SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Second Amendment") is made as of
this ____ day of September 1997 by and between ANGEL AND JEAN ECHEVARRIA
(together, "Landlord"), and PILLOWTEX CORPORATION, a Texas corporation
("Tenant").
RECITALS
A. Landlord and Tenant entered into that certain Industrial Lease
dated November 23, 1992 (the "Original Lease"), pursuant to which Landlord
leased to Tenant, and Tenant leased from Landlord, certain premises commonly
known as 3820 Union Pacific Avenue, Los Angeles, California, consisting of
certain real property, an approximately 320,000 square foot building and
other improvements located on the real property and certain parking areas, as
more particularly described in the Original Lease (the "Premises").
B. Landlord and Tenant amended the Original Lease pursuant to that
certain Broker's Ammendment [sic] executed as of November 11, 1992 (the
"First Amendment"). True and correct copies of the Original Lease and the
First Amendment are attached hereto as EXHIBIT A and incorporated by this
reference. The Original Lease, as amended by the First Amendment, shall be
referred to herein as the "Lease."
C. Landlord and Tenant desire to enter into this Second Amendment to
modify the rent payable by Tenant pursuant to the Lease, to extend the term
of the Lease, and to make certain other changes to the Lease, all in
accordance with the terms and conditions set forth below.
AGREEMENT TERMS AND CONDITIONS
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
agree as follows:
1. CONDITION PRECEDENT. On October 29, 1997, Landlord commenced a
bankruptcy case by filing a voluntary chapter 11 petition under the United
States Bankruptcy Code, 11 U.S.C. Section 101 et seq., Case No. LA 96-45771-TD
with the United States Bankruptcy Court for the Central District of California
(the "Bankruptcy Court"). This Second Amendment shall not be effective unless
and until the Bankruptcy Court has entered an order approving this Second
Amendment upon the terms set forth herein (the "Order"). Immediately upon full
execution of this Second Amendment by Landlord and Tenant, Landlord shall seek
the Order from the Bankruptcy Court. Upon entry of the Order, this Second
Amendment shall immediately become effective, without further action on the
part of either Landlord or Tenant.
2. TERM. Notwithstanding anything to the contrary set forth in the
Lease, including without limitation Section 3.1 thereof, the term of the
Lease is hereby extended through and including December 31, 2004.
3. RENT. The first two (2) sentences of Article 4 of the Lease,
entitled "Rent," are hereby deleted in their entirety and replaced with the
following:
"Tenant shall pay Landlord rent for the Premises ("Rent") in accordance
with the following schedule:
a. From October 1, 1997 through December 31, 1998, Tenant shall
pay to Landlord Rent at the annual rate of Six Hundred Eighteen Thousand Two
Hundred Forty and 00/100 Dollars ($618,240.00), provided, however, the rent
payable for the period from October 1, 1997 through and including December
31, 1997 shall be that portion of the aforesaid annual Rent equal to the
product of (i) such annual Rent multiplied by (ii) one-fourth (1/4);
b. From January 1, 1999 through December 31, 2000, Tenant shall
pay to Landlord Rent at the annual rate of Six Hundred Thirty-Six Thousand
Seven Hundred Eighty-Seven and 00/100 Dollars ($636,787.00);
c. From January 1, 2001 through December 31, 2001, Tenant shall
pay to Landlord Rent at the annual rate of Six Hundred Forty-Two Thousand
Nine Hundred Sixty-Nine and 00/100 ($642,969.00); and
d. From January 1, 2002 through December 31, 2002, Tenant shall
pay to Landlord Rent at the annual rate of Six Hundred Forty-Nine Thousand
One Hundred Fifty-Two and 00/100 ($649,152.00); and
e. From January 1, 2003 through December 31, 2004, Tenant shall
pay to Landlord Rent at the annual rate of Six Hundred Sixty-One Thousand
Five Hundred Seventeen and 00/100 ($661,517.00); and
Rent shall be due and payable by Tenant in advance in consecutive equal
monthly installments on or before the first day of each month."
