1
Exhibit 10.12
STANDARD COMMERCIAL NET 2555 NO. IH 35
LEASE AGREEMENT Minimum of 100,000 gross sq.ft.
Xxxxx Xxxx, XX 00000
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by and between XXXX-XXXXXXXXX-XXXX
#43, hereinafter referred to as "Landlord" and TN TECHNOLOGIES, INC., A TEXAS
CORPORATION, hereinafter referred to as "Tenant";
WITNESSETH:
1. PREMISES AND TERM. In consideration of the obligation of Tenant to
pay rent herein provided, and in consideration of the other terms, provisions
and covenants hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby takes from Landlord certain premises situated within the County of
XXXXXXXXXX, State of TEXAS, more particularly described on Exhibit "A" attached
hereto and incorporated herein by reference, together with all rights,
privileges, easements, appurtenances, and immunities belonging to or in any way
pertaining to the premises and together with the buildings and other
improvements situated or to be situated upon said premises said real property,
buildings and improvements being hereinafter referred to as the "premises".
TO HAVE AND TO HOLD the same for a term commencing on the "commencement
date", as hereinafter defined, and ending ONE HUNDRED EIGHTY (180) months
thereafter, provided, however, that, in the event the "commencement date" is a
date other than the first day of a calendar month, said term shall extend for
said number of months in addition to the remainder of the calendar month
following the "commencement date".
A. The "commencement date" shall be the date Landlord acquires title to
the premises. Tenant acknowledges that as of the commencement date it will have
inspected and will accept the premises, and specifically the buildings and
improvements comprising the same, in their then condition as suitable for the
purpose for which the premises are leased. Taking of possession by Tenant shall
be deemed conclusively to establish that said buildings and other improvements
are in good and satisfactory condition as of when possession was taken. Tenant
further acknowledges that no representations as to the repair of the premises,
nor promises to alter, remodel or improve the premises have been made by
Landlord, unless such are expressly set forth in this lease. If this lease is
executed before the premises become vacant or otherwise available and ready for
occupancy, or if any present tenant or occupant of the premises holds ready for
occupancy, or if any present tenant or occupant of the premises holds over, and
Landlord cannot acquire possession of the premises prior to said "commencement
date", Landlord shall not be deemed to be in default hereunder, and Tenant
agrees to accept possession of the premises at such time as Landlord is able to
tender the same, which date shall thenceforth be deemed the "commencement date";
and Landlord hereby waives payment of rent covering any period prior to the
tendering of possession to Tenant hereunder. After the commencement date Tenant
shall, upon demand, execute and deliver to Landlord a letter of acceptance of
delivery of the premises.
2
B. In the event this lease pertains to a building to be constructed, the
provisions of this subparagraph B shall apply in lieu of the provisions of
subparagraph A above and the "commencement date" shall be the date upon which
the buildings and other improvements erected and to be erected upon the premises
shall have been substantially completed in accordance with the Xxxxxxx Money
Contract dated June 8, 1989, by and between Xxxxx Xxxxxx Incorporated, as
Seller, and Landlord, as Purchaser, relating to the premises.
2. BASE RENT AND SECURITY DEPOSIT. Subject to possible adjustment up or
down on the commencement date, but not thereafter, in accordance with a letter
agreement between Landlord and Tenant, Tenant agrees to pay to Landlord as rent
for the premises in advance, without demand, deduction or setoff for the first
sixty (60) months of the lease term the sum of $49,166.67 per month and for the
second sixty (60) months of the term, the sum of $59,000.00 per month and for
the final sixty (60) months of the lease term, the sum of $68,833.33 per month.
One such monthly installment shall be due and payable on the date hereof and a
like monthly installment shall be due and payable, without demand, on or before
the first day of each calendar month succeeding the "commencement date" during
the hereby demised term, except that the rental payment for any fractional
calendar month at the commencement of the lease term shall be prorated.
B. In addition, Tenant agrees to deposit with Landlord on the date
hereof the sum of FORTY-EIGHT THOUSAND Dollars ($48,000.00), which sum shall be
held by Landlord, without obligation for interest, as security for the
performances of Tenant's covenants and obligations under this lease, it being
expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of Tenant's default. Upon the
occurrence of any event of default by Tenant, Landlord may, from time to time,
without prejudice to any other remedy provided herein or provided by law, use
such fund to the extent necessary to make good any arrears of rent or other
payments due Landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default; and Tenant shall pay to Landlord, on
demand, the amount so applied in order to restore the security deposit to its
original amount. Although the security deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by Landlord to
Tenant at such time after termination of this lease that all of the Tenant's
obligations under this lease have been fulfilled.
3. USE. The premises shall be used only for the purpose of receiving,
storing, shipping, manufacturing and selling (other than retail) products,
materials and merchandise made and/or distributed by Tenant, and for such other
lawful purposes as may be incidental thereto. Outside storage is prohibited
without Landlord's prior written consent. Tenant shall, at its own cost and
expense, obtain any and all licenses and permits necessary for any such use.
Tenant shall comply with all applicable governmental laws, ordinances and
regulations applicable to the use of the premises, and shall promptly comply
with all governmental orders and directives for the correction, prevention and
abatement of nuisances caused or created by Tenant in or upon, or connected
with, the premises, all at Tenant's sole expense. Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
emanate from the premises, nor take any other action which would constitute a
nuisance or would disturb or
2
3
endanger any other tenants of the building in which the premises are situated or
unreasonably interfere with their use of their respective premises.
