Exhibit 10.32
VERSION 4/98
INDUSTRIAL LEASE AGREEMENT
BETWEEN
PINNACLE INDUSTRIAL CENTER LIMITED PARTNERSHIP
AS LANDLORD
AND
TANDY BRANDS ACCESSORIES, INC.
AS TENANT

 

 

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LEASE INDEX

        Section   Subject          
1
  Basic Lease Provisions 1
 
     
2
  Demised Premises 2
 
     
3
  Term 3
 
     
4
  Base Rent 3
 
     
5
  Security Deposit 3
 
     
6
  Operating Expenses and Additional Rent 4
 
     
7
  Use of Demised Premises 5
 
     
8
  Insurance 6
 
     
9
  Utilities 8
 
     
10
  Maintenance and Repairs 8
 
     
11
  Tenant’s Personal Property; Indemnity 9
 
     
12
  Tenant’s Fixtures 9
 
     
13
  Signs 9
 
     
14
  Intentionally Deleted 9
 
     
15
  Governmental Regulations 10
 
     
16
  Environmental Matters 10
 
     
17
  Construction of Demised Premises 12
 
     
18
  Tenant Alterations and Additions 13
 
     
19
  Services by Landlord 15
 
     
20
  Fire and Other Casualty 15
 
     
21
  Condemnation 15
 
     
22
  Tenant’s Default 16
 
     
23
  Landlord’s Right of Entry 20
 
     
24
  Lender’s Rights 21
 
     
25
  Estoppel Certificate 22
 
     
26
  Landlord’s Liability 22
 
     
27
  Notices 22
 
     
28
  Brokers 23
 
     
29
  Assignment and Subleasing 23
 
     
30
  Termination or Expiration 25

 

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        Section   Subject    
31
  Intentionally Deleted 25
 
     
32
  Late Payments 25
 
     
33
  Rules and Regulations 25
 
     
34
  Quiet Enjoyment 25
 
     
35
  Miscellaneous 26
 
     
36
  Special Stipulations 27
 
     
37
  Lease Date 27
 
     
38
  Authority 27
 
     
39
  No Offer Until Executed 27

Exhibit “A” Demised Premises
Exhibit “B” Plans and Specifications
Exhibit “C” Special Stipulations
Exhibit “D” Rules and Regulations
Exhibit “E” Certificate of Authority
Exhibit “F” Subordination, Non-Disturbance and Attornment Agreement

 

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INDUSTRIAL LEASE AGREEMENT
THIS LEASE AGREEMENT (the “Lease”) is made as of the “Lease Date” (as defined in
Section 37 herein) by and between PINNACLE INDUSTRIAL CENTER LIMITED
PARTNERSHIP, a Texas limited partnership (“Landlord”), and TANDY BRANDS
ACCESSORIES, INC., a Delaware corporation (“Tenant”) (the words “Landlord” and
“Tenant” to include their respective legal representatives, successors and
permitted assigns where the context requires or permits).
W I T N E S S E T H:
1. Basic Lease Provisions. The following constitute the basic provisions of this
Lease:
(a) Demised Premises Address: 4421 Davis Blvd.
                                                    Dallas, Texas 75211
(b) Demised Premises Square Footage: approximately 119,804 sq. ft.
(c) Building Square Footage: approximately 330,000 sq. ft.
(d) Annual Base Rent:

         
Lease Year 1
  $ 421,718            
Lease Years 2 - 5
  $ 460,056            
Lease Years 6 - 10
  $ 517,560  

(e) Monthly Base Rent Installments:

         
Lease Year 1
       
Month 1
  $ -0-  
Months 2 - 12
  $ 38,338            
Lease Years 2 - 5
  $ 38,338            
Lease Years 6 - 10
  $ 43,130  

(f) Lease Commencement Date: January 1, 2000
(g) Base Rent Commencement Date: February 1, 2000
(h) Expiration Date: December 31, 2009
(i) Term: 120 months
(j) Tenant’s Operating Expense Percentage: 36.30%

 

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(k) Security Deposit: $38,338
(l) Permitted Use: Storage, distribution, and wholesale sales of accessories,
and office uses incidental thereto.
(m) Address for notice:

      Landlord:  
Pinnacle Industrial Center Limited Partnership
   
c/o Industrial Developments International, Inc.
   
3424 Peachtree Road, N.E., Suite 1500
   
Atlanta, Georgia 30326
   
Attn: Vice President — Operations
   
 
Tenant:  
Tandy Brands Accessories, Inc.
   
690 E. Lamar Blvd.
   
#200
   
Arlington, Texas 76011
   
Attn: David Wagner

(n) Address for rental payments:

         
Pinnacle Industrial Center Limited Partnership
   
c/o IDI Services Group, Inc.
   
3424 Peachtree Road, N.E.
   
Suite 1500
   
Atlanta, Georgia 30326

      (o) Broker(s):  
Vantage Management Company
   
2911 Turtle Creek, Suite 500
   
Dallas, Texas 75219
   
Attention: Mr. Scott Bredehoeft

2. Demised Premises. For and in consideration of the rent hereinafter reserved
and the mutual covenants hereinafter contained, Landlord does hereby lease and
demise unto Tenant, and Tenant does hereby hire, lease and accept, from Landlord
all upon the terms and conditions hereinafter set forth the following premises,
referred to as the “Demised Premises”, as outlined on Exhibit A attached hereto
and incorporated herein: approximately 119,804 square feet of space,
approximately 16,413 square feet of which is office space, having an address as
set forth in Section 1(a), located within Building A (the “Building”), which
contains a total of approximately 330,000 square feet and is located within
Pinnacle Industrial Center (the “Project”), located in Dallas County, Texas.

 

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3. Term. To have and to hold the Demised Premises for a preliminary term (the
“Preliminary Term”) commencing on the Lease Date and ending on the Lease
Commencement Date as set forth in Section l(f), and a primary term (the “Primary
Term”) commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17 (the Preliminary Term,
the Primary Term, and any and all extensions thereof, herein referred to as the
“Term”). The term “Lease Year” shall mean each one (1) year period of the Term
(or portion thereof if the last Lease Year of the Term is less than one (1) full
year) beginning on the Lease Commencement Date, and each anniversary thereof,
and ending on the day immediately prior to the next succeeding anniversary of
the Lease Commencement Date.
4. Base Rent. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the “Base Rent”), payable in
advance, without demand and without abatement, reduction, set-off or deduction,
on the first day of each calendar month during the Term. If the Base Rent
Commencement Date shall fall on a day other than the first day of a calendar
month, the Base Rent shall be apportioned pro rata on a per diem basis (i) for
the period between the Base Rent Commencement Date and the first day of the
following calendar month (which pro rata payment shall be due and payable on the
Base Rent Commencement Date), and (ii) for the last partial month of the Term,
if applicable. No payment by Tenant or receipt by Landlord of rent hereunder
shall be deemed to be other than on account of the amount due, and no
endorsement or statement on any check or any letter accompanying any check or
payment of rent shall be deemed an accord and satisfaction, and Landlord may
accept such check as payment without prejudice to Landlord’s right to recover
the balance of such installment or payment of rent or pursue any other remedies
available to Landlord.
5. Security Deposit. Upon Tenant’s execution of this Lease, Tenant will pay to
Landlord the sum set forth in Section 1(k) (the “Security Deposit”) as security
for the full and faithful performance by Tenant of each and every term, covenant
and condition of this Lease. The acceptance by Landlord of the Security Deposit
paid by Tenant shall not render this Lease effective unless and until Landlord
shall have executed and delivered to Tenant a fully executed copy of this Lease.
The Security Deposit may be commingled with Landlord’s other funds or held by
Landlord in a separate interest bearing account, with interest paid to Landlord,
as Landlord may elect. In the event that Tenant is in default under this Lease,
Landlord may retain the Security Deposit for the payment of any sum due Landlord
or which Landlord may expend or be required to expend by reason of Tenant’s
default or failure to perform; provided, however, that any such retention by
Landlord shall not be or be deemed to be an election of remedies by Landlord or
viewed as liquidated damages, it being expressly understood and agreed that
Landlord shall have the right to pursue any and all other remedies available to
it under the terms of this Lease or otherwise. In the event all or any portion
of the Security Deposit is so retained by Landlord, Tenant shall, within five
(5) days of demand therefor from Landlord, replenish the Security Deposit to the
full amount set forth in Section 1(k). In the event that Tenant shall comply
with all of the terms, covenants and conditions of this Lease, the Security
Deposit shall be returned to Tenant within thirty (30) days after the later of
(a) the Expiration Date or (b) the date that Tenant delivers possession of the
Demised Premises to Landlord. In the event of a sale of the Building, Landlord
shall have the right to transfer the Security Deposit to the purchaser, and upon
acceptance by such purchaser, Landlord shall be released from all liability for
the return of the Security Deposit. Tenant shall not assign or encumber the
money deposited as security, and neither Landlord nor its successors or assigns
shall be bound by any such assignment or encumbrance.

 

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6. Operating Expenses and Additional Rent.
(a) Tenant agrees to pay as Additional Rent (as defined in Section 6(b) below)
its proportionate share of Operating Expenses (as hereinafter defined).
“Operating Expenses” shall be defined as all reasonable expenses for operation,
repair, replacement and maintenance as necessary to keep the Building and the
common areas, driveways, and parking areas associated therewith (collectively,
the “Building Common Area”) in good order, condition and repair, including but
not limited to, utilities for the Building Common Area, expenses associated with
the driveways and parking areas (including sealing and restriping, and snow,
trash and ice removal), security systems, fire detection and prevention systems,
lighting facilities, landscaped areas, walkways, painting and caulking,
directional signage, curbs, drainage strips, sewer lines, all charges assessed
against or attributed to the Building pursuant to any applicable easements,
covenants, restrictions, agreements, declaration of protective covenants or
development standards, property management fees, all real property taxes and
special assessments imposed upon the Building, the Building Common Area and the
land on which the Building and the Building Common Area are constructed, all
costs of insurance paid by Landlord with respect to the Building and the
Building Common Area, and costs of improvements to the Building and the Building
Common Area required by any law, ordinance or regulation applicable to the
Building and the Building Common Area generally (and not because of the
particular use of the Building or the Building Common Area by a particular
tenant), which cost shall be amortized on a straight line basis over the useful
life of such improvement, as reasonably determined by Landlord. Operating
Expenses shall not include expenses for the costs of any maintenance and repair
required to be performed by Landlord at its own expense under Section (10)(b).
Further, Operating Expenses shall not include the costs for capital improvements
unless such costs are incurred for the purpose of causing a material decrease in
the Operating Expenses of the Building or the Building Common Area or are made
with respect to improvements made to comply with laws, ordinances or regulations
as described above. The proportionate share of Operating Expenses to be paid by
Tenant shall be a percentage of the Operating Expenses based upon the proportion
that the square footage of the Demised Premises bears to the total square
footage of the Building (such figure referred to as “Tenant’s Operating Expense
Percentage” and set forth in Section 1(j)). Prior to or promptly after the
beginning of each calendar year during the Term, Landlord shall estimate the
total amount of Operating Expenses to be paid by Tenant during each such
calendar year and Tenant shall pay to Landlord one-twelfth (1/12) of such sum on
the first day of each calendar month during each such calendar year, or part
thereof, during the Term. Within a reasonable time after the end of each
calendar year, Landlord shall submit to Tenant a statement of the actual amount
of Operating Expenses for such calendar year, and the actual amount owed by
Tenant, and within thirty (30) days after receipt of such statement, Tenant
shall pay any deficiency between the actual amount owed and the estimates paid

 

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during such calendar year, or in the event of overpayment, Landlord shall credit
the amount of such overpayment toward the next installment of Operating Expenses
owed by Tenant or remit within thirty (30) days such overpayment to Tenant if
the Term has expired or has been terminated and no Event of Default exists
hereunder. The obligations in the immediately preceding sentence shall survive
the expiration or any earlier termination of this Lease. If the Lease
Commencement Date shall fall on other than the first day of the calendar year,
and/or if the Expiration Date shall fall on other than the last day of the
calendar year, Tenant’s proportionate share of the Operating Expenses for such
calendar year shall be apportioned prorata.
(b) Any amounts required to be paid by Tenant hereunder (in addition to Base
Rent) and any charges or expenses incurred by Landlord on behalf of Tenant under
the terms of this Lease shall be considered “Additional Rent” payable in the
same manner and upon the same terms and conditions as the Base Rent reserved
hereunder except as set forth herein to the contrary. Any failure on the part of
Tenant to pay such Additional Rent when and as the same shall become due shall
entitle Landlord to the remedies available to it for non-payment of Base Rent.
Tenant’s obligations for payment of Additional Rent shall begin to accrue on the
Lease Commencement Date regardless of the Base Rent Commencement Date.
(c) If applicable in the jurisdiction where the Demised Premises are located,
Tenant shall pay and be liable for all rental, sales, use and inventory taxes or
other similar taxes, if any, on the amounts payable by Tenant hereunder levied
or imposed by any city, state, county or other governmental body having
authority, such payments to be in addition to all other payments required to be
paid Landlord by Tenant under the terms of this Lease. Such payment shall be
made by Tenant directly to such governmental body if billed to Tenant, or if
billed to Landlord, such payment shall be paid concurrently with the payment of
the Base Rent, Additional Rent, or such other charge upon which the tax is
based, all as set forth herein.
7. Use of Demised Premises.
(a) The Demised Premises shall be used for the Permitted Use set forth in
Section 1(l) and for no other purpose without Landlord’s prior written consent,
which consent may be withheld in Landlord’s reasonable discretion.
(b) Tenant will permit no liens to attach or exist against the Demised Premises,
and shall not commit any waste.
(c) The Demised Premises shall not be used for any illegal purposes, and Tenant
shall not allow, suffer, or permit any vibration, noise, odor, light or other
effect to occur within or around the Demised Premises that could constitute a
nuisance or trespass for Landlord or any occupant of the Building or an
adjoining building, its customers, agents, or invitees. Upon notice by Landlord
to tenant that any of the aforesaid prohibited uses are occurring, Tenant agrees
to promptly remove or control the same.

 

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(d) Tenant shall not in any way violate any law, ordinance or restrictive
covenant affecting the Demised Premises, and shall not in any manner use the
Demised Premises so as to cause cancellation of, prevent the use of, or increase
the rate of, the fire and extended coverage insurance policy required hereunder.
Landlord makes no (and does hereby expressly disclaim any) covenant,
representation or warranty as to the Permitted Use being allowed by or being in
compliance with any applicable laws, rules, ordinances or restrictive covenants
now or hereafter affecting the Demised Premises, and any zoning letters, copies
of zoning ordinances or other information from any governmental agency or other
third party provided to Tenant by Landlord or any of Landlord’s agents or
employees shall be for informational purposes only, Tenant hereby expressly
acknowledging and agreeing that Tenant shall conduct and rely solely on its own
due diligence and investigation with respect to the compliance of the Permitted
Use with all such applicable laws, rules, ordinances and restrictive covenants
and not on any such information provided by Landlord or any of its agents or
employees.
(e) In the event insurance premiums pertaining to the Demised Premises, the
Building, or the Building Common Area, whether paid by Landlord or Tenant, are
increased over the least hazardous rate available due to the nature of the use
of the Demised Premises by Tenant, Tenant shall pay such additional amount as
Additional Rent.
8. Insurance.
(a) Tenant covenants and agrees that from and after the Lease Commencement Date
or any earlier date upon which Tenant enters or occupies the Demised Premises or
any portion thereof, Tenant will carry and maintain, at its sole cost and
expense, the following types of insurance, in the amounts specified and in the
form hereinafter provided for:
(i) Liability insurance in the Commercial General Liability form (or reasonable
equivalent thereto) covering the Demised Premises and Tenant’s use thereof
against claims for bodily injury or death, property damage and product liability
occurring upon, in or about the Demised Premises, such insurance to be written
on an occurrence basis (not a claims made basis), to be in combined single
limits amounts not less than $3,000,000.00 and to have general aggregate limits
of not less than $5,000,000.00 for each policy year. The insurance coverage
required under this Section 8(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 11 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
(ii) Insurance covering (A) all of the items included in the leasehold
improvements constructed in the Demised Premises by or at the expense of
Landlord (collectively, the “Improvements”), including but not limited to
demising walls and the heating, ventilating and air conditioning system and
(B) Tenant’s trade fixtures, merchandise and personal property from time to time
in, on or upon the Demised Premises, in an amount not less than one hundred
percent (100%) of their full replacement value from time to time during the
Term, providing protection against

 

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perils included within the standard form of “all-risks” fire and casualty
insurance policy, together with insurance against sprinkler damage, vandalism
and malicious mischief. Any policy proceeds from such insurance relating to the
Improvements shall be used solely for the repair, construction and restoration
or replacement of the Improvements damaged or destroyed unless this Lease shall
cease and terminate under the provisions of Section 20.
(b) All policies of the insurance provided for in Section 8(a) shall be issued
in form reasonably acceptable to Landlord by insurance companies with a rating
of not less than “A,” and financial size of not less than Class XII, in the most
current available “Best’s Insurance Reports”, and licensed to do business in the
state in which the Building is located. Each and every such policy:
(i) shall name Landlord, Lender (as defined in Section 24), and any other party
reasonably designated by Landlord, as an additional insured. In addition, the
coverage described in Section 8(a)(ii)(A) relating to the Improvements shall
also name Landlord as “loss payee”;
(ii) shall be delivered to Landlord, in the form of an insurance certificate
acceptable to Landlord as evidence of such policy, prior to the Lease
Commencement Date and thereafter within thirty (30) days prior to the expiration
of each such policy, and, as often as any such policy shall expire or terminate.
Renewal or additional policies shall be procured and maintained by Tenant in
like manner and to like extent;
(iii) shall contain a provision that the insurer will give to Landlord and such
other parties in interest at least fifteen (15) days notice in writing in
advance of any material change, cancellation, termination or lapse, or the
effective date of any reduction in the amounts of insurance; and
(iv) shall be written as a primary policy which does not contribute to and is
not in excess of coverage which Landlord may carry.
(c) In the event that Tenant shall fail to carry and maintain the insurance
coverages set forth in this Section 8, Landlord may upon thirty (30) days notice
to Tenant (unless such coverages will lapse in which event no such notice shall
be necessary) procure such policies of insurance and Tenant shall promptly
reimburse Landlord therefor.
(d) Landlord and Tenant hereby waive any rights each may have against the other
on account of any loss or damage occasioned to Landlord or Tenant, as the case
may be, their respective property, the Demised Premises, its contents or to the
other portions of the Building, arising from any risk covered by all risks fire
and extended coverage insurance of the type and amount required to be carried
hereunder, provided that such waiver does not invalidate such policies or
prohibit recovery thereunder. The parties hereto shall cause their respective
insurance companies insuring the property of either Landlord or Tenant against
any such loss, to waive any right of subrogation that such insurers may have
against Landlord or Tenant, as the case may be.

 

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(e) See Special Stipulations 4, 8, and 9 on Exhibit C hereto.
9. Utilities. During the Term, Tenant shall promptly pay as billed to Tenant all
rents and charges for water and sewer services and all costs and charges for
gas, steam, electricity, fuel, light, power, telephone, heat and any other
utility or service used or consumed in or servicing the Demised Premises and all
other costs and expenses involved in the care, management and use thereof. To
the extent reasonably possible, such utilities shall be separately metered and
billed to Tenant. Any utilities which are not separately metered shall be billed
to Tenant by Landlord at Landlord’s actual cost. In the event Tenant’s use of
any utility not metered is in excess of the average use by other tenants,
Landlord shall have the right to install a meter for such utility, at Tenant’s
expense, and bill Tenant for Tenant’s actual use. If Tenant fails to pay any
utility bills or charges, Landlord may, at its option and upon reasonable notice
to Tenant, pay the same and in such event, the amount of such payment, together
with interest thereon at the Interest Rate as defined in Section 32 from the
date of such payment by Landlord, will be added to Tenant’s next due payment as
Additional Rent.
10. Maintenance and Repairs.
(a) Tenant shall, at its own cost and expense, maintain in good condition and
repair the interior of the Demised Premises, including but not limited to the
heating, air conditioning and ventilation systems, glass, windows and doors,
sprinkler, all plumbing and sewage systems, fixtures, interior walls, floors
(including floor slabs), ceilings, storefronts, plate glass, skylights, all
electrical facilities and equipment including, without limitation, lighting
fixtures, lamps, fans and any exhaust equipment and systems, electrical motors,
and all other appliances and equipment (including, without limitation, dock
levelers, dock shelters, dock seals and dock lighting) of every kind and nature
located in, upon or about the Demised Premises, except as to such maintenance
and repair as is the obligation of Landlord pursuant to Section 10(b). During
the Term, Tenant shall maintain in full force and effect a service contract for
the maintenance of the heating, ventilation and air conditioning systems with an
entity reasonably acceptable to Landlord. Tenant shall deliver to Landlord (i) a
copy of said service contract prior to the Lease Commencement Date, and
(ii) thereafter, a copy of a renewal or substitute service contract within
thirty (30) days prior to the expiration of the existing service contract.
Tenant’s obligation shall exclude any maintenance and repair required because of
the act or negligence of Landlord, its employees, contractors or agents, which
shall be the responsibility of Landlord.
(b) Landlord shall, at its own cost and expense, maintain in good condition and
repair the roof, foundation (beneath the floor slab) and structural frame of the
Building. Landlord’s obligation shall exclude the cost of any maintenance or
repair required because of the act or negligence of Tenant or Tenant’s agents,
contractors, employees and invitees (collectively, “Tenant’s Affiliates”), the
cost of which shall be the responsibility of Tenant.

 

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(c) Unless the same is caused solely by the negligent action or inaction of
Landlord, its employees or agents, and is not covered by the insurance required
to be carried by Tenant pursuant to the terms of this Lease, Landlord shall not
be liable to Tenant or to any other person for any damage occasioned by failure
in any utility system or by the bursting or leaking of any vessel or pipe in or
about the Demised Premises, or for any damage occasioned by water coming into
the Demised Premises or arising from the acts or neglects of occupants of
adjacent property or the public.
11. Tenant’s Personal Property; Indemnity. All of Tenant’s personal property in
the Demised Premises shall be and remain at Tenant’s sole risk. Landlord, its
agents, employees and contractors, shall not be liable for, and Tenant hereby
releases Landlord from, any and all liability for theft thereof or any damage
thereto occasioned by any act of God or by any acts, omissions or negligence of
any persons, other than Landlord. Landlord, its agents, employees and
contractors, shall not be liable for any injury to the person or property of
Tenant or other persons in or about the Demised Premises, Tenant expressly
agreeing to indemnify and save Landlord, its agents, employees and contractors,
harmless, in all such cases, except to the extent caused by the negligence or
misconduct of Landlord, its agents, employees and contractors. Tenant further
agrees to indemnify and reimburse Landlord for any costs or expenses, including,
without limitation, reasonable attorneys’ fees, that Landlord reasonably may
incur in investigating, handling or litigating any such claim against Landlord
by a third person, unless such claim arose from the negligence or misconduct of
Landlord, its agents, employees or contractors. The provisions of this
Section 11 shall survive the expiration or earlier termination of this Lease
with respect to any damage, injury or death occurring before such expiration or
termination.
12. Tenant’s Fixtures. Tenant shall have the right to install in the Demised
Premises trade fixtures required by Tenant or used by it in its business, and if
installed by Tenant, to remove any or all such trade fixtures from time to time
during and upon termination or expiration of this Lease, provided no Event of
Default, as defined in Section 22, then exists; provided, however, that Tenant
shall repair and restore any damage or injury to the Demised Premises (to the
condition in which the Demised Premises existed prior to such installation,
normal wear and tear excepted) caused by the installation and/or removal of any
such trade fixtures.
13. Signs. No sign, advertisement or notice shall be inscribed, painted,
affixed, or displayed on the windows or exterior walls of the Demised Premises
or on any public area of the Building, except in such places, numbers, sizes,
colors and styles as are approved in advance in writing by Landlord, and which
conform to all applicable laws, ordinances, or covenants affecting the Demised
Premises. Any and all signs installed or constructed by or on behalf of Tenant
pursuant hereto shall be installed, maintained and removed by Tenant at Tenant’s
sole cost and expense.
14. Intentionally Deleted.

