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EXHIBIT 10.2
REAL ESTATE PURCHASE CONTRACT
STATE OF TEXAS )
)
COUNTY OF DALLAS )
THIS REAL ESTATE PURCHASE CONTRACT (this "Contract") is made this 19th
day of July, 1999 (the "Effective Date") by and between Home Interior & Gifts,
inc. (hereinafter referred to as "Seller") and Xxxxxx Equities, Inc., a Texas
corporation with principal offices in Dallas County, Texas (hereinafter referred
to as "Purchaser"), upon the terms and conditions set forth herein.
ARTICLE I.
PURCHASE AND SALE
Upon the terms and subject to the conditions set forth in this
Contract, Seller hereby agrees to sell and convey to Purchaser and Purchaser
hereby agrees to purchase from Seller all of the property described in (a), (b)
and (c) below (the "Property") described below:
(a) Seven tracts of land described in Exhibit "A" attached
hereto and made a part hereof, together with all right,
title and interest, if any, of the Seller in and to any
adjacent streets, alleys or rights-of-way (individually,
each a "Tract" and collectively the "Land");
(b) Seven office/warehouse buildings containing approximately
623,799 square feet, parking areas and other improvements
located on the Land, described in Exhibit "A", together with
all fixtures, equipment and systems, owned by Seller, used
in the operation of such buildings and improvements and
affixed to or located on the Land on the date hereof
(individually, each a "Building" and together with the Tract
where such Building is located, each a "Site" and all the
Buildings are collectively referred to herein as the
"Improvements"); and
(c) Such other rights, interests and property as may be
specified in this Contract to be sold, transferred, assigned
or conveyed by Seller to Purchaser.
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ARTICLE II.
PURCHASE PRICE
2.1. Amount of Purchase Price. The Purchase Price ("Purchase Price")
for said Property shall be the sum of Sixteen million four hundred and eight
thousand dollars ($16,408,000.00). If this Contract is terminated with respect
to one or more of the Site(s) as provided for herein, but not all of the Sites,
the Purchase Price shall be reduced by the amount set forth on Exhibit "A" for
the Site(s) being terminated.
2.2. Payment of Purchase Price. The Purchase Price shall be payable in
cash at Closing.
ARTICLE III.
PURCHASER'S OBLIGATIONS
3.1. Conditions to Purchaser's Obligations. The obligations of
Purchaser hereunder to consummate the transactions contemplated hereby are
subject to the satisfaction of each of the following conditions (any of which
may be waived in whole or in part by Purchaser at or prior to the Closing).
3.2. Title Commitment. A commitment for Title Insurance (the
"Commitment") shall be delivered to Purchaser on or before ten business (10)
days after this Contract has been executed, issued by First American Title
Company and countersigned by an escrow officer of Republic Title of Texas, Inc.,
000 Xxxxxxxx Xxxxx, #000, Xxxxxx, Xxxxx 00000, Attn: Xx. Xxxxxx X. Xxxxxxx,
("Title Company") and describing the matters affecting title to each Site and
setting forth the terms and conditions under which said Title Company is willing
to issue its Owners Policy of Title Insurance. No objections to title shall be
made by Purchaser unless such matter(s) has/have a material affect on the value
of any Site. In the event such type of exceptions appear in such binder,
Purchaser shall so notify Seller in writing on or before twenty (20) days from
the date of this Contract. Purchaser shall be deemed to have waived, accepted
and approved all matters set out in the Commitment to which it has not objected
in writing within twenty (20) days of the date of this Contract. Seller will
either cause the objected to exceptions to be released or modified to the
reasonable satisfaction of Purchaser within ten (10) days of Purchaser's
objection (but shall have no obligation to do so), or Purchaser may elect in
writing to terminate this Contract only with respect to the Site(s) which is/are
affected by such objection(s) which has/have not been cured. If Purchaser fails
to terminate this Contract with respect to any Site within such ten (10) day
period, then Purchaser shall be deemed to have waived all such objections
previously made. Any exception to which no objection is made or which exception
is waived or deemed waived or which is modified to the reasonable satisfaction
of Purchaser is referred to herein as a Permitted Exception.
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3.3 Survey. As soon as reasonably practicable, Seller shall furnish
Purchaser a current survey for each Site (hereinafter collectively called the
"Survey") which shall (1) show the area and boundaries of each Tract, (2) locate
all easements (whether of record or apparent from an inspection of each Tract),
rights-of-way on or adjacent to each Tract (identified by recording data, if
applicable), (3) show the location and size of all streets (existing and
proposed) and utility lines on or adjacent to each Tract, (4) reflect any
encroachments or protrusions, railroads, rivers, creeks, or other water causes,
fences, utilities, including size and location and other matters located on or
affecting each Tract (and any recording information relating thereto), (5) set
forth the number of square feet comprising the land thereon, together with a
legal description of each Tract by metes and bounds, (6) contain a certification
as to the existence of any portion of each Tract within a 100 year flood plain
or within any flood prone area as reflected by applicable FEMA map or community
panel, and (7) contain a certification by the surveyor reasonably acceptable to
the Title Company and to Purchaser. In the event the Survey contains any matters
which have a material affect on the value on any Site, Purchaser shall so notify
Seller in writing on or before thirty (30) days from the date of this Contract.
Purchaser shall be deemed to have waived, accepted and approved all matters set
forth on such Survey to which it has not objected in writing within thirty (30)
days of the date of this Contract. Seller will either cause the objected to
exceptions to be released or modified to the reasonable satisfaction of
Purchaser within ten (10) days of Purchaser's objection (but shall have no
obligation to do so), or Purchaser may elect in writing to terminate this
Contract only with respect to the Site(s) which is/are affected by such
objection(s) which has/have not been cured. If Purchaser fails to terminate this
Contract with respect to any Site within such ten (10) day period then Purchaser
shall be deemed to have waived all such objections previously made. Any matter
to which no objection is made or which exception is waived or deemed waived or
which is modified to the reasonable satisfaction of Purchaser shall be a
"Permitted Exception."
3.4 Inspections.
(a) Purchaser and its architects and engineers shall have until
the date which is 60 days after the Effective Date (the "Inspection Expiration
Date"), to inspect the Property and review the Materials (hereinafter defined)
and do any other inspection including environmental audit that Purchaser in its
reasonable discretion deems pertinent. Notwithstanding the foregoing, Seller
grants Purchaser and its engineers the right to core or otherwise penetrate any
slab, parking lot or pavement; provided, however, that Purchaser shall, at its
sole expense, repair and restore any and all portions of the Property that are
cored, penetrated, dismantled or otherwise disturbed in connection with such
inspections and return them to the condition in which they existed immediately
prior to such inspection activities. Buyer shall provide Seller with not less
than twenty-four (24) hours notice of its intention to perform any such
procedure (and Seller may supervise the performance of such procedure). All
inspections shall be done without unreasonably interfering with any tenant's or
Seller's business operations, shall be done in compliance with all applicable
laws and shall be done at the sole risk and expense of Purchaser.
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Seller may also supervise the repair required to be performed by Purchaser (or
its engineers) at Purchaser's expenses. Purchaser shall indemnify Seller and its
agents from and against all claims resulting from any entry on the Property by
Purchaser or any of its agents, contractors, consultants or other
representatives ("Purchaser's Representative") or any activities conducted in or
on the Property by Purchaser, or any of Purchaser's Representatives, together
with all expenses incurred by Seller and/or its agents by reason thereof
including, without limitation, reasonable attorneys' fees and disbursements,
which obligation shall survive the Closing or the termination of this Contract.