4. TAXES.
A. Tenant agrees to pay before they become delinquent all taxes
assessments, and governmental charges of any kind and nature whatsoever
(hereinafter collectively referred to as the "taxes") lawfully levied or
assessed against the building and the grounds, parking areas, driveways and
alleys around the building and constituting part of the premises. Tenant shall
furnish to Landlord, not later than twenty (20) days before the date any such
taxes become delinquent, official receipts of the appropriate taxing authority
or other evidence satisfactory to Landlord evidencing payment thereof. If Tenant
should fail to pay any taxes, assessments, or governmental charges required to
be paid by Tenant hereunder, in addition to any other remedies provided herein,
Landlord may, if it so elects, pay such taxes, assessments, and governmental
charges. Any sums so paid by Landlord shall be deemed to be so much additional
rental owing by Tenant to Landlord and due and payable, on demand, by Landlord,
together with interest thereon, at the rate of ten percent (10%) per annum from
date paid by Landlord to date of repayment by Tenant.
B. In the event the premises constitute a portion of a multiple
occupancy building, in lieu of Tenant paying the "taxes" as above provided,
Landlord agrees to pay, before they become delinquent, all "taxes" lawfully
levied or assessed against such building and the grounds, parking areas,
driveways and alleys around the building, and Tenant agrees to pay to landlord,
as additional rental, upon demand, the amount of Tenant's "proportionate share"
of all such "taxes" paid by Landlord. Tenants' "proportionate share" of all such
"taxes" paid by Landlord. Tenant's "proportionate share", as used in this lease,
shall mean a fraction, the numerator of which is the space contained in the
premises and the denominator of which is the entire space contained in the
building.
C. If, at any time during the term of this lease, the present method of
taxation shall be changed to that in lieu of the whole or any part of any taxes,
assessments or governmental charges levied, assessed or imposed on real estate
and the improvements thereon, there shall be levied, assessed or imposed on
Landlord a capital levy or other tax directly on the rents received therefrom
and/or a franchise tax, assessment levy or charge measured by or based, in whole
or in part, upon such rents for the present or any future building or buildings
on the premises, then all such taxes, assessments, levies or charges, or the
part thereof so measured or based, shall be deemed to be included within the
term "taxes" for the purposes hereof.
D. Tenant may, alone or along with any other tenants of said building,
at its or their sole cost and expense, in its or their own name(s) and/or in the
name of Landlord, dispute and contest any "taxes" by appropriate proceedings
diligently conducted in good faith, but only after Tenant and all other tenants,
if any, joining with Tenant in such contest, have deposited with Landlord the
amount so contested and unpaid (or otherwise secure the payment of such amount
in a manner satisfactory to Landlord) or their proportionate shares thereof, as
the case may be which shall be held by Landlord at interest equal to that then
being earned on 30 day certificates of deposit
3
4
issued by a bank in Austin, Texas, until the termination of the proceedings, at
which time the amount(s) deposited shall be applied by Landlord toward the
payment of the items held valid (plus any court costs, interest, penalties, and
other liabilities associated with the proceedings), and Tenant's share of any
excess shall be returned to Tenant. Tenant further agrees to pay to Landlord,
upon demand, Tenant's share (as among all tenants who participated in the
contest) of all court costs, interest, penalties, and other liabilities relating
to such proceedings. Tenant hereby indemnifies and agrees to hold harmless the
Landlord from and against any cost, damage, or expense (including attorneys'
fees) in connection with any such proceedings.
E. Any payment to be made pursuant to this Paragraph 4, with respect to
the real estate tax year in which this lease commences or terminates shall be
prorated.
5. REPAIRS AND MAINTENANCE.
A. Tenant shall, at its own cost and expense, keep and maintain all
parts of the premises in good condition, promptly making all necessary repairs
and replacements, interior and exterior, structural and non-structural, ordinary
and extraordinary, including but not limited to, windows, glass and plate glass,
doors and any special office entry, walls and finish work, floors and floor
covering, roof, foundation, downspouts, gutters, heating and air conditioning
systems, dock boards, truck doors, dock bumpers, paving, plumbing work and
fixtures, termite and pest extermination, regular removal of trash and debris,
regular mowing of any grass, trimming, weed removal and general landscape
maintenance, including rail spur areas, keeping the parking areas, driveways,
alleys on the premises and the whole of the premises in a clean and sanitary
condition, and maintaining any spur track serving the premises (Tenant agrees to
sign a joint maintenance agreement with the railroad company servicing the
premises, if requested by the railroad company). Tenant shall at its own cost
and expense repaint exterior overhead doors, canopies, entries, handrails,
gutters, and other exposed parts of the building which reasonably require
periodic repainting to prevent deterioration or to maintain aesthetic standards,
but not more than once every 5 years and not at all in the last 2 years of the
lease term.
B. Tenant shall, at its own cost and expense, provide regularly
scheduled preventive maintenance for all heating and air conditioning systems
and equipment within the premises.
6. ALTERATIONS. Tenant shall not make any alterations, additions or
improvements to the premises without the prior written consent of Landlord.
