Exhibit 10.61

 

LEASE

 

DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC,

a Delaware limited liability company

Landlord,

 

and

 

SED INTERNATIONAL, INC.,

a Georgia corporation

Tenant

 

 

 

10/31/01 CALWEST TX MTIN
REVISED 6/9/2009
1800 10th Street, Suite 100
DA-3031401 v4 0942826-00401

 

 

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1.

USE AND RESTRICTIONS ON USE

1

2.

TERM

5

3.

RENT

7

4.

RENT ADJUSTMENTS

8

5.

SECURITY DEPOSIT

15

6.

ALTERATIONS

16

7.

REPAIR

18

8.

LIENS

21

9.

ASSIGNMENT AND SUBLETTING

22

10.

INDEMNIFICATION

27

11.

INSURANCE

30

12.

WAIVER OF SUBROGATION

32

13.

SERVICES AND UTILITIES

32

14.

HOLDING OVER

33

15.

SUBORDINATION

34

16.

RULES AND REGULATIONS

35

17.

REENTRY BY LANDLORD

35

18.

DEFAULT

37

19.

REMEDIES

39

20.

TENANT’S BANKRUPTCY OR INSOLVENCY

50

21.

QUIET ENJOYMENT

52

22.

CASUALTY

53

23.

EMINENT DOMAIN

56

24.

SALE BY LANDLORD

58

25.

ESTOPPEL CERTIFICATES

58

26.

SURRENDER OF PREMISES

59

27.

NOTICES

62

28.

TAXES PAYABLE BY TENANT

62

29.

RELOCATION OF TENANT

63

30.

DEFINED TERMS AND HEADINGS

64

31.

TENANT’S AUTHORITY

65

32.

FINANCIAL STATEMENTS AND CREDIT REPORTS

66

33.

COMMISSIONS

67

34.

TIME AND APPLICABLE LAW

67

35.

SUCCESSORS AND ASSIGNS

67

36.

ENTIRE AGREEMENT

68

37.

EXAMINATION NOT OPTION

68

38.

RECORDATION

68

39.

LIMITATION OF LANDLORD’S LIABILITY

69

40.

RIGHT OF FIRST OFFER

20

 

EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES

EXHIBIT A-1 – SITE PLAN

EXHIBIT B – INITIAL ALTERATIONS

EXHIBIT C – COMMENCEMENT DATE MEMORANDUM

EXHIBIT D – RULES AND REGULATIONS

EXHIBIT E – ADDITIONAL SURRENDER CONDITIONS

EXHIBIT F – RENEWAL OPTION

EXHIBIT G – RIGHT OF FIRST OFFER

 

 

 

10/31/01 CALWEST TX MTIN
REVISED 6/9/2009
1800 10th Street, Suite 100
DA-3031401 v4 0942826-00401

SIGNATURE PAGE

 

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MULTI-TENANT INDUSTRIAL NET LEASE

REFERENCE PAGES

 

 

 

BUILDING:

 

1800 10th Street, Plano, Texas 75074

 

 

 

LANDLORD:

 

DEXUS Industrial SPE Financed Portfolio, LLC, a

 

 

Delaware limited liability company

 

 

 

LANDLORD’S ADDRESS:

 

c/o RREEF Management Company

 

 

1406 Hasley Way, Suite 110

 

 

Carrollton, Texas 75007

 

 

 

WIRE INSTRUCTIONS AND/OR ADDRESS FOR

 

DEXUS Industrial SPE Financed Portfolio, LLC

RENT PAYMENT:

 

Dept# 6724

 

 

Los Angeles, CA 90084-6724

 

 

 

LEASE REFERENCE DATE:

 

June 10, 2009

 

 

 

TENANT:

 

SED International, Inc., a Georgia corporation

 

 

 

TENANT’S NOTICE ADDRESS:

 

4916 North Royal Atlanta Drive

 

 

Tucker, GA 30084

 

 

 

PREMISES ADDRESS:

 

1800 10th Street, Suite Number 100,

 

 

Plano, Texas 75074

 

 

 

PREMISES RENTABLE AREA:

 

Approximately 25,519 sq. ft. (for outline of Premises see Exhibit A)

 

 

 

USE:

 

Distribution center for computers and electronic equipment

 

 

 

COMMENCEMENT DATE:

 

July 1, 2009

 

 

 

TERM OF LEASE:

 

Approximately five (5) years, four (4) months and zero(0) days beginning on the
Commencement Date and ending on the Termination Date, subject to Renewal Option

 

 

 

TERMINATION DATE:

 

October 31, 2014

 

 

 

10/31/01 CALWEST TX MTIN
REVISED 6/9/2009
1800 10th Street, Suite 100
DA-3031401 v4 0942826-00401

SIGNATURE PAGE

 

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ANNUAL RENT and MONTHLY INSTALLMENT OF RENT (Article 3):

Period

Rentable Square
Footage

Annual Rent Per
Square Foot

Annual Rent

Monthly Installment
of Rent

from

through

7/1/2009

10/31/2009

25,519

$0.00

$0.00

$0.00

11/1/2009

6/30/2010

25,519

$4.25

$108,455.75

$9,037.98

7/1/2010

6/30/2011

25,519

$4.38

$111.773.22

$9,314.44

7/1/2011

6/30/2012

25,519

$4.51

$115,090.69

$9,590.89

7/1/2012

6/30/2013

25,519

$4.64

$118,408.16

$9,837.65

7/1/2013

10/31/2014

25,519

$4.78

$121,980.82

$10,165.07

 

 

 

NITIAL ESTIMATED MONTHLY INSTALLMENT OF RENT ADJUSTMENTS (Article 4):

 

$3,041.13 (Taxes $1,595.00; CAM $1,276.00; Insurance $170.13)

 

 

 

TENANT’S PROPORTIONATE SHARE:

 

25.52% (Building totals approximately 100,000 sq. ft.; Premises totals
approximately 25,519 sq. ft.)

 

 

 

SECURITY DEPOSIT:

 

$10,165.07

 

 

 

ASSIGNMENT/SUBLETTING FEE:

 

$1,500.00

 

 

 

REAL ESTATE BROKER DUE COMMISSION:

 

Robert Lynn Company; Peloton Real Estate Partners

 

 

 

TENANT’S SIC CODE:

 

5045

 

 

 

AMORTIZATION RATE:

 

12%

The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. This Lease includes Exhibits A through E,
all of which are made a part of this Lease.

 

 

 

 

 

 

LANDLORD:

 

TENANT:

 

 

 

DEXUS INDUSTRIAL SPE FINANCED

 

SED INTERNATIONAL, INC., a Georgia

PORTFOLIO, LLC, a Delaware limited liability company

 

corporation

 

 

 

 

By:

RREEF Management Company, a Delaware

 

By:

 

 

corporation

 

 

Name: Mark DiVito

 

 

 

 

Title: Vice President of Operations

 

By:

 

 

 

 

 

 

Name: Cynthia Prendergast

 

Dated: ________________, 2009

 

 

Title: Vice President, District Manager

 

 

 

 

 

 

 

Dated: ________________, 2009

 

 

 

 

 

10/31/01 CALWEST TX MTIN
REVISED 6/9/2009
1800 10th Street, Suite 100
DA-3031401 v4 0942826-00401

SIGNATURE PAGE

 

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LEASE

          By this Lease Landlord leases to Tenant and Tenant leases from
Landlord the Premises in the Building as set forth and described on the
Reference Pages. The Premises are depicted on the floor plan attached hereto as
Exhibit A, and the Building is depicted on the site plan attached hereto as
Exhibit A-1. The Reference Pages, including all terms defined thereon, are
incorporated as part of this Lease.

1.       USE AND RESTRICTIONS ON USE.

          1.1          The Premises are to be used solely for the purposes set
forth on the Reference Pages. Tenant shall not do or permit anything to be done
in or about the Premises which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Building or injure, annoy, or
disturb them, or allow the Premises to be used for any improper, immoral,
unlawful, or objectionable purpose, or commit any waste. Tenant shall not do,
permit or suffer in, on, or about the Premises the sale of any alcoholic liquor
without the written consent of Landlord first obtained. Tenant shall comply with
all governmental laws, ordinances and regulations applicable to the use of the
Premises and its occupancy and shall promptly comply with all governmental
orders and directions for the correction, prevention and abatement of any
violations in the Building or appurtenant land, caused or permitted by, or
resulting from the specific use by, Tenant, in or upon, or in connection with,
the Premises, all at Tenant’s sole expense. Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything into the
Premises which will in any way increase the rate of, invalidate or prevent the
procuring of any insurance protecting against loss or damage to the Building or
any of its contents by fire or other casualty or against liability for damage to
property or injury to persons in or about the Building or any part thereof.

          1.2          Tenant shall not, and shall not direct, suffer or permit
any of its agents, contractors, employees, licensees or invitees (collectively,
the “Tenant Entities”) to at any time handle, use, manufacture, store or dispose
of in or about the Premises or the Building any (collectively “Hazardous
Materials”) flammables, explosives, radioactive materials, hazardous wastes or
materials, toxic wastes or materials, or other similar substances, petroleum
products or derivatives or any substance subject to regulation by or under any
federal, state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises shown on the Reference Pages; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant is permitted to use
acid batteries as is necessary for the use of the Premises as shown on the
Reference Pages; provided that Tenant shall use appropriate measures reasonably
acceptable to Landlord to protect the flooring of the Premises as well as
implement a spill prevention plan reasonably acceptable to Landlord. TENANT
SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD EACH AND ALL OF THE LANDLORD ENTITIES
(AS DEFINED IN ARTICLE 30) HARMLESS FROM AND AGAINST ANY AND ALL LOSS, CLAIMS,
LIABILITY (INCLUDING, WITHOUT LIMITATION, ANY STRICT LIABILITY) OR COSTS
(INCLUDING COURT COSTS AND ATTORNEY’S FEES) INCURRED BY REASON OF ANY ACTUAL OR
ASSERTED FAILURE OF TENANT TO FULLY COMPLY WITH ALL APPLICABLE ENVIRONMENTAL
LAWS, OR THE PRESENCE, HANDLING, USE OR DISPOSITION IN OR FROM THE PREMISES OF
ANY HAZARDOUS MATERIALS BY TENANT OR ANY TENANT ENTITY (EVEN THOUGH PERMISSIBLE
UNDER ALL APPLICABLE ENVIRONMENTAL LAWS OR THE PROVISIONS OF THIS LEASE), OR BY
REASON OF ANY ACTUAL OR ASSERTED FAILURE OF TENANT TO KEEP, OBSERVE, OR PERFORM
ANY PROVISION OF THIS SECTION 1.2.

          1.3          Tenant and the Tenant Entities will be entitled to the
non-exclusive use of the common areas of the Building as they exist from time to
time during the Term, including the parking facilities, subject to Landlord’s
rules and regulations regarding such use. However, in no event will Tenant or
the Tenant Entities park more

 

 

 

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REVISED 6/9/2009
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DA-3031401 v4 0942826-00401

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vehicles in the parking facilities than Tenant’s Proportionate Share of the
total parking spaces available for common use. The foregoing shall not be deemed
to provide Tenant with an exclusive right to any parking spaces or any guaranty
of the availability of any particular parking spaces or any specific number of
parking spaces.

2.       TERM.

          2.1          The Term of this Lease shall begin on the Commencement
Date as shown on the Reference Pages and shall terminate on the Termination Date
as shown on the Reference Pages, unless sooner terminated by the provisions of
this Lease. Landlord shall tender possession of the Premises with all the work,
if any, to be performed by Landlord pursuant to Exhibit B to this Lease
substantially completed.