 

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15. Governmental Regulations. Tenant shall promptly comply throughout the Term,
at Tenant’s sole cost and expense, with all present and future laws, ordinances,
orders, rules, regulations or requirements of all federal, state and municipal
governments and appropriate departments, commissions, boards and officers
thereof (collectively, “Governmental Requirements”) relating to (a) all or any
part of the Demised Premises, and (b) to the use or manner of use of the Demised
Premises and the Building Common Area. Tenant shall also observe and comply with
the requirements of all policies of public liability, fire and other policies of
insurance at any time in force with respect to the Demised Premises. Without
limiting the foregoing, if as a result of one or more Governmental Requirements
it is necessary, from time to time during the Term, to perform an alteration or
modification of the Demised Premises (a “Code Modification”) which is made
necessary as a result of the specific use being made by Tenant of the Demised
Premises, then such Code Modification shall be the sole and exclusive
responsibility of Tenant in all respects; any such Code Modification shall be
promptly performed by Tenant at its expense in accordance with the applicable
Governmental Requirement and with Section 18 hereof. If as a result of one or
more Governmental Requirements it is necessary from time to time during the Term
to perform a Code Modification which (i) would be characterized as a capital
expenditure under generally accepted accounting principles and (ii) is not made
necessary as a result of the specific use being made by Tenant of the Demised
Premises (as distinguished from an alteration or modification which would be
required to be made by the owner of any warehouse-office building comparable to
the Building irrespective of the use thereof by any particular occupant), then
(a) Landlord shall have the obligation to perform the Code Modification at its
expense, (b) the cost of such Code Modification shall be amortized on a
straight-line basis over the useful life of the item in question, as reasonably
determined by Landlord, and (c) Tenant shall be obligated to pay (as Additional
Rent, payable in the same manner and upon the same terms and conditions as the
Base Rent reserved hereunder) for the portion of such amortized costs
attributable to the remainder of the Term, including any extensions thereof.
Tenant shall promptly send to Landlord a copy of any written notice received by
Tenant requiring a Code Modification.
16. Environmental Matters.
(a) For purposes of this Lease:
(i) “Contamination” as used herein means the presence of or release of Hazardous
Substances (as hereinafter defined) into any environmental media from, upon,
within, below, into or on any portion of the Demised Premises, the Building, the
Building Common Area or the Project so as to require remediation, cleanup or
investigation under any applicable Environmental Law (as hereinafter defined).
(ii) “Environmental Laws” as used herein means all federal, state, and local
laws, regulations, orders, permits, ordinances or other requirements, which
exist now or as may exist hereafter, concerning protection of human health,
safety and the environment, all as may be amended from time to time.
(iii) “Hazardous Substances” as used herein means any hazardous or toxic
substance, material, chemical, pollutant, contaminant or waste as those terms
are defined by any applicable Environmental Laws (including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601 et seq. (“CERCLA”) and the Resource Conservation and Recovery Act,
42 U.S.C. 6901 et seq. [“RCRA”]) and any solid wastes, polychlorinated
biphenyls, urea formaldehyde, asbestos, radioactive materials, radon,
explosives, petroleum products and oil.

 

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(b) Landlord represents that, except as revealed to Tenant in writing by
Landlord, to Landlord’s actual knowledge, Landlord has not treated, stored or
disposed of any Hazardous Substances upon or within the Demised Premises, nor,
to Landlord’s actual knowledge, has any predecessor owner of the Demised
Premises.
(c) Tenant covenants that all its activities, and the activities of Tenant’s
Affiliates (as defined in Section 10(b)), on the Demised Premises, the Building,
or the Project during the Term will be conducted in compliance with
Environmental Laws. Tenant warrants that it is currently in compliance with all
applicable Environmental Laws and that there are no pending or threatened
notices of deficiency, notices of violation, orders, or judicial or
administrative actions involving alleged violations by Tenant of any
Environmental Laws. Tenant, at Tenant’s sole cost and expense, shall be
responsible for obtaining all permits or licenses or approvals under
Environmental Laws necessary for Tenant’s operation of its business on the
Demised Premises and shall make all notifications and registrations required by
any applicable Environmental Laws. Tenant, at Tenant’s sole cost and expense,
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations and with any other
applicable Environmental Laws. Tenant warrants that it has obtained all such
permits, licenses or approvals and made all such notifications and registrations
required by any applicable Environmental Laws necessary for Tenant’s operation
of its business on the Demised Premises.
(d) Tenant shall not cause or permit any Hazardous Substances to be brought
upon, kept or used in or about the Demised Premises, the Building, or the
Project without the prior written consent of Landlord, which consent shall not
be unreasonably withheld; provided, however, that the consent of Landlord shall
not be required for the use at the Demised Premises of cleaning supplies, toner
for photocopying machines and other similar materials, in containers and
quantities reasonably necessary for and consistent with normal and ordinary use
by Tenant in the routine operation or maintenance of Tenant’s office equipment
or in the routine janitorial service, cleaning and maintenance for the Demised
Premises. For purposes of this Section 16, Landlord shall be deemed to have
reasonably withheld consent if Landlord determines that the presence of such
Hazardous Substance within the Demised Premises could result in a risk of harm
to person or property or otherwise negatively affect the value or marketability
of the Building or the Project.
(e) Tenant shall not cause or permit the release of any Hazardous Substances by
Tenant or Tenant’s Affiliates into any environmental media such as air, water or
land, or into or on the Demised Premises, the Building or the Project in any
manner that violates any Environmental Laws. If such release shall occur, Tenant
shall (i) take all steps reasonably necessary to contain and control such
release and any associated Contamination, (ii) clean up or otherwise remedy such
release and any associated Contamination to the extent required by, and take any
and all other actions required under, applicable Environmental Laws and
(iii) notify and keep Landlord reasonably informed of such release and response.

 

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(f) Regardless of any Consents granted by Landlord pursuant to Section 16(d)
allowing Hazardous Substances upon the Demised Premises, Tenant shall under no
circumstances whatsoever cause or permit (i) any activity on the Demised
Premises which would cause the Demised Premises to become subject to regulation
as a hazardous waste treatment, storage or disposal facility under RCRA or the
regulations promulgated thereunder, (ii) the discharge of Hazardous Substances
into the storm sewer system serving the Project or (iii) the installation of any
underground storage tank or underground piping on or under the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold Landlord harmless
from and against any and all expense, loss, and liability suffered by Landlord
(except to the extent that such expenses, losses, and liabilities arise out of
Landlord’s own negligence or willful act), by reason of the storage, generation,
release, handling, treatment, transportation, disposal, or arrangement for
transportation or disposal, of any Hazardous Substances (whether accidental,
intentional, or negligent) by Tenant or Tenant’s Affiliates or by reason of
Tenant’s breach of any of the provisions of this Section 16. Such expenses,
losses and liabilities shall include, without limitation, (i) any and all
expenses that Landlord may incur to comply with any Environmental Laws; (ii) any
and all costs that Landlord may incur in studying or remedying any Contamination
at or arising from the Demised Premises, the Building, or the Project; (iii) any
and all costs that Landlord may incur in studying, removing, disposing or
otherwise addressing any Hazardous Substances; (iv) any and all fines, penalties
or other sanctions assessed upon Landlord; and (v) any and all reasonable legal
and professional fees and costs incurred by Landlord in connection with the
foregoing. The indemnity contained herein shall survive the expiration or
earlier termination of this Lease.
17. Construction of Demised Premises.
(a) Landlord and Tenant have agreed on a set of plans and specifications and/or
construction drawings (collectively, the “Plans and Specifications”) as set
forth on Exhibit B attached hereto and incorporated herein, covering all work to
be performed by Landlord in constructing the Improvements (as defined in
Section 8(a)(ii)). Any changes to the Plans and Specifications, and the related
costs of construction, requested by Tenant or to comply with any law, rule, or
ordinance as a result of Tenant’s particular use of the Demised Premises
(collectively, “Tenant Changes”) shall be at Tenant’s sole cost and expense and
subject to Landlord’s written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Tenant agrees to pay the bill for such changes
and costs in full to Landlord within ten (10) calendar days following receipt of
such bill. If completion of construction of the Improvements is delayed beyond
the Lease Commencement Date as a result of Tenant Changes, the Term and Tenant’s
obligation to pay Base Rent hereunder shall nevertheless begin on the Lease
Commencement Date.

 

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(b) Landlord shall use reasonable speed and diligence to substantially complete
the Improvements, at Landlord’s sole cost and expense except for Tenant Changes
(as described in subparagraph (a) above), and have the Demised Premises ready
for occupancy on or before the Lease Commencement Date set forth in
Section 1(f). If the Demised Premises are not substantially complete on that
date, such failure to complete shall not in any way affect the obligation of
Tenant hereunder except that the Lease Commencement Date, the Base Rent
Commencement Date, and the Expiration Date shall be postponed one day for each
day substantial completion is delayed until the Demised Premises are
substantially complete, unless the delay is caused by Tenant Changes. No
liability whatsoever shall arise or accrue against Landlord by reason of its
failure to deliver or afford possession of the Demised Premises, and Tenant
hereby releases and discharges Landlord from and of any claims for damage, loss,
or injury of every kind whatsoever as if this Lease were never executed. See
Special Stipulation 5 on Exhibit C hereto.
(c) Upon substantial completion of the Demised Premises, a representative of
Landlord and a representative of Tenant together shall inspect the Demised
Premises and generate a punchlist of defective or uncompleted items relating to
the completion of construction of the Improvements (the “Punchlist”). Landlord
shall, within a reasonable time after the Punchlist is prepared and agreed upon
by Landlord and Tenant, complete such incomplete work and remedy such defective
work as is set forth on the Punchlist. All construction work performed by
Landlord shall be deemed approved by Tenant in all respects except for items of
said work which are not completed or do not conform to the Plans and
Specifications and which are included on the Punchlist.
(d) Upon substantial completion of the Demised Premises and the creation of the
Punchlist, Tenant shall execute and deliver to Landlord a letter of acceptance
in which Tenant (i) accepts the Demised Premises subject only to Landlord’s
completion of the items listed on the Punchlist and (ii) confirms that the Lease
Commencement Date, the Base Rent Commencement Date and the Expiration Date
remain as set forth in Section 1, or if revised pursuant to the terms hereof,
setting forth such dates as so revised.
(e) Landlord hereby warrants to Tenant that the materials and equipment
furnished by Landlord’s contractors in the completion of the Improvements will
be of good quality and new, that during the one (1) year period following the
Lease Commencement Date, such materials and equipment and the work of such
contractors shall be free from defects not inherent in the quality required or
permitted hereunder, and that such work will conform to the Plans and
Specifications. This warranty shall exclude damages or defects caused by Tenant
or Tenant’s Affiliates, improper or insufficient maintenance, improper
operation, or normal wear and tear under normal usage.
18. Tenant Alterations and Additions.
(a) Tenant shall not make or permit to be made any alterations, improvements, or
additions to the Demised Premises (a “Tenant’s Change”), without first obtaining
on each occasion Landlord’s prior written consent (which consent Landlord agrees
not to unreasonably withhold) and Lender’s prior written consent (if such
consent is required). As part of its approval process, Landlord may require that
Tenant submit plans and specifications to Landlord, for Landlord’s approval

 

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or disapproval, which approval shall not be unreasonably withheld. All Tenant’s
Changes shall be performed in accordance with all legal requirements applicable
thereto and in a good and workmanlike manner with first-class materials. Tenant
shall maintain insurance reasonably satisfactory to Landlord during the
construction of all Tenant’s Changes. If Landlord at the time of giving its
approval to any Tenant’s Change notifies Tenant in writing that approval is
conditioned upon restoration, then Tenant shall, at its sole cost and expense
and upon the termination or expiration of this Lease, remove the same and
restore the Demised Premises to its condition prior to such Tenant’s Change. No
Tenant’s Change shall be structural in nature or impair the structural strength
of the Building or reduce its value. Tenant shall pay the full cost of any
Tenant’s Change promptly upon receipt of invoice. Except as otherwise provided
herein and in Section 12, all Tenant’s Changes and all repairs and all other
property attached to or installed on the Demised Premises by or on behalf of
Tenant shall immediately upon completion or installation thereof be and become
part of the Demised Premises and the property of Landlord without payment
therefor by Landlord and shall be surrendered to Landlord upon the expiration or
earlier termination of this Lease.
(b) To the extent permitted by law, all of Tenant’s contracts and subcontracts
for such Tenant’s Changes shall provide that no lien shall attach to or be
claimed against the Demised Premises or any interest therein other than Tenant’s
leasehold interest in the Demised Premises, and that all subcontracts let
thereunder shall contain the same provision. Whether or not Tenant furnishes the
foregoing, Tenant agrees to hold Landlord harmless against all liens, claims and
liabilities of every kind, nature and description which may arise out of or in
any way be connected with such work. Tenant shall not permit the Demised
Premises to become subject to any mechanics’, laborers’ or materialmen’s lien on
account of labor, material or services furnished to Tenant or claimed to have
been furnished to Tenant in connection with work of any character performed or
claimed to have been performed for the Demised Premises by, or at the direction
or sufferance of Tenant and if any such liens are filed against the Demised
Premises, Tenant shall promptly discharge the same; provided, however, that
Tenant shall have the right to contest, in good faith and with reasonable
diligence, the validity of any such lien or claimed lien if Tenant shall give to
Landlord, within fifteen days after demand, either evidence that Tenant has
bonded such lien or such security as may be reasonably satisfactory to Landlord
to assure payment thereof and to prevent any sale, foreclosure, or forfeiture of
Landlord’s interest in the Demised Premises by reason of non-payment thereof;
provided further that on final determination of the lien or claim for lien,
Tenant shall immediately pay any judgment rendered, with all proper costs and
charges, and shall have the lien released and any judgment satisfied. If Tenant
fails to post such security or does not diligently contest such lien, Landlord
may, without investigation of the validity of the lien claim, discharge such
lien and Tenant shall reimburse Landlord upon demand for all costs and expenses
incurred in connection therewith, which expenses shall include any reasonable
attorneys’ fees, paralegals’ fees and any and all costs associated therewith,
including litigation through all trial and appellate levels and any costs in
posting bond to effect a discharge or release of the lien. Nothing contained in
this Lease shall be construed as a consent on the part of Landlord to subject
the Demised Premises to liability under any lien law now or hereafter existing
of the state in which the Demised Premises are located.

 

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19. Services by Landlord. Landlord shall be responsible for providing for
maintenance of the Building Common Area, and, except as required by Section
10(b) hereof, Landlord shall be responsible for no other services whatsoever.
Tenant, by payment of Tenant’s share of the Operating Expenses, shall pay
Tenant’s pro rata share of the expenses incurred by Landlord hereunder.
20. Fire and Other Casualty. In the event the Demised Premises are damaged by
fire or other casualty insured by Landlord, Landlord agrees to promptly restore
and repair the Demised Premises at Landlord’s expense, including the
Improvements to be insured by Tenant but only to the extent Landlord receives
insurance proceeds therefor, including the proceeds from the insurance required
to be carried by Tenant on the Improvements. Notwithstanding the foregoing, in
the event that the Demised Premises are (i) in the reasonable opinion of
Landlord, so destroyed that they cannot be repaired or rebuilt within two
hundred ten (210) days after the date of such damage; or (ii) destroyed by a
casualty which is not covered by Landlord’s insurance, or if such casualty is
covered by Landlord’s insurance but Lender or other party entitled to insurance
proceeds fails to make such proceeds available to Landlord in an amount
sufficient for restoration of the Demised Premises, then Landlord shall give
written notice to Tenant of such determination (the “Determination Notice”)
within forty-five (45) days of such casualty. Either Landlord or Tenant may
terminate and cancel this Lease effective as of the date of such casualty by
giving written notice to the other party within thirty (30) days after Tenant’s
receipt of the Determination Notice. Upon the giving of such termination notice,
all obligations hereunder with respect to periods from and after the effective
date of termination shall thereupon cease and terminate. If no such termination
notice is given, Landlord shall, to the extent of the available insurance
proceeds, make such repair or restoration of the Demised Premises to
substantially the condition existing prior to such casualty, promptly and in
such manner as not to unreasonably interfere with Tenant’s use and occupancy of
the Demised Premises (if Tenant is still occupying the Demised Premises). Base
Rent and Additional Rent shall proportionately abate during the time that the
Demised Premises or any part thereof are unusable by reason of any such damage
thereto.
21. Condemnation.
(a) If all of the Demised Premises is taken or condemned for a public or
quasi-public use, or if a material portion of the Demised Premises is taken or
condemned for a public or quasi-public use and the remaining portion thereof is
not usable by Tenant in the reasonable opinion of Tenant, this Lease shall
terminate as of the earlier of the date title to the condemned real estate vests
in the condemnor or the date on which Tenant is deprived of possession of the
Demised Premises. In such event, the Base Rent herein reserved and all
Additional Rent and other sums payable hereunder shall be apportioned and paid
in full by Tenant to Landlord to that date, all Base Rent, Additional Rent and
other sums payable hereunder prepaid for periods beyond that date shall
forthwith be repaid by Landlord to Tenant, and neither party shall thereafter
have any liability hereunder, except that any obligation or liability of either
party, actual or contingent, under this Lease which has accrued on or prior to
such termination date shall survive.

 

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(b) If only part of the Demised Premises is taken or condemned for a public or
quasi-public use and this Lease does not terminate pursuant to Section 21(a),
Landlord shall, to the extent of the award it receives, proceed promptly and
work diligently to restore the Demised Premises (including the Improvements) to
a condition and to a size as nearly comparable as reasonably possible to the
condition and size thereof immediately prior to the taking, and there shall be
an equitable adjustment to the Base Rent and Additional Rent based on the actual
loss of use of the Demised Premises suffered by Tenant from the taking.
(c) Landlord shall be entitled to receive the entire award in any proceeding
with respect to any taking provided for in this Section 21, without deduction
therefrom for any estate vested in Tenant by this Lease, and Tenant shall
receive no part of such award. Nothing herein contained shall be deemed to
prohibit Tenant from making a separate claim, against the condemnor, to the
extent permitted by law, for the value of Tenant’s moveable trade fixtures,
machinery and moving expenses, provided that the making of such claim shall not
and does not adversely affect or diminish Landlord’s award.
22. Tenant’s Default.
(a) The occurrence of any one or more of the following events shall constitute
an “Event of Default” of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or any Additional Rent hereunder as and
when such rent becomes due and such failure shall continue for more than five
(5) days after Landlord gives written notice to Tenant of such failure;
(ii) if Tenant fails to pay Base Rent or any Additional Rent on time more than
three (3) times in any period of twelve (12) months, notwithstanding that such
payments have been made within the applicable cure period;
(iii) if Tenant fails to take possession of the Demised Premises on the Lease
Commencement Date or promptly thereafter;
(iv) if Tenant permits to be done anything which creates a lien upon the Demised
Premises and fails to discharge or bond such lien, or post security with
Landlord acceptable to Landlord within thirty (30) days after receipt by Tenant
of written notice thereof;
(v) if Tenant fails to maintain in force all policies of insurance required by
this Lease and such failure shall continue for more than ten (10) days after
Landlord gives Tenant written notice of such failure;
(vi) if any petition is filed by or against Tenant or any guarantor of this
Lease under any present or future section or chapter of the Bankruptcy Code, or
under any similar law or statute of the United States or any state thereof
(which, in the case of an involuntary proceeding, is not permanently discharged,
dismissed, stayed, or vacated, as the case may be, within sixty (60) days of
commencement), or if any order for relief shall be entered against Tenant or any
guarantor of this Lease in any such proceedings;

 

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(vii) if Tenant or any guarantor of this Lease becomes insolvent or makes a
transfer in fraud of creditors or makes an assignment for the benefit of
creditors;
(viii) if a receiver, custodian, or trustee is appointed for the Demised
Premises or for all or substantially all of the assets of Tenant or of any
guarantor of this Lease, which appointment is not vacated within sixty (60) days
following the date of such appointment; or
(ix) if Tenant fails to perform or observe any other term of this Lease and such
failure shall continue for more than thirty (30) days after Landlord gives
Tenant written notice of such failure, or, if such failure cannot be corrected
within such thirty (30) day period, if Tenant does not commence to correct such
default within said thirty (30) day period and thereafter diligently prosecute
the correction of same to completion within a reasonable time.
(b) Upon the occurrence of any one or more Events of Default, Landlord may, at
Landlord’s option, without any demand or notice whatsoever (except as expressly
required in this Section 22):
(i) Terminate this Lease by giving Tenant notice of termination, in which event
this Lease shall expire and terminate on the date specified in such notice of
termination and all rights of Tenant under this Lease and in and to the Demised
Premises shall terminate. Tenant shall remain liable for all obligations under
this Lease arising up to the date of such termination, and Tenant shall
surrender the Demised Premises to Landlord on the date specified in such notice;
or
(ii) Terminate this Lease as provided in Section 22(b)(i) hereof and recover
from Tenant all damages Landlord may incur by reason of Tenant’s default,
including, without limitation, an amount which, at the date of such termination,
is calculated as follows: (1) the value of the excess, if any, of (A) the Base
Rent, Additional Rent and all other sums which would have been payable hereunder
by Tenant for the period commencing with the day following the date of such
termination and ending with the Expiration Date had this Lease not been
terminated (the “Remaining Term”), over (B) the aggregate reasonable rental
value of the Demised Premises for the Remaining Term (which excess, if any shall
be discounted to present value at the “Treasury Yield” as defined below for the
Remaining Term); plus (2) the costs of recovering possession of the Demised
Premises and all other expenses incurred by Landlord due to Tenant’s default,
including, without limitation, reasonable attorney’s fees; plus (3) the unpaid
Base Rent and Additional Rent earned as of the date of termination plus any
interest and late fees due hereunder, plus other sums of money and damages owing
on the date of termination by Tenant to Landlord under this Lease or in
connection with the Demised Premises. The amount as calculated above shall be
deemed immediately due and payable. The payment of the amount calculated in
subparagraph (ii)(1) shall not be deemed a penalty but shall merely constitute
payment of

 

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liquidated damages, it being understood and acknowledged by Landlord and Tenant
that actual damages to Landlord are extremely difficult, if not impossible, to
ascertain. “Treasury Yield” shall mean the rate of return in percent per annum
of Treasury Constant Maturities for the length of time specified as published in
document H.15(519) (presently published by the Board of Governors of the U.S.
Federal Reserve System titled “Federal Reserve Statistical Release”) for the
calendar week immediately preceding the calendar week in which the termination
occurs. If the rate of return of Treasury Constant Maturities for the calendar
week in question is not published on or before the business day preceding the
date of the Treasury Yield in question is to become effective, then the Treasury
Yield shall be based upon the rate of return of Treasury Constant Maturities for
the length of time specified for the most recent calendar week for which such
publication has occurred. If no rate of return for Treasury Constant Maturities
is published for the specific length of time specified, the Treasury Yield for
such length of time shall be the weighted average of the rates of return of
Treasury Constant Maturities most nearly corresponding to the length of the
applicable period specified. If the publishing of the rate of return of Treasury
Constant Maturities is ever discontinued, then the Treasury Yield shall be based
upon the index which is published by the Board of Governors of the U.S. Federal
Reserve System in replacement thereof or, if no such replacement index is
published, the index which, in Landlord’s reasonable determination, most nearly
corresponds to the rate of return of Treasury Constant Maturities. In
determining the aggregate reasonable rental value pursuant to subparagraph
(ii)(1)(B) above, the parties hereby agree that, at the time Landlord seeks to
enforce this remedy, all relevant factors should be considered, including, but
not limited to, (a) the length of time remaining in the Term, (b) the then
current market conditions in the general area in which the Building is located,
(c) the likelihood of reletting the Demised Premises for a period of time equal
to the remainder of the Term, (d) the net effective rental rates then being
obtained by landlords for similar type space of similar size in similar type
buildings in the general area in which the Building is located, (e) the vacancy
levels in the general area in which the Building is located, (f) current levels
of new construction that will be completed during the remainder of the Term and
how this construction will likely affect vacancy rates and rental rates and
(g) inflation; or
(iii) Without terminating this Lease, declare immediately due and payable the
sum of the following: (1) the present value (calculated using the “Treasury
Yield”) of all Base Rent and Additional Rent due and coming due under this Lease
for the entire Remaining Term (as if by the terms of this Lease they were
payable in advance), plus (2) the cost of recovering and reletting the Demised
Premises and all other expenses incurred by Landlord in connection with Tenant’s
default, plus (3) any unpaid Base Rent, Additional Rent and other rentals,
charges, assessments and other sums owing by Tenant to Landlord under this Lease
or in connection with the Demised Premises as of the date this provision is
invoked by Landlord, plus (4) interest on all such amounts from the date due at
the Interest Rate, and Landlord may immediately proceed to distrain, collect, or
bring action for such sum, or may file a proof of claim in

