EXHIBIT 10.6
STANDARD INDUSTRIAL LEASE AGREEMENT Facility Address:
(Net Form)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
120,000 Sq. Ft.
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LEASE AGREEMENT
THIS LEASE AGREEMENT, ("Lease") made and entered into on this 14 day of
April, 2000 by and between CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on
behalf of its Separate Account R hereinafter referred to as "Lessor", and
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware Corporation hereinafter referred to as
"Lessee";
WITNESSETH:
1. PREMISES AND TERM.
A. PREMISES. In consideration of the mutual obligations of Lessor and
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Lessee set forth herein, Lessor leases to Lessee, and Lessee hereby leases from
Lessor the Premises located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, more particularly described on EXHIBIT "A" ("Site Plan") and
legally described in Paragraph 26A attached hereto and incorporated herein by
reference, (the "Premises"), together with all rights, privileges, easements,
appurtenances, rights of ingress and egress and amenities belonging to or in any
way pertaining to the Premises, the building where the Premises are located (the
"Building") and the project where the Building is located, to have and to hold,
subject to the terms, covenants and conditions in this Lease.
In addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessee shall have exclusive rights to use the Lessee's
parking area and any other vehicle parking or use areas designated on Exhibit A
as exclusive to Lessee ("Lessee's Exclusive Parking Areas"), and Lessee shall
have non-exclusive rights to use the other common areas of the Project except
those parking areas and any other vehicle parking areas that are not designated
as exclusive to Lessee and as otherwise provided herein. The Premises, the
Building, the common areas (the "Common Areas"), the land upon which they are
located, along with all other buildings and improvements thereon, are herein
collectively referred to as the "Project."
B. TERM. The term of this Lease shall commence on the Commencement Date
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hereinafter set forth and shall end on the last day of the month that is ONE
HUNDRED TWENTY (120) months after the Commencement Date. The parties anticipate
and intend that Lessor will deliver the Premises to Lessee on or before April 7,
2000 (the "Anticipated Delivery Date") in order to permit Lessee to commence its
tenant improvement work. All terms and conditions of the Lease shall be in
effect from the Anticipated Delivery Date. Unless mutually altered in writing
by Lessee and Lessor, the Commencement Date shall be June 1, 2000.
C. EXISTING BUILDING. Lessor represents and warrants that all electrical,
mechanical, plumbing and other systems serving the Premises, the demising walls
of the Premises and all structural and roof components of the Building will in
good working order and good condition as of the Delivery Date. Lessor shall
complete the construction of the interior center demising and the addition to
Lessee's Exclusive Parking Area within thirty (30) and ninety (90) days,
respectively, from the Anticipated Delivery Date of the Premises. If these items
are not completed within this time, Lessor will make arrangements to provide
comparable parking for Lessee within the Project and beginning on the
Commencement Date one day of rent will be abated for each day the Lessor was
late in completing the interior center demising wall or the addition to Lessee's
Exclusive Parking Area. Subject to and conditioned upon Lessor's representation
and warranty in the prior sentence, Lessee acknowledges that (i) it has
inspected and accepts the Premises, (ii) the improvements comprising the same
will be suitable for the purpose for which the Premises are leased after
completion of Lessee's tenant improvements, (iii) the Premises are in good and
satisfactory condition pre-existing environmental conditions, latent defects and
structural components of the Building, Project, and the Premises excepted), and
(iv) the Premises shall be leased on an "as is" basis, and no representations as
to the repair of the Premises, nor promises to alter, remodel or improve the
Premises have been made by Lessor except those expressly set forth in this
Section 1, in Section 4 and in Paragraph 25B of this Lease. Upon request by
Lessor, Lessee shall execute and deliver to Lessor a Letter Acknowledging
Delivery of the Premises.
D. GENERAL CONDITIONS. Lessee's and Lessor's obligations, privileges,
covenants and agreements contained in this Lease shall be operative and
effective regardless of whether the Premises are ever occupied by Lessee. If
Lessee fails to occupy the Premises for any reason, except due to Lessor's
negligence or willful
1 INITIALS
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Lessor:
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Lessee: KHS
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misconduct to include, but not limited to Substances on or about the Project,
after delivery of the Premises to Lessee, this Lease shall be deemed to have
commenced automatically on the Commencement Date.
2. BASE RENT, SECURITY DEPOSIT AND OPERATING EXPENSES.
A. Lessee agrees to pay to Lessor base rent ("Base Rent") for the Premises,
in advance, without demand, deduction or set off, except at otherwise provided
in paragraph 4E., at the rate of SEE BELOW per month during the term hereof. One
such monthly installment, plus the other monthly charges set forth in Paragraph
2C below shall be due and payable on the date hereof and a like monthly
installment shall be due and payable on or before the first day of each calendar
month succeeding the commencement date; except that all payments due hereunder
for any fractional calendar month shall be prorated.
B. In addition, Lessee agrees to deposit with Lessor on the date hereof
the sum of ONE HUNDRED FIFTY THOUSAND DOLLARS AND NO/100 Dollars ($150,000.00)
(the "Security Deposit") which shall be held by Lessor, with interest at no less
than three (3%) percent per annum, as security for the performance of Lessee's
obligations under this Lease, it being expressly understood and agreed that the
Security Deposit is not an advance rental deposit or a measure of Lessor's
damages in case of Lessee's default. Upon each occurrence of an event of
default, Lessor may use all or part of the Security Deposit to pay past due rent
or other payments due Lessor under this Lease, and the cost of any other damage,
injury, expense or liability caused by such event of default without prejudice
to any other remedy provided herein or provided by law. On demand, and after
written notice, Lessee shall pay Lessor the amount that will restore the
Security Deposit to its pre-deduction amount. The Security Deposit shall be
deemed the property of Lessor, but any remaining balance of such deposit shall
be returned by Lessor to Lessee when Lessee's obligations under this Lease have
been fulfilled.
C. Lessee agrees to pay as additional rental its proportionate share (as
defined in Paragraph 23B below) of operating expenses ("Operating Expenses")
which are comprised of (i) Taxes (hereinafter defined) payable by Lessor
pursuant to ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, (▇▇) the cost of maintaining insurance covering
the of which the Premises is a part, (iii) the cost of utilities payable
pursuant to Paragraph 8 below, and the cost of any common area charges payable
by Lessor in accordance with Paragraph 4 below and (iv) any other charges which
Lessor is entitled to collect under the terms of this. During each month of the
term of this Lease, on the same day that rent is due hereunder, Lessee shall
escrow with Lessor an amount equal to 1/12 of the estimated annual cost of its
proportionate share of such Operating Expenses (which estimated amount shall not
exceed 105% of the actual Operating Expenses for the prior calendar year, unless
a greater increase can be substantiated by Lessor with reasonable supporting
documentation). Lessee authorizes Lessor to use the funds deposited with Lessor
under this ▇▇▇▇▇▇▇▇▇ ▇▇ to pay such costs. The initial monthly escrow payments
are based upon the estimated amounts and shall be increased or decreased
annually to reflect the then current projected cost of all such Operating
Expenses (which estimated amount shall not exceed 105% of the actual Operating
Expenses for the prior calendar year, unless a greater increase can be
substantiated by Lessor with reasonable supporting documentation). Lessor shall
total all Operating Expenses annually, and reconcile Lessee's actual
proportionate share of such expenses against Lessee's total escrow payments by
May 1st of each year. If the Lessee's total escrow payments are less than
Lessee's actual proportionate share of all such, Operating Expenses, Lessee
shall pay the difference to Lessor within ten (10) days after demand. If the
total escrow payments of Lessee are more than Lessee's actual proportionate
share of all such, Operating Expenses, Lessor shall retain such excess and
credit it against Lessee's future liabilities for Operating Expenses. Lessee
shall be entitled to audit Lessor's Operating Expense accounts and Lessor shall
cooperate with Lessee in regard to any such audit. If the audit reveals that
Lessee has overpaid its proportionate share of Operating Expenses, such
overpayment shall be reimbursed to Lessee promptly upon demand. If the results
of such audit show that Operating Expenses have been overstated by two (2%)
percent or more, the cost of such audit up to a maximum of $1,000.00 shall be
reimbursed to Lessee by Lessor promptly upon demand. The amount of the monthly
Base Rent and the initial monthly Operating Expenses escrow payments are as
follows:
Months: 01 - 60: 61 - 120:
(1) Base Rent as set forth in Paragraph 2A. $42,000.00 $48,700.00
(2) Tax Escrow $ 8,000.00 $ 8,000.00
(3) Insurance Escrow $ 356.00 $ 356.00
(4) Common Area Escrow $ 1,875.00 $ 1,875.00
(5) Management Fee $ 1,567.00 $ 1,567.00
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Total Monthly Rental Payment $53,798.00 $60,498.00
2 INITIALS
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Lessor:
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Lessee: KHS
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3. TAXES
A. Lessor agrees to pay all taxes, assessments and governmental charges of
any kind and nature (collectively referred to herein as "Taxes") that accrue
against the Premises, the Building and the Project and Lessee shall be liable
for its proportionate share of the same. If at any time during the term of this
Lease, there shall be levied, assessed or imposed on Lessor 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 from the Premises and/or the land and improvements of which the Premises
are a part, 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. The Lessor shall have the right to employ a
tax consulting firm to attempt to assure a fair tax burden on the building and
grounds within the applicable taxing jurisdiction. Lessee agrees to pay its
proportionate share of the cost of such consultant. Lessee acknowledges and
agrees that, except as provided in Paragraph 3B. below, Lessor shall have no
obligation to protest or appeal the valuation of the Building or to provide
notice to Lessee of any such protest or appeal or any appraisal or reappraisal
of such building.
B. In any year which Lessor does not protest the real property tax
assessment levied against the real property, Lessee may choose to protest the
assessment in Lessor's name with Lessor's prior written approval which shall not
be unreasonably withheld or delayed. If Lessor grants permission to Lessee to
protest the assessment, Lessor shall fully cooperate with Lessee's efforts
provided Lessee pays all costs and expenses necessary to conduct such protest.
In the event Lessor protests such assessment and a reduction in the taxes for
the Property results, Lessee shall be entitled to its pro rata share of the
benefit of such reassessment, either as a credit against the next payments of
Rent and Additional Rent due under this Lease or as a refund if this Lease has
expired. If Lessee protests the assessment and the taxes for the Property are
reduced as a result of such protest, Lessee shall each be entitled to its pro
rata share of the benefit of such reassessment. Lessee shall also be entitled to
reimbursement of its expenses in conducting such protest, (not to exceed the
reasonable protest fees that Lessor would have paid if Lessee had protested such
assessment) such reimbursement to be in the form of a credit against Rent and
Additional Rent.
C. Lessee shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Lessor or Lessor's property and (i) Lessor pays the
same or (ii) the assessed value of Lessor's property is increased by inclusion
of such personal property and fixtures and Lessor pays the increased taxes,
then, upon demand Lessee shall pay to Lessor such taxes.
