TRIPLE NET INDUSTRIAL LEASETriple Net Lease Agreement |
|
|
|
You are currently viewing: This Triple Net Lease Agreement involves
SUNTRON CORP | GSL 16/VIF GILLINGHAM, L.P. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Triple Net Lease Agreement by:
<PAGE>
Exhibit 10.19
EXECUTION VERSION
TRIPLE NET INDUSTRIAL LEASE
THE STATE OF TEXAS
Section
Section
COUNTY OF FORT BEND Section
This
Triple Net Industrial Lease ("LEASE") is made and entered into by
and
between Landlord and Tenant hereinbelow named, to be effective as
of the
Effective Date.
WITNESSETH:
1.
DEFINITION OF BASIC TERMS. The parties hereby agree that the
following
defined terms will have the following meanings when used elsewhere
in this Lease
(the "BASIC LEASE TERMS"):
A. "LANDLORD": GSL 16/VIF GILLINGHAM, L.P., a Texas limited
partnership.
Address for Notice:
5858 Westheimer, Suite 800
Houston, Texas 77057
Attn: Mr. Welcome Wilson, Jr., and Mr. Welcome Wilson, Sr.
Telecopy No.: 713-952-7007 AND 713-952-7733
With Required Copy to:
Jonathan Peckham, Esq. AND
Timothy J.
Heinrich, Esq.
Adams and Reese LLP
Boyar & Miller, P.C.
1221 McKinney, Suite 4400
4265 San Felipe, Suite 1200
Houston, Texas 77010
Houston, TX 77027
Telecopy: (713) 652-5152
Telecopy: (713) 552-1758
B. "TENANT": SUNTRON GCO, LP, a Texas limited partnership .
Address for Notice:
1111 Gillingham Lane
Sugar Land, TX 77478
Attn: Mr. Alan Mills, Director of Facilities
Telecopy No.: 281-243-5509
Email address: Alan.Mills@suntroncorp.com
with a copy to:
Suntron Corporation
2401
West Grandview Road
Phoenix, AZ 85023
Attn: Hargopal (Paul) Singh
President and CEO
Telecopy: 602-282-5600
Email: paul.singh@suntroncorp.com
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
1
<PAGE>
C. "LAND": That approximately 32.4061-acre tract of land located
at
1111 Gillingham Lane, in Sugar Land, Fort Bend County, Texas, in
the Brown and
Belknap League Survey, Abstract No. 15, Fort Bend County, Texas,
and more
particularly described by metes and bounds on EXHIBIT "A", attached
hereto and
incorporated herein by this reference.
D. "PREMISES": The following: (i) that portion of the Facility
containing approximately 222,600 square feet of gross leasable area
of
industrial and warehouse space, as more particularly described by
diagram on
EXHIBIT "A-1" attached hereto and incorporated herein by reference,
together
with all rights, privileges, easements, and appurtenances belonging
to or in any
way pertaining thereto, plus (ii) a variable quantity of Office
Space as
provided in Paragraphs 7 and 8 of EXHIBIT "E", plus (iii) for the
period stated
therein, the Sealed Inventory Temporary Space as provided in
Paragraph 6 of
EXHIBIT "E". For purposes of this Lease, the portion of the
Premises described
on EXHIBIT "A-1" is sometimes herein separately called the
"WAREHOUSE/MANUFACTURING PORTION OF THE PREMISES." For purposes
hereof, the
gross leasable area of the Premises is stipulated and agreed to be
the square
footage assigned by this Lease, whether or not the same would be
more or less by
any particular measurement or re-measurement thereof, and includes
second floor
or mezzanine space to the extent currently existing in any area
designated as
"Premises" hereunder.
E. "EFFECTIVE DATE": The same date as the Commencement Date.
F. "TERM": Eighty-Four (84) months from the Commencement Date,
plus
the partial month, if any, during which the Commencement Date
occurs if the
Commencement Date occurs other than on the first day of a calendar
month. Such
word also includes any extension of the initial term of this Lease
as and if
properly extended by Tenant for a Renewal Term (if any Renewal
Options are
contained herein) or any term of renewal otherwise agreed upon in
writing by the
parties (including permissive month-to-month holdover under Section
13(a)
hereof).
G. "BASE RENTAL": means the following sums of fixed monthly
rental
that are due from Tenant to Landlord during the initial Term of
this Lease:
<TABLE>
<CAPTION>
Months of Term
Monthly
Base Rental
--------------
-------------------
<S>
<C>
One (1) - Twelve (12)***
$141,180.00*
Thirteen (13) - Forty-Two (42)
$122,430.00* + Office Space Base Rental**
Forty-Three (43) - Eighty-Four (84) $122,430.00* + Office Space
Base Rental**
+ 7% Escalation (see below)
</TABLE>
Base Rental also refers to any amount referred to as such in any
amendment
hereto mutually agreed to in writing by the parties for the
extension of the
Lease Term not pursuant to a Renewal Option contained herein. The
Base Rental
amounts are subject to 7% escalation per the provisions in
Paragraph 4 of
EXHIBIT "E" to this Lease.
* [During
any period that Sealed Inventory Temporary Space is part of
this
Lease per Paragraph 6 of EXHIBIT "E", add $500.00/month]
** [See
Paragraph 7 of EXHIBIT "E" for applicable amount of Office Space
Base
Rental]
*** [Plus any partial
month during which the Commencement Date occurs]
H. "SECURITY DEPOSIT": Means: $500,000 Letter of Credit as
described
in Section 11.
I. "PERMITTED USE": means (i) general office use, (ii)
manufacturing
and assembly of electronic components, and (iii) warehouse use
(including
shipping, packing and receiving) for goods, materials and equipment
manufactured
or distributed by Tenant (the Office Space, however, shall be used
for office
uses only), in each case subject to the restrictions elsewhere
herein
(including, without limitation, the restriction on High Risk
Use).
J. "CORE PROPOSED USE": means use for manufacturing and assembly
of
electronic components, including, but not limited to, circuit
boards, and
related office and warehouse use, subject to the restrictions
elsewhere herein
(including, without limitation, the restriction on High Risk Use).
Office Space,
however, shall be used for office uses only.
K. "GUARANTOR(S)": Suntron Corporation, a Delaware corporation
.
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
2
<PAGE>
L. "RENEWAL TERM(S)": One (1) term of eighty-four (84) months,
commencing immediately upon the expiration of the initial term.
M. "INITIAL ESTIMATED ADDITIONAL RENT PAYMENTS" means:
<TABLE>
<S>
<C>
CAM Costs -
$________________ per month
Taxes -
$________________ per month
Insurance -
$________________ per month
</TABLE>
N. "FACILITY" means the building(s), structures, improvements
and
fixtures currently existing on the Land as of the Effective Date or
constructed
on the Land at Landlord's option as provided herein, together with
the Land.
O. "BUILDINGS" means the tenant occupiable structures located on
the
Land (and "BUILDING" refers to one or more of the Buildings, as
indicated).
"PRIMARY BUILDING" means the building in which the Premises are
located and the
parties acknowledge it is the only Building located within the
Facility on the
Commencement Date. The Primary Building (and Facility) on the
Commencement Date
is stipulated and agreed (but not warranted or represented under
any particular
measurement) to contain 487,550 square feet of leasable area, and
the same is
not subject to re-measurement or dispute by either party during the
Term;
provided, however, that if additional Buildings (or extensions or
additions to
the Primary Building) are constructed on the Land, then their
leasable area
shall be measured to contain the number of gross square feet as are
contained in
each enclosed floor of their structure, measuring from the exterior
of the
exterior walls (disregarding any inset glass or similar insets) to
the center of
the space without deduction for structural elements, columns or any
other
obstructions of any nature. If mezzanine areas are constructed in
any Buildings
(including the Primary Building) after the Commencement Date, then
such added
mezzanine areas will be disregarded for purposes of adding to the
Facility gross
leasable area and adjusting Tenant's Proportionate Share. Upon full
completion
of such additional or added Building area (but only upon full
completion
thereof), Tenant's Proportionate Share for purposes of this Lease
shall be
adjusted by adding the gross leasable square footage thereof, as
conclusively
measured and determined (as long as in good faith) by Landlord's
independent
architect using the foregoing measurement criteria, to the above
stated square
footage of the Buildings as and if previously adjusted pursuant to
this clause.
