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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 29, 1997
TECHDYNE, INC.
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(Exact name of registrant as specified in its charter)
Florida 1-14659 59-1709103
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2330 West 77th Street, Hialeah, Florida 33016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 556-9210
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Item 5. Other Events
The Company entered into two leases for its manufacturing facilities
in Texas. One lease is for 18,225 square feet in AmorRon Park, Austin, Texas to
be used for offices, manufacturing and warehousing. This lease commenced on
June 1, 1997, is for a period of five years, with one five year-renewal, and
provides for an annual rental of $120,285 plus the Company's proportionate
share of operating expenses, including taxes, insurance, management fees,
common area charges and all of its utility uses. This lease will replace the
Company's 6,825 square feet of leased space in the same AmorRon Park.
A second lease was executed on April 29, 1997 for 15,000 square feet
of space for offices, manufacturing and warehousing in Houston, Texas. This
lease is a net, net lease for five years through August 31, 2002 at an annual
rental of $66,600 the first year, escalating $1,800 per year each year
thereafter, plus the Company's pro rata share of operating expenses, common
area expenses, maintenance charges, insurance and all of its utility charges.
This lease also has one renewal option for five years and replaces the
Company's existing leased space of 11,000 square feet in another area of
Houston, Texas.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of businesses acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
(10) Material Contracts
(i) Lease Agreement between The Company and
PruCrow Industrial Properties, L.P. dated
April 30, 1997
(ii) Lease Agreement between The Company and EGP
Houston Partners, Ltd. Dated April 29, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECHDYNE, INC.
By /s/ Daniel R. Ouzts
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DANIEL R. OUZTS, Vice President
Dated: June 4, 1997
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[Net Lease]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made as of April 30, 1997, between PruCrow
Industrial Properties, L.P. ("Landlord") and the Tenant named below.
Tenant: Techdyne, Inc., a Florida corporation
Tenant's representative, Barry Pardon
address, and phone no. 2230 West 77th Street
Hialeah, Florida 33016
Premises: That portion of the Building, known as
Suite 240, containing approximately
18,225 rentable square feet, as
determined by Landlord, as shown on
Exhibit A.
Project: AmoRon
Building: AmorRon #6
Tenant's Proportionate Share
of Project: 8%
Tenant's Proportionate Share
of Building: 35%
Lease Term: Beginning on the Commencement Date and
ending on the last day of the 60th full
calendar month thereafter.
Commencement Date: Thirty (30) days from date of last
signature on signature page hereof (the
"Effective Date")
Initial Monthly Base Rent: $ 10,023.75
Initial Estimated Monthly 1. Utilities: premises
electricity &
gas separately
metered to
Tenant
Operating Expense Payments:
(estimates only and subject to 2. Common Area Charges: $ 747.23
adjustment to actual costs and
expenses according to the 3. Taxes: $ 1,324.96
provisions of this Lease)
4. Insurance: $ 142.16
5. Others: (Mgmt. fee) $ 331.70
Initial Estimated Monthly Operating
Expense Payments: $ 2,546.05
Initial Monthly Base Rent and
Operating Expense Payments: $ 12,569.80
Security Deposit: $ 3,700.00
Broker: J. Steven Mattingly, Trammell Crow
Central Texas, Ltd. and Jerry Heare,
Commercial Industrial Properties
Addenda: Rules and Regulations; Exhibit A --
Location of Premises; Addendum -- Right
to Extend Term; Construction Allowance
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1. Granting Clause. In consideration of the obligation of Tenant to
pay rent as herein provided and in consideration of the other terms, covenants,
and conditions hereof, Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises, to have and to hold for the Lease Term, subject to the
terms, covenants and conditions of this Lease.
2. Acceptance of Premises. Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the
conduct of Tenant's business, and Tenant waives any implied warranty that the
Premises are suitable for Tenant's intended purposes. Except as provided in
Paragraph 10, in no event shall Landlord have any obligation for any defects in
the Premises or any limitation on its use. The taking of possession of the
Premises shall be conclusive evidence that Tenant accepts the Premises and that
the Premises were in good condition at the time possession was taken except for
items that are Landlord's responsibility under Paragraph 10 and any punchlist
items agreed to in writing by Landlord and Tenant.
3. Use. The Premises shall be used only for the purpose of
receiving, storing, shipping and selling (but limited to wholesale sales)
products, materials and merchandise made and/or distributed by Tenant and for
such other lawful purposes as may be incidental thereto, Tenant may also use
the Premises for light manufacturing. Tenant shall not conduct or give notice
of any auction, liquidation, or going out of business sale on the Premises.
Tenant will use the Premises in a careful, safe and proper manner and will not
commit waste, overload the floor or structure of the Premises or subject the
Premises to use that would damage the Premises. Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to
emanate from the Premises, or take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord or
any tenants of the Project. Outside storage, including without limitation,
storage of trucks and other vehicles, is prohibited without Landlord's prior
written consent. Tenant, at its sole expense, shall use and occupy the Premises
in compliance with all laws, including, without limitation, the Americans With
Disabilities Act, orders, judgments, ordinances, regulations, codes,
directives, permits, licenses, covenants and restrictions now or hereafter
applicable to the Premises (collectively, "Legal Requirements"). The Premises
shall not be used as a place of public accommodation under the Americans With
Disabilities Act or similar state statutes or local ordinances or any
regulations promulgated thereunder, all as may be amended from time to time.
Tenant shall, at its expense, make any alterations or modifications, within or
without the Premises, that are required by Legal Requirements related to
Tenant's use or occupation of the Premises. Tenant will not use or permit the
Premises to be used for any purpose or in any manner that would void Tenant's
or Landlord's insurance, increase the insurance risk, or cause the disallowance
of any sprinkler credits. If any increase in the cost of any insurance on the
Premises or the Project is caused by Tenant's use or occupation of the
Premises, or because Tenant vacates the Premises, then Tenant shall pay the
amount of such increase to Landlord. Any occupation of the Premises by Tenant
prior to the Commencement Date shall be subject to all obligations of Tenant
under this Lease.
4. Base Rent. Tenant shall pay Base Rent in the amount set forth
above. The first month's Base Rent and the Security Deposit shall be due and
payable on the date hereof, and Tenant promises to pay to Landlord in advance,
without demand, deduction or set-off, monthly installments of Base Rent on or
before the first day of each calendar month succeeding the Commencement Date.
Payments of Base Rent for any fractional calendar
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month shall be prorated. All payments required to be made by Tenant to Landlord
hereunder shall be payable at such address as Landlord may specify from time to
time by written notice delivered in accordance herewith. The obligation of
Tenant to pay Base Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall have no
right at any time to abate, reduce, or set-off any rent due hereunder except as
may be expressly provided in this Lease. If Tenant is delinquent in any monthly
installment of Base Rent or of estimated Operating Expenses (as hereinafter
defined) for more than 5 days, Tenant shall pay to Landlord on demand a late
charge equal to 5 percent of such delinquent sum. The provision for such late
charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as a penalty.
5. Security Deposit. The Security Deposit shall be held by Landlord
as security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of
Default (hereinafter defined), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any
damage, injury, expense or liability caused by such Event of Default, without
prejudice to any other remedy provided herein or provided by law. Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.
6. Operating Expense Payments. During each month of the Lease Term
on the same date that Base Rent is due, Tenant shall pay Landlord an amount
equal to 1/12 of the annual cost, as estimated by Landlord from time to time,
of Tenant's Proportionate Share (hereinafter defined) of Operating Expenses for
the Project. Payments thereof for any fractional calendar month shall be
prorated. The term "Operating Expenses" means all costs and expenses incurred
by Landlord with respect to the ownership, maintenance, and operation of the
Project including, but not limited to costs of: Taxes (hereinafter defined) and
fees payable to tax consultants and attorneys for consultation and contesting
taxes; insurance; utilities; maintenance, repair and replacement of all
portions of the Project, including without limitation, paving and parking
areas, roads, roofs, alleys, and driveways, mowing, landscaping, exterior
painting, utility lines, heating, ventilation and air conditioning systems,
lighting, electrical systems and other mechanical and building systems; amounts
paid to contractors and subcontractors for work or services performed in
connection with any of the foregoing; charges or assessments of any association
to which the Project is subject; property management fees payable to a property
manager, including any affiliate of Landlord, or if there is no property
manager, an administration fee of 15 percent of the total amount of Operating
Expenses; security services, if any; trash collection, sweeping and removal;
and additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) or that are appropriate to the continued operation
of the Project or the Building as a bulk warehouse facility in the market area,
provided that the cost of such additions or alterations that are required to be
capitalized for federal income tax purposes shall be amortized on a straight
line basis over a period equal to the lesser of the useful life thereof for
federal income tax purposes or 10 years. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital
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repairs and capital replacements required to be made by Landlord under
Paragraph 10 of this Lease, debt service under mortgages or ground rent under
ground leases, costs of restoration to the extent of net insurance proceeds
received by Landlord with respect thereto, leasing commissions, or the costs of
renovating space for tenants.
If Tenant's total payments of Operating Expenses for any year are
less than Tenant's Proportionate Share of Operating Expenses for such year,
then Tenant shall pay the difference to Landlord within 30 days after demand
and, if more, then Landlord shall retain such excess and credit it against
Tenant's next payments. For purposes of calculating Tenant's Proportionate
Share of Operating Expenses, a year shall mean a calendar year except the last
year, which shall end on the expiration of this Lease. With respect to
Operating Expenses which Landlord allocates to the entire Project, Tenant's
"Proportionate Share" shall be the percentage set forth on the first page of
this Lease as Tenant's Proportionate Share of the Project as reasonably
adjusted by Landlord in the future for changes in the physical size of the
Premises or the Project; and, with respect to Operating Expenses which Landlord
allocates only to the Building, Tenant's "Proportionate Share" shall be the
percentage set forth on the first page of this Lease as Tenant's Proportionate
Share of the Building as reasonably adjusted by Landlord in the future for
changes in the physical size of the Premises or the Building. Landlord may
equitably increase Tenant's Proportionate Share for any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Project or Building that
includes the Premises or that varies with occupancy or use. The estimated
Operating Expenses for the Premises set forth on the first page of this Lease
are only estimates, and Landlord makes no guaranty or warranty that such
estimates will be accurate.
7. Utilities. Tenant shall pay for all water, gas, electricity,
heat, light, power, telephone, sewer, sprinkler services, refuse and trash
collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. Landlord may cause at Tenant's expense any
utilities to be separately metered or charged directly to Tenant by the
provider. Tenant shall pay its share of all charges for jointly metered
utilities based upon consumption, as reasonably determined by Landlord. No
interruption or failure of utilities shall result in the termination of this
Lease or the abatement of rent; provided, however, Base Rent shall be equitably
abated in the event of an interruption of utilities caused solely by Landlord's
gross negligence or willful misconduct. Tenant agrees to limit use of water and
sewer for normal restroom use.
8. Taxes. Landlord shall pay all taxes, assessments and
governmental charges (collectively referred to as "Taxes") that accrue against
the Project during the Lease Term, which shall be included as part of the
Operating Expenses charged to Tenant pursuant to Section 6 hereof. Landlord may
contest by appropriate legal proceedings the amount, validity, or application
of any Taxes or liens thereof. All capital levies or other taxes assessed or
imposed on Landlord upon the rents payable to Landlord under this Lease and any
franchise tax, any excise, transaction, sales or privilege tax, assessment,
levy or charge measured by or based, in whole or in part, upon such rents from
the Premises and/or the Project or any portion thereof shall be paid by Tenant
to Landlord monthly in estimated installments or upon demand, at the option of
Landlord, as additional rent; provided, however, in no event shall Tenant be
liable for any net income taxes imposed on Landlord unless such net income
taxes are in substitution for any Taxes payable hereunder. If any such tax or
excise is levied or
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assessed directly against Tenant, then Tenant shall be responsible for and
shall pay the same at such times and in such manner as the taxing authority
shall require. Tenant shall be liable for all taxes levied or assessed against
any personal property or fixtures placed in the Premises, whether levied or
assessed against Landlord or Tenant.
9. Insurance. Landlord shall maintain all risk property insurance
covering the full replacement cost of the Building. Landlord may, but is not
obligated to, maintain such other insurance and additional coverages as it may
deem necessary, including, but not limited to, commercial liability insurance
and rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant pursuant to Section 6 hereof. The Project
or Building may be included in a blanket policy (in which case the cost of such
insurance allocable to the Project or Building will be determined by Landlord
based upon the insurer's cost calculations). Tenant shall also reimburse
Landlord for any increased premiums or additional insurance which Landlord
reasonably deems necessary as a result of Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all
risk property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required
by law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered to
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of
said insurance.
The all risk property insurance obtained by Landlord and Tenant
shall include a waiver of subrogation by the insurers and all rights based upon
an assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its
officers, directors, employees, managers, agents, invitees or contractors shall
be liable to the other for loss or damage caused by any risk coverable by all
risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims
against such parties for, business interruption and losses occasioned thereby
sustained by Tenant or any person claiming through Tenant resulting from any
accident or occurrence in or upon the Premises or the Project from any cause
whatsoever, including without limitation, damage caused in whole or in part,
directly or indirectly, by the negligence of Landlord or its agents, employees
or contractors.
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10. Landlord's Repairs. Landlord shall maintain, at its expense,
the structural soundness of the roof, foundation, and exterior walls of the
Building in good repair, reasonable wear and tear and uninsured losses and
damages caused by Tenant, its agents and contractors excluded. The term "walls"
as used in this Paragraph 10 shall not include windows, glass or plate glass,
doors or overhead doors, special store fronts, dock bumpers, dock plates or
levelers, or office entries. Tenant shall promptly give Landlord written notice
of any repair required by Landlord pursuant to this Paragraph 10, after which
Landlord shall have a reasonable opportunity to repair.
11. Tenant's Repairs. Landlord shall maintain in good repair and
condition the parking areas and other common areas of the Building, including,
but not limited to driveways, alleys, landscape and grounds surrounding the
Premises, the cost of such maintenance and repair to be paid in accordance with
Section 6 hereof. Subject to Landlord's obligation in Paragraph 10, Tenant, at
its expense, shall repair, replace and maintain in good condition all portions
of the Premises and all areas, improvements and systems exclusively serving the
Premises including, without limitation, dock and loading areas, truck doors,
plumbing, water, and sewer lines up to points of common connection, fire
sprinklers and fire protection systems, entries, doors, ceilings and roof
membrane, windows, interior walls, and the interior side of demising walls, and
heating, ventilation and air conditioning systems. Such repair and replacements
include capital expenditures and repairs whose benefit may extend beyond the
Term. Heating, ventilation and air conditioning systems and other mechanical
and building systems serving the Premises shall be maintained at Tenant's
expense pursuant to maintenance service contracts entered into by Tenant or, at
Landlord's election, by Landlord. The scope of services and contractors under
such maintenance contracts shall be reasonably approved by Landlord. At
Landlord's request, Tenant shall enter into a joint maintenance agreement with
any railroad that services the Premises. If Tenant fails to perform any repair
or replacement for which it is responsible, Landlord may perform such work and
be reimbursed by Tenant within 10 days after demand therefor. Subject to
Paragraphs 9 and 15, Tenant shall bear the full cost of any repair or
replacement to any part of the Building or Project that results from damage
caused by Tenant, its agents, contractors, or invitees and any repair that
benefits only the Premises.
