Exhibit
10.13


 


 


 


STANDARD
INDUSTRIAL LEASE


 


 


270
SHARYLAND, L.P. — LANDLORD


 


 


and


 


 


THE
WORNICK COMPANY RIGHT AWAY DIVISION — TENANT


 


 


DATED: 
MARCH 4TH 2003


 





















 


STANDARD
INDUSTRIAL LEASE


 


THIS STANDARD INDUSTRIAL
LEASE (the “Lease”) is made to be effective the 4th day of March, 2003, by and
between 270 Sharyland, L.P. (“Landlord”), a Texas limited partnership, and The
Wornick Company Right Away Division (“Tenant”), a Nevada corporation, Charter
No. C-25930-99; EIN #74-1909484.


 


W I  T  N
E  S  S  E  T  H:


 


In consideration of the
rents, covenants, and agreements herein set forth, Landlord and Tenant enter
into the following agreement:


 


1.                                     
Definitions and
Key Provisions.  The following terms shall be defined in this Lease
as follows:


 


	
  Premises:

  	
  The 171,179 square foot
  (more or less) space located within the Building identified on Exhibit “A”,
  sometimes also referred to as the “Premises Area”.

  
	
   

  	
   

  
	
  Project:

  	
  The real estate and
  improvements including the approximately 271,872 square foot building (the
  “Building”) as shown on Exhibit “A” and municipally numbered as 5700 South
  International Parkway, Suites B & C, McAllen, Texas; the legal
  description of the real estate (the “Land”) is attached as Exhibit “B”.

  
	
   

  	
   

  
	
  Tenant’s
  Share:

  	
  62.96%; the fraction,
  the numerator of which is the Premises Area and the denominator of which is
  the total number of square feet of rentable space in the Building.

  
	
   

  	
   

  
	
  Initial
  Term:

  	
  Five (5) years unless
  terminated earlier as provided herein, commencing on the Rent Commencement
  Date.

  
	
   

  	
   

  
	
  Renewal
  Terms:

  	
  One (1) additional
  consecutive term of five (5) years.

  
	
   

  	
   

  
	
  Rent
  Commencement Date:

  	
  March 1, 2003.

  
	
   

  	
   

  
	
  Occupancy:

  	
  Tenant may occupy the
  warehouse area of the Premises for the purpose of setting up equipment and
  racks immediately upon execution of this Lease by both parties.

  
	
   

  	
   

  	
   

  	
   

  



 


	
  Base
  Rent:

  	
   

  	
  Monthly

  	
   

  	
  Annually

  	
   

  	
  PSF
  (Annual)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Years 1-5:

  	
   

  	
  $

  	
  59,912.65

  	
   

  	
  $

  	
  718,951.80

  	
   

  	
  $

  	
  4.20 NNN

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Renewal
  Base Rent:
  Years 6-10:

  	
   

  	
  $

  	
  68,899.55

  	
   

  	
  $

  	
  826,794.57

  	
   

  	
  $

  	
  4.83 NNN

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Security
  Deposit:

  	
   

  	
  $

  	
  59,912.65

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Prepaid
  Rent:

  	
   

  	
  $

  	
  134,090.22

  	
   

  	
   

  	
   

  	
   

  



 


Initial Estimated Annual Operating
Expenses:
(estimated on per square foot basis commencing on Tenant’s occupancy and
subject to adjustment to actual costs and expenses as provided herein)


 


	
  1.

  	
   

  	
  Common Area Charges:

  	
  $

  	
  0.40

  	
   

  
	
  2.

  	
   

  	
  Taxes:

  	
  $

  	
  0.54

  	
   

  
	
  3.

  	
   

  	
  Insurance:

  	
  $

  	
  0.06

  	
   

  
	
  4.

