Exhibit 10.7
Standard Industrial Lease Agreement Approximately 118,080 square feet
NML 98 4810 EISENHAUER ROAD, SUITE 240
San Antonio, Texas 78218
Lease Agreement
THIS LEASE AGREEMENT, made and entered into by and between THE NORTHWESTERN
MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, hereinafter referred to
as "Landlord", and CAI, L.P., a Texas limited partnership, hereinafter referred
to as "Tenant";
WITNESSETH:
1. Premises and Term.
A. In consideration of the mutual obligations of Landlord and Tenant set
forth herein, Landlord leases to Tenant, and Tenant hereby takes from
Landlord the approximately 118,080 square feet more particularly
outlined on the floor plan attached as Exhibit "A-1" (the "Premises"),
which Premises are part of that approximately 295,200 square foot
building(s) ("the Building") located on the real property situated
with the County of Bexar, State of Texas, which real property is more
particularly described on Exhibit "A" attached hereto and incorporated
herein by reference (the "Land"), together with all rights,
privileges, easements, appurtenances, and amenities belonging to or in
any way pertaining to the Premises, to have and to hold, subject to
the terms, covenants and conditions in this Lease.
B. The Term of this Lease shall commence on the Commencement Date as
defined in the following Paragraph C (the "Commencement Date"). The
term of this Lease shall end on the last day of the calendar month
that is ONE HUNDRED TWENTY-ONE (121) full calendar months after the
Commencement Date.
C. The Commencement Date shall be deemed February 1, 2001, Tenant shall
be allowed early occupancy on December 1, 2000 or as soon as
practicable for the purposes of storage of merchandise, installing
equipment and set up provided that Tenant does not interfere with
Landlord's construction and otherwise complies with the provisions of
this Lease.
2. Base Rent, Security Deposit and Escrow Payments.
A. Tenant agrees to pay to Landlord Base Rent for the Premises in
advance, without demand, deduction or set off, at the monthly rate as
follows:
Month 1 $38,966.00
Months 2 -0-;
Month 3-36 $38,966.00
Months 37-60 $40,147.00;
Months 61-96 $41,328.00; and
Months 97-121 $42,509.00.
The monthly installment for Month 1 ($38,966.00), plus one (1) month's
portion ($9,946.00) of the other monthly charges set forth in
Paragraph 2C below shall be due and payable in advance on the date
hereof. Subsequent monthly installments shall be due and payable in
advance on or before the first day of each calendar month succeeding
the Commencement Date, except that the Base Rent and other monthly
charges set forth in Paragraph 2C below shall be abated in Month 2.
B. Intentionally deleted.
C. Tenant agrees to pay as additional rent, its Proportionate Share (as
defined in Paragraph 22B below) of (1) Taxes (hereinafter defined)
payable by Landlord pursuant to Paragraph 3A below, (2) the cost of
any jointly metered utilities payable pursuant to Paragraph 8, below,
(3) the cost of maintaining insurance, and (4) the cost of repairs,
replacement (excluding the replacement of Capital Items which are
defined as improvements or replacements which, under generally
accepted accounting principles are amortized for five (5) years or
more), and other operating expenses required by this Lease. During
each month of the term of this Lease, on the same day that Base Rent
is due hereunder, Tenant shall escrow with Landlord an amount equal to
1/12 of the estimated annual cost of its Proportionate Share of such
items. Tenant authorizes Landlord to use the funds deposited with
Landlord under this Paragraph 2C to pay such costs, subject to
accounting to Tenant for such use annually. The initial monthly escrow
payments are based upon the estimated amounts for the year in
question, and shall be increased or decreased annually to reflect the
projected actual cost of all such items. If Tenant's total escrow
payments are less than Tenant's actual Proportionate Share of all such
items, Tenant shall pay the difference to Landlord within ten (10)
days after written demand. If the total escrow payments of Tenant are
more than Tenant's actual Proportionate Share of all such items,
Landlord shall retain such excess and credit it against Tenant's next
annual escrow payments, except during the final year of the Lease, for
which Landlord will promptly refund any excess to Tenant. The amount
of the monthly rental and the initial monthly escrow payments are as
follows:
(1) Base Rent as set forth in Paragraph 2.A $38,966.00
(2) Taxes as set forth in Paragraph 2C(1) $ 5,117.00
(3) Insurance as set forth in Paragraph 2C(3) $ 401.00
(4) Operating Expenses as set forth
in Paragraphs 2C(2) and (4) $ 4428.00
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Monthly Payment Total $48,912.00
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3. Taxes.
A. Landlord agrees to pay all taxes, assessments and/or governmental
charges of any kind and nature (collectively referred to herein as
"Taxes") that accrue against the Premises, the Land and/or the
Building. If at any time during the term of this Lease, there shall be
levied, assessed or imposed on Landlord a capital levy or other tax
directly on the rents received therefrom and/or a franchise tax,
assessment, levy or charge measured by or based, in whole or in part
upon such rents from the Premises, the Land and/or the Building, then
all such taxes, assessments, levies or charges, or the part, thereof
so measured or based, shall be deemed to be included within the term
"Taxes" for the purposes hereof. The Landlord shall have the right to
employ a tax consulting firm to attempt to assure a fair tax burden on
the building and grounds within the applicable taxing jurisdiction.
Tenant agrees to pay its Proportionate Share of the cost of such
consultant.
B. Tenant shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such
taxes are levied or assessed against Landlord or Landlord's property
and (i) Landlord pays the same or (ii) the assessed value of
Landlord's property is increased by inclusion of such personal
property and fixtures and Landlord pays the increased taxes, then,
upon demand Tenant shall pay to Landlord such taxes. In addition, if
the Building is a multiple occupancy Building and the cost of any
improvements constructed to the Tenant's Premises is
disproportionately higher than the cost of improvements constructed to
the Premises of other tenants of the Building, then upon written
demand Tenant shall pay the amount of Taxes attributable to such
disproportionately more
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expensive improvements in addition to its Proportionate Share of
Taxes.
4. Landlord's Repairs.
A. Tenant understands and agrees that this Lease is intended to be a
"net" lease, and as such, Landlord's maintenance, repair and
replacement obligations are limited to those set forth in this
Paragraph 4A. Landlord, at its own cost and expense, shall be
responsible only for roof repair (except for preventative
maintenance), roof replacement and for repair and replacement of only
the foundation and the structural members of the exterior walls of the
Building and for replacement of Capital Items as above defined. The
terms "roof' and "walls" as used herein shall not include skylights,
windows, glass or plate glass, doors, special storefronts or office
entries. Tenant shall immediately give Landlord written notice of
defect or need for repairs, after which Landlord shall have reasonable
opportunity to repair same or cure such defect. Landlord's liability
with respect to any defects, repairs, replacement or maintenance for
which Landlord is responsible hereunder shall be limited to the cost
of such repairs or maintenance or the curing of such defect.
5. Tenant's Maintenance and Repair Obligations.
A. Tenant, at its own cost and expense, shall maintain all parts of the
Premises (except those for which Landlord is expressly responsible
hereunder) in good condition, ordinary wear and tear excepted, and
promptly make all necessary repairs and replacements to the Premises.
B. Landlord shall be responsible for causing the parking areas,
driveways, alleys and grounds surrounding the Premises to be
maintained in a good, neat, clean and sanitary condition, consistent
with the operation of a first class office/warehouse building, which
includes without limitation, prompt maintenance, repairs and
replacements (1) intentionally deleted, (2) of the parking area
associated with the Building, (3) of all grass, shrubbery and other
landscape treatments surrounding the Building, (4) of the exterior of
the Building (including painting), (5) of sprinkler systems, sewage
lines, and (6) of any other maintenance, repair or replacement items
normally associated with the foregoing. However, Tenant shall repair
and pay for any damage caused by the negligence of Tenant, or Tenant's
employees, agents or invitees, or caused by Tenant's default
hereunder.
C. Tenant shall be liable for its Proportionate Share (as defined in
Paragraph 22B below) of the cost and expense of such repair,
replacement, maintenance and other such items defined in the foregoing
Paragraph 2B. The amount of Tenant's rental obligation set forth in
Paragraph 2A above does not include the cost of such items, and
Landlord's performance of repair, replacement, maintenance and other
items, is not a condition to payment of such rental obligations.