Tenant may, without the consent of Landlord, but at its own cost and expense and
in a good workmanlike manner make such minor alterations, additions or
improvements or erect, remove or alter such partitions, or erect such shelves,
bins, machinery and trade fixtures as it may deem advisable, without altering
the basic character of the building or improvements, and in each case, complying
with all applicable governmental laws, ordinances, regulations and other
requirements. All alterations, additions, improvements and partitions erected by
Tenant shall be and remain the property of Tenant during the term of this lease.
Upon the termination of this lease, the alterations, additions or improvements
made to the premises prior to the commencement date shall be surrendered with
the premises in the condition the same were in at the commencement of the term,
subject to ordinary wear and tear and unrepaired casualty or condemnation
damage. If Landlord consents to
4
5
any future alterations, additions or improvements to the premises which are
requested by Tenant, Landlord agrees in its consent to designate which, if any,
of the same must be removed by Tenant upon the termination of this lease, and
upon such termination Tenant shall be obligated to remove such designated
alterations, additions or improvements and restore the affected area of the
premises to the condition the same would have been in at the termination of the
lease has such alterations, additions, or improvements not been made. Tenant
shall not be required to remove at the termination of this lease any
alterations, additions or improvements which the Landlord did not designate for
removal at the time Landlord approved the same for installation. If Landlord so
elects prior to termination of this lease, such alterations, additions,
improvements, and partitions shall become the property of Landlord as of the
date of termination of this lease and shall be delivered up to the Landlord with
the premises. All shelves, bins, machinery and trade fixtures installed by
Tenant may be removed by Tenant prior to the termination of this lease if Tenant
so elects, and shall be removed if required by Landlord; upon any such removal
Tenant shall repair any damage caused by such removal. All such removals and
restoration shall be accomplished in a good workmanlike manner so as not to
damage the primary structure or structural qualities of the buildings and other
improvements situated on the premises.
7. SIGNS. Landlord approves existing Tenant signage for the premises.
Tenant shall have the right to install additional exterior signs upon the
premises only when first approved in writing by Landlord and subject to any
applicable governmental laws, ordinances, regulations and other requirements.
Tenants shall remove all such exterior signs by the termination of this lease.
Such installations and removals shall be made in such manner as to avoid injury
to or defacement of the building and other improvements, and Tenant shall repair
any damage caused by such installation or removal. Landlord's approval for
existing exterior Tenant signage refers to that existing on the commencement
date of the term of this lease.
8. INSPECTION. Landlord and Landlord's agents and representatives shall
have the right to enter and inspect the premises at any reasonable time during
business hours, for the purpose of ascertaining the condition of the premises or
in order to make such repairs as may be required or permitted to be made by
Landlord under the terms of this lease. Landlord and Landlord's agents and
representatives shall not exercise their rights under the immediately preceding
sentence without giving Tenant 48 hours prior notice of intention to enter the
premises; provided, however, no such prior notice shall be necessary if an
emergency exists at the premises which requires immediate action by the
Landlord. During the period that is six (6) months prior to the end of the term
hereof, Landlord and Landlord's agents and representatives shall have the right
to enter the premises at any reasonable time during business hours for the
purpose of showing the premises, and shall have the right to erect on the
premises a suitable sign indicating that the premises are available Tenant shall
give written notice to Landlord at least thirty (30) days prior to vacating the
premises and shall arrange to meet with Landlord for a joint inspection of the
premises at the time of vacating. In the event of Tenant's failure to give such
notice or arrange such joint inspection, Landlord's inspection at or after
Tenant's vacating the premises shall be conclusively deemed correct for purposes
of determining Tenant's responsibility for repairs and restorations.
5
6
9. UTILITIES. Landlord agrees to provide, at its cost, appropriate
water, electricity, sewer, natural gas, and telephone service connections to the
premises; but Tenant shall pay for all water, gas, heat, light, power,
telephone, sewer, sprinkler charges and other utilities and services used on or
from the premises, together with any taxes, penalties, surcharges or the like
pertaining thereto, and maintenance charges for utilities, and shall furnish all
electric light bulbs and tubes. Landlord shall in no event be liable for any
interruption or failure of utility services on the premises.
10. ASSIGNMENT AND SUBLETTING. Tenant shall have the right to assign
this lease or to sublet the whole or any part of the premises without the prior
written consent of Landlord. Notwithstanding any assignment or subletting,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent herein specified and for compliance with all
of Tenant's other obligations under the terms, provisions and covenants of this
lease. Upon the occurrence of an "event of default" as hereinafter defined, if
the premises or any part thereof are then assigned or sublet, Landlord, in
addition to any other remedies herein provided or provided by law, may at its
option collect directly from such assignee or subtenant all rents becoming due
to Tenant under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant hereunder, and no such collection shall be construed
to constitute a novation or a release of Tenant from the further performance of
Tenant's obligations hereunder.
