall thereafter bear interest at the maximum rate allowed
by law until paid. In addition to the foregoing, but again subject to
subsection X. Xxxxx Period for Unpermitted Assignment Pursuant to Section 29,
the Lessor may pursue any and all other remedies available to Lessor at law or
in equity, including without limitation, either or both of the following
actions:
(a) Lessor may terminate this Lease and the use of the Premises by Lessee,
and Lessor shall have the right to enter upon and take possession of
the Premises, with or without notice to
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Lessee, and to evict and expel Lessee and any or all of Lessee's
property, without legal process and without thereby being guilty of
any manner of trespass either at law or in equity; and in such event,
any or all property left in and about the Premises shall be considered
abandoned and Lessor may remove and dispose of any and all such
property as Lessor sees fit without any recourse by Lessee, pursuant
to the provisions of Arkansas law. Lessee shall be responsible for all
costs of moving, storing and disposing of said property; or
(b) Lessor may enter said Premises as the agent of Lessee, without notice
or legal process and without being liable for any manner of trespass,
and relet the Premises, as the agent of Lessee, with or without
Lessee's property or fixtures that may be therein, at such price and
upon such terms and for such duration of time as the Lessor may
determine, and receive the rent therefor, applying the same to any
costs or expenses incurred by Lessor as a result of Lessee's default
under the Lease, including but not limited to leasing and brokerage
fees, attorneys' fees, and construction expenses relating to reletting
the Premises. If the full amount due hereunder shall not be realized
by Lessor over and above the expenses to Lessor in such reletting, the
said Lessee shall pay any deficiency upon Lessor's written demand, and
in no event shall Lessee be entitled to any excess of rent (or rent
plus other sums) obtained by reletting over and above any and all
amounts due hereunder from Lessee to Lessor.
Lessee understands and consents that if a default under Section 17
Breach or Default has occurred, is continuing and/or has not been cured, that
pursuant to Arkansas law, all property placed on the Premises by Lessee is
hereby subjected to a lien in favor of Lessor for the payment of all sums
agreed to be paid by Lessee under this Lease which lien, if any, will be
subject to prior liens, if any, on such property of Lessee by creditors of
Lessee. In any of the foregoing circumstances, including but not limited to
Lessor's remedy of acceleration of remaining monthly rental payments, Lessor
shall have the duty to mitigate any and all damages in favor of Lessee. It is
expressly agreed that in addition to the remedies specified herein in the event
of a default, Lessee shall also be liable for and shall pay to Lessor, in
addition to any sum provided to be paid hereunder, upon written demand, any and
all other sums incurred by Lessor in connection with such default or reletting
the Premises, including without limitation: reasonable attorney's fees;
broker's fees incurred by Lessor in connection with reletting the whole or any
part of the Premises; the costs of removing and storing Lessee's or other
occupant's property; the costs of repairing, altering, remodeling or otherwise
putting the Premises into condition reasonably acceptable to a new tenant or
tenants, and all other reasonable out of pocket expenses incurred by Lessor in
enforcing Lessor's remedies.
X. Xxxxx Period for Unpermitted Assignment Pursuant to Section 29. In the event
that the default is the result of an assignment under Section 29 Lessee Further
Assignment Restriction, for which Lessor has not provided its consent, Lessor
shall elect to accelerate all remaining monthly payments as specified above,
and Lessor agrees not to exercise any other remedies available to Lessor for a
period of one hundred and eighty (180) days following the date of such default
(the "Grace Period"), and during such time Lessee shall be entitled to remain
in possession of the Premises, so long as Lessee continues to make monthly
rental payments on a timely basis to Lessor in accordance with this Lease
during the Grace Period, as if no unpermitted assignment had occurred. In order
to cure such a default, on or before the last day of the Grace Period Lessee
shall:
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(a) pay the accelerated aggregate rental amount of the then remaining
current Least Term or Renewal Term, as applicable, and in such event
the default shall have been cured and Lessee shall be entitled to
remain in possession of the Premises without any further rental or
related obligation being owed to Lessor through and until the
expiration of the then current Lease Term or Renewal Term, as
applicable; or
(b) satisfy Lessor to Lessor's reasonable satisfaction that the default is
cured other than with respect to payment of the accelerated aggregate
rental amount, and in such event the default shall have been cured,
with Lessee continuing to be responsible for all of its obligations
under this Lease, including the monthly payment of rent through the
expiration of the Lease Term or the Renewal Term, as applicable.