(b) In the event Purchaser's inspection of the Property or of any
of the Materials reveals any Material Physical Defects at any Site, then
Purchaser shall give written notice to Seller of such Material Physical Defects
immediately after discovering same, but in all events by no later than the
Inspection Expiration Date (the "Reported Physical Defects"). Except for
Environmental Defects (hereinafter defined), Purchaser shall not have the right
to object to Physical Defects which are not Material Physical Defects. By no
later than the date which is 30 days after the Inspection Expiration Date (the
"Cure Expiration Date"), Seller may (but shall have no obligation to do so)
offer to correct some or all of any such Reported Physical Defects. If (i)
Seller has not offered a reasonable solution with respect to any Reported
Physical Defects or (ii) if there are any Major Physical Defects, then (A) with
respect to any Site other than the Sites located at 4545 and 0000 Xxxxxx Xxxxxx
Xxxx, Xxxxxx, Xxxxx (the "Spring Valley Sites"), Purchaser may terminate this
Contract only with respect to the Site(s) which is/are affected by such uncured
objectionable matter(s) or (B) with respect to either of the Spring Valley
Sites, Purchaser may terminate this Contract with respect to all (but not a
portion) of the Sites. Such termination shall only be effective if Purchaser
delivers written notice thereof to Seller by no later than the Cure Expiration
Date. If Purchaser fails to terminate this Contract with respect to any Site by
the Cure Expiration Date or Purchaser sends no objection notice to Seller by the
Inspection Expiration Date then Purchaser shall be deemed to have waived all
such objections. For purposes of this paragraph:
"Physical Defects" shall mean the physical defects or damage or
deferred maintenance (other than Environmental Defects) affecting the Property
as discovered by Purchaser's inspections;
"Material Physical Defects" shall refer to Physical Defects on each
Site independently and shall mean that the cumulative cost to remedy the
physical defects at any such Site exceeds $25,000; and
"Major Physical Defects" shall refer to the Reported Physical Defects
on each Site independently and shall mean that the cumulative cost to remedy the
Reported Physical Defects at any such Site exceeds the Major Physical Defects
Threshold shown on Exhibit "A" for such Site.
(c) In the event Purchaser's inspection of the Property or of any
of the Materials reveals the presence of any hazardous or toxic substances or
any other
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environmental issues ("Environmental Defects") at any Site which impairs
Purchaser's ability to obtain financing on such Site, then Purchaser shall give
written notice to Seller of such Environmental Defects immediately after
discovering same, but in all events by no later than the Inspection Expiration
Date (the "Reported Environmental Defects"). By no later than the Cure
Expiration Date, Seller may (but shall have no obligation to do so) correct some
or all of any such Reported Environmental Defects. If Seller has not cured to
Purchaser's reasonable satisfaction any Reported Environmental Defects, then (A)
with respect to any Site other than the Spring Valley Sites, Purchaser may
terminate this Contract only with respect to the Site(s) which is/are affected
by such uncured objectionable matter(s) or (B) with respect to either of the
Spring Valley Sites, Purchaser may terminate this Contract with respect to all
(but not a portion) of the Sites. Such termination shall only be effective if
Purchaser delivers written notice thereof to Seller by no later than the Cure
Expiration Date. If Purchaser fails to terminate this Contract with respect to
any Site by the Cure Expiration Date or Purchaser sends no objection notice to
Seller by the Inspection Expiration Date then Purchaser shall be deemed to have
waived all such objections.
(d) As part of its inspections prior to the Inspection Expiration
Date, Purchaser shall have the right to retain, at its sole cost and expense,
Xxxx Environmental Engineers or other engineers of its selection ("Engineer") to
undertake Environmental Site Assessments at the Sites (the "Assessments"). Prior
to commencing such Assessments (i) Purchaser shall provide Seller with the
reasonable opportunity to review and comment on the scope of work and locations
where the samples are being taken in order to facilitate a joint application, if
necessary, for the State of Texas "Innocent Owner Program" and (ii) Purchaser
shall cause the Engineer to provide Seller with a copy of the Engineer's
insurance certificate showing Seller as an additional named insured. Seller
shall be a named party on any Assessments, and copies shall be provided to
Seller upon their respective completion by the Engineer.
3.5 Other Documents. To the extent in Sellers possession and control,
Seller shall deliver to Purchaser within ten (10) days of the execution of this
Contract true and correct copies of the following (the "Materials"):
(1) A Schedule of all insurance policies on the Property.
(2) A copy of all leases, estoppels issued in connection with
proper transfers of leasehold interests or financings,
certificates of occupancy and warranties on the improvements
to the Property.
(3) Complete "as-built" plans, soil tests, engineering
documents, plans and reports for the original construction
and any subsequent engineering or environmental report,
building permit, contract for repairs or improvements.
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(4) A list of operating expenses for calendar years 1996, 1997
and 1998 showing the cost of all operating expenses
including electrical, water, gas, trash and maintenance by
months.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF SELLER AND PURCHASER
Seller hereby represents, warrants to, and where applicable agrees with
Purchaser as follows, which representations and warranties shall be deemed made
by Seller to Purchaser also as of the Closing Date:
(1) Except for final approval of the Board of Directors as
provided in Article XI (l) hereof, Seller has legal capacity
and authority to perform Seller's obligations hereunder.
Except for Seller and Seller's affiliates, to the best
knowledge of Seller, there are no parties in possession of a
portion of the Property as lessees under unrecorded leases.
(2) There is no pending or to the best of Seller's knowledge
threatened condemnation or similar proceeding or assessment
affecting the Property, or any part thereto, not to the best
knowledge of Seller is any such proceeding or assessment
contemplated by any governmental authority;
(3) To the best of its knowledge, Seller has complied in all
material respects with all applicable laws, ordinances,
regulations, statutes, rules and restrictions relating to
the Property, or any part thereof and has received no notice
and has no knowledge of any material violation or claim
thereof;
(4) During the period from the date of this Contract to the
Closing Date, Seller agrees that:
(a) Seller will manage and operate the Property in
substantially the same manner as the same has
heretofore been operated and managed.
(b) The Improvements will be maintained in as good
condition and state of repair as that existing on the
date of this Contract, normal wear and tear and
casualty excepted.
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(c) No additional buildings or other material improvements
will be constructed on the Land without the prior
written consent of Purchaser.
(d) To the best of Seller's knowledge, the Property is free
of asbestos, polychlorinated biphenyls, dioxins, radon
gas and hazardous or toxic substances and, to the best
of Seller's knowledge, has never been used as a so
called "dumpsite" and the Seller has never so used the
Property, nor used asbestos or other toxic substances
in the construction, operation or maintenance of the
Property except in immaterial amounts in accordance
with applicable laws (the foregoing representation and
warranty is limited by and excludes any such conditions
as are disclosed by Purchaser's inspection prior to
Closing).
(e) To the best knowledge of Seller, there are no
agreements relating to the Property which would not be
terminable at or after Closing by Purchaser on thirty
(30) days notice or less without penalty.
For purposes of this section, "to the best knowledge of Seller" or
similar phrases shall be limited to the actual knowledge of Xxx Xxxx and Xxxxxxx
Xxxxxxxxx without independent investigation except that Xxx Xxxx and Xxxxxxx
Xxxxxxxxx will reasonably review the relevant files of Seller.
EXCEPT FOR THE SPECIAL WARRANTY OF TITLE TO BE CONTAINED IN SELLER'S
DEEDS AND THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS CONTRACT,
THE PROPERTY WILL BE CONVEYED AND TRANSFERRED TO BUYER "AS IS, WHERE IS AND
WITHALL FAULTS," AND SELLER DOES NOT WARRANT OR MAKE ANY REPRESENTATION, EXPRESS
OR IMPLIED AS TO ITS FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY, FOOTAGE,
PHYSICAL CONDITION, COMPLIANCE WITH LAWS AND REGULATIONS; OR THE FITNESS OF THE
PROPERTY FOR BUYER'S PLANNED USE. IF CLOSING SHALL OCCUR, EXCEPT FOR LIABILITY
ARISING OUT OF THE INACCURACY OF THE EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS AGREEMENT, SELLER SHALL BE DEEMED TO BE AUTOMATICALLY RELEASED BY
BUYER AND ITS SUCCESSORS AND ASSIGNS OF AND FROM ALL LIABILITIES, OBLIGATIONS
AND CLAIMS, KNOWN OR UNKNOWN, THAT BUYER MAY HAVE AGAINST SELLER OR THAT ARISE
IN THR FUTURE. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING.
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Purchaser hereby represents and warrant to Seller, which
representations and warranties shall be deemed made by Purchaser to Seller also
as of the closing Date, that: (1) Purchaser has legal capacity and authority to
enter into, and to perform, Purchaser's obligations hereunder; and (2) Purchaser
has readily available funds in an amount sufficient to perform its obligations
hereunder and to purchase the Property pursuant to the terms hereof.
ARTICLE V.
CLOSING
The Closing shall be held at the office of Republic Title of Texas,
Inc. on or before December 1, 1999, or such earlier date, or at such time, date,
and place as Seller and Purchaser may agree upon in writing (which date is
herein referred to as the "Closing Date"). At the Closing, Seller shall deliver
to Purchaser one or more duly executed and acknowledged Special Warranty Deeds
(the "Deeds") conveying good and indefeasible title in fee simple to each of the
Sites, free and clear of any and all liens, encumbrances, conditions, easements,
assessments, and restrictions, except for the following:
(1) Covenants, encumbrances, conditions and restrictions set
forth in the Title Commitment and approved by Purchaser
pursuant to Sections 3.02 and Permitted Exceptions;
(2) General real estate taxes for the year of Closing and
subsequent years not yet due and payable and subsequent
assessments for prior years due to change in land usage or
ownership;
(3) Any exceptions approved by Purchaser.
