Exhibit 10.24
Sub-ITEM (a)
STATE OF NORTH CAROLINA
Charlotte, North Carolina
COUNTY OF MECKLENBURG
LEASE AGREEMENT
THIS LEASE (this "Lease") made this the 13th day of May, 1996, by and
between JEM-REALTY, INC., a Delaware corporation, and STANWOOD INTERESTS LIMITED
PARTNERSHIP, a Texas limited partnership, collectively first party, hereinafter
referred to as "Lessor," and HUGHES SUPPLY, INC., a Florida corporation, second
party, hereinafter referred to as "Lessee."
W I T N E S S E T H:
1. Premises. Lessor, for and in consideration of the rents, covenants,
agreements, and stipulations hereinafter mentioned, reserved and contained, to
be paid, kept and performed by Lessee, has leased and rented, and by these
presents does lease and rent, unto said Lessee, and said Lessee hereby agrees to
lease and take upon the terms and conditions which hereinafter appear, the
following described property (hereinafter called "Premises") and personal
property as hereinafter set forth.
The Premises consists of real property and improvements located at 629
Pressley Road, Charlotte, North Carolina 28217, including, without limitation,
the real property described in Exhibit A to this Lease, and a 11,500 (plus or
minus) feet generally described in the plat plan attached to this Lease as
Exhibit B.
2. Warranties. Lessor warrants that Lessor owns the premises in fee simple and
has the right to enter into this Lease; that the Premises are free from liens
and encumbrances except for utility easements and unviolated restrictive
covenants which do not materially adversely affect Lessee's intended use of the
Premises; that the Premises abuts one or more publicly dedicated roads; that the
Premises do not, as of the date of this Lease, and will not, by reason of the
commencement of the term of this Lease, fail to conform to all applicable
building ordinances, laws and regulations in any respect which will materially
adversely interfere with Lessee's use of the Premises for its intended purposes;
that Lessee's proposed use of the Premises is consistent with the zoning
classification applicable to the Premises; that Lessor's past and current uses
of the Premises comply with federal, state and local environmental laws and
regulations; that Lessor has not received a citation from any regulatory agency
for noncompliance with environmental laws; that Lessor has no knowledge of the
presence of fuel storage tanks or of hazardous, toxic, dangerous, or
carcinogenic materials, substances or contaminants, formaldehyde,
polychlorinated biphenyls ("PCBs"), lead, lead dust, asbestos, asbestos
containing materials ("ACMs"), oil, gasoline, other petroleum products or
byproducts, radon or other similar materials or substances (collectively
"Hazardous Materials") on, in or under the Premises and has no knowledge of any
contamination present on, in or under the Premises; and covenants that Lessee,
provided it
performs all of its obligations under this Lease, will peaceably and quietly
enjoy the Premises during the Lease term without any disturbance from Lessor,
anyone claiming by, through or under Lessor, or any other party, except as
otherwise specifically provided in this Lease. If any of title exceptions to the
Premises are hereinafter found to exist, such exceptions will not materially
affect Lessee's use of the Premises.
3. Term. The initial term of this Lease shall be for three (3) years, said term
to begin on the 13th day of May, 1996 (the "Commencement Date") and end on the
12th day of May, 1999 (the "Initial Term"). The Initial Term of this Lease may
be extended, at the option of the Lessee, for up to two (2) successive periods
of three (3) years (each such period of three (3) years herein sometimes
referred to as an "Extended Term") as follows:
First Extended Term - May 13, 1999 to May 12, 2002.
Second Extended Term - May 13, 2002 to May 12, 2005.
The option to extend shall be exercised by the Lessee by giving notice to
the Lessor not more than twelve (12) nor less than six (6) months prior to the
expiration of the then existing term. Each Extended Term shall be upon the same
terms, covenants, and conditions as provided in the Lease. Any termination of
this Lease during the Initial Term or any Extended Term shall terminate all
rights of any further extension hereunder. The use of the word "Term" herein
shall be deemed to include the Initial Term as well as any Extended Term.
4. Rental. As rent for the Premises, Lessee shall pay to Lessor in advance on
the first day of each calendar month of the Term the sum of $6,150.00 per month,
being at the rate of $73,800.00 per annum; provided, however, on each
anniversary of the Commencement Date during the Term, the annual rent shall be
increased over the rent for the prior lease year by an amount equal to the
percentage increase in the CPI from the first month of the previous lease year
to such anniversary date. Such adjustment, however, shall not result in any
instance in a reduction of the annual rent, nor shall any annual rent adjustment
result in an increase in the annual rent by an amount in excess of 3% of the
previous year's rent.
For purposes of this Lease, "CPI" refers to the Consumer Price Index for
All Urban Consumers (CPI-U), All Items, U.S. City Average (1982-1984 equals
100), published by the United States Department of Labor, Bureau of Labor
Statistics. If the CPI is discontinued, such other index as published by the
Department of Labor, Bureau of Labor statistics, or its successor agency, in
substitution therefor or replacement thereof shall be used for making said
computations. If the Department of Labor or its successor agency shall no longer
maintain such statistics, comparable statistics published by a responsible
financial periodical or recognized authority selected by the Lessor and Lessee
shall be used for making said computations. If the base years "(1982-1984 equals
100)" or other base year used in computing the Index is changed, the figures
used in making said adjustment shall be changed accordingly so that all
increases in the CPI, or any substituted or replacement index, as the case may
be, are taken into account notwithstanding any such change in the base year.
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5. Utility Bills. Lessee shall pay all utility bills of all types, including,
but not limited to, water and sewer, natural gas, electricity and sanitary pick
up bills for the Premises, or used by Lessee in connection therewith. If Lessee
does not pay same, Lessor may pay the same, and such payment shall be added to
the rental of the Premises.
6. Ad Valorem Taxes. Lessee shall pay all real property taxes, special and
general assessments, water and sewer assessments and other rents, rates, and
changes and other guaranteed impositions of every kind and nature extraordinary
as well as ordinary relating to the premises or ally business conduct thereon.
Lessee shall also pay any and all ad valorem taxes assessed against the personal
property located on the Premises during the Term.
7. Insurance. Lessee will carry, at Lessee's sole cost and expense, "All Risk"
Insurance Coverage on the Premises in an amount not less than the full insurable
value. The term "full insurable value" shall mean the actual replacement cost,
excluding foundation and excavation costs, as determined by Lessor. Such
policies shall name Lessor as an additional named insured.
All insurance provided for in this Lease shall be effected under
enforceable policies issued by insurers of recognized responsibility licensed to
do business in this state. At least fifteen (15) days prior to the expiration
date of any policy, the original renewal policy for such insurance shall be
delivered by Lessee to Lessor. With fifteen (15) days after the premium on any
policy shall become due and payable, Lessor shall be furnished with satisfactory
evidence of its payment.
If Lessee provides any insurance required by this Lease in the form of a
blanket policy, Lessee shall furnish satisfactory proof that such blanket policy
complies in all respects with the provisions of this Lease and that the coverage
thereunder is at least equal to the coverage which would be provided under a
separate policy covering only the Premises.
If Lessor so requires, the policies of insurance provided for shall be
payable to the holder of any mortgage, as the interest of such holder may
appear, pursuant to a standard mortgagee clause. All such policies shall, to the
extent obtainable, provide that any loss shall be payable to Lessor or to the
holder of any mortgage notwithstanding any act or negligence of Lessee which
might otherwise result in forfeiture of such insurance. All such policies shall,
to the extent obtainable, contain an agreement by the insurers that such
policies shall not be cancelled without at least thirty (30) days prior written
notice to Lessor and to the holder of any mortgage to whom loss hereunder may be
payable.
Lessee will carry at Lessee's own expense insurance coverage on all
equipment, furniture and appliances.
8. Maintenance and Repairs by Lessee, Lessor warrants as of the Commencement
Date of this Lease that the Premises are structurally sound and that all
lighting and all operating systems are in good condition and are not in need of
repair. Except as set forth in
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Paragraph 9, Lessee shall, at it's own expense, keep and maintain the interior
of the Premises, including all systems pertaining to water, sewer, electrical,
heating, ventilation, air conditioning and lighting. Lessee shall also perform
exterior lawn maintenance. It is the intent of the parties that Lessee shall
only be required to make minor repairs not repairs or replacements which are
structural in nature, extra ordinary or capital in nature, or those which will
increase the value of the Premises subsequent to the end of the Term. In
addition, the Lessee shall not be required to repair latent defects in the
Premises.
9. Repairs by Lessor. Lessor agrees to maintain and keep in good repair the
roof, exterior walls, structural supports (including foundations), exterior
doors of any and all buildings located on the Premises, and all water or sewer
pipes located underground or in the slab, sidewalks, parking lots, driveways and
other vehicular access and maneuvering areas. Lessor shall also be responsible
for any repairs or replacements which are structural in nature, which are
extraordinary or capital in nature, which will increase the value of the
Premises subsequent to the end of the Term and any other repairs not expressly
delegated to Lessee in this Lease. Lessor shall also promptly clean up and
dispose of any Hazardous Materials found on, in or under any portion of the
Premises and remediate the Premises to comply with any and all environmental
laws applicable thereto, and to pay for all clean-up and disposal costs at no
cost to Lessee, unless directly caused by Lessee, its employees, agents or
contractors.
10. Destruction of or Damage to the Premises. If the Premises are totally
destroyed by storm, fire, lightning, earthquake or other casualty, this Lease
shall terminate as of the date of such destruction, and rental shall be
accounted for as between Lessor and Lessee as of that date. If the Premises are
damaged, but not wholly destroyed by any of such casualties, rental shall abate
in such proportion as use of the Premises has been destroyed, and Lessor shall
restore the Premises to substantially the same condition as before the damage as
speedily as practicable, whereupon full rental shall recommence; provided
further, however, that if the damage shall be so extensive the same cannot be
reasonably repaired and restored within three (3) months time from the date of
the casualty, then either Lessor or Lessee may cancel this Lease by giving
written notice to the other party within thirty (30) days from the date of such
casualty. And, in such event, rental shall be apportioned and paid up to the
date of such casualty.
11. Modifications and Alterations to the Premises. No modifications,
alterations, or improvements to the building or openings cut through the roof
are allowed without the prior written consent of Lessor, which consent shall not
be unreasonably withheld or delayed.
12. Removal of Fixtures. Lessee may (if not in default hereunder) prior to the
expiration of this Lease, or any extension thereof, remove all personal
property, fixtures and equipment which Lessee has placed in the Premises,
provided Lessee repairs ail damages to the Premises caused by such removal.
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13. Return of the Premises. Lessee agrees to return the Premises to Lessor at
the expiration, or prior termination, of this Lease in good condition and
repair, reasonable wear and tear, damage by storm, fire, lightning, earthquake
or other casualty alone excepted.
14. Condemnation. If the whole of the leased Premises, or such portion thereof
as will make the Premises unusable for the purpose herein leased, be condemned
by any legally constituted authority for any public use or purpose or if Lessor
sells the Premises under threat of condemnation, then in either of said events,
the Term shall cease from the time when possession thereof is taken by public
authorities, and rental shall be accounted for as between Lessor and Lessee as
of that date. Such termination, however, shall be without prejudice to the
rights of either Lessor or Lessee to recover compensation and damage caused by
condemnation from the condemnor. It is further understood and agreed that
neither Lessee, nor Lessor, shall have any rights in any award made to the other
by any condemnation authority.
If there is a partial taking and if it is not so extensive as to render
the remaining portion (after restorations) unsuitable for the business of
Lessee, then this Lease shall continue in effect and Lessor, upon receipt of the
award in condemnation, will expeditiously commence and complete all necessary
repairs and restorations to the building on the Premises so as to constitute the
portion of the building not taken a complete architectural unit and restore it
as nearly as practicable to its prior condition; provided, however, that such
work does not exceed the scope of the original construction of the building, and
Lessor will not be under any duty to expend amounts in excess of the award
received by Lessor. Rent, taxes and other charges payable by Lessee will
equitably abate while Lessor's repairs and restorations are in process. If a
partial taking consists only of a street widening or utility easement which does
not materially affect Lessee's use of the Premises, this Lease will continue in
full force and effect without abatement of rent, taxes or other charges.
15. Governmental Orders. Lessee agrees, at its own expense and solely in
relation to those portions of the Premises which Lessee is required to maintain
or repair under Paragraph 8, to promptly comply with all requirements of any
legally constituted public authority made necessary by reason of Lessee's
specific use of said Premises. Notwithstanding the foregoing, the Lessee shall
not be liable for: (a) repairs, alterations, replacements or retrofitting
required by the accessibility or path of travel requirements set forth in Title
III of the Americans With Disabilities Act of 1990, 42 USC ss. 2101, et seq. and
regulations and guidelines promulgated thereunder, as amended from time to time
(collectively referred to as "ADA"); (b) removal or abatement of ACMs; (c)
repairs, alterations or replacements required to comply with federal, state or
local indoor air quality laws, rules or regulations; (d) repairs or replacements
incident to CFC conversions for heating and cooling systems; (e) installation of
fire sprinkler systems; or (f) repairs, alterations or replacements described in
Paragraph 9. Lessor agrees to promptly comply with any other governmental or
regulatory requirements if not made necessary by reason of Lessee's occupancy of
the Premises or relating to those portions of the Premises which Lessor is
required to maintain or repair under Paragraph 9.
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16. Assignment. Except as set forth below, Lessee may not assign this Lease, or
any interest thereunder, or sublet the Premises in whole or in part without
prior written notice to Lessor of its intent to assign or sublease. Lessee may
(a) sublet all or part of the Premises to any corporation, the majority of whose
shares are owned by Lessee, during the period of such majority ownership only or
(b) assign this Lease to any corporation which owns more than fifty percent
(50%) of Lessee's issued and outstanding shares, or which succeeds to the entire
business of Lessee through purchase, merger, consolidation or reorganization, or
to any affiliate sharing common majority ownership with the Lessee. Subtenants
or assignees shall become liable directly to Lessor for all obligations of
Lessee hereunder, without relieving Lessee's liability.