          2.2          Tenant agrees that in the event of the inability of
Landlord to deliver possession of the Premises on the Commencement Date for any
reason, Landlord shall not be liable for any damage resulting from such
inability, but Tenant shall not be liable for any rent until the time when
Landlord can, after notice to Tenant, deliver possession of the Premises to
Tenant. No such failure to give possession on the Commencement Date shall affect
the other obligations of Tenant under this Lease, except that if Landlord is
unable to deliver possession of the Premises within one hundred twenty (120)
days after the Commencement Date (other than as a result of strikes, shortages
of materials, holdover tenancies or similar matters beyond the reasonable
control of Landlord and Tenant is notified by Landlord in writing as to such
delay), Tenant shall have the option to terminate this Lease unless said delay
is as a result of: (i) Tenant’s failure to agree to plans and specifications
and/or construction cost estimates or bids; (ii) Tenant’s request for materials,
finishes or installations other than Landlord’s standard except those, if any,
that Landlord shall have expressly agreed to furnish without extension of time
agreed by Landlord; (iii) Tenant’s change in any plans or specifications; or,
(iv) performance or completion by a party employed by Tenant (each of the
foregoing, a “Tenant Delay”). If any delay is the result of a Tenant Delay, the
Commencement Date and the payment of rent under this Lease shall be accelerated
by the number of days of such Tenant Delay.

          2.3          In the event Landlord permits Tenant, or any agent,
employee or contractor of Tenant, to enter, use or occupy the Premises prior to
the Commencement Date, such entry, use or occupancy shall be subject to all the
provisions of this Lease other than the payment of rent, including, without
limitation, Tenant’s compliance with the insurance requirements of Article 11.
Said early possession shall not advance the Termination Date.

          2.4          Tenant shall have the renewal option provided for on
Exhibit F to the Lease attached hereto and incorporated herein.

3.       RENT.

          3.1          Tenant agrees to pay to Landlord the Annual Rent in
effect from time to time by paying the Monthly Installment of Rent then in
effect on or before the first day of each full calendar month during the Term,
except that the first full month’s rent shall be paid upon the execution of this
Lease. The Monthly Installment of Rent in effect at any time shall be
one-twelfth (1/12) of the Annual Rent in effect at such time. Rent for any
period during the Term which is less than a full month shall be a prorated
portion of the Monthly Installment of Rent based upon the number of days in such
month. Said rent shall be paid to Landlord, without deduction or offset and
without notice or demand, at the Rent Payment Address, as set forth on the
Reference Pages, or to such other person or at such other place as Landlord may
from time to time designate in writing. Unless specified in this Lease to the
contrary, all amounts and sums payable by Tenant to Landlord pursuant to this
Lease shall be deemed additional rent.

          3.2          Tenant recognizes that late payment of any rent or other
sum due under this Lease will result in administrative expense to Landlord, the
extent of which additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if rent or any other sum
is not paid when due and payable pursuant to this Lease, a late charge shall be
imposed in an amount equal to the greater of: (i) Fifty Dollars ($50.00), or
(ii) six percent (6%) of the unpaid rent or other payment. The amount of the
late charge to be paid by Tenant shall be reassessed and added to Tenant’s
obligation for each successive month until paid. The provisions of this Section
3.2 in no way relieve Tenant of the obligation to pay rent or other payments on
or before the date on which

 

 

 

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REVISED 6/9/2009
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DA-3031401 v4 0942826-00401

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they are due, nor do the terms of this Section 3.2 in any way affect Landlord’s
remedies pursuant to Article 19 of this Lease in the event said rent or other
payment is unpaid after date due.

4.       RENT ADJUSTMENTS.

          4.1         For the purpose of this Article 4, the following terms are
defined as follows:

                        4.1.1          Lease Year: Each calendar year.

                        4.1.2          Expenses: All costs of operation,
maintenance, repair and management of the Building (including the amount of any
credits which Landlord may grant to particular tenants of the Building in lieu
of providing any standard services or paying any standard costs described in
this Section 4.1.2 for similar tenants), as determined in accordance with
generally accepted accounting principles, including the following costs by way
of illustration, but not limitation: water and sewer charges; insurance charges
of or relating to all insurance policies and endorsements deemed by Landlord to
be reasonably necessary or desirable and relating in any manner to the
protection, preservation, or operation of the Building or any part thereof;
utility costs, including, but not limited to, the cost of heat, light, power,
steam, gas; waste disposal; the cost of janitorial services; the cost of
security and alarm services (including any central station signaling system);
costs of cleaning, repairing, replacing and maintaining the common areas,
including parking and landscaping, window cleaning costs; labor costs; costs and
expenses of managing the Building including management and/or administrative
fees; air conditioning maintenance costs; elevator maintenance fees and
supplies; material costs; equipment costs including the cost of maintenance,
repair and service agreements and rental and leasing costs; purchase costs of
equipment; current rental and leasing costs of items which would be capital
items if purchased; tool costs; licenses, permits and inspection fees; wages and
salaries; employee benefits and payroll taxes; accounting and legal fees; any
sales, use or service taxes incurred in connection therewith. In addition,
Landlord shall be entitled to recover, as additional rent (which, along with any
other capital expenditures constituting Expenses, Landlord may either include in
Expenses or cause to be billed to Tenant along with Expenses and Taxes but as a
separate item), Tenant’s Proportionate Share of: (i) an allocable portion of the
cost of capital improvement items which are reasonably calculated to reduce
operating expenses; (ii) the cost of fire sprinklers and suppression systems and
other life safety systems; and (iii) other capital expenses which are required
under any governmental laws, regulations or ordinances which were not applicable
to the Building at the time it was constructed; but the costs described in this
sentence shall be amortized over the reasonable life of such expenditures in
accordance with such reasonable life and amortization schedules as shall be
determined by Landlord in accordance with generally accepted accounting
principles, with interest on the unamortized amount at one percent (1%) in
excess of the Wall Street Journal prime lending rate announced from time to
time. Expenses shall not include depreciation or amortization of the Building or
equipment in the Building except as provided herein, loan principal payments,
costs of alterations of tenants’ premises, leasing commissions, interest
expenses on long-term borrowings or advertising costs.

                        4.1.3          Taxes: Real estate taxes and any other
taxes, charges and assessments which are levied with respect to the Building or
the land appurtenant to the Building, or with respect to any improvements,
fixtures and equipment or other property of Landlord, real or personal, located
in the Building and used in connection with the operation of the Building and
said land, any payments to any ground lessor in reimbursement of tax payments
made by such lessor; and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building or any taxes
to be paid by Tenant pursuant to Article 28.

          4.2         Notwithstanding anything contained herein to the contrary,
it is understood and agreed that for purposes of calculating Tenant’s
Proportionate Share of Expenses (excluding Non-Controllable Expenses, as
hereinafter defined) in any Lease Year in the initial Term of this Lease
(excluding the first full Lease Year and as prorated for any period less than a
calendar year), the amount of Tenant’s Proportionate Share of Expenses
(excluding Non-Controllable Expenses) shall not exceed the actual amount of
Tenant’s Proportionate Share of Expenses (excluding Non-Controllable Expenses)
incurred by Landlord in the previous calendar year plus six percent (6%) of
Tenant’s Proportionate Share of Expenses (excluding Non-Controllable Expenses)
incurred by

 

 

 

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REVISED 6/9/2009
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DA-3031401 v4 0942826-00401

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Landlord in the previous calendar year (as prorated for any period less than a
calendar year and adjusted for any increase in Tenant’s Proportionate Share) as
calculated by Landlord. As used herein, the term “Non-Controllable Expenses”
shall mean insurance premiums, utility charges, governmentally mandated charges
(including sales tax), management fees, the cost of snow or ice removal and
security services. Tenant’s liability for Non-Controllable Expenses and Taxes in
any given Lease Year shall not be similarly limited, and therefore, Tenant shall
remain liable for the full amount of Tenant’s Proportionate Share of the
increase in Non-Controllable Expenses and Taxes in any Lease Year over the
amount of such expenses incurred by Landlord in the previous calendar year.

          4.3          The annual determination of Expenses shall be made by
Landlord and shall be binding upon Landlord and Tenant, subject to the
provisions of this Section 4.3. During the Term, Tenant may review, at Tenant’s
sole cost and expense, the books and records supporting such determination in an
office of Landlord, or Landlord’s agent, during normal business hours, upon
giving Landlord five (5) days advance written notice within sixty (60) days
after receipt of such determination, but in no event more often than once in any
one (1) year period, subject to execution of a confidentiality agreement
acceptable to Landlord, and provided that if Tenant utilizes an independent
accountant to perform such review it shall be one of national standing which is
reasonably acceptable to Landlord, is not compensated on a contingency basis and
is also subject to such confidentiality agreement. If Tenant fails to object to
Landlord’s determination of Expenses within ninety (90) days after receipt, or
if any such objection fails to state with specificity the reason for the
objection, Tenant shall be deemed to have approved such determination and shall
have no further right to object to or contest such determination. In the event
that during all or any portion of any Lease Year or Base Year, the Building is
not fully rented and occupied Landlord shall make an appropriate adjustment in
occupancy-related Expenses for such year for the purpose of avoiding distortion
of the amount of such Expenses to be attributed to Tenant by reason of variation
in total occupancy of the Building, by employing consistent and sound accounting
and management principles to determine Expenses that would have been paid or
incurred by Landlord had the Building been at least ninety-five percent (95%)
rented and occupied, and the amount so determined shall be deemed to have been
Expenses for such Lease Year.

          4.4          Prior to the actual determination thereof for a Lease
Year, Landlord may from time to time estimate Tenant’s liability for Expenses
and/or Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or
portion thereof. Landlord will give Tenant written notification of the amount of
such estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto.

          4.5          When the above mentioned actual determination of Tenant’s
liability for Expenses and/or Taxes is made for any Lease Year and when Tenant
is so notified in writing, then:

                         4.5.1          If the total additional rent Tenant
actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for
the Lease Year is less than Tenant’s liability for Expenses and/or Taxes, then
Tenant shall pay such deficiency to Landlord as additional rent in one lump sum
within thirty (30) days of receipt of Landlord’s bill therefor; and

                        4.5.2          If the total additional rent Tenant
actually paid pursuant to Section 4.3 on account of Expenses and/or Taxes for
the Lease Year is more than Tenant’s liability for Expenses and/or Taxes, then
Landlord shall credit the difference against the then next due payments to be
made by Tenant under this Article 4, or, if the Lease has terminated, refund the
difference in cash.

          4.6          If the Commencement Date is other than January 1 or if
the Termination Date is other than December 31, Tenant’s liability for Expenses
and Taxes for the Lease Year in which said Date occurs shall be prorated based
upon a three hundred sixty-five (365) day year.

5.       SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with
Landlord upon the execution of this Lease. Said sum shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord’s damage in case of Tenant’s
default. If Tenant defaults with respect to any provision of this Lease,
Landlord may use any part of the Security Deposit for the payment of any rent or
any other sum in

 

 

 

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REVISED 6/9/2009
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DA-3031401 v4 0942826-00401

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default, or for the payment of any amount which Landlord may spend or become
obligated to spend by reason of Tenant’s default, or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of Tenant’s
default. If any portion is so used, Tenant shall within five (5) days after
written demand therefor, deposit with Landlord an amount sufficient to restore
the Security Deposit to its original amount and Tenant’s failure to do so shall
be a material breach of this Lease. Except to such extent, if any, as shall be
required by law, Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the Security Deposit or any balance thereof
shall be returned to Tenant at such time after termination of this Lease when
Landlord shall have determined that all of Tenant’s obligations under this Lease
have been fulfilled.