Seller shall furnish at Seller's cost at Closing a Texas Standard Owner
Policy of Title Insurance issued by the Title Company in the full amount of the
Purchase Price containing no exception to such title other than the Permitted
Exceptions and the standard printed exceptions, the exception for taxes shall be
limited to taxes for the year in which Closing occurs and subsequent years and
subsequent assessments for prior years due to change in land usage or ownership,
any exception for parties in possession of each Site shall be limited to rights
of tenants in possession, as tenants only, pursuant to unrecorded leases and
there shall be no exception for visible and apparent easements, and any other
permitted exceptions shall be only those items shown on the Commitment issued by
the Title Company which have been approved by Purchaser or which are Permitted
Exceptions hereunder.
General real estate taxes, special taxes and assessments for the then
current year relating to the property, rents, association dues, utilities and
insurance shall be prorated as of the Closing Date and shall be adjusted in cash
at the Closing. If the Closing shall occur before the tax rate and/or the tax
valuation is fixed for the then current year, the
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apportionment of taxes shall be estimated and pro rated based upon the basis of
the tax rate for the next preceding year applied to the latest assessed
valuation. In the event the actual taxes differ from such estimate, Seller and
Purchaser agree to adjust the proration. Any adjusted payment shall be made
within fifteen (15) days after notification by either party that such adjustment
is necessary.
In addition to the Deeds, at the Closing, Seller shall deliver to
Purchaser (i) one executed original of each of the Leases (hereinafter defined),
(ii) an affidavit executed on behalf of Seller that Seller is not a foreign
corporation or entity, and (iii) the keys to each of the Buildings.
In addition to the Purchase Price, at the Closing, Purchaser shall
deliver to Seller an executed original of each of the Leases.
ARTICLE VI.
XXXXXXX MONEY
For the purpose of securing the performance of Purchaser under the
terms and provisions of this Contract, Purchaser will deliver to the Title
Company the sum of Fifty Thousand Dollars ($50,000) (the "Xxxxxxx Money"),
within three (3) business days of final execution of this Contract. On or before
the Inspection Expiration Date, Purchaser shall deposit an additional xxxxxxx
money deposit in the amount of Four Hundred Fifty Thousand Dollars ($450,000.00)
with the Title Company, which shall become part of the Xxxxxxx Money. The
aggregate Xxxxxxx Money shall consist of Five Hundred Thousand Dollars
($500,000), to be handled and disbursed as provided in this Contract. All sums
comprising the Xxxxxxx Money shall be held in an interest-bearing account at a
federally insured depository institution. At the Closing, the Xxxxxxx Money plus
all interest accrued therein, shall be paid over to Seller and applied to the
cash portion of the Purchase Price or returned to Purchaser at its option.
Unless this Contract is terminated by Purchaser in accordance with, Sections
3.2, 3.3, or 3.4 (in which event the Xxxxxxx Money shall be refunded to
Purchaser), hereof the Xxxxxxx Money of Purchaser shall be non-refundable. If
Purchaser fails to deposit any portion of the Xxxxxxx Money when such portion of
the Xxxxxxx Money is due, this Contract shall automatically terminate and any
Xxxxxxx Money already deposited shall be released to Seller as liquidated
damages. The parties agree that, unless otherwise agreed to by Seller, the
Xxxxxxx Money shall not be used to fund any repairs or replacements to the
Property that are discovered during Purchaser's inspection of the Property.
ARTICLE VII.
BREACH BY SELLER
In the event Seller shall fail to consummate the sale of the Property
for any reason, except Purchaser's default, Purchaser may as Purchaser's sole
and exclusive
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remedies: (1) enforce specific performance of the Contract; or (2) request that
the Xxxxxxx Money shall be forthwith returned by the Title Company to Purchaser
which are agreed to be Purchaser's exclusive remedies.
ARTICLE VIII.
BREACH BY PURCHASER
In the event Purchaser should fail to consummate the purchase of the
Property for any reason, except Seller's default hereunder, Seller will have the
right to receive the Xxxxxxx Money from the Title Company, such sum being agreed
on as liquidated damages for the failure of Purchaser to perform the duties,
liabilities and obligations imposed upon it by the terms and provisions of this
Contract as Seller's exclusive remedy.
ARTICLE IX.
RISK OF LOSS
In the event that any Site is materially damaged or destroyed by fire
or other casualty or a material portion thereof is taken by eminent domain prior
to Closing, Purchaser may elect to (1) terminate the Contract only with respect
to the affected Site, or (2) the transaction shall be closed in accordance with
the terms of this Contract except that Seller shall reduce the Purchase Price by
the amount of any deductible related to such loss of any applicable insurance
policy and assign to Purchaser all of its rights under such insurance policy or
policies.
ARTICLE X.
BROKERAGE COMMISSION
If the sale contemplated by this Contract is closed, Seller agrees to
pay a cash commission equal to six percent (6%) of the first $1,000,000 of the
Purchase Price and three percent (3%) of the balance of the Purchase Price, to
be paid at Closing and be divided equally between Xxxxxx Realty Advisors and The
Staubach Company (collectively, the "Brokers"). The Brokers shall be privileged
to share such commission with any other licensed real estate broker or
salesperson. Notwithstanding the foregoing, the payment of the foregoing
commission to the Brokers shall fully discharge the obligation of Seller for
commissions to the Brokers in connection with this transaction. The Broker's
right to such commission shall vest upon Closing but not otherwise.
Purchaser and Seller each represent and warrant to the other that
except as disclosed herein neither has employed any real estate agent, broker or
finder in connection with the transaction contemplated by this Contract, and
each party agrees to indemnify the other from and against all brokerage
commissions and finders' fees arising or resulting from acts or omissions of the
indemnifying party.
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Purchaser hereby acknowledges that, at the time of the execution of
this Contract, the undersigned Broker advised the Purchaser by this writing that
the Purchaser should have the abstract covering the real estate which is the
subject of this Contract examined by an attorney of the Purchaser's own
selection or that the Purchaser should be furnished with or obtain a policy of
title insurance.
ARTICLE XI.
MISCELLANEOUS
(a) Survival of Covenants. Except as otherwise provided herein, any of
the representations, warranties, covenants and agreements of the parties, as
well as any rights and benefits of the parties, pertaining to a period of time
following the Closing of the transactions contemplated hereby shall survive the
Closing for a period of 90 days after Closing.
(b) Notice. Any notice required or permitted to be delivered hereunder
shall be deemed received when deposited in the United States' mail, postage
prepaid, certified mail, return receipt requested, addressed to Seller or
Purchaser, as the case may be, at the address set forth below:
If to Purchaser: Xxxxxx Equities, Inc.
0000 Xxxxxx Xxxx, # 0000
Xxxxxx, Xxxxx 00000
With Copy to: Xx. Xxx Xxxxxxxxxxxx
0000 Xxxxxxxxxx Xxxxxx, #000
Xxxxxx, Xxxxx 00000
If to Seller: General Counsel
Home Interiors & Gifts, inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
With Copy to: Mr. Xxxxxx Xxxxxxx
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
(c) Texas Law to Apply. This Contract shall be construed under and in
accordance with the laws of the State of Texas, and all obligations of the
parties created hereunder are performable in Dallas County, Texas.
(d) Parties Bound. This Contract shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal
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representatives, successors and assignees where permitted by this Contract. It
is expressly agreed that the rights and duties of Purchaser hereunder shall not
be assignable in whole or in part to any party without the prior written consent
of Seller. Notwithstanding the foregoing, Purchaser may assign this Contract to
a party that is fully cable of performing Purchaser's obligations and truthfully
making Purchaser's representations and warranties under this Contract provided
that (i) Xxxx X. Xxxxx owns a material financial stake (direct or indirect) in
such party and (ii) Purchaser is the general partner of such party if such party
is a limited partnership or the managing member of such party if such party is a
limited liability company.
(e) Legal Construction. In case any one or more of the provisions
contained in this Contract shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or enforceability
shall not affect any other provision hereof and this Contract shall be construed
as if such invalid, illegal, or unenforceable provision had never been contained
herein.