 

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any bankruptcy or insolvency proceedings to enforce payment thereof; provided,
however, that such payment shall not be deemed a penalty or liquidated damages,
but shall merely constitute payment in advance of all Base Rent and Additional
Rent payable hereunder throughout the Term, and provided further, however, that
upon Landlord receiving such payment, Tenant shall be entitled to receive from
Landlord all rents received by Landlord from other assignees, tenants and
subtenants on account of said Demised Premises during the remainder of the Term
(provided that the monies to which Tenant shall so become entitled shall in no
event exceed the entire amount actually paid by Tenant to Landlord pursuant to
this subparagraph (iii)), less all costs, expenses and attorneys’ fees of
Landlord incurred but not yet reimbursed by Tenant in connection with recovering
and reletting the Demised Premises; or
(iv) Without terminating this Lease, in its own name but as agent for Tenant,
enter into and upon and take possession of the Demised Premises or any part
thereof. Any property remaining in the Demised Premises may be removed and
stored in a warehouse or elsewhere at the cost of, and for the account of,
Tenant without Landlord being deemed guilty of trespass or becoming liable for
any loss or damage which may be occasioned thereby unless caused by Landlord’s
negligence. Thereafter, Landlord may, but shall not be obligated to, lease to a
third party the Demised Premises or any portion thereof as the agent of Tenant
upon such terms and conditions as Landlord may deem necessary or desirable in
order to relet the Demised Premises. The remainder of any rentals received by
Landlord from such reletting, after the payment of any indebtedness due
hereunder from Tenant to Landlord, and the payment of any costs and expenses of
such reletting, shall be held by Landlord to the extent of and for application
in payment of future rent owed by Tenant, if any, as the same may become due and
payable hereunder. If such rentals received from such reletting shall at any
time or from time to time be less than sufficient to pay to Landlord the entire
sums then due from Tenant hereunder, Tenant shall pay any such deficiency to
Landlord. Notwithstanding any such reletting without termination, Landlord may
at any time thereafter elect to terminate this Lease for any such previous
default provided same has not been cured; or
(v) Without terminating this Lease, and with or without notice to Tenant, enter
into and upon the Demised Premises and, without being liable for prosecution or
any claim for damages therefor, maintain the Demised Premises and repair or
replace any damage thereto or do anything or make any payment for which Tenant
is responsible hereunder. Tenant shall reimburse Landlord immediately upon
demand for any expenses which Landlord incurs in thus effecting Tenant’s
compliance under this Lease and Landlord shall not be liable to Tenant for any
damages with respect thereto; or
(vi) Without liability to Tenant or any other party and without constituting a
constructive or actual eviction, suspend or discontinue furnishing or rendering
to Tenant any property, material, labor, utilities or other service, wherever
Landlord is obligated to furnish or render the same so long as an Event of
Default exists under this Lease; or

 

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(vii) With or without terminating this Lease, allow the Demised Premises to
remain unoccupied and collect rent from Tenant as it comes due; or
(viii) Pursue such other remedies as are available at law or equity.
(c) If this Lease shall terminate as a result of or while there exists an Event
of Default hereunder, any funds of Tenant held by Landlord may be applied by
Landlord to any damages payable by Tenant (whether provided for herein or by
law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor the settlement
thereof, nor entry of judgment thereon shall bar Landlord from bringing
subsequent actions or proceedings from time to time, nor shall the failure to
include in any action or proceeding any sum or sums then due be a bar to the
maintenance of any subsequent actions or proceedings for the recovery of such
sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises and no act or
omission by Landlord or Landlord’s agents during the Term shall constitute an
acceptance or surrender of the Demised Premises unless made in writing and
signed by Landlord. No re-entry or taking possession of the Demised Premises by
Landlord shall constitute an election by Landlord to terminate this Lease unless
a written notice of such intention is given to Tenant. No provision of this
Lease shall be deemed to have been waived by either party unless such waiver is
in writing and signed by the party making such waiver. Landlord’s acceptance of
Base Rent or Additional Rent in full or in part following an Event of Default
hereunder shall not be construed as a waiver of such Event of Default. No custom
or practice which may grow up between the parties in connection with the terms
of this Lease shall be construed to waive or lessen either party’s right to
insist upon strict performance of the terms of this Lease, without a written
notice thereof to the other party.
(f) If an Event of Default shall occur, Tenant shall pay to Landlord, on demand,
all expenses incurred by Landlord as a result thereof, including reasonable
attorneys’ fees, court costs and expenses actually incurred.
23. Landlord’s Right of Entry. Tenant agrees to permit Landlord and the
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises at all reasonable times for the purposes of inspecting the Demised
Premises and Tenant’s compliance with this Lease, and making any necessary
repairs thereto; provided that, except in the case of an emergency, Landlord
shall give Tenant twenty-four (24) hours reasonable prior notice of Landlord’s
intended entry upon the Demised Premises. Nothing herein shall imply any duty
upon the part of Landlord to do any work required of Tenant hereunder, and the
performance thereof by Landlord shall not constitute a waiver of Tenant’s
default in failing to perform it. Landlord shall not be liable for
inconvenience, annoyance, disturbance or other damage to Tenant by reason of
making such repairs or the

 

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performance of such work in the Demised Premises or on account of bringing
materials, supplies and equipment into or through the Demised Premises during
the course thereof, and the obligations of Tenant under this Lease shall not
thereby be affected; provided, however, that Landlord shall use reasonable
efforts not to disturb or otherwise interfere with Tenant’s operations in the
Demised Premises in making such repairs or performing such work. Landlord also
shall have the right to enter the Demised Premises at all reasonable times to
exhibit the Demised Premises to any prospective purchaser or mortgagee and at
all reasonable times during the last twelve (12) months of the Term to exhibit
the Demised Premises to any prospective tenant thereof.
24. Lender’s Rights.
(a) For purposes of this Lease:
(i) “Lender” as used herein means the current holder of a Mortgage;
(ii) “Mortgage” as used herein means any or all mortgages, deeds to secure debt,
deeds of trust or other instruments in the nature thereof which may now or
hereafter affect or encumber Landlord’s title to the Demised Premises, and any
amendments, modifications, extensions or renewals thereof.
(b) This Lease and all rights of Tenant hereunder are and shall be subject and
subordinate to the lien and security title of any Mortgage. Tenant recognizes
and acknowledges the right of Lender to foreclose or exercise the power of sale
against the Demised Premises under any Mortgage.
(c) Tenant shall, in confirmation of the subordination set forth in Section
24(b) and notwithstanding the fact that such subordination is self-operative,
and no further instrument or subordination shall be necessary, upon demand, at
any reasonable time or times, execute, acknowledge, and deliver to Landlord or
to Lender any and all reasonable instruments requested by either of them to
evidence such subordination.
(d) At any time during the Term, Lender may, by written notice to Tenant, make
this Lease superior to the lien of its Mortgage. If requested by Lender, Tenant
shall, upon demand, at any reasonable time or times, execute, acknowledge, and
deliver to Lender, any and all reasonable instruments that may be necessary to
make this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender’s nominee, or other purchaser at foreclosure) shall
hereafter succeed to the rights of Landlord under this Lease, whether through
possession or foreclosure action or delivery of a new lease, Tenant shall, if
requested by such successor, attorn to and recognize such successor as Tenant’s
landlord under this Lease without change in the terms and provisions of this
Lease and shall promptly execute and deliver any instrument that may be
necessary to evidence such attornment, provided that such successor shall not be
bound by (i) any payment of Base Rent or Additional Rent for more than one month
in advance, except prepayments in the nature of security for the performance by
Tenant of its obligations under this Lease, and then only if such prepayments
have been deposited with and are under the control of such successor,

 

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(ii) any provision of any amendment to the Lease to which Lender has not
consented, (iii) the defaults of any prior landlord under this Lease unless such
successor received notice of such default, or (iv) any offset rights arising out
of the defaults of any prior landlord under this Lease unless such successor
received notice of such default. Upon such attomment, this Lease shall continue
in full force and effect as a direct lease between each successor landlord and
Tenant, subject to all of the terms, covenants and conditions of this Lease.
(f) In the event there is a Mortgage at any time during the Term, Landlord shall
use reasonable efforts to cause the Lender to enter into a subordination,
nondisturbance and attornment agreement with Tenant reasonably satisfactory to
Tenant and consistent with this Section 24.
25. Estoppel Certificate. Landlord and Tenant agree, at any time, and from time
to time, within fifteen (15) days after written request of the other, to
execute, acknowledge and deliver a statement in writing in recordable form to
the requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
unconditionally accepted the Demised Premises and is conducting its business
therein, and (v) and as to such additional matters as may be requested, it being
intended that any such statement delivered pursuant hereto may be relied upon by
the requesting party and by any purchaser of title to the Demised Premises or by
any mortgagee or any assignee thereof or any party to any sale-leaseback of the
Demised Premises, or the landlord under a ground lease affecting the Demised
Premises.
26. Landlord Liability. No owner of the Demised Premises, whether or not named
herein, shall have liability hereunder after it ceases to hold title to the
Demised Premises. Neither Landlord nor any officer, director, shareholder,
partner or principal of Landlord, whether disclosed or undisclosed, shall be
under any personal liability with respect to any of the provisions of this
Lease. In the event Landlord is in breach or default with respect to Landlord’s
obligations or otherwise under this Lease, Tenant shall look solely to the
equity of Landlord in the Building for the satisfaction of Tenant’s remedies. It
is expressly understood and agreed that Landlord’s liability under the terms,
covenants, conditions, warranties and obligations of this Lease shall in no
event exceed the loss of Landlord’s equity interest in the Building.
27. Notices. Any notice required or permitted to be given or served by either
party to this Lease shall be deemed given when made in writing, and either
(i) personally delivered, (ii) deposited with the United States Postal Service,
postage prepaid, by registered or certified mail, return receipt requested, or
(iii) delivered by a recognized overnight delivery service providing proof of
delivery, properly addressed to the address set forth in Section 1(m) (as the
same may be changed by giving written notice of the aforesaid in accordance with
this Section 27). If any notice mailed is properly addressed with appropriate
postage but returned for any reason, such notice shall be deemed to be effective
notice and to be given on the date of mailing.

 

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28. Brokers. Tenant represents and warrants to Landlord that, except for those
parties set forth in Section 1(o) (the “Brokers”), Tenant has not engaged or had
any conversations or negotiations with any broker, finder or other third party
concerning the leasing of the Demised Premises to Tenant who would be entitled
to any commission or fee based on the execution of this Lease. Tenant hereby
further represents and warrants to Landlord that Tenant is not receiving and is
not entitled to receive any rebate, payment or other remuneration, either
directly or indirectly, from the Brokers, and that it is not otherwise sharing
in or entitled to share in any commission or fee paid to the Brokers by Landlord
or any other party in connection with the execution of this Lease, either
directly or indirectly. Tenant hereby indemnifies Landlord against and from any
claims for any brokerage commissions (except those payable to the Brokers, all
of which are payable by Landlord pursuant to a separate agreement) and all
costs, expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys’ fees and expenses, for any breach of the
foregoing. Landlord hereby indemnifies Tenant against and from any claims for
any brokerage commissions by the Brokers and all costs, expenses and liabilities
in connection with any other broker, finder or other third party claiming a
right based on Landlord’s agreement with such party to a commission or fee
related to the execution of this Lease, including, without limitation,
reasonable attorneys’ fees and expenses, for any breach of the foregoing. The
foregoing indemnification shall survive the termination of this Lease for any
reason.
29. Assignment and Subleasing.
(a) Tenant may not assign, mortgage, pledge, encumber or otherwise transfer this
Lease, or any interest hereunder, or sublet the Demised Premises, in whole or in
part, without on each occasion first obtaining the prior express written consent
of Landlord, which consent Landlord shall not unreasonably withhold. Any change
in control of Tenant resulting from a merger, consolidation, stock transfer or
asset sale shall be considered an assignment or transfer which requires
Landlord’s prior written consent. For purposes of this Section 29, by way of
example and not limitation, Landlord shall be deemed to have reasonably withheld
consent if Landlord determines (i) that the prospective assignee or subtenant is
not of a financial strength similar to Tenant as of the Lease Date, (ii) that
the prospective assignee or subtenant has a poor business reputation, (iii) that
the proposed use of the Demised Premises by such prospective assignee or
subtenant (including, without limitation, a use involving the use or handling of
Hazardous Substances) will negatively affect the value or marketability of the
Building or the Project or (iv) that the prospective assignee or subtenant is a
current tenant in the Project or is a bona-fide third-party prospective tenant.
See Special Stipulation 7 on Exhibit C hereto.
(b) If Tenant desires to assign this Lease or sublet the Demised Premises or any
part thereof, Tenant shall give Landlord written notice no later than thirty
(30) days in advance of the proposed effective date of any proposed assignment
or sublease, specifying (i) the name and business of the proposed assignee or
sublessee, (ii) the amount and location of the space within the Demised Premises
proposed to be subleased, (iii) the proposed effective date and duration of the
assignment or subletting and (iv) the proposed rent or consideration to be paid
to Tenant by such assignee or sublessee. Tenant shall promptly supply Landlord
with financial statements and other information as Landlord may reasonably

 

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request to evaluate the proposed assignment or sublease. Landlord shall have a
period of thirty (30) days following receipt of such notice and other
information requested by Landlord within which to notify Tenant in writing that
Landlord elects: (i) to terminate this Lease as to the space so affected as of
the proposed effective date set forth in Tenant’s notice, in which event Tenant
shall be relieved of all further obligations hereunder as to such space, except
for obligations under Sections 11 and 28 and all other provisions of this Lease
which expressly survive the termination hereof; or (ii) to permit Tenant to
assign or sublet such space; provided, however, that, if the rent rate agreed
upon between Tenant and its proposed subtenant is greater than the rent rate
that Tenant must pay Landlord hereunder for that portion of the Demised
Premises, or if any consideration shall be promised to or received by Tenant in
connection with such proposed assignment or sublease (in addition to rent), then
one half (1/2) of such excess rent and other consideration (after payment of
brokerage commissions, attorneys’ fees and other disbursements reasonably
incurred by Tenant for such assignment and subletting if acceptable evidence of
such disbursements is delivered to Landlord) shall be considered Additional Rent
owed by Tenant to Landlord, and shall be paid by Tenant to Landlord, in the case
of excess rent, in the same manner that Tenant pays Base Rent and, in the case
of any other consideration, within ten (10) business days after receipt thereof
by Tenant; or (iii) to refuse, in Landlord’s reasonable discretion (taking into
account all relevant factors including, without limitation, the factors set
forth in the Section 29(a) above), to consent to Tenant’s assignment or
subleasing of such space and to continue this Lease in full force and effect as
to the entire Demised Premises. If Landlord should fail to notify Tenant in
writing of such election within the aforesaid thirty (30) day period, Landlord
shall be deemed to have elected option (iii) above. Upon request by Tenant,
Landlord shall provide Tenant in writing with its reason for such refusal.
Tenant agrees to reimburse Landlord for reasonable legal fees and any other
reasonable costs incurred by Landlord in connection with any requested
assignment or subletting, and such payments shall not be deducted from the
Additional Rent owed to Landlord pursuant to subsection (ii) above. Tenant shall
deliver to Landlord copies of all documents executed in connection with any
permitted assignment or subletting, which documents shall be in form and
substance reasonably satisfactory to Landlord and which shall require such
assignee to assume performance of all terms of this Lease on Tenant’s part to be
performed.
(c) No acceptance by Landlord of any rent or any other sum of money from any
assignee, sublessee or other category of transferee shall be deemed to
constitute Landlord’s consent to any assignment, sublease, or transfer.
Permitted subtenants or assignees shall become liable directly to Landlord for
all obligations of Tenant hereunder, without, however, relieving Tenant of any
of its liability hereunder. No such assignment, subletting, occupancy or
collection shall be deemed the acceptance of the assignee, tenant or occupant,
as Tenant, or a release of Tenant from the further performance by Tenant of
Tenant’s obligations under this Lease. Any assignment or sublease consented to
by Landlord shall not relieve Tenant (or its assignee) from obtaining Landlord’s
consent to any subsequent assignment or sublease.

 

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30. Termination or Expiration.
(a) No termination of this Lease prior to the normal ending thereof, by lapse of
time or otherwise, shall affect Landlord’s right to collect rent for the period
prior to termination thereof.
(b) At the expiration or earlier termination of the Term of this Lease, Tenant
shall surrender the Demised Premises and all improvements, alterations and
additions thereto, and keys therefor to Landlord, clean and neat, and in the
same condition as at the Lease Commencement Date, excepting normal wear and
tear, condemnation and casualty other than that required to be insured against
by Tenant hereunder.
(c) If Tenant remains in possession of the Demised Premises after expiration of
the Term, with or without Landlord’s acquiescence and without any express
agreement of the parties, Tenant shall be a tenant-at-sufferance at the greater
of (i) one hundred fifty percent (150%) of the then current fair market base
rental value of the Demised Premises or (ii) one hundred fifty percent (150%) of
the Base Rent in effect at the end of the Term. Tenant shall also continue to
pay all other Additional Rent due hereunder, and there shall be no renewal of
this Lease by operation of law. In addition to the foregoing, Tenant shall be
liable for all damages, direct and consequential, incurred by Landlord as a
result of such holdover. No receipt of money by Landlord from Tenant after the
termination of this Lease or Tenant’s right of possession of the Demised
Premises shall reinstate, continue or extend the Term or Tenant’s right of
possession.
31. Intentionally Deleted.
32. Late Payments. In the event any installment of rent, inclusive of Base Rent,
or Additional Rent or other sums due hereunder, if any, is not paid (i) within
five (5) days after Tenant’s receipt of written notice of such failure to pay on
the first occasion during any twelve (12) month period, or (ii) as and when due
with respect to any subsequent late payments in any twelve (12) month period,
Tenant shall pay an administrative fee equal to three percent (3%) of such past
due amount, plus interest on the amount past due at the lesser of (i) the
maximum interest rate allowed by law or (ii) a rate of fifteen percent (15%) per
annum (the “Interest Rate”) to defray the additional expenses incurred by
Landlord in processing such payment.
33. Rules and Regulations. Tenant agrees to abide by the rules and regulations
set forth on Exhibit D attached hereto, as well as other rules and regulations
reasonably promulgated by Landlord from time to time, so long as such rules and
regulations are uniformly enforced against all tenants of Landlord in the
Building.
34. Quiet Enjoyment. So long as Tenant has not committed an Event of Default
hereunder, Landlord agrees that Tenant shall have the right to quietly use and
enjoy the Demised Premises for the Term.

 

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35. Miscellaneous.
(a) The parties hereto hereby covenant and agree that Landlord shall receive the
Base Rent, Additional Rent and all other sums payable by Tenant hereinabove
provided as net income from the Demised Premises, without any abatement (except
as set forth in Section 20 and Section 21), reduction, set-off, counterclaim,
defense or deduction whatsoever.
(b) If any clause or provision of this Lease is determined to be illegal,
invalid or unenforceable under present or future laws effective during the Term,
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 that in lieu of such
illegal, invalid or unenforceable clause or provision there shall be substituted
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.
(c) All rights, powers, and privileges conferred hereunder upon the parties
hereto shall be cumulative, but not restrictive to those given by law.
(d) TIME IS OF THE ESSENCE OF THIS LEASE.
(e) No failure of Landlord or Tenant to exercise any power given Landlord or
Tenant hereunder or to insist upon strict compliance by Landlord or Tenant with
its obligations hereunder, and no custom or practice of the parties at variance
with the terms hereof shall constitute a waiver of Landlord’s or Tenant’s rights
to demand exact compliance with the terms hereof.
(f) This Lease contains the entire agreement of the parties hereto as to the
subject matter of this Lease and no representations, inducements, promises or
agreements, oral or otherwise, between the parties not embodied herein shall be
of any force and effect. The masculine (or neuter) pronoun, singular number
shall include the masculine, feminine and neuter gender and the singular and
plural number.
(g) This contract shall create the relationship of landlord and tenant between
Landlord and Tenant; no estate shall pass out of Landlord; Tenant has a
usufruct, not subject to levy and sale, and not assignable by Tenant except as
expressly set forth herein.
(h) Under no circumstances shall Tenant have the right to record this Lease or a
memorandum thereof.
(i) The captions of this Lease are for convenience only and are not a part of
this Lease, and do not in any way define, limit, describe or amplify the terms
or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement.
(k) This Lease shall be interpreted under the laws of the State where the
Demised Premises are located.

 

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(l) The parties acknowledge that this Lease is the result of negotiations
between the parties, and in construing any ambiguity hereunder no presumption
shall be made in favor of either party. No inference shall be made from any item
which has been stricken from this Lease other than the deletion of such item.
36. Special Stipulations. The Special Stipulations, if any, attached hereto as
Exhibit C, are incorporated herein and made a part hereof, and to the extent of
any conflict between the foregoing provisions and the Special Stipulations, the
Special Stipulations shall govern and control.
37. Lease Date. For purposes of this Lease, the term “Lease Date” shall mean the
later date upon which this Lease is signed by Landlord and Tenant.
38. Authority. If Tenant is not a natural person, Tenant shall cause its
corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E. Tenant is authorized by all required
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms. Landlord is authorized by all required partnership action to enter into
this Lease and the individual(s) signing this Lease on behalf of Landlord are
authorized to bind Landlord to its terms.
39. No Offer Until Executed. The submission of this Lease to Tenant for
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.
[SIGNATURES ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands under
seals, the day and year first above written.

          LANDLORD: 

  Date: 9-24-99 PINNACLE INDUSTRIAL CENTER LIMITED PARTNERSHIP, a Texas limited
partnership
      By:   ID International (Texas), Inc.,         a Georgia corporation,
General Partner   

            By:   /s/ Timothy J. Gunter         Name:   Timothy J. Gunter       
Title:   Secretary        (CORPORATE SEAL)   

            By:   CG Pinnacle, L.L.C., a Delaware limited         liability
company, General Partner   

            By:   Connecticut General Life Insurance         Company, a
Connecticut corporation,        its Member   

            By:   CIGNA Investments, Inc.,         authorized signatory   

            By:   /s/ Stephen J. Olstein         Name:   Stephen J. Olstein     
  Title:   Managing Director        (CORPORATE SEAL)
   

         

Date: 9/15/99  TENANT:

TANDY BRANDS ACCESSORIES, INC.,
a Delaware corporation
      By:   /s/ Stan Ninemire         Stan Ninemire        Senior Vice
President        (CORPORATE SEAL)
   

 

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ATTESTATION
Landlord:
STATE OF GEORGIA
COUNTY OF FULTON
BEFORE ME, a Notary Public in and for said County, personally appeared Timothy
J. Gunter and                                         , known to me to be the
person(s) who, as Secretary and                                         ,
respectively, of ID International (Texas), Inc., the corporation which executed
the foregoing instrument in its capacity as general partner of Landlord, signed
the same, and acknowledged to me that they did so sign said instrument in the
name and upon behalf of said corporation, in its capacity as general partner of
Landlord, that the same is their free act and deed and they were duly authorized
thereunto by the corporation and the partnership.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this 24th day of September, 1999.

                  /s/ Charlotte Robinson       Notary Public                My
Commission Expires: 10-06-01    

STATE OF CONNECTICUT
COUNTY OF HARTFORD
BEFORE ME, a Notary Public in and for said County, personally appeared Stephen
J. Olstein and                                         , known to me to be the
person(s) who, as Managing Director and
                                        , respectively, of CIGNA Investments,
Inc., as the authorized signatory of Connecticut General Life Insurance Company,
in turn as the Member of CG Pinnacle, L.L.C., the limited liability company
which executed the foregoing instrument in its capacity as general partner of
Landlord, signed the same, and acknowledged to me that they did so sign said
instrument in the name and upon behalf of said entity, in such capacity, that
the same is their free act and deed and they were duly authorized thereunto by
the entity and the partnership.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this 28th day of September, 1999.