17. Mortgagee's Rights. Lessee's rights shall be subject to any bona fide
mortgage or deed to secure debt which is now, or may hereafter be, placed upon
the Premises by Lessor, and Lessee agrees, at Lessor's cost, to execute and
deliver such documentation as may be reasonably required by any such mortgagee
to effect any subordination. Provided, however, as a condition to such
subordination, Lessor must secure from each mortgagee a nondisturbance agreement
acceptable to Lessee providing that in the event of a foreclosure the mortgagee
will recognize the validity of this Lease and, provided that Lessee is not in
default, will not disturb Lessee's possession or its rights under this Lease.
18. Use of the Premises. The Lessee may use the Premises for office/warehouse
and distribution purposes, including outdoor storage, or for any other lawful
purpose. The Premises shall not be used for any illegal purposes, nor in any
manner to create any nuisance or trespass; nor in any manner to vitiate the
insurance, based on the above purposes for which the Premises are leased.
19. Signs. Lessee shall have the right to erect at Lessee's sole expense a sign
at the entrance to the Premises. This sign shall not be other than a customary
trade sign identifying the business of Lessee. The erection of this sign by
Lessee shall be subject to and in conformity with all applicable laws, zoning
ordinances and building restrictions or covenants of record. On or before
termination of this Lease, Lessee shall remove the sign thus erected, and shall
repair any damage or disfigurement, caused by such removal.
20. Reservation of Right to Sell. Lessor shall have the right to sell the
Premises during the term of this Lease, subject to the following:
a. Lessor agrees to give notice of each proposed sale, including the
purchase price and all other terms and conditions, to Lessee;
b. Lessee will have the right to purchase the Premises at the purchase
price and on the other terms and conditions offered by Lessor or offered to
Lessor by the third party (which offer Lessor wishes to accept), by giving
notice to Lessor within 20 business days after Lessor has notified Lessee of the
terms of Lessor's proposed sale; and
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c. If Lessee does not give notice of the exercise of its option within
such time, Lessor will have the right to sell the Premises upon the terms stated
in the offer made or received by Lessor, but not upon terms more favorable to
the purchaser, unless Lessor again gives notice pursuant to subparagraph a,
above, and Lessee does not exercise its option based upon the new terms.
21. Entry for Carding, etc. Lessor may card the Premises "For Rent" or "For
Sale" ninety (90) days before the termination of this Lease. Lessor may enter
the Premises at reasonable hours during the term of this Lease to exhibit the
same to prospective purchasers and to make repairs required of Lessor under the
terms hereof.
22. Indemnity. Lessor agrees to indemnify and save harmless Lessee and its
parents, subsidiaries, affiliates, directors, officers, employees, agents,
servants, attorneys and representatives from any and all claims, causes of
action, damages, fines, judgments, penalties, costs (including environmental
clean-up costs and response costs), liabilities, expenses or losses (including
without limitation, reasonable attorneys' fees and expenses of litigation)
arising during or after the Term: (a) as a result of any violation by Lessor of
any applicable federal, state or local environmental laws or regulations, as now
or hereinafter in effect, regulating, relating to or imposing liability or
imposing standards of conduct concerning any Hazardous Materials ("Environmental
Laws") relating to the Premises; or (b) as a result of the presence,
disturbance, discharge, release, removal or cleanup of Hazardous Materials as a
result of environmental contamination or other similar conditions which occurred
or first arose prior to commencement of the Term and during the period of
Lessor's ownership of the Premises; or (c) as a result of any violation of the
accessibility or path of travel requirements imposed by ADA; or (d) as a result
of any of Lessor's representations and warranties being untrue. These
indemnities shall survive the expiration, cancellation or termination of the
Lease.
Lessee agrees to indemnify and save harmless Lessor and its stockholders,
affiliates, directors, officers, employees, agents, servants, attorneys and
representatives from any and all claims, causes of action, damages, fines,
judgments, penalties, costs (including environmental clean-up costs and response
costs), liabilities, expenses or losses (including without limitation,
reasonable attorneys' fees and expenses of litigation) arising during or after
the Term: (a) as a result of Lessee's use and occupancy of the Premises,
including, without limitation, any violation by Lessee of any Environmental Laws
relating to the Premises; or (b) as a result of the presence, disturbance,
discharge, release, removal or cleanup of Hazardous Materials as a result of
environmental contamination or other similar condition which occurred or first
arose after the commencement of the Term. These indemnities shall survive for a
period of three (3) years following the expiration, cancellation or termination
of this Lease.
23. Cancellation of Lease by Lessor. It is mutually agreed that in the event:
a. The rent herein reserved is not paid at the time and place when and
where due and Lessee fails to pay said rent within five (5) days after written
demand from Lessor; or
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b. Lessee shall fail to comply with any material term, provision,
condition, or covenant of this Lease, other than the payment of rent, and shall
not cure such failure within thirty (30) days after notice to Lessee of such
failure to comply or such additional time period as may reasonably necessary to
effect a cure of the default provided that Lessee commences and diligently
pursues a cure of the default; or
c. Lessee causes any lien to be placed against the Premises and does not
cure the same within thirty (30) days after notice from Lessor to Lessee
demanding cure; in any of such events, Lessor shall have the option to do any of
the following, in addition to, and not in limitation of any other remedy
permitted by law or by this Lease:
i. Lessor may terminate this Lease, in which event Lessee shall
immediately surrender the Premises to Lessor. Lessee agrees to indemnify Lessor
for all loss and damage which Lessor may suffer by reason of such termination,
whether through inability to relet the Premises, or through decrease in rent, or
otherwise; or
ii. Lessor, as Lessee's agent, without terminating this Lease, may
terminate Lessee's right of possession, and, at Lessor's option, enter upon and
rent the Premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Lessor deems proper.
Lessee shall be liable to Lessor for the deficiency, if any, between Lessee's
rent hereunder and the price obtained by Lessor on reletting.
Pursuit of any of the foregoing remedies shall not preclude pursuit
of any of the other remedies herein provided or any other remedies provided by
law. In any case, Lessor shall use best efforts to mitigate Lessee's damages.
Any notice in this provision may be given by Lessor or its attorney.
24. Effects of Termination of the Lease. No termination of this Lease prior to
the normal ending thereof, by lapse of time otherwise, shall affect Lessor's
right to collect rent for the period prior to the termination thereof.
25. Default of Lessor. Should Lessor fail to perform any of its obligations
hereunder, Lessor shall have a period of 30 days after its receipt of written
notice from Lessee of a failure of performance within which to commence a cure
of that failure. Failure of Lessor to commence that cure within the 30-day
period or to effect that cure within that 30-day period shall be an event of
default under this Lease and Lessee may, at its option, elect to:
a. Terminate this Lease upon 30 days written notice to Lessor;
b. Bring an action to require specific performance of Lessor's
obligations;
c. Provide Lessor with an additional period of time within which to effect
that cure;
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d. Commence such cure itself, and Lessee may either, at its option, offset
any expenses it incurs in effecting such cure against the rent and other
charges due and payable by Lessee hereunder, or require that Lessor
immediately reimburse Lessee for its expenses; provided, however, in the
event of an emergency, Lessee may immediately effect a cure of Lessor's
failure should Lessor fail to act immediately to do so, without the
requirement of any notice by Lessee to Lessor; and/or
e. Pursue any other remedies provided herein or provided by law
26. Purchase Option. Lessee shall have the option to purchase the Premises at
Fair Market Value, payable in cash at closing, said option being exercisable by
Lessee at any time during the Term by written notice given by Lessee to Lessor.
If this option is exercised by Lessee, closing shall be held within sixty (60)
days of the notice of exercise at a time and place, and on a date, reasonably
satisfactory to Lessor and Lessee (the Term shall be extended, if necessary,
through and including the date of closing). Title to the Premises shall be
conveyed free of any liens or encumbrances, and subject only to current year's
ad valorem taxes, applicable building restrictions, easements for utilities
servicing the Premises, and such other conditions of title as may not, in
Lessee's sole discretion, adversely affect the use of the Premises by Lessee or
as may be approved by Lessee (the "Permitted Exceptions"). Immediately following
the date of exercise of this option, Lessor shall furnish Lessee with a
commitment for a standard owner's title insurance policy, ATLA Form B,
reflecting only Permitted Exceptions and standard printed exceptions (the
"Commitment"). Immediately following closing, Lessor shall furnish Lessee with
an owner's title insurance policy issued in conformity with the Commitment. The
cost of the title insurance Commitment and policy shall be borne by Lessor;
provided, however, that the cost of any special endorsements shall be borne by
Lessee; and, further provided, that if Lessee obtains a mortgage title insurance
policy at closing, the cost of the combined owner's and mortgagee's policies
shall be divided equally between Lessor and Lessee. Ad valorem taxes, rent due
under the Lease, utilities and any insurance or other prepaid items assumed by
the Lessee shall be prorated as of the date of closing. Title to the Premises
shall be conveyed by general warranty deed in form acceptable for recording,
subject only to the Permitted Exceptions. Lessor and Lessee shall each bear
their respective costs in connection with exercise of the option and the
closing, including attorney's fees. Lessee shall bear the cost of recording the
deed, the cost of any survey obtained by Lessee, and all costs related to any
financing obtained by Lessee. Except for any prepaid rent, Lessee is not
entitled to a credit for rental payments paid by the Lessee during the Term of
the Lease.
The Lessor and Lessee shall attempt to determine the Fair Market Value by
mutual agreement within fifteen (15) days after Lessee gives notice of its
exercise of the option. However, if the parties cannot reach agreement on the
Fair Market Value, the following provisions shall apply:
a. Lessor and Lessee shall each select a qualified real estate
appraiser within the next fifteen (15) days. Each appraiser must demonstrate to
the reasonable
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satisfaction of both Lessor and Lessee that he has significant experience in
appraising similar properties.
b. The Fair Market Value shall be determined by the appraisers
within thirty (30) days thereafter. Each of the appraisers shall be instructed
to prepare an appraisal of the Premises in accordance with the following
instructions: The method of valuing the property shall use any one or a
combination of appropriate appraisal methodologies (i.e., replacement cost,
comparable sales, and income); provided, however, that any valuation based upon
the income approach (i.e., the capitalization of net rental amounts abstracted
from consideration this Lease and the rental provided for herein. The appraised
value is to be a single value, not a range of values and not a schedule of
different values based upon different methodologies or different assumptions.
The value of any alterations, additions or improvements to the Premises made by
Lessee shall be included in the determination of Fair Market Value.
If the appraised values determined by the two appraisers do not differ by more
than ten percent (l0%), the purchase price shall be the average of the two
values. If the difference is more than ten percent (l0%), and the two appraisers
cannot agree upon a value (in which event such agreed value shall be binding
upon Lessor and Lessee), the two appraisers shall select a third appraiser
within fifteen (15) days thereafter. The third appraiser shall be instructed to
select a value within the range of values established by the initial two (2)
appraisals, within twenty (20) days after his appointment, following the
instructions set forth above, and the Fair Market Value so selected by the third
appraiser shall be binding upon Lessor and Lessee as the purchase price for the
Premises.
27. Holding Over. If Lessee remains in possession of the Premises after
expiration of the term hereof, with Lessor's acquiescence and without any
express agreement of the parties, Lessee shall be a tenant-at-will at the rental
rate in effect at end of the Lease; and there shall be no renewal of this Lease
by operation of law.
28. Notices. Any notice given pursuant to this Lease shall be in writing and
sent by certified mail to:
a. Lessor: c/o Jem-Realty, Inc.
320 Park Place Tower
2001 Park Place North
Birmingham, Alabama 35203
or to such other address as Lessor may hereafter designate in writing to Lessee.
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b. Lessee: Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf
or to such other address as Lessee may hereafter designate in writing to Lessor.
29. Memorandum of Lease and Option. This Lease shall not be recorded, but the
parties agree to execute a Memorandum of this Lease for recording purposes which
shall set forth the commencement date, the term of the Lease and all extensions,
a legal description of the location of the Premises and a description of
Lessee's rights under this Lease, including the purchase option provided for in
paragraph 26 of this Lease. If Lessee records the Memorandum of Lease and
Option, Lessee agrees to pay all related recording fees and taxes.
30. Attorneys' Fees. In any litigation between the parties regarding this Lease,
the losing party agrees to pay to the prevailing party its reasonable attorneys'
fees and expenses of litigation. For purposes of this Paragraph, a party is to
be considered the prevailing party if:
a. It initiated the litigation and obtains (by judgment oral agreement)
substantially the relief sought; or
b. It did not initiate the litigation and the other party does not obtain
(by judgment or agreement) substantially the relief sought.
31. Waiver of Rights. No failure of Lessor to exercise any power given Lessor
hereunder, or to insist upon strict compliance by Lessee with its obligations
hereunder, and no custom or practice of the parties at variance with the terms
hereof shall constitute a waiver of Lessor's right to demand exact compliance
with the terms hereof.
32. Rights Cumulative. All rights, powers and privileges conferred hereunder
upon the parties hereto shall be cumulative but not restrictive to those given
by law.
33. Time of Essence. Time is of the essence of this Agreement.
34. Definitions. "Lessor" as used in this Lease shall include first party, its
heirs, representatives, assigns, and successors in title to the Premises.
"Lessee" shall include second party, its assigns and successors, and if this
Lease shall be validly assigned, or sublet, shall include also Lessee's
assignees or sub-lessees, as to the Premises covered by such assignment or
sub-lease. "Lessor" and "Lessee" include male and female, singular and plural,
corporation, partnership or individual, as may fit the particular parties.
11
35. Miscellaneous. This Lease contains the entire agreement of the parties
hereto, and no representations, inducements, promises or agreements, oral or
otherwise, between the parties, not embodied herein, shall be of any force or
effect.