6.       ALTERATIONS.

          6.1          Except for those, if any, specifically provided for in
Exhibit B to this Lease, Tenant shall not make or suffer to be made any
alterations, additions, or improvements, including, but not limited to, the
attachment of any fixtures or equipment in, on, or to the Premises or any part
thereof or the making of any improvements as required by Article 7, without the
prior written consent of Landlord. When applying for such consent, Tenant shall,
if requested by Landlord, furnish complete plans and specifications for such
alterations, additions and improvements. Landlord’s consent shall not be
unreasonably withheld with respect to alterations which (i) are not structural
in nature, (ii) are not visible from the exterior of the Building, and (iii) do
not affect or require modification of the Building’s electrical, mechanical,
plumbing, HVAC or other systems.

          6.2          In the event Landlord consents to the making of any such
alteration, addition or improvement by Tenant, the same shall be made by using
either Landlord’s contractor or a contractor reasonably approved by Landlord, in
either event at Tenant’s sole cost and expense. If Tenant shall employ any
contractor other than Landlord’s contractor and such other contractor or any
subcontractor of such other contractor shall employ any non-union labor or
supplier, Tenant shall be responsible for and hold Landlord harmless from any
and all delays, damages and extra costs suffered by Landlord as a result of any
dispute with any labor unions concerning the wage, hours, terms or conditions of
the employment of any such labor.

          6.3          All alterations, additions or improvements proposed by
Tenant shall be constructed in accordance with all government laws, ordinances,
rules and regulations, using Building standard materials where applicable, and
Tenant shall, prior to construction, provide the additional insurance required
under Article 11 in such case, and also all such assurances to Landlord as
Landlord shall reasonably require to assure payment of the costs thereof,
including but not limited to, notices of non-responsibility, waivers of lien,
surety company performance bonds and funded construction escrows and to protect
Landlord and the Building and appurtenant land against any loss from any
mechanic’s, materialmen’s or other liens. Tenant shall pay in addition to any
sums due pursuant to Article 4 any increase in real estate taxes attributable to
any such alteration, addition or improvement for so long, during the Term, as
such increase is ascertainable; at Landlord’s election said sums shall be paid
in the same way as sums due under Article 4. Landlord may, as a condition to its
consent to any particular alterations or improvements, require Tenant to deposit
with Landlord the amount reasonably estimated by Landlord as sufficient to cover
the cost of removing such alterations or improvements and restoring the
Premises, to the extent required under Section 26.2.

7.       REPAIR.

          7.1          Landlord shall have no obligation to alter, remodel,
improve, repair, decorate or paint the Premises, except as specified in Exhibit
B if attached to this Lease and except that Landlord shall repair and maintain
the structural portions of the roof, foundation and walls of the Building. By
taking possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them, except as set forth in the punch list to be delivered pursuant to
Section 2.1. It is hereby understood and agreed that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant, except as specifically set forth in this Lease. Landlord
shall not be liable for any failure to make any repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant.

 

 

 

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          7.2          Tenant shall at its own cost and expense keep and
maintain all parts of the Premises and such portion of the Building and
improvements as are within the exclusive control of Tenant in good condition,
promptly making all necessary repairs and replacements, whether ordinary or
extraordinary, with materials and workmanship of the same character, kind and
quality as the original (including, but not limited to, repair and replacement
of all fixtures installed by Tenant, water heaters serving the Premises,
windows, glass and plate glass, doors, exterior stairs, skylights, any special
office entries, interior walls and finish work, floors and floor coverings,
heating and air conditioning systems serving the Premises, electrical systems
and fixtures, sprinkler systems, dock boards, truck doors, dock bumpers,
plumbing work and fixtures, and performance of regular removal of trash and
debris). Tenant as part of its obligations hereunder shall keep the Premises in
a clean and sanitary condition. Tenant will, as far as possible keep all such
parts of the Premises from deterioration due to ordinary wear and from falling
temporarily out of repair, and upon termination of this Lease in any way Tenant
will yield up the Premises to Landlord in good condition and repair, loss by
fire or other casualty excepted (but not excepting any damage to glass). Tenant
shall, at its own cost and expense, repair any damage to the Premises or the
Building resulting from and/or caused in whole or in part by the negligence or
misconduct of Tenant, its agents, employees, contractors, invitees, or any other
person entering upon the Premises as a result of Tenant’s business activities or
caused by Tenant’s default hereunder.

          7.3          Except as provided in Article 22, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant’s business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or to fixtures, appurtenances and equipment in the Building. Except to the
extent, if any, prohibited by law, Tenant waives the right to make repairs at
Landlord’s expense under any law, statute or ordinance now or hereafter in
effect.

          7.4          Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a maintenance
contractor approved by Landlord for servicing all heating and air conditioning
systems and equipment serving the Premises (and a copy thereof shall be
furnished to Landlord). The service contract must become effective within thirty
(30) days of the date Tenant takes possession of the Premises. Should Tenant
fail to do so, Landlord may, upon notice to Tenant, enter into such a
maintenance/ service contract on behalf of Tenant or perform the work and in
either case, charge Tenant the cost thereof along with a reasonable amount for
Landlord’s overhead.

8.       LIENS. Tenant shall keep the Premises, the Building and appurtenant
land and Tenant’s leasehold interest in the Premises free from any liens arising
out of any services, work or materials performed, furnished, or contracted for
by Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within ten (10) days following the imposition of any such lien, to either cause
the same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept (such failure to constitute an Event of
Default), Landlord shall have the right to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be payable to it by Tenant within five (5) days of
Landlord’s demand.

9.       ASSIGNMENT AND SUBLETTING.

          9.1          Tenant shall not have the right to assign or pledge this
Lease or to sublet the whole or any part of the Premises whether voluntarily or
by operation of law, or permit the use or occupancy of the Premises by anyone
other than Tenant, and shall not make, suffer or permit such assignment,
subleasing or occupancy without the prior written consent of Landlord, such
consent not to be unreasonably withheld, and said restrictions shall be binding
upon any and all assignees of the Lease and subtenants of the Premises. In the
event Tenant desires to sublet, or permit such occupancy of, the Premises, or
any portion thereof, or assign this Lease, Tenant shall give written notice
thereof to Landlord at least sixty (60) days but no more than one hundred twenty
(120) days prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and copies of
financial reports and other relevant financial information of the proposed
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          9.2          Notwithstanding any assignment or subletting, permitted
or otherwise, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of the rent specified in this Lease and
for compliance with all of its other obligations under the terms, provisions and
covenants of this Lease. Upon the occurrence of an Event of Default, if the
Premises or any part of them are then assigned or sublet, Landlord, in addition
to any other remedies provided in this Lease or provided by law, may, at its
option, collect directly from such assignee or subtenant all rents due and
becoming due to Tenant under such assignment or sublease and apply such rent
against any sums due to Landlord from Tenant under this Lease, and no such
collection shall be construed to constitute a novation or release of Tenant from
the further performance of Tenant’s obligations under this Lease.

          9.3          In addition to Landlord’s right to approve of any
subtenant or assignee, Landlord shall have the option, in its sole discretion,
in the event of any proposed subletting or assignment, to terminate this Lease,
or in the case of a proposed subletting of less than the entire Premises, to
recapture the portion of the Premises to be sublet, as of the date the
subletting or assignment is to be effective. The option shall be exercised, if
at all, by Landlord giving Tenant written notice within thirty (30) days
following Landlord’s receipt of Tenant’s written notice as required above.
However, if Tenant notifies Landlord, within five (5) days after receipt of
Landlord’s termination notice, that Tenant is rescinding its proposed assignment
or sublease, the termination notice shall be void and the Lease shall continue
in full force and effect. If this Lease shall be terminated with respect to the
entire Premises pursuant to this Section, the Term of this Lease shall end on
the date stated in Tenant’s notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures under this Section only a portion
of the Premises, the rent to be paid from time to time during the unexpired Term
shall abate proportionately based on the proportion by which the approximate
square footage of the remaining portion of the Premises shall be less than that
of the Premises as of the date immediately prior to such recapture. Tenant
shall, at Tenant’s own cost and expense, discharge in full any outstanding
commission obligation which may be due and owing as a result of any proposed
assignment or subletting, whether or not the Premises are recaptured pursuant to
this Section 9.3 and rented by Landlord to the proposed tenant or any other
tenant.

          9.4          In the event that Tenant sells, sublets, assigns or
transfers this Lease, Tenant shall pay to Landlord as additional rent an amount
equal to one hundred percent (100%) of any Increased Rent (as defined below),
less the Costs Component (as defined below), when and as such Increased Rent is
received by Tenant. As used in this Section, “Increased Rent” shall mean the
excess of (i) all rent and other consideration which Tenant is entitled to
receive by reason of any sale, sublease, assignment or other transfer of this
Lease, over (ii) the rent otherwise payable by Tenant under this Lease at such
time. For purposes of the foregoing, any consideration received by Tenant in
form other than cash shall be valued at its fair market value as determined by
Landlord in good faith. The “Costs Component” is that amount which, if paid
monthly, would fully amortize on a straight-line basis, over the entire period
for which Tenant is to receive Increased Rent, the reasonable costs incurred by
Tenant for leasing commissions and tenant improvements in connection with such
sublease, assignment or other transfer.

          9.5          Notwithstanding any other provision hereof, it shall be
considered reasonable for Landlord to withhold its consent to any assignment of
this Lease or sublease of any portion of the Premises if at the time of either
Tenant’s notice of the proposed assignment or sublease or the proposed
commencement date thereof, there shall exist any uncured default of Tenant or
matter which will become a default of Tenant with passage of time unless cured,
or if the proposed assignee or sublessee is an entity: (i) with which Landlord
is already in negotiation; (ii) is already an occupant of the Building unless
Landlord is unable to provide the amount of space required by such occupant;
(iii) is a governmental agency; (iv) is incompatible with the character of
occupancy of the Building; (v) with which the payment for the sublease or
assignment is determined in whole or in part based upon its net income or
profits; or (vi) would subject the Premises to a use which would: (a) involve
increased personnel or wear upon the Building; (b) violate any exclusive right
granted to another tenant of the Building; (c) require any addition to or
modification of the Premises or the Building in order to comply with building
code or other governmental requirements; or, (d) involve a violation of Section
1.2. Tenant expressly agrees that for the purposes of any statutory or other
requirement of reasonableness on the part of Landlord, Landlord’s refusal to
consent to any assignment or sublease for any of the reasons described in this
Section 9.5, shall be conclusively deemed to be reasonable.

          9.6          Upon any request to assign or sublet, Tenant will pay to
Landlord the Assignment/Subletting Fee plus, on demand, a sum equal to all of
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investigating and considering any proposed or purported assignment or pledge of
this Lease or sublease of any of the Premises, regardless of whether Landlord
shall consent to, refuse consent, or determine that Landlord’s consent is not
required for, such assignment, pledge or sublease. Any purported sale,
assignment, mortgage, transfer of this Lease or subletting which does not comply
with the provisions of this Article 9 shall be void.

          9.7          If Tenant is a corporation, limited liability company,
partnership or trust, any transfer or transfers of or change or changes within
any twelve (12) month period in the number of the outstanding voting shares of
the corporation or limited liability company, the general partnership interests
in the partnership or the identity of the persons or entities controlling the
activities of such partnership or trust resulting in the persons or entities
owning or controlling a majority of such shares, partnership interests or
activities of such partnership or trust at the beginning of such period no
longer having such ownership or control shall be regarded as equivalent to an
assignment of this Lease to the persons or entities acquiring such ownership or
control and shall be subject to all the provisions of this Article 9 to the same
extent and for all intents and purposes as though such is an assignment.