4. NO OPTION FOR EXTENSION OF TERM, OPTION ON ADDITIONAL SPACE OR RIGHT
OF FIRST REFUSAL. Upon the execution hereof, the options and rights granted
to Tenant under Section 39 of the Lease shall be of no further force and
effect.
5. NO OTHER CHANGES. Except as set forth in this Second Amendment, all
other provisions of the Lease shall remain in full force and effect and are
hereby ratified. In the event of a conflict between the terms of the Lease
and this Second Amendment, this
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Second Amendment shall prevail. All references in the Lease and in this Second
Amendment to the "Lease" shall be deemed to be the Lease, as amended by this
Second Amendment.
6. NO BROKER. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this Second Amendment and
that no broker, agent or other person brought about this transaction. Tenant
hereby agrees to indemnify, defend, protect and hold Landlord harmless from
and against any claims, losses, liabilities, demands, costs, expenses or causes
of action by any broker, agent or other person (including, without limitation,
Cushman & Wakefield) claiming any commission or other form of compensation
arising directly or indirectly with regard to this Second Amendment.
7. BINDING EFFECT. This Second Amendment shall be binding upon and
inure to the benefit of Landlord, its successors and assigns and Tenant and
its permitted successors and permitted assigns.
8. ATTORNEYS' FEES. Should any party initiate a legal proceeding
against any other party, including an arbitration, then the prevailing party
shall be entitled to recover its reasonable attorneys' fees and costs incurred
in connection with such legal proceeding.
9. AUTHORITY. Tenant has full power and authority to enter into this
Second Amendment, and the person signing on behalf of Tenant has been fully
authorized to do so by all necessary corporate action, or any other action, on
the part of Tenant.
10. CAPTIONS. The captions contained in this Second Amendment are for
convenience only are not intended to limit or define the scope or effect of any
provision of this Second Amendment.
11. CAPITALIZED TERMS. All terms capitalized but not defined in this
Second Amendment shall have the meanings given them in the Lease.
12. SEVERABILITY. The invalidity, illegality or unenforceability of any
provision of this Second Amendment shall not affect the enforceability of any
other provision of this Second Amendment, all of which shall remain in full
force and effect.
13. FACSIMILE. The parties hereto and their respective successors and
assigns are hereby authorized to rely upon the signatures of each person and
entity on this Second Amendment which are delivered by facsimile as
constituting a duly authorized, irrevocable, actual, current delivery of this
Second Amendment with original ink signatures of each person and entity.
14. ESTOPPEL. Tenant certifies to Landlord that, to Tenant's knowledge,
as of the date of this Second Amendment, except as described in paragraph 16
below, (a) Landlord is not in default under the Lease and (b) Tenant does not
have any defenses or offsets
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to payment of rent and performance of its obligations under the Lease as and
when the same becomes due.
15. COUNTERPARTS. This Second Amendment may be executed in any number
of counterparts and each such counterpart shall be deemed to be an original,
but all of which, when taken together, shall constitute one Second Amendment.
16. NO WAIVER OF ALLOWED CLAIM. Tenant has filed a timely proof of
claim, in the amount of Fifty Thousand Dollars ($50,000), in Landlord's
pending chapter 11 bankruptcy proceeding (In re Angel M. Echevarria, Case No.
LA 96-45771-TD) currently pending before the United States Bankruptcy Court for
the Central District of California. Tenant's proof of claim in Landlord's
bankruptcy case shall be allowed for the entire amount filed and nothing
herein shall be deemed to affect the payment on account of such claim through
appropriate means, including Landlord's plan of reorganization or directly
from the Landlord if the bankruptcy proceeding is dismissed.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as of
the date first written above.
LANDLORD:
/s/ ANGEL ECHEVARRIA
---------------------------------
ANGEL ECHEVARRIA
/s/ JEAN ECHEVARRIA
---------------------------------
JEAN ECHEVARRIA
TENANT:
PILLOWTEX CORPORATION,
a Texas corporation
By: /s/ John H. Karnes
--------------------------------
Name: John H. Karnes
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Title: Vice President
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