If any term, covenant or condition of this Lease or the application
thereof to any person, entity or circumstance shall; to any extent, be invalid
or unenforceable, the remainder of this Lease, or the application of such term,
covenant, or condition to persons, entities or circumstances other than those
which or to which sued may be held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties herein have executed this Lease on the
day and year first above written.
JEM-REALTY, INC.
By: /s/ James D. Davis
----------------------------
Its: President
--------------------------
STANWOOD INTERESTS LIMITED
PARTNERSHIP
By: Stanreal, LLC,
its General Partner
/s/ Michael L. Stanwood
----------------------------
Michael L. Stanwood
HUGHES SUPPLY, INC.
By: David H. Hughes
----------------------------
Its: Chairman
--------------------------
12
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that James D. Davis, whose name as Vice-President of JEM-REALTY,
INC., a Delaware corporation, is signed to the foregoing instrument and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation on the day
the same bears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public
My Commission Expires:
2-2-98
---------------------------------
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that MICHAEL L. STANWOOD, whose name as President of STANREAL,
LLC, a Texas limited liability company, the General Partner of STANWOOD
INTERESTS LIMITED PARTNERSHIP, a Texas limited partnership, is signed to the
foregoing instrument and who is known to me, acknowledged before me an this day
that, being informed of the contents of said instrument, as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation on the day the same bears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public
My Commission Expires:
2-2-98
--------------------------------
13
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that David H. Hughes, whose name as Chairman of Hughes Supply,
Inc., a Florida corporation, is signed to the foregoing instrument and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation on the day
the same bears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public
My Commission Expires:
2-2-98
--------------------------------
EXHIBIT A LEGAL DESCRIPTION OF LAND
Lying and being in the City of Charlotte, Mecklenburg County, North Carolina
and being more particularly described as follows:
Being all of Lots 1 and 2 of Block C of Garden Acres Subdivision as same is
shown on a map thereof recorded in Map Book 4, Page 201, Mecklenburg County
Public Registry.
LESS AND EXCEPT THE FOLLOWING:
LEGAL DESCRIPTION OF BUILDING FOOTPRINT
That certain one-story brick building located in Charlotte, Mecklenburg
County, North Carolina, with a foundation footprint more particularly
described as follows:
BEGINNING at a point on the northernmost corner of the building, said
point being located S. 55-22-19 W. 68.49 feet from an old iron located in
the proposed right of way margin of Pressley Road, said iron also being
the common corner with property owned, now or formerly, by Exit Fourteen
Associates (Deed Book 4815, Page 634); thence from said Point of Beginning
S. 51-52-14 E. 45.60 feet to a point; thence S. 38- 15-01 W. 3.00 feet to
a point; thence S. 51-52-14 E. 12.00 feet to a point; thence N. 38-15-01
E. 3.00 feet to a point; thence S. 51-52-14 E. 31.30 feet to a point;
thence S. 38-15- 01 W. 109.00 feet to a point; thence N. 51-52-14 W.
130.20 feet to a point; thence N. 59-05-12 E. 116.50 feet to the Point and
Place of Beginning, all as shown on that certain survey for JR4 Realty,
Inc. dated January 26, 1994, last revised May 10, 1994 by Carolina
Surveyors, Inc. (Hugh E. White, Jr., NCRLS).
TOGETHER WITH an easement for adjacent and subjacent support from the Land
described above, and a non-exclusive, perpetual easement over and across
the Land for the purposes of (i) a.CC.98, regress, egress, regress, both
vehicular and pedestrian to the Building, (ii) maintenance, improvement,
replacement and repair of the Building and. its appurtanances (i.e., docks
steps, porches) and (iii) parking of automobiles and trucks in the
Exclusive Area, as defined in the Reciprocal Easement and Operating
Agreement recorded contemporaneously herewith.
TOGETHER WITH all rights and obligations as landlord under that certain
lease between Ronald W. Kurstin and Jay Sadofsky, as landlord, and
Southern School Supply, Inc. (successor to Stone Southern School Supply),
as tenant, dated September 30, 1988.
-4-
LESS AND EXCEPT THE FOLLOWING:
LEGAL DESCRIPTION OF AIR RIGHTS
The air space above grade over that certain tract or parcel of land lying
and being in the City of Charlotte, Mecklenburq County, North Carolina and
being more particularly described as follows:
Beginning at an old iron located in the proposed right of way margin of
Pressley Road, said iron also marking the common corner with property
owned, now or formerly, by Exit Fourteen Associates (Deed Book 4815, Page
634), thence N. 72-06-34 W. 76.38 feet to a point in Pressley Road: thence
S. 37-53-00 W. 279.38 feet, crossing the proposed right of way margin of
Pressley Road at 38.48 feet, to a point: thence N. 51-52-14 W. 168.98 feet
to a point on the common boundary of property owned by Exit Fourteen
Associates, now or formerly; thence N. 58-56-07 E. 270.59 feet to the
Point or Place of Beginning, containing .721 acres all as shown on #at
certain As Built Survey for JEM Realty, Inc., dated January 26, 1994, last
revised May 10, 1994 by Carolina Surveyor's, Inc. (Hugh E. White, Jr.,
NCRLS).
The Building and Air Rights have been conveyed from Grantor to J. David
Fortenbery by deed, recorded simultaneously herewith.
TOGETHER WITH all rights and privileges accruing under that certain Reciprocal
Easement and Operating Agreement by and between Ronald W. Kurstin and Jay
Sadofsky, as owner of the Land, and J. David Fortenbery, as owner of the
Building and Air Rights, dated as of the dated hereof and recorded prior hereto.
-5-
EXHIBIT B
[MAP]
April 1, 1999
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED VIA OVERNIGHT MAIL
Jem-Realty, LLC Stanwood Interests Limited Partnership
320 Park Place Tower c/o Michael L. Stanwood
2001 Park Place North 8505 Monroe Road
Birmingham, AL 35203 Houston, TX 77061
Re: Branch No. 9011 Southwest Carbon & Alloy
Lease Agreement dated May 13, 1996 by and between
Jem-Realty, Inc., and Stanwood Interests Limited
Partnership, as Lessor, and Hughes Supply, Inc.,
as Lessee ("Lease")
Dear Sirs:
Pursuant to Section 3 of the above referenced Lease, please be
advised that Hughes Supply, Inc. has elected to extend the term of the Lease for
an additional five (5) years. The extended term will commence May 13, 1999 and
will expire May 12, 2004, and will be on all of the terms and conditions of the
Lease.
Please sign and date the Landlord Consent at the bottom of this
letter and return it by overnight mail in the enclosed Federal Express envelope.
Thank you for your assistance with this matter.
Very truly yours,
Mark Scimeca,
Associate General Counsel
Enclosure
c: Steve Armer, Branch Manager (via inter-branch mail)
Jeff Clyne, General Manager (via inter-branch mail)
Benjamin P. Butterfield, Esquire (via hand delivery)
Landlord Consent:
Accepted and Agreed to by:
Jem-Realty, LLC
By: _________________________________ Date:_______________
Landlord
Landlord Consent:
Accepted and Agreed to by:
Stanwood Interests Limited Partnership
By: _________________________________ Date:_______________
Landlord
March 19, 1999
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED VIA OVERNIGHT MAIL
Jem-Realty, LLC Stanwood Interests Limited Partnership
320 Park Place Tower c/o Michael L. Stanwood
2001 Park Place North 8505 Monroe Road
Birmingham, AL 35203 Houston, TX 77061
Re: Branch No. 9017 Charlotte-Multalloy
Lease Agreement dated May 13, 1996 by and between
Jem-Realty, Inc., and Stanwood Interests Limited
Partnership, as Lessor, and Hughes Supply, Inc.,
as Lessee ("Lease")
Dear Sirs:
Pursuant to Section 3 of the above referenced Lease, please be
advised that Hughes Supply, Inc. has elected to extend the term of the Lease for
an additional three (3) years. The extended term will commence May 13, 1999 and
will expire May 12, 2002, and will be on all of the terms and conditions of the
Lease.
Please sign and date the Landlord Consent at the bottom of this
letter and return it by overnight mail in the enclosed Federal Express envelope.
Thank you for your assistance with this matter.
Very truly yours,
Mark Scimeca,
Associate General Counsel
Enclosure
c: Greg Ogburn, Branch Manager (via inter-branch mail)
Benjamin P. Butterfield, Esquire (via hand delivery)
Landlord Consent:
Accepted and Agreed to by:
Jem-Realty, LLC
By: ______________________________ Date:_______________
Landlord
Landlord Consent:
Accepted and Agreed to by:
Stanwood Interests Limited Partnership
By: ______________________________ Date:_______________
Landlord
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment"), made and
entered into as of December 31, 2001 (the "Effective Date") by and between
HUGHES SUPPLY, INC., a Florida corporation (the "Assignor"), and HSI NORTH
CAROLINA, LLC, a North Carolina limited liability company ("Assignee").
W I T N E S S E T H:
WHEREAS, due to legal, tax and compliance costs in North Carolina,
Assognor has decided to convey its assets in North Carolina to a newly formed
North Carolina linited liability company; and
WHEREAS, Assignor and Assignee desire for Assignor to assign all of
Assignor's rights, title and interest in and to all real property leases
including without limitation to those leases set forth in Exhibit "A", attached
hereto and incorporated herein by this reference located in North Carolina
(collectively, "Leases") to Assignee and for Assignee to receive and assume such
rights, title and interest to the Leases;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Assignment by Assignor. From and after the Effective Date, Assignor
hereby assigns, transfers and sets over to Assignee all of Assignor's rights,
title and interest in and to all of the Leases.
2. Assumption by Assignee. From and after the Effective Date, Assignee
hereby accepts the foregoing assignment of and assumes the Leases.
3. Governing Law. This Assignment shall be construed and enforced in
accordance with the laws of North Carolina, but without regard to principles of
such laws relating to conflicts of laws. Any action to construe or enforce this
Assignment shall be brought in the proper court in the State of North Carolina.
4. Counterparts. This Assignment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original and all of which
shall together constitute one and the same agreement.
5. Notwithstanding anything to the contrary contained herein, nothing
contained herein shall release Assignor from any Lease or other obligation
Assignor may have to any third party.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year first above written.
"Assignor"
HUGHES SUPPLY, INC.,
By: Benjamin P. Butterfield
Name: Benjamin P. Butterfield
Title: Secretary & General Counsel
"Assignee"
HSI NORTH CAROLINA, LLC
By: Benjamin P. Butterfield
Name: Benjamin P. Butterfield
Title: Secretary
EXHIBIT "A"
Lease Agreement dated April 3, 2000 between Troy B. Carter ("Landlord") and
Hughes Supply, Inc. ("Tenant") for real property located in Fayetteville, N.C.
Lease Agreement dated October 1, 1998 between Walker S. Stone d/b/a Liberty
Warehouses ("Landlord") and Hughes Supply, Inc. ("Tenant") for real property
located in Durham, N.C.
Lease dated March 7, 2001 between Cabot Industrial Properties, L.P.
("Landlord") and Hughes Supply, Inc. ("Tenant"), as amended and assigned, for
real property located in Monroe, North Carolina
Lease dated February 1, 1998 between Five Points Corporation
("Landlord") and Hughes Supply, Inc. ("Tenant") for certain real property
located in Albermarle, North Carolina
Lease dated January 1, 2000 between Sloan Properties, LLC ("Landlord")
and Hughes Supply, Inc. ("Tenant") for that certain real property located in
Thomasville, North Carolina
Lease dated January 28, 1994 between Swaim Investment Company ("Landlord") and
Hughes Supply, Inc. successor by merger to Swaim Supply Company ("Tenant") for
that certain real property located in High Point, North Carolina
Lease dated January 28, 1994 between Swaim Investment Company ("Landlord") and
Hughes Supply, Inc. successor by merger to Swaim Supply Company ("Tenant"), as
amended, for that certain real property located in Salisbury, North Carolina
Lease dated January 28, 1994 between Swaim Investment Company ("Landlord") and
Hughes Supply, Inc. successor by merger to Swaim Supply Company ("Tenant"), as
amended, for that certain real property located in Henderson, North Carolina
Lease dated March 20, 2000 between CHP of Goldsboro, LLC ("Landlord")
and Hughes Supply, Inc. ("Tenant") for that certain real property located in
Goldsboro, North Carolina
Lease dated May 24, 2001 between Stratford Industrial Associated, LLC
("Landlord") and Hughes Supply, Inc. ("Tenant") for that certain real property
located in Winston Salem, North Carolina
Lease dated January 19, 1999 between Mr. Kirby M. Crooke and Mrs. Mary Jane
Crooke ("Landlord") and Hughes Supply, Inc. ("Tenant") for real property located
in Monroe, North Carolina
Lease dated March 1, 1999 between W & W Investments ("Landlord") and Hughes
Supply, Inc. ("Tenant") for real property located in Rocky Mount, North Carolina
Lease dated March 1, 1999 between L & M Investments ("Landlord") and Hughes
Supply, Inc. ("Tenant") for real property located in Rocky Mount, North Carolina
Lease dated October 31, 2001 between Manna Pro Corporation ("Landlord") and
Hughes Supply, Inc. ("Tenant") for real property located in Stanford, North
Carolina
Lease dated May 19, 1997 between Edbar Associates ("Landlord") and Hughes
Supply, Inc. ("Tenant") for real property located in Ashville, North Carolina
Lease dated September 30, 1998 between Leonhardt Enterprises ("Landlord") and
Hughes Supply, Inc. ("Tenant") for real property located in Concord, North
Carolina
Lease dated May 13, 1996 between JEM-Realty, Inc. and Stanwood Interests Limited
Partnership (collectively "Landlord") and Hughes Supply, Inc. ("Tenant"), as
amended for real property located in Charlotte, North Carolina
Lease Agreement dated March 13, 1997 between Venture North, LLC ("Landlord") and
Hughes Supply, Inc. ("Tenant") for that certain real property located in
Wilmington, North Carolina
Sublease Agreement dated July 9, 1998 between Hughes Supply, Inc. ("HSI") and
LeBleu Corporation ("Subtenant") for that certain real property located in
Wilmington, North Carolina
Lease Agreement dated December 1, 1997 between I.L. Smith Construction, Inc.