12. Tenant-Made Alterations and Trade Fixtures. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent. Tenant shall cause, at its expense, all Tenant-Made Alterations to
comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations. All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by
contractors reasonably acceptable to Landlord and only good grades of materials
shall be used. All plans and specifications for any Tenant-Made Alterations
shall be submitted to Landlord for its approval. Landlord may monitor
construction of the Tenant-Made Alterations. Tenant shall reimburse Landlord
for its reasonable costs in reviewing plans and specifications and in
monitoring construction. Landlord's right to review plans and specifications
and to monitor construction shall be solely for its own benefit, and Landlord
shall have no duty to see that such plans and specifications or construction
comply with applicable laws, codes, rules and regulations. Tenant shall provide
Landlord with the identities and mailing addresses of all persons performing
work or supplying materials, prior to beginning such construction, and Landlord
may post on and about the Premises notices of non-responsibility pursuant to
applicable law. Tenant shall furnish security or make other arrangements
satisfactory to Landlord to assure payment for the
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completion of all work free and clear of liens and shall provide certificates
of insurance for worker's compensation and other coverage in amounts and from
an insurance company satisfactory to Landlord protecting Landlord against
liability for personal injury or property damage during construction. Upon
completion of any Tenant-Made Alterations, Tenant shall deliver to Landlord
sworn statements setting forth the names of all contractors and subcontractors
who did work on the Tenant-Made Alterations and final lien waivers from all
such contractors and subcontractors. Upon surrender of the Premises, all
Tenant-Made Alterations and any leasehold improvements constructed by Landlord
or Tenant shall remain on the Premises as Landlord's property, except to the
extent Landlord's requires removal at Tenant's expense of any such items or
Landlord and Tenant have otherwise agreed in writing in connection with
Landlord's consent to any Tenant-Made Alterations. Tenant shall repair any
damage caused by such removal.
Tenant, at its own cost and expense and without Landlord's prior
approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") in the ordinary course of its business provided
that such items do not alter the basic character of the Premises, do not
overload or damage the Premises, and may be removed without injury to the
Premises, and the construction, erection, and installation thereof complies
with all Legal Requirements and with Landlord's requirements set forth above.
Tenant shall remove its Trade Fixtures and shall repair any damage caused by
such removal.
13. Signs. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or 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 Landlord's prior written consent.
Upon surrender or vacation of the Premises, Tenant shall have removed all signs
and repair, paint, and/or replace the building facia surface to which its signs
are attached. Tenant shall obtain all applicable governmental permits and
approvals for sign and exterior treatments. All signs, decorations, advertising
media, blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord's
approval and conform in all respects to Landlord's requirements.
14. Parking. Tenant shall be entitled to park in common with other
tenants of the Project in those areas designated for nonreserved parking.
Landlord may allocate parking spaces among Tenant and other tenants in the
Project if Landlord determines that such parking facilities are becoming
crowded. Landlord shall not be responsible for enforcing Tenant's parking
rights against any third parties.
15. Restoration. If at any time during the Lease Term the Premises
are damaged by a fire or other casualty, Landlord shall notify Tenant within 60
days after such damage as to the amount of time Landlord reasonably estimates
it will take to restore the Premises. If the restoration time is estimated to
exceed 6 months, either Landlord or Tenant may elect to terminate this Lease
upon notice to the other party given no later than 30 days after Landlord's
notice. If neither party elects to terminate this Lease or if Landlord
estimates that restoration will take 6 months or less, then, subject to receipt
of sufficient insurance proceeds, Landlord shall promptly restore the Premises
excluding the improvements installed by Tenant or by Landlord and paid by
Tenant, subject to delays arising from the collection of insurance proceeds or
from Force Majeure events. Tenant at Tenant's expense shall promptly perform,
subject to delays arising from the collection of insurance proceeds, or from
Force Majeure events, all repairs or restoration not required to be done by
Landlord and shall promptly re-
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enter the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either party may terminate this Lease if the
Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Tenant shall pay to Landlord with respect to any damage to the Premises
the amount of the commercially reasonable deductible under Landlord's insurance
policy (currently $10,000) within 10 days after presentment of Landlord's
invoice. If the damage involves the premises of other tenants, Tenant shall pay
the portion of the deductible that the cost of the restoration of the Premises
bears to the total cost of restoration, as determined by Landlord. Tenant shall
not be required to pay any portion of the deductible if such restoration arises
solely due to Landlord's negligence or willful misconduct. Base Rent and
Operating Expenses shall be abated for the period of repair and restoration in
the proportion which the area of the Premises, if any, which is not usable by
Tenant bears to the total area of the Premises. Such abatement shall be the
sole remedy of Tenant, and except as provided herein, Tenant waives any right
to terminate the Lease by reason of damage or casualty loss.
16. Condemnation. If any part of the Premises or the Project 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 (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord this Lease shall terminate and Base Rent
shall be apportioned as of said date. If part of the Premises shall be Taken,
and this Lease is not terminated as provided above, the Base Rent payable
hereunder during the unexpired Lease Term shall be reduced to such extent as
may be fair and reasonable under the circumstances. In the event of any such
Taking, Landlord shall be entitled to receive the entire price or award from
any such Taking without any payment to Tenant, and Tenant hereby assigns to
Landlord Tenant's interest, if any, in such award. Tenant shall have the right,
to the extent that same shall not diminish Landlord's award, to make a separate
claim against the condemning authority (but not Landlord) for such compensation
as may be separately awarded or recoverable by Tenant for moving expenses and
damage to Tenant's Trade Fixtures, if a separate award for such items is made
to Tenant.
17. Assignment and Subletting. Without Landlord's prior written
consent, Tenant shall not assign this Lease or sublease the Premises or any
part thereof or mortgage, pledge, or hypothecate its leasehold interest or
grant any concession or license within the Premises and any attempt to do any
of the foregoing shall be void and of no effect. For purposes of this
paragraph, a transfer of the ownership interests controlling Tenant shall be
deemed an assignment of this Lease unless such ownership interests are publicly
traded. Notwithstanding the above, Tenant may assign or sublet the Premises, or
any part thereof, to any entity controlling Tenant, controlled by Tenant or
under common control with Tenant (a "Tenant Affiliate"), without the prior
written consent of Landlord. Tenant shall reimburse Landlord for all of
Landlord's reasonable out-of-pocket expenses in connection with any assignment
or sublease. Upon Landlord's receipt of Tenant's written notice of a desire to
assign or sublet the Premises, or any part thereof (other than to a Tenant
Affiliate), Landlord may, by giving written notice to Tenant within 30 days
after receipt of Tenant's notice, terminate this Lease with respect to the
space described in Tenant's notice, as of the date specified in Tenant's notice
for the commencement of the proposed assignment or sublease.
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Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or
assignment plus any bonus or other consideration therefor or incident thereto)
exceeds the rental payable under this Lease, then Tenant shall be bound and
obligated to pay Landlord as additional rent hereunder all such excess rental
and other excess consideration within 10 days following receipt thereof by
Tenant.
If this Lease be assigned or if the Premises be subleased (whether
in whole or in part) or in the event of the mortgage, pledge, or hypothecation
of Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other
than Tenant, then upon a default by Tenant hereunder Landlord may collect rent
from the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant and,
except to the extent set forth in the preceding paragraph, apply the amount
collected to the next rent payable hereunder; and all such rentals collected by
Tenant shall be held in trust for Landlord and immediately forwarded to
Landlord. No such transaction or collection of rent or application thereof by
Landlord, however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties, or
obligations hereunder.
18. Indemnification. Except for the negligence of Landlord, its
agents, employees or contractors, and to the extent permitted by law, Tenant
agrees to indemnify, defend and hold harmless Landlord, and Landlord's agents,
employees and contractors, from and against any and all losses, liabilities,
damages, costs and expenses (including reasonable attorneys' fees) resulting
from claims by third parties for injuries to any person and damage to or theft
or misappropriation or loss of property occurring in or about the Project and
arising from the use and occupancy of the Premises or from any activity, work,
or thing done, permitted or suffered by Tenant in or about the Premises or due
to any other act or omission of Tenant, its subtenants, assignees, invitees,
employees, contractors and agents. The furnishing of insurance required
hereunder shall not be deemed to limit Tenant's obligations under this
Paragraph 18.
19. Inspection and Access. Landlord and its agents,
representatives, and contractors may enter the Premises at any reasonable time
to inspect the Premises and to make such repairs as may be required or
permitted pursuant to this Lease and for any other business purpose. Landlord
and Landlord's representatives may enter the Premises during business hours for
the purpose of showing the Premises to prospective purchasers or, during the
last six (6) months of the Lease Term, to prospective tenants. Landlord may
erect a suitable sign on the Premises stating the Premises are available to let
or that the Project is available for sale. Landlord may grant easements, make
public dedications, designate common areas and create restrictions on or about
the Premises, provided that no such easement, dedication, designation or
restriction materially interferes with Tenant's use or occupancy of the
Premises. At Landlord's request, Tenant shall execute such instruments as may
be necessary for such easements, dedications or restrictions.
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20. Quiet Enjoyment. If Tenant shall perform all of the covenants
and agreements herein required to be performed by Tenant, Tenant shall, subject
to the terms of this Lease, at all times during the Lease Term, have peaceful
and quiet enjoyment of the Premises against any person claiming by, through or
under Landlord.
21. Surrender. Upon termination of the Lease Term or earlier
termination of Tenant's right of possession, Tenant shall surrender the
Premises to Landlord in the same condition as received, broom clean, ordinary
wear and tear and casualty loss and condemnation covered by Paragraphs 15 and
16 excepted. Any Trade Fixtures, Tenant-Made Alterations and property not so
removed by Tenant as permitted or required herein shall be deemed abandoned and
may be stored, removed, and disposed of by Landlord at Tenant's expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and disposition of such property. All obligations of
Tenant hereunder not fully performed as of the termination of the Lease Term
shall survive the termination of the Lease Term, including without limitation,
indemnity obligations, payment obligations with respect to Excess Operating
Expenses and all obligations concerning the condition and repair of the
Premises.
22. Holding Over. If Tenant retains possession of the Premises
after the termination of the Lease Term, unless otherwise agreed in writing,
such possession shall be subject to immediate termination by Landlord at any
time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Base Rent for the holdover period, an amount
equal to 150% of the Base Rent in effect on the termination date, computed on a
monthly basis for each month or part thereof during such holding over. All
other payments shall continue under the terms of this Lease. In addition,
Tenant shall be liable for all damages incurred by Landlord as a result of such
holding over. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
provided, and this Paragraph 22 shall not be construed as consent for Tenant to
retain possession of the Premises.
23. Events of Default. Each of the following events shall be an
event of default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or
any other payment required herein when due, and such failure shall continue
for a period of 10 days from the date such payment was due.
(ii) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (A) make a general assignment for the benefit of creditors;
(B) 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 a bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts 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 (collectively a
"proceeding for relief"); (C) become the subject of any proceeding for
relief which is not dismissed within 60 days of its filing or entry; or (D)
die or suffer a legal disability (if Tenant, guarantor, or surety is an
individual) or be dissolved or otherwise fail to maintain its legal
existence (if Tenant, guarantor or surety is a corporation, partnership or
other entity).
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(iii) Any insurance required to be maintained by Tenant pursuant
to this Lease shall be cancelled or terminated or shall expire or shall be
reduced or materially changed, except, in each case, as permitted in this
Lease.
(iv) Tenant shall not occupy or shall vacate the Premises or
shall fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in monetary or
other default under this Lease.
(v) Tenant shall attempt or there shall occur any assignment,
subleasing or other transfer of Tenant's interest in or with respect to this
Lease except as otherwise permitted in this Lease.
(vi) Tenant shall fail to discharge any lien placed upon the
Premises in violation of this Lease within 30 days after any such lien or
encumbrance is filed against the Premises.
(vii) Tenant shall fail to comply with any provision of this
Lease other than those specifically referred to in this Paragraph 23, and
except as otherwise expressly provided herein, such default shall continue
for more than 30 days after Landlord shall have given Tenant written notice
of such default.
24. Landlord's Remedies. Upon each occurrence of an Event of
Default and so long as such Event of Default shall be continuing, Landlord may
at any time thereafter at its election: terminate this Lease or Tenant's right
of possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and
equipment at the Premises.
If Landlord terminates this Lease, Landlord may recover from Tenant
the sum of: all Base Rent and all other amounts accrued hereunder to the date
of such termination; the cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing
commissions incurred by Landlord, and costs of removing and storing Tenant's or
any other occupant's property, repairing, altering, remodeling, or otherwise
putting the Premises into condition acceptable to a new tenant or tenants, and
all reasonable expenses incurred by Landlord in pursuing its remedies,
including reasonable attorneys' fees and court costs; and the excess of the
then present value of the Base Rent and other amounts payable by Tenant under
this Lease as would otherwise have been required to be paid by Tenant to
Landlord during the period following the termination of this Lease measured
from the date of such termination to the expiration date stated in this Lease,
over the present value of any net amounts which Tenant establishes Landlord can
reasonably expect to recover by reletting the Premises for such period, taking
into consideration the availability of acceptable tenants and other market
conditions affecting leasing. Such present values shall be calculated at a
discount rate equal to the 90-day U.S. Treasury bill rate at the date of such
termination.
If Landlord terminates Tenant's right of possession (but not this
Lease), Landlord may, but shall be under no obligation to, relet the Premises
for the account of Tenant for such
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rent and upon such terms as shall be satisfactory to Landlord without thereby
releasing Tenant from any liability hereunder and without demand or notice of
any kind to Tenant. For the purpose of such reletting Landlord is authorized to
make any repairs, changes, alterations, or additions in or to the Premises as
Landlord deems reasonably necessary or desirable. If the Premises are not
relet, then Tenant shall pay to Landlord as damages a sum equal to the amount
of the rental reserved in this Lease for such period or periods, plus the cost
of recovering possession of the Premises (including attorneys' fees and costs
of suit), the unpaid Base Rent and other amounts accrued hereunder at the time
of repossession, and the costs incurred in any attempt by Landlord to relet the
Premises. If the Premises are relet and a sufficient sum shall not be realized
from such reletting [after first deducting therefrom, for retention by
Landlord, the unpaid Base Rent and other amounts accrued hereunder at the time
of reletting, the cost of recovering possession (including attorneys' fees and
costs of suit), all of the costs and expense of repairs, changes, alterations,
and additions, the expense of such reletting (including without limitation
brokerage fees and leasing commissions) and the cost of collection of the rent
accruing therefrom] to satisfy the rent provided for in this Lease to be paid,
then Tenant shall immediately satisfy and pay any such deficiency. Any such
payments due Landlord shall be made upon demand therefor from time to time and
Tenant agrees that Landlord may file suit to recover any sums falling due from
time to time. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect in writing to terminate this Lease for such
previous breach.