P. "BROKERS": Though not entitled to a commission in connection
with
this Lease, The Staubach Company, Bob Berry, agent, is representing
Tenant in
these lease negotiations ("TENANT'S BROKER"), and River Oaks
Financial Group,
Inc., is representing Landlord in these lease negotiations
("LANDLORD'S
BROKER"); each such broker having agreed to accept its commissions
relating to
the sale of the Premises by Tenant to Landlord as its sole
compensation for all
services relating to such sale and this Lease.
Q. "SUPPLEMENTAL LOC" means that certain $1,500,000 Letter of
Credit
described in Section 11A.
R. "SALE CONTRACT" means that certain Earnest Money Contract dated
to
be effective as of December 27, 2005, as amended, between GSL
Industrial
Partners, L.P., as predecessor to Landlord by assignment, as Buyer,
and Tenant,
as Seller, providing for Tenant's sale of the Facility to Landlord,
along with
certain adjacent land which is not part of the Facility.
S. "GLOSSARY": means the Glossary of Certain Defined Terms set
forth
as Addendum No. 1 to this Lease. The following terms are defined in
the Glossary
(or the location for their definition is given therein):
<TABLE>
<CAPTION>
Defined in Glossary (Alphabetical): Location Given
in Glossary (Order of Appearance):
-----------------------------------
-------------------------------------------------
<S>
<C>
Applicable Holdover Multiplier
Lease
Approved Environmental Inspector
Commencement Date
Claims and Losses
rental
CAM Costs
Existing Mortgagee SNDA Agreement
Common Areas
SNDA Agreement
EDGAR
Renewal Option
Environmental Laws
Renewal Term
Events of Default
Fair
Market Value Rental Rate
Expanded Environmental Report
Sealed Inventory Temporary Space
Hazardous Materials
Unincluded Building Area
High Risk Use
Temporary Office Space
Home Page
Initial Office Space Term
Initial Required Environmental Report Extended Office Space
Term
</TABLE>
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
3
<PAGE>
<TABLE>
<S>
<C>
Mortgagee
Office Space Base Rental
Mortgage(s)
Data Center Area
Office Space
Other Acceptable Location
Permitted Materials
Relocated Temporary Office Space
Proportionate Share
Additional Office Space
Recommended Practices
Security Deposit LOC
Restrictions
Acceptable Security Deposit Letter of Credit
Special Business Requirements and
Supplemental LOC
Licenses Taxes
Uniform Mandatory Change
</TABLE>
2.
DEMISE; COMMON AREA USAGE.
(a) General Demising Clause. Landlord hereby leases the Premises
to
Tenant, and Tenant hereby leases and takes the Premises from
Landlord, on the
terms and conditions stated in this Lease.
(b) Common Areas; Parking Rights Tenant and its partners (if a
partnership), officers, employees, agents, customers, invitees,
and/or licensees
shall have the non-exclusive right to use the Common Areas for
their designed
purposes (except Other Party Parking Areas), including (i) right to
Tenant's
Proportionate Share of the number of parking spaces existing in the
Facility as
of the Commencement Date (not any added thereafter except spaces
that replace
one or more such spaces existing on the Commencement Date but later
demolished),
either on a designated or undesignated (first come first-served)
basis as
described below ("TENANT'S MINIMUM PARKING ALLOCATION"); and (ii)
the
non-exclusive right to use Common Area driveways within the
Facility (excluding
other tenants' reserved areas such as loading docks, reserved
parking, exclusive
service areas, etc.), in each case subject to such rules and
regulations ("RULES
AND REGULATIONS") with regard to such Common Area use as Landlord
may from time
to time in good faith prescribe and publish to Tenant in writing
for valid
business purposes, and subject to use and rights of ingress and
egress of
Landlord and other tenants, and their respective employees, agents,
contractors,
customers, invitees, licensees and visitors. The initial Tenant's
Minimum
Parking Allocation hereunder is based on Tenant's initial
Proportionate Share,
which in turn is based on the size of the Premises excluding the
Additional
Office Space, and Tenant's Minimum Parking Allocation automatically
adjusts at
the time that there is any adjustment of Tenant's Proportionate
Share (including
because of reduction in the Temporary Office Space as provided in
Paragraph 7 of
EXHIBIT "E"). The initial Tenant's Minimum Parking Allocation will
be provided
on an unreserved, undesignated basis; provided, however, that it is
the parties
understanding that at all times during such period that Tenant's
Minimum Parking
Allocation is undesignated, there will be sufficient parking
available to Tenant
to satisfy Tenant's Minimum Parking Allocation. Upon Landlord's
election from
time to time by written notice to Tenant, Landlord may designate
specific
parking spaces comprising Tenant's Minimum Parking Allocation in
the Facility
and require that Tenant park only in those designated areas (as
located and
relocated from time to time hereunder, the "DESIGNATED TENANT
PARKING AREAS"),
which Designated Tenant Parking Areas may, at any time Landlord
elects as long
as Landlord pays to remove and/or move any parking signage
installed by Tenant,
either be reverted to common (undesignated) parking or moved to a
different
location in the Facility. At any time that there are Designated
Tenant Parking
Areas for Tenant established by Landlord as herein provided, Tenant
shall have
the right to reserve such Designated Tenant Parking Areas for its
exclusive use
by appropriate signage and, provided such signage and any other
measures taken
by Tenant (such as manning after hours phone numbers to take calls
regarding
towed vehicles, etc., if any) are sufficient to comply with
applicable law,
Tenant may establish a right to tow parkers in Designated Tenant
Parking Areas
who are not Tenant's partners (if a partnership), officers,
employees, agents,
customers, invitees, and/or licensees ("TENANT'S PARKERS").
Landlord shall not
be responsible for enforcing Tenant's exclusive or reserved parking
rights in
any Designated Tenant Parking Areas against any third parties, but
agrees to
notify each other tenant of the Facility that the Designated Tenant
Parking
Areas are reserved for Tenant's exclusive use when the same may be
the case from
time to time hereunder. Tenant hereby agrees to and does hereby
indemnify,
defend and hold harmless Landlord from any liabilities, claims,
actions, suits,
proceedings, judgments, costs, fees and expenses (including,
without limitation,
costs of litigation, costs of court and reasonable attorneys'
fees), arising out
of Tenant's reservation of the Designated Tenant Parking Areas as
reserved and
the enforcement of such exclusive parking by towing or otherwise,
provided that
Landlord has disclosed to each other tenant of the facility that
Tenant has such
rights to reserve parking in the Designated Tenant Parking Areas.
The remainder
of the parking areas in the Facility that are not Designated Tenant
Parking
Areas (collectively, the "OTHER PARTY PARKING AREAS") may be
operated by
Landlord as common parking area for multiple tenants of other
tenant space in
the Facility, or to grant other tenants the right to reserve
specified areas
thereof for their exclusive use, but none of such Other Party
Parking Areas
shall be used by Tenant's Parkers at any time that there are
Designated Tenant
Parking Areas established hereunder. Landlord and/or such other
tenants may
establish towing policies and signage for the enforcement of
exclusive parking
for other tenants (and their employees, visitors, etc.) in the
Other Party
Parking Areas if they so elect. Prior to any other tenant leasing
another part
of the Facility, Landlord will not enforce Tenant's obligation to
cause the
Tenant Parkers to park exclusively in Designated Tenant Parking
Areas. No
provision hereof
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
4
<PAGE>
allowing Tenant reservation of Designated Tenant Parking Areas by
Tenant or
allowing other tenants to do the same with respect to Other Party
Parking Areas
in the Facility shall ever be deemed to require that Landlord
account to Tenant
and other tenants for their respective CAM Costs solely with
respect to such
party's own designated parking areas; rather, all parking areas
will be treated
and accounted for as Common Area for CAM Cost purposes. If Tenant
causes undue
damage or wear to the Common Area parking or driveway areas by
reason of all or
some of its truck traffic being over a reasonable weight limit for
a parking
area of this nature, Tenant will be responsible for the entire cost
to repair
such damage or undue wear if Tenant's truck traffic can be
identified to have
caused the same.