10.      INDEMNIFICATION. NONE OF THE LANDLORD ENTITIES SHALL BE LIABLE AND
TENANT HEREBY WAIVES ALL CLAIMS AGAINST THEM FOR ANY DAMAGE TO ANY PROPERTY OR
ANY INJURY TO ANY PERSON IN OR ABOUT THE PREMISES OR THE BUILDING BY OR FROM ANY
CAUSE WHATSOEVER (INCLUDING WITHOUT LIMITING THE FOREGOING, RAIN OR WATER
LEAKAGE OF ANY CHARACTER FROM THE ROOF, WINDOWS, WALLS, BASEMENT, PIPES,
PLUMBING WORKS OR APPLIANCES, THE BUILDING NOT BEING IN GOOD CONDITION OR
REPAIR, GAS, FIRE, OIL, ELECTRICITY OR THEFT), EXCEPT TO THE EXTENT CAUSED BY OR
ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR ITS
AGENTS, EMPLOYEES OR CONTRACTORS. TENANT SHALL PROTECT, DEFEND, INDEMNIFY AND
HOLD THE LANDLORD ENTITIES HARMLESS FROM AND AGAINST ANY AND ALL LOSS, CLAIMS,
LIABILITY OR COSTS (INCLUDING COURT COSTS AND ATTORNEYS’ FEES) INCURRED BY
REASON OF (I) ANY DAMAGE TO ANY PROPERTY (INCLUDING BUT NOT LIMITED TO PROPERTY
OF ANY LANDLORD ENTITY) OR ANY INJURY (INCLUDING BUT NOT LIMITED TO DEATH) TO
ANY PERSON OCCURRING IN, ON OR ABOUT THE PREMISES OR THE BUILDING TO THE EXTENT
THAT SUCH INJURY OR DAMAGE SHALL BE CAUSED BY OR ARISE FROM ANY ACTUAL OR
ALLEGED ACT, NEGLECT, FAULT, OR OMISSION BY OR OF TENANT OR ANY TENANT ENTITY TO
MEET ANY STANDARDS IMPOSED BY ANY DUTY WITH RESPECT TO THE INJURY OR DAMAGE;
(II) THE CONDUCT OR MANAGEMENT OF ANY WORK OR THING WHATSOEVER DONE BY THE
TENANT IN OR ABOUT THE PREMISES OR FROM TRANSACTIONS OF THE TENANT CONCERNING
THE PREMISES; (III) TENANT’S FAILURE TO COMPLY WITH ANY AND ALL GOVERNMENTAL
LAWS, ORDINANCES AND REGULATIONS APPLICABLE TO THE CONDITION OR USE OF THE
PREMISES OR ITS OCCUPANCY; OR (IV) ANY BREACH OR DEFAULT ON THE PART OF TENANT
IN THE PERFORMANCE OF ANY COVENANT OR AGREEMENT ON THE PART OF THE TENANT TO BE
PERFORMED PURSUANT TO THIS LEASE; THIS INDEMNITY SHALL BE EFFECTIVE EVEN WHEN
LANDLORD OR ITS AGENTS, EMPLOYEES OR CONTRACTORS ARE JOINTLY, COMPARATIVELY,
CONTRIBUTIVELY, OR CONCURRENTLY NEGLIGENT WITH TENANT; PROVIDED, HOWEVER, THAT
IN SUCH SITUATIONS TENANT SHALL HAVE NO OBLIGATION TO INDEMNIFY LANDLORD FOR
LANDLORD’S OR ITS AGENTS’, EMPLOYEES’ OR CONTRACTORS’ GROSS NEGLIGENCE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN THE EVENT ANY ACT
OR OMISSION OF TENANT OR ANY TENANT ENTITY RESULTS IN A LOSS, CLAIM, CAUSE OF
ACTION, OR SUIT THAT IS BASED UPON THE STRICT LIABILITY OF LANDLORD, ANY
LANDLORD ENTITY OR LANDLORD’S CONTRACTORS, THEN TENANT SHALL PROTECT, DEFEND,
INDEMNIFY AND HOLD THE LANDLORD ENTITIES HARMLESS FROM AND AGAINST ANY AND ALL
LOSS, CLAIMS, LIABILITY OR COSTS (INCLUDING COURT COSTS AND ATTORNEYS’ FEES)
INCURRED BY REASON OF SUCH ACT OR OMISSION OF TENANT OR TENANT ENTITY. THE
PROVISIONS OF THIS ARTICLE SHALL SURVIVE THE TERMINATION OF THIS LEASE WITH
RESPECT TO ANY CLAIMS OR LIABILITY ACCRUING PRIOR TO SUCH TERMINATION.

 

 

 

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11.      INSURANCE.

          11.1          Tenant shall keep in force throughout the Term: (i) a
Commercial General Liability insurance policy or policies to protect the
Landlord Entities against any liability to the public or to any invitee of
Tenant or a Landlord Entity incidental to the use of or resulting from any
accident occurring in or upon the Premises with a limit of not less than
$1,000,000 per occurrence and not less than $2,000,000 in the annual aggregate,
or such larger amount as Landlord may prudently require from time to time,
covering bodily injury and property damage liability and $1,000,000
products/completed operations aggregate; (ii) Business Auto Liability covering
owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per
accident; (iii) insurance protecting against liability under Worker’s
Compensation Laws with limits at least as required by statute; (iv) Employers
Liability with limits of $1,000,000 each accident, $1,000,000 disease policy
limit, $1,000,000 disease—each employee; (v) All Risk or Special Form coverage
protecting Tenant against loss of or damage to Tenant’s alterations, additions,
improvements, carpeting, floor coverings, panelings, decorations, fixtures,
inventory and other business personal property situated in or about the Premises
to the full replacement value of the property so insured, (vi) Business
Interruption Insurance for 100% of the 12 months actual loss sustained, and
(vii) Excess Liability in the amount of $2,000,000.

          11.2          The aforesaid policies shall (i) be provided at Tenant’s
expense; (ii) name the Landlord Entities as additional insureds (General
Liability) and loss payee (Property—Special Form); (ii) be issued by an
insurance company with a minimum Best’s rating of “A:VII” during the Term; and
(iv) provide that said insurance shall not be canceled unless thirty (30) days
prior written notice (ten days for non-payment of premium) shall have been given
to Landlord; a certificate of Liability insurance on ACORD Form 25 and a
certificate of Property insurance on ACORD Form 27 shall be delivered to
Landlord by Tenant upon the Commencement Date and at least thirty (30) days
prior to each renewal of said insurance.

          11.3          Whenever Tenant shall undertake any alterations,
additions or improvements in, to or about the Premises (“Work”) the aforesaid
insurance protection must extend to and include injuries to persons and damage
to property arising in connection with such Work, without limitation including
liability under any applicable structural work act, and such other insurance as
Landlord shall require; and the policies of or certificates evidencing such
insurance must be delivered to Landlord prior to the commencement of any such
Work.

12.      WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the respective
party but only to the extent of the net insurance proceeds payable under such
policies. Each party shall obtain any special endorsements required by their
insurer to evidence compliance with the aforementioned waiver.

13.      SERVICES AND UTILITIES. Tenant shall pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler system charges and other utilities and
services used on or from the Premises, together with any taxes, penalties, and
surcharges or the like pertaining thereto and any maintenance charges for
utilities. Tenant shall furnish all electric light bulbs, tubes and ballasts,
battery packs for emergency lighting and fire extinguishers. If any such
services are not separately metered to Tenant, Tenant shall pay such proportion
of all charges jointly metered with other premises as determined by Landlord, in
its sole discretion, to be reasonable. Any such charges paid by Landlord and
assessed against Tenant shall be immediately payable to Landlord on demand and
shall be additional rent hereunder. Tenant will contract directly with a utility
provider to service the Premises with electrical service; however Tenant will
not, without the written consent of Landlord, contract with a utility provider
to service the Premises with any other utility, including, but not limited to,
telecommunications, water, sewer or gas, which is not previously providing such
service to other tenants in the Building. Landlord shall in no event be liable
for any interruption or failure of utility services on or to the Premises.

14.      HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One
Hundred Fifty Percent (150%) of the greater of (i) the amount of the Annual Rent
for the last period prior to the date of such termination plus all Rent
Adjustments under Article 4; and (ii) the then market rental value of the
Premises as determined by Landlord assuming a new lease of the Premises of the
then usual duration and other terms, in either case, prorated on a daily basis,
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retention. If Landlord gives notice to Tenant of Landlord’s election to such
effect, such holding over shall constitute renewal of this Lease for a period
from month to month or one (1) year, whichever shall be specified in such
notice, in either case at the Holdover Rate, but if the Landlord does not so
elect, no such renewal shall result notwithstanding acceptance by Landlord of
any sums due hereunder after such termination; and instead, a tenancy at
sufferance at the Holdover Rate shall be deemed to have been created. In any
event, no provision of this Article 14 shall be deemed to waive Landlord’s right
of reentry or any other right under this Lease or at law.

15.      SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord’s interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant’s interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver within ten
(10) days of Landlord’s request such further instruments evidencing such
subordination or superiority of this Lease as may be required by Landlord.

16.      RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
all the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Building
of any such rules and regulations.

17.      REENTRY BY LANDLORD.

          17.1          Landlord reserves and shall at all times have the right
to re-enter the Premises to inspect the same, to show said Premises to
prospective purchasers, mortgagees or tenants, and to alter, improve or repair
the Premises and any portion of the Building, without abatement of rent, and may
for that purpose erect, use and maintain scaffolding, pipes, conduits and other
necessary structures and open any wall, ceiling or floor in and through the
Building and Premises where reasonably required by the character of the work to
be performed, provided entrance to the Premises shall not be blocked thereby,
and further provided that the business of Tenant shall not be interfered with
unreasonably. Landlord shall have the right at any time to change the
arrangement and/or locations of entrances, or passageways, doors and doorways,
and corridors, windows, elevators, stairs, toilets or other public parts of the
Building and to change the name, number or designation by which the Building is
commonly known. In the event that Landlord damages any portion of any wall or
wall covering, ceiling, or floor or floor covering within the Premises, Landlord
shall repair or replace the damaged portion to match the original as nearly as
commercially reasonable but shall not be required to repair or replace more than
the portion actually damaged. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant’s business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned by
any action of Landlord authorized by this Article 17.

          17.2          For each of the aforesaid purposes, Landlord shall at
all times have and retain a key with which to unlock all of the doors in the
Premises, excluding Tenant’s vaults and safes or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means which Landlord may deem proper to open said doors in an emergency to
obtain entry to any portion of the Premises. As to any portion to which access
cannot be had by means of a key or keys in Landlord’s possession, Landlord is
authorized to gain access by such means as Landlord shall elect and the cost of
repairing any damage occurring in doing so shall be borne by Tenant and paid to
Landlord within five (5) days of Landlord’s demand. Notwithstanding anything to
the contrary in this Section 17.2, Landlord shall notify Tenant of Landlord’s
entry as soon as is reasonably possible.

18.      DEFAULT.

          18.1          Except as otherwise provided in Article 20, the
following events shall be deemed to be Events of Default under this Lease:

 

 

 

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                         18.1.1     Tenant shall fail to pay when due any sum of
money becoming due to be paid to Landlord under this Lease, whether such sum be
any installment of the rent reserved by this Lease, any other amount treated as
additional rent under this Lease, or any other payment or reimbursement to
Landlord required by this Lease, whether or not treated as additional rent under
this Lease, and such failure shall continue for a period of five (5) days after
written notice that such payment was not made when due, but if any such notice
shall be given, for the twelve (12) month period commencing with the date of
such notice, the failure to pay within five (5) days after due any additional
sum of money becoming due to be paid to Landlord under this Lease during such
period shall be an Event of Default, without notice.

                         18.1.2     Tenant shall fail to comply with any term,
provision or covenant of this Lease which is not provided for in another Section
of this Article and shall not cure such failure within twenty (20) days
(forthwith, if the failure involves a hazardous condition) after written notice
of such failure to Tenant provided, however, that such failure shall not be an
event of default if such failure could not reasonably be cured during such
twenty (20) day period, Tenant has commenced the cure within such twenty (20)
day period and thereafter is diligently pursuing such cure to completion, but
the total aggregate cure period shall not exceed ninety (90) days.