  	
   

  	
  Total:

  	
  $

  	
  1.00

  	
   Per Square Foot
  Annually Beginning March 1, 2003

  



 


	
  Brokers:

  	
  Grubb & Ellis,
  Best/White, LLC

  



 





















 


2.                                     
Granting Clause
and Quiet Enjoyment.  In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises for the term hereof. Notwithstanding the fact that the Rent
Commencement Date is subsequent to the effective date of this Lease, it is the
intention of Landlord and Tenant that each have vested rights hereunder and
that this Lease constitutes a binding and valid obligation of each as of the
date this Lease is fully executed. Landlord covenants and agrees that upon
Tenant’s paying rent and performing all of the covenants and conditions set
forth in this Lease, Tenant shall peaceably and quietly have, hold and enjoy
the Premises, for the purposes specified in Section 6.1 hereof subject, however, to all of
the terms hereof and to all reservations in favor of Landlord, all zoning
ordinances and other laws and regulations governing or regulating the use of
the Premises, and all easements, rights-of-way, and presently recorded
instruments which affect the Premises. Landlord warrants and represents to
Tenant that the Premises and the Building each contain within ten percent
(10%), plus or minus, of the useable, rentable square feet set forth in
Section 1 hereof.


 


3.                                     
Renewal Terms.  Provided Tenant is not then
in default hereunder, Tenant shall have the right to extend the term of this
Lease for the applicable Renewal Terms provided Tenant gives Landlord written
notice of its election to extend the Lease at least six (6) months prior to the
expiration of the then expiring Term.


 


4.                                     
Security Deposit.  Concurrently with Tenant’s
execution of this Lease, Tenant shall deposit with Landlord the Security
Deposit referenced in Section 1 which shall be held by Landlord, without obligation
for interest or segregation, as security for performance of Tenant’s covenants
and obligations under this Lease, it being expressly understood and agreed that
such deposit is not an advance rental deposit or an exact measure of Landlord’s
damages in case of Tenant’s default. Upon the occurrence of any default by
Tenant, Landlord may, without prejudice to any other available remedy, use such
fund to make good any rent arrearage or any other damage, injury, expense or
liability caused by such event of default, and Tenant shall pay to Landlord
within ten (10) days of written demand therefor, the amount so applied in order
to restore the Security Deposit to its original amount. Subject to the
requirements of and conditions imposed by laws applicable to security deposits
under commercial leases, and if Tenant is not then in default hereunder,
Landlord shall, within ninety (90) days of the expiration of this Lease, return
to Tenant the portion of the Security Deposit remaining after deducting all
damages, charges, and other amounts permitted by Law. Landlord and Tenant agree
that such deductions shall include, without limitation, all damages and losses
that Landlord has suffered or that Landlord reasonably estimates that it will
suffer as a result of any breach of this Lease by Tenant.


 


Subject to the
requirements of and conditions imposed by laws applicable to security deposits
under commercial leases, Landlord shall, within the time required by applicable
law, return to Tenant that portion of the Security Deposit remaining after
deducting all damages, charges and other amounts permitted by law. Landlord and
Tenant agree that such deductions shall include, without limitation, all
damages and losses that Landlord has suffered or that Landlord reasonably
estimates that it will suffer as a result of any breach of this Lease by
Tenant.


 


5.                                     
Rent.


 


5.1                              
Base Rent.  Tenant shall pay Base Rent
to Landlord for the Premises in the amounts set forth in Section 1; and more
specifically in equal and successive monthly installments of Base Rent as set
forth therein. Said Base Rent shall be paid in advance on the first day of each
month of the Term, without charge to Landlord, with proration to occur for any
partial month if the Rent Commencement Date is other than on the first day of a
calendar month. In addition to the Security Deposit, the Prepaid Rent, and the
first monthly installment of estimated Operating Expenses (as herein defined)
shall be due and payable on the date this Lease is fully executed. All rentals
to be paid by Tenant to Landlord shall be in lawful money of the United States
of America and shall be paid without deduction, offset or charge, prior notice
or demand, and at such place or places as may be designated from time to time
by Landlord. Upon the occurrence of an event of default specified in this
Lease, Landlord may at its option, require Tenant to make any payment(s) of
rental by certified check or money order. Tenant’s obligation to pay rent under
this Lease is an independent covenant and no act or circumstance, regardless of
whether such act or circumstance constitutes a breach of this Lease by
Landlord, shall release Tenant of its obligation to pay rent as required by
this Lease.