(c) No Blockage of Common Areas. Tenant shall, at its own cost
and
expense, keep its employees, agents, customers, contractors,
invitees, and/or
licensees from parking on any streets running through or contiguous
to the
Facility or any other Common Areas that are not striped and
identified by
Landlord as Common Area parking spaces. Tenant hereby consents to
the removal of
any vehicle in violation of the foregoing designated parking areas
as
established by Landlord, subject to Landlord's compliance with any
signage or
other legal requirements related to towing of vehicles. Tenant
agrees that it
will not engage in, authorize or cause vehicle washing or any
significant
washing operations of any type (other than reasonable restroom or
kitchen
washing) to take place in the Premises, including the truck apron,
docks and
parking areas, or in any of the Common Areas. There will be no
overnight truck
parking in Common Areas (including Designated Tenant Parking
Areas); provided,
however, Landlord agrees that Tenant may park small trucks and
other vehicles
owned by Tenant overnight in the Designated Tenant Parking Areas as
long as not
parked in any areas not marked as parking spaces.
3.
PAYMENT OF BASE RENTAL; ADDITIONAL RENT PAYMENTS.
(a) Base Rental. The monthly installments of Base Rental
hereunder
shall be payable monthly on the first day of each calendar month
throughout the
Term, without demand, offset or deduction except as specifically
provided for in
this Lease. Monthly Base Rental for any partial month during which
the actual
Commencement Date occurs shall be pro rated on a per diem basis and
paid on the
Commencement Date.
(b) Additional Rent Payments. All payments required of Tenant
under
this Lease, whether or not designated as such, are additional
"rent" for all
purposes of this Lease and are sometimes herein collectively called
"RENT" or
"RENTAL," and all rental due hereunder that is not Base Rental is
herein
sometimes separately referred to as "ADDITIONAL RENT." Unless
otherwise
expressly so stated in the relevant provision of this Lease
requiring such
Additional Rent payment, all Additional Rent shall be paid by
Tenant to Landlord
with the payment of the next monthly Base Rental due from Tenant
following
Landlord's written invoice for such charge, but if the invoice is
not received
by the twentieth (20th) of a calendar month, then Tenant has thirty
(30) days
after Landlord's invoice in which to make payment. Except for the
automatic
monthly Additional Rent payments due without invoicing or demand
with the Base
Rental as provided in paragraph (c), immediately below, Landlord
may bill Tenant
for Additional Rent on a monthly, quarterly or other periodic basis
chosen from
time to time by Landlord, and may do so at different intervals for
different
types of payments.
(c) Certain Additional Rent Payments. Without limitation of the
foregoing, Tenant agrees to pay to Landlord, as Additional Rent,
without demand,
offset or deduction (except as specifically provided for in this
Lease) (i)
Tenant's Proportionate Share of Taxes pursuant to Section 7, (ii)
Tenant's
Proportionate Share of maintaining Landlord's insurance pursuant to
Section
9(a), and (iii) Tenant's Proportionate Share of CAM Costs pursuant
to Section
10. During each month of the term of this Lease, on the same day
that Base
Rental is due hereunder, Tenant shall pay to Landlord, in advance
as Additional
Rent, an amount equal to one-twelfth (1/12) of the estimated annual
cost of its
share of such items as shown by Landlord's most recent estimate
statement
received from Landlord. The initial monthly Additional Rent
payments in Section
1.M. of the Basic Lease Terms are based upon the estimated amounts
due for each
item for the year in question, and shall be adjusted periodically
to reflect the
projected actual cost of all such items, and reconciled when actual
figures are
known as hereinbelow provided. If the Tenant's total estimated
Additional Rent
payments actually made to Landlord hereunder for any of the above
three items
for a given year (or insurance year, as applicable) are less than
Tenant's
actual Proportionate Share of such item, Tenant shall pay the
difference to
Landlord within thirty (30) days after demand. If the total
estimated Additional
Rent payments actually made by Tenant for any of the above three
items for a
given year (or insurance year, as applicable) are more than
Tenant's actual
Proportionate Share of such item, Landlord shall refund such excess
to Tenant
within thirty (30) days after Landlord completes the accounting for
the prior
year, or retain such excess and credit it against Tenant's next
Additional Rent
payments (or reconciliation payments) due hereunder.
4.
USE OF THE PREMISES.
(a) In General. The Premises shall be occupied only by Tenant,
and
only for the Permitted Use as defined in the Basic Lease Terms. The
Permitted
Use shall expressly include, but not necessarily be limited to, the
Core
Proposed Use as
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
5
<PAGE>
defined in the Basic Lease Terms. Tenant is responsible for having
verified that
the regulations and restrictions affecting the Land permit such
Core Proposed
Use and any other desired Permitted Use by Tenant. The Permitted
Use shall be
subject to any and all other specific restrictions on use stated
elsewhere in
this Lease. All risk of obtaining, and for satisfying requirements
for, Special
Business Requirements and Licenses, and complying with all
regulations and
restrictions applicable to the Premises are Tenant's sole risk and
expense.
(b) Nuisance; Excessive Vibration. Tenant agrees that it will
not
engage in any use of the Premises, whether or not within the
definition of
Permitted Use, in a manner that results in (i) the setting up of
Excessive
Vibration (as hereinbelow defined) in the structure of the Primary
Building or
(ii) creation of a legal nuisance to or other unreasonable
interference with the
business of any other tenant in the Facility, or to the users of
Common Areas or
any adjacent or nearby property, by reason of smoke, fumes, dust,
noise or
similar matter. For purposes hereof, "EXCESSIVE VIBRATION" is the
level of
vibration that would normally be considered inappropriate or
undesirable for a
multi-tenant property in which tenants are engaged in warehouse and
light
industrial use of a typical nature. Landlord agrees to include a
clause
substantially similar to the foregoing, but in each case including
the above
definition of Excessive Vibration (such clause being herein called
the "STANDARD
NUISANCE CLAUSE"), in each lease of space in the Facility to
another tenant.
5.
COMMENCEMENT DATE. The "COMMENCEMENT DATE" shall be March __,
2006.
6.
AS-IS CONDITION ACCEPTED BY TENANT. Tenant acknowledges that (i) it
has
inspected and accepts the Premises and Facility, (ii) the buildings
and
improvements comprising or containing the Premises are suitable for
the purpose
for which the Premises are leased, (iii) the Premises and Facility
are in good
and satisfactory condition, and (iv) no representations as to the
repair of the
Premises, nor promises to alter, remodel or improve the Premises or
Facility,
have been made to Tenant by Landlord (except Landlord's work
required under
Section 15(b), which is NOT a condition to commencement of the Term
of this
Lease or payment of rental hereunder, and future ongoing repair
obligations of
Landlord under Section 15 hereof). Tenant accepts the Premises and
any rights it
receives hereunder in or to the use of any part of the Facility
"AS-IS," "WITH
ALL FAULTS" and without representation or warranty of any nature or
kind from
Landlord. The square foot area of the Premises is not guaranteed or
warranted by
Landlord.
7.
TAXES. Each tax year during the Term of this Lease, Tenant shall
pay to
Landlord, as Additional Rent in accordance with Section 3(c)
hereof, Tenant's
Proportionate Share of all Taxes for that year as defined in the
Glossary. Any
Taxes for a fractional year shall be prorated. Tenant shall pay all
property,
excise or other taxes on Tenant's inventory, furnishings, equipment
or fixtures
at the Premises prior to delinquency. If any such property of
Tenant is ever
assessed to Landlord as part of the assessment of Taxes relating to
the Facility
or Premises, Tenant shall cooperate with Landlord to promptly
separate such tax
assessments that should be made directly to Tenant on its property,
but until
such separation is effectuated Tenant will pay Landlord the amount
of taxes
assessed against such items as additional Taxes hereunder.
8.
UTILITIES.
(a) Utility Connections; Sub-metering; Service Capacities.