                         18.1.3     Tenant shall fail to vacate the Premises
immediately upon termination of this Lease, by lapse of time or otherwise, or
upon termination of Tenant’s right to possession only.

                         18.1.4     Tenant shall become insolvent, admit in
writing its inability to pay its debts generally as they become due, file a
petition in bankruptcy or a petition to take advantage of any insolvency
statute, make an assignment for the benefit of creditors, make a transfer in
fraud of creditors, apply for or consent to the appointment of a receiver of
itself or of the whole or any substantial part of its property, or file a
petition or answer seeking reorganization or arrangement under the federal
bankruptcy laws, as now in effect or hereafter amended, or any other applicable
law or statute of the United States or any state thereof.

                         18.1.5     A court of competent jurisdiction shall
enter an order, judgment or decree adjudicating Tenant bankrupt, or appointing a
receiver of Tenant, or of the whole or any substantial part of its property,
without the consent of Tenant, or approving a petition filed against Tenant
seeking reorganization or arrangement of Tenant under the bankruptcy laws of the
United States, as now in effect or hereafter amended, or any state thereof, and
such order, judgment or decree shall not be vacated or set aside or stayed
within sixty (60) days from the date of entry thereof.

 

 

19.     REMEDIES.

          19.1        Except as otherwise provided in Article 20, upon the
occurrence of any of the Events of Default described or referred to in Article
18, Landlord shall have the option to pursue any one or more of the following
remedies without any notice or demand whatsoever, concurrently or consecutively
and not alternatively:

                         19.1.1     Landlord may, at its election, terminate
this Lease or terminate Tenant’s right to possession only, without terminating
the Lease.

                         19.1.2     Upon any termination of this Lease, whether
by lapse of time or otherwise, or upon any termination of Tenant’s right to
possession without termination of the Lease, Tenant shall surrender possession
and vacate the Premises immediately, and deliver possession thereof to Landlord,
and Tenant hereby grants to Landlord full and free license to enter into and
upon the Premises in such event and to repossess Landlord of the Premises as of
Landlord’s former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant’s signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord’s right to rent or any other right given to Landlord
under this Lease or by operation of law.

                         19.1.3     Upon any termination of this Lease, whether
by lapse of time or otherwise, Landlord shall be entitled to recover as damages,
all rent, including any amounts treated as additional rent under this Lease,

 

 

 

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and other sums due and payable by Tenant on the date of termination, plus as
liquidated damages and not as a penalty, an amount equal to the sum of: (i) an
amount equal to the then present value of the rent reserved in this Lease for
the residue of the stated Term of this Lease including any amounts treated as
additional rent under this Lease and all other sums provided in this Lease to be
paid by Tenant, minus the fair rental value of the Premises for such residue;
(ii) the value of the time and expense necessary to obtain a replacement tenant
or tenants, and the estimated expenses described in Section 19.1.4 relating to
recovery of the Premises, preparation for reletting and for reletting itself;
and (iii) the cost of performing any other covenants which would have otherwise
been performed by Tenant.

                         19.1.4     Upon any termination of Tenant’s right to
possession only without termination of the Lease:

                                        19.1.4.1  Neither such termination of
Tenant’s right to possession nor Landlord’s taking and holding possession
thereof as provided in Section 19.1.2 shall terminate the Lease or release
Tenant, in whole or in part, from any obligation, including Tenant’s obligation
to pay the rent, including any amounts treated as additional rent, under this
Lease for the full Term, and if Landlord so elects Tenant shall continue to pay
to Landlord the entire amount of the rent as and when it becomes due, including
any amounts treated as additional rent under this Lease, for the remainder of
the Term plus any other sums provided in this Lease to be paid by Tenant for the
remainder of the Term.

                                        19.1.4.2  Landlord shall use
commercially reasonable efforts to relet the Premises or portions thereof to the
extent required by applicable law. Landlord and Tenant agree that nevertheless
Landlord shall at most be required to use only the same efforts Landlord then
uses to lease premises in the Building generally and that in any case that
Landlord shall not be required to give any preference or priority to the showing
or leasing of the Premises or portions thereof over any other space that
Landlord may be leasing or have available and may place a suitable prospective
tenant in any such other space regardless of when such other space becomes
available and that Landlord shall have the right to relet the Premises for a
greater or lesser term than that remaining under this Lease, the right to relet
only a portion of the Premises, or a portion of the Premises or the entire
Premises as a part of a larger area, and the right to change the character or
use of the Premises. In connection with or in preparation for any reletting,
Landlord may, but shall not be required to, make repairs, alterations and
additions in or to the Premises and redecorate the same to the extent Landlord
deems necessary or desirable, and Tenant shall pay the cost thereof, together
with Landlord’s expenses of reletting, including, without limitation, any
commission incurred by Landlord, within five (5) days of Landlord’s demand.
Landlord shall not be required to observe any instruction given by Tenant about
any reletting or accept any tenant offered by Tenant unless such offered tenant
has a credit-worthiness acceptable to Landlord and leases the entire Premises
upon terms and conditions including a rate of rent (after giving effect to all
expenditures by Landlord for tenant improvements, broker’s commissions and other
leasing costs) all no less favorable to Landlord than as called for in this
Lease, nor shall Landlord be required to make or permit any assignment or
sublease for more than the current term or which Landlord would not be required
to permit under the provisions of Article 9.

                                        19.1.4.3  Until such time as Landlord
shall elect to terminate the Lease and shall thereupon be entitled to recover
the amounts specified in such case in Section 19.1.3, Tenant shall pay to
Landlord upon demand the full amount of all rent, including any amounts treated
as additional rent under this Lease and other sums reserved in this Lease for
the remaining Term, together with the costs of repairs, alterations, additions,
redecorating and Landlord’s expenses of reletting and the collection of the rent
accruing therefrom (including reasonable attorneys’ fees and broker’s
commissions), as the same shall then be due or become due from time to time,
less only such consideration as Landlord may have received from any reletting of
the Premises; and Tenant agrees that Landlord may file suits from time to time
to recover any sums falling due under this Article 19 as they become due. Any
proceeds of reletting by Landlord in excess of the amount then owed by Tenant to
Landlord from time to time shall be credited against Tenant’s future obligations
under this Lease but shall not otherwise be refunded to Tenant or inure to
Tenant’s benefit.

          19.2        Upon the occurrence of an Event of Default, Landlord may
(but shall not be obligated to) cure such default at Tenant’s sole expense.
Without limiting the generality of the foregoing, Landlord may, at Landlord’s
option, enter into and upon the Premises if Landlord determines in its sole
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a commercially reasonable time to maintain, repair or replace anything for which
Tenant is responsible under this Lease or to otherwise effect compliance with
its obligations under this Lease and correct the same, without being deemed in
any manner guilty of trespass, eviction or forcible entry and detainer and
without incurring any liability for any damage or interruption of Tenant’s
business resulting therefrom and Tenant agrees to reimburse Landlord within five
(5) days of Landlord’s demand as additional rent, for any expenses which
Landlord may incur in thus effecting compliance with Tenant’s obligations under
this Lease, plus interest from the date of expenditure by Landlord at the Wall
Street Journal prime rate.

          19.3        Tenant understands and agrees that in entering into this
Lease, Landlord is relying upon receipt of all the Annual and Monthly
Installments of Rent to become due with respect to all the Premises originally
leased hereunder over the full Initial Term of this Lease for amortization,
including interest at the Amortization Rate. For purposes hereof, the
“Concession Amount” shall be defined as the aggregate of all amounts (i) forgone
or expended by Landlord as free rent under the lease, (ii) under Exhibit B
hereof for construction allowances (excluding therefrom any amounts expended by
Landlord for Landlord’s Work, as defined in Exhibit B), and (iii) for brokers’
commissions payable by reason of this Lease (each of subsections (i), (ii) and
(iii) being hereinafter referred to as a “Concession”). Accordingly, Tenant
agrees that if this Lease or Tenant’s right to possession of the Premises leased
hereunder shall be terminated as of any date (“Default Termination Date”) prior
to the expiration of the full Initial Term hereof by reason of a default of
Tenant, there shall be due and owing to Landlord as of the day prior to the
Default Termination Date, as rent in addition to all other amounts owed by
Tenant as of such Date, the amount (“Unamortized Amount”) of the Concession
Amount determined as set forth below; provided, however, that in the event that
such amounts are recovered by Landlord pursuant to any other provision of this
Article 19, Landlord agrees that it shall not attempt to recover such amounts
pursuant to this Section 19.3. For the purposes hereof, the “Unamortized Amount”
shall be calculated by dividing (i) the Concession Amount plus interest accruing
at the Amortization Rate and amortizing fully over the period commencing on the
Commencement Date and ending on the last day of the Initial Term of this Lease,
computed on the basis of a 365 day year, by (ii) the total number of days in the
Initial Term of this Lease, then multiplying such quotient by (iii) the number
of days in the period commencing on the Termination Date and ending on the last
day of the Initial Term of this Lease. The foregoing provisions shall also apply
to and upon any reduction of space in the Premises, as though such reduction
were a termination for Tenant’s default, except that (i) the Unamortized Amount
shall be reduced by any amounts paid by Tenant to Landlord to effectuate such
reduction and (ii) the manner of application shall be that the Unamortized
Amount shall first be determined as though for a full termination as of the
Effective Date of the elimination of the portion, but then the amount so
determined shall be multiplied by the fraction of which the numerator is the
rentable square footage of the eliminated portion and the denominator is the
rentable square footage of the Premises originally leased hereunder; and the
amount thus obtained shall be the Unamortized Amount.

          19.4        If, on account of any breach or default by Tenant in
Tenant’s obligations under the terms and conditions of this Lease, it shall
become necessary or appropriate for Landlord to employ or consult with an
attorney or collection agency concerning or to enforce or defend any of
Landlord’s rights or remedies arising under this Lease or to collect any sums
due from Tenant, Tenant agrees to pay all costs and fees so incurred by
Landlord, including, without limitation, reasonable attorneys’ fees and costs.
Tenant expressly waives any right to: (i) trial by jury; and (ii) service of any
notice required by any present or future law or ordinance applicable to
landlords or tenants but not required by the terms of this Lease.

          19.5        Pursuit of any of the foregoing remedies shall not
preclude pursuit of any of the other remedies provided in this Lease or any
other remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy provided in this Lease constitute a forfeiture or waiver
of any rent due to Landlord under this Lease or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions and
covenants contained in this Lease.

          19.6        No act or thing done by Landlord or its agents during the
Term shall be deemed a termination of this Lease or an acceptance of the
surrender of the Premises, and no agreement to terminate this Lease or accept a
surrender of said Premises shall be valid, unless in writing signed by Landlord.
No waiver by Landlord of any violation or breach of any of the terms, provisions
and covenants contained in this Lease shall be deemed or construed to constitute
a waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord’s acceptance of the payment of
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Event of Default shall not be construed as a waiver of such Default, unless
Landlord so notifies Tenant in writing. Forbearance by Landlord in enforcing one
or more of the remedies provided in this Lease upon an Event of Default shall
not be deemed or construed to constitute a waiver of such Default or of
Landlord’s right to enforce any such remedies with respect to such Default or
any subsequent Default.

          19.7        To secure the payment of all rentals and other sums of
money becoming due from Tenant under this Lease, Landlord shall have and Tenant
grants to Landlord a first lien upon the leasehold interest of Tenant under this
Lease, which lien may be enforced in equity, and a continuing security interest
upon all goods, wares, equipment, fixtures, furniture, inventory, accounts,
contract rights, chattel paper and other personal property of Tenant situated on
the Premises, and such property shall not be removed therefrom without the
consent of Landlord until all arrearages in rent as well as any and all other
sums of money then due to Landlord under this Lease shall first have been paid
and discharged. Upon the occurrence of an Event of Default, Landlord shall have,
in addition to any other remedies provided in this Lease or by law, all rights
and remedies under the Uniform Commercial Code, including without limitation the
right to sell the property described in this Section 19.7 at public or private
sale upon five (5) days’ notice to Tenant. Tenant shall execute all such
financing statements and other instruments as shall be deemed necessary or
desirable in Landlord’s discretion to perfect the security interest hereby
created.