11. INSURANCE, FIRE AND CASUALTY DAMAGE.
A. Tenant agrees to maintain replacement cost insurance on the
buildings, fixtures, equipment and other improvements which comprise a part of
the premises, which insurance shall be issued by an insurer acceptable to, and
in form reasonably required by, Landlord and its mortgagee. Subject to the
provisions of subparagraphs 11B and 11D below, such insurance shall be for the
sole benefit of Landlord and under its control. Such insurance shall contain
such "loss payee" and "mortgagee" clauses as may be required by Landlord or its
mortgagee or both. As between Landlord and Tenant the proceeds of such
replacement cost insurance shall be used by Landlord to satisfy its obligations
under subparagraph 11B below. Such insurance coverage may not be canceled or
amended in any respect without prior notice to and the consent of the Landlord.
Should the Tenant fail to obtain and maintain the insurance required hereby,
Landlord may obtain the same and Tenant shall immediately reimburse Landlord for
the cost thereof, together with interest at the rate of ten percent (10%) per
annum until repaid. During the term of this lease, Tenant shall furnish Landlord
and Landlord's mortgagee, if any, a certificate of insurance confirming that the
insurance required by this lease is in effect. Tenant may obtain casualty
insurance on its property as it may elect.
B. If the buildings situated upon the premises should be damaged or
destroyed by any peril covered by the insurance to be provided by Tenant under
subparagraph 11A above, Tenant shall give immediate notice thereof to Landlord
and Landlord shall at its sole cost and expense thereupon proceed with
reasonable diligence to rebuild and repair such building to substantially the
condition in which they existed prior to such damage or destruction. In the
event the premises have not been rebuilt and repaired as herein provided within
180 days after the occurrence of such damage, Tenant may terminate this lease
effective as of the date Tenant notified Landlord in
6
7
writing. During the period required to rebuild or repair damage which was NOT
caused by the acts or omissions of Tenant or its employees or contractors, the
rent for such period shall be equitably abated taking into account the portion
of the premises which Tenant is unable to use and occupy in the manner in which
it used and occupied the same immediately prior to such damage. Landlord's
obligation to rebuild shall not extend to any property on which Tenant does not
maintain replacement cost insurance coverage.
C. Landlord shall bear the risk of any uninsured casualty damage to the
premises, provided Tenant has not failed to perform its obligations set out in
Subparagraph 11A above and Tenant has not violated the terms and conditions of
the insurance coverages required by said Subparagraph 11A to be maintained by
Tenant. Otherwise, the risk of any uninsured casualty shall be borne by Tenant.
D. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
premises requires that all the insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon all rights and
obligations hereunder shall cease and terminate.
E. Each of Landlord and Tenant hereby releases the other and the
insurers of each from any and all liability or responsibility to the other or
any claiming through or under them by way of subrogation or otherwise for any
loss or damage to property caused by fire or any other perils insured in
policies of insurance covering such property, even if such loss or damage shall
have been caused by the fault or negligence of the other party, or anyone for
whom such party may be responsible, provided, however, that this release shall
be applicable and in force and effect only with respect to loss or damage
occurring during such times as the releasor's policies shall contain a clause or
endorsement to the effect that any such release shall not adversely affect or
impair said policies or prejudice the right of the releasor to recover
thereunder and then only to the extent of the insurance proceeds payable under
such policies. Each of Landlord and Tenant agrees that it will request its
insurance carriers to include in its policies such a clause or endorsement. If
extra cost shall be charged therefor, each party shall advise the other thereof
and of the amount of the extra cost, and the other party, at its election, may
pay the same, but shall not be obligated to do so.
12. LIABILITY. Landlord shall not be liable to Tenant or Tenant's
employees agents patrons or visitors, or to any other person whomsoever, for any
injury to person or damage to property on or about the premises, resulting from
and/or caused in part or whole by the negligence or misconduct of Tenant, its
agents, servants or employees, or of any other person entering upon the
premises, or caused by the buildings and improvements located on the premises
becoming out of repair, or caused by leakage of gas, oil, water or steam, or by
electricity emanating from the premises, or due to any cause whatsoever, and
Tenant hereby covenants and agrees that it will at all times indemnify and hold
safe and harmless the property, the Landlord (including without limitation the
trustee and beneficiaries if Landlord is a trust), Landlord's agents and
employees from any loss, liability, claims, suits, costs, expenses, including
without limitation
7
8
attorney's fees and damages, both real and alleged, arising out of any such
damage or injury; except injury to persons or damage to property the cause of
which is the act or omission of Landlord, its agents and employees. Tenant shall
procure and maintain throughout the term of this lease a policy or policies of
insurance, at its sole cost and expense, insuring both Landlord and Tenant
against all claims, demands or actions arising out of or in connection with: (i)
the premises; (ii) the condition of the premises; (iii) Tenant's operations in
and maintenance and use of the premises; and (iv) Tenant'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. All such policies
shall be procured by Tenant from responsible insurance companies satisfactory to
Landlord. Certified copies of such policies, together with receipt evidencing
payment of premiums therefor, shall be delivered to Landlord prior to the
commencement date of this lease. Not less than fifteen (15) days prior to the
expiration date of any such policies, certified copies of the renewals thereof
(bearing notations evidencing the payment of renewal premiums) shall be
delivered to Landlord. Such policies shall further provide that not less than
thirty (30) days, written notice shall be given to Landlord before such policy
may be canceled or changed to reduce insurance provided thereby.