Landlord
agrees to provide water and sewer, electricity, and telephone
service
connections (but not telephone systems or equipment, which Tenant
shall provide
at its own sole cost) to the Premises, which shall hereafter be
maintained by
Tenant. Electricity connection will be in the capacity currently
existing to
Tenant's meter with the electricity supplier, Landlord and Tenant
acknowledging
that the Warehouse/Manufacturing Portion of the Premises is
presently separately
and directly metered for direct connection in Tenant's name and
neither Landlord
nor Tenant shall change such direct connection arrangement without
the other's
prior written consent. Water and sewer connection will be provided
through a
common service connection of Landlord with the relevant utility
supplier, and
Tenant shall be entitled to use up to its Proportionate Share of
the water and
sewer capacity allocated to the Facility as a whole, unless
Landlord adds
additional water and sewer capacity at its (or another tenant's)
sole cost after
the Commencement Date for the purpose of allocating such added
water and sewer
capacity to another tenant or tenants of the Facility, in which
event Tenant's
Proportionate Share will continue to be its Proportionate Share of
the capacity
existing as of the Commencement Date. Tenant shall pay for all
water, gas, heat,
light, power, telephone, sewer, sprinkler charges and other
utilities and
services used on or at the Premises, and the maintenance charges
for utilities,
and shall furnish all electric light bulbs and tubes for the
interior of the
Premises (and the interior of any other areas of the Primary
Building that
Tenant may have any right to use hereunder whether periodically or
temporarily),
as well as all lighting attached to the exterior of the Premises,
and as to any
commonly metered utilities such as water and sewer will pay its pro
rata share
based on usage as reasonably determined by Landlord. Landlord shall
have the
right (but not the obligation) to cause any of said utility
services to be
separately metered to Tenant or sub-metered, at Landlord's expense,
and any such
utilities so directly metered will be connected in Tenant's name
and billed
directly to Tenant by the utility supplier (and paid by Tenant
directly to the
utility supplier) or, if sub-
INITIALS OF
INITIALS
OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
6
<PAGE>
metered, such sub-meter will be used to determine Tenant's pro rata
share of
such utility cost. Until such time as Tenant is no longer the sole
occupant of
the Facility, Tenant will pay 100% of the usage charges for water
and sewer
usage for the entire Facility and no part of the water and sewer
charges will be
allocated as CAM Costs. If Landlord elects to sub-meter rather than
separately
meter certain utilities, such utility sub-meter will simply be the
basis for
Landlord's allocation of a "pro rata share" of such utility costs
to Tenant as
Additional Rent hereunder. All telephone service for Tenant shall
be connected
at Tenant's cost and in a manner such that Tenant shall be
separately and
directly billed therefor. Tenant shall pay its pro rata share, as
determined by
Landlord in its good faith judgment (or by sub-meter, if installed
by either
party), of all charges for jointly metered utilities. The
provisions of this
Section 8(a) are subject to any other provision of this Lease
requiring Tenant
to pay utility usage in other portions of the Primary Building
during certain
times when Tenant is entitled to use of portions thereof and they
are not
required to be separately metered. Subject to Landlord's reasonable
approval as
to type and reliability of the sub-meter for purposes of measuring
usage,
location of the improvement and time and method of construction,
Tenant shall be
entitled at any time, at Tenant's sole cost and expense, to install
a sub-meter
for the water and sewer usage of Tenant from which Tenant's pro
rata share of
water and sewer usage charges will be determined for purposes of
this Lease.
Tenant shall be entitled to connect its fire sprinkler system to
the Facility
water supply.
(b) Interruption of Utility Service. Landlord shall not be liable
for
any interruption or failure of any such utility service on or
serving the
Premises unless the same is caused by the gross negligence of
Landlord, or if
caused by Landlord's disruption of the utility service facilities
through
Landlord's negligence and Landlord fails to restore or replace such
facilities
within two (2) business days after receipt of notice from Tenant of
the
occurrence of the disruption.
9.
INSURANCE PREMIUMS.
(a) Landlord's Insurance. Tenant shall pay to Landlord, as
Additional
Rent in accordance with Section 3(c) hereof, its Proportionate
Share of all
insurance premiums for the insurance policies and coverages
required pursuant to
Section 14(a) hereof (the "INSURANCE PREMIUMS"). If any such
insurance of
Landlord is of a blanket nature covering multiple projects
including the
Facility, then Landlord shall prorate the cost of such blanket
policy so that
the Facility is only charged its pro rata share of such cost based
on the
rentable square footage of the Facility in relation to the
aggregate square
footage of all the properties covered by such blanket policy,
unless the policy
actually breaks down the aggregate policy premium by property, in
which event
only the actual premium payable for the Facility will be used for
purposes of
determining Landlord's Insurance Premiums for the Facility as
herein defined.
(b) Tenant's Insurance. Tenant shall pay all insurance premiums
for
the insurance policies and coverages required pursuant to Section
14(b) hereof.
If Tenant should fail to obtain or maintain such coverages at any
time during
the Term of this Lease, Landlord may, but shall not be obligated
to, obtain such
insurance policies and coverages at Tenant's expense, but providing
coverage for
Landlord only, and charge the cost thereof to Tenant as Additional
Rent under
this Lease, due from Tenant to Landlord on demand.
10.
COMMON AREA MAINTENANCE COSTS. Tenant agrees to pay to Landlord,
as
Additional Rent in accordance with Section 3(c) hereof, Tenant's
Proportionate
Share of any CAM Costs (as defined in the Glossary) incurred by
Landlord. The
initial monthly payments by Tenant for the CAM Costs in this
paragraph (as
indicated in Section 1.M.) are based upon the estimated amounts due
for each
item for the year in question, and shall be increased or decreased
periodically
to reflect the projected actual cost of all such CAM Costs as
estimated from
time to time by Landlord.
11.
SECURITY DEPOSIT. On the Effective Date, Tenant shall deposit
with
Landlord, as a Security Deposit (herein so called), an Acceptable
Security
Deposit Letter of Credit (as hereinbelow defined) in the face
amount of the
Security Deposit specified in the Basic Lease Terms (the "SECURITY
DEPOSIT
LETTER OF CREDIT"). Such Security Deposit Letter of Credit shall be
held by
Landlord for the Term of this Lease to secure Tenant's performance
of and
liabilities under this Lease. The following terms and conditions
govern the
nature, deposit, drawing from and application of the Security
Deposit Letter of
Credit:
(a) The Security Deposit Letter of Credit shall be maintained in
full
force and effect in accordance with its terms until Landlord is
obligated to
release the same back to Tenant under the provisions hereof.
(b) The Security Deposit Letter of Credit, in order to be
acceptable
to Landlord and to satisfy the requirements of the posting thereof
by Tenant
with Landlord hereunder, must be an "ACCEPTABLE SECURITY DEPOSIT
LETTER OF
CREDIT" in order to be accepted by Landlord for purposes of
satisfying Tenant's
obligations under this Section, being a letter of credit that
complies with and
conforms to the following conditions and requirements: (i) it must
be in the
face amount of $500,000.00; (ii) it must be an unconditional and
irrevocable
letter of credit; (iii) it must be issued in the name of Landlord
as
Beneficiary; (iv) it must be issued by
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
7
<PAGE>
(and at all times be drawable on) US Bank, N.A. or, at Tenant's
option, a U.S.
national bank having offices in Harris County, Texas, and having
deposits in
excess of one billion dollars; (v) it must have an initial term
commencing on a
date no earlier than ten (10) days prior to the Effective Date of
this Lease and
no later than the Effective Date, and ending no earlier than the
first
anniversary of the Effective Date; (vi) it must renew automatically
throughout
the Term of this Lease on continuous (evergreen) one year intervals
and provide
by its terms that it automatically so renews unless notice of
cancellation is
given to Landlord by the issuer by certified mail, return receipt
requested, at
least sixty (60) days prior to the stated expiry date, Tenant
hereby agreeing to
prevent any such notice of non-renewal from being given by the
issuer of the
Security Deposit Letter of Credit; (vii) it must at all times be
drawable by
Landlord at a banking office of the issuer located in Harris
County, Texas;
(viii) it must be drawable by Landlord on presentation of a sight
draft only,
and must allow partial draws by Landlord at its discretion, (ix) it
must
specifically provide that it may be transferred by Landlord to any
subsequent
owner of the Premises (including a purchaser at foreclosure) by
written notice
by the transferring Landlord/beneficiary to the issuer, at which
time the issuer
of the letter of credit must be obligated to issue a new letter of
credit on the
identical terms to the transferee (naming the transferee as
beneficiary) upon
written request by such transferee and surrender of the previously
issued letter
of credit, without any fee, charge or condition; and (x) it must
otherwise be in
form and substance acceptable to Landlord in its commercially
reasonable
discretion, provided that the terms of any previously provided
Security Deposit
Letter of Credit hereunder (in the event of a tendered replacement,
etc.) will
be deemed acceptable to Landlord and also will be deemed
commercially reasonable
requirements on the part of Landlord for purposes of any proposed
replacement
thereof. Subject to the foregoing, Tenant may from time to time (no
more often
than once each Lease Year) request and require that Landlord accept
a
replacement of the Security Deposit Letter of Credit by another
issuer that
meets the above criteria.