Exercise by Landlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises and/or a termination of this Lease by Landlord, whether by
agreement or by operation of law, it being understood that such surrender
and/or termination can be effected only by the written agreement of Landlord
and Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at any
time to enforce its rights under this Lease strictly in accordance with same
shall not be construed as having created a custom in any way or manner contrary
to the specific terms, provisions, and covenants of this Lease or as having
modified the same. Tenant and Landlord further agree that forbearance or waiver
by Landlord to enforce its rights pursuant to this Lease or at law or in
equity, shall not be a waiver of Landlord's right to enforce one or more of its
rights in connection with any subsequent default. A receipt by Landlord of rent
or other payment with knowledge of the breach of any covenant hereof shall not
be deemed a waiver of such breach, and no waiver by Landlord of any provision
of this Lease shall be deemed to have been made unless expressed in writing and
signed by Landlord. To the greatest extent permitted by law, Tenant waives the
service of notice of Landlord's intention to re-enter as provided for in any
statute, or to institute legal proceedings to that end, and also waives all
right of redemption in case Tenant shall be dispossessed by a judgment or by
warrant of any court or judge. The terms "enter," "re-enter," "entry" or
"re-entry," as used in this Lease, are not restricted to their technical legal
meanings. Any reletting of the Premises shall be on such terms and conditions
as Landlord in its sole discretion may determine (including without limitation
a term different than the remaining Lease Term, rental concessions, alterations
and repair of the Premises, lease of less than the entire Premises to any
tenant and leasing any or all other portions of the Project before reletting
the Premises). Landlord shall not be liable, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the Premises or
collect rent due in respect of such reletting.
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25. Tenant's Remedies/Limitation of Liability. Landlord shall not
be in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time
as is reasonably necessary). All obligations of Landlord hereunder shall be
construed as covenants, not conditions; and, except as may be otherwise
expressly provided in this Lease, Tenant may not terminate this Lease for
breach of Landlord's obligations hereunder. All obligations of Landlord under
this Lease will be binding upon Landlord only during the period of its
ownership of the Premises and not thereafter. The term "Landlord" in this Lease
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 obligations of Landlord
thereafter accruing, but such obligations shall be binding during the Lease
Term upon each new owner for the duration of such owner's ownership. Any
liability of Landlord under this Lease shall be limited solely to its interest
in the Project, and in no event shall any personal liability be asserted
against Landlord in connection with this Lease nor shall any recourse be had to
any other property or assets of Landlord.
26. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO
TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27. Subordination. This Lease and Tenant's interest and rights
hereunder are and shall be subject and subordinate at all times to the lien of
any first mortgage, now existing or hereafter created on or against the Project
or the Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant
agrees, at the election of the holder of any such mortgage, to attorn to any
such holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment
as shall be requested by any such holder. Tenant hereby appoints Landlord
attorney in fact for Tenant irrevocably (such power of attorney being coupled
with an interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded. Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include
deeds of trust, security assignments and any other encumbrances, and any
reference to the "holder" of a mortgage shall be deemed to include the
beneficiary under a deed of trust.
28. Mechanic's Liens. Tenant has no express or implied authority to
create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or
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perform labor for any construction or repairs. Tenant covenants and agrees that
it will pay or cause to be paid all sums legally due and payable by it on
account of any labor performed or materials furnished in connection with any
work performed on the Premises and that it will save and hold Landlord harmless
from all loss, cost or expense based on or arising out of asserted claims or
liens against the leasehold estate or against the interest of Landlord in the
Premises or under this Lease. Tenant shall give Landlord immediate written
notice of the placing of any lien or encumbrance against the Premises and cause
such lien or encumbrance to be discharged within 30 days of the filing or
recording thereof; provided, however, Tenant may contest such liens or
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such 30 day period.
29. Estoppel Certificates. Tenant agrees, from time to time, within
10 days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such
other matters pertaining to this Lease as may be requested by Landlord.
Tenant's obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for Landlord's execution of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate. Tenant hereby irrevocably appoints Landlord as
its attorney in fact to execute on its behalf and in its name any such estoppel
certificate if Tenant fails to execute and deliver the estoppel certificate
within 10 days after Landlord's written request thereof.
30. Environmental Requirements. Except for Hazardous Material
contained in products used by Tenant in de minimis quantities for
manufacturing, ordinary cleaning and office purposes, Tenant shall not permit
or cause any party to bring any Hazardous Material upon the Premises or
transport, store, use, generate, manufacture or release any Hazardous Material
in or about the Premises without Landlord's prior written consent. Tenant, at
its sole cost and expense, shall operate its business in the Premises in strict
compliance with all Environmental Requirements and shall remediate in a manner
satisfactory to Landlord any Hazardous Materials released on or from the
Project by Tenant, its agents, employees, contractors, subtenants or invitees.
Tenant shall complete and certify to disclosure statements as requested by
Landlord from time to time relating to Tenant's transportation, storage, use,
generation, manufacture, or release of Hazardous Materials on the Premises. The
term "Environmental Requirements" means all applicable present and future
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any governmental authority or agency regulating or
relating to health, safety, or environmental conditions on, under, or about the
Premises or the environment, including without limitation, the following: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; and all state and local counterparts
thereto, and any regulations or policies promulgated or issued thereunder. The
term "Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas, or synthetic gas usable for fuel (or mixtures of
natural gas and such synthetic gas). As defined in Environmental Requirements,
Tenant is and shall be deemed to be the "operator" of Tenant's "facility" and
the "owner" of all Hazardous Materials brought on the Premises by Tenant, its
agents, employees, contractors
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or invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the Premises or disturbed in breach of the requirements of this Paragraph
30, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 30 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligations of Tenant under this Paragraph 30 shall survive
any termination of this Lease.
Landlord shall have access to, and a right to perform inspections
and tests of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations.
Such inspections and tests shall be conducted at Landlord's expense, unless
such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Landlord for
the reasonable cost of such inspection and tests. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant.
31. Rules and Regulations. Tenant shall, at all times during the
Lease Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between said rules and
regulations and other provisions of this Lease, the other terms and provisions
of this Lease shall control. Landlord shall not have any liability or
obligation for the breach of any rules or regulations by other tenants in the
Project.
32. Security Service. Tenant acknowledges and agrees that, while
Landlord may patrol the Project, Landlord is not providing any security
services with respect to the Premises and that Landlord shall not be liable to
Tenant for, and Tenant waives any claim against Landlord with respect to, any
loss by theft or any other damage suffered or incurred by Tenant in connection
with any unauthorized entry into the Premises or any other breach of security
with respect to the Premises.
33. Force Majeure. Neither Landlord nor Tenant shall be held
responsible for delays in the performance of its obligations hereunder when
caused by strikes, lockouts, labor disputes, acts of God, inability to obtain
labor or materials or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, delay in
issuance of permits, enemy or hostile governmental action, civil commotion,
fire or other casualty, and other causes beyond the reasonable control of
Landlord ("Force Majeure"); provided, however,
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no Force Majeure event shall relieve Tenant from its obligation to pay rent or
from other monetary obligations hereunder.
34. Entire Agreement. This Lease constitutes the complete and
entire agreement of Landlord and Tenant with respect to the subject matter
hereof. No representations, inducements, promises or agreements, oral or
written, have been made by Landlord or Tenant, or anyone acting on behalf of
Landlord or Tenant, which are not contained herein, and any prior agreements,
promises, negotiations, or representations are superseded by this Lease. This
Lease may not be amended except by an instrument in writing signed by both
parties hereto.
35. Severability. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in
that event, it is the intention of the parties hereto that the remainder of
this Lease shall not be affected thereby. 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 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.
36. Brokers. Tenant represents and warrants that it has dealt with
no broker, agent or other person in connection with this transaction and that
no broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord 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 dealt with Tenant with regard to this leasing
transaction.
37. Miscellaneous. (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used
in this instrument, there is more than one person, firm or corporation, each
shall be jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under
this Lease shall be in writing and shall be sent by registered or certified
mail, return receipt requested, or by a reputable national overnight courier
service, postage prepaid, or by hand delivery addressed to the parties at their
addresses as follows: if to Tenant, at the address set forth on the first page
hereof; and if to Landlord at c/o Prudential Real Estate Investors, 8 Campus
Drive, Arbor Circle South, Parsippany, New Jersey 07054-4493, Attention:
William H. Anderson and Joe Margolis, with a copy to c/o Crow Investment Trust,
3200 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, Attention:
James C. Hendricks, and with a copy to Lewis and Roca LLP, 40 North Central
Avenue, Suite 1800, Phoenix, Arizona 85004-4429, Attention: Andy Carper. Either
party may by notice given aforesaid change its address for all subsequent
notices. Except where otherwise expressly provided to the contrary, notice
shall be deemed given upon delivery.
(d) Except as otherwise expressly provided in this Lease or
as otherwise required by law, Landlord retains the absolute right to withhold
any consent or approval.
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(e) At Landlord's request from time to time Tenant shall
furnish Landlord with true and complete copies of its most recent annual and
quarterly financial statements prepared by Tenant or Tenant's accountants and
any other financial information or summaries that Tenant typically provides to
its lenders or shareholders.
(f) Neither this Lease nor a memorandum of lease shall be
filed by or on behalf of Tenant in any public record (except for filings
required of Tenant as a publicly-traded corporation with federal and state
securities commissions and agencies, as required by law). Landlord may prepare
and file, and upon request by Landlord, Tenant will execute, a memorandum of
lease.
(g) The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease
shall have no binding force or effect, shall not constitute an option for the
leasing of the Premises, nor confer any right or impose any obligations upon
either party until execution of this Lease by both parties.
(i) 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.
(j) Any amount not paid by Tenant within 5 days after its
due date in accordance with the terms of this Lease shall bear interest from
such due date until paid in full at the lesser of the highest rate permitted by
applicable law or 15 percent per year. It is expressly the intent of Landlord
and Tenant at all times to comply with applicable law governing the maximum
rate or amount of any interest payable on or in connection with this Lease. If
applicable law is ever judicially interpreted so as to render usurious any
interest called for under this Lease, or contracted for, charged, taken ,
reserved, or received with respect to this Lease, then it is Landlord's and
Tenant's express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding
any principles of conflicts of laws.
(l) Time is of the essence as to the performance of
Tenant's obligations under this Lease.
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(m) All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.
38. Landlord's Lien/Security Interest. Tenant hereby grants
Landlord a security interest, and this Lease constitutes a security agreement,
within the meaning of and pursuant to the Uniform Commercial Code of the state
in which the Premises are situated as to all of Tenant's property situate in,
or upon, or used in connection with the Premises (except merchandise sold in
the ordinary course of business) as security for all of Tenant's obligations
hereunder, including without limitation, the obligation to pay rent. Such
personalty thus encumbered includes specifically all trade and other fixtures
for the purpose of this Paragraph and inventory, equipment, contract rights,
accounts receivable and the proceeds thereof. In order to perfect such security
interest, Tenant shall execute such financing statements and file the same at
Tenant's expense at the state and county Uniform Commercial Code filing offices
as often as Landlord in its discretion shall require; and Tenant hereby
irrevocably appoints Landlord its agent for the purpose of executing and filing
such financing statements on Tenant's behalf as Landlord shall deem necessary.
39. Limitation of Liability of PRISA, Landlord's Partners, and
Others. Any obligation or liability whatsoever of Landlord which may arise at
any time under this Lease, or any obligation or liability which may be incurred
by it pursuant to any other instrument, transaction, or undertaking
contemplated hereby, shall not be personally binding upon, nor shall resort for
the enforcement thereof be had to the property of, PRISA or PRISA's clients,
the constituent partners of Landlord, or any of their respective directors,
officers, representatives, employees or agents, regardless of whether such
obligation or liability is in the nature of contract, tort, or otherwise.
40. Termination of Prior Lease. Upon the Effective Date, this Lease
shall supercede, replace, and be in lieu of that certain lease agreement
between AmorRon Park, Limited and Tenant dated May 1, 1995, and that certain
letter agreement dated October 9, 1996.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as
of the day and year first above written.
Date: April 30, 1997 TENANT:
TECHDYNE, INC.
By: /s/ Barry Pardon
---------------------------------------------
Barry Pardon, President
Date: May 2, 1997 LANDLORD:
By: PruCrow, LLC, its general partner
By: /s/ William H. Anderson
----------------------------------------
William H. Anderson, Representative of
Executive Committee
18
<PAGE>
Rules and Regulations
1. The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or its agents, or used by them for any purpose other than
ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas outside
of its Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in the
offices, halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or
adjoining buildings by the use of any radio or musical instrument or by the
making of loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric
connections in the Premises, Landlord or its agent will direct the electrician
as to where and how the wires may be introduced; and, without such direction,
no boring or cutting of wires will be permitted. Any such installation or
connection shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or
boiler, or other mechanical apparatus in the Premises, except as specifically
approved in the Lease. The use of oil, gas or inflammable liquids for heating,
lighting or any other purpose is expressly prohibited. Explosives or other
articles deemed extra hazardous shall not be brought into the Project.
7. Parking any type of recreational vehicles is specifically
prohibited on or about the Project. Except for the overnight parking of
operative vehicles, no vehicle of any type shall be stored in the parking areas
at any time. In the event that a vehicle is disabled, it shall be removed
within 48 hours. There shall be no "For Sale" or other advertising signs on or
about any parked vehicle. All vehicles shall be parked in the designated
parking areas in conformity with all signs and other markings. All parking will
be open parking, and no reserved parking, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.
8. Tenant shall maintain the Premises free from rodents, insects
and other pests.
9. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in violation
of the Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of
Tenant's carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by the janitors or any other employee or person.
11. Tenant shall give Landlord prompt notice of any defects in the
water, lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
heating apparatus, or any other service equipment affecting the Premises.
<PAGE>
12. Tenant shall not permit storage outside the Premises, including
without limitation, outside storage of trucks and other vehicles, or dumping of
waste or refuse or permit any harmful materials to be placed in any drainage
system or sanitary system in or about the Premises.
13. All moveable trash receptacles provided by the trash disposal
firm for the Premises must be kept in the trash enclosure areas, if any,
provided for that purpose.