If upon the expiration of the Grace Period Lessee has failed to pay
the accelerated aggregate rental amount or is not able to otherwise cure the
default relating to the unpermitted assignment to Lessor's reasonable
satisfaction, then Lessor shall be free to elect any and all remedies against
Lessee as provided in this Section 17 Breach or Default.
SECTION EIGHTEEN
EMINENT DOMAIN
If the Premises be subjected to any eminent domain proceedings, the
Lease shall terminate if all of the Premises are taken or if the portion taken
is so extensive that the residue is wholly inadequate for Lessee to carry on
Lessee's business and neither party shall have any further obligations or
liabilities to the other, except those arising prior to termination. If the
taking be partial, then Lessee's rental shall be reduced in the proportion
which the value of the property taken bears to the whole value of the Premises
originally leased. In such condemnation proceedings Lessee may claim
compensation for the taking of any removable installations which by the terms
of this Lease Lessee would be permitted to remove at the expiration of this
Lease, but Lessee shall be entitled to no additional award, it being agreed
that all damages allocable to full fee simple ownership of the entire Premises
shall in any event be payable to Lessor.
SECTION NINETEEN
PARTIES BOUND
The covenants and conditions contained herein shall, subject to the
provisions as to assignment, transfer and subletting, apply to and bind the
successors and assigns of the parties hereto.
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SECTION TWENTY
NOTICES
Any notices provided for herein will be deemed to have been given when
deposited by certified mail, return receipt requested, postage prepaid,
addressed to the parties as follows:
To Lessor: Xxxxxx Investments II, LC
Attn: Xxxxx Xxxxxx
0000 Xxxxx Xxxx.
Xxxxxxxxxxxx, XX 00000
To Lessee: Staffmark, Inc.
Attn: Xxxxxx Xxxxxxx
000 X. Xxxxxx
Xxxxxxxxxxxx, XX 00000
SECTION TWENTY-ONE
SUBORDINATION AND ATTORNMENT
The Lessee hereby subordinates this Lease to any mortgage, deed of
trust or encumbrance which the Lessor may have placed, or may hereafter place,
on the Premises or any part thereof. Lessor agrees that Lessee may file a
Memorandum of Lease in the form attached hereto as Exhibit ___. Lessee agrees
to execute, on demand, any instrument which may be deemed reasonably necessary
to render such mortgage, deed of trust, or encumbrance, whenever made, superior
and prior to this Lease. In the event that Lessee refuses or fails to do so,
Lessor is hereby appointed Lessee's attorney-in-fact to execute such instrument
in the name of Lessee and as the act and deed of Lessee, and this authority is
hereby declared to be coupled with an interest and irrevocable by Lessee during
the Lease Term and any extension or renewal thereof. Further, Lessee shall, in
the event any proceedings are brought for the foreclosure of, or in the event
of the exercise of the power of sale under, any mortgage made by Lessor
covering any part of the Premises, attorn to the purchaser upon any such
foreclosure or any other sale and recognize such purchaser as Lessor under this
Lease.
SECTION TWENTY-TWO
MERGER
This Lease Agreement with Option to Renew and Right of First Refusal
contains the entire agreement between the parties and supersedes any prior or
contemporaneous oral or written agreements which supplement or contradict the
terms and provisions set forth herein.
SECTION TWENTY-THREE
ATTORNEY'S FEES
If any legal action shall be brought to recover any rent or enforce
any right under the terms of this Lease or for a default hereunder, the
prevailing party shall be entitled to recover from the other party any
reasonable costs of collection and attorneys' fees incurred as a consequence of
enforcing the provisions of the Lease, the amount of which shall be fixed by
the Court and shall be made a part of the judgment or decree rendered.
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SECTION TWENTY-FOUR
PROVISIONS SEPARABLE
In the event any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
remaining provisions of this Lease and this Lease shall be construed as if such
invalid, illegal or unenforceable provision or provisions had never been
contained herein.
SECTION TWENTY-FIVE
CONSENT OR WAIVER OF BREACH
The consent of either party to any act or the waiver by either party
of a breach of any provision of this Lease shall not operate or be construed as
a consent or waiver of any subsequent act or breach by the other party.
Further, the receipt by Lessor of any rental payment due hereunder with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. No provision of this Lease shall be deemed to have been
waived by Lessor or Lessee unless such waiver is in writing signed by Lessor or
Lessee, as the case may be.