D. Tenant agrees to pay its Proportionate Share of the cost of (1)
operation, maintenance and/or landscaping of any property or facility
that is operated, maintained or landscaped by any property owner or
community owner association that is named in any restrictive covenants
or deed restrictions to which the Premises are subject and which are
actually billed to the Building, and (2) operating and maintaining any
property, facilities or services provided for the common use of Tenant
and other tenants of the Building, which costs shall include, without
limitation, reasonable and customary management fees, maintenance and
repair costs, sewer, landscaping, trash and security (if furnished by
Landlord), wages and employee benefits payable to employees of
Landlord whose duties are directly connected with the operation and
maintenance of the Building (but not such costs resulting from
Landlord's make-ready work for other tenants), amounts paid to
contractors or subcontractors for work or services performed in
connection with the operation and maintenance of the Building, all
service, supplies, repairs, replacements (excluding Capital Items as
defined above) or other
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expenses for maintaining and operating the Building, and any other
facilities or services provided for the common use of Tenant and other
tenants of the Building.
E. Tenant shall, at its sole cost and expense, during the term of this
Lease maintain a regularly scheduled preventative maintenance/service
contract with a maintenance contractor for the servicing of all hot
water, heating and air-conditioning systems and equipment within the
leased premises. The maintenance contractor and contract must be
approved by Landlord and must include all services suggested by the
equipment manufacturer. Tenant shall at all times conduct maintenance
on the heating, ventilation and air-conditioning ("HVAC") equipment
within the leased premises in accordance with all Federal, state or
local laws. In the event that a leak occurs in any portion of the HVAC
equipment on the premises, Tenant shall promptly repair such leak in
accordance with such Federal, state or local laws and shall, in any
event, repair such leaks within the deadline imposed by such Federal,
state or local laws. Tenant hereby agrees to indemnify, defend and
hold Landlord harmless against any and all damages, liabilities,
losses, costs and expenses, including reasonable attorneys' fees,
incurred by Landlord as a result of Tenant's failure to conduct
maintenance on the HVAC equipment at the Property in accordance with
Federal, state or local laws. In lieu of providing the specified
maintenance/service contract, Tenant may utilize its employees to
service the hot water, heating and air-conditioning systems and
equipment provided that Landlord is provided with acceptable evidence
that said employees are qualified and licensed to perform such
service.
F. Intentionally deleted.
6. Alterations. Tenant shall not make any alterations, additions or
improvements to the Premises without the prior written consent of Landlord
which consent shall not be unreasonably withheld or delayed provided that
said alterations, additions or improvements shall not involve the exterior,
structural components or roof of the Premises or Building. Tenant, at its
own cost and expense, may, without the prior consent of Landlord, erect
such shelves, bins, machinery and trade fixtures as it desires provided
that (a) such items do not alter the basic character of the Premises or the
Building; (b) such items do not overload or damage the same; (c) such items
may be removed without injury to the Premises; and (d) the construction,
erection or installation thereof complies with all applicable governmental
laws, ordinances, regulations and with Landlord's specifications and
requirements. All shelves, bins, machinery and trade fixtures installed by
Tenant shall be removed on or before the earlier to occur of the date of
termination of this Lease or vacating the Premises, at which time Tenant
shall restore the Premises to their original condition. All installations,
removals and restorations shall be performed in a good and workmanlike
manner so as not to damage or after the primary structure or structural
qualities of the Building or the Premises. If Tenant is not in default,
upon expiration or earlier termination of this Lease, all trade fixtures
which constitute the personal property of Tenant may be removed by Tenant
at Tenant's sole expense.
7. Signs. Any signage, decorations, advertising media, blinds, draperies,
window treatments, bars, and security installations Tenant desires for the
Premises shall be subject to Landlord's prior written approval and shall be
submitted to Landlord prior to the Commencement Date. Tenant shall repair,
paint, and/or replace the building facia surface to which its signs are
attached upon vacation of the Premises, or the removal or alteration of its
signage, all of which shall be accomplished at Tenant's sole cost and
expense. Tenant shall not, (i) make any changes to the exterior of the
Premises, (ii) install any exterior lights, decorations, balloons, flags,
pennants, banners or painting, or (iii) erect or install any signs, windows
or door lettering, decals, window and storefront stickers, placards,
decorations or advertising media of any type that can be viewed from the
exterior of the Premises, without Landlord's prior written consent.
8. Utilities. Tenant shall obtain and pay for all water, gas, heat, light,
power, telephone, sewer, sprinkler charges and other utilities and services
used on or at the Premises, together with any taxes,
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penalties, surcharges or the like pertaining to the Tenant's use of the
Premises, and any maintenance charges for utilities. Landlord shall have
the right to cause any of said services to be separately metered to Tenant,
at Tenant's expense. Tenant shall pay its pro rata share as reasonably
determined by Landlord, of all charges for jointly metered utilities.
Landlord shall not be liable for any interruption or failure of utility
service on the Premises.
9. Insurance.
A. Landlord's Insurance. At all times during the Term, Landlord shall
procure and keep in force and effect the following insurance:
(1) All-Risk property insurance insuring the Building, its equipment,
and common area furnishings, all in such amounts and with such
deductibles as Landlord considers appropriate;
(2) Commercial General Liability insurance insuring its interests in
the Project; and
(3) Intentionally deleted.
B. Tenant's Insurance. Tenant shall at its sole cost and expense, keep in
full force and effect the following insurance:
(1) All-Risk property insurance on "Tenant's Property" for the full
replacement value. Such policy shall contain an agreed amount
endorsement in lieu of a coinsurance clause. "Tenant's Property"
is defined to be all improvements and betterments of Tenant
located in or on the Premises, Common Areas or Building,
excluding that which may be insured by Landlord's All-Risk
property insurance as set forth in Paragraph 9.A.(1) above;
(2) Commercial General Liability insurance insuring Tenant against
any liability arising out of its use, occupancy or maintenance of
the Premises or the business operated by Tenant pursuant to the
Lease. Such insurance shall be in the amount of at least
$2,000,000 per occurrence. Such policy shall name Landlord,
Landlord's wholly owned subsidiaries and agents and any
mortgagees of Landlord as additional insureds; and
(3) Worker's Compensation insurance as required by state law, unless
Tenant shall elect, on a company-wide basis, to become
self-insured therefor; and
(4) Any other form or forms of insurance or increased amounts of then
reasonable and customary insurance as Landlord or any mortgagees
of Landlord may reasonably require from time to time.
All such policies shall be written in a form reasonably satisfactory
to Landlord and any mortgagees of Landlord, and shall provide that
Landlord, and any mortgagees of Landlord, shall receive not less than
thirty (30) days' prior written notice of any cancellation. Policies
will be written by insurance companies authorized to transact business
in the State of Texas with a Best's Rating of "A" or higher. Prior to
or at the time that Tenant takes possession of the Premises, Tenant
shall deliver to Landlord copies of policies or certificates
evidencing the existence of the amounts and forms of coverage
satisfactory to Landlord. Tenant shall, within thirty (30) days prior
to the expiration of such policies, furnish Landlord with renewals or
"binders" thereof, or Landlord may order such insurance and charge the
cost thereof to Tenant as Additional Rent.
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C. Forms of Policies. All policies maintained by Tenant will provide that
they may not be terminated nor may coverage be reduced except after
thirty (30) days' prior written notice to Landlord. All Commercial
General Liability and All-Risk property policies maintained by Tenant
shall be written as primary policies, not contributing with and not
supplemental to the coverage that Landlord may carry.
D. Waiver of Subrogation. Notwithstanding that any loss or damage may de
due to or result from the negligence of either of the parties hereto,
Landlord and Tenant, for themselves and their respective insurers,
each waive any and all rights to recover against the other; against
any subsidiary or joint venture of such other party; against any other
tenant or occupant of the Project; or against the officers, directors,
shareholders, partners, employees, agents, customers, invitees, or
business visitors of such other party, of such other tenant or
occupant of the Project, of any subsidiary or joint venture of such
other party, for any loss or damage to the property of such waiving
party arising from any cause.
E. Adequacy of Coverage. Landlord, its agent and employees make no
representation that the limits of liability specified to be carried by
Tenant pursuant to this Paragraph 9, are adequate to protect Tenant.
If Tenant believes that any of such insurance coverage is inadequate,
Tenant will obtain such additional insurance coverage as Tenant deems
adequate, at Tenant's sole expense.