14. No auction, public or private, will be permitted on the
Premises or the Project.
15. No awnings shall be placed over the windows in the Premises
except with the prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking
or for any immoral or illegal purposes or for any purpose other than that
specified in the Lease. No gaming devices shall be operated in the Premises.
17. Tenant shall ascertain from Landlord the maximum amount of
electrical current which can safely be used in the Premises, taking into
account the capacity of the electrical wiring in the Project and the Premises
and the needs of other tenants, and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe capacity.
18. Tenant assumes full responsibility for protecting the Premises
from theft, robbery and pilferage.
19. Tenant shall not install or operate on the Premises any
machinery or mechanical devices of a nature not directly related to Tenant's
ordinary use of the Premises and shall keep all such machinery free of
vibration, noise and air waves which may be transmitted beyond the Premises.
2
<PAGE>
EXHIBIT "A"
BUILDING: AmorRon Building #6
LEGAL DESCRIPTION: AmorRon Park 1st Resubdivision, Lot 6
2.845 acres, Williamson County, Round Rock,
Texas
ADDRESS: 800 Paloma Drive, Suite 240
Round Rock, Texas 78664
[DIAGRAM OF FLOOR PLAN]
<PAGE>
ADDENDUM
RIGHT TO EXTEND TERM
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 30, 1997, BETWEEN
PRUCROW INDUSTRIAL PROPERTIES, L.P.
and
TECHDYNE, INC.
(a) Provided that as of the time of the giving of the First
Extension Notice and the Commencement Date of the First Extension Term (as
those terms are hereinafter defined), (i) Tenant is the Tenant originally named
herein, (ii) Tenant actually occupies all of the Premises initially demised
under this Lease and any space added to the Premises, and (iii) no Event of
Default exists or would exist but for the passage of time or the giving of
notice, or both, then Tenant shall have the right to extend the Lease Term for
an additional term of five (5) years (such additional term is hereinafter
called the "Extension Term") commencing on the day following the expiration of
the Lease Term (hereinafter referred to as the "Commencement Date of the
Extension Term"). Tenant shall give Landlord written notice (hereinafter called
the "Extension Notice") of its election to extend the term of the Lease Term no
sooner than nine (9) months, but no later than six (6) months, prior to the
scheduled expiration date of the Lease Term.
(b) The Base Rent payable by Tenant to Landlord during the
Extension Term shall be the greater of (i) the Base Rent applicable to the last
year of the initial Lease Term and (ii) the then prevailing market rate for
comparable space in the Project and comparable buildings in the vicinity of the
Project, taking into account the size of the Lease, the length of the renewal
term and the credit of Tenant. The Base Rent shall not be reduced by reason of
any costs or expenses by Landlord by reason of Landlord's not having to find a
new tenant for such premises (including, without limitation, brokerage
commissions, costs of improvements, rent concessions or lost rental income
during any vacancy period). In the event Landlord and Tenant fail to reach an
agreement on such rental rate and execute the Amendment (defined below) within
thirty (30) days after the date of Landlord's receipt of the Extension Notice,
then Tenant's exercise of the renewal option shall be deemed withdrawn and the
Lease shall terminate on its original expiration date.
(c) The determination of Base Rent does not reduce the Tenant's
obligation to pay or reimburse Landlord for operating expenses and other
reimbursable items as set forth in the Lease, and Tenant shall reimburse and
pay Landlord as set forth in the Lease with respect to such operating expenses
and other items with respect to the Premises during the Extension Term without
regard to any cap on such expenses set forth in the Lease.
(d) Except for the Base Rent as determined above, Tenant's
occupancy of the Premises during the Extension Term shall be on the same terms
and conditions as are in effect immediately prior to the expiration of the
initial Lease Term; provided, however, Tenant shall
1
<PAGE>
have no further right to any allowances, credits or abatements or any options
to expand, contract, renew or extend the Lease.
(e) If Tenant does not give the Extension Notice within the period
set forth in paragraph (a) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice.
(f) Landlord shall have no obligation to refurbish or otherwise
improve the Premises for the Extension Term. The Premised shall be tendered on
the Commencement Date of the Extension Term in "as is" condition.
(g) If the Lease is extended for the Extension Term, then Landlord
shall prepare and Tenant shall execute an amendment to the Lease confirming the
extension to the Lease Term and the other provisions applicable thereto (the
"Amendment").
(h) If Tenant exercises its right to extend the term of the Lease
for the Extension Term pursuant to this Addendum, the term "Lease Term" as used
in the Lease, shall be construed to include, when practicable, the Extension
Term except as provided in (d) above.
2
<PAGE>
ADDENDUM
CONSTRUCTION ALLOWANCE
Tenant intends to make certain improvements to the dock area of the
Premises and the electrical system of the Premises, and to paint a portion of
the Premises, and to perform other work, all as approved by Landlord pursuant
to Section 12 of the Lease (the "Work"). Without limiting the provisions of
Paragraph 12 of the Lease, Tenant agrees to provide to Landlord the CAD
diskette prepared in connection with Tenant's architectural drawings relating
to the Work.
Landlord agrees to reimburse Tenant in an amount up to $35,700.87
(the "Construction Allowance"). Landlord shall pay the Construction Allowance
to Tenant within 30 days after (i) completion of the Work as substantiated by
Landlord, (ii) submission to Landlord by Tenant of invoices substantiating the
amount actually incurred by Tenant to non-affiliated entities in connection
with the completion of the Work, and (iii) submission of lien waivers or other
evidence reasonably acceptable to Landlord that the Work has been completed
without any liens attaching to the Premises.
<PAGE>
STANDARD COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 Parties. This lease agreement ("Lease") is entered into by and
between the following Lessor and Lessee:
EGP Houston Partners, Ltd. ("Lessor")
- ---------------------------------------------------------------------
Techdyne Incorporated ("Lessee")
- ---------------------------------------------------------------------
1.02 Leased Premises. In consideration of the rents, terms, provisions
and covenants of this Lease, Lessor hereby leases, lets and demises to Lessee
the following described premises ("leased premises"):
15,000 (Approximate sq. ft.) AP96083 (Job no.)
- ---------------- ----------------------------
Northwest Point Distribution Center (Name of building or project)
- -------------------------------------------------
7110 Brittmoore, Suite 300 (Street address/suite number)
- -------------------------------------------------
Houston, Texas 77041 (City, State, and Zip Code)
- -------------------------------------------------
1.03 Term. Subject to and upon the conditions set forth herein, the term
of this Lease shall commence on July 1, 1997 (the "commencement date"), plus
the number of days necessary to end the Lease term on the last day of a month,
and shall terminate 62 months thereafter. Lessor shall not be liable to Lessee
in the event Lessor does not deliver possession of the leased premises to
Lessee on the commencement date, and Lessor's non-delivery of the leased
premises to Lessee on the commencement date shall not effect this Lease or the
obligations of Lessee hereunder. The commencement date shall be delayed,
however, until possession of the leased premises is delivered to Lessee, and
the Lease term shall be extended for a period equal to the delay in delivery of
the possession of the leased premises to Lessee plus the number of days
necessary to end the lease term on the last day of the month. If delivery of
possession of the leased premises is delayed, Lessor and Lessee shall, upon
such delivery execute an amendment to this Lease setting forth a commencement
date and expiration date of the Lease. In the event Lessee enters the leased
premises prior to the commencement date, Lessee shall execute and deliver to
Lessor a Hold Harmless Agreement in a form provided by Lessor whereby Lessee
releases Lessor from all liabilities, claims and causes of action arising out
of any construction or other work performed at the leased premises and agrees
to pay utility charges incurred by Lessee during such early possession. In
addition, Lessee shall provide Lessor a copy of it's insurance certificate
insuring such work and naming Lessor as an additional insured.
1.04 Base Rent, Common Area Maintenance Charge and Security Deposit.
Base rent is $(see 16.02) per month. The initial Common Area
Maintenance Charge estimate is $320.00 per month.
Security deposit is $5,850.00.
1.05 Addresses.
Lessor's Address: Lessee's Address:
4635 Southwest Freeway, Suite 425 7110 Brittmoore, Suite 300
- ------------------------------------ ------------------------------------
Houston, Texas 77027 Houston, Texas 77041
- ------------------------------------ ------------------------------------
- ------------------------------------ ------------------------------------
1.06 Permitted Use. General Office and Light Manufacturing
----------------------------------------------------
ARTICLE 2.00 RENT
2.01 Base Rent. Lessee agrees to pay monthly as base rent during the term
of this Lease without notice, demand, counter-claim, set-off or abatement, the
sum of money set forth in section 1.04 of this Lease, which amount shall be
payable to Lessor at the address shown above. One monthly installment of rent
shall be due and payable on the date of execution of this Lease by Lessee for
the first month's rent and a like monthly installment shall be due and payable
on or before the first day of each calendar month succeeding the commencement
date during the term of this Lease; provided, if the commencement date should
be a date other than the first day of a calendar month, the monthly rental set
forth above shall be prorated to the end of that calendar month, and all
succeeding installments of rent shall be payable on or before the first day of
each succeeding calendar month during the term of this Lease. Lessee shall pay,
as additional rent, all other sums due under this Lease.
2.02 Operating Expenses. In the event Lessor's operating expenses for the
building and/or project of which the leased premises are a part shall, in any
calendar year during the term of this Lease, exceed the sum of $ Base Year 1997
per square foot, Lessee agrees to pay as additional rent Lessee's pro rata
share of such excess operating expenses. Lessor may invoice Lessee monthly for
Lessee's pro rata share of the estimated operating expenses for each calendar
year, which amount shall be adjusted each year based upon anticipated operating
expenses. Within nine months following the close of each calendar year, Lessor
shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. In the event the
accounting shows that the total of the monthly payments made by Lessee exceeds
the amount of additional rent due by Lessee under this section, the accounting
shall be accompanied by a refund. In the event the accounting shows that the
total of the monthly payments made by Lessee is less than the amount of
additional rent due by Lessee under this section, the account shall be
accompanied by an invoice for the additional rent. Notwithstanding any other
provision in this Lease, during the year in which the Lease terminates, Lessor,
prior to the termination date, shall have the option to invoice Lessee for
Lessee's pro rata share of the excess operating expenses based upon the
previous year's operating expenses. If this Lease shall terminate on a day
other than the last day of a calendar year, the amount of any additional rent
payable by Lessee applicable to the year in which such termination shall occur
shall be prorated on the ratio that the number of days from the commencement of
the calendar year to and including the termination date bears to 365. Provided
Lessee is not in default of any terms of this Lease, Lessee shall have the
right, at its own expense, to audit Lessor's books relevant to the additional
rent payable under this section. Lessee agrees to pay any additional rent due
under this section. With respect to such audit, Lessee 1) may review Lessor's
books during office hours, 2) must perform such audit at the location of
Lessor's books, 3) must request such audit within thirty (30) days of receipt
of it's annual reconciliation of operating expenses, 4) must deliver to Lessor
a copy of the results of such audit, 5) may not audit the same calendar year
more than one time and 6) may only audit Lessor's books should Lessee's share
of excess operating expenses increase from the previous calendar year.
Assignees of Lessee may only audit periods for which they occupy the leased
premises and subtenants of Lessee shall have no audit rights. Lessee agrees to
pay any additional rent due under this section within ten days following
receipt of the invoice or accounting showing additional rent due.
2.03 Definition of Operating Expenses. The term "operating expenses"
includes all expenses incurred by Lessor with respect to the maintenance and
operation of the building of which the leased premises are a part, including,
but not limited to, the following: maintenance, repair and replacement costs;
security; management fees, wages and benefits payable to employees of Lessor
whose duties are directly connected with the operation and maintenance of the
building; all services, utilities, supplies, repairs, replacements or other
expenses for maintaining and operating the common parking and plaza areas;
barrier removal assessment plans; the cost, including interest, amortized over
its useful life, of any capital improvement made to the building by Lessor
after the date of this Lease which is required under any governmental law or
regulation that was not applicable to the building at the time it was
constructed; the cost, including interest, amortized over its useful life, of
installation of any device or other equipment which improves the operating
efficiency of any system within the leased premises and thereby reduces
operating expenses; all other expenses which would generally be regarded as
operating and maintenance expenses which would reasonably be amortized over a
period not to exceed five years; all real property taxes and installments of
special assessments, including dues and assessments by means of deed
restrictions and/or owners' associations which accrue against the building of
which the leased premises are a part during the term of this Lease; and all
insurance premiums Lessor is required to pay or deems necessary to pay,
including public liability insurance, with respect to the building. The term
operating expenses does not include the following: repairs, restoration or
other work occasioned by fire, wind, the elements or other casualty; income and
franchise taxes of Lessor; expenses incurred in leasing to or procuring of
lessee, leasing commissions, advertising expenses and expenses for the
renovating of space for new lessees; interest or principal payments on any
mortgage or other indebtedness of Lessor; compensation paid to any employee of
Lessor above the grade of property manager; any depreciation allowance or
expense (except for depreciation of capital improvements and equipment
specifically included within the definition of operating expenses); or
operating expenses which are the responsibility of Lessee; or "common area
maintenance expenses" as defined in paragraph 2.05 of this Lease.
-1-
<PAGE>
2.04 Common Area Maintenance Charge. The common area maintenance charge
reflected in paragraph 1.04 of this Lease is Lessor's estimate of the Lessee's
pro rata share of the common area maintenance expenses for the calendar year in
which this Lease was executed. Lessor will invoice Lessee for such monthly
common area maintenance charge, which Lessee agrees to pay. The common area
maintenance charge will be adjusted each calendar year based upon anticipated
future common area maintenance expenses. Within nine (9) months following the
close of each calendar year, Lessor will provide Lessee an accounting showing
in reasonable detail all computations of actual total common area maintenance
expenses and Lessee's pro rata share of the common area maintenance expenses
incurred by Lessor for the immediately preceding year. If the accounting
indicates that the total of the monthly payments made by Lessee for common area
maintenance charges exceeds Lessee's actual pro rata share of the common area
maintenance expenses, the accounting shall be accompanied by a refund from the
Lessor to the Lessee. If the accounting indicates that the total of the monthly
payments made by Lessee for common area maintenance charges is less than
Lessee's actual pro rata share of the common area maintenance expenses, the
accounting will be accompanied by an invoice from the Lessor to the Lessee for
the additional common area maintenance charges, which Lessee agrees to pay.
During the year in which this Lease terminates, Lessor, prior to the
termination date, has the option to invoice Lessee for Lessee's pro rata share
of that year's common area maintenance expenses based upon the actual common
area maintenance expenses for the prior calendar year. If this Lease terminates
on a date other than the last day of a calendar year, the amount of any
additional common area maintenance charges payable by Lessee, applicable to the
year in which the Lease terminates, will be prorated on the ratio that the
number of days from the commencement of the calendar year to and including the
termination date bears to 365. Lessee agrees to pay any common area maintenance
charges due under this paragraph within ten (10) days following receipt of the
invoice for same.