SECTION TWENTY-SIX
ENVIRONMENTAL MATTERS
Lessee hereby covenants that it will not manufacture at or install in
the Premises any hazardous or toxic materials subject to regulation by State or
Federal law or regulations during the Lease Term. Lessee shall indemnify and
hold Lessor harmless from any and all claims, losses, damages, penalties,
fines, expenses (including reasonable attorney's fees) and liabilities
whatsoever arising out of or relating to the presence, handling, treatment,
removal, cleanup or incident of any such hazardous or toxic materials by
Lessee.
SECTION TWENTY-SEVEN
CONDUCT OF BUSINESS AND USES
The Premises are leased to Lessee for the purpose of carrying on the
business of human resources, temporary staffing, training and consulting
business, uses related thereto and corporate headquarters for a publicly held
company and related matters. Lessee covenants unto Lessor that the Premises
will be used for those purposes, and those related to them, and no other,
except with the prior written consent of Lessor. Lessee covenants and agrees
that Lessee will not do or permit to be done anything in, upon, or about the
Premises that increases the hazard of fire beyond that which exists by reason
of use and occupancy of the Premises for the purposes mentioned. Further,
Lessee will not do or permit to be done anything within Lessee's control which
would make the Premises or the improvements thereon uninsurable in whole or in
part.
SECTION TWENTY-EIGHT
MISCELLANEOUS
A. Time shall be of the essence with respect to every term and
condition of this Lease.
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B. In the event that any rental payment to be made under the terms of
this Lease is not paid on or before the tenth (10) day of each month,
Lessee agrees to pay a late charge equal to five percent (5%) of said
past due rental payment.
C. This Lease may be amended or modified only by an instrument in
writing duly executed by all parties hereto or their successors.
D. This Lease may be executed in multiple counterparts, each of which
shall be deemed an original, and all of which taken together shall be
deemed one instrument.
E. All trash and refuse deposited outside the building on the Premises
must be placed in sufficient receptacles to be furnished by Lessee and
approved by the appropriate governmental officials or bodies for the
City of Fayetteville, Arkansas.
SECTION TWENTY-NINE
LESSEE FURTHER ASSIGNMENT RESTRICTION
In the event that Lessee is a corporation, partnership, limited
liability company or other form of business entity, and during the Lease Term,
or any renewal or extension thereof, any of the following changes shall occur,
this shall constitute an assignment of this Lease, which requires the prior
written consent of Lessor pursuant to Section Five, Assignment and Sublease
(which as stated in Section 5 shall not be unreasonably withheld by Lessor):
A. a merger, consolidation, or recapitalization occurs where the
Lessee is not the surviving business entity;
B. (i) a stock purchase, tender offer, exchange offer, merger or open
market purchases of Lessee's common stock by an individual, entity or
related group occur during a consecutive 180 day period; and (ii)
pursuant to the applicable transaction in (i) upon its consummation, a
change in ownership or voting control of the Lessee occurs with
respect to a majority of Lessee's outstanding voting common shares;
C. a sale of substantially all of the assets of Lessee and its
subsidiaries taken as a whole; or
D. there shall occur any change whereby an individual, partnership,
limited liability company, corporation or other entity or related
group acquires the ownership of, or the power to vote, a majority of
the outstanding voting common shares of stock of the Lessee.
Provided, however, that the acquisition of all of the outstanding
shares of stock of the Lessee by any corporation, limited partnership or
limited liability company a class of whose common stock or interests, as
applicable, is/are registered under the Securities Exchange Act of 1934, as
amended, shall not be deemed
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an assignment of this Lease pursuant to Section 5 Assignment and Sublease, if
and only if the acquiring entity becomes a party to this Lease or becomes an
unconditional guarantor of this Lease.
SECTION THIRTY
RENEWAL TERMS
If the Lessee shall have materially performed every agreement and
covenant on Lessee's part to have been kept and performed under covenants,
terms and conditions of this Lease, and any amendments thereto, and is not in
breach or default of this Lease at the time of exercise and at the time of
renewal, including all renewals or extensions hereof, then upon the expiration
of the Lease Term, or the then current Renewal Term, Lessee shall have the
option to renew this Lease in the Premises for two (2) additional terms of five
(5) years as the parties shall agree, with each renewal period being referred
to herein as the "Renewal Term," subject to the following provisions:
A. Notice of the exercise of the option to renew must be given in
writing to Lessor, pursuant to the notice provisions of this Lease,
not later than six (6) months prior to the end of the original Lease
Term, or the then current Renewal Term agreed to by the parties, as
applicable.
B. Should the Lessee exercise the options to renew granted herein,
this Lease shall be extended on the same terms and conditions as set
forth herein, during each Renewal Term, with the exception of the
monthly rental payments as set forth below.