 


5.2                              
Operating Expense
Payments.  It is the
intention of Landlord and Tenant that Landlord receive the Base Rent “net” of
all other charges except as expressly provided herein; accordingly, beginning
on the earlier of (i) the Commencement Date (as defined in the Construction
Addendum) or (ii) Tenant’s initial occupancy of the Premises, Tenant shall pay
as additional rent Tenant’s Share of the “Operating Expenses” for the Project.
The


 


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term “Operating Expenses” shall mean all costs
and expenses (including without limitation sales tax) incurred by Landlord with
respect to the ownership, maintenance and operation of the Project, including
but not limited to: Taxes as provided in Section 11); Insurance (as provided in Section 14); association fees,
if any; utilities for the Project; maintenance, repair and replacement of all
portions of the Project, including without limitation, signs, fire suppression
systems (if any), repair or replacement of exterior surfaces, including but not
limited to painting, cleaning and graffiti removal, paving and parking areas,
roads, roof (routine maintenance and repair only), alleys, landscaping, line
painting, utility lines, lighting, electrical systems; amounts paid to
contractors and subcontractors for work or services performed in connection
with the foregoing; reasonable property management fees (which, at Landlord’s
option, may be payable to itself, an affiliate or third party manager);
deductibles on insurance loss; security services, if any; trash collection and
sweeping and compliance with laws, rules, regulations and orders of
governmental authorities. Operating Expenses do not include debt service under
mortgages; costs of restoration to the extent of net insurance proceeds
received by Landlord with respect thereto; utilities for the Premises; leasing
commissions; or the cost of renovating space for other tenants of the Project
or capital expenditures unless incurred by Landlord with a principal purpose
to: (i) effect a reduction in the Operating Expenses; or (ii) keep the Project
in compliance with applicable laws, rules, regulations and orders of
governmental authorities. The costs of additions or alterations which are
required to be capitalized for federal income tax purposes shall be amortized
on a straight-line basis over a period equal to the lesser of the useful life
thereof for federal income tax purposes or ten (10) years. Landlord may at its
option increase Tenant’s Share of the Operating Expenses (or any portion
thereof) if in Landlord’s reasonable opinion a disproportionate allocation is
necessary because of Tenant’s use or operation.


 


Landlord shall furnish
Tenant a written statement estimating Tenant’s Share of the Operating Expenses
for the current calendar year (herein the “Estimate”). Beginning on the Rent Commencement
Date and on the first day of each month during the Term, Tenant shall pay
Landlord as additional rent one-twelfth (1/12) of the Estimate. In addition,
Tenant shall pay with the rental payment for the first month following receipt
of the Estimate an amount equal to the number of months elapsed in the calendar
year prior to receipt of the Estimate times one-twelfth (1/12) of the Estimate,
so as to bring said monthly payments current for the year. As soon as practical
after the end of each calendar year, Landlord shall furnish Tenant a written
statement showing Tenant’s Share of the total Operating Expenses actually due
for the calendar year ended (the “Actual Expenses”). If the Actual Expenses
exceed the Estimate, then Tenant agrees to pay within ten (10) days of receipt
of said statement, the difference between Tenant’s Share of the Actual Expenses
and the Estimate. If the Estimate exceeds the Actual Expenses, then Landlord
agrees to refund the difference at the time that such statement is furnished,
provided Tenant is not then in default in the performance of any of its
obligations under this Lease. In the event, and only in such event, that during
the term hereof a specific CAM category actually exceeds Landlord’s estimate,
as set forth in Section 1
hereof, for the first year, and subsequently, the actual amount of each
preceding year for that category by ten percent (10%) or more, and upon not
less than fifteen (15) business days written notice from Tenant to Landlord
within three (3) months of receipt of the Actual Expenses statement reflecting
such, Tenant shall have the right to review and Landlord shall provide copies
of invoices, statements, receipts or similar evidence of said specific CAM
category expenses for amounts over twenty-five dollars ($25.00) at Landlord’s
business office during regular business hours. If Landlord is required to
conduct research regarding the expense amounts, Tenant shall pay Landlord
$25.00 per hour per personnel for such research. If Landlord and Tenant are
unable to agree on the amount to be paid by Tenant, each shall designate a CPA
and the two CPA’s shall designate a third CPA to serve as arbitrator of the
dispute. The arbitrator’s decision as to the amount to be paid by Tenant shall
be binding upon the parties. The non-prevailing party shall bear the expenses
incurred by this action. The provisions of this Section shall apply for
any partial calendar year during which this Lease is effective, subject to a
pro rata adjustment based upon the number of calendar months or portions
thereof that this Lease is in effect. Tenant’s obligation to pay any such
difference in the Operating Expenses shall survive the termination or
expiration of this Lease.