2.05 Definition of Common Area Maintenance Expenses. If the leased
premises is a part of a multi-occupancy building, the term "common area
maintenance expenses" includes all expenses incurred by Lessor for utilities
that are common to more than one tenant that serve the leased premises, lawn
maintenance, exterior painting, repair and maintenance and/or replacement of
exterior lighting and common domestic and sanitary sewer facilities, and any
other expenses incurred by Lessor that are common to all of the tenants in said
multi-occupancy building.
2.06 Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if the monthly rental payment is not received by Lessor on or
before the tenth day of the month for which the rent is due, or if any other
payment due Lessor by Lessee is not received by Lessor on or before the tenth
day of the month next following the month in which Lessee was invoiced, a late
payment charge of five percent of such past due amount shall be come due and
payable in addition to such amounts owed under this Lease. In addition, Lessor
shall be entitled to charge twenty-five dollars ($25.00) for each check or
payment which is not honored by Lessee's bank. Said charge to be in addition to
any other amounts owed under this Lease.
2.07 Increase in Insurance Premiums. If an increase in any insurance
premiums paid by Lessor for the building is caused by Lessee's use of the
leased premises in a manner other than as set forth in section 1.06, or if
Lessee vacates the leased premises and causes an increase in such premiums,
then Lessee shall pay as additional rent the amount of such increase to Lessor.
2.08 Security Deposit. The security deposit set forth above shall be held
by Lessor for the performance of Lessee's covenants and obligations under this
Lease, it being expressly understood that the deposit shall not be considered
an advance payment of rental or a measure of Lessor's damage in case of default
by Lessee. Upon the occurrence of any event of default by Lessee or breach by
Lessee of Lessee's covenants under this Lease, Lessor may, from time to time,
without prejudice to any other remedy, use the security deposit to the extent
necessary to make good any arrears of rent, or to repair any damage or injury,
or pay any expense or liability incurred by Lessor as a result of the event of
default or breach of covenant, and any remaining balance of the security
deposit shall be returned by Lessor to Lessee within a reasonable period of
time following termination of this Lease. If any portion of the security
deposit is so used or applied, Lessee shall upon ten days written notice from
Lessor, deposit with Lessor by cash or cashier's check an amount sufficient to
restore the security deposit to its original amount.
2.09 Holding Over. In the event that Lessee does not vacate the leased
premises upon the expiration or termination of this Lease, Lessee shall be a
tenant at will for the holdover period and all of the terms and provisions of
this Lease shall be applicable during that period, except that Lessee shall pay
Lessor as base rental for the period of such holdover an amount equal to one
and one half times the base rent which would have been payable by Lessee had
the holdover period been a part of the original term of this Lease. Lessee
agrees to vacate and deliver the leased premises to Lessor immediately upon
Lessee's receipt of notice from Lessor to vacate. The rental payable during the
holdover period shall be payable to Lessor on demand. No holding over by
Lessee, whether with or without the consent of Lessor and notwithstanding
receipt by Lessee of an invoice from Lessor for holdover rent, shall operate to
extend the term of this Lease.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 Use. Lessee warrants and represents to Lessor that the leased
premises shall be used and occupied only for the purpose as set forth in
section 1.06. Lessee shall occupy the leased premises, conduct its business and
control its agents, employees, invitees and visitors in such a manner as is
lawful, reputable and will not create a nuisance. Lessee shall not permit any
operation which emits any odor or matter which intrudes into other portions of
the building, use any apparatus or machine which makes undue noise or causes
vibration in any portion of the building or otherwise interfere with, annoy or
disturb any other lessee in its normal business operations or Lessor in its
management of the building. Lessee shall neither permit any waste on the leased
premises nor allow the leased premises to be used in any way which would, in
the opinion of Lessor, be extra hazardous on account of fire or which would in
any way increase or render void the fire insurance on the building. Lessee
warrants to Lessor that the insurance questionnaire (filled out by Lessee,
signed and presented to Lessor prior to the execution of this Lease) accurately
reflects Lessee's original intended use of the leased premises. The insurance
questionnaire is made a part of this Lease by reference as though fully copied
herein. If at any time during the term of this Lease the State Board of
Insurance or other insurance authority disallows any of Lessor's sprinkler
credits or imposes an additional penalty or surcharge in Lessor's insurance
premiums because of Lessee's original or subsequent placement or use of storage
racks or bins, method of storage or nature of Lessee's inventory or any other
act of Lessee, Lessee agrees to pay as additional rent the increase (between
fire walls) in Lessor's insurance premiums.
3.02 Signs. No sign of any type or description shall be erected, placed
or painted in or about the leased premises or project except those signs
submitted to Lessor in writing and approved by Lessor in writing, and which
signs are in conformance with Lessor's sign criteria established for the
project.
3.03 Compliance with Laws, Rules and Regulations. Lessee, at Lessee's
sole cost and expense, shall comply with all laws, ordinances, orders, rules
and regulations now in effect or enacted subsequent to the date hereof of
state, federal, municipal or other agencies or bodies having jurisdiction over
Lessee or the use, condition and occupancy of the leased premises. Lessee will
comply with the rules and regulations of the building adopted by Lessor which
are set forth on a schedule attached to this Lease. Lessor shall have the right
at all times to change and amend the rules and regulations in any reasonable
manner as may be deemed advisable for the safety, care, cleanliness,
preservation of good order and operation or use of the building or the leased
premises. All changes and amendments to the rules and regulations of the
building will be sent by Lessor to Lessee in writing and shall thereafter be
carried out and observed by Lessee. Should the building of which the leased
premises are a part not be classified as a "commercial facility which is a
place of public accommodations" as defined in Title III of the American With
Disabilities Act of 1990 (the Act) on the date hereof, and Lessee's use,
alterations or improvements thereafter causes the building to be classified as
such, Lessee shall be responsible for and shall indemnify Lessor against any
and all costs and expenses of Lessor associated with complying with the Act.
3.04 Warranty of Possession. Lessor warrants that it has the right and
authority to execute this Lease, and Lessee, upon payment of the required rents
and subject to the terms, conditions, covenants and agreements contained in
this Lease, shall have possession of the leased premises during the full term
of this Lease as well as any extension or renewal thereof. Lessor shall not be
responsible for the acts or omissions of any other Lessee or third party that
may interfere with Lessee's use and enjoyment of the leased premises, except
for those claiming by, through or under Lessor.
3.05 Inspection. With reasonable notice to Lessee, except in a bonafide
emergencies, Lessor or its authorized agents shall at any and all reasonable
times have the right to enter the leased premises to inspect the same, conduct
tests, environmental audits or other procedures to determine Lessee's
compliance with the terms; to supply janitorial service or any other service to
be provided by Lessor, to show the leased premises to prospective purchasers,
lessees or mortgagees; to alter, improve or repair the leased premises or any
other portion of the building or for any other purpose Lessor deems necessary.
Lessor shall at all times have and retain a key with which to unlock all of the
doors in, upon and about the leased premises. Lessee shall not change Lessor's
lock system or in any other manner prohibit Lessor from entering the leased
premises. Lessor shall have the right to use any and all means which Lessor may
deem proper to open any door in an emergency without liability therefor. During
the final one-hundred fifty days of the Lease term, Lessor or its authorized
agents shall have the right to erect or maintain on or about the leased
premises or the building customary signs advertising the leased premises for
lease or sale.
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3.06 HAZARDOUS WASTE. The term "Hazardous Substances," as used in this
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the use and/or the removal of which is required or the use of
which is 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 the environment. Lessee hereby agrees that (i) no activity will
be conducted on the premises that will produce any Hazardous Substance, except
for such activities that are part of the ordinary course of Lessee's business
activities (the "Permitted Activities") provided said Permitted Activities are
conducted in accordance with all Environmental Laws and have been approved in
advance in writing by Lessor; 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 Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Lessee's business (the
"Permitted Materials") provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and approved in advance in
writing by Lessor; 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 above
ground tanks 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 Hazardous Substances to be brought onto the premises, except for the
Permitted Materials described below, and if so brought or found located
thereon, the same shall be immediately removed, with proper disposal, and all
required cleanup procedures shall be diligently undertaken pursuant to all
Environmental Laws. Lessor or Lessor's representative shall have the right but
not the obligation to enter the premises for the purpose of inspecting the
storage, use and disposal of Permitted Materials to ensure compliance with all
Environmental Laws. Should it be determined, in Lessor's sole opinion, that
said Permitted Materials are being improperly stored, used, or disposed of,
then Lessee shall immediately take such corrective action as requested by
Lessor. Should Lessee fail to take such corrective action within 24 hours,
Lessor shall have the right to perform such work and Lessee shall promptly
reimburse Lessor for any and all costs associated with said work. If at any
time during or after the term of the Lease, the premises is found to be so
contaminated or subject to said conditions, Lessee shall diligently institute
proper and thorough cleanup procedures at Lessee's sole cost. Before taking any
action to comply with hazardous material laws or to clean up hazardous material
contaminating the premises, Lessee shall submit to Lessor a plan of action,
including any and all plans and documents required by any hazardous material
law to be submitted to a governmental authority (collectively, a "plan of
action"). Before Lessee begins the actions necessary to comply with hazardous
material laws or to clean up contamination from hazardous materials, Lessor
shall have (1) approved the nature, scope and timing of the plan of action, and
(2) approved any and all covenants and agreements to effect the plan of action.
Lessee agrees to indemnify and hold Lessor harmless from all claims, demands,
actions, liabilities, costs, expenses, damages and obligations of any nature
arising from or as a result of the use of the premises by Lessee. The foregoing
indemnification and the responsibilities of Lessee shall survive the
termination or expiration of this Lease.
Permitted Materials: (list permitted materials, if none, enter "None")
NONE
3.07 CERTIFICATE OF OCCUPANCY. Upon occupancy of the leased premises,
Lessee shall be required to obtain a Certificate of Occupancy (the CO) from the
municipality in which the building is located. Failure of Lessee to obtain and
deliver the CO to Lessor upon occupancy shall be a default which shall allow
Lessor to pursue the remedies set forth in Article 11.02 of this Lease.
ARTICLE 4.00 UTILITIES AND SERVICE
4.01 Building Services. Lessor shall provide the normal utility service
connections to the building. Lessee shall pay directly to the appropriate
supplier the cost of all utility services, including, but not limited to,
initial connection charges, all charges for gas, electricity, water, sanitary
and storm sewer service, and for all electric lights. Lessee shall pay all
costs caused by Lessee introducing excessive pollutants or solids other than
ordinary human waste into the sanitary sewer system, including permits, fees
and charges levied by any governmental subdivision for any such pollutants or
solids. Lessee shall be responsible for the installation and maintenance of any
dilution tanks, holding tanks, settling tanks, sewer sampling devices, sand
traps, grease traps or similar devices as may be required by any governmental
subdivision for Lessee's use of the sanitary sewer system. If the leased
premises are in a multi-occupancy building, Lessee shall pay all surcharges
levied due to Lessee's use of sanitary sewer or waste removal services insofar
as such surcharges affect Lessor or other lessees in the building. Cessation of
any of these defined services shall not render Lessor liable in any respect for
damages to either person or property, be construed as an eviction of Lessee,
work an abatement of rent or relieve Lessee from fulfillment of any covenant in
this Lease, except as due to intentional acts of the Lessor.
4.02 Theft or Burglary. Lessor shall not be liable to Lessee for losses
to Lessee's property or personal injury caused by criminal acts or entry by
unauthorized persons into the leased premises or the building. Lessee shall be
responsible for repairs of damage and restoration of the leased premises
following any such act.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 Existing Conditions. Lessee accepts the leased premises in its
present as-is condition as of the date hereof, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Lessee acknowledges
that neither Lessor nor any agent of Lessor has made any warranty or
representation of any kind, either express or implied as to the condition of
the leased premises or the suitability of the leased premises for Lessee's
intended use. The taking of possession of the leased premises by Lessee shall
be conclusive evidence, as against Lessee, that Lessee accepts the leased
premises and that the leased premises were in good and satisfactory condition
at the time such possession was so taken. Prior to taking occupancy of the
leased premises, Lessee shall sign a copy of the space plan of the leased
premises acknowledging its condition on the date thereof.
5.02 Lessor Repairs. Lessor shall not be required to make any
improvements, replacements or repairs of any kind or character to the leased
premises or the project during the term of this Lease except as are set forth
in this section. Lessor shall maintain only the roof, foundation, parking and
common areas, and the structural soundness of the exterior walls (excluding
windows, window glass, plate glass and doors and surfaces of walls). Lessor's
costs of maintaining the items set forth in this section are subject to the
additional rent provisions in section 2.02. Lessor shall not be liable to
Lessee, except as expressly provided in this Lease, for any damage or
inconvenience, and Lessee shall not be entitled to any abatement or reduction
of rent by reason of any repairs, alterations or additions made by Lessor under
this Lease. Nothing contained herein shall entitle Lessee to make any repairs,
alterations or additions to the leased premises at Lessor's expense or to
terminate the Lease based on the physical condition of the leased premises.
5.03 Lessee Repairs. Lessee shall, at its sole cost and expense,
maintain, repair and replace all other parts of the leased premises in good
repair and condition, including, but not limited to, heating, ventilating and
air conditioning systems, down spouts, fire sprinkler system, dock bumpers,
lawn maintenance, pest control and extermination, trash pick-up and removal,
and painting the building and exterior doors. Lessee shall repair and pay for
any damage caused by any act or omission of Lessee or Lessee's agents,
employees, invitees, licensees or visitors. If the leased premises are served
by rail, Lessee agrees, if requested by the railroad, to enter into a joint
maintenance agreement with the railroad and bear its pro rata share of the cost
of maintaining the railroad spur. If Lessee fails to make the repairs or
replacements promptly as required herein, Lessor may, at its option, make the
repairs and replacements and the cost of such repairs and replacements shall be
charged to Lessee as additional rent and shall become due and payable by Lessee
within ten days from receipt of Lessor's invoice. Costs incurred under this
section are the total responsibility of Lessee and do not constitute operating
expenses under section 2.02.
5.04 Request for Repairs. All requests for repairs or maintenance that
are the responsibility of Lessor pursuant to any provision of this Lease must
be made in writing to Lessor at the address in section 1.05 and delivered
pursuant to section 14.07. Notices sent by facsimile transmission shall not be
considered proper notice for the purposes hereof. Lessor shall have a
reasonable time, but in no event more than 60 days, to begin such repairs or
maintenance and shall have a reasonable time within which to perform such
repairs or maintenance after they have begun.