4. LESSOR'S REPAIRS AND MAINTENANCE.
A. Lessor, shall maintain the roof, structural steel, center demising wall,
the foundation and the structural soundness of the exterior walls of the
Building in good repair, reasonable wear and tear accepted, and Lessee shall be
liable for its proportionate share of the cost of routine maintenance or repair
provided, however, Lessee shall promptly upon demand, reimburse Lessor for any
damage to the same caused by Lessee's act, neglect, fault or omission. The term
"walls" as used herein shall not include windows, glass or plate glass, doors,
special storefronts or office entries. Lessee shall immediately give Lessor
written notice of defect or need for repairs, after which Lessor shall have
reasonable opportunity to repair the same or cure such defect. Lessor's
obligation to maintain the aforementioned items shall be limited solely to the
cost of such repairs or maintenance or the curing of any defect in the same.
▇. ▇▇▇▇▇▇ shall perform the paving maintenance, common area and landscape
replacement and maintenance, exterior painting, common electrical connections,
common water and sewage line plumbing, (for Lessee's use and enjoyment of the
Premises,) and any other common maintenance items and Lessee shall be liable for
its proportionate share of the cost and expense of such repair, replacement, and
maintenance, excepting costs relating to Substances not introduced to the
Premises by Lessee or it's agents. Lessor reserves the right to perform any
obligations that are otherwise Lessee's obligations in Paragraph 5, only after
written notice and appropriate cure period, in which event Lessee shall
reimburse upon receipt of invoice with reasonable detail, Lessor for the
entirety of the reasonable costs of such performance.
▇. ▇▇▇▇▇▇ reserves the right to alter or modify the Building and the Common
Areas associated therewith, when such alterations or modifications are required
by governmental laws, codes, ordinances, regulations, or any other applicable
authorities, including, without limitation, the Americans with Disabilities Act
of 1990 (the "ADA"), provided Lessor shall not materially interfere with
Lessee's use and enjoyment of the Premises. In such event, Lessee shall be
liable for its proportionate share of such cost. If such modification is a
capital modification for the general benefit of the, Project, and is required
regardless of Lessee's particular use of the Premises, then the cost shall be an
operating expense allocated over the useful life of the modification. If such
modification is predicated by the use of another lessee in the Project or is
principally for the benefit of another lessee in the Project, the Lessee shall
not be liable for any portion of these costs. Notwithstanding the foregoing, if
such modification is predicated by Lessee's particular use of the Premises or is
principally for the
3 INITIALS
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Lessor:
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Lessee: KHS
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benefit of Lessee (and not other lessees of the Building) the cost shall be
borne entirely by Lessee and Lessee shall reimburse Lessor for same promptly
upon demand.
D. Lessee agrees to pay its proportionate share of the cost of (i)
maintenance and/or landscaping of any property that is a part of the Building
and/or the Project, (ii) property management fee (not to exceed market property
management fees), staff salary and benefits allocated to the Building and/or the
Project and (iii) operating and maintaining any property, facilities or
services, including, but not limited to, the cost of the monitoring, repair and
maintenance of water systems or sewer plants, and security systems and service,
if any, provided for the common use or benefit of Lessee and other lessees of
the Project or Building.
All such expenses of Lessor for maintaining and operating the Building
and/or the Project, including, but not limited to, the items set forth in
▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇, ▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇ included as additional rental under the
provisions of Paragraph 2C. Lessor agrees that Operating Costs do not and shall
not include any capital costs for roof, foundation, building structural,
provisioning of utilities or parking lot replacement, restoration or other work
occasioned by fire, windstorm or other casualty to the extent of net insurance
proceeds received by Lessor with respect thereto, income and franchise taxes of
Lessor, expenses incurred in leasing to or procuring of lessees, leasing
commissions, advertising expenses, expenses for the renovating of space for new
lessees, interest or principal payments on any mortgage or other indebtedness of
Lessor, or depreciation allowance or expense. In addition, Operating Expenses
shall not include the following:
(1) Attorneys' fees, costs and disbursements and other expenses incurred
in connection with leasing, renovating or improving space for Lessees
or prospective Lessees of the Project;
(2) Costs (including permit, license and inspection fees) incurred in
improving or decorating, painting or redecorating space for Lessees or
vacant space;
(3) Lessor's costs of any services sold to Lessees for which Lessor is
entitled to be reimbursed by such Lessees as an additional charge or
rental over and above the base rental, utility costs and maintenance
costs payable under the lease with such Lessee or other occupant;
(4) Any amortization on the Project except as expressly permitted herein;
(5) Costs incurred due to violation by Lessor of any of the terms and
conditions of this Lease or any other lease relating to the Project;
(6) All items and services for which Lessee pays third persons or which
Lessor provides selectively to one or more Lessees or occupants of the
Project (other than Lessee) without reimbursement;
(7) Promotional expenditures;
(8) Repairs or other work paid for through condemnation proceeds;
(9) Repairs resulting from any defect in the original design or
construction of the Building that are is covered under a warranty or
which are the result of a breach of contract or which are a breach of
guaranty;
(10) Any capital expenditures (except as otherwise provided herein);
(11) Any ground lease, mortgage or debt service payment.
E. In the event that Lessor fails to cure any breach of its obligations to
maintain and repair or fails to cure any breach or any other obligation under
this Lease within thirty (30) days after receipt of Lessee's notice of default,
or if having commenced said cure, Lessor does not diligently pursue it to
completion, then Lessee may elect to cure said breach at Lessee's expense and
may invoice Lessor for the cost of such cure. Lessor after receiving such
invoice and proper supporting documentation shall reimburse Lessee for such
reasonable costs within thirty (30) days. If Lessor has not paid such invoice in
this thirty (30) day period, Lessee shall send a second notice regarding the
payment of this invoice to Lessor. If Lessor has not paid this invoice within
sixty (60) days after receiving said second notice, Lessee shall have the right
to offset the cost of cure from rent until Lessee's reasonable damages caused by
such breach are recovered. If Lessee's reasonable damages exceed the remaining
financial obligations of Lessee under this Lease, Lessor shall reimburse any
remaining balances to Lessee upon the expiration or early termination of this
Lease. Prior to seeking such offset or reimbursement, Lessee shall document the
damages and supply said documentation to Lessor.
4 INITIALS
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Lessor:
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Lessee: KHS
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5. LESSEE'S REPAIRS AND MAINTENANCE.
A. In regard to the Premises, Lessee, at its own cost and expense, shall
(i) maintain all parts of the Premises (except for those items for which Lessor
is responsible under Paragraph 4) in good condition, reasonable wear and tear
excepted (ii) promptly make all necessary repairs and replacements, including,
but not limited to, windows, glass and plate glass, exterior doors, any special
office entry, interior walls and finish work, interior doors and floor covering,
utility connections located within or serving only the Premises, downspouts,
gutters, heating and air conditioning systems serving only the Premises, light
bulbs and ballasts, dock boards, truck doors, dock bumpers, paving, plumbing
work and fixtures, termite and pest extermination, regular removal of trash and
debris, dedicated sewer lines, and any damage due to vandalism or malicious
mischief (iii) keep Lessee's Exclusive Parking Areas in a clean and sanitary
condition, and (iv) repair all wind damage to glass except with respect to
tornado or hurricane damage, notwithstanding the foregoing, if any damage to the
Premises is caused by the act, neglect, fault or omission of other lessee's in
the Project, then Lessee shall promptly notify Lessor of such damage. Lessor
shall then diligently proceed and pursue to completion the repair of such damage
and recover the cost of these repairs from the applicable lessee's.
B. Lessee and its employees, agents, customers, invitees, and/or licensees
shall have the right to use Lessee's Exclusive Parking Areas, as designated on
Exhibit A, subject to such reasonable rules and regulations as Lessor may from
time to time prescribe after written notice so long as the new rules and
regulations do not unreasonably interfere with Lessee's use or occupancy of the
Premises, and subject to rights of ingress and egress of other lessees. Lessee
shall control for Lessee's exclusive use Lessee's Exclusive Parking Areas
(including the entire truck apron and parking area on the north side of the
Building) for the purpose of car and truck storage and parking. Lessee shall
have the right to secure the car and truck parking area with fencing and/or
security cameras. All of Lessee's truck parking and employee parking shall be
within Lessee's Exclusive Parking Areas and shall be free of charge for the
initial Lease term and all Lease term extensions and renewals. Lessor shall not
be responsible for enforcing Lessee's parking rights against any third parties.
Lessee shall undertake reasonable measures, at its own cost and expense, to keep
its employees, agents, customers, invitees, and/or licensees from parking
outside of Lessee's Exclusive Parking Area on any streets running through or
contiguous to the Building or Project or any other areas as designated by
Lessor. Lessee hereby consents to the removal of any vehicle in violation of the
foregoing designated areas of parking as established by Lessor.
C. Lessee, at its own cost and expense, shall perform regularly scheduled
preventive maintenance by Lessee's employee or by maintenance contractor
approved by Lessor (which approval will not be unreasonably withheld or delayed)
for servicing all hot water, heating and air conditioning systems and equipment
located within the Premises. The maintenance or service contract must include
all generally acceptable services suggested by the equipment manufacturer in its
operations/maintenance manual and must become effective and a copy thereof
delivered to Lessor within thirty (30) days of the date Lessee takes possession
of the Premises.
D. Lessee agrees that no washing of any type (other than reasonable
restroom or kitchen washing or food preparation) will take place in the Premises
provided that truck washing may occur in Lessee's Exclusive Parking Areas.
Lessee shall be fully responsible for all repairs, clean up and any other
consequences of cleaning its trucks in the Exclusive Parking Area, including,
but not limited to, storm sewers, truck apron concrete, subgrade, joints, and
stains.
▇. ▇▇▇▇▇▇ hereby grants to Lessee all rights of access, ingress and egress
at the points shown on Exhibit A in, to, from and over any and all streets, ways
or alleys adjoining, abutting or adjacent to the Project and the Building,
together with the right to use, in common with other occupants of the Project,
any and all of the Common Areas pertaining to the Project with the exception of
any parking areas that are not designated for Lessee's exclusive use.
F. Lessee's Exclusive Parking Areas shall not be disturbed without
Lessee's consent which consent may be withheld in Lessee's sole discretion. In
the event that unauthorized persons, including tenants or invitees of tenants
occupying the Building, utilize said parking areas for parking or other purposes
to an extent which shall be objectionable to Lessee, Lessor shall, upon written
request from Lessee, immediately take whatever reasonable action as shall be
necessary to prevent said unauthorized utilization. Lessor shall not use or
permit the use of the Common Areas for any purpose other than the parking and
passage of vehicles and the movement of pedestrian traffic, lighting,
landscaping, directional and traffic controls signals, and Lessor will not,
except as shown on Exhibit A, construct, locate or allow construction or
location of any fence, barricade, structure, buildings, or other obstruction
which would interfere with the intended uses thereof, of the free flow of
traffic to, or access from, the Common Areas.