          19.8        Any and all property which may be removed from the
Premises by Landlord pursuant to the authority of this Lease or of law, to which
Tenant is or may be entitled, may be handled, removed and/or stored, as the case
may be, by or at the direction of Landlord but at the risk, cost and expense of
Tenant, and Landlord shall in no event be responsible for the value,
preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand,
any and all expenses incurred in such removal and all storage charges against
such property so long as the same shall be in Landlord’s possession or under
Landlord’s control. Any such property of Tenant not retaken by Tenant from
storage within thirty (30) days after removal from the Premises shall, at
Landlord’s option, be deemed conveyed by Tenant to Landlord under this Lease as
by a bill of sale without further payment or credit by Landlord to Tenant.

          19.9        If more than one (1) Event of Default occurs during the
Term or any renewal thereof, Tenant’s renewal options, expansion options and
rights of first offer and/or refusal, if any are provided for in this Lease,
shall be null and void.

 

 

20.     TENANT’S BANKRUPTCY OR INSOLVENCY.

          20.1        If at any time and for so long as Tenant shall be
subjected to the provisions of the United States Bankruptcy Code or other law of
the United States or any state thereof for the protection of debtors as in
effect at such time (each a “Debtor’s Law”):

                         20.1.1  Tenant, Tenant as debtor-in-possession, and any
trustee or receiver of Tenant’s assets (each a “Tenant’s Representative”) shall
have no greater right to assume or assign this Lease or any interest in this
Lease, or to sublease any of the Premises than accorded to Tenant in Article 9,
except to the extent Landlord shall be required to permit such assumption,
assignment or sublease by the provisions of such Debtor’s Law. Without
limitation of the generality of the foregoing, any right of any Tenant’s
Representative to assume or assign this Lease or to sublease any of the Premises
shall be subject to the conditions that:

                                     20.1.1.1  Such Debtor’s Law shall provide
to Tenant’s Representative a right of assumption of this Lease which Tenant’s
Representative shall have timely exercised and Tenant’s Representative shall
have fully cured any default of Tenant under this Lease.

                                     20.1.1.2  Tenant’s Representative or the
proposed assignee, as the case shall be, shall have deposited with Landlord as
security for the timely payment of rent an amount equal to the larger of: (i)
three (3) months’ rent and other monetary charges accruing under this Lease; and
(ii) any sum specified in Article 5; and shall have provided Landlord with
adequate other assurance of the future performance of the obligations of the
Tenant under this Lease. Without limitation, such assurances shall include, at
least, in the case of assumption of this Lease, demonstration to the
satisfaction of the Landlord that Tenant’s Representative has and will continue
to have sufficient unencumbered assets after the payment of all secured
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expenses to assure Landlord that Tenant’s Representative will have sufficient
funds to fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant’s obligations under this Lease.

                                     20.1.1.3  The assumption or any
contemplated assignment of this Lease or subleasing any part of the Premises, as
shall be the case, will not breach any provision in any other lease, mortgage,
financing agreement or other agreement by which Landlord is bound.

                                     20.1.1.4  Landlord shall have, or would
have had absent the Debtor’s Law, no right under Article 9 to refuse consent to
the proposed assignment or sublease by reason of the identity or nature of the
proposed assignee or sublessee or the proposed use of the Premises concerned.

21.     QUIET ENJOYMENT. Landlord represents and warrants that it has full right
and authority to enter into this Lease and that Tenant, while paying the rental
and performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Landlord shall not be liable for any interference or disturbance by
other tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.

22.     CASUALTY.

          22.1        In the event the Premises or the Building are damaged by
fire or other cause and in Landlord’s reasonable estimation such damage can be
materially restored within one hundred eighty (180) days, Landlord shall
forthwith repair the same and this Lease shall remain in full force and effect,
except that Tenant shall be entitled to a proportionate abatement in rent from
the date of such damage. Such abatement of rent shall be made pro rata in
accordance with the extent to which the damage and the making of such repairs
shall interfere with the use and occupancy by Tenant of the Premises from time
to time. Within forty-five (45) days from the date of such damage, Landlord
shall notify Tenant, in writing, of Landlord’s reasonable estimation of the
length of time within which material restoration can be made, and Landlord’s
determination shall be binding on Tenant. For purposes of this Lease, the
Building or Premises shall be deemed “materially restored” if they are in such
condition as would not prevent or materially interfere with Tenant’s use of the
Premises for the purpose for which it was being used immediately before such
damage.

          22.2        If such repairs cannot, in Landlord’s reasonable
estimation, be made within one hundred eighty (180) days, Landlord and Tenant
shall each have the option of giving the other, at any time within ninety (90)
days after such damage, notice terminating this Lease as of the date of such
damage. In the event of the giving of such notice, this Lease shall expire and
all interest of the Tenant in the Premises shall terminate as of the date of
such damage as if such date had been originally fixed in this Lease for the
expiration of the Term. In the event that neither Landlord nor Tenant exercises
its option to terminate this Lease, then Landlord shall repair or restore such
damage, this Lease continuing in full force and effect, and the rent hereunder
shall be proportionately abated as provided in Section 22.1.

          22.3        Landlord shall not be required to repair or replace any
damage or loss by or from fire or other cause to any panelings, decorations,
partitions, additions, railings, ceilings, floor coverings, office fixtures or
any other property or improvements installed on the Premises by, or belonging
to, Tenant. Any insurance which may be carried by Landlord or Tenant against
loss or damage to the Building or Premises shall be for the sole benefit of the
party carrying such insurance and under its sole control.

          22.4        In the event that Landlord should fail to complete such
repairs and material restoration within sixty (60) days after the date estimated
by Landlord therefor as extended by this Section 22.4, Tenant may at its option
and as its sole remedy terminate this Lease by delivering written notice to
Landlord, within fifteen (15) days after the expiration of said period of time,
whereupon the Lease shall end on the date of such notice or such later date
fixed in such notice as if the date of such notice was the date originally fixed
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the Term; provided, however, that if construction is delayed because of changes,
deletions or additions in construction requested by Tenant, strikes, lockouts,
casualties, Acts of God, war, material or labor shortages, government regulation
or control or other causes beyond the reasonable control of Landlord, the period
for restoration, repair or rebuilding shall be extended for the amount of time
Landlord is so delayed.

          22.5        Notwithstanding anything to the contrary contained in this
Article: (i) Landlord shall not have any obligation whatsoever to repair,
reconstruct, or restore the Premises when the damages resulting from any
casualty covered by the provisions of this Article 22 occur during the last
twelve (12) months of the Term or any extension thereof, but if Landlord
determines not to repair such damages Landlord shall notify Tenant and if such
damages shall render any material portion of the Premises untenantable Tenant
shall have the right to terminate this Lease by notice to Landlord within
fifteen (15) days after receipt of Landlord’s notice; and (ii) in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises or Building requires that any insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon this Lease shall
end on the date of such damage as if the date of such damage were the date
originally fixed in this Lease for the expiration of the Term.

          22.6        In the event of any damage or destruction to the Building
or Premises by any peril covered by the provisions of this Article 22, it shall
be Tenant’s responsibility to properly secure the Premises and upon notice from
Landlord to remove forthwith, at its sole cost and expense, such portion of all
of the property belonging to Tenant or its licensees from such portion or all of
the Building or Premises as Landlord shall request.

23.     EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant’s use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose, and Tenant hereby assigns to
Landlord any interest it may have in or claim to all or any part of such sums,
other than any separate award which may be made with respect to Tenant’s trade
fixtures and moving expenses; Tenant shall make no claim for the value of any
unexpired Term.

24.     SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord shall transfer or deliver said security,
as such, to Landlord’s successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.

25.     ESTOPPEL CERTIFICATES. Within ten (10) days following any written
request which Landlord may make from time to time, Tenant shall execute and
deliver to Landlord or mortgagee or prospective mortgagee a sworn statement
certifying: (i) the date of commencement of this Lease; (ii) the fact that this
Lease is unmodified and in full force and effect (or, if there have been
modifications to this Lease, that this Lease is in full force and effect, as
modified, and stating the date and nature of such modifications); (iii) the date
to which the rent and other sums payable under this Lease have been paid; (iv)
the fact that there are no current defaults under this Lease by either Landlord
or Tenant except as specified in Tenant’s statement; and (v) such other matters
as may be requested by Landlord. Landlord and Tenant intend that any statement
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upon by any mortgagee, beneficiary or purchaser, and Tenant shall be liable for
all loss, cost or expense resulting from the failure of any sale or funding of
any loan caused by any material misstatement contained in such estoppel
certificate. Tenant irrevocably agrees that if Tenant fails to execute and
deliver such certificate within such ten (10) day period Landlord or Landlord’s
beneficiary or agent may execute and deliver such certificate on Tenant’s
behalf, and that such certificate shall be fully binding on Tenant.

26.     SURRENDER OF PREMISES.

          26.1        Tenant shall arrange to meet Landlord for two (2) joint
inspections of the Premises as set forth in Exhibit E, the first to occur at
least thirty (30) days (but no more than sixty (60) days) before the last day of
the Term, and the second to occur not later than forty-eight (48) hours after
Tenant has vacated the Premises as set forth in Exhibit E attached hereto and
incorporated herein. In the event of Tenant’s failure to arrange such joint
inspections and/or participate in either such inspection, Landlord’s inspection
at or after Tenant’s vacating the Premises shall be conclusively deemed correct
for purposes of determining Tenant’s responsibility for repairs and restoration.

          26.2        All alterations, additions, and improvements in, on, or to
the Premises made or installed by or for Tenant, including carpeting
(collectively, “Alterations”), shall be and remain the property of Tenant during
the Term. Upon the expiration or sooner termination of the Term, all Alterations
shall become a part of the realty and shall belong to Landlord without
compensation, and title shall pass to Landlord under this Lease as by a bill of
sale. At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all Alterations by whomsoever made, in
the same conditions received or first installed, broom clean and free of all
debris, excepting only ordinary wear and tear and damage by fire or other
casualty. Notwithstanding the foregoing, if Landlord elects by notice given to
Tenant at least ten (10) days prior to expiration of the Term, Tenant shall, at
Tenant’s sole cost, remove any Alterations, including carpeting, so designated
by Landlord’s notice, and repair any damage caused by such removal. Tenant must,
at Tenant’s sole cost, remove upon termination of this Lease, any and all of
Tenant’s furniture, furnishings, movable partitions of less than full height
from floor to ceiling and other trade fixtures and personal property
(collectively, “Personalty”). Personalty not so removed shall be deemed
abandoned by the Tenant and title to the same shall thereupon pass to Landlord
under this Lease as by a bill of sale, but Tenant shall remain responsible for
the cost of removal and disposal of such Personalty, as well as any damage
caused by such removal. In lieu of requiring Tenant to remove Alterations and
Personalty and repair the Premises as aforesaid, Landlord may, by written notice
to Tenant delivered at least thirty (30) days before the Termination Date,
require Tenant to pay to Landlord, as additional rent hereunder, the cost of
such removal and repair in an amount reasonably estimated by Landlord.

          26.3        All obligations of Tenant under this Lease not fully
performed as of the expiration or earlier termination of the Term shall survive
the expiration or earlier termination of the Term Upon the expiration or earlier
termination of the Term, Tenant shall pay to Landlord the amount, as estimated
by Landlord, necessary to repair and restore the Premises as provided in this
Lease and/or to discharge Tenant’s obligation for unpaid amounts due or to
become due to Landlord. All such amounts shall be used and held by Landlord for
payment of such obligations of Tenant, with Tenant being liable for any
additional costs upon demand by Landlord, or with any excess to be returned to
Tenant after all such obligations have been determined and satisfied. Any
otherwise unused Security Deposit shall be credited against the amount payable
by Tenant under this Lease.