(c) If an Event of Default occurs, the Security Deposit Letter
of
Credit may at Landlord's option be drawn down and applied to
Tenant's unpaid,
defaulted obligations, or to pay any costs incurred by Landlord in
performing
Tenant's obligations (including, without limitation, payment of
rental
deficiencies if Landlord repossesses the Premises without
terminating the Lease
and does not elect a lump sum recovery), or to reimburse Landlord
for any
damages suffered by Landlord as a result of any Event of Default by
Tenant, and
Landlord may draft on the Security Deposit Letter of Credit in the
amount of
such rent, payment, cost or damage, but such payment of Tenant's
obligations
from the Security Deposit Letter of Credit shall not be deemed to
have cured any
Tenant Event of Default under this Lease unless and until (A) all
of the
following occur (i) Landlord has fully drawn Security Deposit
Letter of Credit
funds that cover Tenant's defaulted obligations pertaining to all
then existing
Events of Default and (if not purely Events of Default in payment
of Rent,
including late charges and interest) all damages and costs of
Landlord resulting
therefrom, (ii) Landlord makes written demand to Tenant for
replenishment of the
Security Deposit Letter of Credit to its then required minimum
amount as per
paragraph (d), below, and (iii) Tenant timely tenders the required
replenishment
under paragraph (d) hereof in the form of a replacement for or
amendment of the
Security Deposit Letter of Credit complying with the requirements
hereof in the
replenished (increased) amount ("SD/LOC REPLENISHMENT DOCUMENTS"),
or (B) both
of the following occur: (i) Tenant tenders SD/LOC Replenishment
Documents and
simultaneously provides Landlord a written notice that it is
tendering the
SD/LOC Replenishment Documents for a draw made by Landlord with the
intent to
cure all Events of Default then existing, as specified in detail in
such notice,
whether or not the same are timely or been demanded by Landlord
under paragraph
(d), and (ii) Landlord fails to reject such SD/LOC Replenishment
Documents in
written notice to Tenant within ten (10) business days after
receipt of such
Tenant notice and SD/LOC Replenishment Documents (such deemed
acceptance by
Landlord does not prevent Landlord from making further draws on the
Security
Deposit Letter of Credit if it incurred other costs not then drawn
or it later
discovers or incurs other damage, loss or cost from such Event of
Default).
Notwithstanding the foregoing, however, no such Security Deposit
Letter of
Credit draw by Landlord and subsequent replenishment by Tenant (or
any other act
by Tenant) shall be deemed to have cured any Event of Default if
Landlord has
terminated this Lease or permanently repossessed the Premises (or
exercised its
rights to permanently repossess the Premises, whether or not it yet
has achieved
physical possession thereof) prior to Tenant's tendering of SD/LOC
Replenishment
Documents and applicable notice as contemplated in clauses (A) or
(B), above.
Notwithstanding the foregoing, however, Landlord shall never be
liable to Tenant
(in damages or otherwise) for applying or drawing from any Security
Deposit or
Security Deposit Letter of Credit any damage claim of Landlord
arising from an
Event of Default by Tenant under this Lease (nor for any amount of
rent, payment
or cost reimbursement calculated by Landlord in good faith)
notwithstanding that
a court may later determine that the amount of damages (or rent,
payment or cost
reimbursement) claimed by Landlord was incorrectly determined by
Landlord.
(d) If the Security Deposit Letter of Credit is drawn against in
whole
or in part, Tenant shall restore the drawable amount of the
Security Deposit
Letter of Credit held by Landlord to its required minimum amount
(i.e.,
$500,000.00), immediately upon (but in no event later than five (5)
business
days after) written demand by Landlord; provided, however, that
Landlord shall
never be obligated to hold more than one Security Deposit Letter of
Credit to
cover the $500,000.00 Security Deposit Letter of Credit requirement
herein and
in no event shall Tenant be able to cure any Event of Default by
restoration of
the Security Deposit Letter of Credit to the appropriate amount(s)
after the
date that Landlord elects to terminate this Lease pursuant to
Section 25(a)(i)
hereof or permanently repossess the Premises pursuant to Section
25(a)(ii)
hereof. The Security Deposit Letter of Credit (or
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
8
<PAGE>
an accounting thereof) shall be returned to Tenant for cancellation
within
thirty (30) days after expiration or termination of this Lease and
surrender of
the Premises by Tenant, less lawful deductions for damages and
other sums due
under this Lease.
(e) Should any Security Deposit Letter of Credit held by
Landlord
hereunder ever come within forty-five (45) days of expiration
(without a
substitute Security Deposit Letter of Credit having been delivered
to and
accepted by Landlord prior to such time), such occurrence shall
constitute an
immediate and automatic Event of Default and Landlord shall be
entitled at any
time and from time to time thereafter to draw on such Security
Deposit Letter of
Credit then held by it hereunder, in full or in part (at Landlord's
election),
and apply the same as provided hereunder; provided, however, that
it shall not
be an Event of Default by Tenant to allow notice of non-renewal to
be given by
the issuer such that the Security Deposit Letter of Credit expires
no earlier
than thirty (30) days after the last day of the Term of this Lease
unless there
is then an Event of Default existing under this Lease, in which
event Tenant
shall not permit such notice of non-renewal to be given until such
Event of
Default is fully cured or Landlord has been fully compensated for
all damages,
loss, cost and liability arising from such Tenant Event of Default.
Under no
circumstances shall Tenant be entitled to require that Landlord
accept a cash
Security Deposit in lieu of the Security Deposit Letter of
Credit.
(f) Expiration of the Security Deposit Letter of Credit without
the
amount thereof being drawn by Landlord (or otherwise being
deposited by Tenant
with Landlord in cash), regardless of whether Landlord could have
timely drawn
down the amount of the Security Deposit Letter of Credit
thereunder, shall not
excuse Tenant from the obligation to maintain the Security Deposit
Letter of
Credit on deposit with Landlord at all times as required by this
Section 11, and
shall constitute an immediate "Event of Default" by Tenant under
this Lease
should such situation occur. All Security Deposit hereunder, in
whatever form,
shall be held by Landlord without obligation to pay or account for
interest
thereon, and no proceeds from any draw by Landlord on the Security
Deposit
Letter of Credit shall ever be required to be segregated in any way
from
Landlord's other funds.
Within thirty (30) days after expiration or earlier termination of
this Lease or
the deadline imposed by any statute of mandatory applicability to
this Lease,
whichever is sooner, Landlord will account in writing to Tenant (at
its last
known address in the records of Landlord) for any deductions from
the Security
Deposit Letter of Credit as permitted by this Lease and return the
Security
Deposit Letter of Credit to Tenant with any unused, unapplied
residue thereof
intact, if any. The provisions of this Section 11 survive any early
termination
of this Lease (including for Tenant Event of Default), and Landlord
shall be
entitled to hold, draw from and apply monies from the Security
Deposit Letter of
Credit hereunder for as long as Landlord is due monies from Tenant
hereunder, or
is continuing to incur damages, rent deficiencies or other
obligations accruing
from Tenant under or on account of this Lease or Tenant's Event(s)
of Default
hereunder. Tenant shall not ever be entitled to require that
Landlord pay rental
due under this Lease from the Security Deposit Letter of
Credit.
11A.
SUPPLEMENTAL LOC; LIMITED TENANT OFFSET RIGHTS. Tenant agrees
in
addition to all other obligations, deposits and requirements of
this Lease to
provide Landlord with and maintain throughout the Term hereof
(subject to the
reduction clauses therein) a Supplemental LOC in compliance with
EXHIBIT "G",
attached hereto and incorporated herein by this reference, and to
otherwise
fully comply with and perform the provisions set forth in EXHIBIT
"G", and the
parties agree that Tenant shall have the limited offset rights
specifically set
forth in said EXHIBIT "G".
12.