G. During the Lease term, Lessor shall provide and maintain paved
driveways to the Premises in order to provide convenient ingress and egress from
the delivery or service entrances to adjacent public streets and highways for
the purpose of receiving and delivering merchandise and otherwise servicing the
Premises, as
5 INITIALS
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Lessor:
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Lessee: KHS
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shown on Exhibit A. Said driveways shall be of sufficient width so
as to permit the passage, unloading, and the turning around of trailer trucks
and other commercial vehicles. Said driveways shall not be removed or changed
without written authorization of Lessee.
H. In making any permitted or required replacement, change, restoration,
alteration, improvement, enlargement or repair of or to the Premises, Lessor and
Lessee and their contractors and suppliers may use the portion of the common
area adjacent to Lessee's Premises for the parking of trucks and delivery
vehicles, storage of materials, temporary structures and other matters
incidental to such work, provided that no such use shall unreasonably interfere
with the operation of the business of any Lessee. In making any permitted or
required replacement, change, restoration, alteration, improvement or repair of
or to any portion of the project other than the Premises, Lessor, or any of
Lessor's tenants and their contractors and suppliers may use such portions of
the common areas as will not materially block the access to the Premises, for
the parking of trucks and delivery vehicles, storage of materials and other
matters incidental to such work, provided that no such use shall unreasonably
interfere with the operation of the business of Lessee or any sublessee or
licensee of Lessee.
I. Throughout the Lease term, no entrance, exit, approach or means of
entrance, exit or approach to and from the Premises or the Project shall be
unreasonably interfered with or disturbed by Lessor or anyone claiming by,
through or under Lessor. Lessee, its customers, sublessees, licensees, employees
and invitees, shall have vehicular and pedestrian ingress and egress at all
times between each of the entrances and exits of the Project and a public street
or highway, except for reasonable periods during which repairs, maintenance or
other work are being performed by utility companies or municipal authorities or
repairs for maintenance are being performed by Lessor.
J. Any and all security of any kind for Lessee, Lessee's agents, employees
or invitees, the Premises, or any personal property thereon (including, without
limitation, any personal property of any sublessee) shall be the sole
responsibility and obligation of Lessee, and shall be provided by Lessee at
Lessee's sole cost and expense. Lessee acknowledges and agrees that Lessor shall
have no obligation or liability whatsoever with respect to the same except due
to Lessor's negligence or willful misconduct. Lessee shall indemnify and hold
Lessor harmless from and against any and all loss, cost, damage or other
liability arising directly or indirectly from security measures or the absence
thereof with respect to the Premises and the building or the project of which
the Premises are a part. Lessee may, at Lessee's sole cost and expense, install
alarm systems in the Premises provided such installation complies with the
provisions of Paragraph 6 hereof. Removal of such alarm systems shall be
Lessee's sole responsibility and, at Lessee's sole cost and expense, shall be
completed prior to lease termination and all affected areas of the Premises
shall be repaired and/or restored in a good and workmanlike manner to the
condition that existed prior to such installation. Notwithstanding the
foregoing, Lessor may elect in Lessor's sole discretion to contract for common
security services, to whatever extent Lessor may deem appropriate, for the
building or the project of which the Premises are a part, provided, however
Lessee acknowledges and agrees that Lessor shall in no event be obligated to
provide any such services and the provision of such services shall not alter or
modify Lessee's indemnification of Lessor or the obligation of Lessee to provide
its own security as set forth herein. The cost of any security services
contracted for by Lessor which are provided for all tenants at the Project,
including Lessee, shall be treated as an operating expense pursuant to ▇▇▇▇▇▇▇▇▇
▇▇ hereof.
6. ALTERATIONS. Lessee, at any time during the Lease, shall have the option to
make any alterations, additions, partitions or other improvements to the
Premises or installing fixtures on the Premises, as required to operate Lessee's
business at its own cost and expense with no base rent, additional rent, or
supervisory fee due under the Lease for such space or modifications, provided
such improvements are not structural in nature. Such alterations, additions,
partitions, other improvements, and fixtures shall require the prior written
consent of Lessor, which consent will not be unreasonably withheld, conditioned
or delayed, provided that alterations, additions, partitions, or other
improvements that cost less than fifty thousand dollars ($50,000.00) in any
calendar year and do not affect the building's structural integrity or
mechanical systems will not require Lessor's prior written approval. Lessee, at
its own cost and expense, may erect shelves and bins as it desires without
Lessor's consent as well as alterations, additions, partitions, or other
improvements and fixtures which have been specifically consented to in writing
by Lessor (except as otherwise provided above), provided that (a) such items are
consistent with Lessee's permitted use of the Premises, (b) such items do not
overload or cause material damage to the same, (c) such items may be removed
without injury to the Premises, and (d) the construction, erection or
installation thereof complies with all applicable governmental laws, codes,
ordinances, regulations, or any other applicable authorities, including, without
limitation, the Americans with Disabilities Act of 1990 (the "ADA"), and with
Lessor's reasonable details, specifications and other requirements. Any
reasonable architectural, engineering, construction management, permits,
inspections, or other cost or fee required to assure compliance with the
conditions set forth in this Paragraph 6 shall be paid by Lessee promptly upon
demand. All alterations, additions, partitions, or other improvements and
fixtures erected or installed by Lessee shall be and remain the property of
Lessor during the term of this Lease.; provided that Lessor shall have the
option, exercisable in Lessor's sole discretion, to require Lessee either (i)
upon request made prior to the construction of such alterations, additions,
partitions, or other improvements (excluding Lessee's personal
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property) remove at the termination of this Lease, at Lessee's sole cost and
expense, all or part of any alterations, additions, partitions, or other
improvements and fixtures, at which time Lessee shall promptly restore the
Premises to its original condition, or (ii) to keep in place the same in which
case such alterations, additions, improvements, fixtures, and partitions shall
remain the property of Lessor. All shelves, bins, and trade fixtures and
personal property installed by Lessee shall be removed on or before the earlier
to occur of the date of termination of this Lease or vacating the Premises, at
which time Lessee shall restore the Premises to their original condition,
reasonable wear and tear excepted. All alterations, installations, removals and
restoration shall be performed in a good and workmanlike manner so as not to
damage or alter the primary structure or structural qualities of the buildings
and other improvements situated on the Premises or of which the Premises are a
part. Lessee, at its sole cost and expense, may, from time to time, install
antennas and/or satellite dishes, refrigeration, heating, ventilation or air
conditioning equipment on the roof of the Premises subject to applicable codes
and Lessor's prior written consent, which will not be unreasonably withheld,
conditioned or delayed. Such installations must not adversely affect the
structural integrity of the building and must comply with Lessor's reasonable
standard construction and engineering specifications. There shall be no
additional rent charged for such use of the roof. Upon removal of such antennas
and/or satellite dishes, refrigeration, heating, ventilation and air
conditioning equipment, Lessee shall restore the roof to its original condition,
subject to normal wear and tear.
7. SIGNS. Lessee shall have the right to its pro-rata share of exterior
signage on the Premises subject to applicable codes and Lessor's prior written
approval, which shall not be unreasonably withheld, conditioned, or delayed. All
signage installed by Lessee on the Premises shall be done at the sole cost and
expense of Lessee, but may be included as a portion of the anticipated Lessee
Improvements. Lessee shall repair, paint, and/or replace the building facial
surface to which its signs are attached upon vacation of the Premises, or the
removal or alteration of its signage. Lessee shall not (i) make any changes to
the exterior of the Premises, (ii) install any exterior lights, decorations,
balloons, flags, pennants, banners or painting, or (iii) erect or install any
signs, windows or door lettering, placards, decorations or advertising media of
any type which can be viewed from the exterior of the Premises, without Lessor's
prior written consent not to be unreasonably withheld, conditioned or delayed.
All signs, decorations, advertising media, blinds, draperies and other window
treatment or bars or other security installations visible from outside the
Premises shall conform at Lessee's expense with all applicable governmental
laws, ordinances, regulations, or other requirements.
8. UTILITIES. For Lessee's intended use and occupancy, Lessor agrees to
provide water, sewer, electricity, and telephone service connections to the
Premises upon the commencement date hereof, which connections, outside of the
Premises shall be maintained by Lessor and connections inside of the Premises
shall be maintained by Lessee. Lessee shall pay for all water, gas, heat, light,
power, telephone, sewer, sprinkler charges and other utilities and services used
on or at the Premises, and any maintenance or inspection charges for Lessee's
utilities. Lessor shall cause any of said services to be separately metered to
Lessee. Lessee shall pay its pro rata share, as reasonably determined by Lessor,
of all charges for jointly metered utilities. Lessor shall not be liable for any
interruption or failure of utility service on the Premises, provided Lessor's
negligence or willful misconduct do not cause such interruption or failure.
9. INSURANCE.
A. Lessor shall be obligated to maintain industry standard liability and
casualty insurance covering the buildings situated on the Premises or of which
the Premises are a part, except for those items the repair and maintenance of
which are Lessee's responsibility under Paragraph 5, in an amount not less than
one hundred percent (100%) of the "replacement cost" thereof insuring against
the perils of Fire, Lightning, Extended Coverage, Vandalism, and Malicious
Mischief.
B. Lessee, at its own expense, shall maintain during the term of this Lease
a policy or policies of worker's compensation and comprehensive general
liability insurance, including personal injury and property damage, with
contractual liability endorsement, in the amount of One Million Dollars
($1,000,000.00) for property damage and One Million Dollars ($1,000,000.00) per
occurrence for personal injuries or deaths of persons occurring in or about the
Premises. Lessee, at its own expense, also shall maintain during the term of
this Lease, fire and extended coverage insurance covering (i) the replacement
cost of all alterations, additions, partitions and improvements installed or
placed on the Premises by Lessee or by Lessor on behalf of Lessee and (ii) the
replacement cost of all of Lessee's personal property contained within the
Premises and (iii) business interruption of Lessee. Said policies shall (i) name
Lessor as an additional insured (except for the worker's compensation policy,
which instead shall include waiver of subrogation endorsement in favor of
Lessor), (ii) be issued by an insurance company which is reasonably acceptable
to Lessor, (iii) provide that said insurance shall not be canceled unless thirty
(30) days prior written notice shall have been given to Lessor, and (iv) provide
primary coverage to Lessor when any policy issued to Lessor provides duplicate
or similar coverage, and in such circumstance Lessor's coverage under Lessor's
policy shall be deemed excess over and above the coverage provided by Lessee's
policy. Said policy or policies or certificates thereof shall be delivered to
Lessor by Lessee upon commencement of the term of the Lease and upon each
renewal of said insurance.