13 CONDEMNATION.
A. If the whole or any substantial part of the premises should be taken
for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the use of
the premises for the purpose for which they are then being used, this lease
shall terminate and the rent shall be abated during the unexpired portion of
this lease, effective when the physical taking of said premises shall occur.
B. If part of the premises shall be taken for any public or quasi-public
use under governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this lease is not terminated
as provided in the subparagraph above, this lease shall not terminate, but the
rent payable hereunder during the unexpired portion of the lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances.
C. In the event of any such taking or private purchase in lieu thereof,
Landlord and Tenant shall each be entitled to receive and retain such separate
awards and/or portion of lump sum awards as may be allocated to their respective
interests in any condemnation proceedings.
14. HOLDING OVER. Tenant will, at the termination of this lease by lapse
of time or otherwise, yield up immediate possession to Landlord. In the event of
any holding over by Tenant or any of its successors in interest after the
expiration or termination of this lease, unless the parties hereto otherwise
agree in writing, the hold over tenancy shall be subject to termination by
Landlord at any time upon not less than five (5) days advance written notice, or
by Tenant at any time upon not less than thirty (30) days advance written
notice, and all of the other terms and provisions of this lease shall be
applicable during that period, except that Tenant shall pay Landlord from time
to time upon demand as rental for the period of any hold over, an
8
9
amount equal to one and one-half (1 1/2) the rent in effect on the termination
date, computed on a daily basis for each day of the holdover period. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this lease except as otherwise expressly provided.
15. QUIET ENJOYMENT. Landlord covenants that it now has, or will acquire
before Tenant takes possession of the premises, good title to the premises, free
and clear of all liens and encumbrances, excepting only the lien for current
taxes not yet due, such mortgage or mortgages as are permitted by the terms of
this lease, zoning ordinances, and other building and fire ordinances and
governmental regulations relating to the use of such property, and easements,
restrictions, and other conditions of record. In the event this lease is a
sublease, then Tenant agrees to take the premises subject to the provisions of
the prior leases. Landlord represents and warrants that it has full right and
authority to enter into this lease and that Tenant, upon paying the rental
herein set forth and performing its other covenants and agreements herein set
forth, shall peaceably and quietly have, hold, and enjoy the premises for the
term hereof without hindrance or molestation from Landlord, subject to the terms
and provisions of this lease.
16 EVENTS OF DEFAULT. The following events shall be deemed to be events
of default by Tenant under this lease:
(a) Tenant shall fail to pay any installment of the rent hereby reserved
when due, or any payment with respect to taxes hereunder when due, or any other
payment or reimbursement to Landlord required herein when due, and such failure
shall continue for a period of five (5) days from the date such payment was due.
(b) Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
(c) Tenant shall file a petition under any section or chapter of the
National Bankruptcy Act, as amended, or under any similar law or statute of the
United States or any State thereof; or Tenant shall be adjudged bankrupt or
insolvent in proceedings filed against Tenant thereunder.
(d) A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant.
(e) Tenant shall fail to comply with any term, provision, or covenant of
this lease (other than the foregoing in this Paragraph 16), and shall not cure
such failure within sixty (60) days, or twenty (20) days for monies owed to
Landlord, after written notice thereof to Tenant.
17 REMEDIES. Upon the occurrence of any such events of default described
in Paragraph 16 hereof, Landlord shall have the option to pursue any one or more
of the following remedies without any notice or demand whatsoever:
(a) Terminate this lease, in which event Tenant shall immediately
surrender the premises to Landlord, and if Tenant fails so to do, Landlord may,
without prejudice to any other
9
10
remedy which it may have for possession or arrearages in rent, lawfully enter
upon and take possession of the premises and expel or remove Tenant and any
other person who may be occupying such premises or any part thereof, lawfully,
and Tenant agrees to pay to Landlord on demand the amount of any loss and damage
which Landlord may suffer by reason of such termination, whether through
inability to relet the premises on satisfactory terms or otherwise.
(b) Enter upon and take possession of the premises and lawfully expel or
remove Tenant and any other person who may be occupying such premises or any
part thereof, by force if necessary, and relet the premises and receive the rent
therefor; and Tenant agrees to pay to the Landlord on demand any deficiency that
may rise by reason of such reletting. In the event Landlord is successful in
reletting the premises at a rental in excess of that agreed to be paid by Tenant
pursuant to the terms of this Agreement, Landlord and Tenant each mutually agree
that Tenant shall not be entitled, under any circumstances, to such excess
rental, and Tenant does hereby specifically waive any claim to such excess
rental.
(c) Lawfully enter upon the premises,and do whatever Tenant is obligated
to do under the terms of this lease; and Tenant agrees to reimburse Landlord,
on demand, for any reasonable expenses which Landlord may incur in thus
effecting compliance with Tenant's obligations under this lease.