(f) Prior Agreements Superseded. This Contract constitutes the sole and
only agreement of the parties hereto and superseded any prior understandings or
written or oral agreements between the parties respecting the within subject
matter.
(g) Gender. Words of any gender used in this Contract shall be and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vise versa, unless the context requires
otherwise.
(h) Attorney's Fee. If any party shall be required to employ an
attorney to enforce or defend the rights of such party hereunder, the prevailing
party shall be entitled to recover reasonable attorney's fees and costs of
court.
(i) Section 1031. The parties covenant and agree to reasonably
cooperate with each other, at no cost to the other, in effecting a tax deferred
exchange involving the Property under and pursuant to Section 1031 of the Code.
No party shall be obligated to take title to any replacement property or incur
any cost or expense as part of such cooperation. The obligations of the parties
hereunder shall not be conditioned upon effecting any such tax deferred
exchange.
(j) Sale/Leaseback. At Closing, Purchaser and Seller will enter into
counterpart lease agreements (individually, each a "Lease" and collectively, the
"Leases") for each Site (except the Site located in Lewisville, Texas) in a
lease form which substantially conforms to the form of Lease attached hereto as
Exhibit "B" as modified by the written comments and conceptual changes written
on the face thereof. Prior to Closing, Purchaser and Seller shall finalize the
form of Lease based on the foregoing modifications. The lease rate will be three
dollars ($3.00) per square foot, per annum, payable monthly, absolute net, with
Seller/tenant being responsible for ordinary expenses, associated with each
leased Site. The expenses include, but are not limited to, the real estate
taxes, personal property taxes, all insurance expenses, all utilities, and
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repairs and maintenance to each leased Site. The term for each Lease shall
commence at Closing and shall expire as set forth on Exhibit "A".
(k) Access to Property. Commencing on the date which is the earlier of
(i) the date which Seller notifies Purchaser that it has completed its
communications with its employees at each Site and (ii) fifteen (15) days after
the Effective Date, Seller agrees that Purchaser will be allowed to show each
Site to prospective lease tenants at anytime during normal business hours, with
twenty-four (24) hour notice to Seller and Purchaser (or Purchaser's
Representatives) and will be allowed to erect a "For Lease" sign on each Site.
Neither Purchaser nor Purchaser's Representatives shall hold itself out as the
agent of Seller and no lease or other agreement between Purchaser, or
Purchaser's Representatives and any party shall, in any way, bind Seller.
Purchaser shall indemnify Seller and its agents from and against all claims
resulting from any entry on the Property by Purchaser or Purchaser's
Representatives or any activities conducted in or on the Property by Purchaser,
or any of Purchaser's Representatives, together with all expenses incurred by
Seller and/or its agents by reason thereof including, without limitation,
reasonable attorneys' fees and disbursements, which obligation shall survive the
Closing or the termination of this Contract.
[SIGNATURES ON THE FOLLOWING PAGE]
13
14
Executed in multiple counterparts this 19th day of July, 1999.
SELLER:
Home Interiors & Gifts, inc.
By: /s/ XXXXXX X. XXXXXX, XX.
--------------------------------
Name: XXXXXX X. XXXXXX, XX.
------------------------------
Title: CEO
-----------------------------
PURCHASER:
Xxxxxx Equities, Inc.
By: /s/ XXXX X. XXXXX
--------------------------------
Xxxx X. Xxxxx, President
15
EXHIBIT "A"
Legal:
Being Lot 1, in Block A, of HOME INTERIORS PARK, an Addition to the City of
Farmers Branch, Texas, according to the Map thereof recorded in Volume 71189,
Page 000, xx xxx Xxx Xxxxxxx xx Xxxxxx Xxxxxx, Xxxxx;
Being part of Xxxx 0 xxx 0, Xxxxx 0, xx XXXXXXXXXXXX XXXXXXXXXX XXXX, SECTION
FOUR-SECOND INSTALLMENT, an Addition to the City of Farmers Branch, Dallas
County, Texas, according to the Map thereof recorded in Volume 73063, Page 24,
of the Map Records of Dallas County, Texas, and being more particularly
described on Exhibit A attached hereto and made a part hereof for all purposes;
Being a portion of Block C, of CARROLLTON COMMERCE CENTER, an Addition to the
City of Carrollton, Dallas County, Texas, according to the Map thereof recorded
in Volume 78167, Page 1250, Map Records, Dallas County, Texas, and being more
part described on Exhibit A attached hereto and made a part hereof for all
purposes;
Being a tract of land containing 3.91 acres, more or less, situated in the XXXXX
X. XXXXXXX SURVEY, ABSTRACT NO. 1296, Dallas County, Texas, and being more
particularly described by metes and bounds description to be provided;
Being 2 tracts of land situated in the X. Xxxx Xxxxxx, Xxxxxxxx Xx. 000, Xxxxxx
Xxxxxx, Xxxxx and being more particularly described on Exhibit A attached hereto
and made a part hereof for all purposes;
Being all of XXX 0, XXXXX 0 XX XXXXXXXXX XXXXXXXX XXXX NO. 7, an Addition to the
City of Xxxxxxx, Xxxxxx County, Texas, according to the Map thereof recorded in
Volume 80155, Page 1113, of the Map Records of Dallas County, Texas. SAVE AND
EXCEPT that right of way dedicated to the City of Garland by instrument filed
06/01/1994, recorded in Volume 94104, Page 0000, Xxxx Xxxxxxx, Xxxxxx Xxxxxx,
Xxxxx; and
Being a 2.0 acre tract of land in the X. X. XXXX SURVEY, Abstract No. 695, City
of Lewisville, Xxxxxx County, Texas, and being more particularly described on
Exhibit A attached hereto and made a part hereof for all purposes.
16
Improvements:
Agreed Value of each
Site as a portion of Lease
the total Purchase Expiration Major Physical
Price Date Defects Threshold
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(1) 0000 Xxxxxx Xxxxxx 210,233 S.F. 8.0000 acres $ 5,718,573 June 30, 2000 $100,000
Dallas, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(2) 0000 Xxxxxx Xxxxxx 114,380 S.F. 5.5770 acres $ 3,099,870 June 30, 2000 $100,000
Dallas, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(3) 0000 X. Xxxxxxx Xx. 54,000 S.F. 3.1945 acres $ 1,350,000 May 31, 2000 $ 25,000
Carrollton, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(4) 000 X. Xxxxxxx Xxxx 78,750 S.F. 3.9100 acres $ 2,133,300 June 30, 2000 $ 25,000
Coppell, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(5) 10351 Home Road 86,400 S.F. 5.0000 acres $ 2,073,600 August 31, 2000 $ 25,000
Frisco, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(6) 0000 Xxxx Xxxxxxxx 54,000 S.F. 4.5044 acres $ 1,404,000 April 30, 2000 $ 25,000
Garland, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
(7) 000 X. Xxx. 000 26,036 S.F. 2.0000 acres $ 628,657 No Lease $ 25,000
Lewisville, Texas
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
Total............ $ 16,408,000
-------- ----------------------- ----------------- ------------------ ---------------------- ------------------- -----------------
17
EXHIBIT "B"
Form of Lease
18
LEASE AGREEMENT
Note: The concepts noted in brackets shall be added to this form of Lease
prior to its execution.
THIS LEASE AGREEMENT is made and entered into as of the date set forth
below between Xxxxxx Equities, Inc., hereinafter referred to as "Lessor" and
_________________, hereinafter referred to as "Lessee":
W I T N E S S E T H :
1. LEASED PREMISES: In consideration of the rents, terms, provisions
and covenants of this Lease, Lessor hereby leases, lets and demises to Lessee
the following described premises (referred to as "leased premises" and
containing approximately ____ square feet) situated at ___________________
(sometimes referred to as "the building" or "the project"):
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
2. TERM: Subject to and upon the conditions set forth below, the term
of this Lease shall commence on __________ (the "commencement date") and shall
terminate __________(__) months thereafter.
3. RENT: (a) Lessee agrees to pay monthly as base rental during the
term of this Lease the following amounts:
Months Monthly Base Rental
------ -------------------
_________________________: $______ per month
_________________________: $______ per month
_________________________: $______ per month
_________________________: $______ per month
_________________________: $______ per month
Each installment shall be payable to Lessor at the address shown below on the
first day of the month. One monthly installment of rent shall be due and payable
on or before the first day of each calendar month succeeding the "commencement
date" or "completion date" during the demised term; provided, that if the
"commencement date" or the "completion date" should be a date other than the
first day of a calendar month, the monthly rental set forth above shall be
prorated to the end of that calendar month, and all succeeding installments of
rent shall be
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payable on or before the first day of each succeeding calendar month during the
demised term. Lessee shall pay, as additional rental, all other sums due under
this Lease.