PAYMENT OF RENT; LATE PAYMENT. All sums payable by Tenant to
Landlord
pursuant to this Lease are deemed "RENTAL," whether or not
specifically
denominated as rent in any other provision of this Lease. Monthly
Base Rental
due hereunder shall be paid to Landlord at its address for payment
designated
from time to time, monthly in advance as the same shall become due,
without
demand, offset or deduction except as expressly provided in this
Lease. If
monthly Base Rental or any other sum of rent due by Tenant to
Landlord under
this Lease is received by Landlord later than five (5) business
days after such
payment is due, Tenant shall automatically and without notice or
demand be
liable to pay and shall immediately owe to Landlord a late charge
equal to five
percent (5%) of the delinquent payment, in addition to any other
applicable
charges hereunder.
13.
HOLDOVER.
(a) Permissive Holding Over. Any holding over in possession of all
or
part of the Premises by Tenant with the written consent of Landlord
(and without
such writing specifying contrary terms), after the natural
expiration of the
Term of this Lease, shall thereafter constitute this Lease a
tenancy from
month-to-month, under the terms and provisions of this Lease (other
than (i)
those describing the initial term, and (ii) any provision for Lease
renewal or
an option to purchase the Premises), at the rate agreed to by
Landlord and
Tenant in writing or, in the absence of such agreement, at a
monthly Base Rental
of 140% of the monthly Base Rental in effect for the month
preceding such
holdover (ignoring any rent abatement provisions, if any,
applicable thereto),
as then adjusted by the terms of this Lease or any amendment
hereto. Tenant
shall also pay all Additional Rent due under this Lease for such
period. If
Tenant holds over otherwise intending to be in a month to month
holdover
pursuant to this paragraph (a) but does not ensure before the
commencement of
each holdover month that the Security Deposit Letter of Credit
under Section 11
hereof extends at
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
9
<PAGE>
least thirty (30) days beyond the expiration of the then coming
holdover month,
then Tenant shall not be deemed in permissive holdover but instead
shall be in a
condition of impermissible holdover under Section 13(b) hereof.
(b) Other Holding Over. In the event of holding over in possession
of
all or part of the Premises by Tenant without the written consent
of Landlord,
after the expiration or other termination of this Lease and without
execution of
a new Lease, Tenant shall, throughout the entire holdover period,
be liable for
and pay monthly Base Rental equal to the Applicable Holdover
Multiplier times
the monthly Base Rental in effect for the month preceding such
holdover
(ignoring any rent abatement provisions, if any, applicable
thereto), as then
adjusted by the terms of this Lease or any amendment hereto, plus
all Additional
Rent which would have been applicable had the Term of this Lease
continued
through the period of such holding over by Tenant, which holdover
rents are
assessable on a pro-rated, per diem basis during the period of
impermissible
holdover. No holding over by Tenant after the expiration of the
Term of this
Lease shall be construed to extend the Term of this Lease except
with Landlord's
prior written consent as a deemed month-to-month tenancy pursuant
to Section
13(a). In the event of any unauthorized holding over by Tenant,
Tenant shall
indemnify, defend and hold harmless Landlord from and against all
claims for
damages by any other tenant or prospective tenant to whom Landlord
may have
leased all or any part of the Premises effective before or after
the expiration
of the Term of this Lease, resulting from delay by Tenant in
delivering
possession of all or any part of the Premises to Landlord. Any
holding over
without Landlord's prior written consent shall constitute Tenant
a
tenant-at-sufferance of Landlord, subject to immediate eviction,
and the same
shall be deemed an immediate Event of Default.
(c) Failure to Vacate Constitutes Holding Over. For purposes
hereof,
"holding over" by Tenant includes failure by Tenant to remove any
improvements
or alterations it is required to remove from the Premises by the
terms hereof,
or failure to remove from the Premises its trade fixtures, movable
equipment or
other personal property, whether or not actively conducting
business thereon,
and includes holding over by any subtenant, whether or not such
sublease was in
violation of this Lease and void.
14.
INSURANCE.
(a) Landlord's Insurance. Landlord shall maintain insurance
covering
the insurable portions of the Buildings in an amount not less than
eighty
percent (80%) of the estimated "replacement cost" thereof (with
replacement cost
endorsement) insuring against the perils of Fire, Lightning,
Extended Coverage,
Vandalism, and Malicious Mischief, or such greater coverage as
Landlord may
elect or its mortgage lender may require. Landlord's insurance
shall not be
required to cover any glass, exterior office front or entrances, or
related
framing, sealants and glazing), any improvements or alterations
installed by or
at the expense of Tenant (or any other occupant), or any fixtures,
equipment,
furnishings, or other contents of the Premises. As its mortgage
lender may
require or as Landlord may deem prudent or necessary, Landlord may
also elect to
carry rent loss, general liability, automobile liability, flood,
environmental
or other insurance coverages as it may elect. All proceeds of
Landlord's
insurance coverages shall be the sole property and for the sole
benefit of
Landlord, and/or its mortgage lender, except that Tenant's recourse
to any
liability coverage is not precluded unless the effect of any other
clause of
this Lease results in Tenant waiving its claims against Landlord
that would
otherwise be payable from such liability policy. Landlord will not
carry a
deductible exceeding 1% of the insurable value of the Buildings
without the
prior written consent of Tenant, and during any time that Tenant is
the sole
occupant of the Facility and specifies the same in written notice
to Landlord or
the majority of tenants of the Facility (by rentable square
footage) agree in
writing, Landlord will maintain a lesser deductible than it has
elected to carry
within the above maximum, but Landlord will never be required to
carry less than
$50,000.00 as its deductible when more than 10% of the Facility is
not leased to
third parties unless otherwise agreed by Landlord and Landlord will
never be
required to carry a deductible greater than $25,000.00) (as
applicable, the
"PERMITTED DEDUCTIBLE").
(b) Tenant's Insurance. Tenant shall maintain insurance as required
by
the terms of EXHIBIT "C" attached hereto and incorporated herein by
this
reference.
15.
LANDLORD'S REPAIRS; OTHER WORK.
(a) Repairs of Structural Items. As its sole repair and
maintenance
obligations under this Lease, Landlord shall make necessary repairs
to keep in
good repair and serviceable condition the structural elements of
the roof,
foundation, gutters and downspouts, and exterior walls of the
Premises (except
glass and related framing, glazing and sealants, office front,
entrances,
roll-up doors or overhead dock doors [or related equipment], dock
bumpers and
any lighting attached to the exterior of the Premises), excluding
damage or
injury caused by negligent or intentional wrongdoing or breach of
this Lease by
Tenant, its employees, servants, agents, contractors, customers,
visitors or
invitees, or misuse, abuse or improper operation of the Premises.
Tenant agrees
to give Landlord prompt written notice of latent defects (or
suspected latent
defects) and need for repairs of the structural roof elements,
foundation or
exterior walls promptly upon becoming aware or suspecting the
existence thereof
(in any event no later than three (3)
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
10
<PAGE>
days thereafter). Tenant's failure to timely notify Landlord shall
not release
Landlord from responsibility for the repair, but Tenant will be
responsible for
any additional damage, aggravated conditions or increased work
resulting from
excessive delay by Tenant in notification. Landlord shall not be in
default of
this Lease or otherwise liable in any way to Tenant or any third
party by reason
of the foregoing structural elements of the Facility being or
becoming out of
repair until it has been notified in writing by Tenant of the
specific item
required to be repaired by Landlord and Landlord has had reasonable
opportunity
to repair the same. Notwithstanding the foregoing, Landlord shall
not be
responsible under any circumstances for repairing or replacing any
portion of
the Facility to the extent the defective condition thereof was
warranted or
represented against by Tenant or any affiliate of Tenant in
connection with
Landlord's purchase of the Premises (and/or Facility) from Tenant
or such
affiliate (but this limitation on Landlord's responsibility does
not extend to
repair or replacement of facilities due to normal wear and
tear).