 


For purposes of this
Section, a year shall mean a calendar year except for the first year of this
Lease, which shall begin on the Rent Commencement Date and the last year which
shall end at the expiration of the Lease.


 


Landlord and Tenant are
knowledgeable and experienced in commercial transactions and agree that the
provisions of this Lease for determining charges, amounts and additional rental
payable by Tenant (including without limitation, payments under Sections 1, 5,
11 and 13 hereof regarding operating expenses, taxes, and utilities, etc.) are
commercially reasonable and valid, and as to each such charge or amount,
constitute a “method by which the charge is to be computed” for purposes of
Section 93.004 of the Texas Property Code, as enacted by House Bill 2186,
77th Legislature.


 


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5.3                              
Late Charges.  Tenant agrees to pay a late
charge of ten percent (10%) as additional rent for each payment due hereunder
that remains unpaid, i.e., not received in Landlord’s office, for more than
five (5) days after the first (1st) day of the month to cover
Landlord’s administrative costs of processing such late payment. In addition to
said late charge, any rental or other amount due from Tenant under this Lease
which is more than thirty (30) days delinquent shall bear interest from the
date such rental or other amount was due at the lesser of the rate of eighteen
percent (18%) per year or the then maximum nonusurious rate under applicable
law, (the lesser of said amounts being herein referred to as the “Maximum
Rate.”) In the event the late charge is ever deemed to be “interest” the amount
of interest on past due amounts shall be automatically reduced so that the
combination of said late charge and the interest on past due amounts, if any,
does not exceed the Maximum Rate. Any amount collected which exceeds the
Maximum Rate will be deemed credited to other amounts owed by Tenant to
Landlord under this Lease, and any remaining excess after such credit shall be
refunded to Tenant. It is the intent of both Landlord and Tenant to at all
times comply with the applicable law regarding the maximum nonusurious amount
or rate of interest which may be contracted for, charged, taken, reserved or
received by Landlord.


 


6.                                     
Conduct of
Business of Tenant.  


 


6.1                              
Use of Premises.  The Premises shall be
occupied and used by Tenant solely for the purpose of conducting therein the
business of light manufacturing, receiving and distributing, storing and
selling (wholesale only) of products, materials and merchandise made or
distributed by Tenant and for such lawful purposes as may be incident thereto
and for no other purpose without Landlord’s prior written consent which shall
not be unreasonably withheld. Any and all forklift or similar vehicles used or
placed in or around the Premises must have polyurethane coated wheels. Tenant
shall not use the Premises as a place of public accommodation. Tenant’s
acceptance of occupancy from Landlord shall constitute acknowledgment by Tenant
that Tenant has inspected the Premises and the Project of which the Premises
are a part and that same are suitable for Tenant’s intended use thereof as
stated in this Section.  Tenant recognizes and agrees that Landlord is
making no warranties, expressed or implied, as to the suitability of the
Premises or the Project for any particular use. Tenant accepts the space “AS
IS” with all faults.


 


6.2                              
Operation by
Tenant.  Tenant
covenants and agrees to the following:


 


(a)                                 
Tenant,
at Tenant’s expense, shall comply with all laws, rules, orders, ordinances,
directions, regulations and requirements of federal, state, county and
municipal authorities regardless of when they become effective, pertaining to
Tenant’s use or occupancy of the Premises and with any recorded covenants,
conditions and restrictions, including, without limitation, all applicable
federal, state and local laws, regulations or ordinances pertaining to air,
soil and water quality, Hazardous Materials (as defined in Section 29.3 hereof), waste
disposal, air emissions and other environmental, health and safety, zoning and
land use matters, the Americans with Disabilities Act or similar laws and with
any directive or order of any public officer or officers, pursuant to law,
which impose any duty upon Landlord or Tenant with respect to the use or
occupancy of the Premises;


 


(b)                                
Tenant
shall comply with all requirements of any authority or agency having
jurisdiction over the insurance rates with respect to the use or occupancy of
the Premises;


 


(c)                                 
Landlord
shall have the exclusive right to use the roof, side and rear walls of the
Premises for any purpose, including but not limited to erecting signs or other
structures on or over all or any part of the same, erecting scaffolds and other
aids to the construction and installation of the same, and installing,
maintaining, using, repairing, and replacing pipes, ducts, conduits and wires
leading through, to or from the Premises and serving other parts of the Project
in locations which do not materially interfere with Tenant’s use of the
Premises. Tenant shall have no right whatsoever to the exterior or exterior
walls, or the roof of the Premises or any portion of the Project outside the
Premises, except as otherwise provided in this Lease;


 


(d)                                
Tenant
agrees that it shall not use or permit the Premises to be used for an adult
bookstore, adult motion picture theater, nude or semi-nude entertainment club,
or similar adult entertainment establishment.