(b) If any increase in the fire insurance premiums paid by Lessor for
the building in which Lessee occupies space is caused by Lessee's use and
occupancy of the leased premises, or if Lessee vacates the leased premises and
causes an increase in such premiums, then Lessee shall pay as additional rental
the amount of such increase to Lessor.
(c) Other remedies for nonpayment of rent notwithstanding, if the
monthly rental payment is not received by Lessor within 3 business days after
Lessor notifies Lessee in writing that the rent is overdue, a service charge of
five per cent (5%) of such past due amount shall become due and payable in
addition to such amounts owed under this Lease. In addition, Lessor shall be
entitled to charge twenty-five dollars for each check or payment which is not
honored by Lessee's bank. Said charge to be in addition to any other amounts
owed under this Lease.
(d) In the event the operating expenses (as defined below) of Lessor
for the building and/or project of which the leased premises are a part shall,
in any calendar year during the term of this Lease, exceed the sum of $ -0- per
square foot, Lessee agrees to pay as additional rental Lessee's pro rata share
of such excess operating expenses. Lessor shall, within three (3) months
following the close of any calendar year for which additional rental is due
under this paragraph, invoice Lessee for the additional rental. The invoice
shall include in reasonable detail all computations of the additional rental,
and Lessee agrees to pay the additional rental within thirty (30) days following
receipt of the invoice. If this Lease shall terminate on a day other than the
last day of a year, the amount of any additional rental payable by Lessee
applicable to the year in which such termination shall occur shall be prorated
on the ratio that the number of days from the commencement of such year to and
including such termination date bears to 365. During the year in which this
Lease terminates, Lessor shall have the option to invoice Lessee for Lessee's
pro rata share of the excess operating expenses based upon the previous year's
excess operating expenses; Lessor shall invoice Lessee under this option within
thirty days prior to the termination of this Lease or at any time thereafter.
Lessee shall have the right, at it own expense and at a reasonable time, to
audit Lessor's books relevant to the additional rentals due under this paragraph
3.
(e) The term "operating expenses" as used above includes all expenses
incurred with respect to the maintenance and operation of the building and/or
project of which the leased premises are a part, including, but not limited to,
maintenance and repair costs, sewer, security, trash and snow removal,
landscaping and pest control, all services, supplies, repairs, or other expenses
for maintaining and operating the building and/or project including common area,
parking area. The term "operating expenses" also includes all real property
taxes and installments of special assessments, including special assessments due
to deed restrictions, which accrue against the building and/or project of which
the leased premises are a part during the term of this Lease as well as all
insurance premiums Lessor is required to pay or reasonably deems necessary to
pay, including liability insurance, with respect to the building and/or project.
The term operating expenses does not include any capital improvement to the
building and/or project of which the leased premises are a part, nor shall it
include repairs, restoration or other
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work occasioned by fire, windstorm or other casualty, income and franchise taxes
of Lessor, expenses incurred in leasing to or procuring of tenants, leasing
commissions, advertising expenses, expenses for the renovating of space for new
tenants, interest or principal payments on any mortgage or other indebtedness of
Lessor, compensation paid to any employee of Lessor above the grade of building
superintendent nor any depreciation allowance or expense.
4. REPAIRS AND MAINTENANCE: (a) Unless otherwise expressly provided, Lessor
shall not be required to make any improvements, replacements or repairs of any
kind or character to the leased premises during the time of this Lease except
such repairs as are set forth in this subparagraph. Lessor shall maintain only
the roof, foundation, parking areas, and the structural soundness of the
exterior walls (excluding all windows, window glass, plate glass and all doors)
of the building in good repair and condition except for reasonable wear and
tear. Lessor's costs of maintaining the items set forth in this subparagraph are
subject to the additional rental provisions in paragraph 3. Lessee shall repair
and pay for any damage caused by the negligence or default of Lessee or Lessee's
agents and employees. Lessee shall immediately give written notice of the need
for repairs, which repairs shall be made by Lessor beginning not more than
fifteen (15) days after written notice by Lessee. Lessor shall not be liable to
Lessee, except as expressly provided in this Lease, for any damage or
inconvenience, and Lessee shall not be entitled to any abatement or reduction of
rent by reason of any repairs, alterations or additions made by Lessor under
this Lease.
(b) Lessee shall, at its own cost and expense, maintain all other parts
of the building and other improvements on the leased premises in good repair and
condition (ordinary wear and tear and casualty excepted), including, but not
limited to, plumbing, heating and air conditioning systems, downspouts, fire
sprinkler system, dock bumpers, regular mowing and trimming of any grass, pest
control and extermination including termite eradication, weed removal and
regular removal of debris. Lessee shall take good care of all the property and
its fixtures, including all landscaping. Should Lessee neglect to keep and
maintain the leased premises, then Lessor shall have the right, but not the
obligation, to have the work done and the cost therefor shall be charged to
Lessee as additional rental and shall become payable by Lessee with the payment
of the rental next due hereunder.
(c) Lessee shall not allow any damage to be committed on any portion of
the leased premises, and at the termination of this Lease, by lapse of time or
otherwise, Lessee shall deliver the leased premises to Lessor in as good
condition as existed at the commencement date or completion date of this Lease,
ordinary wear and tear and casualty excepted. The cost and expense of any
repairs necessary to restore the condition of the leased premises shall be borne
by Lessee, and if Lessor undertakes to restore the leased premises it shall have
a right of reimbursement against Lessee.
(d) All requests for repairs or maintenance that the responsibility of
Lessor pursuant to any provision of this Lease must be made in writing to Lessor
at the address set forth below.
(e) If after the date hereof, Lessee or its employees, agents, or
contractors shall ever violate the provisions of Paragraph 7 below (that apply
to Lessee regarding toxic or hazardous
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21
materials), or if Lessee's acts, negligence, breach of this provision or
business operations directly and materially expand the scope of any
contamination from toxic or hazardous materials, then Lessee shall clean-up,
remove and dispose of the material causing the violation, in compliance with
all applicable governmental standards, laws, rules and regulations and repair
any damage to the leased premises or building within such period of time as may
be responsible under the circumstances after written notice by Lessor, provided
that such work shall commence not later than thirty (30) days from such notice
and be diligently and continuously carried to completion by Lessee or Lessee's
designated contractors. Lessee shall notify Lessor of its method, time and
procedure for any clean-up or removal of toxic or hazardous materials under
this provision; and Lessor shall have the right to require reasonable changes
in such method, time or procedure or to require the same to be done after
normal business hours or when the building is otherwise closed (i.e., weekends
or holidays).
5. MAINTENANCE CONTRACT: Lessee shall, at its sole cost and expense, during the
term of this Lease maintain a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for the servicing of
all heating and air conditioning systems and equipment within the leased
premises. The maintenance contractor and contract must include all services
suggested by the equipment manufacturer. In the event this service contract is
not provided, then Lessor shall have the right, but not the obligation, to have
the work done and the cost therefor shall be charged to Lessee as additional
rental and shall become payable by Lessee with the payment of the rental next
due hereunder.
6. SIGNS: Lessee shall allow Lessee to keep in place any existing signs relating
to Lessee's business as of the date hereof. No additional Lessee signs or other
objects shall be attached to the building or canopy.
7. USAGE: Lessee warrants and represents to Lessor that the leased premises
shall be used and occupied only for the purposes of office/warehouse. Lessee
shall occupy the leased premises, conduct its business and control its agents,
employees, invitees and visitors in such a way as is lawful and reputable.
Without Lessor's prior written consent, Lessee shall not receive, store or
otherwise handle any product, material or merchandise which is explosive or
highly flammable. Lessee shall not commit, or suffer to be committed any waste
on the leased premises.