("Landlord") and Hughes Supply, Inc. ("HSI")
Sublease Agreement dated January 12, 2001 between Hughes Supply, Inc.
("Sublandlord") and Southeast Ocean Pools, Inc. for that certain real property
located in Leland, North Carolina
ORL1 #696007 v2
Exhibit 10.24
Sub-ITEM (b)
STATE OF TEXAS
La Porte, Texas
COUNTY OF HARRIS
LEASE AGREEMENT
THIS LEASE (this "Lease") made this the 13th day of May, 1996, by and
between JEM-REALTY, INC., a Delaware corporation, and STANWOOD INTERESTS LIMITED
PARTNERSHIP, a Texas limited partnership, collectively first party, hereinafter
referred to as "Lessor," and HUGHES SUPPLY,INC., a Florida corporation, second
party, hereinafter referred to as "Lessee."
W I T N E S S E T H:
1. Premises. Lessor, for and in consideration of the rents, covenants,
agreements, and stipulations hereinafter mentioned, reserved and contained, to
be paid, kept and performed by Lessee, has leased and rented, and by these
presents does lease and rent, unto said Lessee, and said Lessee hereby agrees to
lease and take upon the terms and conditions which hereinafter appear, the
following described property (hereinafter called "Premises") and personal
property as hereinafter set forth.
The Premises consists of real property and improvements located at 11835
West Fairmont Parkway, LaPorte, Texas 77571, including, without limitation,
approximately 2.323 (plus or minus) acres of real property described in Exhibit
A to this Lease together with the warehouse and office facility and other
improvements thereon described in Exhibit B to this Lease.
2. Warranties. Lessor warrants that Lessor owns the premises in fee simple and
has the right to enter into this Lease; that the Premises are free from liens
and encumbrances except (for utility easements and unviolated restrictive
covenants which do not materially adversely affect Lessee's intended use of the
Premises; that the Premises abuts one or more publicly dedicated roads; that the
Premises do not, as of the date of this Lease, and will not, by reason of the
commencement of the term of this Lease, fail to conform to all applicable
building ordinances, laws and regulations in any respect which will materially
adversely interfere with Lessee's use of the Premises for its intended purposes;
that Lessee's proposed use of the Premises is consistent with the zoning
classification applicable to the Premises; that Lessor's past and current uses
of the Premises comply with federal, state and local environmental laws and
regulations; that Lessor has not received a citation from any regulatory agency
for noncompliance with environmental laws; that Lessor has no knowledge of the
presence of fuel storage tanks or of hazardous, toxic, dangerous, or
carcinogenic materials, substances or contaminants, formaldehyde,
polychlorinated biphenyls ("PCBs"), lead, lead dust, asbestos, asbestos
containing materials ("ACMs"), oil, gasoline, other petroleum products or
byproducts, radon or other similar materials or substances (collectively
"Hazardous Materials") on, in or under the Premises and has no knowledge of any
contamination present on, in or under the Premises; and covenants that Lessee,
provided it performs all of its obligations under this Lease, will peaceably and
quietly enjoy the Premises during the Lease term without any disturbance from
Lessor, anyone claiming by, through or under Lessor, or any other party, except
as otherwise specifically provided in this Lease. If any of title exceptions to
the Premises are hereinafter found to exist, such exceptions will not materially
affect Lessee's use of the Premises.
3. Term. The initial term of this Lease shall be for three (3) years, said term
to begin on the 13th day of May, 1996 (the "Commencement Date") and end on the
12th day of May, 1999 (the "Initial Term"). The Initial Term of this Lease may
be extended, at the option of the Lessee, for up to two (2) successive periods
of three (3) years (each such period of three (3) years herein sometimes
referred to as an "Extended Term") as follows:
First Extended Term - May 13, 1999 to May 12, 2002.
Second Extended Term - May 13, 2002 to May 12, 2005.
The option to extend shall be exercised by the Lessee by giving notice to
the Lessor not more than twelve (12) nor less than six (6) months prior to the
expiration of the then existing term. Each Extended Term shall be upon the same
terms, covenants, and conditions as provided in the Lease. Any termination of
this Lease during the Initial Term or any Extended Term shall terminate all
rights of any further extension hereunder. The use of the word "Term" herein
shall be deemed to include the Initial Term as well as any Extended Term.
4. Rental rent for the Premises, Lessee shall pay to Lessor in advance on the
first day of each calendar month of the Term the sum of $3,800.00 per month,
being at the rate of $45,600.00 per annum; provided, however, on each
anniversary of the Commencement Date during the Term, the annual rent shall be
increased over the rent for the prior lease year by an amount equal to the
percentage increase in the CPI from the first month of the previous lease year
to such anniversary date. Such adjustment, however, shall not result in any
instance in a reduction of the annual rent, nor shall any annual rent adjustment
result in an increase in the annual rent by an amount in excess of 3% of the
previous year's rent.
For purposes of this Lease, "CPI" refers to the Consumer Price Index for
All Urban Consumers (CPI-U), All Items, US City Average (1982-1984 equals 100),
published by the United States Department of Labor, Bureau of Labor Statistics.
If the CPI is discontinued, such other index as published by the Department of
Labor, Bureau of Labor statistics, or its successor agency, in substitution
therefor or replacement thereof shall be used for making said computations. If
the Department of Labor or its successor agency shall no longer maintain such
statistics, comparable statistics published by a responsible financial
periodical or recognized authority selected by the Lessor and Lessee shall be
used for making said computations. If the base years "(1982-1984 equals 100)" or
other base year used in computing the Index is changed, the figures used in
making said adjustment shall be changed
2
accordingly so that all increases in the CPI, or any substituted or replacement
index, as the case may be, are taken into account notwithstanding any such
change in the base year.
5. Utility Bills. Lessee shall pay all utility bills of all types, including,
but not limited to, water and sewer, natural gas, electricity and sanitary pick
up bills for the Premises, or used by Lessee in connection therewith. If Lessee
does not pay same, Lessor may pay the same, and such payment shall be added to
the rental of the Premises.
6. Ad Valorem Taxes. Lessee shall pay all real property taxes, special and
general assessments, water and sewer assessments and other rents, rates, and
changes and other guaranteed impositions of every kind and nature extraordinary
as well as ordinary relating to the premises or any business conduct thereon.
Lessee shall also pay any and all ad valorem taxes assessed against the personal
property located on the Premises during the Term.
7. Insurance. Lessee will carry, at Lessee's sole cost and expense, "All Risk"
Insurance Coverage on the Premises in an amount not less than the full insurable
value. The term "full insurable value" shall mean the actual replacement cost,
excluding foundation and excavation costs, as determined by Lessor. Such
policies shall name Lessor as an additional named insured.
All insurance provided for in this Lease shall be effected under
enforceable policies issued by insurers of recognized responsibility licensed to
do business in this state. At least fifteen (15) days prior to the expiration
date of any policy, the original renewal policy for such insurance shall be
delivered by Lessee to Lessor. With fifteen (15) days after the premium on any
policy shall become due and payable, Lessor shall be furnished with satisfactory
evidence of its payment.
If Lessee provides any insurance required by this Lease in the form of a
blanket policy, Lessee shall furnish satisfactory proof that such blanket policy
complies in all respects with the provisions of this Lease and that the coverage
thereunder is at least equal to the coverage which would be provided under a
separate policy covering only the Premises.
If Lessor so requires, the policies of insurance provided for shall be
payable to the holder of any mortgage, as the interest of such holder may
appear, pursuant to a standard mortgagee clause. All such policies shall, to the
extent obtainable, provide that any loss shall be payable to Lessor or to the
holder of any mortgage notwithstanding any act or negligence of Lessee which
might otherwise result in forfeiture of such insurance. All such policies shall,
to the extent obtainable, contain an agreement by the insurers that such
policies shall not be cancelled without at least thirty (30) days prior written
notice to Lessor and to the holder of any mortgage to whom loss hereunder may be
payable.
Lessee will carry at Lessee's own expense insurance coverage on all
equipment, fixtures and appliances.
3
8. Maintenance and Repairs by Lessee. Lessor warrants as of the Commencement
Date of this Lease that the Premises are structurally sound and that all
lighting and all operating systems are in good condition and are not in need of
repair. Except as set forth in Paragraph 9, Lessee shall, at it's own expense,
keep and maintain the interior of the Premises, including all systems
pertaining to water, sewer, electrical, heating, ventilation, air conditioning
and lighting. Lessee shall also perform exterior lawn maintenance. It is the
intent of the parties that Lessee shall only be required to make minor repairs
not repairs or replacements which are structural in nature, extra ordinary or
capital in nature, or those which will increase the value of the Premises
subsequent to the end of the Term. In addition, the Lessee shall not be required
to repair latent defects in the Premises.
9. Repairs by Lessor. Lessor agrees to maintain and keep in good repair the
roof, exterior walls, structural supports (including foundations), exterior
doors of any and all buildings located on the Premises, and all water or sewer
pipes located underground or in the slab, sidewalks, parking lots, driveways and
other vehicular access and maneuvering areas. Lessor shall also be responsible
for any repairs or replacements which are structural in nature, which are
extraordinary or capital in nature, which will increase the value of the
Premises subsequent to the end of the Term and any other repairs not expressly
delegated to Lessee in this Lease. Lessor shall also promptly clean up and
dispose of any Hazardous Materials found on, in or under any portion of the
Premises and remediate the Premises to comply with any and all environmental
laws applicable thereto, and to pay for all clean-up and disposal costs at no
cost to Lessee, unless directly caused by Lessee, its employees, agents or
contractors.
10. Destruction of or Damage to the Premises. If the Premises are totally
destroyed by storm, fire, lightning, earthquake or other casualty, this Lease
shall terminate as of the date of such destruction, and rental shall be
accounted for as between Lessor and Lessee as of that date. If the Premises are
damaged, but not wholly destroyed by any of such casualties, rental shall abate
in such proportion as use of the Premises has been destroyed, and Lessor shall
restore the Premises to substantially the same condition as before the damage as
speedily as practicable, whereupon full rental shall recommence; provided
further, however, that if the damage shall be so extensive the same cannot be
reasonably repaired and restored within three (3) months time from the date of
the casualty, then either Lessor or Lessee may cancel this Lease by giving
written notice to the other party within thirty (30) days from the date of such
casualty. And, in such event, rental shall be apportioned and paid up to the
date of such casualty.
11. Modifications and Alterations to the Premises. No modifications,
alterations, or improvements to the building or openings cut through the roof
are allowed without the prior written consent of Lessor, which consent shall not
be unreasonably withheld or delayed.
12. Removal of Fixtures. Lessee may (if not in default hereunder) prior to the
expiration of this Lease, or any extension thereof, remove all personal
property, fixtures and equipment which Lessee has placed in the Premises,
provided Lessee repairs all damages to the Premises caused by such removal
4
13. Return of the Premises.. Lessee agrees to return the Premises to Lessor at
the expiration, or prior termination, of this Lease in good condition and
repair, reasonable wear and tear, damage by storm, fire, lightning, earthquake
or other casualty alone excepted.
14. Condemnation. If the whole of the leased Premises, or such portion thereof
as will make the Premises unusable for the purpose herein leased, be condemned
by any legally constituted authority for any public use or purpose or if Lessor
sells the Premises under threat of condemnation, then in either of said events,
the Term shall cease from the time when possession thereof is taken by public
authorities, and rental shall be accounted for as between Lessor and Lessee as
of that date. Such termination, however, shall be without prejudice to the
rights of either Lessor or Lessee to recover compensation and damage caused by
condemnation from the condemnor. It is further understood and agreed that
neither Lessee, nor Lessor, shall have any rights in any award made to the other
by any condemnation authority.
If there is a partial taking and if it is not so extensive as to render
the remaining portion (after restorations) unsuitable for the business of
Lessee, then this Lease shall continue in effect and Lessor, upon receipt of the
award in condemnation, will expeditiously commence and complete all necessary
repairs and restorations to the building on the Premises so as to constitute the
portion of the building not taken a complete architectural unit and restore it
as nearly as practicable to its prior condition; provided, however, that such
work does not exceed the scope of the original construction of the building, and
Lessor will not be under any duty to expend amounts in excess of the award
received by Lessor. Rent, taxes and other charges payable by Lessee will
equitably abate while Lessor's repairs and restorations are in process. If a
partial taking consists only of a street widening or utility easement which does
not materially affect Lessee's use of the Premises, this Lease will continue in
full force and effect without abatement of rent, taxes or other charges.
15. Governmental Orders. Lessee agrees, at its own expense and solely in
relation to those portions of the Premises which Lessee is required to maintain
or repair under Paragraph 8, to promptly comply with all requirements of any
legally constituted public authority made necessary by reason of Lessee's
specific use of said Premises. Notwithstanding the foregoing, the Lessee shall
not be liable for: (a) repairs, alterations, replacements or retrofitting
required by the accessibility or path of travel requirements set forth in Title
III of the Americans With Disabilities Act of 1990, 42 USC ss. 2101, et seq. and
regulations and guidelines promulgated thereunder, as amended from time to time
(collectively referred to as "ADA"); (b) removal or abatement of ACMs; (c)
repairs, alterations or replacements required to comply with federal, state or
local indoor air quality laws, rules or regulations; (d) repairs or replacements
incident to CFC conversions for heating and cooling systems; (e) installation of
fire sprinkler systems; or (f) repairs, alterations or replacements described in
Paragraph 9. Lessor agrees to promptly comply with any other governmental or
regulatory requirements if not made necessary by reason of Lessee's occupancy
of the Premises or relating to those portions of the Premises which Lessor is
required to maintain or repair under Paragraph 9.