 


7.                                     
Rules and
Regulations. Tenant and Tenant’s
agents, employees, and invitees shall faithfully observe and comply with all
reasonable, uniform rules and regulations promulgated by Landlord from time to
time for the safety, care or cleanliness of the Project and for the
preservation of good order therein. Landlord shall not be


 


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responsible to Tenant for the nonperformance by any
other tenant or occupant of the Project of any of the rules and regulations,
but shall try to enforce performance of all rules and regulations by all
tenants.


 


8.                                     
Parking and Use of
Common Area and Facilities.


 


8.1                              
Common Area.  All parking areas, access
roads and facilities furnished, made available or maintained by Landlord on the
Project for the general use in common of tenants of the Project and their
invitees in the Project or on the Land, including employee parking areas, truck
ways, driveways, loading docks and areas, delivery areas, pickup stations,
pedestrian sidewalks, courts and ramps, landscaped areas, retaining walls,
stairways, hallways, common restrooms, lighting facilities, and other similar
areas and improvements provided by Landlord for the general use in common of
tenants of the Project and their customers (all within the Project are herein
collectively called the “Common Area”) shall at all times be subject to the
exclusive control and management of Landlord. Tenant acknowledges that it does
not have an exclusive interest in the Common Area. Landlord reserves the right
to grant such easements and other rights in the Common Area as Landlord may
from time to time deem necessary for the benefit of the Project and/or its
tenants, including without limitation, easements for mutual ingress and egress,
truck turning and similar matters for the benefit of adjacent properties.
Landlord may, at its sole option, modify the Common Areas or make such changes
thereto as Landlord deems reasonably necessary for the benefit of the Project
and/or its tenants.


 


8.2                              
Use of Common Area.  Tenant and Tenant’s business
invitees, employees and customers shall have the nonexclusive right, in common
with Landlord and all others to whom Landlord has granted or may hereafter
grant rights, to use the Common Area, subject to such reasonable, uniform rules
and regulations as Landlord may from time to time impose and the rights of
Landlord set forth above. Landlord may at any time close temporarily all or any
part of the Common Area to make repairs or changes, to prevent the acquisition
of public rights therein or for any other reasonable purpose. Tenant shall not
interfere with the other tenants’ right to use any part of the Common Area.
Landlord may allocate parking spaces among Tenant and other tenants in the
Project if, in Landlord’s opinion, such parking facilities are becoming
crowded. Landlord shall not be responsible for enforcing Tenant’s parking
rights against any third parties. Nothing herein shall obligate Landlord to
maintain or provide any security services or systems for the Project. Tenant
agrees that Landlord shall not be liable to Tenant for, and Tenant waives any
claim against Landlord with respect to, any loss by theft or any other damage
suffered or incurred by Tenant in connection with any unauthorized entry into
the Premises or Project, or other criminal or willful acts of third parties.


 


9.                                     
Maintenance of
Premises.


 


9.1                              
Maintenance by
Landlord.  Landlord shall keep or
cause to be kept the foundations, roof and exterior walls of the Premises in
good order, repair and condition except for damage thereto due to the acts or
omissions of Tenant, Tenant’s employees or invitees. Landlord shall commence
required repairs as soon as reasonably practicable after receiving written
notice from Tenant thereof, but in any event within ten (10) business days from
such notice. Except as provided in this Section, Landlord shall not be
obligated to make repairs, replacements or improvements of any kind upon the
Premises, or to any equipment, merchandise, stock in trade, facilities or
fixtures therein, all of which shall be Tenant’s responsibility. Landlord
reserves the right to enter into a standard maintenance contract with a third
party for the routine and regular maintenance of all heating, ventilation and
air-conditioning equipment located on the roof or exterior of the Premises. 
Landlord shall be responsible for repairs as well as maintenance of said
equipment, but Tenant agrees to reimburse Landlord for all expenses incurred by
Landlord in connection with such standard maintenance contract and the
maintenance and repair of the heating, ventilation, and air-conditioning
equipment serving the Premises.