Neither Lessee nor Lessor shall ever knowingly permit to remain in,
incorporate into, use, or otherwise place or dispose of at the leased premises
or in the building or project any toxic or hazardous materials in concentrations
or levels sufficient that by the then applicable EPA, OSHA or other applicable
governmental standards cause the specific materials so identified to be
classified or identified as toxic or hazardous materials unless (i) such
materials are in small quantities, properly labeled and contained, (ii) such
materials are handled and disposed of in accordance with highest accepted
industry standards for safety, storage, use and disposal, (iii) such materials
are for use in the ordinary course of business (i.e. as with office or cleaning
supplies), (iv) notice of and a copy of the current material safety data sheet
is provided to the other party for each such hazardous or toxic material and (v)
such materials are handled and disposed of in accordance with all applicable
governmental laws, rules and regulations. If after
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22
the date hereof Lessor or Lessee ever obtains knowledge of the presence in the
leased premises or the building or the project of such toxic or hazardous
materials which affect the leased premises, the party having knowledge shall
notify the other party thereof in writing promptly after obtaining such
knowledge. For purposes of this Lease, hazardous or toxic materials shall mean
hazardous or toxic chemicals or any materials containing hazardous or toxic
chemicals at levels or content which cause such materials to be classified as
hazardous or toxic as then prescribed by the prevalent industry practice and
standards or by the then current levels or content as set from time to time by
EPA or OSHA or as defined under 29 CFR 1910 or 29 CFR 1925 or other applicable
governmental laws, rules or regulations.
8. INSURANCE: Lessee shall not permit the leased premises to be used in any way
which would, in opinion of Lessor, be extra hazardous on account of fire or
otherwise which would in any way increase or render void the fire insurance on
leasehold improvements or contents in the building belonging to other tenants in
the building. If at any time during the term of this Lease the State Board of
Insurance or other insurance authority disallows any of Lessor's sprinkler
credits or imposes an additional penalty or surcharge in Lessor's insurance
premiums because of Lessee's original or subsequent placement or use of storage
racks or bins, method of storage or nature of Lessee's inventory or any other
act of Lessee, Lessee agrees to pay as additional rental the increase (between
fire walls) in Lessor's insurance premiums.
9. UTILITY SERVICE: Lessor shall provide the normal utility service connections
into the leased premises. Lessee shall pay the cost of all utility services,
including, but not limited to, initial connection charges, all charges for gas,
water and electricity used on the leased premises, and for all electric light
lamps or tubes. Lessee shall pay all costs caused by Lessee introducing the cost
of such excessive pollutants or solids other than ordinary human waste into the
sanitary sewer system, including permits, fees and charges levied by any
governmental subdivision for any such pollutants or solids. Lessee shall be
responsible for all installation and maintenance of any dilution tanks, holding
tanks, settling tanks, sewer sampling devices, sand traps, grease traps or
similar devices as may be required by any governmental subdivision for Lessee's
use of the sanitary sewer system. Lessor shall not be required to pay for any
utility services, supplies or upkeep in connection with the leased premises.
10. COMPLIANCE WITH LAWS, RULES AND REGULATIONS: Lessee, at Lessee's expense,
shall comply with all laws, ordinances, orders, rules and regulations of state,
federal, municipal or other agencies or bodies having jurisdiction relating to
the use, condition and occupancy of the leased premises. Lessee will comply with
the rules of the building adopted by Lessor which are set forth on a schedule
attached to this Lease. Lessor shall have the right at all times to change the
rules and regulations of the building or to amend them in any reasonable manner
as may be deemed advisable for the safety, care and cleanliness, and for the
preservation of good order, of the leased premises. All changes and amendments
in the rules and regulations of the building will be sent by Lessor to Lessee in
writing and shall thereafter be carried out and observed by Lessee.
11. ALTERATIONS AND IMPROVEMENTS: Lessee shall not make or allow to be made any
alterations or physical additions in or to the leased premises without first
obtaining written
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consent of Lessor. Any alterations, physical additions or improvements to the
leased premises made by Lessee shall at once become the property of Lessor and
shall be surrendered to Lessor upon the termination of this Lease. Lessor, at
its option, may require Lessee to remove any physical additions and/or repair
any alterations in order to restore the leased premises to the condition
existing at the time Lessee took possession, all costs of removal and/or
alterations to be borne by Lessee. This clause shall not apply to moveable
equipment or furniture owned by Lessee which may be removed by Lessee at the
end of the term of this Lease if Lessee is not then in default and if such
equipment and furniture is not then subject to any other rights, liens and
interests of Lessor.
12. CONDEMNATION: (a) If, during the term (or any extension or renewal) of this
Lease, all or a substantial part of the leased premises are taken for any public
or quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by purchase in lieu thereof, and the taking would
prevent or materially interfere with the use of the leased premises for the
purposes for which the leased premises are then being used, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease effective on the date physical possession is taken by the condemning
authority.
(b) In the event a portion of the leased premises shall be taken for
any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in subparagraph (a) above, Lessor may,
at Lessor's sole risk and expense, restore and reconstruct the building and
other improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances.
13. FIRE AND CASUALTY: (a) If the leased premises should be totally destroyed by
fire or other casualty, or if the leased premises should be so damaged so that
rebuilding cannot reasonably be completed within ninety (90) working days after
the date of written notification by Lessee to Lessor of the destruction, this
Lease shall terminate and the rent shall be abated for the unexpired portion of
the Lease, effective as of the date of the written notification.
(b) If the leased premises should be partially damaged by fire or other
casualty, and rebuilding or repairs can reasonably be completed within ninety
(90) working days from the date of written notification by Lessee to Lessor of
the destruction, this Lease shall not terminate, but Lessor may at its sole risk
and expense proceed with reasonable diligence to rebuild or repair the building
or other improvements to substantially the same condition in which they existed
prior to the damage. If the leased premises are to be rebuilt or repaired and
are untenantable in whole or in part following the damage, and the damage or
destruction was not caused or contributed to by act or negligence of Lessee, its
agents, employees, invitees or those for whom Lessee is responsible, the rent
payable under this Lease during the period for which the leased premises are
untenantable shall be adjusted to such an extent as may be fair and reasonable
under the circumstances. In the event that Lessor fails to complete the
necessary repairs or rebuilding within ninety (90) working days from the date of
written notification by Lessee to Lessor of the
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destruction, Lessee may at its option terminate this Lease by delivering
written notice of termination to Lessor, whereupon all rights and obligations
under this Lease shall cease to exist.
14. PROPERTY INSURANCE: Lessor shall at all times during the term of this Lease
maintain a policy or policies of insurance with the premiums paid in advance,
issued by and binding upon some solvent insurance company, insuring the building
against all risk of direct physical loss in an amount equal to ninety percent
(90%) of the full replacement cost of the building structure and its
improvements as of the date of the loss (and at Lessors option, loss of rents
attributable to such loss); provided, that Lessor shall not be obligated in any
way or manner to insure any personal property (including, but not limited to,
any furniture, machinery, goods or supplies) of Lessee or which Lessee may have
upon or within the leased premises or any fixtures installed by or paid for by
Lessee upon or within the leased premises or any additional improvements which
Lessee may construct on the leased premises.
15. WAIVER OF SUBROGATION: Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release each other of and
from any and all rights of recovery, claim, action or cause of action, against
each other, their agents, officers and employees, for any loss or damage that
may occur to the leased premises, improvements to the building of which the
leased premises are a part, or personal property (contents) within the building,
by reason of fire or the elements regardless of cause or origin, including
negligence of Lessor or Lessee and their agents, officers and employees. Because
this paragraph will preclude the assignment of any claim mentioned in it by way
of subrogation or otherwise to an insurance company or any other person, each
party to this Lease agrees immediately to give to each insurance company which
has issued to its policies of insurance covering all risk of direct physical
loss, written notice of the terms of the mutual waivers contained in this
paragraph, and to have the insurance policies properly endorsed, if necessary,
to prevent the invalidation of the insurance coverages by reason of the mutual
waivers contained in this paragraph.
16. HOLD HARMLESS: Lessor shall not be liable to Lessee's employees, agents,
invitees, licensees or visitors, or to any other person, for any injury to
person or damage to property on or about the leased premises caused by the
negligence or misconduct of Lessee, its agents, servants or employees, or of any
other person entering upon the leased premises under express or implied
invitation by Lessee, or caused by the building and improvements located on the
leased premises becoming out of repair, or caused by leakage of gas, oil, water
or steam or by electricity emanating from the leased premises. Lessee agrees to
indemnify and hold harmless Lessor of and from any loss, attorney's fees,
expenses or claims arising out of any such damage or injury. Lessee shall
procure and maintain throughout the term of this Lease a policy or policies of
insurance, at its sole cost and expense, insuring both Lessor as its interest
may appear with respect to the premises and Lessee against all claims, demands
or actions arising out of or in connection with: (i) the premises; (ii) the
condition of the premises; (iii) Lessee's operations in the maintenance and use
of the premises; and (iv) Lessee's liability assumed under this Lease, the
limits of such policy or policies to be in the amount of not less than $300,000
per occurrence in respect of injury to persons (including death), and in the
amount of not less than $50,000 per occurrence in respect of property damage or
destruction, including loss of use thereof.