5
16. Assignment. Except as set forth below, Lessee may not assign this Lease, or
any interest thereunder, or sublet the Premises in whole or in part without
prior written notice to Lessor of its intent to assign or sublease. Lessee may
(a) sublet all or part of the Premises to any corporation, the majority of whose
shares are owned by Lessee, during the period of such majority ownership only or
(b) assign this Lease to any corporation which owns more than fifty percent
(50%) of Lessee's issued and outstanding shares, or which succeeds to the entire
business of Lessee through purchase, merger, consolidation or reorganization, or
to any affiliate sharing common majority ownership with the Lessee. Subtenants
or assignees shall become liable directly to Lessor for all obligations of
Lessee hereunder, without relieving Lessee's liability.
17. Mortgagee's Rights. Lessee's rights shall be subject to any bona fide
mortgage or deed to secure debt which is now, or may hereafter be, placed upon
the Premises by Lessor, and Lessee agrees, at Lessor's cost, to execute and
deliver such documentation as may be reasonably required by any such mortgagee
to effect any subordination. Provided, however, as a condition to such
subordination, Lessor must secure from each mortgagee a nondisturbance agreement
acceptable to Lessee providing that in the event of a foreclosure the mortgagee
will recognize the validity of this Lease and, provided that Lessee is not in
default, will not disturb Lessee's possession or its rights under this Lease.
18. Use of the Premises. The Lessee may use the Premises for office/warehouse
and distribution purposes, including outdoor storage, or for any other lawful
purpose. The Premises shall not be used for any illegal purposes, nor in any
manner to create any nuisance or trespass; nor in any manner to vitiate the
insurance, based on the above purposes for which the Premises are leased.
19. Signs. Lessee shall have the right to erect at Lessee's sole expense a sign
at the entrance to the Premises. This sign shall not be other than a customary
trade sign identifying the business of Lessee. The erection of this sign by
Lessee shall be subject to and in conformity with all applicable laws, zoning
ordinances and building restrictions or covenants of record. On or before
termination of this Lease, Lessee shall remove the sign thus erected, and shall
repair any damage or disfigurement, caused by such removal.
20. Reservation of Right to Sell. Lessor shall have the right to sell the
Premises during the term of this Lease, subject to the following:
a. Lessor agrees to give notice of each proposed sale, including the
purchase price and all other terms and conditions, to Lessee;
b. Lessee will have the right to purchase the Premises at the purchase
price and on the other terms and conditions offered by Lessor or offered to
Lessor by the third party (which offer Lessor wishes to accept), by giving
notice to Lessor within 20 business days after Lessor has notified Lessee of the
terms of Lessor's proposed sale; and
6
c. If Lessee does not give notice of the exercise of its option within
such time, Lessor will have the right to sell the Premises upon the terms stated
in the offer made or received by Lessor, but not upon terms more favorable to
the purchaser, unless Lessor again gives notice pursuant to subparagraph a,
above, and Lessee does not exercise its option based upon the new terms.
21. Entry for Carding, etc. Lessor may card the Premises "For Rent" or "For
Sale" ninety (90) days before the termination of this Lease. Lessor may enter
the Premises at reasonable hours during the term of this Lease to exhibit the
same to prospective purchasers and to make repairs required of Lessor under the
terms hereof.
22. Indemnity. Lessor agrees to indemnify and save harmless Lessee and its
parents, subsidiaries, affiliates, directors, officers, employees, agents,
servants, attorneys and representatives from any and all claims, causes of
action, damages, fines, judgments, penalties, costs (including environmental
clean-up costs and response costs), liabilities, expenses or losses (including
without limitation, reasonable attorneys' fees and expenses of litigation)
arising during or after the Term: (a) as a result of any violation by Lessor of
any applicable federal, state or local environmental laws or regulations, as now
or hereinafter in effect, regulating, relating to or imposing liability or
imposing standards of conduct concerning any Hazardous Materials ("Environmental
Laws") relating to the Premises; or (b) as a result of the presence,
disturbance, discharge, release, removal or cleanup of Hazardous Materials as a
result of environmental contamination or other similar conditions which occurred
or first arose prior to commencement of the Term and during the period of
Lessor's ownership of the Premises; or (c) as a result of any violation of the
accessibility or path of travel requirements imposed by ADA; or (d) as a result
of any of Lessor's representations and warranties being untrue. These
indemnities shall survive the expiration, cancellation or termination of the
Lease.
Lessee agrees to indemnify and save harmless Lessor and its stockholders,
affiliates, directors, officers, employees, agents, servants, attorneys and
representatives from any and all claims, causes of action, damages, fines,
judgments, penalties, costs (including environmental clean-up costs and response
costs), liabilities, expenses or' losses (including without limitation,
reasonable attorneys' fees and expenses of litigation) arising during or after
the Term: (a) as a result of Lessee's use and occupancy of the Premises,
including, without limitation, any violation by Lessee of any Environmenta1
Laws relating to the Premises; or (b) as a result of the presence, disturbance,
discharge, release, removal or cleanup of Hazardous Materials as a result of
environmental contamination or other similar condition which occurred or first
arose after the commencement of the Term. These indemnities shall survive for a
period of three (3) years following the expiration, cancellation or termination
of this Lease,
23. Cancellation of Lease by Lessor. It is mutually agreed that in the event:
a The rent herein reserved is not paid at the time and place when and
where due and Lessee fails to pay said rent within five (5) days after written
demand from Lessor, or
7
b. Lessee shall fail to comply with any material term, provision,
condition, or covenant of this Lease, other than the payment of rent, and shall
not cure such failure within thirty (30) days after notice to Lessee of such
failure to comply or such additional time period as may reasonably necessary to
effect a cure of the default provided that Lessee commences and diligently
pursues a cure of the default; or
c. Lessee causes any lien to be placed against the Premises and does not
cure the same within thirty (30) days after notice from Lessor to Lessee
demanding cure; in any of such events, Lessor shall have the option to do any of
the following, in addition to, and not in limitation of any other remedy
permitted by law or by this Lease:
i. Lessor may terminate this Lease, in which event Lessee shall
immediately surrender the Premises to Lessor. Lessee agrees to indemnify Lessor
for all loss and damage which Lessor may suffer by reason of such termination,
whether through inability to relet the Premises, or through decrease in rent, or
otherwise; or
ii. Lessor, as Lessee's agent, without terminating this Lease, may
terminate Lessee's right of possession, and, at Lessor's option, enter upon and
rent the Premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Lessor deems proper.
Lessee shall be liable to Lessor for the deficiency, if any, between Lessee's
rent hereunder and the price obtained by Lessor on reletting.
Pursuit of any of the foregoing remedies shall not preclude pursuit
of any of the other remedies herein provided or any other remedies provided by
law. In any case, Lessor shall use best efforts to mitigate Lessee's damages.
Any notice in this provision may be given by Lessor or its attorney.
24. Effects of Termination of the Lease. No termination of this Lease prior to
the normal ending thereof, by lapse of time otherwise, shall affect Lessor's
right to collect rent for the period prior to the termination thereof.
25. Default of Lessor. Should Lessor fail to perform any of its obligations
hereunder, Lessor shall have a period of 30 days after its receipt of written
notice from Lessee of a failure of performance within which to commence a cure
of that failure. Failure of Lessor to commence that cure within the 30-day
period or to effect that cure within that 30-day period shall be an event of
default under this Lease and Lessee may, at its option, elect to:
a. Terminate this Lease upon 30 days written notice to Lessor;
b. Bring an action to require specific performance of Lessor's
obligations;
c. Provide Lessor with an additional period of time within which to effect
that cure;
8
d. Commence such cure itself, and Lessee may either, at its option, offset
any expenses it incurs in effecting such cure against the rent and other
charges due and payable by Lessee hereunder, or require that Lessor
immediately reimburse Lessee for its expenses; provided, however, in the
event of an emergency, Lessee may immediately effect a cure of Lessor's
failure should Lessor fail to act immediately to do so, without the
requirement of any notice by Lessee to Lessor; and/or
e. Pursue any other remedies provided herein or provided by law.
26. Purchase Option. Lessee shall have the option to purchase the Premises at
Fair Market Value, payable in cash at closing, said option being exercisable by
Lessee at any time during the Term by written notice given by Lessee to Lessor.
If this option is exercised by Lessee, closing shall be held within sixty (60)
days of the notice of exercise at a time and place, and on a date, reasonably
satisfactory to Lessor and Lessee (the Term shall be extended, if necessary,
through and including the date of closing). Title to the Premises shall be
conveyed free of any liens or encumbrances, and subject only to current year's
ad valorem taxes, applicable building restrictions, easements for utilities
servicing the Premises, and such other conditions of title as may not, in
Lessee's sole discretion, adversely affect the use of the Premises by Lessee or
as may be approved by Lessee (the "Permitted Exceptions"). Immediately following
the date of exercise of this option, Lessor shall furnish Lessee with a
commitment for a standard owner's title insurance policy, ATLA Form B,
reflecting only Permitted Exceptions and standard printed exceptions (the
"Commitment"). Immediately following closing, Lessor shall furnish Lessee with
an owner's title insurance policy issued in conformity with the Commitment. The
cost of the title insurance Commitment and policy shall be borne by Lessor;
provided, however, that the cost of any special endorsements shall be borne by
Lessee; and, further provided, that if Lessee obtains a mortgage title insurance
policy at closing, the cost of the combined owner's and mortgagee's policies
shall be divided equally between Lessor and Lessee. Ad valorem taxes, rent due
under the Lease, utilities and any insurance or other prepaid items assumed by
the Lessee shall be prorated as of the date of closing. Title to the Premises
shall be conveyed by general warranty deed in form acceptable for recording,
subject only to the Permitted Exceptions. Lessor and Lessee shall each bear
their respective costs in connection with exercise of the option and the
closing, including attorney's fees. Lessee shall bear the cost of recording the
deed, the cost of any survey obtained by Lessee, and all costs related to any
financing obtained by Lessee. Except for any prepaid rent, Lessee is not
entitled to a credit for rental payments paid by the Lessee during the Term of
the Lease.
The Lessor and Lessee shall attempt to determine the Fair Market Value by
mutual agreement within fifteen (15) days after Lessee gives notice of its
exercise of the option. However, if the parties cannot reach agreement on the
Fair Market Value, the following provisions shall apply:
a. Lessor and Lessee shall each select a qualified real estate
appraiser within the next fifteen (15) days. Each appraiser must demonstrate to
the reasonable
9
satisfaction of both Lessor and Lessee that he has significant experience in
appraising similar properties.
b. The Fair Market Value shall be determined by the appraisers
within thirty (30) days thereafter. Each of the appraisers shall be instructed
to prepare an appraisal of the Premises in accordance with the following
instructions: The method of valuing the property shall use any one or a
combination of appropriate appraisal methodologies (i.e., replacement cost,
comparable sales, and income); provided, however, that any valuation based upon
the income approach (i.e., the capitalization of net rental amounts abstracted
from comparable real estate leased for similar uses) shall exclude from
consideration this Lease and the rental provided for herein. The appraised value
is to be a single value, not a range of values and not a schedule of different
values based upon different methodologies or different assumptions. The value of
any alterations, additions or improvements to the Premises made by Lessee shall
be included in the determination of Fair Market Value
If the appraised values determined by the two appraisers do not differ by more
than ten percent (10%), the purchase price shall be the average of the two
values. If the difference is more than ten percent (10%), and the two appraisers
cannot agree upon a value (in which event such agreed value shall be binding
upon Lessor and Lessee), the two appraisers shall select a third appraiser
within fifteen (15) days thereafter. The third appraiser shall be instructed to
select a value within the range of values established by the initial two (2)
appraisals, within twenty (20) days after his appointment, following the
instructions set forth above, and the Fair Market Value so selected by the third
appraiser shall be binding upon Lessor and Lessee as the purchase price for the
Premises.
27. Holding Over. If Lessee remains in possession of the Premises after
expiration of the term hereof, with Lessor's acquiescence and without any
express agreement of the parties, Lessee shall be a tenant-at-will at the rental
rate in effect at end of the Lease; and there shall be no renewal of this Lease
by operation of law.
28. Notices. Any notice given pursuant to this Lease shall be in writing and
sent by ceitified mail to:
a. Lessor: c/o Jem-Realty, Inc.
320 Park Place Tower
2001 Park Place
North Birmingham, Alabama 35203
or to such other address as Lessor may hereafter designate in writing to Lessee.
10
b. Lessee: Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
Attention: J. Stephen Zepf
or to such other address as Lessee may hereafter designate in writing to Lessor.
29. Memorandum of Lease and Option. This Lease shall not be recorded, but the
parties agree to execute a Memorandum of this Lease for recording purposes which
shall set forth the commencement date, the term of the Lease and all extensions,
a legal description of the location of the Premises and a description of
Lessee's rights under this Lease, including the purchase option provided for in
paragraph 26 of this Lease. If Lessee records the Memorandum of Lease and
Option, Lessee agrees to pay all related recording fees and taxes.
30. Attorneys' Fees. In any litigation between the parties regarding this
Lease, the losing party agrees to pay to the prevailing party its reasonable
attorneys' fees and expenses of litigation. For purposes of this Paragraph, a
party is to be considered the prevailing party if:
a. It initiated the litigation and obtains (by judgment oral agreement)
substantially the relief sought; or
b. It did not initiate the litigation and the other party does not obtain
(by judgment or agreement) substantially the relief sought.
31. Waiver of Rights. No failure of Lessor to exercise any power given Lessor
hereunder, or to insist upon strict compliance by Lessee with its obligations
hereunder, and no custom or practice of the parties at variance with the terms
hereof shall constitute a waiver of Lessor's right to demand exact compliance
with the terms hereof.
32. Rights Cumulative. All rights, powers and privileges conferred hereunder
upon the parties hereto shall be cumulative but not restrictive to those given
by law.
33. Time of Essence. Time is of the essence of this Agreement.
34. Definitions. "Lessor" as used in this Lease shall include first party, its
heirs, representatives, assigns, and successors in title to the Premises.