C. The amount of the monthly rental payment for each Renewal Term
shall be the lessor of: (1) 1/2 of the Previous Year CPI increase
times the monthly lease payment over the last monthly lease payment of
the initial Lease Term; or (2) the fair market value of rentals of
similar and comparable properties in the Fayetteville/Springdale Area
as detained in a written report by an appraiser unaffiliated with
either Lessor or Lessee.
D. The right of first refusal described in Section Thirty-One of this
Lease shall be renewed and extended during the Renewal Terms.
SECTION THIRTY-ONE
RIGHT OF FIRST REFUSAL
If the Lessee shall have materially performed every agreement and
covenant on Lessee's part to have been kept and performed under the terms and
conditions of this Lease and is not in breach or default of this Lease at the
time of exercise, Lessee shall be granted a right of first refusal on the
following terms and conditions, to purchase the Premises:
A. The Lessee's right of first refusal to purchase the Premises shall
exist during the initial Lease Term as described in Section Two of
this Lease and any Renewal Term specified in Section Thirty of this
Lease.
B. In the event that the Lessor shall receive a bona fide offer from a
third party to purchase the Premises or if the Lessor shall decide
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to sell the Premises, Lessor shall give Lessee a written offer to sell
the Premises to the Lessee, setting forth the price and the terms of
sale, as set forth in the offer received by Lessor from the potential
third party purchaser of the Premises, or the Lessor's offer to sell
the Premises.
C. In either event, Lessor shall send the written offer to Lessee at
the address required under Section Twenty for notices by Certified
Mail, requiring Lessee to accept the offer in writing and to sign a
suitable contract to purchase the Premises within the period of thirty
(30) business days after the mailing of the notice.
D. The failure of Lessee to accept the offer to purchase or sign a
contract within the period provided herein shall nullify and void this
right of first refusal to Lessee, and Lessor shall be at liberty to
sell the Premises to any other person, firm, corporation or other
entity, at the price and on the terms offered to Lessee.
SECTION THIRTY-TWO
APPLICABLE LAW
This Lease shall be construed in accordance with and governed by the
laws of the State of Arkansas applicable to agreements made and to be performed
wholly within such jurisdiction with regard to the conflicts of laws provisions
thereof. The Courts of the State of Arkansas for Washington County, and the
Federal Courts for the Western District of Arkansas shall have jurisdiction
over any and all disputes which arise between the parties under this Agreement,
whether in law or in equity, and each of the parties shall submit and hereby
consents to such Court's exercise of jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Commercial Lease
Agreement with Option to Renew and Right of First Refusal on this 2nd day of
June, 1999.
LESSOR: XXXXXX INVESTMENTS II, LC ,
AN ARKANSAS LIMITED LIABILITY COMPANY
BY: /S/ XXXXX X. XXXXXX
-------------------
XXXXX X. XXXXXX, MANAGER
LESSEE: STAFFMARK, INC.,
A DELAWARE CORPORATION
BY: /S/ XXXXX XXXXXXX
-----------------
XXXXX XXXXXXX
CHIEF FINANCIAL OFFICER
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ACKNOWLEDGMENT
STATE OF ARKANSAS )
) ss.
COUNTY OF WASHINGTON )
On this date, before the undersigned, a Notary Public, duly
commissioned, qualified and acting, within and for the said County and State,
appeared in person the within named XXXXX X. XXXXXX to me personally known, who
stated that he was the Manger of XXXXXX INVESTMENTS II, LC an Arkansas Limited
Liability Company, and was duly authorized in his capacity to execute the
foregoing instrument for and in the name and behalf of said company, and
further stated and acknowledged that he had so signed, executed and delivered
said instrument for the consideration, uses and purposes therein mentioned and
set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 2nd day of June, 1999.
My Commission Expires: /s/ Xxxxx XxXxxxxx
------------------
Notary Public
0-00-00
XXXXXXXXX XXXXXXXXXXXXXX
XXXXX XX XXXXXXXX )
) ss.
COUNTY OF WASHINGTON )
On this date, before the undersigned, a Notary Public, duly
commissioned, qualified and acting, within and for the said County and State,
appeared in person the within named XXXXX XXXXXXX to me personally known, who
stated that he was the Chief Financial Officer of STAFFMARK, INC., a Delaware
Corporation, and was duly authorized in his capacity to execute the foregoing
instrument for and in the name and behalf of said company, and further stated
and acknowledged that he had so signed, executed and delivered said instrument
for the consideration, uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 2nd day of June, 1999.
My Commission Expires: /s/Xxxxx XxXxxxxx
-----------------
Notary Public
7-24-07
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