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Certificates of Insurance evidencing such coverage shall be delivered to Lessor
upon request. [This paragraph shall be revised so that the indemnity shall be
mutual.]
17. QUIET ENJOYMENT: Lessor warrants that it has full right to execute and to
perform this Lease and to grant the estate demised and that Lessee, upon payment
of the required rents and performing the terms, conditions, covenants and
agreements contained in this Lease, shall peaceably and quietly have, hold and
enjoy the leased premises during the full term of this Lease as well as any
extension or renewal thereof. Lessor shall not be responsible for the acts or
omissions of any other Lessee or third party that may interfere with Lessee's
use and enjoyment of the leased premises.
18. LESSOR'S RIGHT OF ENTRY: Lessor shall have the right, at all reasonable
hours upon reasonable notice to Lessee, to enter the leased premises for the
following reasons: inspection; cleaning or making repairs; or determining if an
event of default under this Lease has occurred. During the final one hundred
fifty days of the lease term, Lessor and its authorized agents shall have the
right to erect and maintain on or about the leased premises customary signs
advertising the property for lease or for sale.
19. ASSIGNMENT OR SUBLEASE: Lessor shall have the right to transfer and assign,
in whole or in part, its rights and obligations in the building and property
that are the subject of this Lease. Lessee shall not assign this Lease or sublet
all or any part of the leased premises without the prior written consent of
Lessor (which consent shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing, Lessee may transfer and assign its rights and
obligations, in whole or in part under this lease to any affiliate of Lessee
without the consent of Lessor provided that such affiliate maintains the
insurance required to be maintained by Lessee hereunder and if requested by
Lessor shall provide Lessor with a Certificate of Insurance evidencing such
coverage. In the event of any assignment or subletting, Lessee shall
nevertheless at all times remain fully responsible and liable for the payment of
the rent and for compliance with all of its other obligations under the terms,
provisions and covenants of this Lease. Upon the occurrence of an "event of
default" as defined below, if all or any part of the leased premises are then
assigned or sublet, Lessor, in addition to any other remedies provided by this
Lease or provided by law, may, at its option, collect directly from the assignee
or subtenant all rents becoming due to Lessee by reason of the assignment or
sublease, and Lessor shall have a security interest in all properties on the
leased premises to secure payment of such sums. Any collection directly by
Lessor from the assignee or subtenant shall not be construed to constitute a
novation or a release of Lessee from the further performance of its obligations
under this Lease. Nothing contained herein shall allow any assignee or sublessee
of Lessee to transfer and assign, in whole or in part, its rights and
obligations in the building and property that are the subject of this Lease
whatsoever.
20. DEFAULT BY LESSEE: The following shall be deemed to be events of default by
Lessee under this Lease:
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26
(a) Lessee shall fail to pay when due any installment of rent or any
other payment required pursuant to this Lease and such failure shall continue
for a period of five (5) days after receiving written notice of such failure;
[Paragraphs (b) and (d) shall be revised to give Lessee a 30 day right to cure
and paragraph (c) shall be revised to give Lessee a 60 day right to cure.]
(b) Lessee shall fail to comply with any term, provision or covenant of
this Lease.
(c) Lessee shall file a petition or be adjudged bankrupt or insolvent
under the National Bankruptcy Act, as amended, or any similar law or statute of
the United States or any state; or a receiver or trustee shall be appointed for
all or substantially all of the assets or Lessee; or Lessee shall make a
transfer in fraud of creditors or shall make an assignment for the benefit of
creditors; or
(d) Lessee shall do or permit to be done any act which results in a
lien being filed against the leased premises or the building and/or project of
which the leased premises are a part.
21. REMEDIES FOR LESSEE'S DEFAULT: Upon the occurrence of any event of default
set forth in this Lease, Lessor shall have the option to pursue any one or more
of the following remedies without any notice or demand:
(a) Terminate this Lease, in which event Lessee shall immediately
surrender the leased premises to Lessor, and if Lessee fails to surrender the
leased premises, Lessor may, without prejudice to any other remedy which it may
have for possession or arrearages in rent, enter upon and take possession of the
leased premises, by picking or changing locks if necessary, and lock out, expel,
or remove Lessee and any other person who may be occupying all or any part of
the leased premises without being liable for prosecution of any claim for
damages. Lessee agrees to pay on demand the amount of all loss and damage which
Lessor may suffer by reason of the termination of the Lease under this
subparagraph, whether through inability to relet the leased premises on
satisfactory terms or otherwise.
(b) Enter upon and take possession for the leased premises, by picking
or changing locks if necessary, and lock out, expel or remove Lessee and any
other person who may be occupying all or any part of the leased premises without
being liable for any claim for damages, and relet the leased premises on behalf
of the Lessee and receive directly the rent by reason of the reletting. Lessee
agrees to pay Lessor on demand any deficiency that may arise by reason of any
reletting of the leased premises.
(c) Enter upon the leased premises, by picking or changing locks if
necessary, without being liable for prosecution of any claim for damages, and do
whatever Lessee is obligated to do under the terms of this Lease. Lessee agrees
to reimburse Lessor on demand for any reasonable expenses which Lessor may incur
in effecting compliance with Lessee's obligations under this Lease; further,
Lessee agrees that Lessor shall not be liable for any damages resulting to
Lessee from effecting compliance with Lessee's obligations under the
subparagraph caused by the negligence of Lessor or otherwise.
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(d) In the event Lessor exercises any of it rights provided herein and
Lessee subsequently cures such default, Lessor shall be entitled to receive a
service charge of one hundred dollars from Lessee for its time and expense in
addition to any other amounts owed hereunder, prior to allowing the Lessee to
re-enter and re-occupy the premises.
22. WAIVER OF DEFAULT OR REMEDY: Failure of Lessor to declare an event of
default immediately upon its occurrence, or delay in taking any action in
connection with an event of default, shall not constitute a waiver of the
default, but Lessor shall have the right to declare the default at any time and
take such action as is lawful or authorized under this Lease. Pursuit of any one
or more of the remedies set forth in paragraph 25 above shall not preclude
pursuit of any of one or more of the other remedies provided elsewhere in this
Lease or provided by law, nor shall pursuit of any remedy provided constitute
forfeiture or waiver of any rent or damages accruing to Lessor by reason of the
violation of any of the terms, provisions or covenants of this Lease. Failure by
Lessor to enforce one or more of the remedies provided upon an event of default
shall not be deemed or construed to constitute a waiver of the default or of any
other violation or breach of any of the terms, provisions and covenants
contained in this Lease.
23. ACTS OF GOD: Lessor shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Lessee, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
by or prevented by an act of God or force majeure.
24. ATTORNEY'S FEES: In the event Lessee defaults in the performance of any of
the terms, covenants, agreements or conditions contained in this Lease and
Lessor places in the hands of an attorney the enforcement of all or any part of
this Lease, the collection of any rent due or to become due or recovery of the
possession of the leased premises, Lessee agrees to pay Lessor reasonable
attorney's fees for the services of the attorney, whether suit is actually filed
or not.
25. HOLDING OVER: In the event of holding over by Lessee after the expiration or
termination of this Lease, the holdover shall be as a tenant at will and all of
the terms and provisions of this Lease shall be applicable during that period,
except that Lessee shall pay Lessor as rental for the period of such hold over
an amount equal to one and one-half the rent which would have been payable by
Lessee had the hold over period been a part of the original term of this Lease.
Lessee agrees to vacate and deliver the leased premises to Lessor upon Lessee's
receipt of notice from Lessor to vacate. The rental payable during the hold over
period shall be payable to Lessor on demand. No holding over by Lessee, whether
with or without consent of Lessor, shall operate to extend this Lease except as
otherwise expressly provided.
26. RIGHTS OF FIRST MORTGAGE: Lessee accepts this Lease subject and subordinate
to any recorded first mortgage or deed of trust lien presently existing or
hereafter created upon the leased premises provided Lessor provides Lessee with
a Subordination Nondisturbance and Attornment agreement executed by the lien
holder in a form reasonably acceptable to Lessee. Lessor is hereby irrevocably
vested with full power and authority to subordinate Lessee's interest under this
Lease to any first mortgage or deed of trust lien hereafter placed on the leased
premises, and Lessee agrees upon demand to execute additional instruments
subordinating this
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Lease as Lessor may require provided Lessor provides Lessee with a
Subordination Nondisturbance and Attornment agreement executed by the lien
holder in a form reasonably acceptable to Lessee.