"Lessee" shall include second party, its assigns and successors, and if this
Lease shall be validly assigned, or sublet, shall include also Lessee's
assignees or sub-lessees, as to the Premises covered by such assignment or
sub-lease. "Lessor" and "Lessee" include male and female, singular and plural,
corporation, partnership or individual, as may fit the particular parties.
11
35. Miscellaneous. This Lease contains the entire agreement of the parties
hereto, and no representations, inducements, promises or agreements, oral or
otherwise, between the parties, not embodied herein, shall be of any force or
effect.
If any term, covenant or condition of this Lease or the application
thereof to any person, entity or circumstance shall; to any extent, be invalid
or unenforceable, the remainder of this Lease, or the application of such term,
covenant, or condition to persons, entities or circumstances other than those
which or to which sued may be held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties herein have executed this Lease on the day
and year first above written.
JEM-REALTY, INC.
By: /s/ James D. Davis
----------------------------
Its: President
--------------------------
STANWOOD INTERESTS LIMITED
PARTNERSHIP
By: Stanrel, LLC,
its General Partner
/s/ Michael L. Stanwood
--------------------------
Michael L. Stanwood
HUGHES SUPPLY, INC.
By: /s/ David H. Hughes
----------------------------
Its: Chairman
---------------------------
12
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that James D. Davis, whose name as President of JEM-REALTY, INC.,
a Delaware corporation, is signed to the foregoing instrument and who
is known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation on the day
the same fears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public Robert A. Paine
My Commission Expires:
2-2-98
---------------------------------
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that MICHAEL L. STANWOOD, whose name as President, of STANREAL,
LLC, a Texas limited liability company, the General Partner of STANWOOD
INTERESTS LIMITED PARTNERSHIP, a Texas limited partnership, is signed to the
foregoing instrument and who is known to me, acknowledged before me on this day
that, being informed of the contents of said instrument, he as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation on the day the same bears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public Robert A. Paine
My Commission Expires:
2-2-98
---------------------------------
13
STATE OF ALABAMA )
COUNTY OF JEFFERSON )
I, the undersigned Notary Public in and for said County, in said State,
hereby certify that David H. Hughes, whose name as Chairman of Hughes Supply,
Inc., a Florida corporation, is signed to the foregoing instrument and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation on the day
the same bears date.
Given under my hand and official seal, this 13th day of May, 1996.
/s/ Robert A. Paine
--------------------------------
Notary Public Robert A. Paine
My Commission Expires:
2-2-98
---------------------------------
EXHIBIT A
METES AND BOUNDS DESCRIPTION
Being a 2.323 acre (101,171 sq. ft.) tract of land comprising part of
Richard Pearsall 1/3 League, A-625, La Porte, Harris County, Texas, and further
described as all of that certain 2.319 acre tract conveyed by Friendswood
Development Corporation to Cajun Investment on Feb. 10, 1983 (Harris County
Clerk's File No. H 819145). The 2.323 acre tract as surveyed by H. Carlos Smith,
Engineers & Surveyors, Inc. on October 11, 1993, is more particularly described
by metes and bounds as follows;
COMMENCING at Copperweld 3158 found at the intersection of the North
right-of-way line of Fairmont Parkway (250' ROW) with the Northerly extension of
the West right-of-way Line of Bay Area Boulevard (150' ROW) and being the
Southeast corner of that certain 4.451 acre tract of land conveyed to Bayport
Investors (HCCF No. G 816532).
Thence S 86 degrees 52 minutes 54 seconds W (Reference Bearing);
coincident with the North right-of-way line of Fairmont Parkway; a distance of
595.00 feet to a copperweld found for the Southeast corner of this 2.323 acre
tract and the POINT OF BEGINNING.
Thence S 86 degrees 52 minutes 54 seconds W; coincident with the North
right-of-way line of Fairmont Parkway; a distance of 200.30 feet to a copperweld
found for the Southwest corner of this 2.323 acre tract.
Thence N 03 degrees 09 minutes 05 seconds W (Call N 03 degrees 07 minutes
06 seconds W) a distance of 505.14 feet to a Copperweld found for the
Northwest corner of this 2.323 acre tract.
Thence N 86 6 degrees 54 minutes 21 seconds E (Call N 86 degrees 56
minutes 22 seconds E) a distance of 200.30 feet (Call 200 feet) to a Copperweld
found for the Northeast corner of this 2.323 acre tract.
Thence S 03 degrees 09 minutes 05 seconds E (Call S 03 degrees 07 minutes
06 seconds E); coincident with the West boundary line of that certain 2.5497
acre Westinghouse Electric Corporation tract (HCCF No. H 428711); a distance of
505.06 feet (Call 504.94 feet) returning to the POINT OF BEGINNING.
EXHIBIT A - Page 1 of 1
EXHIBIT B
[MAP]
Hughes Supply, Inc.
New Location Insurance Information
- -------------------------------------------------------------------------------
Please complete the following information required to establish insurance
coverage for new branch locations:
1) New branch name: Southwest Carbon & Alloy Houston
Street (physical) address: 11835 Fairmont Parkway
City, State, Zip Code: LaPorte, TX 77571
Location code (branch number): 009011
Expected date branch will open: May 13, 1996
2) Maximum anticipated inventory value: $1,000,000.00
Maximum anticipated furniture and fixtures value: $ 5,000.00
-------------
Total contents value (total of above): $1,005,000.00
-------------
3) Is this new location located within an already existing HSI branch? No
If yes, please disregard questions 4 through 9.
4) Building construction type (metal, concrete, etc.): Metal
5) Approximate age of building (in years): 15 years
6) Total building square footage: 10,000 sq. ft.
7) Please check one of the following:
|_| (a) The building is owned by Hughes Supply, Inc. or leased from
Hughes, Inc.
|X| (b) The building is leased korn an outside party (other than
Hughes, Inc., and insurance coverage is required to be provided
by Hughes Supply, Inc. under the terms of the lease agreement.
|_| (c) The building is leased from an outside party (other than
Hughes, Inc.) and insurance coverage is not required to be
provided by Hughes Supply, Inc. under the terms of the lease
agreement.
8) If you checked (a) or (b) in question 7 above, please indicate the value
of the building: $275,000.00
9) If this new location replaces another existing location (i.e. due to a
move) and the old location is no longer owned or occupied by Hughes
Supply, Inc., please complete the following infomation:
Old branch name: _______________________
Street (physical) address: _______________________
City, State, Zip Code: _______________________
April 1, 1999
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED VIA OVERNIGHT MAIL
Jem-Realty, LLC Stanwood Interests Limited Partnership
320 Park Place Tower c/o Michael L. Stanwood
2001 Park Place North 8505 Monroe Road
Birmingham, AL 35203 Houston, TX 77061
Re: Branch No. 9011 Southwest Carbon & Alloy
Lease Agreement dated May 13, 1996 by and between
Jem-Realty, Inc., and Stanwood Interests Limited
Partnership, as Lessor, and Hughes Supply, Inc., as
Lessee ("Lease")
Dear Sirs:
Pursuant to Section 3 of the above referenced Lease, please be
advised that Hughes Supply, Inc. has elected to extend the term of the Lease for
an additional five (5) years. The extended term will commence May 13, 1999 and
will expire May 12, 2004, and will be on all of the terms and conditions of the
Lease.
Please sign and date the Landlord Consent at the bottom of this
letter and return it by overnight mail in the enclosed Federal Express envelope.
Thank you for your assistance with this matter.
Very truly yours,
Mark Scimeca,
Associate General Counsel
Enclosure
c: Steven Armer, Branch Manager (via inter-branch mail)
Jeff Clyne, General Manager (via inter-branch mail)
Benjamin P. Butterfield, Esquire (via hand delivery)
Landlord Consent:
Accepted and Agreed to by:
Jem-Realty, LLC
By: ______________________________ Date:_______________
Landlord
Landlord Consent:
Accepted and Agreed to by:
Stanwood Interests Limited Partnership
By: ______________________________ Date:_______________
Landlord
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment"), made and
entered into as of May 13, 1996 by and between HUGHES SUPPLY, INC., a Florida
corporation (the "Assignor"), and SOUTHWEST STAINLESS, L.P., a Delaware limited
partnership ("the Assignee").
W I T N E S S E T H:
WHEREAS, Assignor and Assignee desire for Assignor to assign all of
Assignor's rights, title and interest in and to all real property leases
including without limitation to those leases set forth in Exhibit "A", attached
hereto and incorporated herein by this reference located in Texas (collectively,
"Leases") to Assignee and for Assignee to receive and assume such rights, title
and interest to the Leases;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Assignment by Assignor. Effective as of May 13, 1996, Assignor hereby
assigns, transfers and sets over to Assignee all of Assignor's rights, title and
interest in and to all of the Leases.
2. Assumption by Assignee. Effective as of May 13, 1996, Assignee hereby
accepts the foregoing assignment of and assumes the Leases.
3. Governing Law. This Assignment shall be construed and enforced in
accordance with the laws of Texas, but without regard to principles of such laws
relating to conflicts of laws. Any action to construe or enforce this Assignment
shall be brought in the proper court in the State of Texas.
4. Counterparts. This Assignment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original and all of which
shall together constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year first above written.
"Assignor"
HUGHES SUPPLY, INC.,
a Florida corporation
By:_________________________________
Name: ____________________________
Title:____________________________
"Assignee"
SOUTHWEST STAINLESS, L.P.,
a Delaware limited partnership
By: Z&L Acquisition Corp.,
a Delaware corporation
Its: General Partner
By:_______________________________
Name: ____________________________
Title: ___________________________
EXHIBIT "A"
Lease Agreement dated May 13, 1996 between JEM-Realty, Inc., a Delaware
corporation, and Stanwood Interests Limited Partnership, a Texas limited
partnership ("Lessor") and Hughes Supply, Inc., a Florida corporation ("Lessee")
for real property located at 11835 West Fairmont Parkway, LaPorte, TX
Exhibit 10.24
Sub-ITEM (c)
Monroe Road
Houston, TX
LEASE AGREEMENT
(STANDARD/BUILDING)
THIS LEASE (this "Lease") made this the 1st day of July, 1998, by and
between JEM-REALTY, LLC, a Delaware limited liability company, and STANWOOD
INTERESTS LIMITED PARTNERSHIP, a Texas limited partnership, collectively first
party, hereinafter collectively referred to as "Landlord", and SOUTHWEST
STAINLESS, L.P.. a Delaware limited partnership, second party, hereinafter
referred to as "Tenant";
W I T N E S S E T H:
1. Premises. Landlord, for and in consideration of the rents,
covenants, agreements, and stipulations hereinafter mentioned, reserved and
contained, to be paid, kept and performed by Tenant, has leased and rented, and
by these presents does lease and rent, unto said Tenant, and said Tenant hereby
agrees to lease and take upon the terms and conditions which hereinafter appear,
the following described property (hereinafter called "Premises") and personal
property as hereinafter set forth.
The Premises consists of real property and improvements, if any, located at
Tract 26 of South Houston Gardens, No. 6, as recorded in Volume 2, Page 74 of
the Harris County Map Records, Harris County, Texas.
2. Term. To have and to hold for a term of two (2) years, said term to
begin on the 1st day of July, 1998, and to end on the 30th day of June, 2000.
3. Rental. During the initial term of this Lease, Tenant will pay a yearly
rental of FIFTY-FOUR THOUSAND DOLLARS ($54,000.00) and the yearly rental will be
due and payable in equal monthly installments of FOUR THOUSAND FIVE HUNDRED
DOLLARS ($4,500.00) in advance on the 1st day of each and every calendar month
during such initial term of this Lease.
4. Utility Bills. Tenant will pay all utility bills of all types,
including, but not limited to, water and sewer, natural gas, electricity and
sanitary pick up bills for the Premises, or used by Tenant in connection
therewith. If Tenant does not pay same, Landlord may pay the same, and such
payment will be added to the rental of the Premises.
5. Ad Valorem Taxes. Tenant will pay in the first instance all real
property taxes which may be assessed by any lawful authority against the
Premises. Tenant shall have the right, at Tenant's sole expense, to appeal any
and all taxes applicable to the Premises and Landlord agrees that Landlord will
cooperate with Tenant reasonably and sign all documents reasonably required in
connection with any such appeal. Tenant may delay payment of any portion of such
taxes which are the subject of an appeal until the resolution of such appeal, in
which event Tenant shall be solely responsible for the payment of any penalties,
interest, or additional taxes
which result from such delay. Notwithstanding the foregoing, Tenant shall not
permit the filing of a tax lien against the Premises.
6. Insurance. Tenant will carry, at Tenant's sole cost and expense, "All
Risk" Insurance Coverage on the demised Premises in an amount not less than the
full insurable value. The term "full insurable value" will mean the actual
replacement cost, excluding foundation and excavation costs, as reasonably
determined by Landlord. Such policies will name Landlord as an additional named
insured.
All insurance provided for in this Lease will be effected under enforceable
policies issued by insurers of recognized responsibility licensed to do business
in this state. At least fifteen (15) days prior to the expiration date of any
policy, the original renewal policy for such insurance will be delivered by
Tenant to Landlord. Within fifteen (15) days after the premium on any policy
will become due and payable, Landlord will be furnished with satisfactory
evidence of its payment.
If Tenant provides any insurance required by this Lease in the form of a blanket
policy, Tenant will furnish satisfactory proof that such blanket policy complies
in all respects with the provisions of this Lease and that the coverage
thereunder is at least equal to the coverage which would be provided under a
separate policy covering only the Premises.
If Landlord so requires, the policies of insurance provided for will be payable
to the holder of any mortgage, as the interest of such holder may appear,
pursuant to a standard mortgagee clause. All such policies will, to the extent
obtainable, provide that any loss will be payable to Landlord or to the holder
of any mortgage notwithstanding any act or negligence of Tenant which might
otherwise result in forfeiture of such insurance. All such policies will, to the
extent obtainable, contain an agreement by the insurers that such policies will
not be canceled without at least thirty (30) days prior written notice to
Landlord and to the holder of any mortgage to whom loss hereunder may be
payable.