5.05 Lessee Damages. Lessee shall not allow any damage to be committed on
any portion of the leased premises or building, and at the termination of this
Lease, by lapse of time or otherwise, Lessee shall deliver the leased premises
to Lessor in as good condition as existed at the commencement date of this
Lease, ordinary wear and tear excepted. Lessor's standard move-out checklist
shall be followed by Lessee to ensure compliance with this provision. The cost
and expense of any repairs necessary to restore the condition of the leased
premises shall be borne by Lessee.
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5.06 Maintenance Contract. Lessee shall, at its sole cost and expense,
during the term of this Lease maintain a regularly scheduled preventative
maintenance/service contract on an annual basis with a maintenance contractor
for the servicing of all hot water, heating and air conditioning systems and
equipment within or serving the leased premises. The maintenance contractor and
contract must be approved by Lessor and must include all services suggested by
the equipment manufacturer. A copy of the service contract shall be provided to
Lessor within sixty (60) days following the commencement date. In the event the
service contract is not provided, then Lessor shall have the right, but not the
obligation to have the work done and the cost therefore shall be charged to
Lessee as additional rent and shall become payable by Lessee with the payment
of the rent next due hereunder.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 Lessor Improvements. If construction to the leased premises is to be
performed by Lessor prior to or during Lessee's occupancy, Lessor will complete
the construction of the improvements to the leased premises, in accordance with
plans and specifications agreed to by Lessor and Lessee, which plans and
specifications are made a part of this Lease by reference. Lessee shall execute
a copy of the plans and specifications and change orders, if applicable,
setting forth the amount of any costs to be borne by Lessee within seven days
of receipt of the plans and specifications. In the event Lessee fails to
execute the plans and specifications and change order within the seven day
period, Lessor may, at its sole option, declare this Lease canceled or notify
Lessee that the base rent shall commence on the commencement date specifically
set forth in section 1.03 even though the improvements to be constructed by
Lessor may not be complete. Any changes or modifications to the approved plans
and specifications shall be made and accepted by written change order or
agreement signed by Lessor and Lessee and shall constitute an amendment to this
Lease. Any improvements made by Lessor shall at once become the property of
Lessor and shall be surrendered to Lessor upon termination of this Lease
without credit to Lessee.
6.02 Lessee Improvements. Lessee shall not make or allow to be made any
alterations or physical additions in or to the leased premises without
complying with all local, state and federal ordinances, laws, statutes and
without first obtaining the written consent of Lessor, which consent may in the
sole and absolute discretion of Lessor be denied. Any alterations, physical
additions or improvements to the leased premises made by Lessee shall at once
become the property of Lessor and shall be surrendered to Lessor upon the
termination of this Lease without credit to Lessee; provided, however, Lessor,
at its option, may require Lessee to remove any physical additions and/or
repair any alterations in order to restore the leased premises to the condition
existing at the time Lessee took possession, all costs of removal and/or
alterations to be borne by Lessee. This clause shall not apply to moveable
equipment or furniture owned by Lessee, which may be removed by Lessee at the
end of the term of this Lease if Lessee is not then in default, if such
equipment and furniture are not then subject to any other rights, liens and
interest of Lessor and such removal can be accomplished without material damage
to the leased premises. Upon completion of any such work Lessee shall provide
Lessor with "as built plans", copies of all construction contracts and proof of
payment for all labor and materials.
6.03 Mechanics Lien. Lessee shall not permit any mechanic's or
materialman's lien(s) or other lien to be placed upon the leased premises or
the building and nothing in the Lease shall be deemed or construed in any way
as constituting the consent or request of Lessee, express or implied, by
inference or otherwise, to any person for the performance of any labor or the
furnishing of any materials to the leased premises, or any part that would give
the rise to any mechanic's or materialman's or other lien against the leased
premises. In any event if any such lien is attached to the leased premises,
then, in addition to any other right or remedy of Lessor, Lessor may, but shall
not be obligated to, obtain the release or otherwise discharge the same. Any
amount paid by Lessor for any of the aforesaid purposes shall be paid by Lessee
to Lessor on demand as additional rent.
ARTICLE 7.00 CASUALTY AND INSURANCE
7.01 Substantial Destruction. If the leased premises should be totally
destroyed by fire or other casualty, if the leased premises should be damaged
so that rebuilding cannot reasonably be completed within one hundred fifty days
after the date of written notification by Lessee to Lessor of the destruction,
or if the leased premises are part of a building which is substantially
destroyed (even though the leased premises are not totally or substantially
destroyed) this Lease shall terminate and the rent shall be abated for the
unexpired portion of the Lease, effective as of the date of the written
notification.
7.02 Partial Destruction. If the leased premises should be partially
damaged by fire or other casualty, and rebuilding or repairs can reasonably be
completed within one hundred twenty days from the date of written notification
by Lessee to Lessor of the destruction, this Lease shall not terminate, and
Lessor shall at its sole risk and expense proceed with reasonable diligence to
rebuild or repair the building or other improvements to substantially the same
condition in which they existed prior to the damage, provided, Lessor shall
have no obligation to repair or rebuild Lessee's furniture, fixtures or
personal property. If the destruction was caused by an act or omission of
Lessee, its employees, agents, or invitees, Lessee shall pay Lessor the
difference between the actual cost of rebuilding or repairing the leased
premises and any insurance proceeds received by Lessor. If the leased premises
are to be rebuilt or repaired and are untenantable in whole or in part
following the damage, and the damage or destruction was not caused or
contributed to by act or negligence of Lessee, its agents, employees, invitees
or those for whom Lessee is responsible, the rent payable under this Lease
during the period for which the leased premises are untenantable shall be
adjusted to such an extent as may be fair and reasonable under the
circumstances. In the event that Lessor fails to complete the necessary repairs
or rebuilding within one hundred twenty days from the date of written
notification by Lessee to Lessor of the destruction, Lessee may at its option
terminate this Lease by delivering written notice of termination to Lessor,
whereupon all rights and obligations under this Lease shall cease to exist.
7.03 Property Insurance. Lessor shall at all times during the term of
this Lease maintain a policy or policies of insurance with the premiums paid in
advance, issued by and binding upon some solvent insurance company, insuring
the building against all risk of direct physical loss in an amount equal to at
least ninety percent of the full replacement cost of the building structure and
its improvements as of the date of the loss; provided, Lessor shall not be
obligated in any way or manner to insure any personal property (including, but
not limited to, any furniture, machinery, goods or supplies) of Lessee upon or
within the leased premises, any fixtures installed or paid for by Lessee upon
or within the leased premises, or any improvements which Lessee may construct
on the leased premises. Lessee shall have no right in or claim to the proceeds
of any policy of insurance maintained by Lessor even if the cost of such
insurance is borne by Lessee as set forth in article 2.00.
7.04 Release of Claims and Waiver of Subrogation. Lessor and Lessee
release each other from any claim, by subrogation or otherwise, for any damages
to the leased premises, improvements to the building of which the leased
premises are a part, or personal property located at or within the leased
premises or the building to which the leased premises are a part, by reason of
fire, the elements, explosion or any other occurrence, regardless of cause,
including negligence of either Lessor or Lessee. This release applies only to
the extent permitted by law, the damage is covered by insurance proceeds, and
the release does not adversely affect any insurance coverage.
Lessor and Lessee will notify the issuing insurance company of the release and
waiver set forth in this paragraph and will have the insurance policies
endorsed, if necessary, to prevent invalidation of the insurance coverage.
7.05 Hold Harmless. (See 16.07)
7.06 LIABILITY INSURANCE. Lessee shall, at its sole expense, maintain at
all times during the term of this Lease public liability insurance with respect
to the leased premises and the conduct or operation of Lessee's business
therein, naming Lessor as an additional insured, with limits of not less that
$2,000,000.00 for death or bodily injury to any one or more persons in a single
occurrence and $500,000.00 for property damage. Lessee shall deliver a
certificate of such insurance to Lessor on or before the commencement date and
thereafter from time to time upon request.
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ARTICLE 8.00 CONDEMNATION
8.01 Substantial Taking. If all or a substantial part of the leased
premises or a substantial part of the building of which the leased premises are
a part (even though the leased premises are not taken) are taken for any public
or quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by purchase in lieu thereof, and the taking would
prevent or materially interfere with the use of the leased premises or the
building of which the leased premises are a part for the purpose for which it
is then being used, this Lease shall terminate and the rent shall be abated
during the unexpired portion of this Lease effective on the date title or
physical possession is taken by the condemning authority. Lessee shall have no
claim to any condemnation award or proceeds in lieu thereof.
8.02 Partial Taking. If a portion of the leased premises or a substantial
portion of the building of which the leased premises are a part shall be taken
for any public or quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu thereof, and
this Lease is not terminated as provided in section 8.01 above, Lessor shall at
Lessor's sole risk and expense, restore and reconstruct the building and other
improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances. Lessee shall have no claim to any
condemnation award or proceeds in lieu thereof.
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 Lessor Assignment. Lessor shall have the right to sell, transfer or
assign, in whole or in part, its rights and obligations under this Lease and in
the leased premises. Any such sale, transfer or assignment shall operate to
release Lessor from any and all liabilities under this Lease arising after the
date of such sale, assignment or transfer.
9.02 Lessee Assignment. (See 16.08)
9.03 Conditions of Assignment. If Lessee desires to assign or sublet all
or any part of the leased premises, it shall so notify Lessor at least thirty
days in advance of the date on which Lessee desires to make such assignment or
sublease. Lessee shall provide Lessor with a copy of the proposed assignment or
sublease and such information as Lessor might request concerning the proposed
sublessee or assignee to allow Lessor to make informed judgments as to the
financial condition, reputation, operations and general desirability of the
proposed sublessee or assignee. Within fifteen days after Lessor's receipt of
Lessee's proposed assignment or sublease and all required information
concerning the proposed sublessee or assignee, Lessor shall have the following
options: (1) cancel this Lease as to the leased premises or portion thereof
proposed to be assigned or sublet; (2) consent to the proposed assignment or
sublease, and, if the rent due and payable by any assignee or sublessee under
any such permitted assignment or sublease (or a combination of the rent payable
under such assignment or sublease plus any bonus or any other consideration or
any payment incident thereto) exceeds the rent payable under this Lease for
such space, Lessee shall pay to Lessor all such excess rent and other excess
consideration within ten days following receipt thereof by Lessee; or (3)
refuse, in its sole and absolute discretion and judgment, to consent to the
proposed assignment or sublease, which refusal shall be deemed to have been
exercised unless Lessor gives Lessee written notice providing otherwise. Upon
the occurrence of an event of default, if all or any part of the leased
premises are then assigned or sublet, Lessor, in addition to any other remedies
provided by this Lease or provided by law, may, at its option, collect directly
from the assignee or sublessee all rents becoming due to Lessee by reason of
the assignment or sublease, and Lessor shall have a security interest in all
properties on the leased premises to secure payment of such sums. Any
collection directly by Lessor from the assignee or sublessee shall not be
construed to constitute a novation or a release of Lessee or any guarantor from
the further performance of its obligations under this Lease. As a condition to
Lessor's review of any assignment or sublease, Lessee shall deliver to Lessor a
non-refundable fee of $500.00 to defer Lessor's administrative costs with
respect thereto. In addition, all legal fees and expenses incurred by Lessor in
connection with the review by Lessor of Lessee's requested assignment or
sublease together with any legal fees and disbursements incurred in the
preparation and/or review of any documentation required by the requested
assignment or sublease, shall be the responsibility of Lessee and shall be paid
by Lessee within five (5) days of demand for payment thereof.
9.04 Subordination. Lessee accepts this Lease subject and subordinate to
any recorded mortgage or deed of trust lien presently existing or hereafter
created upon the building or project of which the leased premises are a part
and to all existing recorded restrictions, covenants, easements and agreements
with respect to the building or project of which the leased premises are a
part. Lessor is hereby irrevocably vested with full power and authority to
subordinate Lessee's interest under this Lease to any first mortgage or deed of
trust lien hereafter placed on the leased premises, and Lessee agrees upon
demand to execute additional instruments subordinating this Lease as Lessor may
require. If the interest of Lessor under this Lease shall be transferred by
reason of foreclosure or other proceedings for enforcement of any first
mortgage or deed of trust on the leased premises, Lessee shall be bound to the
transferee (sometimes called the "Purchaser") at the option of the Purchaser,
under the terms, covenants and conditions of this Lease for the balance of the
term remaining, including any extensions or renewals, with the same force and
effect as if the Purchaser were Lessor under this Lease, and, if requested by
the Purchaser, Lessee agrees to attorn to the Purchaser, including the first
mortgagee under any such mortgage if it be the Purchaser, as its Lessor.
9.05 Estoppel Certificates. Lessee agrees to furnish, from time to time,
within five days after receipt of a request from Lessor, Lessor's mortgagee or
any potential purchaser of the building or project, a statement certifying, if
applicable, the following: Lessee is in possession of the leased premises; the
leased premises are acceptable; the Lease is in full force and effect; the
Lease is unmodified; Lessee claims no present charge, lien, or claim of offset
against rent; the rent is paid for the current month, but is not prepaid for
more than one month and will not be prepaid for more than one month in advance;
there is no existing default by reason of some act or omission by Lessor; and
such other matters as may be reasonably required by Lessor or Lessor's
mortgagee or any potential purchaser. Lessee's failure to deliver such
statement, in addition to being a default under this Lease, shall be deemed to
establish conclusively that this Lease is in full force and effect except as
declared by Lessor, that Lessor is not in default of any of its obligations
under this Lease, and that Lessor has not received more than one month's rent
in advance. Any notice and cure provisions set forth in any other part of this
Lease shall not apply to a default of this section 9.05.
ARTICLE 10.00 LIENS
10.01 Landlord's Lien.
10.02 Uniform Commercial Code.
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ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 Default by Lessee. The following shall be deemed to be events of
default by Lessee under this Lease:
(a) Lessee shall fail to pay when due any installment of rent or any
other payment required pursuant to this Lease;
(b) Lessee shall abandon any substantial portion of the leased premises;
(c) Lessee shall fail to comply with any term, provision or covenant of
this Lease, other than the payment of rent;
(d) Lessee or any guarantor of Lessee's obligations hereunder shall file
a petition or be adjudged bankrupt or insolvent under any applicable federal or
state bankruptcy or insolvency law, or admit that it cannot meet its financial
obligations as they become due; or a receiver or trustee shall be appointed for
all or substantially all of the assets of Lessee or such guarantor; or Lessee
or any guarantor of Lessee's obligations hereunder shall make a transfer in
fraud of creditors or shall make an assignment for the benefit of creditors; or
(e) Lessee shall do or permit to be done any act which results in a lien
being filed against the leased premises or the building and/or project of which
the leased premises are a part.
11.02 Remedies for Lessee's Default. Upon the occurrence of any event of
default set forth in this Lease, Lessor shall have the option to pursue any one
or more of the remedies set forth herein without any notice or demand.