                  /s/ Barbara T. Dressler       Notary Public                My
Commission Expires: September 30, 2002    

 

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Tenant:
STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, a Notary Public in and for said County, personally appeared Stan
Ninemire and                                         , known to me to be the
person(s) who, as Senior Vice President and
                                        , respectively, of Tandy Brands
Accessories, Inc., the corporation which executed the foregoing instrument in
its capacity as Tenant, signed the same, and acknowledged to me that they did so
sign said instrument in the name and upon behalf of said corporation as officers
of said corporation, that the same is their free act and deed as such officers,
respectively, and they were duly authorized thereunto by its board of directors;
and that the seal affixed to said instrument is the corporate seal of said
corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed my
official seal, this 15th day of September, 1999.

                  /s/ Janice Gooch       Notary Public        My Commission
Expires: 6-18-2001    

 

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EXHIBIT “A”
DEMISED PREMISES
(GRAPHIC) [c05410c0541001.gif]

 

 

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Rev. 8/25/99
EXHIBIT “B”
PLANS AND SPECIFICATIONS
INTERIOR FINISH STANDARD SPECIFICATIONS
INDUSTRIAL DEVELOPMENTS INTERNATIONAL, INC.

1.  
CARPENTRY & MILLWORK
  A.  
One 3’-0” Lavatory Counter — Top with Back-Splash in each bathroom.
  B.  
One 6’-0” Plastic Laminate Base & Upper Cabinets with Laminate Tops in
kitchen/break room.
  2.  
DOORS

A.  
Glass entrance door is existing. If relocation is required, there would be an
additional charge.
  B.  
Interior doors — 1/30 lf of interior partitions.

  1.  
3’-0” x 7’-0” KD hollow metal frame. (Redi or Timely)
    2.  
3’-0” x 7’-0” Solid Core, Flush, Stain Grade Birch Door.
    3.  
1-1/2 Pair Plain Bearing Butts, US-3 Finish.
    4.  
Lever action privacy or passage latch, Series A, “Levon” style by Schlage or
equal.
    5.  
Floor or wall mounted door stop.

C.  
Labeled Doors — 1/40 lf of Warehouse/Office Separation Wall.

  1.  
3’-0” x 7’-0”, Solid Core Door and Frame.
    2.  
1-1/2 Pair Plain Bearing Butts, US-3 Finish.
    3.  
Lever Action Lockset, Series D, “Olympiad” style by Schlage or equal.
    4.  
Surface Mounted Closer.

3.  
PARTITIONS
  A.  
Demising Walls — One per tenant space.

  1.  
Partition extended to deck above and constructed of 6”, 20 ga. Studs at 24” o.c.
with 5/8” Fire Code Gypsum Board, both sides. Fire tape to deck.

B.  
Office/Warehouse Separation Wall — One per tenant space.

  1.  
Drywall Partition 10’ high and constructed of 3 5/8”, 25 ga. studs at 24’ O.C.
with 5/8” Fire Code Gypsum Board both sides and 3 1/2” thick insulation.

 

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C.  
Interior Partitions

  1.  
9’-6” Interior Partitions to extend 6” above ceiling, construction to be of
3-5/8”, 25 ga. Studs at 24” o.c. with 5/8” Gypsum Board on both sides.

4.  
ACOUSTICAL CEILINGS - All finished office area
  A.  
2’-0” x 4’-0” Standard Grid System with 5/8” non-directional fissured tile,
mineral board ceiling panels. Ceiling grid system to be non-continuous installed
in individual office/work areas.

5.  
FLOORING
  A.  
Vinyl Composition Tile is to be installed in kitchen/break room and all
restrooms. Tile to be 1/8” Armstrong “Excelon” line or equal.
  B.  
All other finished office areas are to be carpeted. An allowance of $12.00/sy to
purchase and install carpeting is included.
  C.  
A 4” Rubber Cove Base is to be installed in all finished office areas.
  D.  
Warehouse floors are to be cleaned and sealed with one coat of acrylic sealer.
  6.  
PAINTING & WALL COVERING
  A.  
All walls in finished office area are to be primed and painted with two coats of
Flat Latex Paint.
  B.  
Doors are to be stained and sealed.
  C.  
Restroom walls to be painted with one coat of primer and one coat of premium
grade washable semi-gloss latex paint.
  D.  
No walls are painted in the warehouse.
  E.  
FRP wainscot paneling to be installed in rest rooms on all wet walls as per
code.
  7.  
HVAC
  A.  
The warehouse area will be cooled to approximate average of 80° degrees
Fahrenheit when it is 100° degrees outside. Heating in the warehouse area will
be an approximate average of 55° degrees Fahrenheit when it is 20° degrees
Fahrenheit outside.
     
Heating and Air Conditioning in office area to be furnished at a rate of one ton
per 350 SF. Higher cooling loads imposed by equipment or heavier than normal
occupancy would be at additional cost. Provide a standard heat/cool thermostat
mounted 5’-0” A.F.F in each zone. A 20 degree Fahrenheit differential from the
exterior temperature is expected.

 

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B.  
Exhaust fans are to be provided in restrooms.
  8.  
PLUMBING
  A.  
Tank-type, elongated commode(s) to meet handicap requirements in each restroom.
  B.  
One lavatory in each restroom.
  C.  
One single-bowl stainless steel sink in kitchen/break room.
  D.  
One electric hot water heater to meet requirements of space.
  9.  
FIRE PROTECTION
  A.  
Sprinkler heads are to be dropped from the existing system to office area
ceilings. An allowance of one sprinkler head per 120 SF of finished office area
is included. If partition configuration dictates additional heads, they would be
installed at an additional charge.
  10.  
ELECTRICAL
     
SERVICE:
  A.  
400 amp/480 volt/3 phase depending on size of lease area.
     
OFFICE AREA:
  A.  
One 2’ x 4’ lay-in, 4 tube fluorescent with acrylic lens & energy saving ballast
per (80) SF.
  B.  
One lighted exit sign per 750 SF (minimum of 2).
  C.  
One 120v duplex convenience outlet per 75 SF.
  D.  
One dedicated 120v duplex receptacle per 1000 SF (minimum of 2).
  E.  
Provisions for one telephone outlet per 250 SF.
  F.  
One single pole switch per 250 SF.
  G.  
Two 3-way switches per 2500 SF.
  H.  
Power wiring of all HVAC systems listed under HVAC. (Exhaust fans & A/C @ 350
SF/TON.)

 

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WAREHOUSE AREA:
  A.  
Lighting is to be by 400w metal halide fixtures providing 25 fc at 36’ AFF (two
rows per bay); high or dense racking may cause increase in number of light
fixtures @ tenant’s expense.
  B.  
Power wiring of all HVAC systems listed under HVAC. (Ventilation & gas fired
unit heaters).
  11.  
SPECIALTIES
  A.  
5lb — ABC type fire extinguishers located as required per code.
  12.  
TOILET ACCESSORIES (One each per bathroom stall)
  A.  
48” grab bar.
  B.  
Single roll toilet paper holder.
  C.  
Surface mounted towel dispenser.
  D.  
16” x 24’ mirror.
  13.  
SIDEWALKS
  A.  
Provide 50 SF of connecting sidewalk per tenant space where applicable.
  14.  
ARCHITECTURAL
  A.  
Provide all preliminary and construction documents.

 

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EXHIBIT C
Special Stipulations
The Special Stipulations set forth herein are hereby incorporated into the body
of the lease to which these Special Stipulations are attached (the “Lease”), and
to the extent of any conflict between these Special Stipulations and the
preceding language, these Special Stipulations shall govern and control.
1. Intentionally Deleted.
2. SNDA. Tenant acknowledges that Landlord is in the process of obtaining a
construction loan related to the construction of the Building. As part of such
loan transaction, Landlord is required to deliver to the construction lender a
Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) in the form
attached hereto as Exhibit F signed by Tenant. Accordingly, simultaneously with
the execution of this Lease, Tenant shall execute and deliver to Landlord a SNDA
in the form attached hereto as Exhibit F, and Landlord is hereby authorized to
deliver the SNDA signed by Tenant to the construction lender as part of the
construction loan closing.
3. Inspection Rights.
(a) Landlord’s books and records pertaining to the calculation of Operating
Expenses for any calendar year within the Term may be inspected by Tenant (or by
an independent certified accountant) at Tenant’s expense, at any reasonable time
within three (3) months after Tenant’s receipt of Landlord’s statement for
Operating Expenses; provided that Tenant shall give Landlord not less than
fifteen (15) days’ prior written notice of any such inspection. If Landlord’s
calculation of Tenant’s share of Operating Expenses for the inspected calendar
year was incorrect, then Tenant shall be entitled to a credit against future
Base Rent for said overpayment (or a refund of any overpayment if the Term has
expired) or Tenant shall pay to Landlord the amount of any underpayment, as the
case may be. If Tenant’s inspection proves that Landlord’s calculation of
Tenant’s share of Operating Expenses for the inspected calendar year resulted in
an overpayment by more than ten percent (10%) of Tenant’s share, Landlord shall
also pay the actual and reasonable fees and expenses of Tenant (as evidenced by
receipts) related directly to conducting said inspection.
(b) All of the information obtained through Tenant’s inspection with respect to
financial matters (including, without limitation, costs, expenses, income) and
any other matters pertaining to Landlord, the Demised Premises, the Building
and/or the Project as well as any compromise, settlement, or adjustment reached
between Landlord and Tenant relative to the results of the inspection shall be
held in strict confidence by Tenant and its officers, agents, and employees; and
Tenant shall cause its independent professionals and any of its officers, agents
or employees to be similarly bound. The obligations within this subsection
(b) shall survive the expiration or earlier termination of the Lease.

 

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4. Landlord Insurance.
(a) Landlord shall maintain at all times during the Term of this Lease, with
such deductible as Landlord in its sole judgment determines advisable, insurance
on the “All-Risk” or equivalent form on a Replacement Cost Basis against loss or
damage to the Building. Such insurance shall be in the amount of 80% of the
replacement value of the Building (excluding all fixtures and property required
to be insured by Tenant under this Lease).
(b) Landlord shall maintain at all times during the Term commercial liability
insurance with limits at least equal to the amount as Tenant is required to
maintain pursuant to Section 8(a)(i) of this Lease.
5. Construction of Demised Premises. Notwithstanding the provisions of Section
17(b) of this Lease, in the event that Landlord is unable to substantially
complete the Demised Premises for occupancy by Tenant on or before the date
which is ninety (90) days after the Lease Commencement Date, as extended by
Delay as defined below, Tenant may, at its option and as its sole remedy,
terminate this Lease by written notice to Landlord given within thirty (30) days
following the expiration of such ninety (90)-day period (provided that
substantial completion has not occurred prior to Landlord’s receipt of said
termination notice), and thereafter neither Landlord nor Tenant shall have any
further obligation hereunder. For purposes of this Lease, “Delay” shall mean
delays incurred by reason of Tenant’s failure to approve the Plans and
Specifications as set forth in Section 17(a) or changes requested by Tenant in
the Plans and Specifications after Tenant’s approval thereof, and for such
additional time as is equal to the time lost by Landlord or Landlord’s
contractors or suppliers in connection with the performance of Landlord’s work
and/or the construction of the Demised Premises and related improvements due to
strikes or other labor troubles, governmental restrictions and limitations, war
or other national emergency, non-availability of materials or supplies, delay in
transportation, accidents, floods, fire, damage or other casualties, weather or
other conditions, acts or omissions of Tenant, or delays by utility companies in
bringing utility lines to the Demised Premises.
6. Landlord Default. Landlord shall not be in default unless it fails to perform
the obligations required of it by this Lease within thirty (30) days after
written notice from Tenant specifying which obligation Landlord has failed to
perform. Provided, however, that if the nature of the specified obligation is
such that more than thirty (30) days are reasonably required to complete its
cure, then Landlord shall not be in default if it commences to cure within said
thirty (30) day period and thereafter diligently prosecutes the same to
completion. As to Landlord’s maintenance and repair obligations hereunder, if
Landlord has not cured or commenced to cure a maintenance or repair default set
forth in said notice within said thirty (30) day period, Tenant, may, at its
option, cure such default. If Tenant elects to cure said default, Tenant shall,
prior to commencement of said work, provide to Landlord a specific description
of the work to be performed by Tenant and the name of Tenant’s contractor. Any
materials used shall be of equal or better quality than currently exists in the
Building and Tenant’s contractor shall be adequately insured and of good
reputation. Landlord shall reimburse Tenant for the reasonable, actual cost of
said cure upon receipt of adequate bills or other supporting evidence
substantiating said cost, less any amounts otherwise reimbursable to Tenant
under any insurance policies carried by Tenant.

 

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7. Assignment and Subleasing. Notwithstanding the provisions of Section 29 of
this Lease, Tenant may assign its rights and obligations under this Lease to any
entity owning a majority of the outstanding stock of Tenant, or to any entity
under common ownership or control with Tenant, or to any entity owned by Tenant,
without the prior consent of Landlord, provided that (a) the successor entity
shall have a Tangible Net Worth (as hereinafter defined) equal Tenant’s Tangible
Net Worth as of the Lease Date and (b) Tenant shall give Landlord prior written
notice of such assignment, together with reasonable evidence of the Tangible Net
Worth of such successor. For purposes herein, “Tangible Net Worth” is defined as
the excess of the value of tangible assets (i.e. assets excluding those which
are intangible such as goodwill, patents and trademarks) over liabilities.
8. Blanket Insurance. Any insurance provided for in Section 8(a) may be
maintained by means of a policy or policies of blanket insurance, covering
additional items or locations or insureds, provided, however, that:
(i) Landlord and any other parties in interest from time to time designated by
Landlord to Tenant shall be named as an additional insured thereunder as its
interest may appear;
(ii) the coverage afforded Landlord and any such other parties in interest will
not be reduced or diminished by reason of the use of such blanket policy of
insurance;
(iii) the policy identifies with specificity the particular address of the
Demised Premises/Building as being covered under the blanket policy; and the
limits of such blanket policy of insurance apply separately to each location
covered thereby;
(iv) the policy expressly waives any pro rata distribution requirements
contained in Tenant’s blanket policy covering the Demised Premises; and
(v) the requirements set forth in Section 8 are otherwise satisfied.
9. Umbrella Insurance. Notwithstanding the provisions of Section 8(a)(i) of the
Lease, such insurance may have general aggregate limits of $2,000,000 for any
policy year that Tenant carries umbrella insurance coverage of at least
$5,000,000, provided (i) Landlord and any other parties in interest from time to
time designated by Landlord to Tenant shall be named as an additional insured
under such umbrella policy as their interests may appear, (ii) such umbrella
policy contains a “per location aggregate” endorsement, and (iii) the
requirements set forth in Section 8 of the Lease are otherwise satisfied.

 

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EXHIBIT D
Rules And Regulations
These Rules and Regulations have been adopted by Landlord for the mutual benefit
and protection of all the tenants of the Building in order to insure the safety,
care and cleanliness of the Building and the preservation of order therein.
1. The sidewalks shall not be obstructed or used for any purpose other than
ingress and egress. No tenant and no employees of any tenant shall go upon the
roof of the Building without the consent of Landlord.
2. No awnings or other projections shall be attached to the outside walls of the
Building.
3. The plumbing fixtures shall not be used for any purpose other than those for
which they were constructed, and no sweepings, rubbish, rags or other
substances, including Hazardous Substances, shall be thrown therein.
4. No tenant shall cause or permit any objectionable or offensive odors to be
emitted from the Demised Premises.
5. The Demised Premises shall not be used for lodging or sleeping or for any
immoral or illegal purposes.
6. No tenant shall make, or permit to be made any unseemly or disturbing noises,
sounds or vibrations or disturb or interfere with tenants of this or neighboring
buildings or premises or those having business with them.
7. Each tenant must, upon the termination of this tenancy, return to the
Landlord all keys of stores, offices, and rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay to the Landlord the cost of replacing the same
or of changing the lock or locks opened by such lost key if Landlord shall deem
it necessary to make such change.
8. Canvassing, soliciting and peddling in the Building and the Project are
prohibited and each tenant shall cooperate to prevent such activity.
9. Landlord will direct electricians as to where and how telephone or telegraph
wires are to be introduced. No boring or cutting for wires or stringing of wires
will be allowed without written consent of Landlord. The location of telephones,
call boxes and other office equipment affixed to the Demised Premises shall be
subject to the approval of Landlord.
10. Parking spaces associated with the Building are intended for the exclusive
use of passenger automobiles. Except for intermittent deliveries, no vehicles
other than passenger automobiles may be parked in a parking space without the
express written permission of Landlord. Trucks and tractor trailers may only be
parked at designated areas of the Building. Trucks and tractor trailers shall
not block access to the Building.
11. No tenant shall use any area within the Project for storage purposes other
than the interior of the Demised Premises.

 

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EXHIBIT E
CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (“Tenant”), hereby certifies as follows to PINNACLE INDUSTRIAL
CENTER LIMITED PARTNERSHIP, a Texas limited partnership (“Landlord”), in
connection with Tenant’s proposed lease of premises in Building A, at Pinnacle
Industrial Center, Dallas County, Texas (the “Premises”):
1. Tenant is duly organized, validly existing and in good standing under the
laws of the State of Delaware, and duly qualified to do business in the State of
Texas.
2. That the following named persons, acting individually, are each authorized
and empowered to negotiate and execute, on behalf of Tenant, a lease of the
Premises and that the signature opposite the name of each individual is an
authentic signature:

         
 
      /s/ Stan Ninemire
 
(name)  
 
(title)  
 
(signature)                     (name)   (title)   (signature)                  
  (name)   (title)   (signature)

3. That the foregoing authority was conferred upon the person(s) named above by
the Board of Directors of Tenant, at a duly convened meeting held June 15, 1999.

                  /s/ Darrel A. Rice       Secretary        [CORPORATE SEAL]  

 

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EXHIBIT F

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT made this  _____  day of                     ,  _____  between
GUARANTY FEDERAL BANK, F.S.B., a federal savings bank (hereinafter called
“Lender”),                                          (hereinafter called
“Tenant”), and                                         (hereinafter called
“Landlord”).
W I T N E S S E T H  T H A T:
WHEREAS, Lender is the owner and holder of a [Deed of Trust] (hereinafter called
the “Deed of Trust”) dated                     ,  _____, covering the real
property described in Exhibit A and the buildings and improvements thereon
(hereinafter collectively called the “Mortgaged Premises”) securing the payment
of a promissory note in the stated principal amount of $                    
payable to the order of Lender;
WHEREAS, Tenant is the tenant under a lease (hereinafter called the “Lease”)
dated                                         ,  _____, executed by and between
Landlord and Tenant, covering certain property (hereinafter called the “Demised
Premises”) consisting of all or a part of the Mortgaged Premises; and
WHEREAS, Tenant and Lender desire to confirm their understanding with respect to
the Lease and the Deed of Trust;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Lender and Tenant hereby agree and covenant as follows:
1. Subordination. The Lease now is, and shall at all times and for all purposes
continue to be, subject and subordinate, in each and every respect, to the Deed
of Trust, with the provisions of the Deed of Trust controlling in all respects
over the provisions of the Lease, it being understood and agreed that the
foregoing subordination shall apply to any and all increases, renewals,
modifications, extensions, substitutions, replacements and/or consolidations of
the Deed of Trust, provided that any and all such increases, renewals,
modifications, extensions, substitutions, replacements and/or consolidations
shall nevertheless be subject to the terms of this Agreement.
2. Non-Disturbance. So long as (i) Tenant is not in default (beyond any period
given Tenant to cure such default) in the payment of rent or additional rent or
in the performance of any of the other terms, covenants or conditions of the
Lease on Tenant’s part to be performed, (ii) the Lease is in full force and
effect according to its original terms, or with such amendments or modifications
as Lender shall have approved, and (iii) Tenant attorns to Lender or a purchaser
of the Mortgaged Premises as provided in Paragraph 3, then (a) Tenant’s
possession, occupancy, use and quiet enjoyment of the Demised Premises under the
Lease, or any extensions or renewals thereof or acquisition of additional space
which may be effected in accordance with any option therefor in the Lease, shall
not be terminated, disturbed, diminished or interfered with by Lender in the
exercise of any of its rights under the Deed of Trust, and (b) Lender will not
join Tenant as a party defendant in any action or proceeding for the purpose of
terminating Tenant’s interest and estate under the Lease because of any default
under the Deed of Trust.

 

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3. Attornment. If Lender shall become the owner of the Mortgaged Premises or the
Mortgaged Premises shall be sold by reason of non-judicial or judicial
foreclosure or other proceedings brought to enforce the Deed of Trust or the
Mortgaged Premises shall be conveyed by deed in lieu of foreclosure, the Lease
shall continue in full force and effect as a direct Lease between Lender or
other purchaser of the Mortgaged Premises, who shall succeed to the rights and
duties of Landlord, and Tenant, and Tenant shall attorn to Lender or such
purchaser, as the case may be, upon any such occurrence and shall recognize
Lender or such purchaser, as the case may be, as the Landlord under the Lease.
Such attornment shall be effective and self-operative without the execution of
any further instrument on the part of any of the parties hereto. Tenant agrees,
however, to execute and deliver at any time and from time to time, upon the
request of Landlord or of any holder(s) of any of the indebtedness or other
obligations secured by the Deed of Trust or any such purchaser, any instrument
or certificate which, in the sole reasonable judgment of the requesting party,
is necessary or appropriate, in connection with any such foreclosure or deed in
lieu of foreclosure or otherwise, to evidence such attornment. Tenant hereby
waives the provisions of any statute or rule of law, now or hereafter in effect,
which may give or purport to give Tenant any right or election to terminate or
otherwise adversely affect the Lease and the obligations of Tenant thereunder as
a result of any such foreclosure or deed in lieu of foreclosure.
4. Obligations and Remedies. If Lender shall become the owner of the Mortgaged
Premises or the Mortgaged Premises shall be sold by reason of non-judicial or
judicial foreclosure or other proceedings brought to enforce the Deed of Trust
or the Mortgaged Premises shall be conveyed by deed in lieu of foreclosure,
Lender or other purchaser of the Mortgaged Premises, as the case may be, shall
have the same remedies by entry, action or otherwise in the event of any default
by Tenant (beyond any period given Tenant to cure such default) in the payment
of rent or additional rent or in the performance of any of the other terms,
covenants and conditions of the Lease on Tenant’s part to be performed that
Landlord had or would have had if Lender or such purchaser had not succeeded to
the interest of Landlord. Upon attornment by Tenant as provided herein, Lender
or such purchaser shall be bound to Tenant under all the terms, covenants and
conditions of the Lease and Tenant shall have the same remedies against Lender
or such purchaser for the breach of an agreement contained in the Lease that
Tenant might have had under the Lease against Landlord if Lender or such
purchaser had not succeeded to the interest of Landlord; provided, however, that
Lender or such purchaser shall not be liable or bound to Tenant:
(a) for any act or omission of any prior landlord (including Landlord); or
(b) for any offsets or defenses which Tenant might have against any prior
landlord (including Landlord); or
(c) for or by any rent or additional rent which Tenant might have paid for more
than the current month to any prior landlord (including Landlord); or

 

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(d) by any amendment, modification or consensual termination of the Lease made
without Lender’s consent; or
(e) for any security deposit, rental deposit or similar deposit given by Tenant
to a prior landlord (including Landlord) unless such deposit is actually paid
over to Lender or such purchaser by the prior landlord; or
(f) for any repairs or replacements to or required by the Demised Premises or
the Mortgaged Premises arising prior to the date Lender or such purchaser takes
possession of the Mortgaged Premises; or
(g) for any construction of or payment or allowance for tenant improvements to
the Demised Premises or any part thereof or to the Mortgaged Premises or any
part thereof for the benefit of Tenant; or
(h) for the payment of any leasing commissions or other expenses for which any
prior landlord (including Landlord) incurred the obligation to pay; or
(i) by any notice given by Tenant to a prior landlord (including Landlord)
unless a copy thereof was also then given to Lender.
The person or entity to whom Tenant attorns shall be liable to Tenant under the
Lease only for matters arising during such person’s or entity’s period of
ownership, and such liability shall terminate upon the transfer by such person
or entity of its interest in the Lease and the Mortgaged Premises.
5. No Abridgment. Nothing herein contained is intended, nor shall it be
construed, to abridge or adversely affect any right or remedy of Landlord under
the Lease in the event of any default by Tenant (beyond any period given Tenant
to cure such default) in the payment of rent or additional rent or in the
performance of any of the other terms, covenants or conditions of the Lease on
Tenant’s part to be performed.
6. Notices of Default to Lender. Tenant agrees to give Lender a copy of any
default notice sent by Landlord under the Lease to Tenant or by Tenant to
Landlord and to promptly send written notice to Lender upon learning of any
default under the Lease by any party to the Lease.
7. Representations by Tenant. Tenant represents and warrants to Lender that
Tenant has validly executed the Lease; the Lease is valid, binding and
enforceable and is in full force and effect in accordance with its terms; the
Lease has not been amended except as stated herein; no rent under the Lease has
been paid more than thirty (30) days in advance of its due date; there are no
defaults existing under the Lease; and Tenant, as of this date, has no charge,
lien, counterclaim or claim of offset under the Lease, or otherwise, against the
rents or other charges due or to become due under the Lease.