Tenant will carry at Tenant's own expense insurance coverage on all equipment,
fixtures and appliances.
7. Maintenance. Tenant shall be responsible for maintaining the Premises.
8. Modifications and Alterations to the Premises. No modifications,
alterations, or improvements to the Premises are allowed without the prior
written consent of Landlord, which consent will not be unreasonably withheld or
delayed; provided, however, that Tenant shall be permitted to install, without
Landlord's consent, such fences, gates, screening structures, utilities, other
improvements and landscaping as Tenant deems necessary or desirable to use the
Premises for the permitted uses hereunder.
9. Removal of Fixtures. Tenant may (if not in default hereunder) prior to
the expiration of this Lease, or any extension thereof, remove all personal
property, fixtures and equipment which Tenant has placed in the Premises,
provided that during such removal Tenant will make all reasonable repairs
necessary to return the Premises to its original condition,
2
reasonable wear and tear excepted.
10. Condemnation. If the whole of the Premises, or such portion thereof as
will make the Premises unusable for the purpose herein leased, be condemned by
any legally constituted authority for any public use or purpose or if Landlord
sells the Premises under threat of condemnation, then in either of said events
the term hereby granted will cease from the time when possession thereof is
taken by public authorities, and rental will be accounted for as between
Landlord and Tenant as of that date. Such termination, however, will be without
prejudice to the rights of either Landlord or Tenant to recover compensation and
damage caused by condemnation from the condemnor. It is further understood and
agreed that neither Tenant nor Landlord will have any rights in any award made
to the other by any condemnation authority.
If there is a partial taking and if it is not so extensive as to render the
remaining portion (after restorations) unsuitable for the business of Tenant,
then this Lease will continue in effect and Landlord, upon receipt of the award
in condemnation, will expeditiously commence and complete all necessary repairs
and restorations to the Premises so as to constitute the portion of the building
not taken a complete architectural unit and restore the Premises as nearly as
practicable to its prior condition; provided, however, that such work does not
exceed the scope of the original construction, and Landlord will not be under
any duty to expend amounts in excess of the award received by Landlord. Rent,
taxes and other charges payable by Tenant will equitably abate while Landlord's
repairs and restorations are in process. If a partial taking consists only of a
street widening or utility easement which, at Tenant's sole discretion, is
determined not to materially affect Tenant's use of the Premises, this Lease
will continue in full force and effect without abatement of rent, taxes or other
charges.
11. Governmental Orders. Tenant agrees, at its own expense and solely in
relation to those portions of the Premises which Tenant is required to maintain
or repair under Paragraph 7, to promptly comply with all requirements of any
legally constituted public authority made necessary by reason of Tenant's
specific use of said Premises.
12. Assignment. Except as set forth below, Tenant may not assign this
Lease, or any interest thereunder, or sublet the Premises in whole or in part
without prior written notice to Landlord of its intent to assign or sublease.
Tenant may (a) sublet all or part of the Premises to any corporation, the
majority of whose shares are owned by Tenant, during the period of such majority
ownership only or (b) assign this Lease to any corporation which owns more than
fifty percent (50%) of Tenant's issued and outstanding shares, or which succeeds
to the entire business of Tenant through purchase, merger, consolidation or
reorganization, or to any affiliate sharing common majority ownership with the
Tenant. Subtenants or assignees will become liable directly to Landlord for all
obligations of Tenant hereunder, without relieving Tenant's liability.
13. Mortgagee's Rights. Tenant's rights will be subject to any bona fide
mortgage or deed to secure debt which is now, or may hereafter be, placed upon
the Premises by Landlord, and Tenant agrees, at Landlord's cost, to execute and
deliver such documentation as may be reasonably required by any such mortgagee
to effect any subordination. Provided, however, as a condition to such
subordination, Landlord must secure from each mortgagee a nondisturbance
3
agreement acceptable to Tenant providing that in the event of a foreclosure the
mortgagee will recognize the validity of this Lease and, provided that Tenant is
not in default, will not disturb Tenant's possession or its rights under this
Lease.
14. Use of the Premises. The Tenant may use the Premises for outside
storage of pipe and other construction supplies or for any other lawful purpose.
The Premises will not be used for any illegal purposes, nor in any manner to
create any nuisance or trespass; nor in any manner to vitiate the insurance,
based on the above purposes for which the Premises are leased.
15. Signs. Tenant will have the right to erect at Tenant's sole expense
signage at the entrance to and upon the Premises, including but not limited to a
customary trade sign identifying the business of Tenant. The erection of signage
by Tenant will be subject to and in conformity with all applicable laws, zoning
ordinances and building restrictions or covenants of record. On or before
termination of this Lease, Tenant will remove the signage thus erected, and will
repair any damage or disfigurement, caused by such removal. All signage proposed
by Tenant shall be subject to Landlord's review and approval, which approval
shall not be unreasonably withheld, conditioned or delayed.
16. Entry for Carding, etc. Landlord may card the Premises "For Rent" or
"For Sale" ninety (90) days before the termination of this Lease. Landlord may
enter the Premises at reasonable hours during the term of this Lease to exhibit
the same to prospective purchasers and to make repairs required of Landlord
under the terms hereof.
17. Indemnity. Landlord agrees to indemnify and save harmless Tenant and
its parents, subsidiaries, affiliates, directors, officers, employees, agents,
servants, attorneys and representatives from any and all claims, causes of
action, damages, fines, judgments, penalties, costs (including environmental
clean-up costs and response costs), liabilities, expenses or losses (including
without limitation, reasonable attorneys' fees and expenses of litigation)
arising during or after the Lease term: (a) as a result of any violation by
Landlord or prior owners or occupants of the Premises of any applicable federal,
state or local environmental laws or regulations, as now or hereinafter in
effect, regulating, relating to or imposing liability or imposing standards of
conduct concerning any Hazardous Materials; or (b) as a result of the presence,
disturbance, discharge, release, removal or cleanup of Hazardous Materials or as
a result of environmental contamination or other similar conditions which
existed prior to commencement of the Lease term; or (c) as a result of any
violation of the accessibility or path of travel requirements imposed by ADA; or
(d) as a result of any of Landlord's representations and warranties being
untrue. These indemnities will survive the expiration, cancellation or
termination of the Lease.
Tenant agrees to indemnify and save harmless Landlord and its parents,
subsidiaries, affiliates, directors, officers, employees, agents, servants,
attorneys and representatives from any and all claims, causes of action,
damages, fines, judgments, penalties, costs (including environmental clean-up
costs and response costs), liabilities, expenses or losses (including without
limitation, reasonable attorneys' fees and expenses of litigation) arising
during or after the Term: (a) as a result of any violation by Tenant of any
applicable federal, state or local environmental laws or regulations, as now or
hereinafter in effect, regulating, relating to or imposing liability or imposing
standards of conduct concerning any Hazardous Materials; or (b) as a result of
the
4
presence, disturbance, discharge, release, removal or cleanup of Hazardous
Materials or as a result of environmental contamination or other similar
conditions which existed after commencement of the Term and which was caused by
or brought onto the Premises by Tenant or Tenant's agents, contractors,
employees, licensees and invitees; or (c) as a result of any violation by Tenant
of the accessibility or path of travel requirements imposed by ADA; or (d) as a
result of any of Tenant's representations and warranties being untrue. These
indemnities will survive the expiration, cancellation or termination of the
Lease; provided, however, that Tenant will not be liable for the acts of any
other tenants of said property.
18. Default of Tenant. It is mutually agreed that in the event: (a) the
rent herein reserved is not paid at the time and place when and where due and
Tenant fails to pay said rent within five (5) days after written demand from
Landlord; or (b) Tenant will fail to comply with any material term, provision,
condition, or covenant of this Lease, other than the payment of rent, and will
not cure such failure within thirty (30) days after notice to Tenant of such
failure to comply or such additional time period as may reasonably be necessary
to effect a cure of the default provided that Tenant commences and diligently
pursues a cure of the default; or (c) Tenant causes any lien to be placed
against the Premises and does not cure the same within thirty (30) days after
notice from Landlord to Tenant demanding cure, THEN in any of such events,
Landlord will have the option to do any of the following, in addition to, and
not in limitation of any other remedy permitted by law or by this Lease: (i)
Landlord may terminate this Lease, in which event Tenant will immediately
surrender the Premises to Landlord. Tenant agrees to indemnify Landlord for all
loss and damage which Landlord may suffer by reason of such termination, whether
through inability to relet the Premises, or through decrease in rent, or
otherwise; or (ii) Landlord, as Tenant's agent, without terminating this Lease,
may terminate Tenant's right of possession, and, at Landlord's option, enter
upon and rent the Premises at the best price obtainable by reasonable effort,
without advertisement and by private negotiations and for any term Landlord
deems proper. Tenant will be liable to Landlord for the deficiency, if any,
between Tenant's rent hereunder and the price obtained by Landlord on reletting.
Pursuit of any of the foregoing remedies will not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law. In any
case, Landlord will use best efforts to mitigate Tenant's damages. Any notice in
this provision may be given by Landlord or its attorney. No termination of this
Lease prior to the normal ending thereof, by lapse of time otherwise, will
affect Landlord's right to collect rent for the period prior to the termination
thereof.
19. Default of Landlord. Should Landlord fail to perform any of its
obligations hereunder, Landlord will have a period of thirty (30) days after its
receipt of written notice from Tenant of a failure of performance within which
to commence a cure of that failure. Failure of Landlord to commence that cure
within the 30-day period or to effect that cure within that 30-day period will
be an event of default under this Lease and Tenant may, at its option, elect to:
(a) terminate this Lease upon thirty (30) days written notice to Landlord; (b)
bring an action to require specific performance of Landlord's obligations; (c)
provide Landlord with an additional period of time within which to effect that
cure;(d) commence such cure itself, and Tenant may either, at its option, offset
any expenses it incurs in effecting such cure against the rent and other charges
due and payable by Tenant hereunder, or require that Landlord immediately
reimburse Tenant for its expenses; provided, however, in the event of an
emergency, Tenant may immediately effect a cure of Landlord's failure should
Landlord fail to act immediately to do so,
5
without the requirement of any notice by Tenant to Landlord; and/or (e) pursue
any other remedies provided herein or provided by law.
20. Warranties. Landlord warrants that Landlord owns the Premises in fee
simple and has the right to enter into this Lease; that the Premises are free
from liens and encumbrances except for utility easements and unviolated
restrictive covenants which do not materially adversely affect Tenant's intended
use of the Premises; that the Premises has legal, direct, pedestrian and
vehicular access to and from and abuts one or more publicly dedicated roads;
that the Premises are in compliance with all applicable laws, regulations and
ordinances; to the best of Landlord's knowledge, that past and current uses of
the Premises comply with federal, state and local environmental laws and
regulations; that Landlord has not received a citation from any regulatory
agency for noncompliance with environmental laws; that Landlord has no knowledge
of the presence of fuel storage tanks or of hazardous, toxic, dangerous, or
carcinogenic materials, substances or contaminants, formaldehyde,
polychlorinated biphenyls ("PCBs"), lead, lead dust, asbestos, asbestos
containing materials ("ACMs"), oil, gasoline, other petroleum products or
byproducts, radon or other similar materials or substances (collectively
"Hazardous Materials") on, in or under the Premises and has no knowledge of any
contamination present on, in or under the Premises; and covenants that Tenant,
provided it performs all of its obligations under this Lease, will peaceably and
quietly enjoy the Premises during the Lease term without any disturbance from
Landlord, anyone claiming by, through or under Landlord, or any other party,
except as otherwise specifically provided in this Lease.
21. Holding Over. If Tenant remains in possession of the Premises after
expiration of the term hereof, with Landlord's acquiescence and without any
express agreement of the parties, Tenant will be a tenant-at-will at the rental
rate in effect at end of the Lease; and there will be no renewal of this Lease
by operation of law.
22. Notices. Any notice given pursuant to this Lease will be in writing
and sent by certified mail to:
(a) Landlord: Jem-Realty, LLC and Stanwood Interests Limited Partnership
c/o Jem-Realty, Inc.
320 Park Place Tower
2001 Park Place North
Birmingham, Alabama 35203
or to such other address as Landlord may hereafter designate in writing to
Tenant.
(b) Tenant: Southwest Stainless, L.P.
c/o Hughes Supply, Inc.
20 North Orange Avenue, Suite 200
Orlando, Florida 32801
Attention: Mark Scimeca, Esquire,
Associate General Counsel
or to such other address as Tenant may hereafter designate in writing to
Landlord.
6
23. Memorandum of Lease. This Lease will not be recorded, but the parties
agree to execute a Memorandum of this Lease for recording purposes which will
set forth the commencement date, the term of the Lease and all extensions, a
legal description of the location of the Premises and a description of Tenant's
rights under this. If Tenant records the Memorandum of Lease, Tenant agrees to
pay all recording fees and taxes required by reason of the recording of the
Memorandum of Lease.
24. Construction of Lease Terms. The terms of this Lease will not be
construed more strongly against any party, regardless of which party was
responsible for the preparation and drafting of this Lease.
25. Attorneys Fees. In any litigation between the parties regarding this
Lease, the losing party agrees to pay to the prevailing party its reasonable
attorney's fees and expenses of litigation. For purposes of this Paragraph, a
party is to be considered the prevailing party if:
(a) it initiated the litigation and obtains (by judgment or agreement)
substantially the relief sought; or
(b) it did not initiate the litigation and the other party does not
obtain (by judgment or agreement) substantially the relief sought.
26. Waiver of Rights. No failure of Landlord to exercise any power given
Landlord hereunder, or to insist upon strict compliance by Tenant with its
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof will constitute a waiver of Landlord's right to demand exact
compliance with the terms hereof.