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C. Lessee will not permit the Premises to be used for any purpose or in any
manner that would (i) void the insurance thereon, (ii) increase the insurance
risk or premium (unless Lessee pays the amount of such increase), or (iii) cause
the disallowance of any sprinkler credits. If any increase in the cost of any
insurance on the Premises or the building of which the Premises are a part is
caused by Lessee's use of the Premises, or because Lessee vacates the Premises,
then Lessee shall promptly pay the amount of such increase to Lessor upon
demand.
D. 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 Premises,
improvements to the building or buildings of which the Premises are a part, or
personal property (building contents) within the building(s) and/or Premises
covered or required to be covered by the insurance to be provided under this
Lease, EVEN IF SUCH LOSS OR DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER
TORTIOUS CONDUCT, ACTS OR OMISSIONS OF THE RELEASED PARTY OR THE RELEASED
PARTY'S AGENTS, DIRECTORS, OFFICERS, EMPLOYEES OR INVITEES. Said mutual waivers
shall be in addition to, and not in limitation or derogation of, any other
waiver or release contained in this Lease with respect to any loss or damage to
property of the parties hereto. Without in any way limiting the foregoing
waivers and to the extent permitted by applicable law, the parties hereto each,
on behalf of their respective insurance companies insuring the property of
either Lessor or Lessee against any such loss, waive any right of subrogation
that Lessor or Lessee or their respective insurance companies based upon an
assignment from its insured. Each party to this Lease agrees immediately after
execution of this Lease to give each insurance company which has issued to its
policies of fire and extended coverage insurance, written notice of the terms of
the mutual waivers contained in this subparagraph, and if necessary to prevent
the invalidation of said insurance coverage by reason of said waivers, to have
the insurance policies properly endorsed.
10. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building should be damaged or destroyed by fire
or other peril, Lessee immediately shall give written notice to Lessor. If the
building situated upon the Premises or of which the Premises are a part should
be damaged or destroyed by any peril covered by the insurance to be provided by
Lessor under Paragraph 9A above, and in Lessor's estimation, rebuilding or
repairs cannot be completed within one hundred eighty (180) days after the date
of such damage, Lessee may elect to terminate this Lease and the Base Rent and
additional rental shall be abated during the unexpired portion of this Lease,
effective upon the date of the occurrence of such damage.
B. If the Building should be damaged by any peril covered by the insurance
to be provided by Lessor under Paragraph 9A above, and in Lessor's estimation,
rebuilding or repairs can be substantially completed within one hundred eighty
(180) days after the date of such damage, this Lease shall not terminate, and
Lessor shall restore the Premises to substantially its previous condition,
except that Lessor shall not be required to rebuild, repair or replace any part
of the partitions, fixtures, additions and other improvements that may have been
constructed, erected or installed in or about the Premises for the benefit of,
or by, or for, Lessee. If such repairs and rebuilding have not been
substantially completed within one hundred eighty (180) days after the date of
such damage, Lessee, as Lessee's exclusive remedy, may terminate this Lease by
delivering written notice of termination to Lessor in which event the rights and
obligations hereunder shall cease and terminate. For purposes of this Paragraph
10B, if Lessee reasonably determines that the Premises are not suitable for
Lessee's intended use in whole or in part following such damage, the Base Rent
and additional rental payable hereunder during the period in which Lessee
reasonably determines that the Premises are not usable shall be reduced (i)
according to the square footage of the unusable area contained in the Premises,
as reasonably determined by Lessee, or (ii) to such extent as may be fair and
reasonable under the circumstances, as reasonably determined by Lessee.
C. 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 the insurance proceeds be applied to such indebtedness, then
Lessor shall have the right to terminate this Lease by delivering written notice
of termination to Lessee within fifteen (15) days after such requirement is made
known by any such holder, whereupon all rights and obligations hereunder shall
cease and terminate.
11. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of
recovery and causes of action that Lessee has released, Lessor shall indemnify
Lessee, hold Lessee harmless and defend Lessee against any and all claims or
liability for any injury or damage to any person in, on or about the Premises,
the Building or the Project or any part thereof when such injury or damage shall
be caused by the act, neglect, fault of, or omission of any duty with respect to
the same by Lessor, its agents, servants, contractors, invitees, tenants, or
employees. Notwithstanding the foregoing or anything to the contrary in this
Lease, Lessee hereby agrees that in no event shall Lessor be liable for any
incidental or consequential damages whatsoever resulting from such
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claim or liability, including, without limitation, any damages as a result of
any interruption of Lessee's business or any loss of income therefrom. Except
for any claims, rights of recovery and causes of action that Lessor has
released, Lessee shall indemnify Lessor, hold Lessor harmless from and defend
Lessor against any and all claims or liability for any injury or damage (i) to
any person or property whatsoever occurring in, on or about the Premises or any
part thereof and/or of the building of which the Premises are a part, including
without limitation elevators, stairways, passageways or hallways, the use of
which Lessee may have in accordance with this Lease, when such injury or damage
shall be caused by the act, neglect, fault of, or omission of any duty with
respect to the same by Lessee, its agents, servants, employees, or invitees,
contractors, subtenants, (ii) arising from the conduct of management of any work
done by the Lessee in or about the Premises when such injury or damage shall be
caused by the act, neglect, fault of, or omission of any duty with respect to
the same by Lessee, its agents, servants, employees, or invitees, contractors,
subtenants, (iii) arising from transactions of the Lessee when such injury or
damage shall be caused by the act, neglect, fault of, or omission of any duty
with respect to the same by Lessee, its agents, servants, employees, or
invitees, contractors, subtenants, and (iv) all costs, counsel fees, expenses
and liabilities incurred in connection with any such claim or action or
proceeding brought thereon when such injury or damage shall be caused by the
act, neglect, fault of, or omission of any duty with respect to the same by
Lessee, its agents, servants, employees, or invitees, contractors, subtenants.
The provisions of this Paragraph 11 shall survive the expiration or termination
of this Lease with respect to any claims or liability occurring prior to such
expiration or termination.
12. USE. The Premises shall be used only for the purpose of general office
use, receiving, storing, servicing, shipping, product preparation, grocery store
services (other than on-site retail) and selling (other than by on-site retail)
products, materials, alcoholic beverages and merchandise made and/or distributed
by Lessee and for such other lawful purposes as may be incidental thereto.
Outside storage, (excluding storage of trucks and other vehicles and the washing
thereof) at any time is prohibited without Lessor's prior written consent.
Lessee shall, at its own cost and expense, obtain any and all licenses and
permits necessary for such use (including, but not limited to, a Certificate of
Occupancy), in regard to Lessee's tenant improvements, if required), shall at
all times maintain the Premises in a clean, healthful and safe condition and
comply with all governmental laws, codes, ordinances, regulations or any other
applicable authorities with regard to the use, condition or occupancy of the
Premises including, without limitation, the ADA. Lessee shall be responsible, at
Lessee's sole cost and expense, for the correction, prevention, and abatement of
nuisances in or upon, or connected with, the Premises to the extent caused by
Lessee. Lessee shall not permit any unreasonably objectionable or unpleasant
odors, smoke, dust, gas, noise, vibrations, or pest infestations to emanate from
the Premises, nor take any other action that would constitute an unreasonable
nuisance or would unreasonably disturb, unreasonably interfere with, or endanger
Lessor or any other lessees of the building or project of which the Premises are
a part, excepting pre-existing conditions and Substances. Lessee's use of the
Premises shall at all times comply with the insurance provisions in Paragraph 9C
hereof. Lessee agrees that the point pressure resulting from Lessee's racking
system, inventory, forklifts and equipment pertaining to Lessee's use of the
Premises shall not exceed allowable design floor loading for floor slabs on
grade (provided Lessor shall inform Lessee in writing of the allowable design
floor loading). Lessee shall hold harmless Lessor from any loss, liability, and
expenses, both real and alleged, arising out of any damage or repair caused by
Lessee's negligence or failure to comply with this paragraph.
13. INSPECTION. Lessor and Lessor's agents and representatives shall have
the right to enter the Premises at any reasonable time during business hours,
after first giving Lessee 24 hours prior written notice, except in cases of
emergency when no such notice is required, to inspect the Premises and to make
such repairs as may be required or permitted pursuant to this Lease. Lessor
shall not unreasonably interfere with Lessee's use and enjoyment of the Premises
when Lessor exercises its right of entry under this Section 13. During the
period that is six (6) months prior to the end of the term hereof and at any
time Lessee is in monetary default, Lessor and Lessor's representatives may
enter the Premises during business hours for the purpose of showing the
Premises. Lessee shall neither prevent, prohibit, nor in any way impair such
showing of the Premises. In addition, during the last six months of any term,
including exercised extensions, Lessor shall have the right to erect a suitable
sign on or near the Premises stating the Premises are available. Lessee shall
notify Lessor in writing at least thirty (30) days prior to vacating the
Premises and shall arrange to meet with Lessor for a joint inspection of the
Premises prior to vacating.
14. ASSIGNMENT AND SUBLETTING.
A. Lessee, shall not have the right to assign, sublet, transfer or encumber
this Lease, or any interest therein, without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, conditioned or
delayed. Any attempted assignment, subletting, transfer or encumbrance by Lessee
in violation of the terms and covenants of this Paragraph shall be void.
Notwithstanding the foregoing, Lessee shall have the right to assign this Lease
to any affiliate (as such term is defined in the Securities Act of 1933)
provided that such assignment is in form satisfactory to Lessor and that such
affiliate agrees to and performs all obligations of Lessee under this lease. Any
assignee, sublessee or transferee of Lessee's interest in this Lease (all such
assignees, sublessees and transferees being hereinafter referred to as
"Transferees"), by assuming Lessee's obligations hereunder,
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shall assume liability to Lessor for all amounts paid to persons other than
Lessor by such Transferees in contravention of this Paragraph. No assignment,
subletting, or other transfer, whether consented to by Lessor or not, or
permitted hereunder, shall relieve Lessee of its liability hereunder. If an
event of default occurs while the Premises or any part thereof are assigned or
sublet, then Lessor, in addition to any other remedies herein provided, or
provided by law, may collect directly from such Transferee all rents payable to
the Lessee and apply such rent against any sums due Lessor hereunder. No such
collection shall be construed to constitute a novation or a release of Lessee
from the further performance of Lessee's obligations hereunder. Notwithstanding
the foregoing, without Lessor's consent, Lessee may assign its leasehold
interest to: (a) a parent, subsidiary, sibling or affiliate corporation,
controlling, controlled by or under common control with, Lessee; (b) a successor
corporation related to Lessee by merger, consolidation, non-bankruptcy
reorganization or government action; (c) a reincorporation that strictly
involves changing the state in which Lessee is incorporated; or (d) a purchaser
of substantially all of Lessee's assets located in the Property. In addition,
the restrictions on Transfer (as defined above) do not apply to the sale or
other transfer of Lessee's capital stock including: (i) any transfer in
connection with the merger, consolidation or non-bankruptcy reorganization; (ii)
any transaction related to a public sale or private placement; (iii) any
transfer of any sale of stock amongst existing shareholders; or (iv) an activity
in any company stock option programs.