(b) Construction of Certain Demising Improvements. Landlord shall
be
responsible for the cost and performance of such work as is
necessary to fully
separate the Warehouse/Manufacturing Portion of the Premises from
other space
within the Primary Building, including closing off any doors or
other open areas
in the present demising wall separating the Warehouse/Manufacturing
Portion of
the Premises from the rest of the Primary Building. Tenant
acknowledges that
causing such partitioning will require that Tenant's personnel go
outside the
Primary Building to traverse from other portions of the Primary
Building that
Tenant has rights from time to time hereunder to occupy. Such
Landlord work
shall be conducted in compliance with requirements of applicable
fire codes,
access laws and health and safety codes; provided, however, that
Tenant agrees,
at its cost, to make any changes as may be necessary in the
interior of its
Premises to allow such full demising of the Warehouse/Manufacturing
Portion of
the Premises from all other tenant space in the Primary Building,
and to obtain
a separate certificate of occupancy for the Warehouse/Manufacturing
Portion of
the Premises. Landlord shall cause such demising wall completion to
be carried
out promptly following the Effective Date. Landlord shall use
reasonable
measures to minimize disruption of Tenant's use of the
Warehouse/Manufacturing
Portion of the Premises during such construction, but shall not be
liable to
Tenant for the reasonable and necessary construction disruption
attendant to
such work.
(c) Certain Landlord Reserved Rights. Landlord reserves the
right,
from time to time during the Term, to add to the Buildings on the
Land, and to
modify and relocate Common Areas, including providing garage
parking in lieu of
surface parking; provided, however, that Landlord agrees not to
provide
replacement for Designated Tenant Parking Areas unless within the
same area as
the Designated Tenant Parking Areas, or a reasonably equivalent
area in terms of
distance from the Premises and Landlord will bear the cost of
relocating and/or
replacing Tenant exclusive parking or towing signage as needed in
connection
with any such relocation of Facility parking areas.
16.
TENANT MAINTENANCE AND REPAIR.
(a) Tenant's Repairs Generally. Tenant shall, at its expense, at
all
times maintain and repair, and keep in good repair and good
operating condition
and in a clean, safe and sanitary condition, the entire interior
Premises (i.e.,
the area and facilities within the exterior surfaces of exterior
walls, demising
walls and roof), including, without limitation, plate glass (and
related
framing, glazing and sealants), store front and entrances,
plumbing, closets,
pipes, fixtures, electrical and lighting equipment (including
replacement of
bulbs and ballasts), all private utility lines and facilities
(including
underground facilities such as lift stations, etc.), fire
sprinklering systems,
and air conditioning or other equipment, if any, excepting only
repair of
structural elements required of Landlord under Section 15. Tenant
shall take
good care of the Premises and its fixtures and suffer no waste
other than
reasonable (non-negligent) wear and tear. Tenant shall be
responsible for
keeping the roof, gutters and downspouts open and free of all
debris and other
obstructions. Tenant shall be responsible for maintenance and
repair of all
equipment and machinery incorporated into the Premises, including
cranes,
whatever the cause thereof, and Landlord conveys and assigns to
Tenant co-equal
rights with Landlord during the period while this Lease is in force
to directly
enforce all manufacturers' and installers' warranties, if any, with
respect to
such equipment and machinery, to the extent permitted by the terms
thereof
(without warranty by or recourse to Landlord on account
thereof).
(b) Tenant's Maintenance Contracts. At Tenant's expense, Tenant
shall
enter into a maintenance agreement for the HVAC systems serving the
Premises,
with a licensed HVAC service company reasonably approved by
Landlord, for the
complete Term of this Lease, and if the Premises is served by
overhead crane(s),
private utility systems, and/or fire alarm or fire control or
protection
systems, whether installed by Landlord or Tenant, also a
maintenance agreement
with a service contractor acceptable to Landlord for the standard
manufacturer
suggested maintenance and repair of such systems during the entire
Term of this
Lease. Tenant will obtain and promptly provide to Landlord copies
of the
above-referenced maintenance contracts and an annual certificate of
inspection
with respect to any fire alarm or fire control/suppression system
installed in
the Premises. Within five (5) business days after Landlord's
request, Tenant
will provide evidence of the actual occurrence of maintenance of
such systems by
such contractors, in terms of certificates from the vendor showing
dates of
visits, services performed and work deferred or pending.
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
11
<PAGE>
17.
EQUIPMENT OPERATION. Tenant shall be responsible and liable for
the
safe and proper operation of any and all equipment within or
comprising a part
of the Premises, and shall be responsible for any training
necessary for said
safe and proper operation of equipment which shall include, but not
be limited
to, any conveyance devices such as top running electric cranes,
hoists, jib
cranes, forklifts, or heaters (if any). Any liabilities resulting
from the
operation of said equipment shall be the sole responsibility of
Tenant.
18.
ALTERATIONS AND IMPROVEMENTS BY TENANT.
(a) Tenant Office Improvements. Landlord agrees that Tenant shall
be
permitted to finish out a portion of the Warehouse/Manufacturing
Portion of the
Premises for office use (the "TENANT OFFICE IMPROVEMENTS"),
including adding
interior walls and a separate exterior entrance to such converted
office area.
The Tenant Office Improvements shall be constructed at Tenant's
sole cost and
expense, including the costs of any building permits and other
regulatory
approvals. Tenant's architect shall submit complete, permittable
construction
drawings, plans and specifications for the Tenant Office
Improvements to
Landlord for Landlord's written approval, and Landlord shall either
approve or
disapprove with comments such plans within fifteen (15) days
following receipt
thereof. Landlord's failure to so timely respond shall be deemed to
be
Landlord's approval of the plans and specifications. Landlord shall
not
unreasonably withhold or condition Landlord's approval of the plans
and
specifications, but may condition its approval on Tenant's
agreement to restore
all or a portion of such converted area to its original condition
prior to the
expiration of the Term. Landlord's approval of any Tenant plans
and
specifications (including under clause (b) hereof) will be for the
sole benefit
of Landlord, is not for the benefit of or reliance by Tenant or any
third party,
and does not render Landlord liable or responsible for any defect
or deficiency
therein. If Landlord disapproves the plans and specifications,
Landlord shall
state specific reasons for such disapproval. Upon revision, the
plans and
specifications shall again be submitted to Landlord for written
approval, and
the time period and procedure provided above shall again apply to
such
resubmission. Tenant shall cause the Tenant Office Improvements to
be
constructed in accordance with the approved plans and
specifications and in a
lien-free manner (and otherwise in accordance with the requirements
of Section
18(b) hereof). Landlord shall be permitted to inspect the
construction from time
to time upon reasonable advance notice to Tenant, and either Tenant
or Tenant's
architect shall be permitted to accompany Landlord during such
inspection.
Landlord is not liable to Tenant in damages over any dispute
relating whether
Landlord's approval of plans and specifications is unreasonably
withheld, it
being agreed that Tenant's sole remedy therefor is to obtain
injunctive or
declaratory relief requiring Landlord's approval if it has been
unreasonably
withheld, and to obtain recovery of Tenant's costs of court and
reasonable
attorneys' fees in obtaining such relief. Any changes or additions
to Common
Area required by any applicable law, including (without limitation)
handicapped
access laws, by reason of Tenant's construction or installation of
the Tenant
Office Improvements, if any, shall be included in the plans and
specifications
for the Tenant Office Improvements and shall be simultaneously
constructed and
installed by Tenant at its sole cost and expense.
(b) Alterations and Improvements by Tenant Generally. All
alterations,
additions and improvements installed at the expense or direction of
Tenant,
except trade fixtures and unattached equipment and personalty and
the Tenant
Office Improvements, shall become the property of Landlord and
shall remain upon
and be surrendered with the Premises as part thereof on the
termination of this
Lease unless Landlord has conditioned its approval of such
installation on
Tenant's agreement to remove the same and restore the affected area
to its
condition on the Commencement Date (or some other agreed condition)
before or by
the end of the Term. All alterations, improvements, additions and
repairs made
by Tenant to the Premises shall be made in a good and workmanlike
manner, shall
be performed only with proper permits, and otherwise shall be in
compliance with
all applicable laws, ordinances, regulations and deed restrictions.
Tenant shall
not make any improvements or alterations in or to the Premises
without the prior
written consent of Landlord. If consent is granted to make
improvements or
alterations, such improvements and alterations shall not commence
until Tenant
has furnished to Landlord plans and specifications for the proposed
improvements
or alterations, and a certificate of an insurance company showing
liability,
auto, worker's compensation/employer's liability and property
coverage in an
amount, type and manner satisfactory to Landlord and protecting
Landlord (as an
additional insured) from liability for injury to any person and
damage to any
property, on or off the Premises, in connection with the making of
such
improvements or alterations. Tenant's obligation to rectify any
poor
construction or non-compliance with legal requirements relating to
its
improvements, alterations, additions and repairs shall survive
expiration or
termination of this Lease for any reason.