27. ESTOPPEL CERTIFICATES: Lessee agrees to furnish promptly, from time to time,
upon request of Lessor or Lessor's mortgagee, a statement certifying, if
applicable, that Lessee is in possession of the leased premises; the leased
premises are acceptable; the Lease is in full force and effect; the Lease is
unmodified; Lessee claims no present charge, lien, or claim of offset against
rent; the rent is paid for the current month, but is not prepaid for more than
one month and will not be prepaid for more than one month in advance; there is
no existing default by reason of some act or omission by Lessor; and such other
matters as may be reasonably required by Lessor or Lessor's mortgagee.
28. SUCCESSORS: This Lease shall be binding upon an inure to the benefit of
Lessor and Lessee and their respective heirs, personal representatives,
successors and assigns. It is hereby covenanted and agreed that should Lessor's
interest in the leased premises cease to exist for any reason during the term of
this Lease, then notwithstanding the happening of such event this Lease
nevertheless shall remain unimpaired and in full force and effect and Lessee
hereunder agrees to attorn to the then owner of the leased premises.
29. RENT TAX: If applicable in the jurisdiction where the leased premises are
situated, Lessee shall pay and be liable for all rental, sales and use taxes or
other similar taxes, if any, levies or imposed by any city, state, county or
other governmental body having authority, such payments to be in addition to all
other payments required to be paid to Lessor by Lessee under the terms of this
Lease. Any such payment shall be paid concurrently with the payment of the rent
upon which the tax is based as set forth above.
30. DEFINITIONS: The following definitions apply to the terms set forth below as
used in this Lease:
(a) An "act of God" or "force majeure" is defined for purposes of this
Lease as strikes, lockouts, sit-downs, material or labor restrictions by any
governmental authority, unusual transportation delays, riots, floods, washouts,
explosions, earthquakes, fire, storms, weather (including wet grounds or
inclement weather which prevents construction), acts of the public enemy, wars,
insurrections and any other cause not reasonably within the control of Lessor
and which by the exercise of due diligence Lessor is unable, wholly or in part,
to prevent or overcome.
(b) The "commencement date" shall be the date set forth in paragraph 2.
The "commencement date" shall constitute the commencement of this Lease for all
purposes, whether or not Lessee has actually taken possession.
(c) "Real property tax" means all school, city, state and county taxes
and assessments including special district taxes or assessments.
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(d) "Square feet" or "square foot" as used in this Lease includes the
area contained within the space occupied by Lessee.
(e) "Pro rata share" shall be ________% which represents the ratio of
the Demised Premises (_______ square feet) to the total area of the Project
(_______ square feet).
31. MISCELLANEOUS: The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of such paragraph. If any provision of this Lease shall ever be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Lease, and such other provisions shall
continue in full force and effect.
32. NOTICE: (a) All rent and other payments required to be made by Lessee shall
be payable to Lessor at the address set forth below:
(b) All payments required to be made by Lessor to Lessee shall be
payable to Lessee at the address set forth below, or at any other address within
the United States as Lessee may specify from time to time by written notice.
(c) Any notice or document required or permitted to be delivered by
this Lease shall be deemed to be delivered (whether or not actually received)
when deposited in the United States Mail, postage prepaid, certified mail,
return receipt requested, addressed to the parties at the respective addresses
set out below:
LESSOR: LESSEE: (Legal Address)
Xxxxxx Equities, Inc. ----------------------------------
a Texas Corporation ----------------------------------
000 Xxxxxxxx Xxxxx, #000 ----------------------------------
Xxxxxx, Xxxxx 00000 ----------------------------------
33. ENTIRE AGREEMENT AND LIMITATION OF WARRANTS: IT IS EXPRESSLY AGREED BY
LESSEE, AS A MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS
LEASE, WITH SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE
AGREEMENT OF THE PARTIES: THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATION,
WARRANTIES, UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO
THIS LEASE OF THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT
INCORPORATED IN WRITING IN THIS LEASE. LESSOR AND LESSEE EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE
AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN
THIS LEASE. IT IS LIKEWISE AGREED THAT THIS LEASE MAY NOT BE ALTERED, WAIVED,
AMENDED OR EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY BOTH LESSOR AND
LESSEE.
34. OTHER PROVISIONS:
(a) Warehouse Buildings Rules and Regulations Exhibit "A"
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SIGNED AT , this day of , 19 .
----------------- ------ ------- ---
LESSOR: LESSEE:
Xxxxxx Equities, Inc.
----------------------------
------------------------------ ----------------------------
BY: Xxxx X. Xxxxx BY:
----------------------------
(TYPE NAME AND TITLE)
AGENT FOR LESSOR:
----------------------------
----------------------------
BY:
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WAREHOUSE BUILDINGS
RULES AND REGULATIONS
EXHIBIT "A"
1. Lessor agrees to furnish Lessee two keys for each lock existing upon the
entrance doors when Tenant assumes possession without charge.
Additional keys will be furnished at a nominal charge.
2. Lessee will refer all contractors, contractor's representatives and
installation technicians, rendering any service on or to the leased premises for
Lessee, to Lessor for Lessor's approval and supervision before performance of
any contractual service. This provision shall apply to all work performed on or
about the leased premises or project, including installation of telephones,
telegraph equipment, electrical devices and attachments and installations of any
nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment of
any other physical portion of the leased premises or project.
3. Lessee shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.
4. Lessee shall not place, install or operate on the leased premises or in any
part of Building, stove or xxxx for commercial purposes thereon or therein, or
place or use in or about the leased premises any explosives, gasoline, kerosene,
oil, acids, caustics, or any flammable, explosive or hazardous material without
written consent of Lessor.
5. Lessor will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the leased premises or the project regardless
of whether such loss occurs when area is locked against entry or not.
6. No dogs, cats, fowl or other animals shall be brought into or kept in or
about the leased premises or project.
7. Employees of Lessor shall not receive or carry messages for or to any Lessee
or other person, nor contract with or render free or paid services to any Lessee
or Lessee's agents, employees or invitees.
8. None of the parking, recreation or lawn areas, entries, passages, doors shall
be blocked or obstructed, or any rubbish, litter, trash, or material of any
nature placed, emptied or thrown into these areas or such area be used by
Lessee's agents, employees or invitees at any time for purposes inconsistent
with their designation by Lessor.
9. The water closets and other water fixtures shall not be used for any purpose
other than those for which they were constructed, and any damage resulting to
them from misuse, or by the defacing of injury of any part of the Building shall
be borne by the person who shall occasion it.
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10. Nothing shall be thrown out of the windows or doors of the Building.
11. Lessee shall not leave any vehicle in a state of disrepair (including,
without limitation, flat tires, out of date inspection stickers or license
plates) on the leased premises or project. If Lessee or its employees, agents or
invitees park their vehicles in areas other than the designated parking areas or
leave any vehicle in a state of disrepair, Lessor, after posting written notice
on the vehicle of such violation, Lessor shall have the right to remove such
vehicles at vehicle owner's expense.
12. Lessee shall not make penetrations or alterations to the roof, exterior
walls, or the foundation without express written consent from the Lessor. No
equipment, antenna of any kind may be installed on any portion of the roof or
exterior portion of the Building without express written consent from the
Lessor.
13. No temporary or permanent signs may be erected on or about the premises
without express written consent from the Lessor.
14. Canvassing, peddling, soliciting and distribution of hand bills or any other
written material in the Building or in the Building's parking areas are
prohibited, and each Lessee shall cooperate to prevent the same.
15. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
16. The alleyways and sidewalks of the building shall not be used by Lessee for
any purpose other than ingress to or egress from the demised premises.
17. Landlord reserves the right to make such other and reasonable Rules and
Regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the building, and for the preservation of good order
therein.
18. Lessor may waive any one or more of these Rules and Regulations for the
benefit of any particular Tenant or Tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other Lessee or Lessees nor prevent Lessor from thereafter enforcing any such
Rules and Regulations against any or all of the Lessees in the Building.
It is Lessor's desire to maintain in the Building the highest standard of
dignity and good taste consistent with comfort and convenience for Lessees.
Any action or condition not meeting this high standard should be reported
directly to Lessor. Your cooperation will be mutually beneficial and sincerely
appreciated. The Lessor reserves the right to make such other and further
reasonable Rules and Regulations as in its judgment may from time to time be
needful, for the safety, care and cleanliness of the leased premises, and for
the preservation of good order herein.
2