F. Certain Insurance Risks. Except to the extent that Tenant shall be
expressly authorized in writing by Landlord to perform certain acts
and to bring certain substances onto the Premises, Tenant shall not
otherwise do or permit to be done any act or thing upon the Premises
or the Project which would (a) jeopardize or be in conflict with fire
insurance policies covering the Project or fixtures and property in
the Project; (b) increase the rate of fire insurance applicable to the
Project to an amount higher than it otherwise would be for normal
warehouse or distribution use; or (c) subject Landlord to any
liability or responsibility for injury to any person or persons or to
property by reason of any business or operation being carried on upon
the Premises.
10. Fire and Casualty Damage.
A. Tenant immediately shall give written notice to Landlord if the
Premises or the Building are damaged or destroyed. If the Premises or
Building should be totally destroyed or so damaged by an insured peril
and in Landlord's estimation, rebuilding or repairs cannot be
completed within one hundred eighty (180) days after the date of
Landlord's actual knowledge of such damage, this Lease shall terminate
and the rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.
B. If the Building or the Premises should be damaged by any insured
peril, and in Landlord's estimation rebuilding or repairs can be
substantially completed within one hundred eighty (180) days after the
date of Landlord's actual knowledge of such damage, this Lease shall
not terminate, and Landlord shall restore the Premises to
substantially its previous condition, except that Landlord shall not
be required to rebuild, repair or replace any part of the partitions,
fixtures, additions and other improvements required to be covered by
Tenant's insurance pursuant to Paragraph 9B above. Effective upon the
date of the occurrence of such damage and ending upon substantial
completion (as defined in Paragraph 1. above), if the Premises are
untenantable in whole or part during such period, the rent shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances. If such repairs and rebuilding have not been
substantially completed within one hundred eighty (180) days after the
date of such damage, Tenant, as Tenant's exclusive remedy, may
terminate this Lease by delivering thirty (30) days prior written
notice of termination to Landlord in which
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event the rights and obligations hereunder shall cease and terminate
thirty (30) days after receipt of such written notice by Landlord.
C. In connection with any repair or reconstruction to the Premises
arising from or necessitated by fire or other casualty which is
covered by the insurance provided pursuant to Paragraph 9A above,
Tenant shall pay Landlord the amount of the deductible of such
insurance if the cost of such repair or reconstruction is necessitated
by the negligent act of the Tenant.
D. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust
covering the Premises requires that the insurance proceeds be applied
to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant
within fifteen (15) days after such requirement is made known by any
such holder, whereupon all rights and obligations hereunder shall
cease and terminate. During the first five (5) years of this Lease,
Landlord agrees to use its reasonable best efforts to cause any such
holder of any indebtedness to allow the use of insurance proceeds for
the repair and rebuilding of the Premises.
E. Anything in this Lease to the contrary notwithstanding except as set
forth in Paragraph 10C above, to the extent of a recovery of loss
proceeds under the policies of insurance described in this Lease,
Landlord and Tenant hereby waive and release each other and any
related parties and affiliates of and from any and all rights of
recovery, claim action or cause of action, against each other, their
agents, officers and employees, for any loss or damage that may occur
to the Premises, the Building, or personal property within the
Building and/or Premises arising from or caused by fire or other
casualty or hazard covered or required to be covered by hazard
insurance under this Lease. Upon execution of this Lease, Landlord and
Tenant shall notify their respective insurance companies of the mutual
waivers contained herein and, if available, shall cause each policy
described in this Lease to be so endorsed.
11. Liability and Indemnification.
A. Landlord's Indemnification. Landlord shall hold Tenant harmless and
defend Tenant against any and all claims, actions, damages or
liability (including without limitation, all costs, attorneys fees and
expenses incurred in connection therewith) in connection with any
loss, injury or damage to any person or property occurring in, on or
about or arising out of all or part of the Premises and/or the
Building or the use or occupancy thereof, or the conduct or operation
of Landlord's business, when such injury or damage shall be caused by
the act, neglect, fault of, or omission of, any duty with respect to
the same by Landlord, its agents, servants and employees (unless the
indemnified loss is caused wholly or in part by Tenant's negligence,
in which event this indemnity shall not apply to the allocable share
of such loss resulting from Tenant's negligence).
B. Tenant's Indemnification. Except for any injury to persons or damage
to property that is caused by or results from the negligence or
deliberate act of Landlord, its employees, or agents, and subject to
the provisions of Paragraph 9D above, Tenant shall indemnify and hold
Landlord, Landlord's wholly owned subsidiaries and the employees and
agents of Landlord and Landlord's wholly owned subsidiaries,
(hereinafter collectively referred to as the "Indemnified Parties" and
individually as an "Indemnified Party") harmless from and against, any
and all demands, claims, causes of action, fines, penalties, damages,
liabilities, judgments, and expenses (including, without limitation,
reasonable attorneys' fees) incurred in connection with or arising
from:
(1) the use or occupancy or manner of use or occupancy of the
Premises by Tenant or any person claiming under Tenant;
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(2) any activity, work, or thing done or permitted by Tenant in or
about the premises, the Building, or the Project;
(3) any breach by Tenant or its employees, agents, contractors, or
invitees of this Lease;
(4) any injury or damage to the person, property, or business of
Tenant, its employees, agents, contractors, or invitees entering
upon the Premises under the express or implied invitation of
Tenant; and:
(5) any alleged violation by Tenant of the ADA and/or any other law,
rule, code, or regulation. Landlord, at Landlord's expense, shall
insure that the exterior of the Building complies with applicable
accessibility standards imposed by the State of Texas as of the
Commencement Date. However, Tenant shall be responsible for the
cost of any future accessibility compliance as it relates
directly to the Premises or its Proportionate Share of the cost
of any future accessibility compliance as it relates to the
Building or Common Areas.
If any action or proceeding is brought against an Indemnified Party by
reason of the foregoing Tenant, upon written notice from such
Indemnified Party, shall defend the same at Tenant's expense, with
counsel reasonably satisfactory to Landlord.
C. Waiver and Release. Tenant and Landlord, as a material part of the
consideration passing to the other, by this Paragraph 11C,
respectively waive and release all claims against the other, the
other's wholly owned subsidiaries, and all of the other's or the
other's wholly owned subsidiaries' employees and agents with respect
to all matters for which the respective parties have disclaimed
liability pursuant to the provisions of this Lease.
D. The provisions of this Paragraph shall survive the expiration or
termination of this Lease with respect to any claims or liability
occurring prior to such expiration or termination. The indemnification
provided by this Paragraph 11 is subject to Tenant's and Landlord's
waiver of recovery in the preceding Paragraph 10 to the extent of
either Tenant's or Landlord's recovery of loss proceeds under policies
of insurance described in Paragraph 10.
12. Use.
A. The Premises shall be used only for the purpose of receiving, storing,
servicing, repairing, shipping and selling (other than retail)
products, materials and merchandise made and/or distributed by Tenant
and for such other lawful purposes as may be incidental thereto
provided that Tenant shall not use the Premises for the receipt,
storage or handling of any product, material or merchandise that is
explosive or highly inflammable or hazardous or make any use of the
Premises which would make void or voidable any policy of fire or
extended coverage insurance covering any of the Building or property
of Landlord. Outside storage, including without limitation, storage of
trucks and other vehicles (except trucks and other vehicles used in
Tenant's ordinary course of business at the Premises, which trucks and
other vehicles may be parked on the Premises as needed by Tenant
during business hours, and stored thereon by Tenant during
non-business hours), is prohibited without Landlord's prior written
consent. Tenant shall comply with all governmental laws, ordinances
and regulations applicable to the use of the Premises, and promptly
shall comply with all governmental orders and directives for the
correction, prevention and abatement of nuisances in or upon, or
connected with, the Premises, all at Tenant's sole expense. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust,
gas noise, or vibrations to emanate from the Premises, nor take any
other action that would constitute a nuisance or would disturb,
unreasonably interfere with, or endanger Landlord or any other tenants
of the Building. Landlord warrants that the current zoning of the
Premises is "BPD-Business Park
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District".
B. Tenant and its employees, customers and licensees shall have the
non-exclusive rights to use any parking areas associated with the
Premises that have been designated for such use by Landlord, subject
to (1) all reasonable rules and regulations promulgated by Landlord
and (2) rights of ingress and egress of other tenants. Landlord shall
not be responsible for enforcing Tenant's parking rights against any
third parties. Tenant shall not sublease any parking spaces without
Landlord's written consent.