 


9.2                              
Maintenance by
Tenant.  Tenant shall at
all times keep the Premises (including all entrances and vestibules) and all
partitions, gutters and downspouts, windows and window frames and moldings,
glass, doors, door openers, fixtures, equipment and appurtenances thereof
(including lighting, electrical, and plumbing equipment and appurtenances and
all interior heating, ventilation and air-conditioning equipment) and all parts
of the Premises not required in Section 9.1 to be maintained by Landlord in
good order, condition and repair and in a clean, orderly, sanitary and safe
condition, damage by unavoidable casualty excepted (including but not limited
to doing such things as necessary to cause the Premises to comply with
applicable laws, rules, regulations and orders of governmental and public
authorities and agencies). If replacement of equipment, fixtures and
appurtenances thereto are necessary, Tenant shall replace the same with
equipment, fixtures and appurtenances of the same quality, and shall repair all
damages done in or by such replacement.


 


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9.3                              
Fire Equipment.  Tenant agrees to supply and
maintain at its own expense any fire extinguishers, or other fire prevention
equipment, including, without limitation, sprinkler or fire suppression
systems, required by law, rules, orders, ordinances, and regulations of any
city, county, or state in which the Premises are located and/or required by any
insurance carrier, underwriters association, bureau, or any other similar body
having jurisdiction involving the Premises. Additionally, Tenant agrees to
comply, at its own expense, with all recommendations of any such authority.


 


10.                              
Alterations, Liens
and Signs.


 


10.1                       
Alterations.  Tenant will not paint,
decorate or change the architectural treatment of any part of the exterior of
the Premises or construct any changes to the interior of the Premises, without
Landlord’s prior written approval thereto, and will promptly remove any paint,
decoration, alteration, addition or changes applied or installed without
Landlord’s approval or take such other action with respect thereto as Landlord
directs. Tenant shall not make any structural alterations, additions or changes
to the Premises. Tenant may, at its own cost and expense erect shelves, bins,
racks and removable (i.e., not attached to the realty) trade fixtures (collectively
“Trade Fixtures”) in the ordinary
course of its business provided such items do not alter the basic character of
the Premises, do not damage the Premises, may be removed without injury to the
Premises and the construction, erection and installation thereof complies with
all legal requirements and other provisions of this Lease. If Landlord grants
consent to any requested alterations, the alterations shall be performed in a
good, workmanlike and lien free manner in accordance with all applicable legal requirements
and any restrictions which may be imposed by Landlord as a condition to its
consent. All alterations, changes, additions and all leasehold improvements
made by Tenant or made by Landlord on Tenant’s behalf and all fixtures
installed by Tenant which are not Trade Fixtures are herein collectively
referred to as “Tenant
Additions”, and shall be the property of Landlord. Such Tenant Additions shall not
be removed by Tenant on, before or following expiration or termination of the
Lease without Landlord’s consent except as may be required pursuant to Section 27.1.


 


10.2                       
Liens.  Tenant shall promptly pay
all contractors and materialmen, and not permit or suffer any lien to attach to
the Premises or Project or any part thereof, and indemnify and save harmless
Landlord against the same. Landlord shall have the right to require Tenant to
furnish a bond or other indemnity satisfactory to Landlord prior to the
commencement of any work by Tenant on the Premises. If any lien attaches or is
claimed, Tenant, within ten (10) days following the imposing of any such lien,
shall cause the same to be released of record by payment or posting of a bond
as provided in the Texas Property Code. Tenant has no express or implied
authority to create or place any lien or encumbrance of any kind upon, or in
any manner to bind the interest of Landlord in the Premises or Project or to
charge the rentals payable hereunder for any claim in favor or any person
dealing with Tenant, including, without limitation, those who may furnish
materials or perform labor for any construction or repairs.


 


10.3                       
Signs.  Tenant will not place or
permit on any exterior door or window or any exterior wall of the Premises any
sign, awning, canopy, advertising matter, decoration, lettering or other thing
of any kind without the written consent of Landlord except as provided in the
Sign Criteria Addendum attached hereto. Failure by Tenant to erect an approved
company name/logo sign on the Building within forty-five (45) days of occupancy
shall constitute a default hereunder.