In the event Tenant fails to pay any installment of rent hereunder as
and when such installment is due, to help defray the additional cost to Landlord
for processing such late payments Tenant shall pay to Landlord on demand a late
charge in an amount equal to five percent (5%) of such installment; and the
failure to pay such amount within ten (10) days after demand therefor shall be
an event of default hereunder. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as liquidated damages or as limiting Landlord's remedies
in any manner.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants herein contained. No act or thing done by the Landlord or its agents
during the term hereby granted shall be deemed a termination of this lease or an
acceptance of the surrender of the premises, and no agreement to terminate this
lease or to accept a surrender of said premises shall be valid unless in writing
signed by Landlord. No waiver by Landlord or any violation or breach of any of
the terms, provisions and covenants herein contained shall be deemed or
construed to constitute a waiver of any other violation or breach of any of the
terms, provisions and covenants herein contained. Landlord's acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default, unless Landlord
so notifies Tenant in writing. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default or of Landlord's right to
enforce any such remedies with respect to such default or any subsequent
default. If, on account of any breach or default by Tenant in Tenant's
obligations under the terms and conditions of this lease, it shall become
10
11
necessary or appropriate for Landlord to employ or consult with an attorney
concerning or to enforce or defend any of Landlord's rights or remedies
hereunder, Tenant agrees to pay any reasonable attorneys' fees so incurred.
18. LANDLORD'S LIEN. Landlord waives all statutory and contractual liens
against any of the property of Tenant to secure the payment of rent and other
sums due and payable under this lease.
19. MORTGAGES. Tenant accepts this lease subject and subordinate to any
mortgage(s) and/or deed(s) of trust now or at any time hereafter constituting a
lien or charge upon the premises or the improvements situated thereon which is
held by a mortgagee who has entered into a written subordination, recognition,
nondisturbance and attornment agreement with Tenant, provided, however, that if
the mortgagee, trustees, or holder of any such mortgage or deed of trust elects
to have Tenant's interest in this lease superior to any such instrument, then by
notice to Tenant from such mortgagee, trustee or holder, this lease shall be
deemed superior to such lien, whether this lease was executed before or after
said mortgage or deed of trust. Tenant shall at any time hereafter, on demand,
execute any instruments, releases or other documents which may be required by
any mortgagee for the purpose of subjecting and subordinating this lease to the
lien of any mortgage which is held by a mortgagee who has entered into a written
subordination, recognition, nondisturbance and attornment agreement with
Tenant.
20 LANDLORD'S DEFAULT. In the event Landlord should become in default in
any payments due on any such mortgage described in Paragraph 19 hereof, Tenant
is authorized and empowered, after giving Landlord five (5) days prior written
notice of such default and Landlord's failure to cure such default, to pay any
such items for and on behalf of Landlord, and the amount of any item so paid by
Tenant for or on behalf of Landlord, together with any interest or penalty
required to be paid in connection therewith, shall be payable on demand by
Landlord to Tenant; provided, however, that Tenant shall not be authorized and
empowered to make any payment under the terms of this Paragraph 20, unless the
item paid shall be superior to Tenant's interest hereunder. In the event Tenant
pays any mortgage debt in full, in accordance with this paragraph, it shall, at
its election, be entitled to the mortgage security by assignment or subrogation.
21. MECHANIC'S LIENS. Tenant shall have no authority, express or
implied, to create or place any lien or encumbrance, of any kind or nature
whatsoever upon, or in any manner to bind, the interest of Landlord in the
premises or to charge the rentals payable hereunder for any claim in favor of
any person dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs, and each such claim shall affect
and each such lien shall attach to, if at all, only the leasehold interest
granted to Tenant by this instrument. Tenant covenants and agrees that it will
pay or cause to be paid all sums legally due and payable by it on account of any
labor performed or materials furnished in connection with any work performed on
the premises on which any lien is or can be validly and legally asserted against
its leasehold interest in the premises or the improvements thereon and that it
will save and hold Landlord harmless from any and all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold estate
or against the right, title and interest of the Landlord in the premises or
under the terms of this lease.
11
12
22. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by Landlord to Tenant or with reference to the sending, mailing, or delivery of
any notice or the making of any payment by Tenant to Landlord shall be deemed to
be complied with when and if the following steps are taken:
(a) All rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at the address hereinbelow set
forth or at such other address as Landlord may specify from time to time by
written notice delivered in accordance herewith. Tenant's obligation to pay rent
and any other amounts to Landlord under the terms of this lease shall not be
deemed satisfied until such rent and other amounts have been actually received
by Landlord.
(b) All payment required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address hereinbelow set forth, or at such
other address within the continental United States as Tenant may specify from
time to time by written notice delivered in accordance herewith.
(c) Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered whether actually received or not when
deposited in the United States Mail, postage prepaid, Certified or Registered
Mail, addressed to the parties hereto at the respective addresses set out below,
or at such other address as they have theretofore specified by written notice
delivered in accordance herewith:
Landlord: Tenant:
Xxxx-Xxxxxxxxx-Xxxx #43 TN Technologies, Inc., a Texas Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 c/o Baker Xxxxxx, Inc.
X.X. Xxx 0000 (78768-2176) 0000 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000 X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director of Real Estate
President:
TN Technologies, Inc.
X.X. Xxx 000
Xxxxx Xxxx, Xxxxx 00000
If and when included within the term "Landlord", as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address for the receipt of notices
and payments to Landlord; if and when included within the term "Tenant", as used
in this instrument, there are more than one person, firm or corporation, all
shall jointly arrange
12
13
among themselves for their joint execution of such a notice specifying some
individual at some specific address within the continental United States for the
receipt of notices and payments to Tenant. All parties included within the terms
"Landlord" and "Tenant", respectively, shall be bound by notices given in
accordance with the provisions of this paragraph to the same effect as if each
had received such notice.