13. Inspection. Landlord and Landlord's agents and representatives shall have
the right to enter the Premises at any reasonable time during business
hours, to inspect the Premises and to make such repairs as may be required
or permitted pursuant to this Lease. During the period that is twelve (12)
months prior to the end of the Lease term, Landlord and Landlord's
representatives may enter the Premises during business hours for the
purpose of showing the Premises. In addition, Landlord shall have the right
to erect a suitable sign on the Premises stating the Premises are
available. Tenant shall notify Landlord in writing at least thirty (30)
days prior to vacating the Premises and shall arrange to meet with Landlord
for a joint inspection of the Premises prior to vacating. If Tenant fails
to give such notice or to arrange for such inspection, then Landlord's
inspection shall be deemed correct for the purpose of determining Tenant's
responsibility for repairs and restoration of the Premises.
14. Assignment and Subletting.
A. Tenant shall not have the right to sublet all or part of the Premises
or to assign, transfer or encumber this Lease, or any interest
therein, without the prior written consent of Landlord. Any attempted
assignment, subletting, transfer or encumbrance by Tenant in violation
of the terms and covenants of this Paragraph shall be void. No
assignment, subletting or other transfer, whether consented to by
Landlord or not, or permitted hereunder, shall relieve Tenant of its
liability hereunder. If an event of default occurs while the Premises
or any part thereof are assigned or sublet, then Landlord, in addition
to any other remedies herein provided, or provided by law, may collect
directly from such assignee, subtenant or transferee all rents payable
to the Tenant and apply such rent against any sums due Landlord
hereunder. No such collection shall be construed to constitute a
novation or a release of Tenant from the further performance of
Tenant's obligations hereunder.
B. Upon the occurrence of an assignment or subletting, whether consented
to by Landlord, or mandated by judicial intervention, Tenant hereby
assigns, transfers and conveys all rents or other sums received by
Tenant under any such assignment or sublease, which are in excess of
the rents and other sums payable by Tenant under this Lease, and
agrees to pay such amounts within ten (10) days after receipt.
C. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. (S) 101 et. seq., (the
"Bankruptcy Code"), any and all monies or other consideration payable
or otherwise to be delivered in connection with such assignment shall
be paid or delivered to Landlord, shall be and remain the exclusive
property of Landlord and shall not constitute property of Tenant or of
the estate of Tenant within the meaning of the Bankruptcy Code. Any
and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be
promptly paid or delivered to Landlord.
D. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed, without further
act or deed, to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such assignee
shall upon demand execute and deliver to Landlord an instrument
confirming such assumption.
9
E. Notwithstanding the provisions of Paragraph 14A, Tenant may, after
prior written notice to Landlord, assign the Lease or any part
thereof, or sublease the Premises, in whole or in part without
Landlord's prior consent to:
(1) any corporation or other legal entity which has the power to
direct Tenant's management and operation, or any corporation
whose management and operation is controlled by Tenant; or
(2) any corporation a majority of whose voting stock is owned by
Tenant; or
(3) any corporation or other entity in which or with which Tenant is
merged or consolidated, in accordance with applicable statutory
provisions for merger or consolidation of corporations or other
entities, so long as the liabilities of the corporations or other
entities participating in such merger or consolidation are
assumed by the corporation or other entity surviving such merger
or created by such consolidation; or
(4) any corporation or other entity acquiring this Lease and a
substantial portion of Tenant's assets; or
(5) any corporate or other successor to a successor corporation or
entity becoming such by either of the methods described in
subsections (4); or
(6) any entity (or member of a group of affiliated entities) which is
acquiring the majority of Tenant's business located and operated
in the San Antonio, Texas, "Area of Dominant Influence for Media
Coverage" (as such term is commonly defined in the advertising
industry);
F. Tenant's right to assignment or sublet under Paragraph 14E above is
conditioned upon the following:
(1) that the proposed subtenant or assignee is engaged in the
substantially the same business activities as Tenant,
(2) that no more than two (2) subtenants or assignees may occupy the
Premises; and
(3) that Tenant and Guarantor remain fully liable under this Lease.
15. Condemnation. If ten percent (10%) or more of the Premises are taken for
any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof and, in the reasonable opinion of Tenant, the taking prevents or
materially interferes with the use of the Premises for the purpose for
which they were leased to Tenant, then Tenant, at its election, may
terminate this Lease by giving written notice to Landlord of such election
and the rent shall be abated during the unexpired portion of this Lease,
effective on the date of such taking. If less than ten percent (10%) of the
Premises are taken for any public or quasi-public use under any
governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, this Lease shall not terminate, but
the rent payable hereunder during the unexpired portion of this Lease shall
be reduced to such extent as may be fair and reasonable under all of the
circumstances. All compensation awarded in connection with or as a result
of any of the foregoing proceedings shall be the property of Landlord and
Tenant hereby assigns any interest in any such award to Landlord; provided,
however, Landlord shall have no interest in any award made to Tenant for
loss of business or goodwill or for the taking of Tenant's fixtures and
improvements, if a separate award for such items is made to Tenant.
10
16. Holding Over. At the termination of this Lease by its expiration or
otherwise, Tenant immediately shall deliver possession to Landlord with all
repairs and maintenance required herein to be performed by Tenant
completed. If, for any reason, Tenant retains possession of the Premises
after the expiration or termination of this Lease or fails to complete any
repairs required hereby, unless the parties hereto otherwise agree in
writing, such possession shall be subject to termination by either Landlord
or Tenant at any time upon not less than ten (10) days advance written
notice, and provided all of the other terms and provisions of this Lease
shall be applicable during such period, except that Tenant shall pay
Landlord from time to time, upon demand, as rental for the period of such
possession, an amount equal to one hundred fifty percent (150%) of the rent
in effect on the termination date, computed on a daily basis for any day of
each calendar month of such period. No holding over by Tenant, whether with
or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided. The preceding provisions of this Paragraph
16 shall not be construed as consent for Tenant to retain possession of the
Premises in the absence of written consent thereto by Landlord.
17. Quiet Enjoyment. Landlord covenants that on or before the Commencement Date
it will have good title to the Premises, free and clear of all liens and
encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental
regulations relating to the use of such property, and easements,
restrictions and other conditions of record. Landlord represents that it
has the authority to enter into this Lease and that so long as Tenant pays
all amounts due hereunder and performs all other covenants and agreements
herein set forth, Tenant shall peaceably and quietly have, hold and enjoy
the Premises for the term hereof without hindrance or molestation from
Landlord, subject to the terms and provisions of this Lease.
18. Events of Default. The following events (herein individually referred to as
an "event of default") each shall be deemed to be events of nonperformance
by Tenant under this Lease:
A. Tenant shall fail to pay any installment of the rent herein reserved
when due, or any other payment or reimbursement to Landlord required
herein when due or any payment or reimbursement required under any
other lease with Landlord, and such failure shall continue for a
period of five (5) days from the date such payment was due. Landlord
shall provide written notice of Tenant's failure no more than two (2)
times per lease year whereupon Tenant shall have five (5) days from
the date of receipt of said notice to cure.
B. Tenant shall fail to pay any amounts owed to contractors or
subcontractors for work or services performed, or bond-around any such
disputed claim in a manner to free the Premises from any lien claim
arising therefrom, in connection with the operation, construction,
management or maintenance of the Building as provided herein, and such
failure shall continue for a period of five (5) business days from the
date Tenant is notified in writing that such payment was due.
C. The Tenant or any guarantor of the Tenant's obligations hereunder
shall (i) become insolvent; (ii) admit in writing its inability to pay
its debts; (iii) make a general assignment for the benefit of
creditors; (iv) commence any case, proceeding or other action seeking
to have an order for relief entered on its behalf as a debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or of any substantial part of its property; or (v) take any action
to authorize or in contemplation of any of the actions set forth above
in this Paragraph 18.
D. Any case, proceeding or other action against the Tenant or any
guarantor of the Tenant's
11
obligations hereunder shall be commenced seeking (i) to have an order
for relief entered against it as debtor or to adjudicate it a bankrupt
or insolvent; (ii) reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of
debtors; (iii) appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its
property, and such case, proceeding or other action (a) results in the
entry of an order for relief against it which is not fully stayed
within seven (7) business days after the entry thereof or (b) shall
remain undismissed for a period of forty-five (45) days.
E. Tenant shall for a period of more than thirty (30) days (i) vacate all
or a substantial portion of the Premises or (ii) fail to continuously
operate its business at the Premises for the permitted use set forth
herein, whether or not Tenant is in default of the rental payments due
under this Lease.
