EXHIBIT 10.1
SECOND AMENDMENT TO LEASE
AGREEMENT
THIS SECOND AMENDMENT TO LEASE
AGREEMENT (this “ Second Amendment ”) is made
and entered into by and between US INDUSTRIAL REIT II, a Texas real
estate investment trust (“ Landlord ”) and
ELECTRONIC ARTS INC., a Delaware corporation (“ Tenant
”).
W I T N E S S E T
H:
WHEREAS, Louisville Realty
Corporation, a Delaware corporation (“ Original
Landlord ”) and Tenant entered into that certain Lease
Agreement dated April 1, 1999 (the “ Original
Lease ”), whereby Original Landlord leased to Tenant
approximately 250,000 rentable square feet (the “
Premises ”) on the east side of the building located
at 5000 Commerce Crossings Drive, Louisville, Kentucky (the “
Building ”), as more particularly described in the
Original Lease;
WHEREAS, Original Landlord and
Tenant entered into that certain First Amendment of Lease dated
February 23, 2004 (the “ First Amendment
”), wherein the Term of the Original Lease was extended
through April 30, 2010 (the Original Lease, as amended by the
First Amendment, shall be referred to herein as the “
Lease ”);
WHEREAS, Landlord is successor in
interest to that of Original Landlord; and
WHEREAS, Landlord and Tenant desire
to further amend the Lease to provide for a further extension of
the Term.
NOW, THEREFORE, in consideration of
Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows (capitalized
terms used herein having the meaning attributed to them in the
Lease unless specifically otherwise provided):
1. Term . The Term is hereby
extended to expire on April 30, 2015 (the “ Extended
Term ”).
2. Renewal Options .
Paragraph 4 of the Original Lease is hereby deleted in its
entirety. The first clause of Paragraph 5 of the First Amendment is
hereby deleted in its entirety and replaced by the
following:
“Tenant shall have two
(2) consecutive options (each, a “ Renewal Option
”) to renew the Term with respect to all (but not less than
all) of the Premises demised under or pursuant to the Lease for
additional terms (each, a “ Renewal Term ”) of
five (5) years each, commencing on the day immediately
following the expiration date of the Term or Renewal Term then in
effect, under the following terms and conditions and subject to
there being no material adverse change in Tenant’s financial
condition:”
Similarly, Paragraph 5(c)(i) of the First
Amendment is hereby deleted in its entirety and replaced by the
following:
“The Base Rent for the first
and second Renewal Terms shall be equal to the then prevailing
market rent (“Prevailing Market Rent”) for similar
institutional quality bulk warehouse space with a minimum
twenty-eight foot (28’) clear height located within a
radius of ten (10) miles of the Premises (the “Relevant
Market Rent”). In no event shall the rental rate for any
Renewal Term be less than the adjusted rental rate payable under
this Lease on the expiration date of the Term or Renewal Term then
in effect.”
3. Annual Base Rent .
Notwithstanding anything in the Lease to the contrary, Tenant
hereby agrees to pay annual Base Rent during the Extended Term with
respect to the Premises according to the following schedule and in
accordance with the Lease:
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Periods During the
Extended Term
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Annual Base Rent Rate
Per
Square Foot of Net Rentable
Area
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Annual Base
Rent
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Monthly
Payment
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04/01/09 - 05/31/09
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$0.00
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$
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0.00
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$
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0.00
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06/01/09 - 12/31/09
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$2.20
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$
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550,000.00
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$
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45,833.33
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01/01/10 - 01/31/10
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$0.00
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$
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0.00
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$
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0.00
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02/01/10 - 04/30/10
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$2.20
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$
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550,000.00
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$
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45,833.33
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05/01/10 - 04/30/11
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$2.60
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$
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650,000.00
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$
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54,166.67
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05/01/11 - 04/30/12
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$3.20
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$
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800,000.00
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$
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66,666.67
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05/01/12 - 04/30/13
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$3.30
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$
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825,000.00
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$
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68,750.00
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05/01/13 - 04/30/14
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$3.40
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$
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850,000.00
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$
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70,833.33
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05/01/14 - 04/30/15
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$3.50
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$
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875,000.00
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$
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72,916.67
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Notwithstanding the foregoing,
Landlord acknowledges receipt of Base Rent for the months of April,
2009, May, 2009, and June, 2009, paid pursuant to the terms
and provisions of Paragraph 3 of the First Amendment, in the
aggregate amount of One Hundred Seventy-One Thousand Eight Hundred
Seventy-Five and 01/100 Dollars ($171,875.01). Accordingly, such
advance payment of Base Rent shall be credited against
Tenant’s obligation to pay Base Rent, as set forth above, for
the months of June, 2009, July, 2009, and August, 2009, and
the remainder of such advance payment of Base Rent ($34,375.02)
shall be credited as a partial payment against Tenant’s
obligation to pay Base Rent, as set forth above, for the month of
September, 2009.