19.
SURRENDER; CONDITION OF PREMISES. At the expiration or earlier
termination of this Lease, Tenant shall deliver the Premises to
Landlord in good
order, repair and condition (including all Landlord approved
alterations,
additions or installations by Tenant not expressly required to be
removed as
herein provided at the option of Landlord), excepting only (i)
normal wear and
tear that is not a usual maintenance or repair item for which
Tenant is
obligated, (ii) repairs that Landlord is obligated to perform under
the terms of
this Lease, and (iii) damage by fire or other insured casualty if
required to be
insured by Landlord hereunder, subject to Tenant's continuing
liability (which
is hereby agreed to survive expiration or termination of this Lease
for any
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S REPRESENTATIVE:
------
------
12
<PAGE>
reason) to pay its Proportionate Share of any Permitted Deductible
and any loss
or damage for which Landlord's claims are not waived under Section
34(b) hereof.
Notwithstanding the foregoing, however, Tenant shall not be
required to remove
the Tenant Office Improvements unless required to do so under the
conditions
stated in Section 18(b). Any damage caused by the installation or
removal of
furnishings, inventory, equipment, trade fixtures, or air
conditioning and/or
heating equipment owned by Tenant shall be repaired at Tenant's
expense prior to
the expiration of the Term of this Lease, or Landlord may do so and
Tenant shall
reimburse Landlord the cost thereof, plus an overhead charge to
Landlord equal
to five percent (5%) of such costs, on demand, which foregoing
provisions
survive expiration or early termination hereof. At least thirty
(30) days prior
to expiration of the Term of this Lease but no sooner than
forty-five (45) days
prior to such Term expiration (or within fifteen days after any
earlier
termination of this Lease), Tenant shall obtain and deliver to
Landlord the
Initial Required Environmental Report from an Approved
Environmental Inspector,
as such terms are defined in the Glossary. If the Initial Required
Environmental
Report recommends additional investigative work to verify that
there are no
recognized environmental conditions on the Premises, then Tenant
shall cause
such additional investigative work to be performed and the
Expanded
Environmental Report to be delivered to Landlord within thirty (30)
days of the
Initial Required Environmental Report. If Tenant fails to obtain
either or both
such reports, then Landlord may do so at Tenant's expense plus a
five percent
(5%) administrative charge to Landlord on the cost thereof. Such
sums may be
recovered by suit, or from any residual of the Security Deposit (if
any) that
has not been used for other Tenant obligations and liabilities
hereunder.
20.
INDEMNITY.
(a) Claims or Losses Arising Inside the Premises. Tenant hereby
agrees
to indemnify, defend and hold harmless Landlord, its agents,
employees,
officers, directors, shareholders, beneficiaries, representatives,
Mortgagees,
affiliates and related parties, from and against any and all Claims
and Losses
suffered or incurred by Landlord or any such indemnified party, or
asserted or
claimed against Landlord or any such indemnified party arising in
or upon the
Premises. THE FOREGOING INDEMNITY SHALL APPLY WHETHER OR NOT SUCH
CLAIM OR LOSS
IS BASED OR ALLEGED TO BE BASED ON A NEGLIGENT ACT OR OMISSION
(INCLUDING,
WITHOUT LIMITATION, FAILURE OR REFUSAL TO ENFORCE OR MONITOR
TENANT'S COMPLIANCE
WITH ANY TERM OF THIS LEASE) BY LANDLORD OR ANY OF THE PARTIES
INDEMNIFIED
HEREUNDER. Notwithstanding the foregoing, however, that it is
agreed that (A) as
to Landlord, this indemnity shall not apply to Claims or Losses
arising solely
from (i) the active negligence (as opposed to alleged negligence by
omission or
inaction) of any agent, employee or representative of Landlord
while physically
on the Premises acting in the course and scope of his or her agency
or
employment, or (ii) Landlord's negligent failure to make repairs
that are
Landlord's responsibility pursuant to Section 15 hereof, following
receipt of
notice from Tenant identifying such repairs, and (B) as to any
other indemnified
party, Tenant's indemnity of that party shall not apply to that
party's own
affirmative acts of negligence or intentional misconduct while such
party is
physically on the Premises. Notwithstanding anything to the
contrary or apparent
contrary elsewhere herein, Tenant's indemnity in this Section
shall, as to
events or occurrences prior to the later of termination of this
Lease or
Tenant's vacating of the Premises, survive expiration or
termination of this
Lease for any reason.
(b) Certain Other Claims and Losses. Tenant hereby further agrees
to
indemnify, defend and hold harmless Landlord, its agents,
employees, officers,
directors, shareholders, beneficiaries, representatives,
Mortgagees, affiliates
and related parties, from and against any and all Claims and Losses
suffered or
incurred by Landlord or any such indemnified party, or asserted or
claimed
against Landlord or any such indemnified party, to the extent
arising in whole
or in part from the negligence or willful misconduct, or breach of
this Lease,
by Tenant, its agents, employees, servants, contractors, suppliers,
or
sub-occupants (whether or not such occupancy may be in violation of
this Lease).
21.
CONDEMNATION/EMINENT DOMAIN TAKING. If the whole or substantially
the
whole of the Premises or Facility should be taken for any public or
quasi-public
use under any governmental law, ordinance, or regulation, or by
right of eminent
domain, or should be sold to the condemning authority in lieu of
condemnation
(such right of sale in lieu being herein expressly reserved by
Landlord), then
Tenant's rights to occupy the Premises and to require Landlord's
performance
hereunder shall terminate as of the date when physical possession
of the
Premises is taken by the condemning authority, and Landlord will
look solely to
the condemning authority for compensation for Tenant's remaining
rent
obligations under this Lease for the term following the taking of
physical
possession by the condemning authority. If less than the whole or
substantially
the whole of the Facility or Premises is thus taken or sold,
Landlord (whether
or not the Premises are affected thereby) may terminate Tenant's
rights of
possession and to Landlord's further performance under this Lease
by giving
written notice thereof to Tenant within sixty (60) days after the
right of
election accrues, in which event the Lease rights of Tenant shall
terminate as
of the date when physical possession of such portion of the
Premises is taken by
the condemning authority and Landlord will look to the condemning
authority for
Tenant's further rent payments due hereunder, after such taking
date, to the
extent of the allowed condemnation award. If, upon any such taking
or sale of
less than the whole or substantially the whole of the Facility,
Landlord does
not elect to terminate Tenant's further rights under this Lease,
then Tenant's
rights under this Lease shall not be thus terminated, the monthly
Base Rental
payable under this
INITIALS OF
INITIALS OF
LANDLORD'S REPRESENTATIVE:
TENANT'S
REPRESENTATIVE:
------
------
13
<PAGE>
Lease shall be diminished (without prejudice to Landlord's rights
to claim the
lost value of this Lease for the balance of its Term as part of its
condemnation
award) by an amount representing that part of the monthly Base
Rental
attributable to the portion of the Premises which was so taken or
sold, and
Landlord shall, at Landlord's sole expense, restore and reconstruct
the
remainder of the Premises an architectural whole or, at its option,
to as close
as possible to their former condition to the extent that the same,
in Landlord's
judgment, may be feasible on the remaining Land (including
expansion of the
footprint of the Premises outside its original footprint in order
to reproduce
the Premises to closer to its original size). Tenant shall not be
entitled to
any claim as a result of such condemnation relating to the taking
of its
leasehold interest under this Lease (or any license it has
hereunder in or to
any Common Areas), and hereby assigns over to Landlord any and all
of Tenant's
claim therein or thereto; provided, however, that, to the extent
such claim is
allowed by law and does not reduce the claim that Landlord would
otherwise have
been entitled to make with respect to the Premises or Facility (in
the absence
of Tenant's improvements), Tenant may make a separate claim against
the
condemning authority for any taking of unsalvageable personal
property and trade
fixtures installed in the Premises by Tenant at its cost, business
interruption
costs (but NOT lost lease or lease replacement value), and moving
expenses;
provided further, however, that if Tenant fa