F. Tenant shall fail to discharge or effectively bond-around any lien
placed upon the Premises in violation of Paragraph 21, hereof within
twenty (20) days after any such lien or encumbrance is filed against
the Premises.
G. Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than those listed in this Paragraph 18), and shall
not cure such failure within twenty (20) days after written notice
thereof to Tenant.
19. Remedies.
A. Upon each occurrence of an event of default, Landlord shall have the
option to pursue any one or more of the following remedies without any
notice or demand:
(1) Terminate this Lease; and/or
(2) Enter upon and take possession of the Premises without
terminating this Lease; and/or
(3) Alter all locks and other security devices at the Premises with
or without terminating this Lease, deny access to Tenant, and
pursue, at Landlord's option, one or more remedies pursuant to
this Lease, Tenant hereby specifically waiving any state or
federal law to the contrary. This provision shall control over
any conflicting provisions of the Texas Property Code or any
successor statute governing the right of landlords to change the
door locks of commercial tenants.
B. Upon the occurrence of any event of default Tenant immediately shall
surrender the Premises to Landlord, and if Tenant fails so to do,
Landlord, without waiving any other remedy it may have, may enter upon
and take possession of the Premises and expel or remove Tenant and any
other person who may be occupying such Premises or any part thereof,
without being liable for prosecution or any claim of damages therefor.
C. If Landlord repossesses the Premises with or without terminating the
Lease, Tenant, at Landlord's option, shall be liable for and shall pay
Landlord on demand all rental and other payments owed to Landlord
hereunder, accrued to the date of such repossession, plus all amounts
required to be paid by Tenant to Landlord until the date of expiration
of the term as stated in Paragraph 1. Actions to collect amounts due
by Tenant to Landlord under this subparagraph may be brought from time
to time, on one or more occasions, without the necessity of Landlord's
waiting until expiration of the Lease term. In the event of any
damages provable by Landlord, Tenant shall be liable and responsible
to Landlord and termination shall not relieve Tenant from such
liability.
12
D. Upon an event of default, in addition to any sum provided to be paid
herein, Tenant also shall be liable for and shall pay to Landlord (1)
any reasonable brokerage fees incurred by Landlord in connection with
the execution of this Lease; (2) reasonable brokers' fees incurred by
Landlord in connection with any reletting of the whole or any part of
the Premises; (3) the costs of removing and storing Tenant's or other
occupant's property; (4) the costs of repairing, altering, remodeling
or otherwise putting the Premises into condition acceptable to a new
tenant or tenants; and (5) all reasonable expenses incurred by
Landlord in enforcing or defending Landlord's rights and/or remedies.
If either party hereto institutes any action or proceeding to enforce
any provision hereof by reason of any alleged breach of any provision
of this Lease, the prevailing party shall be entitled to receive from
the losing party all reasonable attorney's fees and all court costs in
connection with such proceeding.
E. In the event Tenant fails to make any payment due hereunder when
payment is due, to help defray the additional cost to Landlord for
processing of such late payments, Tenant shall pay to Landlord on
demand a late charge in an amount equal to five percent (5%) of such
installment; and the failure to pay such amount within ten (10) days
after demand therefore shall be an additional event of default
hereunder. The provision for such late charges shall be in addition to
all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as liquidated damages or as limiting Landlord's
remedies in any manner.
F. Exercise by Landlord of any one or more remedies hereunder granted or
otherwise is available, including without limitation, the institution
by Landlord, its agents or attorney of a forcible detainer or
ejectment action to re-enter the Premises shall not be construed to be
an election to terminate this Lease or relieve Tenant of its
obligation to pay rent hereunder and shall not be deemed to be an
acceptance of surrender of the Premises by Landlord, whether by
agreement or by operation of law, it being understood that such
surrender can be effected only by the written agreement of Landlord
and Tenant. Tenant and Landlord further agree that forbearance by
Landlord to enforce its rights pursuant to the Lease at law or in
equity, shall not be a waiver of Landlord's right to enforce one or
more of its rights in connection with any subsequent default.
G. In the event of termination and/or repossession of the Premises for an
event of default, Landlord shall use reasonable efforts to relet the
Premises; provided, that, Tenant shall not be entitled to credit or
reimbursement of any proceeds in excess of the rental owed hereunder.
Landlord may relet the whole or any portion of the Premises for any
period, to any tenant and for any use and purpose.
H. If Landlord fails to commence to perform any of its obligations
hereunder within thirty (30) days after receipt of written notice from
Tenant specifying such failure, Tenant's exclusive remedy shall be an
action for damages, however, if the nature of Landlord's obligation is
such that more than thirty (30) calendar days are required for its
performance, then Landlord shall not be deemed in default if it is
diligently pursuing the same to completion. Unless and until Landlord
fails to so cure said default after such notice, Tenant shall not have
any remedy or cause of action by reason thereof. All obligations of
Landlord hereunder will be binding upon Landlord only during the
period of its possession of the Premises and not thereafter. The term
"Landlord" shall mean only the owner, for the time being of the
Premises, and in the event of the transfer by such owner of its
interest in the Premises, such owner shall thereupon be released and
discharged from all covenants and obligations of the Landlord
thereafter accruing, but such covenants and obligations shall be
binding during the Lease term upon each new owner for the duration of
such owner's ownership. Notwithstanding any other provision hereof,
Landlord shall not have any personal liability hereunder. In the event
of any breach or default by Landlord in any term or provision of this
Lease, and, as a consequence, if Tenant shall recover a money judgment
against Landlord, such judgment
13
shall be satisfied only out of the proceeds received at a judicial
sale upon execution and levy against the right, title and interest of
Landlord in the Building, and in the rents or other income from the
Building receivable by Landlord, and neither Landlord nor Landlord's
owners, partners or venturers shall have any personal, partnership,
corporate or other liability hereunder.
I. If Landlord repossesses the Premises pursuant to the authority herein
granted, then Landlord shall have the right to (i) keep in place and
use or (ii) remove and store all of the furniture, fixtures and
equipment at the Premises at Tenant's sole expense, including that
which is owned by or leased to Tenant at all times prior to any
foreclosure thereon by Landlord or repossession thereof by any
Landlord thereof or third party having a lien thereon. Landlord also
shall have the right to relinquish possession of all or any portion of
such furniture, fixtures and equipment and other property to any
person ("Claimant") who represents to Landlord a copy of any
instrument represented by Claimant to have been executed by Tenant (or
any predecessor of Tenant) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures,
equipment or other property, without the necessity on the part of
Landlord to inquire into the authenticity or legality of said
instrument, Landlord may, at its sole option and without prejudice to,
or waiver of any right it may have i) escort Tenant to the Premises to
retrieve any personal belongings of Tenant and/or its employees, or
ii) obtain a list from Tenant of the personal property of Tenant
and/or its employees, and make such property available to Tenant and
or Tenant's employees; provided, however, Tenant first shall pay in
cash all reasonable costs and estimated expenses to be incurred in
connection with the removal of such property and making it available.
The rights of Landlord herein stated shall be in addition to any and
all other rights that Landlord has or may hereafter have at law or in
equity, and Tenant stipulates and agrees that the rights herein
granted Landlord are commercially reasonable.
J. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease,
whether or not expressly denominated as rent, shall constitute rent.
K. This is a contract under which applicable law excuses Landlord from
accepting performance from (or rendering performance to) any person or
entity other than Tenant.
20. Mortgages. Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a
lien or charge upon the Premises or the improvements situated thereon or
the Building, provided, however, that if the mortgagee, trustee, or holder
of any such mortgage or deed of trust elects to have Tenant's interest in
this Lease superior to any such instrument, then by notice to Tenant from
such mortgagee, trustee or holder, this Lease shall be deemed superior to
such lien, whether this Lease was executed before or after said mortgage or
deed of trust. Tenant agrees to attorn to any mortgagee, trustee under a
deed of trust or purchaser at a foreclosure sale or trustee's sale as
Landlord under this Lease. Tenant, at any time hereafter, within ten (10)
days after demand, shall execute any instruments, releases or other
documents that may be required by any mortgagee for the purpose of
subjecting and subordinating this Lease to the lien of any such mortgage
provided that mortgagee assures the right of possession of the Premises to
Tenant under the terms of this Lease. Landlord represents that, as of the
date hereof, there exists no mortgage or deed of trust affecting the
Premises.