23. MISCELLANEOUS.
A. Words of any gender used in this lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.
B. The terms, provisions, covenants, and conditions contained in this
lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, legal representatives, successors and
permitted assigns except as otherwise herein expressly provided. Each party
agrees to furnish the other, promptly upon demand, a corporate resolution, proof
of due authorization by partners, or other appropriate documentation evidencing
the due authorization of such party to enter into this lease.
C. The captions inserted in this lease are for convenience only and in
no way define, limit or otherwise describe the scope or intent of this lease, or
any provision hereof, or in any way affect interpretation of this lease.
D. Tenant agrees from time to time within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, and estoppel
certificate stating that this lease is in full force and effect, the date to
which rent has been paid, the unexpired term of this lease and such other
matters pertaining to this lease as may be reasonably requested by Landlord. It
is understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this lease.
E. This lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.
F. All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this lease shall survive the
expiration or earlier termination of the term hereof, including without
limitation all payment obligations with respect to taxes and insurance and all
obligations concerning the condition of the premises. Upon the expiration or
earlier termination of the term hereof, and prior to Tenant vacating the
premises, Tenant shall pay to Landlord any amount reasonably estimated by
Landlord as necessary to put the premises, including without limitation all
heating and air conditioning systems and equipment therein, in good condition
and repair. Tenant shall also, prior to vacating the premises, pay to Landlord
the amount, as estimated by Landlord, of Tenant's obligation hereunder for real
estate taxes and insurance premiums for the year in which the lease expires or
terminates. All such amounts shall be used and held by Landlord for payment of
such obligations of Tenant hereunder, with Tenant being liable for any
additional costs therefor upon demand by Landlord, or with any excess to be
13
14
returned to Tenant after all such obligations have been determined and
satisfied, as the case may be. Any security deposit held by Landlord shall be
credited against the amount payable by Tenant under this Paragraph 23(F). Upon
the expiration or early termination of the term hereof and prior to Tenant
vacating the premises, Tenant shall pay to Landlord an amount reasonably
estimated by Landlord as necessary to restore to good operating condition any
system, fixture or equipment in the premises which is not then in good operating
condition and to repair any damage to the premises for which Tenant is liable
under other provisions of this lease.
G. If any clause or provision of this lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
lease, then and in that event, it is the intention of the parties hereto that
the remainder of this lease shall not be affected thereby, and it is also the
intention of the parties of this lease that in lieu of each clause or provision
of this lease that is illegal, invalid or unenforceable, there be added as a
part of this lease contract a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
H. All references in this lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this lease.
I. So long as no uncured event of default by Tenant shall exist
hereunder, and to the extent not prohibited by applicable law now or hereafter
in effect, Landlord agrees that Tenant may (but shall not be obligated to) close
after 5:00 P.M. on days other than holidays, Saturdays and Sundays, and at
anytime on holidays, Saturdays and Sundays, the access easement from Lot 2 in
Block A of Xxxxxx Subdivision across Lot 1 in Block A of said Xxxxxx Subdivision
providing access to Interstate Highway 35 and to said Block 2. Such closures may
be affected by gates, barriers or similar devices installed, operated, opened
and closed at the sole cost and expense of Tenant. Any such gates, barriers or
closure devices shall be marked with signs or other devices as necessary to make
them clearly visible when closed or in place.
24. ADDITIONAL PROVISIONS. In addition to Tenant's rights under
paragraph 6 above, Tenant shall have the right to cause the area of the
premises to be expanded to include additional improvements. All such additional
improvements shall be subject to the requirements of paragraph 6 above and shall
be constructed in accordance with plans and specifications approved by Landlord.
Upon the completion of such additional improvements, Landlord shall purchase the
same from Tenant for a sum of money equal to the cost of constructing the same.
Once Landlord has purchased such additional improvements from Tenant, Tenant
shall pay to a Landlord as rental for the same for each year of the remainder of
the term of this lease a sum of money equal to said purchase price multiplied by
a percentage which is equal to the interest rate being paid on the date of such
purchase on U.S. Treasury bills with a 26 week maturity, plus three hundred
(300) basis points. From and after the purchase of such additional improvements,
the same shall be deemed a part of the premises and subject to all the terms
hereof. If at the time of such purchase the unexpired term of this lease is less
than 10 years, Landlord and Tenant will enter into a modification of this lease
to extend the term hereof to the date which is 10 years after the date of the
purchase of such improvements. If the lease term is extended by operation of the
14
15
immediately preceding sentence, the annual rent for the original premises leased
hereunder shall be increased (but never decreased) on the anniversary date of
this lease in each lease year beginning after the 15th year of the lease term by
an amount equal to the lesser of (x) four percent (4%) per annum or (y) the
percentage increase (if any) in the average of the monthly Consumer Price Index
(hereafter defined) for the twelve (12) consecutive calendar months next
preceding such anniversary date for which a Consumer Price Index has been
published over the average of the monthly Consumer Price Index for the twelve
(12) calendar months which are the 13th through the 24th months both inclusive,
prior to such anniversary date. The term "Consumer Price Index" shall mean the
Consumer Price Index, All Urban Consumers, All Items published for the area
which is nearest Xxxxxx, Xxxxx (0000-00 = 100) published by the Bureau of Labor
Statistics, U.S. Department of Labor. In the event the Consumer Price Index
ceases to be based on 1982-84 = 100, or if a substantial change is made in the
terms or number of items contained in the Consumer Price Index, then the
Consumer Price Index for any particular period shall be adjusted appropriately
by Landlord. In the event the Consumer Price Index or a successor or substitute
Index is no longer published, a reliable governmental or other non-partisan
publication evaluating information used in determining the Consumer Price Index
shall be the basis for adjusting said rent.