 

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8. Rent Payment. If Lender shall become the owner of the Mortgaged Premises or
the Mortgaged Premises shall be sold by reason of non-judicial or judicial
foreclosure or other proceedings brought to enforce the Deed of Trust or the
Mortgaged Premises shall be conveyed by deed in lieu of foreclosure, Tenant
agrees to pay all rents directly to Lender or other purchaser of the Mortgaged
Premises, as the case may be, in accordance with the Lease immediately upon
notice of Lender or such purchaser, as the case may be, succeeding to Landlord’s
interest under the Lease. Tenant further agrees to pay all rents directly to
Lender immediately upon notice that Lender is exercising its rights to such
rents under the Deed of Trust or any other loan documents (including but not
limited to any Assignment of Leases and Rents) following a default by Landlord
or other applicable party.
9. Notice of Deed of Trust. To the extent that the Lease shall entitle Tenant to
notice of any deed of trust or security agreement, this Agreement shall
constitute such notice to the Tenant with respect to the Deed of Trust and to
any and all other deeds of trust and security agreements which may hereafter be
subject to the terms of this Agreement.
10. Landlord Defaults. Tenant agrees with Lender that effective as of the date
of this Agreement: (i) Tenant shall not take any steps to terminate the Lease
for any default by Landlord or any succeeding owner of the Mortgaged Premises
until after giving Lender written notice of such default, stating the nature of
the default and giving Lender thirty (30) days from receipt of such notice to
effect cure of the same, or if cure cannot be effected within said thirty (30)
days due to the nature of the default, Lender shall have a reasonable time to
cure provided that it commences cure within said thirty (30) day period of time
and diligently carries such cure to completion; and (ii) notice to Landlord
under the Lease (oral or written) shall not constitute notice to Lender.
11. No Amendment, Termination, Assignment or Subletting of Lease. Tenant agrees
that Tenant’s interest in and obligations under the Lease shall not be altered,
modified or terminated without the prior written consent of Lender. Tenant
further agrees that Tenant shall not assign the Lease or allow it to be assigned
in any manner or sublet the Demised Premises or any part thereof without the
prior written consent of Lender in any situation where Landlord’s consent to any
such action is required under the Lease.
12. Liability of Lender. If Lender shall become the owner of the Mortgaged
Premises or the Mortgaged Premises shall be sold by reason of foreclosure or
other proceedings brought to enforce the Mortgage or the Mortgaged Premises
shall be conveyed by deed in lieu of foreclosure, Tenant agrees that,
notwithstanding anything to the contrary contained in the Lease, after such
foreclosure sale or conveyance by deed in lieu of foreclosure, Lender shall have
no personal liability to Tenant under the Lease and Tenant shall look solely to
the estate and property of Landlord in the Mortgaged Premises, to the net
proceeds of sale thereof or the rentals received therefrom, for the satisfaction
of Tenant’s remedies for the collection of a judgment or other judicial process
requiring the payment of money by Landlord in the event of any default or breach
by Landlord with respect to any of the terms, covenants, and conditions of the
Lease to be observed or performed by Landlord and any other obligation of
Landlord created by or under this Lease, and no other property or assets of
Landlord or of its partners, officers, beneficiaries, co-tenants, shareholders,
or principals (as the case may be) shall be subject to levy, execution or other
enforcement procedures for the satisfaction of Tenant’s remedies. The term
“Landlord” as used herein shall be limited to mean and include only the owner or
owners at the time in question of Landlord’s interest in the Lease, which term
shall include Lender in the event Lender

 

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acquires title to the Mortgaged Premises. Further, in the event of any transfer
by Landlord of Landlord’s interest in this Lease, Landlord (and in the case of
any subsequent transfers or conveyances, the then assignor), including each of
its partners, officers, beneficiaries, co-tenants, shareholders or principals
(as the case may be) shall be automatically freed and released, from and after
the date of such transfer or conveyance, of all liability for the performance of
any covenants and agreements which accrue subsequent to the date of such
transfer of Landlord’s interest.
13. Notice. Any notice or communication required or permitted hereunder shall be
given in writing, sent by (a) personal delivery, or (b) expedited delivery
service with proof of delivery, or (c) United States mail, postage prepaid,
registered or certified mail, or (d) telegram, telex or telecopy, addressed as
follows:

         
To Lender:
  Guaranty Federal Bank, F.S.B.
8333 Douglas Avenue
Dallas, Texas 75225
Attn: Commercial Real Estate Lending Division  
 
     
To Tenant:
   
 
     
 
   
 
     
 
   

             
 
  Attn:      
 
     

or to such other address or to the attention of such other person as hereafter
shall be designated in writing by the applicable party sent in accordance
herewith. Any such notice or communication shall be deemed to have been given
and received either at the time of personal delivery or, in the case of delivery
service or mail, as of the date of first attempted delivery at the address and
in the manner provided herein, or in the case of telegram, telex or telecopy,
upon receipt.
14. Modification. This Agreement may not be modified orally or in any manner
other than by an agreement in writing signed by the parties hereto or their
respective successors in interest.
15. Successor Lender. The term “Lender” as used throughout this Agreement
includes any successor or assign of Lender and any holder(s) of any interest in
the indebtedness secured by the Deed of Trust.
16. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and assigns, and any purchaser
or purchasers at foreclosure of the Mortgaged Premises, and their respective
heirs, personal representatives, successors and assigns.
17. Paragraph Headings. The paragraph headings contained in this Agreement are
for convenience only and shall in no way enlarge or limit the scope or meaning
of the various and several paragraphs hereof.

 

f-5

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18. Gender and Number. Within this Agreement, words of any gender shall be held
and construed to include any other gender, and words in the singular number
shall be held and construed to include the plural and words in the plural number
shall be held and construed to include the singular, unless the context
otherwise requires.
19. Applicable Law. This Agreement and the rights and duties of the parties
hereunder shall be governed by all purposes by the law of the State of
California and the law of the United States applicable to transactions within
such state.
20. Counterparts. This Agreement may be executed in multiple counterparts, and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be one and the same instrument with
the same signature as of all parties to this Agreement had signed the same
signature page.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement to be
duly executed as of the day and year first above written.

             
 
  LENDER:    
 
                GUARANTY FEDERAL BANK, F.S.B.,
a federal savings bank    
 
           
 
  By:       
 
    Name: 
 
   
 
    Title: 
 
   
 
     
 
   
 
           
 
  TENANT:    
 
           
 
       
 
  By:       
 
    Name: 
 
   
 
    Title: 
 
   
 
     
 
   
 
           
 
  LANDLORD:    
 
           
 
       
 
  By:       
 
    Name: 
 
   
 
    Title: 
 
   
 
     
 
   

[ACKNOWLEDGMENTS]

 

f-6

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FIRST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT
THIS AMENDMENT is made as of the Amendment Date (as hereinafter defined) by and
between PINNACLE INDUSTRIAL CENTER LIMITED PARTNERSHIP, a Texas limited
partnership (“Landlord”) and TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (“Tenant”).
RECITALS
Landlord and Tenant have previously entered into that certain Industrial Lease
Agreement dated September 24, 1999 (the “Lease”) for the lease of approximately
119,804 square feet of space, more commonly known as 4421 Davis Blvd., Dallas,
Texas 75211 (the “Original Demised Premises”) located within Pinnacle Industrial
Center, Dallas County, Texas.
Landlord and Tenant desire to amend the Lease to, among other things, increase
the Base Rent, increase the square footage within the Original Demised Premises,
adjust the Lease Commencement Date, and extend the Term.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration in hand paid by each party hereto to the
other, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:
1. All capitalized terms used herein but undefined shall have the meaning as
defined in the Lease.
2. Section 1(d) of the Lease is hereby deleted in its entirety and the following
is substituted therefor:
1(d) Annual Base Rent:

         
Lease Year 1
  $ 467,830.00  
 
       
Lease Years 2 - 5
  $ 510,360.00  
 
       
Lease Years 6 - 10
  $ 574,152.00  

3. Section 1(e) of the Lease is hereby deleted in its entirety and the following
is substituted therefor:
1(e) Monthly Base Rent Installments:

         
Lease Year 1
       
Month 1
  $ -0-  
Months 2 – 12
  $ 42,530.00  
 
       
Lease Years 2 – 5
  $ 42,530.00  
 
       
Lease Years 6 – 10
  $ 47,846.00  

 

 

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4. The Lease Commencement Date, as defined in Section 1(f) of the Lease, is
hereby extended to February 1, 2000.
5. The Base Rent Commencement Date, as defined in Section 1(g) of the Lease, is
hereby extended to March 1, 2000.
6. The Expiration Date, as defined in Section 1(h) of the Lease, is hereby
extended to January 31, 2010. As used herein, “Term” is hereby defined as the
period commencing on the Commencement Date and terminating on the Expiration
Date, as extended hereby.
7. Commencing on the Amendment Date, the Original Demised Premises shall be
expanded to also include that certain additional 15,014 square foot space, all
of which is warehouse space, as more particularly described on Exhibit “A”
attached hereto and incorporated herein by reference, the address of which is
the same address as the Original Demised Premises (the “Expansion Space”).
Commencing on the Amendment Date, the Demised Premises shall be defined as the
Original Demised Premises and the Expansion Space.
8. For purposes of calculating Tenant’s pro rata share of Operating Expenses
pursuant to Section 6 of the Lease, commencing on the Amendment Date, Tenant’s
Operating Expense Percentage, as set forth in Section 1(j) of the Lease, shall
be 40.85%.
9. Except for Vantage Management Company, whose commission shall be paid by
Landlord, Landlord and Tenant each represents and warrants to the other that
neither party has engaged or had any conversations or negotiations with any
broker, finder or other third party concerning the matters set forth in this
Amendment who would be entitled to any commission or fee based on the execution
of this Amendment. Landlord and Tenant each hereby indemnifies the other against
and from any claims for any brokerage commissions and all costs, expenses and
liabilities in connection therewith, including, without limitation, reasonable
attorneys’ fees and expenses, for any breach of the foregoing. The foregoing
indemnification shall survive the termination of the Lease for any reason.
10. Landlord shall use reasonable speed and diligence to substantially complete
the Improvements for the Expansion Space on the same basis as and pursuant to
the Plans and Specifications for the warehouse portion of the Original Demised
Premises.
11. Tenant represents to Landlord that, as of the date hereof, Landlord is not
in default of the Lease.
12. For purposes of this Amendment, the term “Amendment Date” shall mean the
date upon which this Amendment is signed by Landlord or Tenant, whichever is
later.

 

-2-

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13. Except as amended hereby, the Lease shall be and remain in full force and
effect and unchanged. As amended hereby, the Lease is hereby ratified and
confirmed by Landlord and Tenant. To the extent the terms hereof are
inconsistent with the terms of the Lease, the terms hereof shall control.
14. submission of this Amendment to Tenant for examination or consideration does
not constitute an offer to amend the Lease, and this Amendment shall become
effective only upon the execution and delivery thereof by Landlord and Tenant.
[SIGNATURES ON FOLLOWING PAGE]

 

-3-

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and sealed as of the Amendment Date.

                          LANDLORD:
 
                        PINNACLE INDUSTRIAL CENTER LIMITED     PARTNERSHIP, a
Texas limited partnership
 
                    Date: January 5, 2000   By:   ID International (Texas),
Inc., a Georgia
corporation, General Partner
 
                            By:   /s/ Henry D. Gregory                          
Name: Henry D. “Greg” Gregory             Title: President
 
                                [CORPORATE SEAL]

 
                        By:   CG Pinnacle, L.L.C., a Delaware
limited liability company, General Partner
 
                            By:   Connecticut General Life Insurance
Company, a Connecticut corporation,
its Member
 
                                By:   CIGNA Investments, Inc.,
authorized signatory
 
                   
 
              By:   /s/ Leon Pouncy
 
                   
 
                  Name: Leon Pouncy
Title: Managing Director
 
                   
 
          [CORPORATE SEAL]

 

-4-

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  TENANT:    
 
                TANDY BRANDS ACCESSORIES, INC., a Delaware corporation    
 
           
Date: 12-17-99
  By:   /s/ Stan Ninemire
 
Name:    
 
      Title:    
 
           
 
      [CORPORATE SEAL]    

 

-5-

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CONSENT
The capitalized terms of this Consent shall have the meaning as defined in the
Amendment to which this Consent is attached (the “Amendment”), unless otherwise
defined. The undersigned, being the holder of that Deed of Trust, Mortgage and
Security Agreement (hereinafter called the “Deed of Trust”) dated July 17, 1999
and recorded in Volume 99144, Page 01392, Real Property Records of Dallas
County, Texas, covering the real property described in this Amendment
(hereinafter collectively called the “Mortgaged Premises”) securing the payment
of a promissory note (the Note) in the stated principal amount of $6,887,811
payable to the order of Lender, which Note was modified to evidence an increase
the maximum principal amount of the loan evidenced a new promissory note (the
“Replacement Promissory Note”) in the maximum amount of $7,394,083 payable to
the order of Lender, and the Deed of Trust has been modified to reflect such
Replacement Promissory Note, hereby consents to the Amendment, and agrees that
any reference to the Lease in that certain Subordination, Non-Disturbance and
Attornment Agreement signed and delivered by Landlord, Tenant, and the
undersigned, shall mean the Lease as amended by the Amendment.

                     
 
          LENDER:    
 
                                GUARANTY FEDERAL BANK, F.S.B.,             a
federal savings bank
 
                   
Date:
          By:        
 
 
 
         
 
Name:    
 
              Title:    

 

-6-

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CERTIFICATE OF AUTHORITY
CORPORATION
The undersigned, Secretary of TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (“Tenant”), hereby certifies as follows to PINNACLE INDUSTRIAL
CENTER LIMITED PARTNERSHIP, a Texas limited partnership (“Landlord”), in
connection with that First Amendment to Industrial Lease Agreement for Tenant’s
lease of premises in Building A, at Pinnacle Industrial Center, Dallas County,
Texas (the “Premises”):
1. Tenant is duly organized, validly existing and in good standing under the
laws of the State of Delaware, and duly qualified to do business in the State of
Texas.
2. That the following named persons, acting individually, are each authorized
and empowered to negotiate and execute, on behalf of Tenant, a lease of the
Premises and that the signature opposite the name of each individual is an
authentic signature:

          Stan Ninemire   Senior Vice President   /s/ Stan Ninemire          
(name)   (title)   (signature)                     (name)   (title)  
(signature)                     (name)   (title)   (signature)

3. That the foregoing authority was conferred upon the person(s) named above by
the Board of Directors of Tenant, at a duly convened meeting held Dec. 21, 1999.

                  /s/ Darrel A. Rice       Secretary           

[CORPORATE SEAL]

 

 

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Exhibit A
(GRAPHIC) [c05410c0541002.gif]

 

 

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SECOND AMENDMENT TO LEASE
(Expansion of Demised Premises)
I. PARTIES AND DATE
THIS SECOND AMENDMENT TO LEASE (this “Amendment”), dated as September 4, 2003,
is entered into by and between PINNACLE INDUSTRIAL DALLAS, INC., a Delaware
corporation (“Landlord”), and TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (“Tenant”).
II. RECITALS
A. Pinnacle Industrial Center Limited Partnership, a Texas limited partnership,
predecessor-in-interest to Landlord, and Tenant entered into that certain
Industrial Lease Agreement dated as of September 24, 1999, as amended by that
certain First Amendment to Industrial Lease Agreement dated as of January 5,
2000 (collectively as amended, the “Lease”), for the leasing of certain premises
measuring approximately 134,818 rentable square feet (the “Demised Premises”) in
that certain building located at 4421 Davis Blvd., Dallas, Texas 75211 (the
“Building”), as the Demised Premises is more particularly described in the
Lease. The Expiration Date of the Lease is January 31, 2010. Capitalized terms
used and not otherwise defined herein shall have the same definitions as set
forth in the Lease.
B. Tenant desires to expand the Demised Premises by approximately 28,954
rentable square feet (the “Expansion Premises”), and Landlord has agreed to such
expansion. In connection therewith, Landlord and Tenant hereby reaffirm and
modify the Lease, and expand the Demised Premises, all as more particularly set
forth in this Amendment.
III. MODIFICATIONS
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease upon
the terms and conditions hereinafter set forth.
A. Reaffirmance of Lease. Subject to the terms of this Amendment, Landlord and
Tenant hereby reaffirm all of the terms and provisions of the Lease.
B. Expansion of Demised Premises. Effective as of October 15, 2003 (the
“Expansion Premises Commencement Date”), the Demised Premises shall be expanded
to incorporate the Expansion Premises, which is conclusively deemed to contain
28,954 square feet of rentable area, such Expansion Premises being more
particularly indicated in cross-hatch on the attached Exhibit A. If delivery of
possession is delayed for any reason whatsoever, this Amendment shall not be
void or voidable. If the Expansion Premises Commencement Date is other than the
date set forth above, the parties shall memorialize the Expansion Premises
Commencement Date promptly following determination thereof.

 

1

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C. Improvement Work. In order to prepare the Expansion Premises for Tenant’s
occupancy, Landlord will cause to be completed certain improvement work deemed
necessary in Landlord’s reasonable discretion (the “Work”), including without
limitation, the removal of the existing demising walls and the construction of
new demising walls. Such Work shall be performed by Coker & Associates
(“Landlord’s Contractor”). The Work shall be completed diligently in accordance
with plans prepared by Landlord’s Contractor and approved by Tenant (such
approval not to be unreasonably withheld) and all applicable laws. Tenant shall
pay for one-third (1/3) of all costs and expenses incurred by Landlord for the
Work, plus all costs for the Work which exceed a total of $225,000.00
(collectively, “Tenant’s Share”); provided, however, that: (i) Landlord shall
not be entitled to pay itself any fees in connection with the Work (but nothing
herein shall prevent Landlord from paying a construction management fee to its
property manager, such fee to be included in the final bid); and (ii) if the
total cost of the Work is estimated to exceed $225,000.00, Tenant shall be
entitled to value engineer and/or make changes to the Work to reduce the amount
of estimated costs. The parties currently anticipate that the cost of the Work
will be approximately $212,700.00. Tenant shall pay Landlord for Tenant’s Share
within ten (10) days of a written request for same from Landlord delivered to
Tenant following substantial completion of the Work and delivery of the
Expansion Premises. Landlord shall warrant and repair any defects in the Work
which are reported to Landlord in writing within twelve (12) months following
the Expansion Premises Commencement Date.
D. Modification of Square Footage and Tenant’s Proportionate Share. Effective as
of the Expansion Premises Commencement Date, (i) the square footage of the
Demised Premises shall be amended to be 163,772 square feet of rentable area;
and (ii) Tenant’s Operating Expense Percentage, as set forth in Section 1(j) of
the Lease, shall be amended to be 49.63%.
E. Annual Base Rent. Section 1(d) of the Lease is hereby deleted in its entirety
and the following is substituted therefor:

          Annual Base Rent:        
 
       
Lease Year 1
  $ 467,830.00  
Lease Year 2 – The day preceding the Expansion Premises Commencement Date
  $ 510,360.00  
Expansion Premises Commencement Date – 2/15/05
  $ 620,695.88  
2/16/05 – 1/31/10
  $ 697,668.72  

F. Monthly Base Rent. Section 1(e) of the Lease is hereby deleted in its
entirety and the following is substituted therefor:

          Monthly Base Rent Installments:        
 
       
Lease Year 1
       
Month 1
  $ 0  
Months 2-12
  $ 42,530.00  
Lease Year 2 – The day preceding the Expansion Premises Commencement Date
  $ 42,530.00  
Expansion Premises Commencement Date – 2/15/05
  $ 51,724.66  
2/16/05 – 1/31/10
  $ 58,139.06  

 

2

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G. Environmental Matters. Section 16 of the Lease is hereby amended as follows:
a. Section 16(b) of the Lease is hereby deleted in its entirety and replaced
with the following paragraph:
“Tenant will immediately advise Landlord in writing upon Tenant obtaining
knowledge of any of the following: (i) any pending or threatened Environmental
Claim (defined below) against Tenant relating to the Demised Premises, the
Building or, the Project; (ii) any condition or occurrence on the Demised
Premises, the Building or the Project caused or permitted by Tenant or any
Tenant Affiliate (defined below) that (a) results in noncompliance by Tenant
with any applicable Environmental Law, or (b) could reasonably be anticipated to
form the basis of an Environmental Claim against Tenant or Landlord or the
Demised Premises; (iii) any condition or occurrence on the Demised Premises or
any property adjoining the Demised Premises caused or permitted by Tenant or any
Tenant Affiliate that could reasonably be anticipated to cause the Demised
Premises to be subject to any restrictions on the ownership, occupancy, use or
transferability of the Demised Premises under any Environmental Law; and
(iv) the actual or anticipated taking of any removal or remedial action by
Tenant in response to the actual or alleged presence of any Hazardous Substances
on the Demised Premises, the Building or the Project. All such notices shall
describe in reasonable detail the nature of the claim, investigation, condition,
occurrence or removal or remedial action and Tenant’s response thereto. In
addition, Tenant will provide Landlord with copies of all communications
regarding the Demised Premises with any government or governmental agency
relating to Environmental Laws, all such communications with any person relating
to Environmental Claims, and such detailed reports of any such Environmental
Claim as may reasonably be requested by Landlord. In the event any investigation
or monitoring of site conditions or any clean-up, containment, restoration,
removal or other remedial work (collectively, the “Remedial Work”) is required
under any Environmental Law, by any judicial order, or by any governmental
entity as the result of operations or activities upon, or any use or occupancy
of, any portion of the Demised Premises by Tenant or any Tenant Affiliate, then
Tenant shall perform or cause to be performed the Remedial Work in compliance
with such law or, if Tenant fails to commence the Remedial Work within thirty
(30) days after it has been determined that Tenant or any Tenant Affiliate
caused or permitted the contamination which triggered the Remedial Work,
Landlord may cause such Remedial Work to be performed and Tenant shall reimburse
Landlord for the cost thereof within thirty (30) days of demand therefor. All
Remedial Work performed by Tenant shall be performed by one or more contractors,
selected by Tenant and approved in advance in writing by Landlord, and under the
supervision of a consulting engineer selected by Tenant and approved in advance
in writing by Landlord. All costs and expenses of such Remedial Work which is
the result of environmental contamination caused or permitted by Tenant or any
Tenant Affiliate shall be paid by Tenant, including, without limitation, the
charges of such contractor(s), the consulting engineer, and Landlord’s
reasonable attorneys’ fees and costs incurred in connection with monitoring or
review of such Remedial

 

3

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Work. The covenants and agreements of Tenant set forth in this Section 16(b)
shall survive the expiration or earlier termination of this Lease. Except to the
extent of Remedial Work resulting from environmental contamination caused or
permitted by Tenant or any Tenant Affiliate, Landlord shall cause all Remedial
Work to be completed promptly and in accordance with all applicable laws at
Landlord’s sole cost and expense, without reimbursement from Tenant. If Tenant
is unable to use the Premises as a result of any environmental contamination not
caused or permitted by Tenant or any Tenant Affiliate, Tenant shall be entitled
to receive an abatement of all rent payable under the Lease from the
commencement of such interruption until Tenant’s use of the Premises is
restored. As used herein, the term (1) “Tenant Affiliates” shall mean Tenant,
its assignees, subtenants, and their respective agents, employees,
representatives and contractors; (2) “Environmental Claim” means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of non-compliance or violation, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law or any Environmental Permit, including without limitation
(i) any and all Environmental Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (ii) any and all
Environmental Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Substances or arising from alleged injury or threat of injury to
health, safety or the environment; and (3) “Environmental Permits” means all
permits, approvals, identification numbers, licenses and other authorizations
required under any applicable Environmental Law.”
b. In the first sentence of Section 16(d) of the Lease, the phrase “which
consent shall not be unreasonably withheld” is hereby deleted.
c. A new Section 16(h) is hereby inserted in the Lease to read as follows:
“At any time and from time to time during the term of this Lease, Landlord may
perform an environmental site assessment report concerning the Demised Premises,
prepared by an environmental consulting firm chosen by Landlord, indicating the
presence or absence of Hazardous Substances caused or permitted by Tenant and
the potential cost of any compliance, removal or remedial action in connection
with any such Hazardous Substances on the Demised Premises. Tenant shall grant
and hereby grants to Landlord and its agents access to the Demised Premises and
specifically grants Landlord an irrevocable non-exclusive license to undertake
such an assessment. The cost of any such environmental site assessment shall be
borne by Landlord unless (i) Landlord initiates same based on Landlord’s
reasonable belief that Tenant has caused or permitted a Hazardous Substance
problem on or at the Demised Premises and (ii) the results of such assessment
indicate that Tenant has caused or permitted a Hazardous Substance problem on or
at the Demised Premises. If Tenant shall be held responsible for the costs of
the assessment as above described, Tenant shall pay Landlord for the costs of
such assessment within thirty (30) days after demand.”