21. Mechanic's Liens. Tenant has no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in
any manner to bind the interest of Landlord or Tenant in the Premises or to
charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform
labor for any construction or repairs. Tenant covenants and agrees that it
will pay or cause to be paid all sums legally due and payable by it on
account of any labor performed or materials furnished in connection
14
with any work performed on the Premises, or will duly and timely bond
around 150% of any disputed claim and that it will save and hold Landlord
harmless from any and all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of the Landlord in the Premises or under the terms of
this Lease. Tenant agrees to give Landlord immediate written notice of the
placing of any lien or encumbrance against the Premises.
22. Miscellaneous.
A. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The
captions inserted in this Lease are for convenience only and in no way
define, limit or otherwise describe the scope or intent of this Lease,
or any provision hereof, or in any way affect the interpretation of
this Lease.
B. In the event the Premises constitute a portion of a multiple occupancy
building, Tenant's Proportionate Share, as used in this Lease, shall
mean a fraction, the numerator of which is the space contained in the
Premises and the denominator of which is the entire rentable space
contained in the Building.
C. The terms, provisions and covenants and conditions contained in this
Lease shall run with the land and shall apply to, inure to the benefit
of, and be binding upon, the parties hereto and upon their respective
heirs, executors, personal representatives, legal representatives,
successors and assigns, except as otherwise herein expressly provided.
Landlord shall have the right to transfer and assign, in whole or in
part, its rights and obligations in the Building and property that are
the subject of this Lease. Each party agrees to furnish to the other,
promptly upon demand, a corporate resolution, proof of due
authorization by partners, or other appropriate documentation
evidencing the due authorization of such party to enter this Lease.
D. Landlord and Tenant shall not be held responsible for delays in the
performance of its non-monetary obligations hereunder when caused by
material shortages, acts of God or labor disputes.
E. Tenant agrees, from time to time, within ten (10) days after request
of Landlord, to deliver to Landlord, or Landlord's designee, a
Certificate of Occupancy, financial statements and an estoppel
certificate stating that this Lease is in full force and effect, the
date to which rent has been paid, the unexpired term of this Lease and
such other factual matters pertaining to this Lease as may be
requested by Landlord. It is understood and agreed that Tenant's
obligation to furnish such estoppel certificates in a timely fashion
is a material inducement for Landlord's execution of this Lease. If
Tenant fails to execute the same within such ten (10) day period,
Landlord is hereby authorized to execute the same as attorney-in-fact
for Tenant.
F. This Lease constitutes the entire understanding and agreement of the
Landlord and Tenant with respect to the subject matter of this Lease,
and contains all of the covenants and agreements of Landlord and
Tenant with respect thereto. Landlord and Tenant each acknowledge that
no representations, inducements, promises or agreements, oral or
written, have been made by Landlord or Tenant, or anyone acting on
behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations not
expressly set forth in this Lease are of no force or effect. This
Lease may not be altered, changed or amended except by an instrument
in writing signed by both parties hereto.
G. All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall
survive the expiration or earlier termination of the
15
term hereof, including without limitation, all payment obligations
with respect to taxes and insurance and all obligations concerning the
condition and repair of the Premises. Upon the expiration or earlier
termination of the term hereof, and prior to Tenant vacating the
Premises, Tenant shall pay to Landlord any amount reasonably estimated
by Landlord as necessary to put the Premises, including without
limitation, all heating and air conditioning systems and equipment
therein, in good condition and repair, reasonable wear and tear
excluded. Tenant shall also, prior to vacating the Premises, pay to
Landlord the amount, as estimated by Landlord, of Tenant's obligation
hereunder for real estate taxes and insurance premiums for the year in
which the Lease expires or terminates. All such amounts shall be used
and held by Landlord for payment of such obligations of Tenant
hereunder, with Tenant being liable for any additional costs therefor
upon demand by Landlord, or with any excess to be returned to Tenant
after all such obligations have been determined and satisfied as the
case may be. Any security deposit held by Landlord shall be credited
against the amount due for Tenant under this Paragraph 22G.
H. Landlord expressly reserves the right, at Landlord's sole cost and
expense, to remove Tenant from the Premises and to relocate Tenant in
some other space (the "New Premises") of Landlord's choosing of
approximately the same dimensions and size within the Building or any
other building owned or managed by Landlord in the vicinity of the
Building, which other space shall be improved in such a manner so that
the New Premises shall be comparable in its interior design and
decoration to the Premises; provided, however, that if Landlord
exercises Landlord's election to remove and relocate Tenant in the New
Premises, which is at that time leasing for a higher rate of Base
Rent, then Tenant shall not be required to pay the difference between
the Base Rent of the Premises and the higher Base Rent of the New
Premises, provided further, that if Tenant is removed and relocated to
the New Premises which is then leasing at a Base Rent less than the
Base Rent of the Premises at that time, Tenant's Base Rent shall be
reduced to the Base Rent then being charged for the New Premises.
Nothing herein contained shall be construed to relieve Tenant, or
imply that Tenant is relieved, of the liability for or obligation to
pay any additional rental due by reason of any of other provisions of
this Lease, which provisions shall be applied to the New Premises.
Tenant agrees that Landlord's exercise of Landlord's election to
remove and relocate Tenant shall not terminate this Lease or release
Tenant, in whole or in part, from Tenant's obligation to pay the
rental and perform the covenants and agreements hereunder for the full
term of this Lease. In the event of any such relocation, this Lease
shall continue in full force and effect with no change in the terms,
covenants or conditions hereof other than (i) the substitution of the
New Premises for the Premises specified in Paragraph 1, hereof, and
(ii) the reduction of Base Rent from the amount specified in Paragraph
2A hereof, as provided above, in the event that the New Premises is
leasing at a Base Rent less than the Base Rent for the Premises at the
time of such relocation. Upon request from Landlord, Tenant shall
execute an amendment to this Lease reflecting the aforesaid changes.
Notwithstanding the above, should Landlord elect to relocate Tenant to
the New Premises, Landlord shall be required to fixture and finish the
interior comparable to the Premises and Tenant shall not be required
to move to the New Premises until the New Premises is complete, ready
for occupancy, with fixtures and finish in place, all at Landlord's
expense.
I. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term
of this Lease, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected
thereby, and it is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this
Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
J. All references in this Lease to "the date hereof" or similar
references shall be deemed to refer
16
to the last date, in point of time, on which all parties hereto have
executed this Lease.
K. Tenant represents and warrants that it has dealt with no broker, agent
or other person in connection with this transaction or that no broker,
agent or other person brought about this transaction, other than
CAVENDER & HILL PROPERTIES, INC. and OSBORN PROPERTIES, and Tenant
agrees to indemnify and hold Landlord harmless from and against any
claims by any other broker, agent or other persons claiming a
commission or other form of compensation by virtue of having dealt
with Tenant with regard to this leasing transaction.
L. If and when included within the term "Landlord", as used in this
instrument, there is more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of a
notice specifying some individual at some specific address for the
receipt of notices and payments to Landlord. If and when included
within the term "Tenant", as used in this instrument, there is more
than one person, firm or corporation, all shall jointly arrange among
themselves for their joint execution of a notice specifying some
individual at some specific address within the continental United
States for the receipt of notices and payments to Tenant. All parties
included within the terms "Landlord" and "Tenant", respectively, shall
be bound by notices given in accordance with the provisions of
Paragraph 23, hereof to the same effect as if each had received such
notice.
M. Tenant acknowledges that (1) it has inspected and accepts the Premises
in an "As Is, Where Is" condition, (2) the buildings and improvements
comprising the same are suitable for the purpose for which the
Premises are leased and Landlord has made no warranty, representation,
covenant, or agreement with respect to the merchantability or fitness
for any particular purpose of the Premises, (3) the Premises are in
good and satisfactory condition, (4) no representations as to the
repair of the Premises, nor promises to alter, remodel or improve the
Premises have been made by Landlord (unless and except as may be set
forth in Exhibit "B" attached to this Lease, if one shall be attached,
or as is otherwise expressly set forth in this Lease), and (5) there
are no representations or warranties, expressed, implied or statutory,
that extend beyond the description of the Premises.
23. Notices. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with
reference to the sending, mailing or delivering of notice or the making of
any payment by Landlord to Tenant or with reference to the sending, mailing
or delivering of any notice or the making of any payment by Tenant to
Landlord shall be deemed to be complied with when and if the following
steps are taken:
A. All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address for Landlord set
forth below or at such other address as Landlord may specify from time
to time by written notice delivered in accordance herewith. Tenant's
obligation to pay rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such rent an
and other amounts have been actually received by Landlord. In addition
to Base Rent due hereunder, all sums due Landlord hereunder shall be
deemed to be additional rental owed to Landlord.