 


11.                              
Real Estate Taxes.  Landlord has the sole right
to render the Project, land and any improvements thereon to any appropriate
taxing authorities. Tenant, as additional rent, agrees to pay Tenant’s Share of
all taxes (both general and special), assessments, or governmental charges
(hereinafter “Taxes”) lawfully levied or assessed against the land, Project or
any portion thereof, including without limitation any gross receipts or similar
tax. Tenant’s Share of the Taxes shall be payable as additional rent in
accordance with Section 5.2. Additionally, Tenant
shall pay to Landlord upon demand, Tenant’s Share of all reasonable costs
(including tax consultant and/or attorney’s fees) incurred by Landlord in
connection with any protest or contest of the valuation of taxes imposed on the
Project or land. Provided, however, Landlord shall have no obligation to take
any such action. Tenant shall have the right to inspect, at Landlord’s business
office during regular business hours and upon reasonable notice to Landlord,
the tax bills which Landlord receives from the applicable taxing authorities.


 


12.                              
Personal Property
Taxes.  During the term
of this Lease, Tenant shall pay prior to delinquency all taxes assessed against
and levied upon fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises. When possible, Tenant shall cause
its personal property to be assessed and billed


 


6





















 


separately
from the real property of Landlord. If any of Tenant’s personal property shall
be assessed with Landlord’s real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written
statement therefor or, at Landlord’s option as provided in Section 11.


 


13.                              
Utilities.  Tenant agrees to convert all
utilities to Tenant’s name upon move-in and to pay before delinquency all
charges for all utilities (including but not limited to gas, water, heat,
sewer, electricity, telephone, garbage removal, water meter charges and all
hookup or connection fees or charges) which may accrue with respect to the
Premises during the term of this Lease. Additionally, Tenant shall pay to
Landlord, as additional rent, upon demand, its share of any utilities which are
not separately metered based upon usage as reasonably determined by Landlord.
Landlord shall in no event be liable to Tenant for any interruption in the
service of any such utilities to the Premises, howsoever such interruption may
be caused and this Lease shall continue in full force and effect despite any
such interruptions. Tenant agrees to limit use of water and sewer to normal
restroom use. Tenant acknowledges that it has inspected the utilities available
to the Premises and that it has determined that such utilities are sufficient
for all anticipated uses of the Premises. Tenant shall not install any
equipment or make any use of the Premises which overloads the utilities
available to the Premises and if Landlord reasonably deems Tenant’s use of
equipment to be in violation of this provision, Landlord may, in addition to
such other remedies which Landlord has hereunder, require Tenant, at Tenant’s expense,
to upgrade such utility lines and related equipment including without
limitation transformers.


 


14.                              
Insurance; Waiver;
Indemnification.


 


14.1                       
Landlord’s
Obligation.  During the term
of this Lease and any extension or renewal hereof, Landlord shall procure and
maintain such “all risk property and general liability” insurance coverage on
the Project as Landlord deems appropriate, including, if Landlord so elects,
loss of rental insurance in an amount of one or more year’s annual rental.


 


14.2                       
Tenant’s
Obligations.


 


14.2.1.          
All Risk Property
and General Liability.  Tenant, as additional rent, shall pay to Landlord an amount
equal to Tenant’s Share of all premiums paid by Landlord for the insurance
coverage described in Section 14.1. Tenant’s Share of such premiums is
payable as additional rent in accordance with Section 5.2.


 


14.2.2.          
Liability.  Tenant shall procure and
maintain a policy or policies of insurance insuring Tenant, with Landlord named
as additional insured, against all claims, damages or actions arising out of or
in connection with Tenant’s use or occupancy of the Premises or by the
condition of the Premises, the limits of such policy or policies to be in an
amount not less than $1,000,000 per occurrence, and in an amount not less than
$2,000,000 in the general aggregate for bodily injury and property damage. Said
policy or policies shall additionally include “Fire Legal Liability” insurance
coverage in the maximum allowable amount. Tenant shall also maintain workman’s
compensation insurance in the required statutory amounts and provide Landlord
with proof of all insurance.