 

4

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H. Tenant’s Default. Section 22(a)(i) of the Lease is hereby amended by the
insertion of the following at the end of the sentence: “provided, however, that
for each calendar year during which Landlord has already given Tenant two
(2) written notices of the failure to pay Base Rent or any Additional Rent, no
further notice shall be required (i.e., the Event of Default will automatically
occur on the fifth (5th) day after the day upon which the rent was due);”.
Section 22(a)(ii) is hereby deleted from the Lease.
I. Assignment. A new Section 29(d) is hereby inserted in the Lease to read as
follows:
“In the event of the transfer and assignment by Landlord of its interest in this
Lease and in the Building to a person expressly assuming Landlord’s obligations
under this Lease, Landlord shall thereby be released from any obligations
hereunder arising after such transfer and assumption, and Tenant agrees to look
solely to such successor in interest of the Landlord for performance of such
obligations. Any security given by Tenant to secure performance of Tenant’s
obligations hereunder shall be transferred by Landlord to such successor in
interest and Landlord shall thereby be discharged of any further obligation
relating thereto.”
J. Waiver of Jury Trial. A new Section 31 is hereby inserted in the Lease to
read as follows:
“Waiver of Jury Trial. LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE DEMISED PREMISES
(INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR ANY
CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD
TO ENTER INTO AND ACCEPT THIS LEASE.”
K. Address for Notice. Landlord’s address for notices in Section 1(m) of the
Lease shall be changed to:
Pinnacle Industrial Dallas, Inc.
c/o SSR Realty Advisors, Inc.
One California Street, Suite 1400
San Francisco, California 94111
Attn: Pinnacle Industrial Park Asset Manager

 

5

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With a copy to:
IDI
3424 Peachtree Road, N.E., Suite 1500
Atlanta, Georgia 30326
Attn: Pinnacle Industrial Park Property Manager
L. Representations and Warranties. Tenant hereby represents, warrants and agrees
that: (i) there exists no breach, default or event of default under the Lease,
as amended by this Amendment, or any event or condition which, with notice or
passage of time or both, would constitute a breach, default or event of default
on the part of Tenant under the Lease, as amended by this Amendment; (ii) the
Lease, as amended by this Amendment, continues to be a legal, valid and binding
agreement and obligation of Tenant; (iii) to Tenant’s actual knowledge, Landlord
is not in default under the Lease, as amended by this Amendment; and (iv) Tenant
has no offset or defense to its performance or obligations under the Lease, as
amended by this Amendment. Landlord hereby represents, warrants and agrees that:
(w) there exists no breach, default or event of default under the Lease, as
amended by this Amendment, or any event or condition which, with notice or
passage of time or both, would constitute a breach, default or event of default
on the part of Landlord under the Lease, as amended by this Amendment; (x) the
Lease, as amended by this Amendment, continues to be a legal, valid and binding
agreement and obligation of Landlord; (y) to Landlord’s actual knowledge,
without inquiry, Tenant is not in default under the Lease, as amended by this
Amendment; and (z) at the date of this Amendment, the Building is not encumbered
by the lien of a mortgage or deed of trust.
M. Broker. Tenant and Landlord warrant that they have had no dealings with any
broker or agent in connection with this Amendment other than IDI, whose
commission shall be paid by Landlord. Landlord and Tenant covenant to pay, hold
harmless and indemnify each other from and against any and all cost, expense or
liability for any compensation, commission or charges claimed by any other
broker or agent utilized by the indemnitor with respect to this Amendment or the
negotiation hereof.
IV. GENERAL
A. Effect of Amendment; Ratification. Except to the extent the Lease is
expressly modified by this Amendment, the terms and provisions of the Lease
shall remain unmodified and in full force and effect. In the event of conflict
between the terms of the Lease and the terms of this Amendment, the terms of
this Amendment shall prevail.
B. Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument.
C. Governing Law. The Lease, this Amendment, and any enforcement of the
agreements and modifications set forth therein or herein, shall be governed by
and construed in accordance with the laws of the state where the Demised
Premises is located.

 

6

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D. Sole Agreement. The Lease and this Amendment shall constitute the sole
agreement between Landlord and Tenant respecting the Demised Premises and the
leasing of the Demised Premises to Tenant. No other agreements or understandings
shall be effective.
E. Time of the Essence. Time is of the essence of this Amendment and each and
every provision hereof.
F. Attorneys’ Fees. The provisions of the Lease respecting payment of attorneys’
fees shall also apply to this Amendment.
G. Authority to Execute. Tenant represents that each of the individuals
executing this Amendment on behalf of Tenant is duly authorized to execute and
deliver this Amendment on behalf of Tenant and agrees to deliver evidence of
such authority to Landlord upon request by Landlord.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Lease as
of the date and year first above written.

                              LANDLORD:       TENANT:    
 
                            PINNACLE INDUSTRIAL DALLAS, INC.,       TANDY BRANDS
ACCESSORIES, INC.,     a Delaware corporation       a Delaware corporation    
 
                            By:               By:   /s/ Stan Ninemire          
               
 
  Name:               Name:   Stan Ninemire    
 
  Title:               Title:   Executive Vice President    
 
                            Date of Execution: September ___, 2003       By:    
                                 
 
                  Name:        
 
                  Title:  
 
   
 
                     
 
   
 
                                            Date of Execution: September ___,
2003    

 

7

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EXHIBIT A
EXPANSION PREMISES
(GRAPHIC) [c05410c0541003.gif]

 

A-1

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Re:  
Pinnacle Park II
3631 West Davis Street
Dallas, Texas 75211

THIRD AMENDMENT TO LEASE

         
THE STATE OF TEXAS
  §    
 
  §   KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS
  §    

THIS THIRD AMENDMENT TO LEASE (this “Amendment”) has been executed as of (but
not necessarily on) the 24th day of August, 2009, by THE REALTY ASSOCIATES FUND
VII, L.P., a Delaware limited partnership (“Landlord”), and TANDY BRANDS
ACCESSORIES, INC., a Delaware corporation (“Tenant”).
R E C I T A L S:
A. Pinnacle Industrial Center Limited, Partnership, a Texas limited partnership
(“Original Landlord”) and Tenant have heretofore executed that certain
Industrial Lease Agreement (the “Original Lease”) dated September 24, 1999, as
amended and/or affected by Tenant Acceptance of Demised Premises dated
                    , 2000, by First Amendment to Industrial Lease Agreement
dated January 5, 2000, Second Amendment to Lease (Expansion of Demised Premises)
dated September 4, 2003, Agreement and Acknowledgement dated February 29, 2008
and Subordination of Landlord’s Lien dated March 25, 2008 (the Original Lease,
as so amended, the “Lease”), pursuant to which Tenant is currently leasing
approximately 163,772 rentable square feet (the “Current Premises”) in the
above-referenced Building, as more particularly described in the Lease (the
“Building”). Unless otherwise defined herein, all initially capitalized terms
used herein will have the respective meanings assigned thereto in the Lease.
B. Landlord has acquired title to among other property, the Building and all of
Original Landlord’s interest under the Lease.
C. Landlord and Tenant desire to execute this Amendment in order to evidence
their agreement to (i) expand the Current Premises; (ii) extend the Term; and
(iii) make certain other amendments to the Lease, all as more particularly set
forth in this Amendment.
NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:
THIRD AMENDMENT TO LEASE – Page 1 of 26

 

 

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ARTICLE I
CERTAIN AMENDMENTS
Section 1.01 Second Expansion Premises. As of the date the Contingency (as
hereinafter defined) is satisfied, estimated to be on or about December 1, 2009,
but in any event to be not earlier than the date that the current tenant and
occupant of the Second Expansion Premises has vacated same and has removed all
furniture, fixtures and personal property therefrom such that the Refurbishment
Work (as defined below) may be commenced immediately (the “Second Expansion
Premises Effective Date” or “SEPED”), subject to the terms, conditions and
contingencies set forth herein, and regardless of whether the Refurbishment Work
is completed, the Current Premises shall be expanded to include approximately
61,130 rentable square feet in the Building as shown cross-hatched on Exhibit A
of this Amendment (the “Second Expansion Premises”; and together with the
Current Premises, the “Premises”). As a result, the Premises covered under the
Lease will equal approximately 224,902 rentable square feet in the Building;
provided, further, that from and after the SEPED, the term “Demised Premises” as
used in the Lease shall mean and refer to, and shall be one and the same as, the
“Premises” described above.
Section 1.02 Tenant’s Operating Expense Percentage. As of the Second Expansion
Premises Effective Date, Tenant’s Operating Expense Percentage shall be amended
to be 68.152% (i.e., 224,902 rentable square feet in the Premises divided by
330,000 rentable square feet in the Building).
Section 1.03 Term. The Term is hereby extended through and including January 31,
2020, subject to adjustment and earlier termination as provided in the Lease.
Except as set forth in Exhibit B of this Amendment, Tenant shall have no further
renewal rights or options and all of such rights or options, if any, are hereby
deleted.
Section 1.04 Base Rent. As of the Second Expansion Premises Effective Date, the
Base Rent due and payable by Tenant to Landlord under the Lease with respect to
the entire Premises (i.e., the Current Premises and the Second Expansion
Premises) shall be as follows:

                      Annual     Monthly   Period*:   Base Rent Per R.S.F.:    
Base Rent:  
Second Expansion Premises Effective Date – 150th day following SEPED**
  $ 0.00     $ 0.00  
151st day following SEPED – 1/31/13
  $ 3.35     $ 62,785.14  
2/1/13 – 1/31/18
  $ 3.55     $ 66,533.51  
2/1/18 – 1/31/20
  $ 3.75     $ 70,281.88  

      *  
Note: Pursuant to the above schedule, Tenant’s Base Rent obligation for the
Current Premises is reduced.
  **  
To the extent that the Refurbishment Work is not sufficiently completed by the
date which is 150 days following the SEPED so that the Second Expansion Premises
can be used and occupied by Tenant for the uses and purposes permitted and
contemplated hereunder, and if such failure to so sufficiently complete is due,
in whole or in part, to Landlord’s (or its agents’, employees’ or contractors’)
acts or omissions to act, then the Base Rent shall thereafter be further
equitably abated until the date that such Refurbishment Work is so substantially
completed.

THIRD AMENDMENT TO LEASE – Page 2 of 26

 

 

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The Base Rent under the Lease shall be due and payable in equal monthly
installments, each such monthly installment due and payable on the first day of
each calendar month, in advance, without demand and without setoff or deduction
whatsoever (except, in each such case, as may be otherwise expressly set forth
in the Lease or herein). Prior to the Second Expansion Premises Effective Date,
the Base Rent shall remain as set forth in the Lease.
Section 1.05 AS IS; Refurbishment Work. Landlord is leasing the Premises to
Tenant “as is” “where without representation or warranty, either express or
implied, without any obligation to alter, remodel, improve, repair or decorate
any part of the Premises; provided, however, Landlord shall provide Tenant with
an allowance (the “Refurbishment Allowance”) in an amount equal to $674,706.00
to perform improvements to the Premises (the “Refurbishment Work”, which
Refurbishment Work shall be deemed a “Tenant’s Change” under Section 18(a) of
the Original Lease, provided, however, that to the extent that any conflicts or
contradictions may exist between Section 18 of the Original Lease and this
Amendment, the terms and conditions of this Amendment shall be controlling [so
that, by way of example and not limitation, if the Refurbishment Work
contemplated by the plans and specifications approved by Landlord and Tenant as
provided below includes “structural” changes or work, then such structural work
shall be a permitted Tenant’s Change notwithstanding any provision of said
Section 18 to the contrary]) pursuant to plans and specifications approved by
Landlord and Tenant in writing (such approval not to be unreasonably withheld or
delayed). Tenant shall pay Landlord all costs of the Refurbishment Work in
excess of the Refurbishment Allowance, and Landlord shall have the right to
deduct all costs or the Refurbishment Work from the Refurbishment Allowance.
Upon Landlord’s request (to be made before Landlord enters into any contracts to
perform the Refurbishment Work), Tenant shall deposit with Landlord the amount
by which the total agreed contract price for the applicable Refurbishment Work
exceeds the amount of the Refurbishment Allowance, and Landlord shall have no
obligation to perform the Refurbishment Work unless Tenant has deposited such
funds (the “Deposit”) with Landlord. Landlord shall maintain the funds so
deposited by Tenant in a separate, FDIC insured account. Such funds deposited by
Tenant (and interest earned on such funds, which, as between Landlord and
Tenant, shall be deemed income of Tenant) shall be placed in an interest bearing
account for the sole purpose of paying for the agreed costs of the Refurbishment
Work which are in excess of the Refurbishment Allowance. The Refurbishment Work
shall be performed only by contractors engaged by Landlord utilizing a
guaranteed maximum price contract form providing for the fixed price agreed to
by Landlord and Tenant in the approved budget described below; provided,
however, (i) Tenant may elect to provide Landlord with the name(s) of general
contractor/contractors to participate in the competitive bidding process,
(ii) Tenant may review the summary bid sheet and select the general contractor,
and (iii) all general contractors must meet all of Landlord’s insurance
requirements and qualifications. Landlord will use commercially reasonable
efforts to cause construction of the Refurbishment Work to be commence promptly
after approval of the plans and selection of the general contractor and will use
commercially reasonable efforts to cause such work to be diligently performed to
completion. At the conclusion of the
THIRD AMENDMENT TO LEASE – Page 3 of 26

 

 

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above-described competitive bidding process, Landlord and Tenant shall mutually
and reasonably agree upon the budget and fixed price for the Refurbishment Work,
and such fixed price shall be the total guaranteed maximum price to be set forth
in the above-described construction contract(s); provided, further, that it is
agreed that Tenant shall thereafter not be liable or responsible for any costs
incurred in connection with the Refurbishment Work which is in excess of such
agreed guaranteed maximum price, except (A) any costs in excess of such amount
which Tenant agrees to pay in written change orders executed by Tenant in
advance in writing (and Landlord may require Tenant to increase its
above-described Deposit by the amount of such costs so agreed to, concurrently
with the full execution and delivery of such agreed change order), (B) any costs
in excess of such amount that are incurred due to damages or disruption to the
Refurbishment Work caused directly by Tenant and/or any of Tenant’s agents,
employees or contractors, and (C) any increases in costs or additional costs
that are permitted under the guaranteed maximum price contract due to
exceptions, conditions and/or exclusions to the guaranteed maximum price
contained in the guaranteed maximum price contract (but only if such exceptions,
conditions and exclusions are part of a standard AIA contract and are beyond the
control of Landlord, or if Tenant has first approved in writing any and all
exceptions, conditions and exclusions that are not part of a standard AIA
contract). Within 60 days after final completion of the Refurbishment Work
(including all punch-list items) and Landlord’s receipt of all draw requests for
the Refurbishment Work, Landlord shall prepare for Tenant’s review and approval
a reconciliation of the total costs of the Refurbishment Work (including
reasonable supporting documentation requested by Tenant). If as a result of
payments made by Tenant to Landlord pursuant to this Section (and interest
earned on such payments), Tenant has overpaid or underpaid for the actual cost
of the Refurbishment Work as set forth in such reconciliation, then Landlord or
Tenant (as applicable) shall pay the other within 30 days of delivery of the
reconciliation for such overpayment (including from funds deposited by Tenant
with Landlord) or underpayment (as applicable), subject however to the terms,
limitations and conditions set forth in this Section 1.05. Tenant acknowledges
that Landlord’s contractors may construct the Refurbishment Work while Tenant
occupies the Premises, that the construction of the Refurbishment Work may
prevent Tenant from using all or part of the Premises from time to time and that
the construction of the Refurbishment Work may create noise dust and debris that
will interfere with Tenant’s use of the Premises, but Landlord agrees that
Landlord and its contractor(s) shall reasonably endeavor to minimize, to the
extent reasonably possible, any interference with Tenant’s use or occupancy of
the Premises from such Refurbishment Work. Tenant acknowledges and agrees that
it shall have no right to any abatement of rent or to recover any other damages
from Landlord due to its inability to use all or portions of the Premises while
the Refurbishment Work is being completed or due to interference with its
business operations caused by such construction except as is otherwise expressly
set forth above. Tenant shall reasonably cooperate with Landlord’s contractors
in completing the Refurbishment Work and Landlord’s Contractors are hereby
granted authority to enter the Premises to complete the Refurbishment Work.
Landlord and Tenant shall reasonably coordinate the completion of the
Refurbishment Work in order to minimize disruptions to Tenant’s business
activities, but Landlord shall have no obligation to incur costs in order to
minimize such disruptions. Landlord shall notify Tenant in writing when Landlord
believes that the Refurbishment Work is substantially completed and ready for
inspection, and representatives of Landlord and Tenant shall then inspect the
Premises together and shall identify (and mutually and reasonably agree upon)
any and all items requiring completion (the “Punchlist Items”), which list of
Punchlist Items shall be attached to the Confirmation to be executed pursuant to
Section 1.09 hereof, and Landlord shall thereafter, but in any event within
30 days, complete or repair all such Punchlist Items. Tenant shall be solely
responsible for
THIRD AMENDMENT TO LEASE – Page 4 of 26

 

 

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moving its personal property (e.g., computers, telephone equipment, cabling, and
photocopy machines) from time to time, at Tenant’s sole expense, to facilitate
the completion of the Refurbishment Work, and Landlord and its contractors shall
have no obligation to move any of Tenant’s personal property. Landlord or its
agent shall supervise the Refurbishment Work, make disbursements from the funds
deposited with Landlord required to be made to the contractor, and act as a
liaison between the contractor and Tenant and coordinate the relationship
between the Refurbishment Work, the Building, and the Building’s systems. In
consideration for Landlord’s construction supervision services, Tenant shall pay
to Landlord a construction supervision fee equal to 3% of the total costs
(including “hard” and “soft” costs as such terms are commonly understood in the
area of the Building in connection with tenant improvement construction) related
to the Refurbishment Work, which Landlord may deduct from the Refurbishment
Allowance. Any unused portion of the Refurbishment Allowance as of December 31,
2010 shall be the property of Landlord.
Section 1.06 Brokers. Landlord and Tenant represent to the other that it has not
dealt with any broker or agent in connection with the negotiation or execution
of this Amendment except Holt Lunsford Commercial and Jackson & Cooksey. Ltd.
(collectively, “Broker”). Landlord will be responsible to pay the commission, if
any, owed to Broker pursuant to the terms of a separate written agreement.
Landlord and Tenant hereby indemnify the other from any claims, losses, damages
(including attorneys’ fees) resulting from a breach by the indemnifying party of
the above representation.
Section 1.07 Extension Option. Tenant shall have an extension option in
accordance with Exhibit B of this Amendment.
Section 1.08 Miscellaneous Amendments to Lease.
A. The “Permitted Use” (defined in Section 1(l) of the Original Lease) is
amended to include office use as a permitted primary use, subject to Section
7(d) of the Original Lease; provided, that Landlord hereby represents and
warrants that during the undersigned Landlord’s ownership of the Project the
undersigned Landlord has not granted or created any restrictive covenants or
other agreements currently encumbering the Project or Premises that prevent
office use in the Project or Premises.
B. The “management fees” component of Operating Expenses is currently 3% and
during the remainder of the Term shall not materially exceed management fees of
comparable projects. Landlord further agrees that there shall hereafter be
excluded from Operating Expenses (and tenant shall accordingly not be obligated
to pay a proportionate share of) the following except to the extent any of the
following are specifically identified as being an “Operating Expense” (or a
component of Operating Expenses, such as “real property taxes”) under the Lease
or this Amendment (i) any costs or expenses which, under generally accepted
accounting principles consistently applied, would not be considered to be an
operating expense of the Building or Premises, and (ii) any other costs or
expenses which are not then customarily passed through to, and paid or
contributed to by, tenants of reasonably comparable projects or properties of
comparable type and quality in the portions of the U.S. Interstate-30 corridor
situated in the western sector of Dallas, Texas and in Grand Prairie, Texas. For
example, since the cost of snow removal is specifically identified as being a
specific Operating Expense under the Lease, the cost of snow removal shall be
included in Operating Expenses regardless of whether subsections (i) or
(ii) above apply.
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C. All utilities serving the Premises shall be obtained by Tenant directly from
the utility provider and Landlord shall have no obligation to furnish any
utilities to the Premises. If a failure of electricity service to the Premises
continues for more than 15 consecutive business days, causes the Premises to be
unusable for Tenant’s intended use, is caused by the gross negligence or willful
misconduct of Landlord and is within the reasonable control of Landlord to
restore within such 15 consecutive day period (except for interruptions
attributable to a casualty, which are addressed under Section 20 of the Lease),
then Tenant shall be entitled, as its sole and exclusive remedy, to a reasonable
abatement of Base Rent for each consecutive day (after such 15-day period) that
the Premises are untenantable and Tenant does not use the Premises.
D. The reference to “roof” in Section 10(b) of the Original Lease is amended to
be “roof (full roof replacement only, with all other roof repairs and
maintenance being included in Operating Expenses)”.
E. Landlord shall perform its obligations under Section 19 of the Original Lease
in a commercially reasonable manner.
F. The second sentence of Section 4(a) of Exhibit C of the Original Lease is
deleted and replaced with the following: “Such insurance shall contain a
commercially reasonable amount of coverage consistent with comparable projects”.
G. The following is added to Section 4 of Exhibit C of the Original Lease:
“(c) Upon Tenant’s request, Landlord shall provide Tenant proof of the insurance
it is required to maintain under the Lease.”
H. As provided in Section 18(a) of the Original Lease, Tenant shall not be
required to remove or restore any “Tenant’s Change” (as defined in Section 18(a)
of the Original Lease) unless Landlord conditioned its approval of the Tenant’s
Change upon restoration; provided, further, that Tenant shall not, in that
regard, be required to remove or restore any of the original Improvements and/or
Tenant Changes (each as defined in Section 17(a) of the Original Lease)
construed with regard to the Premises pursuant to Section 17 of the Original
Lease.
I. Upon the expiration of the Term Tenant shall have the right to remove its
trade fixtures, subject to and in accordance with Section 12 of the Original
Lease; provided, further, that if the Refurbishment Work includes the purchase
and installation of a generator, then Tenant shall be entitled to remove the
generator.
THIRD AMENDMENT TO LEASE – Page 6 of 26

 

 