B. All payments required to be made by Landlord to Tenant hereunder shall
be payable to Tenant at the address set forth below, or at such other
address within the continental United States as Tenant may specify
from time to time by written notice delivered in accordance herewith.
C. Any written notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered upon the earlier to occur of
(1) tender of delivery (in the case of a hand-delivered notice,
courier or overnight delivery for which a receipt is given) or (2)
upon
17
receipt or refusal of U.S. Certified Mail, Return Receipt Requested,
addressed to the parties hereto at the respective addresses set out
below, or at such other address as they have theretofore specified by
written notice delivered in accordance herewith.
24. Hazardous Waste.
A. The term "hazardous substance(s)" as used in the Lease, is defined as
follows:
Any element, compound, mixture, solution, particle or substance, which
presents danger or potential danger for damage or injury to health,
welfare or to the environment including, but not limited to: (i) those
substances which are inherently or potentially radioactive, explosive
ignitable, corrosive, reactive, carcinogenic or toxic and (ii) those
substances which have been recognized as dangerous or potentially
dangerous to health, welfare or to the environment by any federal,
municipal, state, county or other governmental or quasi-governmental
authority and/or any department or agency thereof.
B. Tenant represents and warrants to Landlord that at all times during
the term of this Lease and any extensions or renewals thereof, Tenant
shall:
(i) obtain Landlord's prior written consent, which consent shall be
granted or withheld in Landlord's sole discretion, to the
manufacturing, processing, distributing, using, producing,
treating, storing (above or below ground level), disposing of, or
allowing to be present (the "Presence") of any hazardous
substance in or about the Premises. In connection with each such
consent requested by Tenant, Tenant shall submit to Landlord a
description, including the composition, quantity and all other
information requested by Landlord concerning the proposed
Presence of any hazardous substance. Landlord's consent to the
Presence of any hazardous substance may be deemed given only by
inclusion of a description of the composition and quantity of the
proposed hazardous substance on Exhibit "C" to this Lease. Any
hazardous substance, which Landlord has agreed to the Presence
thereof, shall be deemed to be an Allowed Substance for purposes
of this Article. Landlord's consent to the Presence of any
hazardous substance at any time during the lease term or renewal
thereof shall not waive the requirement of obtaining Landlord's
consent to the subsequent Presence of any other, or increased
quantities of, hazardous substance in or about the Premises. If
Landlord subsequently consents to the Presence of any other
hazardous substance, or to increased quantities of any hazardous
substance, such consent shall be deemed given only by amendment
of Exhibit "C" to this Lease. Notwithstanding the foregoing,
Tenant acknowledges that, unless specifically approved by
Landlord in writing, chlorinated solvents including, but not
limited to, Trichloroethene(TCE), 1,1,1 Trichloroethene (TCE),
1,1 Dichloroethane (DCA), 1,2, Dichloroethane (DCA), and 1,1
Dichlorethene (DCE), ("Chlorinated Solvents") shall be deemed not
to be Allowed Substances, and the Presence, manufacture,
processing, distribution, production, treatment, storage below
ground level, or disposal of Chlorinated Solvents on the demised
premises or the Project is strictly prohibited.
(ii) refrain from (and prohibit others from) allowing the Presence of
any hazardous substance in or about the Premises which is not an
Allowed Substance;
(iii) promptly comply at Tenant's own cost and expense, with all laws,
orders, rules, regulations, certificates of occupancy, or other
requirements, as the same now exist or may hereafter be enacted,
amended or promulgated, of any federal, municipal, state, county
or other governmental or quasi-governmental authorities and/or
any department or agency thereof relating to the Presence of
hazardous substances in or about the Premises which were created
or allowed to be present by Tenant, its
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employees, contractors, agents or invitees, whether or not such
substances are Allowed Substances.
(iv) indemnify and hold Landlord, its agents and employees, harmless
from any and all demands, claims, causes of action, penalties,
liabilities, judgments, damages (including consequential damages)
and expenses including, without limitation, court costs and
reasonable attorneys fees incurred by Landlord as a result of (a)
Tenant's failure or delay in complying, to Landlord's
satisfaction, with the provisions of sections (B)(i) or (ii)
above; (b) Tenant's failure or delay in properly complying with
such law, order, rule, regulation, certificate of occupancy or
other requirement referred to in section (B) (iii), above or (c)
any adverse effect which results from the Presence of any
hazardous substance in or about the Premises which were created
or allowed to be present by Tenant, its employees, contractors,
agents or invitees, whether or not such hazardous substance is an
Allowed Substance. If any action or proceeding is brought against
Landlord, its agents or employees by reason of any such claim,
Tenant, upon notice from Landlord, will defend such claim at
Tenant's expense with counsel reasonably satisfactory to
Landlord. This indemnification by Tenant of Landlord shall
survive the termination of the Lease.
(v) promptly disclose to Landlord by delivering, in the manner
prescribed for delivery of notice in the Lease, a copy of any
forms, submissions, notices, reports, or other written
documentation (Communications) relating to the Presence of any
hazardous substance in or about the Premises, whether or not such
hazardous substance is an Allowed Substance, and whether such
Communications are delivered to Tenant or are requested of Tenant
by any federal, municipal, state, county or other government or
quasi-governmental authority and/or any department or agency
thereof.
(vi) notwithstanding any other provisions of this Lease, allow
Landlord, any authorized representative of Landlord, access and
the right to enter and inspect the Premises for the Presence of
any hazardous substance, whether or not such hazardous substance
is an Allowed Substance, at any time deemed reasonable by
Landlord, without prior notice to Tenant.
C. Compliance by Tenant with any provisions of this Article shall not be
deemed a waiver of any other provision. Without limiting the
foregoing, Landlord's consent to the Presence of any hazardous
substance shall not relieve Tenant of its indemnity obligations under
the terms of this Article.
25. Waiver of Landlord's Lien. Landlord hereby waives any statutory liens and
rights of distress with respect to the personal property (trade fixtures,
equipment and merchandise) of Tenant from time to time located within the
Premises ("Tenant's Property"). This Lease does not grant a contractual
lien or any other security interest to Landlord or in favor of Landlord
with respect to Tenant's Property. Landlord further agrees to execute and
deliver such instruments reasonably requested by any lender of Tenant
having a security interest in Tenant's Property ("Tenant's Lender") from
time to time to evidence or effect the aforesaid waiver and agreements.
26. Leasehold Improvements. Landlord, at Landlord's expense, shall construct
one (1) sheetrock demising wall (320 I.f.) separating the Premises from the
remainder of the building. Landlord shall be responsible for no other
improvements or modifications to the Premises and Tenant agrees to accept
the Premises in its current "as-is" condition. Landlord shall provide a
Leasehold Improvement Allowance of up to Two Hundred Thirty-six Thousand
One Hundred Sixty and No/100 Dollars ($236,160.00) to be applied toward the
costs of Tenant's Leasehold Improvements to the Premises. Prior to
commencement of construction, Tenant shall submit plans and specifications
for Landlord's reasonable approval which shall be attached hereto as
Exhibit "B". All improvements shall be
19
constructed in a good and workmanlike manner by a general contractor
reasonably approved by Landlord in advance and in accordance with all
applicable statutes, laws, regulations, permits, licenses and other legal
requirements. Landlord shall reimburse Tenant for its bona fide costs of
Tenant's Leasehold Improvements not the exceed the Leasehold Improvement
Allowance after all of the following events have taken place:
A. completion by Tenant and approval by Landlord of all of Tenant's
Leasehold Improvements;
B. Receipt by Landlord from Tenant of a Certificate of Occupancy
issued by the City of San Antonio; and
C. Receipt by Landlord from Tenant a release and waiver of liens by
the general contractor, holding Landlord harmless from any
obligation whatsoever which may be or may have been incurred by
Tenant or Tenant's contractors or subcontractors, during the
construction of the Leasehold Improvements.
27. Authority. The parties executing this document represent, warrant and
covenant that they are fully authorized and empowered to execute this Lease
Agreement on behalf of the respective parties, and that the execution
hereof by the parties shown below is legally binding, respectively, on the
Landlord and Tenant named herein.
28. Guaranty. This Lease is conditioned upon the execution by Conn Appliances,
Inc. of that certain Continuing Lease Guaranty by Corporation attached
hereto as Exhibit "D".