(1) Without declaring the Lease terminated, Lessor may enter upon and
take possession of the leased premises, by picking or changing locks if
necessary, and lock out, expel or remove Lessee and any other person who may be
occupying all or any part of the leased premises without being liable for any
claim for damages, and relet the leased premises on behalf of Lessee and
receive the rent directly by reason of the reletting. Lessee agrees to pay
Lessor on demand any deficiency that may arise by reason of any reletting of
the leased premises; further, Lessee agrees to reimburse Lessor for any
expenditures made by it in order to relet the leased premises, including, but
not limited to, remodeling and repair costs.
(2) Without declaring the Lease terminated, Lessor may enter upon the
leased premises, by picking or changing locks if necessary, without being
liable for any claim for damages, and do whatever Lessee is obligated to do
under the terms of this Lease. Lessee agrees to reimburse Lessor on demand for
any expenses which Lessor may incur in effecting compliance with Lessee's
obligations under this Lease; further, Lessee agrees that Lessor shall not be
liable for any damages resulting to Lessee from effecting compliance with
Lessee's obligations under this Lease caused by the negligence of Lessor or
otherwise.
(3) Lessor may terminate this Lease, in which event Lessee shall
immediately surrender the leased premises to Lessor, and if Lessee fails to
surrender the leased premises, Lessor may, without prejudice to any other
remedy which it may have for possession or arrearages in rent, enter upon and
take possession of the leased premises, by picking or changing locks if
necessary, and lock out, expel or remove Lessee and any other person who may be
occupying all or any part of the leased premises without being liable for any
claim for damages. Lessee agrees to pay on demand the amount of all loss and
damage which Lessor may suffer by reason of the termination of this Lease under
this section, including without limitation, loss and damage due to failure of
Lessee to maintain and or repair the leased premises as required hereunder
and/or due to the inability to relet the leased premises on satisfactory terms
or otherwise. In addition, upon termination Lessor may collect from Lessee the
value of all future rentals required to be paid under this Lease from the date
Lessor terminates the Lease until the original termination date, discounted to
present value using a discount rate of six percent (6%), less the reasonable
market value of the leased premises in the specific area in which the leased
premises are located on the date of termination. Notwithstanding anything
contained in this Lease to the contrary, this Lease may be terminated by Lessor
only by mailing or delivering written notice of such termination to Lessee, and
no other act or omission of Lessor shall be construed as a termination of this
Lease.
(4) In the event that Lessor exercises its remedy to lock out Lessee in
accordance with any provision of this Lease, Lessee agrees that no notice shall
be required to be posted by Lessor on any door to the leased premises (or
elsewhere) disclosing the reason for such action or any other information, and
that Lessor shall not be obligated to provide a key to the changed lock to
Lessee unless Lessee shall have first:
(I) brought current all payments due to Lessor under this Lease
(unless Lessor has permanently repossessed the leased premises or terminated
this Lease, in which event payment of all past due amounts shall not obligate
Lessor to provide a key);
(II) fully cured and remedied to Lessor's satisfaction all other
defaults of Lessee under this Lease (unless Lessee has abandoned or vacated the
leased premises, in which event Lessor shall not be obligated to provide the
new key to Lessee under any circumstances) and;
(III) provided Lessor with additional security deposit and
assurances satisfactory to Lessor that Lessee intends to and is able to meet
and comply with its future obligations under this Lease, both monetary and
nonmonetary. Lessor may, upon written request by Lessee, at Lessor's
convenience and upon Lessee's execution and delivery of such waivers and
indemnifications as Lessor may require at Lessor's option either:
(i) escort Lessee or its specifically authorized employees or
agents to the leased premises to retrieve personal belongings of Lessee's
employees and property of Lessee that is not subject to a Security Interest
provided in this Lease, or
(ii) obtain from Lessee a list of such property and arrange for
such items to be removed from the leased premises and made available to Lessee
at such place at such time as Lessor may designate, provided however, that if
Lessor elects option (ii), then Lessee shall be required to pay in cash in
advance to Lessor the estimated cost that Lessor may incur upon moving and
storage charges theretofore incurred by Lessor with respect to such property.
THE PROVISIONS OF THIS ARTICLE ARE INTENDED TO OVERRIDE AND SUPERSEDE ANY
CONFLICTING PROVISIONS OF THE TEXAS PROPERTY CODE AND ANY AMENDMENTS OR
SUCCESSOR STATUTES THERETO, AND OF ANY OTHER LAW, TO THE MAXIMUM EXTENT
PERMITTED BY THE LAW.
(5) Notwithstanding any other remedy set forth in this Lease, in the
event Lessor has made rent concessions of any type or character, or waived any
base rent, and Lessee fails to take possession of the leased premises on the
commencement or completion date or otherwise defaults at any time during the
term of this Lease, the rent concessions, including any waived base rent, shall
be canceled and the amount of the base rent or other rent concessions shall be
due and payable immediately as if no rent concessions or waiver of any base
rent had ever been granted. A rent concession or waiver of the base rent shall
not relieve Lessee of any obligation to pay any other charge due and payable
under this Lease including without limitation any sum due under section 2.02.
(6) In the event Lessor exercises any of its rights provided herein and
Lessee subsequently cures such default, Lessor shall be entitled to receive a
service charge of $500.00 from the Lessee for its time and expense, in addition
to any other amounts owed hereunder, prior to allowing the Lessee to reenter
and reoccupy the premises.
ARTICLE 12.00 RELOCATION
12.01 Relocation Option. In the event Lessor determines to utilize the
leased premises for other purposes during the term of this Lease, Lessee agrees
to relocate to other space in the building and/or project designated by Lessor,
provided such other space is of equal or larger size than the leased premises.
12.02 Expenses. Lessor shall pay all out-of-pocket expenses of any such
relocation, including the expenses of moving and reconstruction of all Lessee
furnished and Lessor furnished improvements. In the event of such relocation,
this Lease shall continue in full force and effect without any change in the
terms or conditions of this Lease, but with the new location substituted for
the old location set forth in section 1.02 of this Lease.
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ARTICLE 13.00 DEFINITIONS
13.01 Abandon. "Abandon" means the vacating of all or a substantial
portion of the leased premises by Lessee, whether or not Lessee is in default
of the rental payments due under this Lease.
13.02 Act of God or Force Majeure. An "act of God" or "force majeure" is
defined for purposes of this Lease as strikes, lockouts, sit downs, material or
labor restrictions by any governmental authority, unusual transportation
delays, riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections and any other cause not reasonably
within the control of Lessor and which by the exercise of due diligence Lessor
is unable, wholly or in part, to prevent or overcome.
13.03 Building or Project. "Building" or "project" as used in this Lease
means the building and/or project described in section 1.02, including the
leased premises and the land upon which the building or project is situated.
13.04 Commencement Date. "Commencement date" shall be the date set forth
in section 1.03. The commencement date shall constitute the commencement of the
term of this Lease for all purposes, whether or not Lessee has actually taken
possession.
13.05 Square Feet. "Square feet" or "square foot" as used in this Lease
includes the area contained within the leased premises together with a common
area percentage factor of the leased premises proportionate to the total
building area.
ARTICLE 14.00 MISCELLANEOUS
14.01 Waiver. Failure of Lessor to declare an event of default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not constitute a waiver of the default, but
Lessor shall have the right to declare the default at any time and take such
action as is lawful or authorized under this Lease. Pursuit of any one or more
of the remedies set forth in article 11.00 above shall not preclude pursuit of
any one or more of the other remedies provided elsewhere in this Lease or
provided by law, nor shall pursuit of any remedy constitute forfeiture or
waiver of any rent or damages accruing to Lessor by reason of the violation of
any of the terms, provisions or covenants of this Lease. Failure by Lessor to
enforce one or more of the remedies provided upon an event of default shall not
be deemed or construed to constitute a waiver of the default or of any other
violation or breach of any of the terms, provisions and covenants contained in
this Lease.
14.02 Act of God. Lessor shall not be required to perform any covenant or
obligation in this Lease, or be liable in damages to Lessee, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
or prevented by an act of God, force majeure or by Lessee.
14.03 Attorney's Fees. In the event Lessee defaults in the performance of
any of the terms, covenants, agreements or conditions contained in this Lease
and Lessor places in the hands of an attorney the enforcement of all or any
part of this Lease, the collection of any rent due or to become due or recovery
of the possession of the leased premises, Lessee agrees to pay Lessor's costs
of collection, including reasonable attorney's fees for the services of the
attorney, whether suit is actually filed or not.
14.04 Successors. This Lease shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective heirs, personal
representatives, successors and assigns. It is hereby covenanted and agreed
that should Lessor's interest in the leased premises cease to exist for any
reason during the term of this Lease, then notwithstanding the happening of
such event this Lease nevertheless shall remain unimpaired and in full force
and effect, and Lessee hereunder agrees to attorn to the then owner of the
leased premises.
14.05 Rent Tax. If applicable in the jurisdiction where the leased
premises are situated, Lessee shall pay and be liable for all rental, sales and
use taxes or other similar taxes, if any, levied or imposed by any city, state,
county or other governmental body having authority, such payments to be in
addition to all other payments required to be paid to Lessor by Lessee under
the terms of this Lease. Any such payment shall be paid concurrently with the
payment of the rent, additional rent, operating expenses or other charge upon
which the tax is based as set forth above.
14.06 Captions. The captions appearing in this Lease are inserted only as
a matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
14.07 Notice. All rent and other payments required to be made by Lessee
shall be payable to Lessor at the address set forth in section 1.05. All
payments required to be made by Lessor to Lessee shall be payable to Lessee at
the address set forth in section 1.05 or at any other address within the United
States as Lessee may specify from time to time by written notice. For the
purposes hereof, any notice or document required or permitted to be delivered
by the terms of this Lease (other than delivery of rental payments) shall be
deemed to be delivered upon the earlier of actual receipt or (whether or not
actually received) when deposited in the United States Mail, postage prepaid,
certified mail, return receipt requested, addressed to the parties at the
respective addresses set forth in section 1.05. Rental payments shall be deemed
received upon actual receipt. In no event shall notice by facsimile
transmission be proper notice under the terms of this Lease.
14.08 Submission of Lease. Submission of this Lease to Lessee for
signature does not constitute a reservation of space or an option to lease.
This Lease is not effective until execution by and delivery to both Lessor and
Lessee.
14.09 Corporate Authority. If Lessee executes this Lease as a
corporation, each of the persons executing this Lease on behalf of Lessee does
hereby personally represent and warrant that Lessee is a duly authorized and
existing corporation, that Lessee is qualified to do business in the state in
which the leased premises are located, that the corporation has full right and
authority to enter into this Lease, and that each person signing on behalf of
the corporation is authorized to do so. In the event any representation or
warranty is false, all persons who execute this Lease shall be liable,
individually, as Lessee. Lessee shall additionally deliver 1) a corporate
resolution authorizing execution of this Lease and confirming the authority of
those persons executing the Lease, 2) certified Articles of Incorporation and
3) a certificate of existence and good standing from Lessee's state of
incorporation and a certificate evidencing Lessee's authority to do business in
the State of Texas.
14.10 Partnership Authority. If Lessee executes this Lease as a general
or limited partnership, each person executing this Lease on behalf of Lessee
does hereby personally represent and warrant that Lessee is a duly authorized
and existing partnership, that, if applicable, Lessee is qualified to do
business in the state where the leased premises are located, that the
partnership has full right and authority to enter into this Lease, and that
each person signing on behalf of the partnership is authorized to do so. In the
event any representation or warranty is false, all persons who execute this
Lease shall be liable, individually, as Lessee. Lessee, shall additionally
deliver a copy of its partnership agreement, and if a limited partnership, a
copy of its certificate of limited partnership. The party executing the Lease
on behalf of Lessee, if a corporate managing general partner or general
partner, shall additionally deliver 1) a corporate resolution authorizing
execution of the Lease and confirming the authority of those executing this
Lease, 2) certified Articles of Incorporation, 3) a certificate of existence
and good standing from the State of Texas or if such party is not incorporated
in Texas, a certificate of existence and good standing from such party's state
of incorporation and a certificate evidencing such party's authority to do
business in the State of Texas.
14.11 Severability. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
14.12 Lessor's Liability. If Lessor shall be in default under this Lease
and, if as a consequence of such default, Lessee shall recover a money judgment
against Lessor, such judgment shall be satisfied only out of the right, title
and interest of Lessor in the building as the same may then be encumbered and
neither Lessor nor any person or entity comprising Lessor shall be liable for
any deficiency. In no event shall Lessee have the right to levy execution
against any property of Lessor nor any person or entity comprising Lessor other
than its interest in the building as herein expressly provided.
14.13 Indemnity. Lessor agrees to indemnify and hold harmless Lessee from
and against any liability or claim, whether meritorious or not, arising with
respect to any broker whose claim arises by, through or on behalf of Lessor.
Lessee agrees to indemnify and hold harmless Lessor from and against any
liability or claim, whether meritorious or not, arising with respect to any
broker whose claim arises by, through or on behalf of Lessee.
14.14 Notice to Mortgagees. Provided that Lessee has received prior
written notice of the name and address of such lender, Lessee shall serve
written notice of any claimed default or breach by Lessor under this Lease upon
any lender which is a beneficiary under any deed of trust or mortgage against
the leased premises, and no notice to Lessor shall be effective against Lessor
unless such notice is served upon said lender; notwithstanding anything to the
contrary contained herein, Lessee shall allow such lender the same period
following lender's receipt of such notice to cure such default or breach as is
afforded Lessor.
14.15 No Recordation. Lessee shall not record this Lease without the
prior written consent of Lessor.
14.16 Counterparts. This Lease may be executed in two or more
counterparts, and it shall not be necessary that any one of the counterparts be
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<PAGE>
executed by all of the parties hereto. Each fully or partially executed
counterpart shall be deemed an original, but all such counterparts taken
together shall constitute but one and the same instrument.
14.17 Governing Law. THE LEASE SHALL BE CONSTRUED UNDER AND IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA AS APPLICABLE TO TRANSACTIONS WITHIN THE STATE OF TEXAS.
14.18 Broker. Lessee represents and warrants that Lessee has dealt with,
and only with Lessee's Broker named below as broker in connection with this
Lease and that, insofar as Lessee knows, no other broker negotiated this Lease
or is entitled to any commission in connection herewith. Lessee shall indemnify
and hold Lessor harmless from and against all claims (and costs of defending
against and investigating such claims) of any other broker or similar parties
claiming under Lessee in connection with this Lease.
Lessee's Broker: Cawley Internatinal
---------------------------------
5420 LBJ Freeway, Suite 740
---------------------------------
Dallas, TX 75240
---------------------------------
14.19 Publication. Lessee hereby agrees that Lessor shall have the right,
but not the obligation, at no cost to Lessee, to publicize and/or advertise the
execution of this Lease and the related transaction.