B. If this Lease is assigned to any person or entity pursuant to the
provision of the Bankruptcy Code, 11 U.S.C. (S) 101 et. seq., (the "Bankruptcy
Code"), any and all monies or other consideration payable or otherwise to be
delivered in connection with such assignment shall be paid or delivered to
Lessor, shall be and remain the exclusive property of Lessor and shall not
constitute property of Lessee or of the estate of Lessee within the meaning of
the Bankruptcy Code. Any and all monies or other considerations constituting
Lessor's property under the preceding sentence not paid or delivered to Lessor
shall be held in trust for the benefit of Lessor and be promptly paid or
delivered to Lessor.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed, without further act or deed,
to have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall upon demand execute and deliver
to Lessor an instrument confirming such assumption.
15. CONDEMNATION. If the Premises, Project, or Exclusive Parking Area, or
any portion thereof 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 imminent taking, and the taking prevents or
materially interferes with the use of the Premises for the purpose for which
they were leased to Lessee, Lessee shall have the right to terminate this lease
and the Base Rent and additional rental shall be abated during the unexpired
portion of this Lease, effective on the date of such taking. All compensation
awarded in connection with or as a result of any of the foregoing proceedings
shall be the property of Lessor and Lessee hereby assigns any interest in any
such award to Lessor; provided, however, Lessor shall have no interest in any
award made to Lessee for loss of business or goodwill or for Lessee's costs of
relocation, for the taking of Lessee's fixtures and improvements.
16. HOLDING OVER. At the termination of this Lease by its expiration or
otherwise, Lessee immediately shall deliver possession to Lessor with all
repairs and maintenance required herein to be performed by Lessee completed. If,
for any reason, Lessee retains possession of the Premises after the expiration
or termination of this Lease, unless the parties hereto otherwise agree in
writing, such possession shall be subject to termination by either Lessor or
Lessee at any time upon not less than twenty (20) days advance written notice,
and all of the other terms and provisions of this Lease shall be applicable
during such period, except that Lessee shall pay Lessor from time to time, upon
demand, as rental for the period of such possession, an amount equal to one
hundred fifty percent (150%) of the Base Rent in effect on the termination date,
computed on a daily basis for each day of such period. No holding over by
Lessee, whether with or without consent of Lessor shall operate to extend this
Lease except as otherwise expressly provided. The preceding provisions of this
Section 16 shall not be construed as consent for Lessee to retain possession of
the Premises in the absence of written consent thereto by Lessor.
17. QUIET ENJOYMENT. Lessor covenants that on or before the commencement
date it will have 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. Lessor represents that it has the authority to enter into
this Lease and that so long as there is not an uncured event of default, Lessee
shall peaceably and quietly have, hold and enjoy the Premises for the term
hereof without hindrance or molestation from Lessor, subject to the terms and
provisions of this Lease.
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18. EVENTS OF DEFAULT. The following events (herein individually referred to as
"event of default") each shall be deemed to be events of nonperformance by
Lessee under this Lease:
A. Lessee shall fail to pay any installment of Base Rent or any additional
rental herein reserved when due, or any other payment or reimbursement to Lessor
required herein when due, and such failure shall continue for a period of five
days after receipt of written notice from Lessor stating that the payment was
not received.
B. Lessee shall (i) become insolvent; (iii) admit in writing its inability
to pay its debts: (iii) make a general assignment for the benefit of creditors;
(iv) commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as a debtor or to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or of any substantial part of its property; or (v) take any action to
authorize or in contemplation of any of the actions set forth above in this
Paragraph.
C. Any case, proceeding or other action against the Lessee shall be
commenced seeking (i) to have an order for relief entered against it as a debtor
or to adjudicate it as bankrupt or insolvent; (ii) reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors
(iii) appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (a) results in the entry of an order for relief
against it which it is not fully stayed within seven (7) business days after the
entry thereof or (b) shall remain undismissed for a period of forty-five (45)
days.
D. Lessee shall fail to discharge or bond against any lien placed upon the
Premises in violation of Paragraph 21 hereof within thirty (30) days after any
such lien or encumbrance is filed against the Premises.
E. Lessee shall fail to comply with any term, provision or covenant of
this Lease (other than those listed in this Paragraph 18), and shall not cure,
or start to cure, such failure within twenty (20) business days after written
notice thereof to Lessee.
19. REMEDIES
A. Upon each occurrence of an event of default, that Lessee fails to cure
within cure period, Lessor after written notice, shall have the option to
pursue any one or more of the following remedies without any notice or demand:
(1) Terminate this Lease; and/or
(2) Enter upon and take possession of the Premises with or without
terminating this Lease; and/or
(3) Alter all locks and other security devices at the Premises with or
without terminating this Lease, and pursue, at Lessor's option, one or more
remedies pursuant to this Lease, and in any such event Lessee immediately
shall surrender the Premises to Lessor, and if Lessee fails so to do, Lessor,
without waiving any other remedy it may have, may enter upon and take
possession of the Premises and expel or remove Lessee and any other person who
may be occupying such Premises or any part thereof.
B. If Lessor terminates this Lease, at Lessor's option, Lessee shall be
liable for and shall pay to Lessor, the sum of all rental and other payments
owed to Lessor hereunder accrued to the date of such termination, plus, as
liquidated damages, an amount equal to the present value (using the current
"prime" interest rate of Chase Bank, or should such financial institution no
longer exist, a comparable financial institution) of(1) the total rental and
other payments owed hereunder for the remaining portion of the Lease term,
calculated as if such term expired on the date set forth in Paragraph 1, less
(2) the then fair market rental of the Premises for such period.
C. If Lessor repossesses the Premises without terminating the Lease,
Lessee, at Lessor's option, shall be liable for and shall pay Lessor on demand
all rental and other payments owed to Lessor hereunder, accrued to the date of
such repossession, plus all amounts required to be paid by Lessee to Lessor
until the date of expiration of the term as stated in Paragraph 1, diminished by
all amounts received by Lessor through reletting of the Premises during such
remaining term (but only to the extent of the rent herein reserved). Actions to
collect amounts due by Lessee to Lessor under this subparagraph may be brought
from time to time, on one or more occasions, without the necessity of Lessor's
waiting until expiration of the Lease term.
D. Upon an event of default, in addition to any sum provided to be paid
herein, Lessee also shall be liable for and shall pay to Lessor (i) brokers'
fees incurred by Lessor in connection with reletting the whole or any part of
the Premises; which fees shall be prorated based on the remaining term of this
Lease as of the date of reletting compared to the term of the replacement lease;
(ii) the costs of removing and storing Lessee's or other occupant's property;
(iii) the costs of repairing, or otherwise putting the Premises into as good
condition as that in which it was originally delivered to Lessee reasonable wear
and tear excepted); and (iv) all reasonable
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expenses incurred by Lessor in enforcing or defending Lessor's rights and/or
remedies. If either party hereto institutes any action or proceeding to enforce
any provision hereof by reason of any alleged breach of any provision of this
Lease, the prevailing party shall be entitled to receive from the losing party
all reasonable attorneys' fees and all court costs in connection with such
proceeding.
E. In the event Lessee fails to make any payment due hereunder when
payment is due and the period to cure has expired, to help defray the additional
cost to Lessor for collecting and/or processing such late payments, Lessee shall
pay to Lessor on demand a late charge in an amount equal to five percent (5%) of
such installment; and the failure to pay such late charge within ten (10) days
after demand therefore shall be an additional event of default hereunder. The
provision for such late charge shall be in addition to all of Lessor's other
rights and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Lessor's remedies in any manner.
F. Exercise by Lessor of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises by Lessor, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Lessor and Lessee. Lessee and Lessor further agree that forbearance by Lessor to
enforce its rights pursuant to the Lease at law or in equity, shall not be a
waiver of Lessor's right to enforce one or more of its rights in connection with
any subsequent default.
G. If Lessor fails to perform any of its obligations hereunder within
thirty (30) days after written notice from Lessee specifying such failure,
Lessee's exclusive remedies shall be the remedies set forth in Paragraph 4E
and/or an action for damages, specific enforcement or injunctive relief. Unless
and until Lessor fails to so cure any default after such notice within the
allowable cure period, Lessee shall not have any remedy or cause of action by
reason thereof. All obligations of Lessor hereunder will be construed as
covenants, not conditions; and all such obligations will be binding upon Lessor
only during the period of its possession of the Premises and not thereafter. The
term "Lessor" shall mean only the owner, for the time being of the Premises, and
in the event of the transfer by such owner of its interest in the Premises, such
owner shall thereupon be released and discharged from all covenants and
obligations of the Lessor thereafter accruing, but such covenants and
obligations shall be binding during the Lease term upon each new owner for the
duration of such owner's ownership. Notwithstanding any other provision hereof,
Lessor shall not have any personal liability hereunder. In the event of any
breach or default by Lessor in any term or provision of this Lease, Lessee
agrees to look solely to the equity or interest then owned by Lessor in the
Project and the security deposits, operating income, other assets, and insurance
coverage related to the Project; however, in no event, shall any deficiency
judgment or any money judgment of any kind be sought or obtained against any
Lessor.
H. If Lessor repossesses the Premises pursuant to the authority herein
granted, then Lessor shall have the right to (i) keep in place and use or (ii)
remove and store all of the furniture, fixtures and equipment at the Premises,
including that which is owned by or leased to Lessee at all times prior to any
foreclosure thereon by Lessor or repossession thereof by any lessor thereof or
third party having a lien thereon. Lessor also shall have the right to
relinquish possession of all or any portion of such furniture, fixtures,
equipment and other property to any person ("Claimant") who presents to Lessor a
copy of any instrument represented by Claimant to have been executed by Lessee
(or any predecessor of Lessee) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures, equipment or other
property, without the necessity on the part of Lessor to inquire into the
authenticity or legality of said instrument. The rights of Lessor herein stated
shall be in addition to any and all other rights that Lessor has or may
hereafter have at law or in equity; and Lessee stipulates and agrees that the
rights herein granted Lessor are commercially reasonable.
I. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Lessee to or on behalf of Lessor under this Lease, whether or not
expressly denominated as rent, shall constitute rent.
J. This is a contract under which applicable law excuses Lessor from
accepting performance from (or rendering performance to) any person or entity
other than Lessee.
K. Notwithstanding anything herein to the contrary, Lessor agrees to
undertake commercially reasonable efforts to mitigate its damages resulting from
any default or breach by Lessee.
20. MORTGAGES. Lessee accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a lien
or charge upon the Premises or the improvements situated thereon or the building
of which the Premises are a part; provided, however, that if the mortgagee,
trustee, or holder of any such mortgage or deed of trust elects to have Lessee's
interest in this Lease superior to any such instrument, then by notice to Lessee
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. Lessee, at any time hereafter on demand, shall execute any
instruments, releases or other documents that may be required by any mortgagee
for the purpose of subjecting and subordinating this Lease to the lien of any
such mortgage.