29. Exhibits. The following Exhibits are hereby incorporated into this Lease:
Exhibit "A" Property Description
Exhibit "A-1" Floorplan
Exhibit "B" Office Finish-out Plans and Specifications
Exhibit "C" Allowed Substances
Exhibit "D" Continuing Lease Guaranty by Corporation
EXECUTED BY LANDLORD, this 5 day of December, 2000.
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: Cavender & Hill Properties, Inc.
Its: Managing Agent
By: /s/ J. Mark Cavender
--------------------------
J. Mark Cavender
Title: President
Address:
The Northwestern Mutual Life Insurance Company
c/o Cavender & Hill Properties, Inc.
900 Isom Road
Suite 306
San Antonio, Texas 78216
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EXECUTED BY TENANT, this 30 day of November 2000.
CAI, L.P.
By: Conn Appliances, Inc.
A Texas Corporation
Its: General Partner
By: /s/ Thomas J. Frank
------------------------
Thomas J. Frank
Its: Chief Executive Officer
Address:
CAI, L.P.
Conn's Appliances
3295 College Street, Suite A
Beaumont, Texas 77701
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EXHIBIT A
PROPERTY DESCRIPTION
Approximately 15.62 acres out of Lot 31, Block 1, NCB 12191, San Antonio, Bexar
County, Texas.
22
EXHIBIT A-1
FLOORPLAN
[GRAPHIC]
23
EXHIBIT B
OFFICE FINISH-OUT
PLANS AND SPECIFICATIONS
To be attached
24
EXHIBIT B
OFFICE FINISH-OUT
PLANS AND SPECIFICATIONS
[GRAPHIC]
EXHIBIT B
OFFICE FINISH-OUT
PLANS AND SPECIFICATIONS
[GRAPHIC]
EXHIBIT B
OFFICE FINISH-OUT
PLANS AND SPECIFICATIONS
[GRAPHIC]
EXHIBIT C
ALLOWED SUBSTANCES
Maximum Quantity of Allowed Substances
Composition of Allowed Substances At any one (1) time
- --------------------------------- --------------------------------------
Acetylene 100 pounds
Freeze-It 12 cans (16 oz. cans)
R-1 34a Freon 180 pounds
R-22 Freon 250 pounds
R-12 Freon 30 pounds
WD-40 12 cans (16 oz. cans)
Denatured alcohol 1 gallon
Tun-O-Wash 12 cans (16 oz. cans)
Service Solvent (acetone) 1 gallon
Acetelyne 100 pounds
Oxygen 100 pounds
Coil Master (condenser coil cleaner) 6 gallons
Soldering Flux 1 pound
Small engine oil 24 quarts
Silicone RTV 48 tubes (6 oz. tubes)
Contact cement 1 quart
Nitrogen 125 pounds
Super-Glue 12 tubes (10 oz. tubes)
Clorox 6 gallons
Pine-O-Pine 2 gallons
Easy-Off oven cleaner 2 gallons
Windex 5 gallons
Tenant warrants that only Air Conditioning Technicians will utilize any Freon or
Freon products, and that all of Tenant's Air Conditioning Technicians have been
tested and certified by the Environmental Protection Agency (E.P.A.) of the
United States of America on the proper handling, recovery and reclaiming of
C.F.C. Refrigerants. Further, any area used for handling or storage of Freon or
Freon products shall be sealed with a concrete sealer or coating acceptable to
Landlord such that the slab is impervious to Freon spills.
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EXHIBIT D
CONTINUING LEASE GUARANTY BY CORPORATION
C.A.I., L.P., a limited partnership organized under the laws of the State of
Texas ("Tenant") is (a) engaged in business as an affiliate of the undersigned,
or (b) engaged in selling, marketing, using or otherwise dealing in merchandise,
supplies, products, equipment or other articles supplied to it by the
undersigned, or (c) because of our inter-corporate or business relations, or by
reason of any of the foregoing, it will be in our direct interest and advantage
to assist Tenant in securing a lease. Therefore, in consideration of the making
of the Lease Agreement by and between The Northwestern Mutual Life Insurance
Company, as Landlord, and CAI, L.P., as Tenant, dated December 5, 2000, for the
premises commonly described as 4810 Eisenhauer Road, Suite 240; San Antonio,
Texas (hereinafter referred to as the "Lease") and for the purpose of inducing
Landlord to enter into and make the Lease, the undersigned hereby
unconditionally guarantees the full and prompt payment of rent and all other
sums required to be paid by Tenant under the Lease ("Guaranteed Payments") and
the full and faithful performance of all terms, conditions, covenants,
obligations and agreements contained in the Lease on the Tenant's part to be
performed ("Guaranteed Obligations") and the undersigned further promises to pay
all of Landlord's costs and expenses (including reasonable attorney's fees)
incurred in endeavoring to collect the Guaranteed Payments or to enforce the
Guaranteed Obligations or incurred in enforcing this Guaranty as well as all
damages which Landlord may suffer in consequence of any default or breach under
the Lease or this Guaranty.
1. Landlord may at any time and from time to time, without notice to the
undersigned, take any or all of the following actions without affecting or
impairing the liability and obligations of the undersigned on this
Guaranty:
(a) grant an extension or extensions of time of payment of any Guaranteed
Payment or time for performance of any Guaranteed Obligation;
(b) grant an indulgence or indulgences in any Guaranteed Payment or in the
performance of any Guaranteed Obligation;
(c) modify or amend the Lease or any term thereof, or any obligation of
Tenant arising thereunder by agreement with Tenant;
(d) consent to any assignment or assignments, sublease or subleases and
successive assignments or subleases by Tenant or the Tenant's assigns
or subTenants or a change or different use of the leased premises;
(e) consent to an extension or extensions of the term of the Lease;
(f) accept other guarantors; and/or
(g) release any person primarily or secondarily liable.
The liability of the undersigned under this Guaranty shall in no way be
affected or impaired by any failure or delay in enforcing any Guaranteed
Payment or Guaranteed Obligation or this Guaranty or any security therefor
or in exercising any right or power in respect thereto, or by any
compromise, waiver, settlement, change, subordination, modification or
disposition of any Guaranteed Payment or Guaranteed Obligation or of any
security therefor. In order to hold the undersigned liable hereunder, there
shall be no obligation on the part of Landlord, at anytime, to resort for
payment to Tenant or any other guaranty or to any security or other rights
and remedies, and Landlord shall have the right to enforce this Guaranty
irrespective of whether or not other proceedings or steps are pending or
being taken seeking resort to or realization upon or from any of the
foregoing.
2. The undersigned waives all diligence in collection or in protection of any
security, presentment,
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protest, demand, notice of dishonor or default, notice of acceptance of
this Guaranty, notice of any extensions granted or other action taken in
reliance hereon and all demands and notices of any kind in connection with
this Guaranty or any Guaranteed Payment or Guaranteed Obligation.
3. The undersigned hereby acknowledges full and complete notice and knowledge
of all of the terms, conditions, covenants, obligations and agreements of
the Lease.
4. The payment by the undersigned of any amount pursuant to this Guaranty
shall not in any way entitle the undersigned to any right, title or
interest (whether by subrogation or otherwise) of the Tenant under the
Lease or to any security being held for any Guaranteed Payment or
Guaranteed Obligation.
5. This Guaranty shall be continuing, absolute and unconditional and remain in
full force and effect until all Guaranteed Payments are made, all
Guaranteed Obligations are performed, and all obligations of the
undersigned under this Guaranty are fulfilled.
6. This Guaranty shall also bind the successors and assigns of the undersigned
and inure to the benefit of Landlord, its successors and assigns. This
Guaranty shall be construed according to the laws of the State of Texas, in
which state it shall be performed by the undersigned.
7. If this Guaranty is executed by more than one person, all singular nouns
and verbs herein relating to the undersigned shall include the plural
number and the obligation of the several guarantors shall be joint and
several.
8. The Landlord and the undersigned intend and believe that each provision of
this Guaranty comports with all applicable law. However, if any provision
of this Guaranty is found by a court to be invalid for any reason, the
parties intend that the remainder of this Guaranty shall continue in full
force and effect and the invalid provision shall be construed as if it were
not contained herein.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be executed by
its duly authorized officers this 30 day of November 2000, and delivered to
Landlord in Bexar County, Texas.
CONN APPLIANCES, INC.
By: /s/ Thomas J. Frank
------------------------
Name: Thomas J. Frank
Its: Chief Executive Officer
ATTEST:
Secretary
[Affix Corporate Seal]
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