27. Rights Cumulative. All rights, powers and privileges conferred
hereunder upon the parties hereto will be cumulative but not restrictive to
those given by law.
28. Time of Essence. Time is of the essence of this Agreement.
29. Environmental Site Assessment. Tenant will have the right, at its
expense, to undertake a Phase I Environmental Site Assessment or equivalent (the
"Environmental Report") with respect to the Premises. In the event that the
results of such Environmental Report are unsatisfactory to Tenant, in its sole
discretion, then Tenant will have the right, at any time within forty-five (45)
days after commencement of the term of this Lease to terminate this Lease
immediately upon written notice to Landlord.
30. Definitions. "Landlord" as used in this Lease will include first
party, its heirs, representatives, assigns, and successors in title to the
Premises. "Tenant" will include second party, its heirs and representatives,
assigns and successors, and if this Lease will be validly assigned, or sublet,
will include also Tenant's assignees or sub-Tenants, as to the Premises covered
by such assignment or sub-lease. "Landlord" and "Tenant" include male and
female, singular and plural, corporation, partnership or individual, as may fit
the particular parties.
7
31. Entire Agreement. This Lease contains the entire agreement of the
parties hereto, and no representations, inducements, promises or agreements,
oral or otherwise, between the parties, not embodied herein, will be of any
force or effect.
32. Severability and Governing Law. If any term, covenant or condition of
this Lease or the application thereof to any person, entity or circumstance
will, to any extent, be invalid or unenforceable, the remainder of this Lease,
or the application of such term, covenant, or condition to persons, entities or
circumstances other than those which or to which sued may be held invalid or
unenforceable, will not be affected thereby, and each term, covenant or
condition of this Lease will be valid and enforceable to the fullest extent
permitted by law. This Lease shall be governed by and construed in accordance
with the law of the state in which the Premises are located.
33. Brokerage. Each of Landlord and Tenant warrants to the other that no
commissions are payable or due to any other broker or finder in connection with
this Lease and each of Landlord and Tenant agrees to indemnify, defend and hold
the other harmless from and against any commissions or fees or claims for
commissions or fees arising under the indemnifying party, which indemnification
will expressly survive the termination of this Lease.
IN WITNESS WHEREOF, the parties herein have executed this Lease on the day
and year first above written.
"LANDLORD"
Witnesses: JEM-REALTY, LLC, a Delaware
limited liability company
____________________________ By:__________________________
Printed:____________________ Printed:_____________________
Title:_______________________
____________________________
Printed:____________________
8
STANWOOD INTERESTS LIMITED
PARTNERSHIP, a Texas limited
partnership
By; Stanreal, LLC, a Texas limited
liability company, its sole general
partner
_____________________________ By:_________________________
Printed:_____________________ Printed:____________________
Title:______________________
_____________________________
Printed:_____________________
"TENANT"
SOUTHWEST STAINLESS, L.P., a
Delaware limited partnership
_____________________________ By: Z & L Acquisition Corp., a
Delaware corporation, its sole
Printed:_____________________ general partner
By:__________________________
_____________________________
Printed:_____________________
Printed:_____________________
Title:_______________________
9
Prepared by and Return to:
Mark Scimeca, Esquire
Associate General Counsel
Hughes Supply, Inc.
20 N. Orange Avenue, Suite 200
Orlando, Florida 32801
Tel.: (407) 841-4755, ext. 2077
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is entered into as of the 1st day of July, 1998,
by and between JEM-REALTY, LLC, a Delaware limited liability company, and
STANWOOD INTERESTS LIMITED PARTNERSHIP, a Texas limited partnership
(collectively "Landlord"), and SOUTHWEST STAINLESS, L.P., a Delaware limited
partnership ("Tenant").
1. Pursuant to a Lease Agreement (the "Lease") executed by Landlord and
Tenant, dated as of July 1, 1998, Landlord has leased to Tenant certain land
described as follows:
Tract 26 of South Houston Gardens, No. 6, as recorded in Volume 2, Page 74
of the Harris County Map Records, Harris County, Texas,
together with all improvements constructed or to be constructed thereon, if any,
and all of Landlord's appurtenant rights, privileges and easements
(collectively, the "Premises").
2. The initial term of the Lease shall commence on July 1, 1998, and shall
expire on June 30, 2000.
3. This Memorandum of Lease is subject to all of the terms, conditions and
understandings set forth in the Lease, which are incorporated herein by
reference and made a part hereof, as though copied verbatim herein. The
provisions of this Memorandum constitute only a general description of the
content of the Lease with respect to matters set forth herein. Accordingly,
third parties are advised that the provisions of the Lease itself shall be
controlling with respect to all matters set forth herein. In the event of any
discrepancy between the provisions of the Lease and this Memorandum, the
provisions of the Lease shall take precedence and prevail over the provisions of
this Memorandum.
10
EXECUTED as of the date first written above.
WITNESSES: LANDLORD:
JEM-REALTY, LLC, a Delaware limited
liability company
____________________________ By:____________________________________
Printed:____________________ Printed:_______________________________
Title:_________________________________
____________________________
Printed:____________________ Date Executed by Landlord:_____________
STATE OF ___________________
COUNTY OF __________________
The foregoing instrument was acknowledged before me this __ day of July,
1998, by _______________________________ , as ________________________ of
Jem-Realty, LLC, a Delaware limited liability company, on behalf of said limited
liability company. She/He is personally known to me or produced the following as
identification:_____________________________________.
(NOTARY SEAL) ___________________________________
Printed Name:______________________
Notary Public, State of ___________
Commission #:______________________
My commission expires:_____________
11
STANWOOD INTERESTS LIMITED
PARTNERSHIP, a Texas limited
partnership
By; Stanreal, LLC, a Texas limited
liability company, its sole
general partner
___________________________ By:______________________________
Printed:___________________ Printed:_________________________
Title:___________________________
___________________________
Printed:___________________ Date Executed by Landlord:_______
STATE OF __________________
COUNTY OF _________________
The foregoing instrument was acknowledged before me this __ day of July,
1998, by _______________________________ , as of Stanreal, LLC, a Texas limited
liability company, as the sole general partner of Stanwood Interests Limited
_____________________ Partnership, a Texas limited partnership, on behalf of
said limited liability company and limited partnership. She/He is personally
known to me or produced the following as
identification:_____________________________________.
(NOTARY SEAL) _________________________________
Printed Name:____________________
Notary Public, State of _________
Commission #:____________________
My commission expires:___________
12
TENANT:
SOUTHWEST STAINLESS, L.P., a Delaware
limited partnership
____________________________ By: Z & L Acquisition Corp., a
Delaware corporation, its sole
Printed:____________________ general partner
By:______________________________
____________________________
Printed:_________________________
Printed:____________________
Title:___________________________
Date Executed by Tenant:_________
STATE OF ___________________
COUNTY OF___________________
The foregoing instrument was acknowledged before me this __ day of
July,1998, by _______________________________ , as _______________________ of Z
& L Acquisition Corp., a Delaware corporation, as the sole general partner of
Southwest Stainless, L.P., a Delaware limited partnership, on behalf of said
corporation and limited partnership. She/He is personally known to me or
produced the following as identification:_______________________________.
(NOTARY SEAL) _________________________________
Printed Name:____________________
Notary Public, State of _________
Commission #:____________________
My commission expires:___________
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement is entered into this 25th day of
February, 2000, by and between JEM-REALTY, LLC, a Delaware limited liability
company, and STANWOOD INTERESTS LIMITED PARTNERSHIP, a Texas limited partnership
(collectively, "Landlord"), and SOUTHWEST STAINLESS, L.P., a Texas limited
partnership ("Tenant"), who covenant and agree as follows:
1. Amendment of Lease. Landlord and Tenant are parties to that certain
Lease Agreement dated July 1, 1998, for certain acreage located on Monroe Road
in Houston, Texas and more particularly described therein (the "Lease") and
hereby amend the Lease as set forth herein. Except as modified herein, the Lease
shall remain unchanged and in full force and effect.
2. Extension of Term. The term of the Lease is hereby extended through and
including May 12, 2002. Tenant shall have the option (the "Option") of extending
the term of the Lease for an additional three (3) years through and including
May 12, 2005, upon six (6) months prior written notice to Landlord of Tenant's
election to exercise such Option. The period commencing July 1, 2000, and ending
May 12, 2002, is referred to herein as the "First Renewal Term." The period
commencing May 13, 2002, and ending May 12, 2005, is referred to herein as the
"Second Renewal Term."
3. Renewal Rent. Tenant shall pay rental to Landlord throughout the First
Renewal Term, and in the event Tenant exercises the Option, throughout the
Second Renewal Term, in the same manner provided for in the Lease except as
follows: Effective July 1, 2000, the monthly rental rate payable by Tenant to
Landlord shall be recalculated to equal the product obtained by multiplying
$4,500.00 by a fraction, the numerator of which will be the CPI-U, as that term
is defined below, for May 2000 and the denominator of which will be the CPI-U
for May 1999. Effective July 1, 2001, and July 1 of each lease year thereafter,
the monthly rental rate payable by Tenant to Landlord shall be recalculated to
equal the product obtained by multiplying the rental rate in effect at the end
of the immediately preceding lease year by a fraction, the numerator of which
will be the CPI-U, as that term is defined below, for May of the immediately
preceding lease year and the denominator of which will be the CPI-U for May of
the lease year which is one (1) year before the immediately preceding lease
year. Notwithstanding anything to the contrary contained herein, in no event
shall rental payable under the Lease increase more than three percent (3%) from
one (1) lease year to the next. Rent for the month of May 2002 shall be prorated
through and including May 12, 2002, or in the event Tenant exercises the Option,
through and including May 12, 2005. The CPI-U will mean the "Consumer Price
Index-Seasonally Adjusted U.S. City Average For All Items For All Urban
Consumers, (1982-84=100)," published monthly in the "Monthly Labor Review" of
the Bureau of Labor Statistics of the United States Department of Labor. If the
CPI-U is discontinued, the "Consumer Price Index-Seasonally Adjusted U.S. City
Average For All Items For Urban Wage Earners and Clerical Workers
(1982-84=100)," published monthly in the "Monthly Labor Review" of the Bureau of
Labor Statistics of the United States Department of Labor (the "CPI-W"), will be
used for making the computation set forth above. If the CPI-W is discontinued,
comparable statistics on the purchasing power of the consumer dollar published
by the Bureau of Labor Statistics of the United States Department of Labor will
be used for making the computation set forth above.
If the Bureau of Labor Statistics will no longer maintain statistics on the
purchasing power of the consumer dollar, comparable statistics published by a
responsible financial periodical or recognized authority agreeable to the
parties will be used for making the computation set forth above. If the base
year "(1982-84=100)" or other base year used in computing the CPI-U is changed,
the figures used in making the computation above will be changed accordingly, so
that all increases in such price index are taken into account notwithstanding
any such change in the base year.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Lease Agreement to be executed effective as of the date first written above.
Witnesses: JEM-REALTY, LLC, a Delaware
limited liability company
__________________________ By:__________________________
Printed:__________________ Printed:_____________________
Title:_______________________
__________________________
Printed:__________________
STANWOOD INTERESTS LIMITED
PARTNERSHIP, a Texas limited
partnership
By: Stanreal, LLC, a Texas limited
liability company, its sole general
partner
__________________________ By:________________________
Printed:__________________ Printed:___________________
Title:_____________________
__________________________
Printed:__________________
SOUTHWEST STAINLESS, L.P., a
Delaware limited partnership
__________________________ By: Z & L Acquisition Corp., a Delaware
Printed:__________________ corporation, its sole general partner
By:__________________________
__________________________ Printed:_____________________
Printed:__________________ Title:_______________________
2
August 26, 2002
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Jem-Realty, LLC and
Stanwood Interests Limited Partnership
c/o Jem-Realty, Inc.
320 Park Place Tower
2001 Park Place North
Birmingham, AL 25203
Re: Lease Agreement dated July 1, 1998, as amended by First Amendment to
Lease dated February 25, 2000 (the "First Amendment"), by and between
Jem-Realty, LLC, a Delaware limited liability company, and Stanwood
Interests Limited Partnership, a Texas limited partnership, as
Landlord, and Southwest Stainless, L.P., a Delaware limited
partnership, as Tenant, for property located at Tract 26 of South
Houston Gardens, No. 6, Houston, Harris County, TX ("Lease").
Dear Landlord:
Please be advised that Southwest Stainless, L.P., a wholly-owned subsidiary of
Hughes Supply, Inc., has elected to exercise its option to renew the referenced
Lease pursuant to Paragraph 2 of the First Amendment. The renewal term will be
for an additional period of three (3) years to commence May 13, 2002 and
continue through and including May 12, 2005. The rental rate will be adjusted
annually in accordance with Paragraph 3 of the First Amendment. This letter
amendment to the Lease shall also serve to correct the name of Tenant in the
First Amendment from and after February 25, 2000 to Southwest Stainless, L.P., a
Delaware limited partnership. All other terms and conditions of the Lease shall
remain unchanged and in full force and effect.
Please indicate the acceptance and agreement of the Landlord to this Letter
Agreement by having Landlord sign below and faxing a signed copy of this letter
to my attention at (407) 649-3018. Thank you for your assistance with this
matter.
Very truly yours,
Mark Scimeca,
Associate General Counsel
MDS:js
Jem-Realty, LLC and
Stanwood Interests Limited Partnership
August 26, 2002
Page Two
cc: Mike Stanwood (via fax)
Mike Cox (via fax)
George Urquiola (via inter-office mail)
ACCEPTED AND AGREED TO BY:
JEM-REALTY, LLC,
a Delaware limited liability company
By:______________________________
Printed:_________________________
Title:___________________________
Date:____________________________
STANWOOD INTERESTS LIMITED PARTNERSHIP
a Texas limited partnership
By:______________________________
Printed:_________________________
Title:___________________________
Date:____________________________