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Lessor shall use commercially reasonable efforts to obtain a commercially
reasonable non-disturbance agreement from any future mortgage holder on terms
reasonably acceptable to Lessee. In addition, Lessee shall not be required to
execute any instrument which materially increases Lessee's obligations or
decreases Lessee's rights under this Lease.
21. MECHANIC'S LIENS. Lessee has no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind the interest of Lessor or Lessee in the Premises or to
charge the rentals payable hereunder for any claim in favor of any person
dealing with Lessee, including those who may furnish materials or perform labor
for any construction or repairs. Lessee 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 by or at the direction of Lessee and that it will save and hold Lessor
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 Lessor in the Premises or under the terms of this
Lease arising out of such work. Lessee agrees to give Lessor immediate written
notice of the placing of any lien or encumbrance against the Premises.
22. HAZARDOUS MATERIALS.
A. The term "Substances," as used in this Lease shall mean pollutants,
contaminants, toxic or hazardous wastes, or any other substances, the use,
storage, handling, disposal, transportation or removal of which is regulated,
restricted, prohibited or penalized by any "Environmental Law," which term shall
mean any federal, state or local law, ordinance or other statute of a
governmental or quasi-governmental authority relating to pollution or protection
of health or the environment and shall specifically include, but not be limited
to, any "hazardous substance" as that term is defined under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 and any
amendments or successors in function thereto.
B. Lessee hereby agrees that (i) no activity will be conducted on the
Premises that will produce any Substance, except for such activities that are
part of the ordinary course for Lessee's business activities (the "Permitted
Activities") provided said Permitted Activities are conducted in accordance with
all Environmental Laws and have been reasonably approved in advance in writing
by Lessor (which approval shall not be unreasonably withheld, conditioned, or
delayed); Lessee shall be responsible for obtaining any required permits and
paying any fees and providing any testing required by any governmental agency;
(ii) the Premises will not be used in any manner for the storage of any
Substances except for the temporary storage of such materials (the "Permitted
Materials") that are used in the ordinary course of Lessee's business (all
products that are typically sold in a retail food or drug store and all related
products used to prepare such products for sale) provided such substances are
properly stored in a manner and location meeting all Environmental Laws and
approved in advance in writing by Lessor (which approval Lessor may grant or
withhold in its sole discretion); Lessee shall be responsible for obtaining any
required permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the Premises will be used as a landfill
or a dump; (iv) Lessee will not install any underground or aboveground tank of
any type; (v) Lessee will not allow any surface or subsurface conditions to
exist or come into existence that constitute, or with the passage of time, may
constitute a public or private nuisance; (vi) Lessee will not permit any
Substances (excepting all products that are typically sold in a retail food or
drug store and all related products used to prepare such products for sale,
("Permitted Materials")) to be brought onto the Premises, except in accordance
with the terms and conditions hereof, and if so brought or found located
thereon, the same shall be immediately removed, and properly disposed, and all
required cleanup procedures shall be diligently undertaken pursuant to all
Environmental Laws; and (vii) Lessee shall in all regards comply with
Environmental Laws including, without limitation, meeting any necessary
financial responsibility requirements. Prior to any Substance being brought upon
or into the Premises by Lessee, excepting (vi) above, whether Lessor's written
permission is required or not, Lessee will provide to Lessor any applicable
material safety data sheets regarding said Substance as well as a written
description of the amount of such Substance to be brought upon or into the
Premises and the common and recognized chemical name of such Substance. Lessee
shall bear responsibility for insuring that all record keeping, reporting and
remediation responsibilities of Lessee under Environmental Laws are met and
Lessee assumes all such responsibility and liability for such legal compliance.
Lessor shall bear responsibility for insuring that all record keeping, reporting
and remediation responsibilities of Lessor under Environmental Laws are met and
Lessor assumes all such responsibility and liability for such legal compliance.
C. After giving at lease twenty-four (24) hours prior written notice
(except in the case of an emergency in which case no prior notice is required),
Lessor or Lessor's representative shall have the right, but not the obligation,
to enter the Premises for, among other purposes, the purposes of inspecting the
storage, use and disposal of any Substances and to review Lessee's compliance
with all Environmental Laws. Should it be determined, in Lessor's sole
commercially reasonable opinion, that any Substances are being improperly
stored, used, or disposed of by Lessee, then Lessee shall after receipt of
written notice, immediately take such corrective action as required by
applicable Environmental Laws. Lessee will provide Lessor written notification
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of the release or disposal of any Substance by Lessee either within the Premises
or outside of Lessee's Premises and will also provide Lessor written notice of
any pending or threatened litigation concerning the breach or purported breach
of any Environmental Laws by Lessee.
D. If at any time during or after the term of the Lease, the Premises is
found to be contaminated by Substances, arising from or as a result of Lessee's
negligence (whether in whole or in part) or any Substances by Lessee or any of
Lessee's agents, employees, assigns or sublessee ("Lessee's Contamination"),
Lessee shall diligently institute proper and thorough cleanup procedures to
remediate Lessee's Contamination in accordance with Environmental Laws at
Lessee's sole cost, and Lessee agrees to indemnify and hold Lessor harmless from
all claims, demands, actions, liabilities, costs, expenses, damages, fines,
reimbursement, restitution, response costs, cleanup costs, and obligations
(including investigative responses and attorney's fees) of any nature to the
extent incurred for the remediation of Lessee's Contamination. The foregoing
indemnification and the responsibilities of Lessee shall apply to Lessee
regardless of whether they arise from any Permitted Activity, Substances or
Permitted Materials (as may be listed below), and shall survive the termination
or expiration of this Lease. Lessor shall be under no obligation to expend any
sums or to seek reimbursement to enforce the indemnification obligations of
Lessee hereunder.
Permitted materials: All products that are typically sold in a retail food
or drug store and all related products used to prepare such products for sale.
E. Lessee acknowledges and agrees that it shall not be unreasonable for
Lessor to withhold its consent to any proposed assignment, subletting, or
transfer of Lessee's interest in this Lease if (i) the anticipated use of the
Premises by the proposed assignee, sublessee, or transferee (collectively, a
"Transferee") involves the generation, storage, use, treatment, or disposal of
Substances excepting Permitted Materials; (ii) the proposed Transferee has been
required by any prior lessor, lender, or governmental authority to make remedial
action in connection with Substances contaminating a property, if the
contamination resulted from such Transferee's actions or use of the property in
question; or (iii) the proposed Transferee is subject to an enforcement order
issued by any governmental authority in connection with the use, disposal, or
storage of a Substance, excepting Permitted Materials.
▇. ▇▇▇▇▇▇ shall advise Lessee of the existence any toxic materials or
hazardous conditions which exist in or about the Premises, Building, Project and
Common Areas or other parts of the Project site and are in violation of local,
state, or federal environmental regulations. It shall be the sole responsibility
of Lessor if required by any local, state, or federal government entities to
remove any such toxic materials and to indemnify and hold Lessee harmless from
any future action, loss, damage or expense (including attorneys fees) which may
occur as a result of the presence of such materials. Lessor and its successors
and assigns shall indemnify, defend, reimburse and hold Lessee, its employees
and lenders, harmless from and against any and all environmental damages,
including the cost of remediation and other expenses (including attorneys fees),
which existed as a result of hazardous substances on the Project site prior to
the Commencement Date or which are caused by the act or negligent omission of
Lessor, its contractors, invitees, agents or employees after the Commencement
Date. Lessor's obligations, as and when required by the applicable environmental
law requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this lease. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
hazardous substances on the Premises or the Project site prior to the
Commencement Date. Lessee shall cooperate fully in any such activities at the
request of Lessor, including allowing Lessor and Lessor's agents to have
reasonable access to the premises, upon twenty-four (24) hours prior written
notice, at reasonable times determined by Lessee, in order to carry out Lessor's
investigative and remedial responsibilities.
Lessee and Lessor acknowledge that the Project is on a site that was
entered into the Voluntary Clean-up Program promulgated by the Texas Natural
Resource and Conservation Commission and has received a Certificate of
Completion for such clean-up (a copy of such Certificate has been provided to
Lessee by Lessor).
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. 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 the interpretation of this Lease.
B. For the purposes of this Lease, Lessor and Lessee agree the area of the
Premises shall be deemed to be the square footage shown on page 1 of this Lease.
Lessee's "proportionate share", as used in this Lease, shall
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mean a fraction, the numerator of which is the area contained in the Premises as
shown on page 1 of this Lease and the denominator of which is the area contained
in the Building (for Operating Expenses affecting only the building) or
contained in all buildings located within the Project (for Operating Expenses
affecting the Project) (each such area being measured in square feet). Such
areas shall be calculated according to the roof dimensions of the particular
areas.
C. The terms, provisions and 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, executors, personal representatives,
legal representatives, successors and assigns, except as otherwise herein
expressly provided. 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. Each party agrees to furnish to 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.
▇. ▇▇▇▇▇▇ and Lessee shall not be held responsible for delays in the
performance of its obligations hereunder when caused by material shortages, acts
of God or labor disputes. Lessee shall not be held responsible for delays in the
performance of its non-monetary obligations hereunder when caused by material
shortages, acts of God or labor disputes.
E. Lessee agrees, from time to time, within ten (10) days after request of
Lessor, to deliver to Lessor, or Lessor's designee, a Certificate of Confirming
Lessee's Occupancy and an estoppel certificate stating (if true) 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 factual matters pertaining to this Lease as
may be requested by Lessor. It is understood and agreed that Lessee's obligation
to furnish such estoppel certificates in a timely fashion is a material
inducement for Lessor's execution of this Lease.
F. This Lease constitutes the entire understanding and agreement of the
Lessor and Lessee with respect to the subject matter of this Lease, and contains
all of the covenants and agreements of Lessor and Lessee with respect thereto.
Lessor and Lessee each acknowledge that no representations, inducements,
promises or agreements, oral or written, have been made by Lessor or Lessee, or
anyone acting on behalf of Lessor or Lessee, which are not contained herein, and
any prior agreements, promises, negotiations, or representations not expressly
set forth in this Lease are of no force or effect. This Lease may not be
altered, changed or amended except by an instrument in writing signed by both
parties hereto.
G. All obligations of Lessee and Lessor 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 insurance and indemnity obligations, and all of Lessee's payment
obligations with respect to Base Rent and additional rental and all obligations
concerning the condition and repair of the Premises. Upon the expiration or
earlier termination of the term hereof, and prior to Lessee vacating the
Premises, Lessee shall restore the Premises to good condition and repair,
reasonable wear and tear excluded. Prior to Lessee vacating the Premises, Lessee
shall make all repairs as specified in Paragraph 5 hereof, including but not
limited to any repairs necessary so that the heating and air conditioning
systems exclusively serving the Premises are in good working order (reasonable
wear and tear excepted). Upon expiration or earlier termination hereof, the
Premises shall be delivered to Lessor in broom clean condition. If any and all
repairs or restoration required of Lessee hereunder are not completed by the
expiration or earlier termination hereof, Lessor may cause the same to be
completed and the costs shall be paid by Lessee promptly upon demand (including
a five (5%) percent service charge for arranging for and coordinating such
work).