4. Additional Rent . During
the Extended Term, Tenant shall continue to pay, as and when due,
as Additional Rent, Tenant’s pro rata share of the Operating
Costs of the Building and Property. In addition, during the
Extended Term, Tenant shall continue to pay, as Additional Rent,
all other amounts payable by Tenant pursuant to the terms and
provisions of the Lease.
5. Controllable Costs .
During the Extended Term, Controllable Costs shall continue to be
capped pursuant to Paragraph 11 of the Original Lease (as amended
by Paragraph 8(a) of the First Amendment); provided, however,
Controllable Costs used to calculate the Additional Rent payable by
Tenant under said Paragraph 11 of the Original Lease (as amended by
Paragraph 8(a) of the First Amendment) shall not be increased by
more than three percent (3%) cumulative per calendar year on a
compounded basis. Tenant, at its expense has the right
to
audit expenses annually during the Extended Term
pursuant to the terms and provisions of Paragraph 11 of the
Original Lease.
6. Condition of the Leased
Premises . By its execution of this Second Amendment, Tenant
acknowledges and agrees that all leasehold improvements and tenant
finish in the Premises are in good and satisfactory condition,
acceptable to Tenant, and Tenant acknowledges that it accepts the
Premises in its present condition, i.e., “AS IS” and
“WITH ALL FAULTS”. Tenant acknowledges that no
representations as to the repair of the Premises or the Building,
nor promises to alter, remodel or improve the Premises or the
Building have been made by Landlord. Notwithstanding the foregoing,
Landlord shall construct and install permanent leasehold
improvements and tenant finish within the Premises in accordance
with, and subject to the limitations and conditions set forth in
Exhibit “A” attached hereto. Landlord and Tenant
each agree that this document constitutes the entire agreement of
the parties with respect to the condition of the Premises and there
were no verbal representations, warranties or understandings
pertaining to this Second Amendment.
7. Termination Option .
Subject to and upon the terms, provisions and conditions set forth
in this Paragraph, Tenant shall have the option (the “
Termination Option ”) to terminate the Lease with
respect to all of the Premises effective as of October 31,
2012 (the “ Early Termination Date ”). In order
to exercise the Termination Option, Tenant must (i) give
Landlord written notice of its exercise of the Termination Option
not later than January 31, 2012, and (ii) concurrently
with the delivery of such notice, pay the Termination Fee (as
hereinafter defined) to Landlord. If Tenant fails to give notice of
exercise of the Termination Option by such deadline, such
Termination Option shall be deemed waived and of no further force
and effect. If Tenant gives notice of exercise of the Termination
Option by such deadline, but fails to pay the Termination Fee to
Landlord, Landlord may at its option either (A) deem the
Termination Option waived and of no further force and effect or
(B) enforce the termination of the Lease, effective as of such
Early Termination Date, and Tenant’s obligation to pay the
Termination Fee. The “ Termination Fee ” shall
be an amount equal to Four Hundred Twenty-Seven Thousand Five
Hundred and No/100 Dollars ($427,500.00). The Termination Option
may be exercised by Tenant only if, at the time of such exercise
and on the Termination Date, no Event of Default exists (unless
Landlord, in its sole discretion, elects to waive such condition).
Tenant shall have no right to assign the Termination Option nor
shall any subtenant have the right to exercise the Termination
Option.
8. Expansion Option . In the
event any or all of the remaining rentable space in the Building
(for purposes of this Paragraph 8, the “ Expansion
Space ”) becomes available for lease, within sixty
(60) days thereafter, Landlord shall give Tenant written
notice thereof (the “ Availability Notice ”),
which notice shall include a description of the Expansion Space and
the date such Expansion Space will become available, and subject to
the renewal rights, expansion rights, rights of first refusal and
rights of first offer of other tenants in the Building heretofore
granted by Landlord or which are included in any lease executed
hereafter to which Tenant fails to exercise its rights under this
Paragraph 8, Tenant shall have ten (10) days from the receipt
of the Availability Notice to either (i) elect to lease said
space as of the time of availability of such Expansion Space for
occupancy, or (ii) notify Landlord that it does not desire to
lease said Expansion Space. In the event Tenant declines or fails
to respond within said ten (10) day period, Tenant shall be
deemed to have elected not to lease such Expansion Space,
Section 9 of
this Second Amendment shall be deemed of no
further force or effect with respect to such Expansion Space, and
Landlord shall have the right to lease such Expansion Space in
Landlord’s sole discretion. If Tenant elects to lease the
Expansion Space, then effective as of the date of availability of
the Expansion Space, as set forth in the Availability Notice
(subject to any holding over by a prior tenant of such Expansion
Space) (the “ Expansion Space Delivery Date ”),
such Expansion Space shall become a part of the Premises (and
Tenant and its agents may access such space and otherwise move into
such space), the annual Base Rent per square foot of rentable area
for such Expansion Space shall be equal to the then applicable Base