27.     NOTICES. Any notice or document required or permitted to be delivered
under this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant’s Notice Address.

 

 

 

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28.      TAXES PAYABLE BY TENANT. In addition to rent and other charges to be
paid by Tenant under this Lease, Tenant shall reimburse to Landlord, upon
demand, any and all taxes payable by Landlord (other than net income taxes)
whether or not now customary or within the contemplation of the parties to this
Lease: (i) upon, allocable to, or measured by or on the gross or net rent
payable under this Lease, including without limitation any gross income tax or
excise tax levied by the State, any political subdivision thereof, or the
Federal Government with respect to the receipt of such rent; (ii) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Premises or any portion thereof,
including any sales, use or service tax imposed as a result thereof; (iii) upon
or measured by the Tenant’s gross receipts or payroll or the value of Tenant’s
equipment, furniture, fixtures and other personal property of Tenant or
leasehold improvements, alterations or additions located in the Premises; or
(iv) upon this transaction or any document to which Tenant is a party creating
or transferring any interest of Tenant in this Lease or the Premises. In
addition to the foregoing, Tenant agrees to pay, before delinquency, any and all
taxes levied or assessed against Tenant and which become payable during the term
hereof upon Tenant’s equipment, furniture, fixtures and other personal property
of Tenant located in the Premises.

29.      RELOCATION OF TENANT. Landlord, at its sole expense, on at least sixty
(60) days prior written notice, may require Tenant to move from the Premises to
other space of comparable size and decor in order to permit Landlord to
consolidate the space leased to Tenant with other adjoining space leased or to
be leased to another tenant. In the event of any such relocation, Landlord will
pay all expenses of preparing and decorating the new premises so that they will
be substantially similar to the Premises from which Tenant is moving, and
Landlord will also pay the expense of moving Tenant’s furniture and equipment to
the relocated premises. In such event this Lease and each and all of the terms
and covenants and conditions hereof shall remain in full force and effect and
thereupon be deemed applicable to such new space except that revised Reference
Pages and a revised Exhibit A shall become part of this Lease and shall reflect
the location of the new premises.

30.      DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease
are for convenience of reference and shall in no way define, increase, limit or
describe the scope or intent of any provision of this Lease. Any indemnification
or insurance of Landlord shall apply to and inure to the benefit of all the
following “Landlord Entities”, being Landlord, Landlord’s investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord’s trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term “rentable area” shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including a
proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable square footage of the Premises and
Tenant’s Proportionate Share shown on the Reference Pages; however, Landlord may
adjust either or both figures if there is manifest error, addition or
subtraction to the Building or any business park or complex of which the
Building is a part, remeasurement or other circumstance reasonably justifying
adjustment. The term “Building” refers to the structure in which the Premises
are located and the common areas (parking lots, sidewalks, landscaping, etc.)
appurtenant thereto. If the Building is part of a larger complex of structures,
the term “Building” may include the entire complex, where appropriate (such as
shared Expenses or Taxes) and subject to Landlord’s reasonable discretion.

31.      TENANT’S AUTHORITY. If Tenant signs as a corporation, partnership,
trust or other legal entity each of the persons executing this Lease on behalf
of Tenant represents and warrants that Tenant has been and is qualified to do
business in the state in which the Building is located, that the entity has full
right and authority to enter into this Lease, and that all persons signing on
behalf of the entity were authorized to do so by appropriate actions. Tenant
agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a
corporate resolution, proof of due authorization by partners, opinion of counsel
or other appropriate documentation reasonably acceptable to Landlord evidencing
the due authorization of Tenant to enter into this Lease. Tenant hereby
represents and warrants that neither Tenant, nor any persons or entities holding
any legal or beneficial interest whatsoever in Tenant, are (i) the target of any
sanctions program that is established by Executive Order of the President or
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Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”); (ii)
designated by the President or OFAC pursuant to the Trading with the Enemy Act,
50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September
23, 2001) or any Executive Order of the President issued pursuant to such
statutes; or (iii) named on the following list that is published by OFAC: “List
of Specially Designated Nationals and Blocked Persons.” If the foregoing
representation is untrue at any time during the Term, an Event of Default will
be deemed to have occurred, without the necessity of notice to Tenant.

32.      FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord’s request, Tenant
shall deliver to Landlord a copy, certified by an officer of Tenant as being a
true and correct copy, of Tenant’s most recent audited financial statement, or,
if unaudited, certified by Tenant’s chief financial officer as being true,
complete and correct in all material respects. Tenant hereby authorizes Landlord
to obtain one or more credit reports on Tenant at any time, and shall execute
such further authorizations as Landlord may reasonably require in order to
obtain a credit report.

33.      COMMISSIONS. Each of the parties represents and warrants to the other
that it has not dealt with any broker or finder in connection with this Lease,
except as described on the Reference Pages.

34.      TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all
of its provisions. This Lease shall in all respects be governed by the laws of
the state in which the Building is located.

35.      SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the
terms, covenants and conditions contained in this Lease shall be binding upon
and inure to the benefit of the heirs, successors, executors, administrators and
assigns of the parties to this Lease.

36.      ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.

37.      EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to
be a reservation of the Premises. Landlord shall not be bound by this Lease
until it has received a copy of this Lease duly executed by Tenant and has
delivered to Tenant a copy of this Lease duly executed by Landlord, and until
such delivery Landlord reserves the right to exhibit and lease the Premises to
other prospective tenants. Notwithstanding anything contained in this Lease to
the contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month’s rent as set forth in Article 3 and any
sum owed pursuant to this Lease.

38.      RECORDATION. Tenant shall not record or register this Lease or a short
form memorandum hereof without the prior written consent of Landlord, and then
shall pay all charges and taxes incident such recording or registration.

39.      LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against
Landlord under this Lease shall be limited to and enforceable only against and
to the extent of Landlord’s interest in the Building. The obligations of
Landlord under this Lease are not intended to be and shall not be personally
binding on, nor shall any resort be had to the private properties of, any of its
or its investment manager’s trustees, directors, officers, partners,
beneficiaries, members, stockholders, employees, or agents, and in no case shall
Landlord be liable to Tenant hereunder for any lost profits, damage to business,
or any form of special, indirect or consequential damages.

40.      RIGHT OF FIRST OFFER. Tenant shall have the right of first offer
provided for on Exhibit G attached hereto and incorporated herein.

 

 

 

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LANDLORD:

TENANT:

 

DEXUS INDUSTRIAL SPE FINANCED

SED INTERNATIONAL, INC., a Georgia

PORTFOLIO, LLC, a Delaware limited liability

corporation

company

 

 

 

By:

 

By:

RREEF Management Company, a Delaware

 

Name: Mark DiVito

 

corporation

 

Title: Vice President of Operations

 

 

By:

 

 

Dated: ______________, 2009

 

 

 

 

 

 

 

Name: Cynthia Prendergast

 

 

 

 

 

Title: Vice President, District Manager

 

 

 

Dated:_____________, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

Exhibit A is intended only to show the general layout of the Premises as of the
beginning of the Term of this Lease. It does not in any way supersede any of
Landlord’s rights set forth in Article 17 with respect to arrangements and/or
locations of public parts of the Building and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.

 

 

 

 

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EXHIBIT A-1 – SITE PLAN
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

Exhibit A-1 is intended only to show the general location of the Premises as of
the beginning of the Term of this Lease. It does not in any way supersede any of
Landlord’s rights set forth in Article 17 with respect to arrangements and/or
locations of public parts of the Building and changes in such arrangements
and/or locations. It is not to be scaled; any measurements or distances shown
should be taken as approximate.

 

 

 

 

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EXHIBIT B – INITIAL ALTERATIONS
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

Tenant shall take the Premises in its “as-is” condition, except for certain
improvements to the Premises (the “Leasehold Improvements”) which shall be
completed in accordance with the terms of this Exhibit B.

Landlord shall deliver all heating and air conditioning systems and equipment
serving the Premises in good working order.

Tenant agrees to submit to Landlord a list of Leasehold Improvements and other
costs associated with the occupancy and use by Tenant for Landlord’s approval.
The plans and specifications including all changes required by Landlord shall be
referred to herein as the “Approved Plans”. Both Landlord and Tenant agree that
this Lease shall be executed subject to satisfactory approval of the Approved
Plans by Landlord and Tenant within five (5) business days from signature of
this Lease.

Tenant shall complete the Leasehold Improvements by using either Landlord’s
contractor or a contractor reasonably approved by Landlord to install or
construct the Leasehold Improvements in accordance with the Approved Plans.
Landlord agrees to provide Tenant an allowance equal to $2.00 per square foot
($51,038.00) (the “Improvement Allowance”), which allowance is to be used solely
for the completion of the Leasehold Improvements and satisfaction of any
architectural fees per the Approved Plans and specifications. The Improvement
Allowance may also be used by Tenant for cabling, wiring, signage and moving
costs. Use of the Improvement Allowance is expressly conditioned upon completion
of all the Leasehold Improvements in accordance with the Approved Plans. Tenant
shall be liable for any additional costs over the Improvement Allowance to
complete the Leasehold Improvements in accordance with the Approved Plans. Any
amount of the Improvement Allowance not used by Tenant shall be forfeited.
Landlord shall reimburse Tenant for the Leasehold Improvements up to the amount
of the Improvement Allowance within forty-five (45) days of Tenant’s submission
to Landlord of invoices satisfactory to Landlord aggregating the amount of the
request and paid by Tenant in connection with the Leasehold Improvements
together with documentation satisfactory to Landlord evidencing completion of
the Leasehold Improvements, including, without limitation, appropriate lien
waivers.

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EXHIBIT C – COMMENCEMENT DATE MEMORANDUM
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

COMMENCEMENT DATE MEMORANDUM

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EXHIBIT D – RULES AND REGULATIONS
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

 

 

1.

No sign, placard, picture, advertisement, name or notice (collectively referred
to as “Signs”) shall be installed or displayed on any part of the outside of the
Building without the prior written consent of the Landlord which consent shall
be in Landlord’s sole discretion. All approved Signs shall be printed, painted,
affixed or inscribed at Tenant’s expense by a person or vendor approved by
Landlord and shall be removed by Tenant at Tenant’s expense upon vacating the
Premises. Landlord shall have the right to remove any Sign installed or
displayed in violation of this rule at Tenant’s expense and without notice.

 

 

2.

If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises or Building, Tenant shall immediately discontinue such use. No awning
shall be permitted on any part of the Premises. Tenant shall not place anything
or allow anything to be placed against or near any glass partitions or doors or
windows which may appear unsightly, in the opinion of Landlord, from outside the
Premises.

 

 

3.

Tenant shall not alter any lock or other access device or install a new or
additional lock or access device or bolt on any door of its Premises without the
prior written consent of Landlord. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys or other means of access to all doors.

 

 

4.

If Tenant requires telephone, data, burglar alarm or similar service, the cost
of purchasing, installing and maintaining such service shall be borne solely by
Tenant. No boring or cutting for wires will be allowed without the prior written
consent of Landlord. Landlord shall direct electricians as to where and how
telephone, data, and electrical wires are to be introduced or installed. The
location of burglar alarms, telephones, call boxes or other office equipment
affixed to the Premises shall be subject to the prior written approval of
Landlord.

 

 

5.

Tenant shall not place a load upon any floor of its Premises, including
mezzanine area, if any, which exceeds the load per square foot that such floor
was designed to carry and that is allowed by law. Heavy objects shall stand on
such platforms as determined by Landlord to be necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any such
equipment or other property from any cause, and all damage done to the Building
by maintaining or moving such equipment or other property shall be repaired at
the expense of Tenant.