Lessee shall also, prior to vacating the Premises, pay to Lessor the
amount, as estimated by Lessor, of Lessee's obligation hereunder for all
operating expenses including, without limitation, taxes, insurance premiums and
common area charges for the year in which the Lease expires or terminates,
prorated for that portion of the year during which this Lease was in force. All
such amounts shall be used and held by Lessor for payment of such obligations of
Lessee hereunder, with Lessee being liable for any additional costs therefor
upon demand by Lessor, or with any excess to be returned to Lessee after all
such obligations have been determined and satisfied as the case may be. In lieu
of waiting until the close of the calendar year in order to determine any excess
additional rentals for operating expenses as set forth in ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
has the option to charge Lessee for Lessee's proportionate share of the
additional rentals based upon the previous year's operating expenses plus five
percent (5%). Any security deposit held by Lessor may, at Lessor's option, be
credited against the amount payable by Lessee under this Paragraph 24G or
otherwise handled in accordance with Paragraph 2B hereof.
H. 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 to 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
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of this Lease, 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.
I. 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.
J. Lessee represents and warrants that it has dealt with no broker, agent
or other person in connection with this transaction or that no broker, agent or
other person brought about this transaction, other than ▇▇▇▇▇▇▇▇ ▇▇▇▇ Houston,
Ltd. (whose fee Lessor shall pay) and Lessee agrees to indemnify and hold Lessor
harmless from and against any claims by any other broker, agent or other person
claiming a commission or other form of compensation by virtue of having been
retained by Lessee with regard to this leasing transaction.
K. If and when included within the term "Lessor", as used in this
instrument, there is more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying some individual at some specific address for the receipt of notices
and payments to Lessor. If and when included within the term "Lessee", as used
in this instrument, there is more than one person, firm or corporation, all
shall jointly arrange among; themselves for their joint execution of a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Lessee. All parties
included within the terms "Lessor" and "Lessee", respectively, shall be bound by
notices given in accordance with the provisions of Paragraph 25 hereof to the
same effect as if each had received such notice.
L. The building of which the Premises are a part was completed in 1999 and
manufacturers' and installers' warranties still exist on certain building
components. Certain of the items installed as part of the Lessee improvement
work for Lessee shall be under a manufacturer's and installer's warranty, which
shall be used for the benefit of Lessee. Additionally, the building of which the
Premises are a part is currently in compliance with all local, state, and
federal environmental regulations including but not limited to all regulations
regarding Substances. Further, there are no deed restrictions on the building
that will conflict with Lessee's intended use. Other than the representations
and warranties described in this paragraph or elsewhere 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 any other
kind arising out of this Lease Agreement and that all express or implied
warranties in connection therewith are expressly disclaimed.
M. This Lease Agreement shall be construed under the laws of the State of
Texas, and Federal laws as applicable.
N. Time is of the essence; and all due dates, time schedules, and
conditions precedent to exercising a right shall be strictly adhered to without
delay except where otherwise expressly provided.
O. Because the Premises are on the open market and are presently being
shown, this Lease shall be treated as an offer subject to non-acceptance by
Lessor, and shall not be valid or binding unless and until accepted by Lessor in
writing and a fully executed copy delivered to both parties hereto.
Notwithstanding the foregoing, Lessee agrees to tender to Lessor an initial sum
with executed originals of this Lease Agreement. Lessor shall for a period of
fifteen (15) days after receipt of such executed Lease and tendered sum have the
ability but not the obligation to review and return an executed original of the
Lease Agreement to Lessee. If Lessor shall notify Lessee of its acceptance or
return an executed original Lease Agreement to the Lessee during, or after the
expiration of, such time period, then this Lease Agreement shall be binding upon
both parties. Upon such occasion, Lessor may retain such sums so deposited by
Lessee and apply such sums to amounts due and owing under the terms of the Lease
Agreement. Lessee agrees that its offer to lease the Premises will be
irrevocably left open during the time period necessary for Lessor to consider
the offer.
24. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivering of notice or the making of any payment by
Lessor to Lessee or with reference to the sending, mailing or delivering of any
notice or the making of any payment by Lessee to Lessor 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 Lessee to Lessor
hereunder shall be payable to Lessor at the address for Lessor set forth below
or at such other address as Lessor may specify from time to time by written
notice delivered in accordance herewith. Lessee's obligation to pay rent and any
other amounts to Lessor under the terms of this Lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Lessor. In addition to Base Rent due hereunder, all sums of money and all
payments due Lessor hereunder shall be deemed to be additional rental owed to
Lessor.
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(b) All payments required to be made by Lessor to Lessee hereunder shall be
payable to Lessee at the address set forth below, or at such other address
within the continental United States as Lessee may specify from time to time by
written notice delivered in accordance herewith.
(c) Any written 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 therefore specified by written notice
delivered in accordance herewith.
25. ADDITIONAL PROVISIONS.
A. Legal Description. For the purposes of this Lease, the rentable square
footage of the Premises shall be deemed to be approximately 120,000 square feet
of office and warehouse space located in a building deemed to be approximately
192,000 square feet on 869,964 square feet of land out of the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Survey, A-642, ▇▇▇▇▇▇ County, Texas, being all of that 15 acre tract of land as
recorded in Volume 1392, Page 507 of the ▇▇▇▇▇▇ County Deed Records, and being
all of that 4.9976 acre tract of land as recorded under ▇▇▇▇▇▇ County Clerk's
File No. C-279243 of the ▇▇▇▇▇▇ County Real Property Records.
B. Lessee Improvement. Lessee has inspected and agrees to accept the Premises
on an "As Is" basis except as otherwise provided in this Lease.
1. Lessor shall provide Lessee with a tenant improvement allowance of
$420,000.00 (the "Allowance") to complete improvements to the Premises. This
Allowance is to be used specifically for improvements to the Premises and no
other purpose. This Allowance will be used to fund all Lessee improvement
costs which will include, but are not limited to, labor costs, material
costs, general contractor's overhead fees, sales taxes, and permitting fees,
not to include any costs associated with pre-existing environmental
conditions. The cost of the center demising wall and the Lessor's
construction management fees shall not be deducted from the Allowance, but
shall be the sole responsibility of the Lessor. All improvements to the
Premises are required to meet all applicable codes and regulations, as well
as Lessor's standard construction specifications and details. Any space
plans and construction drawings prepared by or for Lessee shall require the
written approval from Lessor prior to commencement of construction; such
approval shall not be unreasonably withheld, conditioned or delayed. Initial
Lessee improvements are listed on Exhibit and Lessor conceptually consents to
all such improvements subject to review of plans. Any improvement costs or
expenses in excess of $420,000.00 shall be the sole responsibility of Lessee.
2. Within ten (10) days of the execution of this Lease by both Lessee and
Lessor, Lessor shall provide Lessee with an architectural and engineering
allowance of $23,000.00 to be used solely for completing the architectural,
mechanical, engineering, electrical, and plumbing drawings for the Premises.
All architectural and engineering drawing costs in excess of $23,000.00
related to the construction of the Improvements shall be the sole
responsibility of Lessee.
3. The northeast section of the water detention area that runs along the east
side of the Project shall be converted by Lessor to additional surface
parking of no less quality than currently exists on the Premises. This
additional surface parking will be of sufficient size to provide parking,
ingress, and egress in accordance with all applicable codes for fifty (50)
automobiles. Lessor shall be solely responsible for all costs to convert
this section of the water detention area to additional surface parking. This
work shall be completed within ninety (90) days after the Anticipated
Delivery Date. If Lessee desires to convert a portion or all of this
additional surface parking area provided by Lessor to accommodate trucks and
delivery vehicles the cost of such conversion shall be the sole
responsibility of Lessee.
4. Upon occupancy of the Premises by Lessee, Lessor shall provide an additional
cash allowance to Lessee of $217,680.00 (4.0% of the Base Monthly Rent for
the first ten (10) years of the lease term) in lieu of Lessor paying any
commission to any outside broker acting on behalf of Lessee.
All improvements will be done in accordance with Lessor's standard construction
specifications and any additional improvements must be approved by Lessor.
C. HVAC Maintenance/Service Contract Requirements. The service contract must
become effective within thirty (30) days of the date of occupancy of the
facility and must be performed on at least a quarterly basis. Lessee shall
include the following items in its maintenance contract:
1. Adjust belt tension;
2. Lubricate all moving parts, as necessary;
3. Inspect and adjust all temperature and safety controls;
4. Check refrigeration system for leaks and operation;
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5. Check refrigeration system for moisture;
6. Inspect compressor oil level and crank heaters;
7. Inspect air filters and replace when necessary;
8. Check space conditions;
9. Check condensate drains and drain pans and clean, if necessary;
10. Inspect and adjust all valves;
11. Check and adjust dampers;
12. Run machine through complete cycle.
D. Cancellation Option. So long as Lessee is not in default hereunder and
in consideration of Lessee fulfilling all other terms, conditions, covenants,
and obligations of this Lease, Lessee shall have a one-time right to terminate
this Lease at the end of the sixtieth (60th) month of the lease term ("Early
Termination Date") by paying Lessor a Early Termination Penalty of $650,000.00.
To exercise this early termination option, Lessee must inform Lessor in writing
not less than one hundred and eighty (180) days in advance of the Early
Termination Date and Lessee's payment of the Early Termination penalty must
accompany the notice of early termination. The Early Termination Date shall be
treated as if it were the original termination date on the Lease, and Lessee
shall fully and diligently comply with all provisions and terms of the Lease
governing and applicable to the surrender and the delivery to Lessor by Lessee
of the entire Premises, including without limitation, (i), the repair and
restoration by Lessee of the Premises, (ii) the timely payment of all sums by
Lessee arising or accruing prior to the Early Termination Date, (iii) the
removal by Lessee of any and all liens on the Premises attributable to an act or
omission of Lessee. In the event Lessee fails to comply with these provisions
or is in default subsequent to the notice of early termination, this option
shall be considered null and void, and the Lease shall remain in full force and
effect for the entire one hundred and twenty (120) month term. If no notice of
early termination is received by Lessor in accordance with the above terms, the
Lease shall remain in full force and effect for the entire one hundred twenty
(120) month term.