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J. During the Term of the Lease, subject to the terms and conditions of the
Lease, Tenant shall have the non-exclusive right, at Tenant’s sole cost and
expense and subject to Laws (as hereinafter defined), to construct and install 1
sign on the exterior of the Premises (the “Building Signage”). The location
graphics, material, size, lighting, color and installation of the Building
Signage shall be subject to the prior written consent of Landlord; provided,
however, that such consent shall not be unreasonably withheld or delayed by
Landlord and provided, further, that Landlord in any event hereby approves the
Tenant’s existing sign currently situated on the exterior of the Premises for
all purposes hereunder (if Tenant desires or elects to simply retain such
existing sign in place). In addition, Tenant shall maintain the Building Signage
in a neat, clean and first-class appearance. Tenant shall maintain the Building
Signage at Tenant’s sole cost and expense (including, without limitation,
electricity) and in conformity with all federal, state, and local laws,
ordinances, rules and regulations, all court orders, governmental directives,
and governmental orders and all interpretations of the foregoing, and all
restrictive covenants (including, without limitation, the approval of any
property owner associations) and other matters affecting the Building (“Laws”)
and remove the same and repair and restore all damage caused by such removal at
the expiration or earlier termination of the Lease or Tenant’s right to maintain
the Building Signage; provided, however, Landlord shall have the right to repair
and restore all damage at Tenant’s sole cost and expense.
K. Notwithstanding the foregoing, Tenant may make, without Landlord’s prior
written consent but with at least 30 days’ prior written notice to Landlord (the
“Tenant’s Cosmetic Alterations Notice”) and in accordance with the other terms
and conditions of the Lease concerning Tenant’s Changes (as defined in Section
18(a) of the Original Lease)(including any applicable rules and regulations for
the Building), Tenant’s Changes that satisfy all of the following criteria
(“Cosmetic Alterations”): (1) is of a cosmetic nature such as painting (but not
wallpapering), hanging pictures and installing carpeting; (2) is not visible
from the exterior of the Premises or Building; (3) will not affect the Buildings
systems or Building’s structure; (4) does not require work to be performed
inside the walls or above the ceiling of the Premises; and (5) cost less than
$25,000 per occurrence. The Tenant’s Cosmetic Alterations Notice must describe
the scope of Cosmetic Alterations to be done, the date the Cosmetic Alterations
will be commenced, the estimated cost and the name of the person or persons
performing the Cosmetic Alterations or furnishing materials. Landlord shall have
the right, by giving Tenant written notice within ten (10) days of Landlord’s
receipt of Tenant’s Cosmetic Alterations Notice, to require Tenant to remove
Cosmetic Alterations upon the expiration or earlier termination of the Lease.
L. The following is added after the second, third, fourth and fifth references
to “Demised Premises” in Section 21 of the Lease: “(and/or Building (Common
Areas)”.
M. Section 24(f) of the Original Lease is deleted and replaced with the
following:
“(f) In the event Landlord encumbers the Building and/or Demised Premises with a
Mortgage at any time after the date hereof and Tenant is notified of same
(provided, that Landlord hereby represents and warrants to Tenant that the
Building and/or Demised Premises is not currently subject to a ground lease or
encumbered by a Mortgage, and Landlord further hereby agrees to notify Tenant in
writing promptly following the grant of any Mortgage hereafter
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by Landlord, or its successors or assigns, which encumbers the Building and/or
Demised Premises in whole or in part), and Tenant notifies Landlord in writing
that Tenant requests a subordination and non-disturbance agreement (an “SNDA”)
on Landlord’s Lender’s standard commercially reasonable form, Tenant’s
subordination and attornment obligations under this Section shall be conditioned
on such Lender and Tenant entering into an SNDA in commercially reasonable form
and content and mutually and reasonably satisfactory to both Tenant and such
Lender. Tenant agrees to execute and deliver such an SNDA within 10 days of
Landlord’s request and reimburse Landlord for reasonable fees charged by such
Lender in connection with preparing, negotiating and delivery of the SNDA, and
if Tenant fails to execute and deliver the SNDA, then the Lease shall be
subordinate to any such Lender.”
N. The first sentence of Section 26 of the Original Lease is deleted.
O. In the event Landlord elects to Terminate the Lease pursuant to
Section 29(b)(i) of the Original Lease, Tenant, within 10 days following the
date of delivery to Tenant of such termination notice, Tenant shall have the
right, as its sole remedy, to revoke its request for said subletting or
assignment by giving Landlord written notice of such revocation. If Landlord has
sent the termination notice, and Tenant fails to revoke said request within said
10-day period, the Lease will terminate, subject to the terms and conditions set
forth in this Section.
P. Intentionally deleted.
Q. In the event of any express conflict between the express terms of the Lease
and the terms of the rules and regulations (as they may be amended), the express
terms of the Lease will govern.
R. Notwithstanding anything to the contrary set forth in the Lease (including,
without limitation, in Section 22(a)(iii) of the Original Lease), it is hereby
agreed that Tenant shall in no event be required to continuously occupy the
Premises or to conduct business therein, it being hereby further agreed that
Tenant shall thus be entitled to “go dark” at the Premises at any time during
the Term of the Lease (as extended hereby) and that any such failure by Tenant
to occupy the Premises or to conduct business thereat shall not constitute a
default or Event of Default under the Lease so long as Tenant continues to pay
all rent and other charges due and payable by Tenant under the Lease and so long
as Tenant continues to comply with all other applicable provisions of the Lease
pertaining to such Premises (including, without limitation, maintaining all
insurance required to be maintained by Tenant under the Lease with respect
thereto and maintaining and repairing the Premises in accordance with Tenant’s
obligations and requirements under the Lease).
Section 1.09 Second Expansion Premises Effective Date Confirmation. Promptly
following the substantial completion of the Refurbishment Work, Landlord and
Tenant shall execute the Second Expansion Premises Effective Date Confirmation
attached to this Amendment as Exhibit C or another form mutually and reasonably
acceptable to Landlord and Tenant.
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Section 1.10 Additional Consideration (Letter of Credit). Simultaneously with
the execution of this Amendment, Tenant shall deposit with Landlord a letter of
credit in accordance with Exhibit D of this Amendment.
Section 1.11 Contingency. Tenant acknowledges that there is currently a tenant
leasing and/or occupying the Second Extension Premises. Accordingly, this
Amendment is contingent upon (the “Contingency”) both of the following: (a) the
current tenant vacating the Second Expansion Premises, and (b) the current
tenant entering into a lease termination, relocation or reduction agreement with
Landlord which provides for the current tenant to vacate the Second Expansion
Premises on or before December 31, 2009, on such terms and conditions as are
acceptable to Landlord, in Landlord’s sole discretion. In the event that the
Contingency has not been satisfied by Landlord by December 31, 2009, then, in
such event, Tenant or Landlord may elect, at their respective discretion, to
terminate this Amendment at any time after December 31, 2009 but before the
Contingency is satisfied, whereupon neither party hereto shall have any
liability to the other as a result of such termination; provided, however,
Tenant shall have no right to terminate this Amendment pursuant to this sentence
at any time after Landlord has commenced the performance of the Refurbishment
Work. Furthermore, in the event that Landlord and the current tenant have not
entered into such a lease termination, relocation or reduction agreement by
September 1, 2009, Tenant shall have the right to elect to terminate this
Amendment at any time after September 2009 but before such agreement is entered
into by Landlord and the current tenant, in which event Landlord shall (a) pay
for the cost of the construction drawings relating to the Refurbishment Work
(estimated to be $25,000.00), and (b) pay Tenant $65,000,00 within 30 days of
Tenant’s election to terminate this Amendment; provided, however, Tenant shall
have no right to terminate this Amendment pursuant to this sentence at any time
after Landlord has commenced the performance of the Refurbishment Work.
Section 1.12 Further Amendments. The Lease shall be and hereby is further
amended wherever necessary even though not specifically referred to herein, in
order to give effect to the terms of this Amendment.
Section 1.13 Signage. Subject to compliance thereof with all applicable
governmental laws, rules, regulations, codes and ordinances, Landlord hereby
grants Tenant the right throughout the Term of the Lease (as extended hereby and
as same may be further renewed or extended) to have, install and maintain one or
more signs on the Building, and one or more monument signs (for multi-tenant
usage) at or about the outside ground level of the Building (Tenant shall be
entitled to the top position on such monument sign(s)), all of which signs shall
be at Tenant’s sole cost and expense and installed and maintained at locations
to be mutually and reasonably agreed upon by and between Landlord and Tenant in
advance. Further, it is agreed that Tenant shall have the right to affix signs
and/or lettering on or about the walls, doors and lobby glass on the interior of
the Premises, so long as such signs comply with all applicable governmental
laws, rules, regulations and codes. Such signs shall be installed by Tenant at
Tenant’s sole cost and expense, except to the extent that such signs are agreed
by the parties to be purchased and/or installed as a part of the Refurbishment
Work as described hereinabove. The design and other relevant plans and
specifications for such signs shall be subject to the prior written approval of
Landlord (which approval shall not be unreasonably withheld, conditioned or
delayed), provided that such signs may in any event be the maximum size
permitted by applicable law. Upon the expiration or sooner termination of the
Lease, Tenant shall, at Tenant’s sole cost and expense, remove or cause to be
removed the Building sign(s) and shall repair all damage caused by such removal.
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Section 1.14 Parking. Landlord agrees that in addition to the lease of the
Premises as provided above, Tenant shall have and is hereby granted the
non-exclusive right (in common with other tenants of the Project and all others
to whom Landlord has granted or may grant such rights) to use the Building
Common Area (including all common areas, driveways and parking areas associated
with the Project) throughout the Term of the Lease (as extended pursuant hereto)
for the purposes intended, subject to such reasonable rules and regulations as
Landlord may establish therefore from time to time (including, without
limitation, rules and regulations to control overcrowding of the parking areas);
provided, that (a) at times when there are other tenants or occupants of the
Project, Tenant may not use in excess of its proportionate share of the parking
spaces located in the Building Common Area, and (b) Landlord agrees that the
Building Common Area shall at all times during the Term of the Lease (as
extended hereby) contain the access ways and driveways and Tenant shall be
entitled to not less than its proportionate share of the number of parking
spaces currently situated within the Building Common Area, all in the same
general location and configuration as is in place in the Building Common Area as
of the effective date of this Amendment, and provided, further, that Landlord
additionally agrees that no such parking spaces or areas shall at any time
during the Term of the Lease (as extended hereby) be reserved or limited in any
way, including for the exclusive use of any tenant, occupant or other person or
party entitled to utilize any such portion of the Building Common Area (except
to the extent required by applicable law to be reserved for handicap use and
except if required to control overcrowding of the parking areas). Landlord
hereby further agrees that parking in the Building Common Area shall be limited
to vehicles no larger than standard sized automobiles or pick up trucks,
trailers and utility vehicles, and that no rights to use of any such parking
areas in the Building Common Areas shall be granted by Landlord to any persons
or parties other than the tenants of the Building and Project and their
respective employees, agents, subtenants, licensees, visitors, guests and
invitees. If any parking spaces in the Building Common Area become unavailable
to Tenant due to casualty damage, flooding, condemnation or repairs, Landlord
will use commercially reasonable efforts to provide Tenant with reasonably
satisfactory alternative parking arrangements until the use of such parking
spaces is restored.
ARTICLE II
MISCELLANEOUS
Section 2.01 Ratification. The Lease, as amended hereby, is hereby ratified,
confirmed and deemed in full force and effect in accordance with its terms. Each
party represents to the other that such party: (a) is currently unaware of any
default by the other party under the Lease; and (b) has full power and authority
to execute and deliver this Amendment and this Amendment represents a valid and
binding obligation of such party enforceable in accordance with its terms.
Tenant represents to Landlord that, except as set forth in this Amendment
(including with respect to the Refurbishment Work and Refurbishment Allowance):
(a) Landlord has completed all improvements to the Premises in compliance with
all requirements in the Lease; and (b) all tenant finish costs or allowances
payable by Landlord have been paid and no such costs or allowances are payable
hereafter under the Lease.
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Section 2.02 No Offer. The submission of this Amendment to Tenant shall not be
construed as an offer, nor shall Tenant have any rights under this Amendment
unless Landlord executes a copy of this Amendment and delivers it to Tenant.
Section 2.03 Counterparts. This Amendment may be executed in multiple
counterparts each of which is deemed an original but together constitute one and
the same instrument. This Amendment may be executed by facsimile or “pdf” and
each party has the right to rely upon a facsimile or “pdf” counterpart of this
Amendment signed by the other party to the same extent as if such party had
received an original counterpart.
Section 2.04 Governing Document. In the event the terms of the Lease conflict
with or are inconsistent with those of this Amendment, the terms of this
Amendment shall govern.
Section 2.05 Margin & Substitution Taxes. Notwithstanding anything in the Lease
to the contrary, the definition of “real property taxes” shall include the
following regardless of whether the following are expressly excluded by language
elsewhere in the Lease (a) all taxes allocated by Landlord to the Building
attributable to taxable margin levied pursuant to Chapter 171 of the Texas Tax
Code or any amendment, adjustment or replacement thereof (which amount shall be
calculated assuming that the Building is Landlord’s only asset and source of
income), and (b) any taxes, assessments, levies, impositions, tolls, excises,
tariffs, charges or fees imposed, levied or assessed in lieu of or in
substitution, addition or supplementation of other real property taxes.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, this Amendment has been executed as of (but not necessarily
upon) the date and year first above written.

                                  LANDLORD:        
 
                                THE REALTY ASSOCIATES FUND VII, L.P.,
a Delaware limited partnership        
 
                                By:   Realty Associates Fund VII, LLC
its General Partner        
 
                                    By:   Realty Associates Advisors, LLC,
its Manager
 
                           
 
          By:   Realty Associates Advisors Trust,
its Manager        
 
                           
 
              By:   /s/ Heather L. Hohenthal        
 
                           
 
                  Officer        

            TENANT:

TANDY BRANDS ACCESSORIES, INC.,
a Delaware corporation
      By:   /s/ N. Roderick McGeachy III         Name:   N. Roderick McGeachy
III        Title:   Chief Executive Officer        Date:   August 24, 2009   

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EXHIBIT A
SECOND EXPANSION PREMISES
(GRAPHIC) [c05410c0541004.gif]
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EXHIBIT B
EXTENSION OPTION
Notwithstanding anything to the contrary contained herein, Landlord hereby
grants to Tenant the option to extend the Term (“Extension Option”) for 1 period
of 5 years (“Extension Term”) commencing when the Term (as same has been
extended pursuant to the Amendment, herein so called, to which this Exhibit is
attached and made a part of) expires in accordance with and subject to each of
the following terms and conditions:
1. Extension Notice. If Tenant desires to exercise the Extension Option, Tenant
shall give Landlord written notice (the “Extension Notice”) (subject to
revocation only under Section 5 hereof) of Tenant’s exercise of the Extension
Option, which shall be delivered by U.S. certified mail, return receipt
requested or by a reputable overnight courier service. The Extension Notice must
be received by Landlord no later than the date that is 9 full months prior to
the date that the Extension Term would start and no earlier than the date that
is 15 full months prior to the date that the Extension Term would start. Time is
of the essence with respect to Landlord’s receipt of the Extension Notice and
all other deadlines in this exhibit.
2. Terms of Extension Term. During any Extension Term, all of the terms and
conditions of the Lease (excluding any terms conditions and options specifically
applicable to only the initial or any prior Term) except where specifically
modified by this exhibit shall apply. Tenant shall have no additional extension
option unless otherwise hereafter agreed in writing executed by both Landlord
and Tenant.
3. Rent for Extension Term. The Rent payable during an Extension Term shall be
the Market Rate on the date the Extension Term commences.
4. Definition of Market Rate. The term “Market Rate” shall mean the amount that
a willing, comparable renewal tenant would pay and a willing, comparable
landlord of a similar building in the portion of the U.S. Interstate-30 corridor
situated in the western sector of Dallas, Texas and in Grand Prairie, Texas
(including, but not limited to, Pinnacle Park, Grand Lakes, Lone Star and
Turnpike developments) would accept at arm’s length for similar space, giving
appropriate consideration to all relevant factors, including, without
limitation, the following matters: (i) annual rental rates per rentable square
foot; (ii) the type of escalation clauses (including, but without limitation,
operating expenses, real estate taxes, electrical costs and CPI) and the extent
of liability under the escalation clauses (i.e., whether determined on a “net
lease” basis or by increases over a particular base year or base dollar amount);
(iii) rent abatement provisions reflecting free rent and/or no rent during the
Extension Term; (iv) length of the Extension Term; (v) quality, size, utility
and location of the premises being leased; (vi) whether other renewal tenants
are receiving tenant improvements or refurbishment allowances; (vii) size and
credit standing of Tenant; (viii) the amount of the tenant improvement or
refurbishment allowance being given to Tenant; and (ix) other generally
applicable turns and conditions of tenancy for similar space. In no event shall
Landlord be obligated to provide Tenant with a tenant improvement or
refurbishment allowance. The Market Rate may also designate periodic rental
increases, a new base year(s) and similar economic adjustments. The Market Rate
shall be the Market Rate in effect as of the beginning of the Extension Term,
even though the determination may be made in advance of that date, and the
parties may use recent trends in rental rates in determining the proper Market
Rate as of the beginning of the Extension Term. The Market Rate will be an
effective rate, not specifically including, but accounting for the appropriate
economic considerations described above.
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5. Determination of Market Rate – Baseball Arbitration. If Tenant exercises an
Extension Option (in accordance with Section 1 hereof), Landlord shall determine
the initial proposed Market Rate by using its good faith judgment. Landlord
shall provide Tenant with written notice (“Landlord’s Notice”) of such amount
within 30 days after Tenant exercises such Extension Option. Tenant shall have
20 days (“Tenant’s Review Period”) after receipt of Landlord’s Notice within
which to reject such initial proposed Market Rate. In the event Tenant fails to
timely reject in writing such initial proposed Market Rate, then such initial
proposed Market Rate shall be deemed accepted. In the event Tenant timely
rejects in writing such Market Rate, Landlord and Tenant shall attempt to agree
upon the Market Rate, using their best good faith efforts. If Landlord and
Tenant fail to reach agreement within 15 days following Tenant’s Review Period
(“Outside Agreement Date”), then the parties shall each, by written notice
delivered to the other within 10 days following the Outside Agreement Date,
appoint a real estate broker who shall be licensed in the State or Commonwealth
in which the Premises are located and who specializes in the field of commercial
industrial space leasing in the market in which the Premises are located, has at
least 5 years of experience in such field and market and is recognized within
such field and market as being reputable and ethical. If one party does not
timely appoint a broker, then the broker appointed by the other party shall
promptly appoint a broker for such party having the qualifications described
above and who has not previously represented or worked for or with the party who
appointed the broker making such appointment. Such two individuals shall each
determine, within 10 days after their appointment, such Market Rate. If such
individuals do not agree on the Market Rate, then such two individuals shall,
within 5 days thereafter, render separate written reports of their
determinations and together appoint a third individual having the qualifications
described above and who has not previously worked for or with nor represented
either Landlord or Tenant. If the two brokers are unable to agree upon a third
individual, the individual shall be appointed by the presiding judge of the
county court for the county in which the Premises is located, or, if he or she
refuses to act, by any judge having jurisdiction over the parties. The third
individual shall within 10 days after his or her appointment make a
determination of such Market Rate. The third individual shall determine which of
the determinations of the first two individuals is closest to his or her own and
the determination that is closest shall be final and binding upon the parties,
and such determination may be enforced in any court of competent jurisdiction.
Landlord and Tenant shall each bear the cost of its broker and shall share
equally the cost of the third broker. If for any reason the Market Rate shall
not have been determined prior to the commencement of the Extension Term, then,
until the Market Rate and, accordingly, the Rent shall have been finally
determined, the Rent payable for and during the Extension Term shall be equal to
the Market Rate proposed by Landlord. If upon final determination of the Market
Rate, it shall have been determined that the Rent payable for and during the
Extension Term shall be different than the Rent actually paid by Tenant for the
Extension Term, then an appropriate adjustment shall be made to the Rent
actually paid by Tenant and (i) Tenant shall pay Landlord the amount due, if
any, as a result of such adjustment within 5 business days of the determination
of the Market Rate, and (ii) Tenant shall be entitled to a credit against future
Rent in the amount of the amount due, if any, as a result of such adjustment.
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6. Tenant’s Default. Notwithstanding the foregoing, (a) Tenant shall have no
right to exercise an Extension Option or deliver an Extension Notice at any time
in which an event exists which constitutes an Event of Default under the Lease,
and any delivery of an Extension Notice during such period of time shall be null
and void and of no effect, (b) if an Event of Default occurs under the Lease
(beyond the expiration of any applicable notice and/or cure periods) prior to
Tenant’s exercise of an Extension Option (in accordance with Section 1 hereof),
the Extension Option shall automatically become null and void, and (c) if after
Tenant’s exercise of an Extension Option (in accordance with Section 1 hereof)
but before the commencement of an Extension Term an Event a Default under the
Lease occurs (beyond the expiration of any applicable notice and/or cure
periods), then Landlord may elect, but is not obligated, by written notice given
to Tenant to cancel and declare null and void Tenant’s exercise of the Extension
Option, and the Lease shall continue in full force and effect for the full Term
hereof unaffected by Tenant’s exercise of the Extension Option. If Landlord does
not cancel Tenant’s exercise of the Extension Option, Tenant shall cure the
default within the period of time specified in the Lease.
7. No Extension Option After Transfer. The Extension Option is personal to the
originally named Tenant in the Lease or Lease amendment to which this exhibit is
attached (and an assignee pursuant to Section 7 of Exhibit C of the Original
Lease). If an assignment, sublease or other transfer occurs (other than an
assignment pursuant to Section 7 of Exhibit C of the Original Lease), the
Extension Option shall be deemed null and void and neither Tenant nor any
assignee, subtenant or other transferee shall have the right to exercise such
option. This condition may be waived in writing by Landlord at its sole and
absolute discretion and may not be used by Tenant as a means to negate the
effectiveness of Tenant’s exercise of an Extension Option.
8. Occupancy of Premises. The Extension Option may only be exercised while
Tenant is occupying at least 80,000 rentable square feet of the Premises, and at
Landlord’s election any delivery of an Extension Notice during any period of
time in which Tenant is not occupying at least 80,000 rentable square feet of
the Premises shall be null and void and of no effect.
9. No Extension Option After Exercise of Certain Options. Notwithstanding
anything in the Lease to the contrary, (a) if Tenant exercises any option
contained in the Lease, if any, to terminate the Lease or reduce the size of the
Premises, the Extension Option shall automatically become null and void upon
such exercise, and (b) if Tenant exercises an Extension Option, any rights of
Tenant under the Lease to terminate the Lease or reduce the size of the
Premises, if any, shall automatically become null and void upon such exercise.
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10. Brokerage Commissions. Landlord shall not be liable for any brokerage
commissions payable to any broker(s) representing Tenant related to any
extension pursuant to this exhibit except to the extent Landlord is responsible
for any such commissions pursuant to a separate written agreement with such
broker(s).
11. Amendment to Lease. Promptly after the determination of the Market Rate,
Landlord and Tenant shall enter into an amendment to the Lease to reflect the
Extension Term, which amendment shall be in commercially reasonable form and
content mutually and reasonably acceptable to both Landlord and Tenant.
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EXHIBIT C
SECOND EXPANSION PREMISES EFFECTIVE DATE CONFIRMATION

Landlord:  
THE REALTY ASSOCIATES FUND VII, L.P.

Tenant:  
TANDY BRANDS ACCESSORIES, INC.

This Second Expansion Premises Effective Date Confirmation (this “Confirmation”)
has been executed as of the  _____  day of                      , 2009, and is
made by Landlord and Tenant pursuant to that certain Third Amendment to Lease
dated as of                      , 2009 (the “Amendment”), for certain premises
located at Pinnacle Park II, 3631 West Davis Street, Dallas, Texas 75211 (the
“Premises”). This Confirmation is made pursuant to the Amendment.
1. Second Expansion Premises Effective Date. Landlord and Tenant hereby agree
that the Second Expansion Premises Effective Date (as defined in the Amendment)
is                      , 2009.
2. Acceptance of Premises. Tenant has inspected the Second Expansion Premises
and affirms that the Second Expansion Premises is acceptable in all respects in
its current “as is” condition, with the exception of any “Punchlist Items”
described in Schedule 1 attached hereto and made a part hereof.
3. Incorporation. This Confirmation is incorporated into the Amendment, and
forms an integral part thereof. This Confirmation shall he construed and
interpreted in accordance with the terms of the Lease for all purposes.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Confirmation has been executed as of (but not
necessarily on) the date and year first above written.