Rent with respect to the remainder of the Premises (and all
subsequent increases in Base Rent) and such Expansion Space shall
be subject to all of the terms, provisions and conditions of the
Lease, except for any terms, covenants and conditions that are
expressly or by their nature inapplicable to such Expansion Space
and except that (a) Base Rent and Tenant’s Additional
Rent with respect to such Expansion Space (or a lesser portion
thereof) shall commence on the Expansion Space Delivery Date,
(b) such Expansion Space and any and all leasehold
improvements therein will be provided in its current “AS IS,
WHERE IS” condition; provided however, Tenant will be
provided with a leasehold improvement allowance equal to One and
No/100 Dollars ($1.00) multiplied by the rentable square footage of
such Expansion Space, multiplied by the number of months remaining
in the Extended Term as of the date of Landlord’s delivery of
the Expansion Space to Tenant and divided by seventy-three (73),
which is the total number of months in the Extended Term and
(c) the Term of the Lease insofar as it relates to such
Expansion Space shall be coterminous with the Term (as same may be
extended pursuant to the terms and provisions of the Lease) with
respect to the Premises. The Lease shall be deemed to have been
automatically amended in accordance with this Paragraph 8 as of
such Expansion Space Delivery Date, and Tenant and Landlord shall
thereafter promptly execute and deliver an appropriate amendment of
the Lease to evidence the foregoing. The right of Tenant to lease
the Expansion Space may be exercised by Tenant only if at the time
of such exercise, no Event of Default exists (unless Landlord, in
its sole discretion, elects to waive such condition). No subtenant
of the Premises shall have the right to exercise the rights of
Tenant under this Paragraph 8. Notwithstanding anything set forth
in this Paragraph 8 to the contrary, Tenant’s rights to lease
the Expansion Space pursuant to this Paragraph 8 shall terminate on
the day that is two (2) years from the Effective Date of this
Second Amendment.
9. Right of First Refusal .
(a) Paragraph 7 of the First Amendment is hereby deleted in
its entirety. Subject to the terms and provisions of Paragraph 8
above, from and after the day that is two (2) years from the
Effective Date of this Second Amendment, and subject to the renewal
rights, expansion rights, rights of first refusal and rights of
first offer of other tenants in the Building heretofore granted by
Landlord or which are included in any lease executed hereafter to
which Tenant fails to exercise its Right of Refusal under this
Paragraph 9, Tenant shall have a one time right of first refusal
(the “ Right of Refusal ”) to lease all
remaining rentable space in the Building (for purposes of this
Paragraph 9, the “ Refusal Space ”). The
“one-time” nature of the Right of Refusal shall mean
that Tenant’s Right of Refusal shall apply only the first
time each portion of the Refusal Space becomes available. For
example, in the event one-half of the Refusal Space becomes
available, Tenant’s Right of Refusal shall apply the first
time said space becomes available during the Extended Term, but no
subsequent availability of such space shall trigger the Right of
Refusal. Similarly, in the event at a later date the remaining
one-half of the Refusal Space becomes available, Tenant’s
Right of Refusal shall apply the first time said space becomes
available during the Extended Term, but no subsequent availability
of such space shall trigger the Right of Refusal.
(b) In the event Landlord desires to
accept an offer to lease all or a portion of the Refusal Space from
any third party (a “ Lease Offer ”), as
evidenced by a term sheet or letter of intent signed by the third
party prospect (subject to any confidentiality requirements of such
third party prospect), Landlord shall give Tenant written notice
thereof (the “ ROFR Availability Notice ”),
which notice shall state Landlord’s determination of the
Prevailing Market Rent rate for such Refusal Space described in the
Lease Offer and Tenant shall have five (5) business days from
the date of receipt of the ROFR Availability Notice to either
(i) elect to lease said space at the Prevailing Market Rent
rate stated in the ROFR Availability Notice, by delivering written
notice thereof (the “ Election Notice ”) to
Landlord within such five (5) business day period, or
(ii) notify Landlord that it does not desire to lease said
space. In the event Tenant notifies Landlord that it does not
desire to lease said space or Tenant fails to deliver the Election
Notice to Landlord within said five (5) business day period,
Tenant shall be deemed to have elected not to lease said space, and
Tenant’s Right of Refusal with respect to the Refusal Space
(or portion thereof, as applicable) shall thereafter be of no
further force or effect.
(c) If Tenant exercises the Right of
Refusal, then effective as of the date Landlord delivers possession
of the Refusal Space to Tenant, such Refusal Space shall become a
part of the Premises, the annual Base Rent per rentable square foot
for such Refusal Space shall be equal to the Prevailing Market Rent
rate as stated in the ROFR Availability Notice and such Refusal
Space shall be subject to all of the terms, provisions and
conditions of this Lease, except for any terms, covenants and
conditions that are expressly or by their nature inapplicable to
such Refusal Space, except that (i) Base Rent and
Tenant’s pro rata share of Operating Costs with respect to
such Refusal Space s