 

 

6.

Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building
without Landlord’s prior written consent which consent shall be in Landlord’s
sole discretion.

 

 

7.

Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork, plaster or drywall (except for pictures and general office uses) or in
any way deface the Premises or any part thereof. Tenant shall not affix any
floor covering to the floor of the Premises or paint or seal any floors in any
manner except as approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.

 

 

8.

No cooking shall be done or permitted on the Premises, except that Underwriters’
Laboratory approved microwave ovens or equipment for brewing coffee, tea, hot
chocolate and similar beverages shall be permitted, provided that such equipment
and use is in accordance with all applicable federal, state and city laws,
codes, ordinances, rules and regulations.

 

 

9.

Tenant shall not use any hand trucks except those equipped with the rubber tires
and side guards, and may use such other material-handling equipment as Landlord
may approve. Tenant shall not bring any other

 

 

 

 

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vehicles of any kind into the Building. Forklifts which operate on asphalt areas
shall only use tires that do not damage the asphalt.

 

 

10.

Tenant shall not use the name of the Building or any photograph or other
likeness of the Building in connection with or in promoting or advertising
Tenant’s business except that Tenant may include the Building name in Tenant’s
address. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building.

 

 

11.

All trash and refuse shall be contained in suitable receptacles at locations
approved by Landlord. Tenant shall not place in the trash receptacles any
personal trash or material that cannot be disposed of in the ordinary and
customary manner of removing such trash without violation of any law or
ordinance governing such disposal.

 

 

12.

Tenant shall comply with all safety, fire protection and evacuation procedures
and regulations established by Landlord or any governing authority.

 

 

13.

Tenant assumes all responsibility for securing and protecting its Premises and
its contents including keeping doors locked and other means of entry to the
Premises closed.

 

 

14.

Tenant shall not use any method of heating or air conditioning other than that
supplied by Landlord without Landlord’s prior written consent.

 

 

15.

No person shall go on the roof without Landlord’s permission, with the exception
of the heating and air conditioning systems and equipment maintenance
contractor.

 

 

16.

Tenant shall not permit any animals, other than seeing-eye dogs, to be brought
or kept in or about the Premises or any common area of the property.

 

 

17.

Tenant shall not permit any motor vehicles to be washed or mechanical work or
maintenance of motor vehicles to be performed on any portion of the Premises or
parking lot.

 

 

18.

These Rules and Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the terms, covenants, agreements
and conditions of any lease of any premises in the Building. Landlord may waive
any one or more of these Rules and Regulations for the benefit of any tenant or
tenants, and any such waiver by Landlord shall not be construed as a waiver of
such Rules and Regulations for any or all tenants.

 

 

19.

Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant’s employees, agents, clients, customers, invitees and guests.

 

 

20.

Any toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown into them. The expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the tenant who, or whose employees or invitees, shall have
caused it.

 

 

21.

Tenant shall not permit smoking or carrying of lighted cigarettes or cigars in
areas reasonably designated by Landlord or any applicable governmental agencies
as non-smoking areas.

 

 

 

 

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22.

Any directory of the Building or project of which the Building is a part
(“Project Area”), if provided, will be exclusively for the display of the name
and location of tenants only and Landlord reserves the right to charge for the
use thereof and to exclude any other names.

 

 

23.

Canvassing, soliciting, distribution of handbills or any other written material
in the Building or Project Area is prohibited and each tenant shall cooperate to
prevent the same. No tenant shall solicit business from other tenants or permit
the sale of any goods or merchandise in the Building or Project Area without the
written consent of Landlord.

 

 

24.

Any equipment belonging to Tenant which causes noise or vibration that may be
transmitted to the structure of the Building or to any space therein to such a
degree as to be objectionable to Landlord or to any tenants in the Building
shall be placed and maintained by Tenant, at Tenant’s expense, on vibration
eliminators or other devices sufficient to eliminate the noise or vibration.

 

 

25.

Driveways, sidewalks, halls, passages, exits, entrances and stairways (“Access
Areas”) shall not be obstructed by tenants or used by tenants for any purpose
other than for ingress to and egress from their respective premises. Access
areas are not for the use of the general public and Landlord shall in all cases
retain the right to control and prevent access thereto by all persons whose
presence, in the judgment of Landlord, shall be prejudicial to the safety,
character, reputation and interests of the Building or its tenants.

 

 

26.

Landlord reserves the right to designate the use of parking areas and spaces.
Tenant shall not park in visitor, reserved, or unauthorized parking areas.
Tenant and Tenant’s guests shall park between designated parking lines only and
shall not park motor vehicles in those areas designated by Landlord for loading
and unloading. Vehicles in violation of the above shall be subject to being
towed at the vehicle owner’s expense. Vehicles parked overnight without prior
written consent of the Landlord shall be deemed abandoned and shall be subject
to being towed at vehicle owner’s expense. Tenant will from time to time, upon
the request of Landlord, supply Landlord with a list of license plate numbers of
vehicles owned or operated by its employees or agents.

 

 

27.

No trucks, tractors or similar vehicles can be parked anywhere other than in
Tenant’s own truck dock area. Tractor-trailers which must be unhooked or parked
with dolly wheels beyond the concrete loading areas must use steel plates or
wood blocks under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in the
parking areas or on streets adjacent thereto.

 

 

28.

During periods of loading and unloading, Tenant shall not unreasonably interfere
with traffic flow and loading and unloading areas of other tenants. All
products, materials or goods must be stored within the Tenant’s Premises and not
in any exterior areas, including, but not limited to, exterior dock platforms,
against the exterior of the Building, parking areas and driveway areas. Tenant
agrees to keep the exterior of the Premises clean and free of nails, wood,
pallets, packing materials, barrels and any other debris produced from their
operation.

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EXHIBIT E – ADDITIONAL SURRENDER CONDITIONS
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

          Prior to vacating the Premises, it must be left in good, clean
condition with all systems in good working order. The items that will be
inspected by Landlord are listed below, but are not limited to the following:

 

 

 

 

1.

Service and repair all heating and air conditioning equipment, exhaust fans and
hot water heater. Provide Landlord’s office with a copy of the inspection and
service report provided by the mechanical contractor.

 

 

 

 

2.

All lights in the office and warehouse must be working. Relamp and/or reballast
the fixtures as necessary.

 

 

 

 

3.

Overhead doors must be serviced and repaired.

 

 

 

 

4.

All exterior metal doors, including hardware should be serviced or replaced as
necessary.

 

 

 

 

5.

Repair all damaged sheetrock in the office area and in the warehouse along the
demising walls.

 

 

 

 

6.

Office and warehouse floors should be left in good, clean condition.

 

 

 

 

7.

Fire sprinkler system (if available) must have a current year inspection.

 

 

 

 

8.

Any exterior signage must be removed; repair and repaint the fascia as
necessary.

 

 

 

 

9.

All data cabling must be removed and any damage caused by such removal shall be
repaired as necessary.

          If the Tenant elects not to do any of the above, please note that the
Landlord will have the necessary repairs made and deduct the expenses from the
Security Deposit.

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10/31/01 CALWEST TX MTIN

E-1

 

 

REVISED 6/9/2009

 

 

 

1800 10th Street, Suite 100

 

 

 

DA-3031401 v4 0942826-00401

 

INITIAL HERE

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EXHIBIT F – RENEWAL OPTION
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

          Tenant shall, provided the Lease is in full force and effect and
Tenant is not in default under any of the terms and conditions of the Lease at
the time of notification or commencement, have one (1) option to renew this
Lease for a term of five (5) years, for the portion of the Premises being leased
by Tenant as of the date the renewal term is to commence, on the same terms and
conditions set forth in the Lease, except as modified by the terms, covenants
and conditions as set forth below:

          a. If Tenant elects to exercise said option, then Tenant shall provide
Landlord with written notice no earlier than twelve (12) months prior to the
expiration of the initial term of this Lease but no later than eight (8) months
prior to the expiration of the initial term of this Lease. If Tenant fails to
timely provide such notice, Tenant shall have no further or additional right to
extend or renew the term of the Lease.

          b. The Annual Rent and Monthly Installment of Rent in effect at the
expiration of the then current term of the Lease shall be adjusted to reflect
the current fair market rental for comparable space in the Building and in other
similar buildings in the same rental market as of the date the renewal term is
to commence, as established by mutual agreement of Tenant and Landlord. Tenant
and Landlord hereby agree to negotiate with each other in good faith to
establish a mutually agreeable fair market rental rate within sixty (60) days
after Landlord’s receipt of Tenant’s written request therefor. If the parties
are unable to mutually agree on a fair market value rental rate after good faith
negotiations within the period required by the immediately preceding sentence,
then Tenant shall have no further or additional right to extend the term of the
Lease.

          c. This option is not transferable; the parties hereto acknowledge and
agree that they intend that the aforesaid option to renew this Lease shall be
“personal” to Tenant as set forth above and that in no event will any assignee
or sublessee have any rights to exercise the aforesaid option to renew.

          d. Upon exercise of the renewal option Tenant shall have no further
right to extend the term of the Lease.

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10/31/01 CALWEST TX MTIN

F-1

 

 

REVISED 6/9/2009

 

 

 

1800 10th Street, Suite 100

 

 

 

DA-3031401 v4 0942826-00401

 

INITIAL HERE

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EXHIBIT G – RIGHT OF FIRST OFFER
attached to and made a part of Lease bearing the
Lease Reference Date of June 10, 2009 between
DEXUS INDUSTRIAL SPE FINANCED PORTFOLIO, LLC, a Delaware limited liability
company, as Landlord
and SED INTERNATIONAL, INC., a Georgia corporation, as Tenant

          Provided Tenant is not then in default under the terms, covenants and
conditions of the Lease, and subject to the rights of any other prior tenants in
the Building, Tenant shall have the one-time right to lease any space in the
Building (the “Expansion Premises”) at such time as the Expansion Premises is
vacated by the prior tenant. In such event, Landlord shall give written notice
to Tenant of the availability of the Expansion Premises and the monetary terms
and conditions on which Landlord intends to offer it to the public and Tenant
shall have a period of ten (10) days in which to exercise Tenant’s right to
lease the entire Expansion Premises pursuant to the terms and conditions
contained herein and in Landlord’s notice, failing which Landlord may lease the
Expansion Premises to any third party on whatever basis Landlord desires, and
Tenant shall have no further rights with respect to the Expansion Premises or
any other space in the Building. If Tenant exercises the expansion option
hereunder, (i) Tenant shall have no further rights with respect to any other
space in the Building, and, (ii) effective as of the date Landlord delivers the
Expansion Premises, the Expansion Premises shall automatically be included
within the Premises and subject to all the terms and conditions of the Lease,
except as set forth in Landlord’s notice and as follows:

 

 

 

 

a.

Tenant’s Proportionate Share shall be recalculated, using the total square
footage of the Premises, as increased by the Expansion Premises.

 

 

 

 

b.

Landlord shall have no obligation to improve the Expansion Premises or grant
Tenant any improvement allowance thereon; provided, that the Landlord shall
provide the Expansion Premises to Tenant in the same condition as Tenant is
obligated to surrender the Premises to Landlord upon the expiration or earlier
termination of this Lease, as specified in Exhibit E above.

 

 

 

 

c.

If requested by Landlord, Tenant shall, prior to the beginning of the term for
the Expansion Premises, execute a written memorandum confirming the inclusion of
the Expansion Premises and the Annual Rent for the Expansion Premises.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

10/31/01 CALWEST TX MTIN

G-1

 

 

REVISED 6/9/2009

 

 

 

1800 10th Street, Suite 100

 

 

 

DA-3031401 v4 0942826-00401

 

INITIAL HERE

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