                                  LANDLORD:        
 
                                THE REALTY ASSOCIATES FUND VII, L.P.,
a Delaware limited partnership        
 
                                By:   Realty Associates Fund VII, LLC
its General Partner        
 
                                    By:   Realty Associates Advisors, LLC,
its Manager
 
                           
 
          By:   Realty Associates Advisors Trust,
its Manager        
 
                           
 
              By:            
 
                           
 
                  Officer        

            TENANT:

TANDY BRANDS ACCESSORIES, INC.,
a Delaware corporation
      By:           Name:   N. Roderick McGeachy III        Title:   Chief
Executive Officer        Date:      

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EXHIBIT D
ADDITIONAL CONSIDERATION (LETTER OF CREDIT)
1. General. As additional consideration for Landlord’s agreement to enter into
this Amendment, concurrently with Tenant’s execution and delivery of this
Amendment, and as a condition to Landlord’s obligations under the Lease, Tenant
covenants and agrees to deliver to Landlord, as additional consideration, an
irrevocable letter of credit (the “L/C”) in the form of, and upon all of the
terms and conditions contained in Exhibit D-1 attached hereto and incorporated
herein by reference. The L/C shall be issued by an institutional lender of good
financial standing (which lender shall in any event, have assets equal to or
exceeding $500,000,000 as of the date of issuance of the L/C), having a place of
business where the L/C can be presented for payment in Dallas, Texas and Boston,
Massachusetts. The lender shall be subject to Landlord’s prior written approval;
provided, that such approval shall in any event not be unreasonably withheld,
conditioned or delayed and provided, further, that Landlord hereby initially
approves Comerica Bank as the lender and issuer of the L/C for all purposes of
this Exhibit D. The L/C shall provide for 1 or more draws by Landlord or its
transferee up to the aggregate amount of US $500,000.00 (the “L/C Amount”) on
the terms and conditions of Exhibit D-1. Landlord and Tenant (1) acknowledge and
agree that in no event or circumstance shall the L/C or any renewal thereof or
substitute therefor or any proceeds thereof be deemed to be or treated as a
“security deposit” under any Law applicable to security deposits in the
commercial context (“Security Deposit Laws”), and (2) acknowledge and agree that
the L/C (including any renewal thereof or substitute therefor or any proceeds
thereof) is independent consideration separate and apart from the Security
Deposit and is not intended to serve as a security deposit, and the Security
Deposit Laws shall have no applicability or relevancy thereto.
2. Renewal of L/C. Tenant shall maintain the L/C in effect from the date of
Tenant’s execution of this Amendment until the date which is 60 days after
Tenant shall have performed all of its obligations under the Lease (said period
is hereinafter referred to as the “L/C Term”). If the expiration date of the L/C
(or any renewal or replacement L/C provided pursuant to this section) occurs
prior to the end of the L/C Term, then Tenant shall deliver to Landlord a
renewal of the L/C or a replacement L/C meeting all of the terms and conditions
of this section, not later than thirty (30) days prior to the then applicable
expiration date. Each L/C provided pursuant to this section shall have an
expiration date which is at least one (1) year from such L/C’s date of issue
except where the then applicable expiration date of the issue is less than one
(1) year from the end of the L/C Term, in which case the renewal or replacement
L/C shall be for such lesser period. The issuing bank’s agreement to place an
automatic renewal provision in the L/C, as required pursuant to said
Exhibit D-1, shall not relieve or release Tenant from its obligation to provide
a renewal or replacement L/C on the terms hereinabove stated, it being
understood that any such automatic renewal is an independent obligation of the
issuing bank which is intended for Landlord’s sole benefit. If Tenant fails to
provide the renewal or replacement L/C not later than thirty (30) days prior to
the then-applicable, stated expiration date (excluding automatic renewal
provisions), and if such failure is continuing ten (10) days following the
delivery by Landlord to Tenant of written notice thereof, such failure shall not
be a default by Tenant under the Lease, but Landlord shall thereupon have the
right, without notice or demand, on one or more occasions, to draw upon all or
any part of the remaining proceeds of the L/C, and hold the L/C proceeds as a
cash security deposit pursuant to the Lease and/or apply the L/C proceeds
pursuant to Section 4 of this Exhibit D.
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3. Draw on L/C. Landlord may elect from time to time, in Landlord’s sole
discretion, without notice or demand to Tenant, to draw upon all or any part of
the remaining proceeds of the L/C upon the occurrence of one or more of the
following events: (i) an Event of Default by Tenant occurs under the Lease which
is continuing beyond the expiration of all applicable notice and cure periods,
(ii) Tenant fails to perform any of its obligations under the Lease (including,
but not limited to, its obligations under this section), and Landlord is
precluded by law from giving Tenant the requisite notice needed for an Event of
Default to occur (i.e., a Tenant bankruptcy filing), or (iii) Tenant makes any
assignment for the benefit of all its creditors, Tenant declares bankruptcy or
is the subject of an involuntary bankruptcy proceeding, a trustee or receiver is
appointed to take possession of some or all of Tenant’s assets or, in Landlord’s
reasonable judgment, Tenant is insolvent (provided, that in the event any such
proceeding, filing or appointment is involuntary, such is not stayed or
dismissed within 60 days of the filing or entry thereof).
4. Application of L/C Proceeds. Landlord may elect, from time to time, upon
written notice to Tenant, in Landlord’s sole discretion, to apply the proceeds
it receives from a draw on the L/C in one or more of the following manners
without prejudice to any other remedies: (i) as payment for some or all of the
rent or other amounts due and owed by Tenant under the Lease but unpaid on the
date of such draw, (ii) as payment for some or all of the future amounts of rent
or other amounts payable by Tenant to Landlord under the Lease after the date of
the draw which are not paid as and when due, (iii) as payment for some or all of
the reasonable, out-of-pocket costs Landlord may incur as a result of Tenant’s
failure to perform its obligations under the Lease, (iv) as collateral for lease
obligations of Tenant, and/or (v) in any other manner permitted by the Lease or
applicable law. Landlord may make one or more partial draws under the L/C and
shall have the right, upon written notice to Tenant, to treat each draw or a
portion thereof in one or more of the ways described in the previous sentence.
Tenant hereby waives any other law or regulation that may be inconsistent with
the terms and conditions of this section.
5. Enforcement. Tenant’s obligation to furnish the L/C shall not be released,
modified or affected by any failure or delay on the part of Landlord to enforce
or assert any of its rights or remedies under the Lease or this section, whether
pursuant to the terms thereof or at law or in equity. Landlord’s right to draw
upon the L/C shall be without prejudice or limitation to Landlord’s right to
draw upon any security deposit provided by Tenant to Landlord or to avail itself
of any other rights or remedies available to Landlord under the Lease or at law
or equity.
6. Intentionally Deleted.
7. Conflict. If there is any conflict between the terms and conditions of this
section and the terms and conditions of the Lease, the terms of this section
shall control.
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8. Reduction in Amount of L/C. So long as (a) an Event of Default by Tenant has
not occurred under the Lease which is continuing beyond the expiration of all
applicable notice and cure periods, (b) Tenant has not assigned, sublet, or
transferred the Lease or the Premises except for an assignment pursuant to
Section 7 of Exhibit C of the Original Lease, and (c) Landlord has not drawn
upon the L/C, Tenant shall have the right to reduce the L/C Amount as follows:

          Date:   LC Amount:  
 
       
January 1, 2011
  $ 419,000.00  
January 1, 2012
  $ 330,000.00  
January 1, 2013
  $ 230,000,00  
January 1, 2014
  $ 121,000.00  

The documents evidencing the reduction of the L/C shall be satisfactory to
Landlord, in Landlord’s sole discretion.
9. Elimination of L/C and New Security Deposit. So long as (a) an Event of
Default by Tenant has not occurred under the Lease which is then continuing
beyond the expiration of all applicable notice and cure periods, (b) Tenant has
not assigned, sublet, or transferred the Lease or the Premises except for an
assignment pursuant to Section 7 of Exhibit C of the Original Lease, and
(c) Landlord has not drawn upon the L/C, on or after January 1, 2015 Tenant
shall have the right to deposit with Landlord an additional Security Deposit in
the amount of $102,225.76 to he held by Landlord in accordance with the Lease,
so that the total Security Deposit held by Landlord under the Lease shall equal
$140,563.76 (i.e., $38,338.00 plus $102,225.76), and upon receipt of such cash
Security Deposit Landlord shall allow the L/C to be cancelled.
THIRD AMENDMENT TO LEASE – Page 22 of 26

 

 

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EXHIBIT D-1
LETTER OF CREDIT
SPECIMEN LANGUAGE ONLY (“EXHIBIT A”) REVISED 07/28/09
COMERICA BANK HAS PREPARED THIS SPECIMEN UPON THE REQUEST AND BASED ON THE
INFORMATION PROVIDED. NO REPRESENTATION AS TO THE ACCURACY OR WILLINGNESS FOR
COMMITMENT IS MADE BY COMERICA BANK TO ISSUE THIS LETTER OF CREDIT IN THIS OR
ANY OTHER FORM.
APPROVED BY                                          DATE                     
***********************************************************************************************************
COMERICA BANK
INTERNATIONAL TRADE SERVICES
6260 E. MOCKINGBIRD, 2ND FLOOR
DALLAS, TEXAS 75214
TELEX NO: 3772597
FAX NO.: 214-828-5992
SWIFT: MNBDUS4D
PHONE:                                           

      IRREVOCABLE STANDBY LETTER OF CREDIT NO. *****   DATE OF ISSUE: <date>

                 
“BENEFICIARY”
    :     THE REALTY ASSOCIATES FUND VII, L.P.
 
          C/O TA ASSOCIATES REALTY
 
          28 STATE STREET, 10TH FLOOR
 
          BOSTON, MA 02109
 
          ATTN: ASSET MANAGEMENT DEPARTMENT
 
               
“ACCOUNT PARTY”
    :     TANDY BRANDS ACCESSORIES, INC.
 
               
“EXPIRY DATE”
    :     <date>, OR ANY AUTOMATICALLY EXTENDED DATE, AS HEREIN DEFINED. IN NO
EVENT WILL THIS LETTER OF CREDIT EXTEND BEYOND <date>
 
               
“TOTAL AMOUNT”
    :     USD amount (amount U.S. DOLLARS)

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR, FOR
THE ACCOUNT PARTY, FOR A SUM NOT EXCEEDING THE TOTAL AMOUNT, STATED ABOVE,
AVAILABLE WITH COMERICA BANK, BY PRESENTATION OF THE FOLLOWING:

  1.  
THIS ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS HERETO.

  2.  
DEMAND IN THE FORM OF “ANNEX A”

THIRD AMENDMENT TO LEASE – Page 23 of 26

 

 

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IF A DEMAND FOR PAYMENT MADE BY YOU HEREUNDER DOES NOT, IN ANY INSTANCE CONFORM
TO THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, WE SHALL GIVE YOU WRITTEN
NOTICE WITHIN ONE (1) BUSINESS DAY THAT THE DEMAND FOR PAYMENT WAS NOT EFFECTED
IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, STATING
THE REASONS THEREFOR AND THAT WE WILL UPON YOUR INSTRUCTIONS HOLD ANY DEMAND AT
YOUR DISPOSAL OR RETURN THE SAME TO YOU. UPON BEING NOTIFIED THAT THE DEMAND FOR
PAYMENT WAS NOT EFFECTED IN CONFORMITY WITH THIS LETTER OF CREDIT, YOU MAY
ATTEMPT TO CORRECT ANY SUCH NON-CONFORMING DEMAND FOR PAYMENT TO THE EXTENT THAT
YOU ARE ENTITLED TO DO SO AND WITHIN THE VALIDITY OF THIS LETTER OF CREDIT.
PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS PERMITTED.
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY
EXTENDED WITHOUT AMENDMENT FOR A PERIOD OF ONE YEAR FROM THE PRESENT OR ANY
FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION
DATE WE SHALL SEND TO YOU BY COURIER OUR WRITTEN NOTICE THAT WE ELECT NOT TO
EXTEND THIS CREDIT FOR ANY SUCH ADDITIONAL PERIOD. SAID NOTIFICATION WILL BE
SENT TO THE BENEFICIARY’S ADDRESS INDICATED ABOVE, UNLESS A CHANGE OF ADDRESS IS
OTHERWISE NOTIFIED BY YOU TO US IN WRITING BY RECEIPTED MAIL OR COURIER, QUOTING
OUR LETTER OF CREDIT NUMBER. SAID CHANGE OF ADDRESS NOTIFICATION MUST BE
RECEIVED BY COMERICA BANK, AT OUR ABOVE ADDRESS.
THIS IRREVOCABLE STANDBY LETTER OF CREDIT IS TRANSFERABLE AND CAN BE
SUCCESSIVELY TRANSFERRED TO ANY TRANSFEREE THAT BENEFICIARY STATES IN WRITING TO
US HAS SUCCEEDED AS BENEFICIARY UNDER THIS LETTER OF CREDIT, PROVIDED THAT
TRANSFEREE IS NOT LOCATED IN OR A NATIONAL OF, OR CONTROLLED BY AN ENTITY
LOCATED IN ANY COUNTRY SUBJECT TO FOREIGN ASSET CONTROL REGULATIONS OF THE U.S.
DEPARTMENT OF TREASURY. THIS LETTER OF CREDIT IS TRANSFERABLE ONLY BY COMERICA
BANK. IF TRANSFERRED, THE CREDIT MUST BE RETURNED TO US ALONG WITH ALL
AMENDMENTS TOGETHER WITH A TRANSFER REQUEST SUPPLIED BY COMERICA BANK UPON
REQUEST, DULY EXECUTED, IN CASE OF ANY TRANSFER UNDER THIS STANDBY LETTER OF
CREDIT. THE DEMAND STATEMENT MUST BE EXECUTED BY THE TRANSFEREE AND WHERE THE
BENEFICIARY’S NAME APPEARS WITHIN THIS STANDBY LETTER OF CREDIT, THE
TRANSFEREE’S NAME IS AUTOMATICALLY SUBSITUTED THEREFOR. TRANSFER FEE IS FOR THE
ACCOUNT OF THE APPLICANT.
EXCEPT AS EXPRESSLY STATED HEREIN, THIS UNDERTAKING IS NOT SUBJECT TO ANY
AGREEMENT, CONDITION OR QUALIFICATION. THE OBLIGATION OF COMERICA BANK UNDER
THIS LETTER OF CREDIT IS THE INDIVIDUAL OBLIGATION OF COMERICA BANK AND IS IN NO
WAY CONTINGENT UPON REIMBURSEMENT WITH RESPECT THERETO.
THIRD AMENDMENT TO LEASE – Page 24 of 26

 

 

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THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY DOCUMENTS OR INSTRUMENT REFERRED TO HEREIN OR IN WHICH THIS LETTER OF
CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OR CREDIT RELATES AND ANY SUCH
REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY DOCUMENT OR
INSTRUMENT.
IN THE EVENT YOU WISH TO CANCEL THIS LETTER OF CREDIT, THIS ORIGINAL LETTER OF
CREDIT AND ALL AMENDMENTS HERETO MUST BE SUBMITTED TO COMERICA BANK ACCOMPANIED
BY YOUR LETTER NOTIFYING US OF YOUR INTENT TO CANCEL.
ALL DOCUMENTS ARE TO BE FORWARDED IN ONE LOT AT THE BENEFICIARY’S EXPENSE BY
COURIER TO COMERICA BANK, INTERNATIONAL TRADE SERVICES, AT THE COMERICA BANK
ADDRESS EVIDENCED ABOVE.
WE ENGAGE WITH YOU THAT ANY PRESENTATION DRAWN IN COMPLIANCE WITH THE TERMS OF
THIS CREDIT WILL BE DULY HONORED WITHIN ONE (1) BUSINESS DAY OF PRESENTATION,
WHEN PRESENTED AT THIS OFFICE ON OR BEFORE THE CLOSE OF BUSINESS ON THE EXPIRY
DATE, AS SET FORTH ABOVE.
THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE INTERNATIONAL STANDBY
PRACTICES 1998 OF THE INTERNATIONAL CHAMBER OF COMMERCE.
END OF SPECIMEN LANGUAGE
THIRD AMENDMENT TO LEASE – Page 25 of 26

 

 

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“ANNEX A”
COMERICA BANK STANDBY LETTER OF CREDIT NO. ****** DATED ******
DATE:                                                             
TO:
COMERICA BANK
INTERNATIONAL TRADE SERVICES
6260 E. MOCKINGBIRD LAND, 2ND FL.
MC-6588
DALLAS, TX 75214

RE:  
STANDBY LETTER OF CREDIT NO. ***** DATED ***** ISSUED BY COMERICA BANK

GENTLEMEN:
THE UNDERSIGNED BENEFICIARY HEREBY DEMANDS PAYMENT OF USD
                                         TO BE PAID IN IMMEDIATELY AVAILABLE
FUNDS IN ACCORDANCE WITH THE ABOVE-MENTIONED STANDBY LETTER OF CREDIT.
SINCERELY,

            BENEFICIARY NAME            AUTHORIZED SIGNATURE – TITLE           
PRINT NAME – TITLE       

THIRD AMENDMENT TO LEASE – Page 26 of 26

 

 

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Re:  
Pinnacle Park II
3631 West Davis Street
Dallas, Texas 75211

FOURTH AMENDMENT TO LEASE

         
THE STATE OF TEXAS
  §    
 
  §   KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS
  §    

THIS FOURTH AMENDMENT TO LEASE (this “Amendment”) has been executed as of (but
not necessarily on) the 6 day of October, 2009, by THE REALTY ASSOCIATES FUND
VII, L.P., a Delaware limited partnership (“Landlord”), and TANDY BRANDS
ACCESSORIES, INC., a Delaware corporation (“Tenant”).
R E C I T A L S:
A. Pinnacle Industrial Center Limited Partnership, a Texas limited partnership
(“Original Landlord”) and Tenant have heretofore executed that certain
Industrial Lease Agreement (the “Original Lease”) dated September 24, 1999, as
amended and/or affected by Tenant Acceptance of Demised Premises dated
                    , 2000, by First Amendment to Industrial Lease Agreement
dated January 5, 2000, Second Amendment to Lease (Expansion of Demised Premises)
dated September 4, 2003, Agreement and Acknowledgement dated February 29, 2008,
Subordination of Landlord’s Lien dated March 25, 2008 and Third Amendment to
Lease (the “Third Amendment”) dated August 24, 2009 (the Original Lease, as so
amended, the “Lease”), respecting certain premises in the above-referenced
Building, as more particularly described in the Lease (the “Building”). Unless
otherwise defined herein, all initially capitalized terms used herein will have
the respective meanings assigned thereto in the Lease.
B. Landlord has acquired title to, among other property, the Building and all of
Original Landlord’s interest under the Lease.
C. Landlord and Tenant desire to execute this Amendment in order to evidence
their agreement to (i) modify the Third Amendment; and (ii) make certain other
amendments to the Lease, all as more particularly set forth in this Amendment.
NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:
FOURTH AMENDMENT TO LEASE – Page 1 of 4

 

 

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Article I
CERTAIN AMENDMENTS
SECTION 1.01. Modifications to Third Amendment. Sections 1.03 and 1.04 of the
Third Amendment are amended and restated as follows:
SECTION 1.03. Term. The Term is hereby extended through and including the last
of the 126th full calendar month following the Second Expansion Premises
Effective Date, subject to adjustment and earlier termination as provided in the
Lease. Except as set forth in Exhibit B of the Third Amendment, Tenant shall
have no further renewal rights or options and all of such rights or options, if
any, are hereby deleted.
SECTION 1.04. Base Rent. As of the Second Expansion Premises Effective Date, the
Base Rent due and payable by Tenant to Landlord under the Lease with respect to
the entire Premises (i.e., the Current Premises and the Second Expansion
Premises) shall be as follows:

                      Annual Base             Rent Per     Monthly   Period*:  
R.S.F.:     Base Rent:  
SEPED – 150th day following SEPED**
  $ 0.00     $ 0.00  
 
               
151st day following SEPED – 42nd full month following SEPED
  $ 3.35     $ 62,785.14  
 
               
43rd full month following SEPED – 102nd full month following SEPED
  $ 3.55     $ 66,533.51  
 
               
103rd full month following SEPED – 126th full month following SEPED
  $ 3.75     $ 70,281.88  

      *  
Note: Pursuant to the above schedule, Tenant’s Base Rent obligation for the
Current Premises may be reduced.
  **  
To the extent that the Refurbishment Work is not sufficiently completed by the
date which is 150 days following the SEPED so that the Second Expansion Premises
can be used and occupied by Tenant for the uses and purposes permitted and
contemplated under the Lease, and if such failure to so sufficiently complete is
due, in whole or in part, to Landlord’s (or its agents’, employees’ or
contractors’) acts or omissions to act, then the Base Rent shall thereafter be
further equitably abated until the date that such Refurbishment Work is so
substantially completed.
     
The Base Rent under the Lease shall be due and payable in equal monthly
installments, each such monthly installment due and payable on the first day of
each calendar month, in advance, without demand and without setoff or deduction
whatsoever (except, in each such case, as may be otherwise expressly set forth
in the Lease or herein). Prior to the Second Expansion Premises Effective Date,
the Base Rent shall remain as set forth in the Lease.

FOURTH AMENDMENT TO LEASE – Page 2 of 4

 

 

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SECTION 1.02. Brokers. Landlord and Tenant represent to the other that it has
not dealt with any broker or agent in connection with the negotiation or
execution of this Amendment except Holt Lunsford Commercial and Jackson &
Cooksey, Ltd. (collectively, “Broker”). Landlord will be responsible to pay the
commission, if any, owed to Broker pursuant to the terms of a separate written
agreement. Landlord and Tenant hereby indemnify the other from any claims,
losses, damages (including attorneys’ fees) resulting from a breach by the
indemnifying party of the above representation.
SECTION 1.03. Further Amendments. The Lease shall be and hereby is further
amended wherever necessary, even though not specifically referred to herein, in
order to give effect to the terms of this Amendment.
Article II
MISCELLANEOUS
SECTION 2.01. Ratification.  The Lease, as amended hereby, is hereby ratified,
confirmed and deemed in full force and effect in accordance with its terms. Each
party represents to the other that such party: (a) is currently unaware of any
default by the other party under the Lease; and (b) has full power and authority
to execute and deliver this Amendment and this Amendment represents a valid and
binding obligation of such party enforceable in accordance with its terms.
Tenant represents to Landlord that, except as set forth in the Third Amendment
(including with respect to the Refurbishment Work and Refurbishment Allowance):
(a) Landlord has completed all improvements to the Premises in compliance with
all requirements in the Lease; and (b) all tenant finish costs or allowances
payable by Landlord have been paid and no such costs or allowances are payable
hereafter under the Lease.
SECTION 2.02. No Offer. The submission of this Amendment to Tenant shall not be
construed as an offer, nor shall Tenant have any rights under this Amendment
unless Landlord executes a copy of this Amendment and delivers it to Tenant.
SECTION 2.03. Counterparts. This Amendment may be executed in multiple
counterparts each of which is deemed an original but together constitute one and
the same instrument. This Amendment may be executed by facsimile or “pdf” and
each party has the right to rely upon a facsimile or “pdf” counterpart of this
Amendment signed by the other party to the same extent as if such party had
received an original counterpart.
SECTION 2.04. Governing Document. In the event the terms of the Lease conflict
with or are inconsistent with those of this Amendment, the terms of this
Amendment shall govern.
[SIGNATURES ON FOLLOWING PAGES]
FOURTH AMENDMENT TO LEASE – Page 3 of 4

 

 

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IN WITNESS WHEREOF, this Amendment has been executed as of (but not necessarily
upon) the date and year first above written.

                          LANDLORD:
 
                        THE REALTY ASSOCIATES FUND VII, L.P., a Delaware limited
partnership
 
                        By:   Realty Associates Fund VII, LLC
its General Partner
 
                            By:   Realty Associates Advisors LLC,
its Manager
 
                                By:   Realty Associates Advisors Trust,
its Manager
 
                   
 
              By:   /s/ Heather L. Hohenthal
 
                   
 
                  Officer
Heather L. Hohenthal
Regional Director

            TENANT:

TANDY BRANDS ACCESSORIES, INC.,
a Delaware corporation
      By:   /s/ M.C. Mackey         Name:   M.C. Mackey        Title:   CFO     
  Date:   9/30/09   

FOURTH AMENDMENT TO LEASE – Page 4 of 4