WAIVER OF CONSUMER RIGHTS
14.20 DTPA Waiver. LESSEE WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ., TEXAS BUSINESS &
COMMERCE CODE (THE "DTPA"), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTION. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN SELECTION, LESSEE
VOLUNTARILY CONSENTS TO THIS WAIVER.
LESSEE REPRESENTS AND WARRANTS TO LESSOR THAT (I) THIS DTPA WAIVER IS IN
WRITING; (ii) THIS DTPA WAIVER IS SIGNED BY THE LESSEE; (iii) THE LESSEE IS NOT
IN A SIGNIFICANT DISPARATE BARGAINING POSITION WITH LESSOR WITH RESPECT TO THIS
TRANSACTION; (iv) THE LESSEE IS REPRESENTED BY LEGAL COUNSEL IN THE TRANSACTION
WHICH IS THE SUBJECT OF THIS LEASE; (v) LESSEE'S LEGAL COUNSEL WAS NOT DIRECTLY
OR INDIRECTLY IDENTIFIED, SUGGESTED OR SELECTED BY LESSOR OR ANY AGENT OF
LESSOR; AND (vi) THE TRANSACTION WHICH IS THE SUBJECT OF THIS LEASE DOES NOT
INVOLVE THE LESSEE'S RESIDENCE.
ARTICLE 15.00 AMENDMENT AND LIMITATION OF WARRANTIES
15.01 Entire Agreement. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE
OR TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
15.02 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
15.03 Limitation of Warranties. LESSOR AND LESSEE EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS
LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET
FORTH IN THIS LEASE.
ARTICLE 16.00 OTHER PROVISIONS
16.01 Rules and Regulations
6.02 Base Rent Schedule: Months 1 & 2 Base Rent Abated
Months 3 - 14 $5,550.00 per month
Months 15 - 26 $5,700.00 per month
Months 27 - 38 $5,850.00 per month
Months 39 - 49 $6,000.00 per month
Months 50 - 62 $6,150.00 per month
16.03 Lessor Improvements
16.04 Cancellation Option
16.05 Alterations, Additions or Improvements to Warehouse
16.06 Renewal Option
16.07 Reciprocal Hold Harmless
16.08 Lessee Assignment
ARTICLE 17.00 SIGNATURES
SIGNED at Hialeah, FL this 29th day of April, 1997.
------------------ -------- ----------
LESSOR LESSEE
EGP Houston Partners, Ltd. Techdyne Incorporated
- ------------------------------------ ------------------------------------
/s/ Stewart R. Speed /s/ Barry Pardon
- ------------------------------------ ------------------------------------
By: Stewart R. Speed By: Barry Pardon
- ------------------------------------ ------------------------------------
Vice President President
- ------------------------------------ ------------------------------------
(Type Name and Title) (Type Name and Title)
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<PAGE>
RULES AND REGULATIONS
1. Lessor agrees to furnish Lessee two keys without charge. Additional keys
will be furnished at a nominal charge. Lessee shall not change locks or
install additional locks on doors without prior written consent of
Lessor. Lessee shall not make or cause to be made duplicates of keys
procured from Lessor without prior approval of Lessor. All keys to leased
premises shall be surrendered to Lessor upon termination of this Lease.
2. Lessee will refer all contractors, contractor's representatives and
installation technicians rendering any service on or to the leased
premises for Lessee to Lessor for Lessor's approval before performance of
any contractual service. Lessee's contractors and installation
technicians shall comply with Lessor's rules and regulations pertaining
to construction and installation. This provision shall apply to all work
performed on or about the leased premises or project, including
installation of telephones, telegraph equipment, electrical devices and
attachments and installations of any nature affecting floors, walls,
woodwork, trim, windows, ceilings and equipment or any other physical
portion of the leased premises or project.
3. Lessee shall not at any time occupy any part of the leased premises or
project as sleeping or lodging quarters.
4. Lessee shall not place, install or operate on the leased premises or in
any part of the building any engine, stove or machinery, or conduct
mechanical operations or cook thereon or therein, or place or use in or
about the leased premises or project any explosives, gasoline, kerosene,
oil acids, caustics, or any flammable, explosive or hazardous material
without written consent of Lessor.
5. Lessor will not be responsible for lost or stolen personal property,
equipment, money or jewelry from the leased premises or the project
regardless of whether such loss occurs when the area is locked against
entry or not.
6. No dogs, cats, fowl, or other animals shall be brought into or kept in or
about the leased premises or project.
7. Employees of Lessor shall not receive or carry messages for or to any
Lessee or other person or contract with or render free or paid services
to any Lessee or to any of Lessee's agents, employees or invitees.
8. None of the parking, plaza, recreation or lawn areas, entries, passages,
doors, elevators, hallways or stairways shall be blocked or obstructed or
any rubbish, litter, trash, or material of any nature placed, emptied or
thrown into these areas or such area used by Lessee's agents, employees
or invitees at any time for purposes inconsistent with their designation
by Lessor.
9. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed, and any damage
resulting to them from misuse or by the defacing or injury of any part of
the building shall be borne by the person who shall occasion it. No
person shall waste water by interfering with the faucets or otherwise.
10. No person shall disturb occupants of the building by the use of any
radios, record players, tape recorders, musical instruments, the making
of unseemly noises or any unreasonable use.
11. Nothing shall be thrown out of the windows of the building or down the
stairways or other passages.
12. Lessee and its employees, agents and invitees shall park their vehicles
only in those parking areas designated by Lessor. Lessee shall furnish
Lessor with state automobile license numbers of Lessee's vehicles and its
employees' vehicles within five days after taking possession of the
leased premises and shall notify Lessor of any changes within five days
after such change occurs. Lessee shall not leave any vehicle in a state
of disrepair (including without limitation, flat tires, out of date
inspection stickers or license plates) on the leased premises or project.
If Lessee or its employees, agents or invitees park their vehicles in
areas other than the designated parking areas or leave any vehicle in a
state of disrepair, Lessor, after giving written notice to Lessee of such
violation, shall have the right to remove such vehicles at Lessee's
expense.
13. Parking in a parking garage or area shall be in compliance with all
parking rules and regulations including any sticker or other
identification system established by Lessor. Failure to observe the rules
and regulations shall terminate Lessee's right to use the parking garage
or area and subject the vehicle in violation of the parking rules and
regulations to removal and impoundment. No termination of parking
privileges or removal of impoundment of a vehicle shall create any
liability on Lessor or be deemed to interfere with Lessee's right to
possession of its leased premises. Vehicles must be parked entirely
within the stall lines and all directional signs, arrows and posted speed
limits must be observed. Parking is prohibited in areas not striped for
parking, in aisles, where "No Parking" signs are posted, on ramps, in
cross hatched areas, and in other areas as may be designated by Lessor.
Parking stickers or other forms of identification supplied by Lessor
shall remain the property of Lessor and not the property of Lessee and
are not transferable. Every person is required to park and lock his
vehicle. All responsibility for damage to vehicles or persons is assumed
by the owner of the vehicle or its driver.
14. Movement in or out of the building of furniture or office supplies and
equipment, or dispatch or receipt by Lessee of any merchandise or
materials which requires use of elevators or stairways, or movement
through the building entrances or lobby, shall be restricted to hours
designated by Lessor. All such movement shall be under supervision of
Lessor and carried out in the manner agreed between Lessee and Lessor by
prearrangement before performance. Such prearrangement will include
determination by Lessor of time, method, and routing of movement and
limitations imposed by safety or other concerns which may prohibit any
article, equipment or any other item from being brought into the
building. Lessee assumes, and shall indemnify Lessor against, all risks
and claims of damage to persons and properties arising in connection with
any said movement.
15. Lessor shall not be liable for any damages from the stoppage of elevators
for necessary or desirable repairs or improvements or delays of any sort
or duration in connection with the elevator service.
16. Lessee shall not lay floor covering within the leased premises without
written approval of the Lessor. The use of cement or other similar
adhesive materials not easily removed with water is expressly prohibited.
17. Lessee agrees to cooperate and assist Lessor in the prevention of
canvassing, soliciting and peddling within the building or project.
18. Lessor reserves the right to exclude from the building or project,
between the hours of 6:00 p.m. and 7:00 a.m. on weekdays and at all hours
on Saturday, Sunday and legal holidays, all persons who are not known to
the building or project security personnel and who do not present a pass
to the building signed by the Lessee. Each Lessee shall be responsible
for all persons for whom he supplies a pass.
19. It is Lessor's desire to maintain in the building or project the highest
standard of dignity and good taste consistent with the comfort and
convenience for Lessees. Any action or condition not meeting this high
standard should be reported directly to Lessor. Your cooperation will be
mutually beneficial and sincerely appreciated. Lessor reserves the right
to make such other and further reasonable rules and regulations as in its
judgment may from time to time be necessary, for the safety, care and
cleanliness of the leased premises and for the preservation of good order
therein.
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16.03 Lessor Improvements. The following is hereby added to the end of
Section 6.01
Lessor agree to make leasehold improvements to the leased premises as per the
attached drawing, Exhibit "A". The cost of such improvements shall not exceed
$45,000. In the event cost of said improvements do exceed $45,000 or additional
work is requested by Lessee the excess cost shall be amortized over the term of
the lease at an annual interest rate of 10.0% and shall be paid monthly. The
total cost that Lessor will amortize shall not exceed $55,000.00.
16.04 Cancellation Option
Lessor hereby grants to Lessee the option to cancel this Lease during the
thirty-sixth (36th) month, following the commencement of this Lease provided
Lessee (i) has made a written request for additional lease space (in Northwest
Point Business Park) and the Lessor cannot meet such requirement (additional
space requirements must contain at least 4,000 square feet), (ii) gives Lessor
at least one hundred eighty (180) prior written notice of the exercise of this
option, and (iii) simultaneously with the delivery of the notice pays to Lessor
$55,742.00 as consideration for the cancellation of this Lease.
16.05 Alterations, Additions or Improvements to Warehouse
Any alterations, physical additions or improvements to the warehouse area,
including but not limited to the drop ceiling depicted by footnote 7 on the
attached drawing, requested or made by Lessee shall be surrendered to Lessor
upon the termination of this Lease without credit to Lessee; provided, however,
Lessor, at its option, may require Lessee to remove any physical additions
and/or repair any alterations in order to restore the warehouse to the condition
existing at the time Lessee executed this Lease Agreement, all costs of removal
and/or alterations to be borne by Lessee.
16.06 Renewal Option
If, at the end of the primary term of this lease, Lessee is not in default in
any of the terms, conditions or covenants of the Lease, Lessee, but not any
assignee or subtenant of Lessee, is hereby granted an option to renew this Lease
for an additional term of sixty (60) months upon the same terms and conditions
contained in this Lease with the following exceptions:
A: The renewal option will contain no further renewal options unless expressly
granted by Lessor in writing; and
B: The rental for the renewed term shall be based upon the then prevailing
rental rates for properties of equivalent quality, size, utility and location,
with the length of the lease term and credit standing of the Lessee to be taken
into account.
If Lessee desires to renew this Lease, Lessee will notify Lessor of its
intention to renew no later than four months prior to the expiration date of
this Lease; Lessor shall, within the next fifteen days notify Lessee in writing
of the proposed renewal rate and the Lessee shall, within the next fifteen days
following receipt of the proposed rate, notify the Lessor in writing of its
acceptance or rejection of the proposed rental rate. Rejection of the proposed
rental rate terminates any renewal option pursuant to this paragraph.
16.07 Hold Harmless.
Lessor shall not be liable to Lessee's employees, agents, invitees, licensees or
visitors, or to any other person, for an injury to person or damage to property
on or about the leased premises caused by any act or omission of Lessee, it
agents, servants or employees, any Tenant in the building of which the leased
premise are a part, or of any other person entering upon the leased premises
under express or implied invitation by Lessee, or caused by the improvements
located on the leased premises becoming out of repair, the failure or cessation
of any service provided by Lessor (including security service and devices), or
caused by leakage of gas, oil, water or steam or by electricity emanating form
the leased premises.
Lessee shall not be liable to Lessor's employees, agents, invitees, licensees or
visitors, or to any other person, for an injury to person or damage to property
on or about the leased premises caused by any act or omission of Lessor, its
agents, servants or employees, any Tenant in the building of which the leased
premises are a part, or of any other person entering upon the leased premises
under express or implied invitation by Lessor, or caused by the improvements
located on the leased premises becoming out of repair, the failure or cessation
of any service provided by Lessee (including security service and devices), or
caused by leakage of gas, oil, water or steam or by electricity emanating from
the leased premises.
<PAGE>
16.08 Lessee Assignment.
Lessee shall not assign or in any manner transfer this Lease or any estate or
interest therein, or sublet the leased premises or any part thereof, or grant
any license, concession, or other right of occupancy of any portion of the
leased premises without the prior written consent Lessor. Lessor shall not
unreasonably withhold or delay granting its prior written consent to an
assignment of this Lease or to a sublease proposed by Lessee; provided, however,
it is agreed that withholding of said consent by Lessor to a proposed assignment
or sublease where the proposed assignee or Sublessee has a financial net worth
greater than or equal to that of Lessee's shall be deemed unreasonable. Consent
by Lessor to one or more assignments or sublettings shall not operate as a
waiver of Lessor's rights as to any subsequent assignments and sublettings.
Notwithstanding anything to the contrary contained herein, provided that any
original guarantee or comparable guarantee is still in place or has been waived
or released by Lessor, Lessee may, without any further consent of Lessor, at any
time assign or otherwise tranfer this Lease or any portion thereof to any
parent, subsidiary, or affiliate corporation or entity or to any corporation
resulting from the consolidation or merger of Lessee into or with any other
business organization, or to any person, firm, or corporation acquiring a
majority of Lessee's issued and outstanding capital stock or a substantial part
of the entirety of Lessee's physical assets (not just those located in the
leased premises). As used herein, the expression "affiliate corporation or
entity" means a person or business entity, corporate or otherwise, that directly
or indirectly through one or more intermediaries controls or is controlled by,
or is under common control with, Lessee. The word "control" means the right and
power, directly or indirect, to direct or cause the direction of the management
and policies of a person or business entity, corporation, or otherwise, through
ownership of voting securities, by contract or otherwise.
16.09 Base Monthly Rental Abatement.
Not withstanding the foregoing, it is expressly understood and agreed between
the parties that Lessor shall waive the payment of the first two (2) months of
base rent following the commencement date and Lessee shall occupy the leased
premises during this two (2) month period at no charge for base rent, however,
Lessee shall pay operating expenses and common area maintenance charges during
the two (2) month period.
<PAGE>
[DIAGRAM OF FLOOR PLAN]