E. Renewal Option.
1. While this lease is in full force and effect, provided that Lessee is
not in default of any of the terms, covenants and conditions thereof, at the
time Lessee exercises such option, Lessee shall have the right or option to
extend the original term of this lease for two (2) further terms of sixty (60)
months each. Such extension of the original term shall be on the same terms,
covenants or conditions as provided for in the original term except that the
base rental during the extended term shall be at the fair market rental (the
"Fair Market Base Rental") then in effect on equivalent properties, of
equivalent size and condition, in equivalent areas with the length of the lease,
the length of the renewal term, the credit standing of the Lessee to be taken
into account, cost savings of Lessor for not having to pay leasing commission to
outside brokers, tenant allowances, the method for payment of taxes and expenses
or increases in tax. However, in no event shall the base rent for an extended
term be below the base rent in the primary term of the Lease. Notice of
Lessee's intention to exercise the option must be given to Lessor in writing not
less than twelve (12) months prior to the expiration of the original term of
this Lease or twelve (12) months prior to the expiration of the first extended
term.
2. Upon written notice of Lessee's intent to exercise an extension term
option, Lessor shall within twenty (20) days provide Lessee, with written
notice, the amount in which Lessor contends to be the Fair Market Base Rental.
Within twenty (20) days after receipt of Lessor's written notice of the Fair
Market Base Rental, Lessee shall give Lessor written notice ("Lessee's
Response"), either (a) irrevocably exercising Lessee's extension option and
accepting the statement of Fair Market Base Rental set forth in Lessor's notice,
or (b) rejecting the Fair Market Base Rental set forth in Lessor's notice and
specifying the amount lessee contends to be the Fair Market Base Rental. If
Lessee rejects the Fair Market Base Rental specified by Lessor, then Lessor and
Lessee shall endeavor to negotiate a mutually acceptable resolution to their
dispute concerning the Fair Market Base Rental. If they are unable to agree
within thirty (30) days after receipt by Lessee's Response, of the rejection of
Lessor's Fair Market Base Rental, and a mutually acceptable resolution of the
Fair Market Base Rental is not reached, then Lessee shall either (i) revoke its
intent to exercise the extension period, or (ii) provide Lessor with written
notice to arbitrate the Fair Market Base Rental. If Lessee elects to arbitrate
the Fair Market Base Rental, the term of the Lease shall be extended for the
extended term, and the final determination of the Fair Market Base Rental shall
be binding on both Lessor and Lessee. Upon Lessee's written notice, Lessor and
Lessee shall, within ten (10) days, each separately designate a licensed real
estate appraiser who is reasonably active in regard to the valuation of Houston,
Texas, warehouse properties in the area where the Project is located to
participate in determination of the Fair Market Base Rental. If either Lessor
or Lessee fails timely to designate an appraiser as provided above, then the
determination of Fair Market Base Rental shall be made solely by the appraiser
timely designated by the other party and such determination shall be binding on
Lessor and Lessee. Within sixty-five (65) days after receipt by Lessor of
Lessee's notice (or at such other time as Lessor and Lessee may mutually agree),
each party shall state in writing the amount the party contends to be the Fair
Market Base Rental, including whatever support for such contention the party
wishes to have considered by the appraisers. The appraisers shall arrange for
simultaneous exchange of such written contentions and for presentation of such
additional evidence, rebuttals, or other matters as the parties may wish to
present and the
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Lessor:
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Lessee: KHS
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appraisers may elect to hear or otherwise receive. After presentation of such
additional evidence and argument as the appraisers may elect to receive, if any,
each party may submit a modified statement of contended Fair Market Base Rental.
If the appraisers do not agree upon the actual Fair Market Base Rental, and the
two statements of Fair Market Base Rental are within ten percent (10%) of one
another, then the two statements of Fair Market Base Rental shall be averaged
and such amount shall be binding on Lessor and Lessee as the Fair Market Base
Rental. If the determinations of the two appraisers are greater than ten percent
(10%) from one another, then the two appraisers shall be instructed to appoint,
within ten (10) days thereafter, a third appraiser who has significant
experience and is then active appraising warehouse space in the area. If the two
appraisers designated by Lessor and Lessee cannot agree on the appointment of a
third appraiser within the time period provided, either Lessor or Lessee may
seek the appointment of a third appraiser by the presiding judge for the County
Court where the Project is located. The third appraiser shall then determine
which of the two final contended Fair Market Base Rental amounts submitted by
the parties is closest to the actual Fair Market Base Rental, and such
determination shall be binding on Lessor and Lessee as the Fair Market Base
Rental.
3. All reasonable fees and expenses of the appraisers shall be paid as
follows: Lessor shall advance the fees and expenses of the appraiser designated
by Lessor; Lessee shall advance the fees and expenses of the appraiser
designated by Lessee; and Lessor and Lessee shall each advance one half of any
fees and expenses of the third appraiser. The attorneys' fees and expenses of
counsel for the respective parties and of witnesses shall be paid and borne by
the party engaging such counsel or calling such witness, as the case may be.
4. Payments Pending Determination. If the Fair Market Base Rental for any
Renewal Period has not been determined at such time as Lessee is obligated to
pay Base Rent for such Renewal Period, Lessee shall pay as Base Rent pending
such determination the Base Rent in effect for such space immediately prior to
the Renewal Period; provided, that upon the determination of the applicable Fair
Market Base Rental, any shortage of Base Rent paid shall be paid to Lessor by
Lessee.
F. Additional Parking.
Lessor agrees to assist Lessee in procuring the additional parking adjacent
to the west side of the property from ▇▇▇▇▇▇▇▇▇▇ Realty Management Company
should Lessee deem such parking is necessary for its operations. Any future
lease agreement for this additional parking between Lessee and ▇▇▇▇▇▇▇▇▇▇ Realty
Management Company would exclude Lessor as a party to the Lease for such
additional parking. This Lease between Lessor and Lessee is in no way contingent
upon the terms, status, extension, or execution of any parking agreement with
Weingarten. Lessee shall have the right to install a curb cut and driveway to
provide access from the Building to this additional parking. This curb cut and
driveway shall be constructed and maintained at the sole cost of Lessee. Lessee
shall be required to replace this curb cut and remove this driveway upon Lease
termination and restore the affected parking areas, driveways, and truck court
to their original condition, subject to normal wear and tear.
G. Electrical Service.
Lessee shall have the right to use the standard tenant improvement
allowance to upgrade the Premises with 4000 A @ 480 volt, 3 phase electrical
service. Lessee shall have the right to equip each truck parking space and dock
with a 208V, 3 phase, 60 Hz @ 30 Amp power connection for refrigeration
equipment.
19 INITIALS
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Lessor:
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Lessee: KHS
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H. Loading Docks.
Lessor, at its sole cost and expense, shall provide thirty (30) dock-high
loading doors and three (3) walk up pedestrian doors. Lessee shall have the
right to use the standard tenant improvements allowance or any additional tenant
improvement allowance to modify the height of the overhead doors, install
mechanical levelers, raise the truck apron grade, or any other modifications
required to meet Lessee's operational requirements.
I. Non-Compete Provision.
Subject and subordinate to the restrictions of any existing commitments to
other lessees at the Project, Lessor agrees that it shall not lease space at the
Project to any Internet grocery service entity.
EXECUTED BY LESSOR, this 14th day of April, 2000.
Attest/Witness Connecticut General Life Insurance Company,
On behalf of its Separate Account R
By: CIGNA Investments, Inc.
▇▇▇▇▇ [ILLEGIBLE SIGNATURE] By: /s/ ▇▇▇▇ ▇. EISELO
------------------------------ -------------------------------------
Title: Administrative Assistant title: Managing Director
------------------------ ----------------------------------
ADDRESS:
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
-----------------------------------
"Lessor"
EXECUTED BY LESSEE, this day of , 2000.
Attest/Witness ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
[ILLEGIBLE SIGNATURE] By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ --------------------------------
Title: [ILLEGIBLE TITLE] Title: Senior Vice President and General
Counsel
------------------------ -----------------------------
ADDRESS:
Attn: Vice President, Operations
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
And to:
-------
▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
-----------------------------------
Attn: General Counsel
-----------------------------------
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
"Lessee"
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Lessor:
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Lessee: KHS
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Lessee's Exclusive Parking Areas
[LAYOUT PLAN]
▇▇▇▇▇▇▇▇▇▇.▇▇▇ SCHEMATIC SITE PLAN
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HOUSTON, TEXAS MARCH 29, 2000
EXHIBIT "B"
Site: Katy Road, Houston Texas
ANTICIPATED TENANT IMPROVEMENTS
--------------------------------------------------------------------------------
Summary
Tenant shall have the right, but not the obligation, as allowed and provided
under the terms and conditions of this Lease, to install, construct, modify,
relocate or remove, as reasonably necessary, anticipated Tenant Improvement to
include but not limited to the following:
1. Tenant shall have the ability to equip and provide each of the
delivery truck parking spaces with 280 V, 3 phase, 60 Hz @30 Amp power
connection for refrigeration equipment (to include delivery truck
loading docks and adjacent parking truck parking spaces).
2. Construction of up to approximately 10,000 square feet of office space
and related improvements, which may include the modification or
demolition of existing offices (if any). Exact location of office
space to be determined.
3. Removal of non-structural, non-load bearing walls or partitions.
4. Cutting and reinforcement of entrances in interior or exterior walls
or partitions.
5. Construction, removal or modification of loading docks which may
include dock canopies, dock levelers, heaters and dock lighting as
necessary.
6. Modification or changing grade paving within the proximity of Tenant's
shipping and dock areas.
7. Modification of landscaping, as permitted, to accommodate Tenant's
business needs.
8. Modification to the concrete flooring slab and sewer system, which
may include cutting, for the required installation of under slab
drains for freezers, coolers, product preparation areas and restrooms.
9. Construction, removal or modification of Building and or Premises
systems to include electrical, lighting, HVAC, sprinkler, security and
fire-life safety for Tenant's intended business use.
Page 1 of 2
EXHIBIT "B"
10. Construction, installation or modification of freezer slab(s) on,
below or above existing slab.
11. Construction, installation or modification of refrigeration room(s).
12. Construction, installation or modification of conveyer system(s).
13. Construction, installation or modification of warehouse racking
system(s).
14. Construction, installation or modification of power generator
system(s).
15. Construction, installation or modification of trash area to include
trash compactor system(s).
16. Construction, installation or modification to and on the roof area to
install (i) antennas and satellite dishes and associated equipment,
(ii) refrigeration unit(s) and associated equipment, and (iii) heating
ventilation and air conditioning unit(s) and associated equipment,
(iv) conveyor, racking and associated equipment.
17. Construction, installation or modification of electrical, data,
telephone, fiber, lighting, HVAC, sprinkler, fire detection, potable
water and sanitary sewer systems of the Building and or the Premises.
18. Re-stripe and reseal Tenant parking areas and construction,
installation or modification to parking area lighting and security
system(s).
19. Re-surface and sealing of slab or floors.
20. Painting or decorating of interior or exterior of the Premises.
21. Construction, installation or modification of Tenant's signage.
22. Any USDA required construction, installation or modification to the
Building or Premises as necessary.
23. Installation of security measures including site lighting, fencing,
gates and electronic monitoring systems in and around the truck court.
Page 2 of 2