Provided Tenant installs adequate screening from view in a manner
reasonably acceptable to Landlord, and provided further that applicable building
codes and zoning ordinances (including, without limitation, those establishing
on-site parking requirements) are not violated, Tenant may maintain outside
storage areas behind and east of the buildings on the premises.
Tenant has the right, and Landlord has the right to require Tenant, to
place a barrier in Tenant's east parking lot to xxxx the boundary between the
premises and Lot 2 of Xxxxxx Subdivision. Any such barrier shall be installed,
repaired, replaced and maintained at Tenant's expense.
25 HAZARDOUS SUBSTANCES AND ACTIVITIES. The term "Hazardous Substances,"
as used in this lease, shall mean pollutants, contaminants, toxic or hazardous
wastes, radioactive material or any other substances, the use and/or the removal
of which is now or hereafter required or the use of which is now or hereafter
restricted, prohibited or penalized by an "Environmental Law," which term shall
mean any applicable present or future federal, state or local statute,
ordinance, regulation or other law of a governmental or quasi-governmental
authority relating to pollution or protection of the environment or the
regulation of the use, storage or handling of Hazardous Substances. Tenant will
use and store ("Permitted Activities") Hazardous Substances in the course of its
business in and at the premises and Landlord acknowledges such use and storage,
subject to Tenant's compliance with all provisions of this Lease. All Permitted
Activities shall be conducted in accordance with all Environmental Laws and, in
connection therewith, Tenant shall be responsible for obtaining any required
permits or authorizations and paying any fees and providing any testing required
by any governmental agency incident to the Permitted Activities by Tenant; and
Hazardous Substances on the premises as a result of Permitted Activities by
Tenant shall be properly stored in a manner and location meeting all
Environmental Laws, and in connection therewith, Tenant shall be responsible for
obtaining any required permits or authorizations and paying any fees and
providing any testing required by any governmental
15
16
agency incident to the Permitted Activities by Tenant. If at any time during or
after the term of this Lease and as a result of Tenant's Permitted Activities on
or at the premises, the premises are found to be contaminated with Hazardous
Substances or in violation of any Environmental Laws, Tenant shall diligently
institute proper and thorough clean-up procedures for such contamination or
violation, at Tenant's sole cost. Upon the termination or expiration of this
Lease, Tenant further agrees to remove from the premises and properly dispose of
all Hazardous Substances on the premises as a result of Permitted Activities by
Tenant and all soil, equipment, fixtures, personal property or appurtenances
contaminated with any Hazardous Substances as a result of Permitted Activities
by Tenant, which removal and disposal shall be performed to the satisfaction of
the governmental authorities having jurisdiction of the same. Tenant agrees to
indemnify and hold Landlord harmless from all claims, demands, actions,
liabilities, costs, expenses, penalties, damages and obligations of any nature
arising from or as a result of any breach by Tenant of its covenants contained
in this paragraph or any contamination of the premises with Hazardous Substances
caused by Tenant's Permitted Activities at the premises, including without
limitation any decrease in the market value of the premises after the
termination or expiration of this Lease and resulting from Tenant not removing
from the premises and properly disposing of all Hazardous Substances and all
soil, equipment, fixtures, personal property or appurtenances contaminated with
Hazardous Substances. The foregoing indemnification and responsibilities of
Tenant shall survive the termination or expiration of this Lease for the
applicable period of limitations commencing upon the earlier of the discovery by
Landlord of the event or condition triggering such indemnification or
responsibility or the date on which Landlord should have reasonably discovered
such event or condition.
EXECUTED BY LANDLORD, this 4th day of June, 1990
LANDLORD:
Attest/Witness: Xxxx-Xxxxxxxxx-Xxxx #43
-----------------------
/s/ (illegible) By: /s/ (illegible)
------------------------------------ --------------------------------------
Title: Project Partner Title:
----------------------------- -----------------------------------
EXECUTED BY TENANT, this ____________ day of _______________, 1990
TENANT:
Attest/Witness: TN Technologies, Inc., a Texas Corporation
------------------------------------------
/s/ Xxxxxx X. Organ By: /s/ Xxxx Xxxxxx
------------------------------------ --------------------------------------
Title: VP, Marketing & Sales Title: President
----------------------------- -----------------------------------
16
17
EXHIBIT A
PROPERTY DESCRIPTION
Lot 1 in Block A of XXXXXX SUBDIVISION in the City of Round Rock,
Xxxxxxxxxx County, Texas, being the most easterly 9.38 acres of land out of a
55.55 acre tract of land in the Xxxxx Xxxxx Survey, A-130 in Xxxxxxxxxx County,
Texas, described in deed recorded in Volume 1672, Page 819, Official Records of
Xxxxxxxxxx County, Texas.
17