 


14.2.3.          
Personalty
Coverage.  Tenant also
agrees to carry insurance against fire and such other risks as are from time to
time included in standard extended coverage insurance, for the full insurable
value, covering all of Tenant’s merchandise, trade fixtures, furnishings, wall
covering, floor covering, carpeting, drapes, equipment and all items of
personal property of Tenant located on or within the Premises.


 


14.2.4.          
Construction
Liability.  Tenant, at its
own cost and expense, shall obtain and maintain at all times when demolition,
excavation, or construction work is in progress being done by Tenant on the
Premises, construction liability insurance with limits of not less than
$500,000.00 and $2,000,000.00 in the general aggregate for bodily injury and
property damage, protecting Landlord and Tenant as well as such other person or
persons as Tenant may designate against any and all liability for injury or
damage to any person or property in any way arising out of such demolition,
excavation, or construction work.


 


14.2.5.          
Form of Insurance. All policies required of Tenant
hereunder shall: (i) be issued by a reputable insurance company qualified to do
business in the State of Texas and with an A.M. Best rating reasonably
acceptable to Landlord; (ii) name Landlord as an additional insured and Tenant
as a named insured; (iii) provide that they cannot be canceled for any reason
unless Landlord is given thirty (30) days prior written notice by


 


7





















 


the
insurer; (iv) state that such insurance is primary over any insurance carried
by Landlord; (v) contain an endorsement in favor of Landlord, waiving such
insurance company’s right of subrogation against Landlord; and (vi) contain a
statement that the premium for such policy(es) is current. A duly executed
certificate of insurance shall be delivered to Landlord on or within five (5)
days of the Commencement Date. All renewals shall be delivered to Landlord at
least ten (10) days prior to the expiration of the respective policy terms.
Landlord shall have the right to review said insurance amounts at least yearly
during the term of this Lease and require Tenant to increase said insurance
policies to provide coverage in such amounts as Landlord and/or Landlord’s
lender, in their discretion, deems necessary. Moreover, should Tenant’s use of
the Premises (or any vacancy by Tenant) result in an increased insurance rate,
Landlord may, in its discretion allocate such amount of the insurance premium
to Tenant as Landlord deems reasonable to pass the cost of such increased
premium through to Tenant rather than other tenants of the Project. Tenant
agrees to procure and maintain said increased insurance coverage. The insurance
required of Landlord hereunder may be maintained under a blanket or master
policy which includes properties other than the Project.


 


14.3                       
Mutual Waiver of
Subrogation Rights.  Landlord and
Tenant and all parties claiming under them mutually release and discharge each
other and their respective officers, directors, partners, employees and agents
from all claims and liabilities arising from or caused by any casualty or
hazard to the extent covered by valid and collectible insurance on the Project;
and waive any right of subrogation which might otherwise exist in or accrue to
any person on account thereof; provided that, such release shall not operate in
any case where the effect is to invalidate such insurance coverage. THIS RELEASE SHALL APPLY EVEN IF THE LOSS
OR DAMAGE SHALL BE CAUSED BY THE FAULT OR NEGLIGENCE OF A PARTY HERETO OR FOR
ANY PERSON FOR WHICH SUCH PARTY IS RESPONSIBLE.


 


14.4                       
Waiver.  LANDLORD, ITS AGENTS AND
EMPLOYEES, SHALL NOT BE LIABLE FOR, AND TENANT WAIVES ALL CLAIMS FOR DAMAGE
(EXCEPT CLAIMS CAUSED BY OR RESULTING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT
OF LANDLORD, ITS AGENTS OR EMPLOYEES), INCLUDING BUT NOT LIMITED TO
CONSEQUENTIAL DAMAGES, TO PERSON, PROPERTY OR OTHERWISE, SUSTAINED BY TENANT OR
ANY PERSON CLAIMING THROUGH TENANT RESULTING FROM ANY ACCIDENT OR OCCURRENCE IN
OR UPON ANY PART OF THE PREMISES OR THE PROJECT, INCLUDING BUT NOT LIMITED TO,
CLAIMS FOR DAMAGE RESULTING FROM: (A) ANY EQUIPMENT OR APPURTENANCES BECOMING
OUT OF REPAIR; (B) INJURY DONE OR CAUSED BY WIND, WATER, OR OTHER NATURAL
ELEMENTS; (C) ANY DEFECT IN OR FAILURE OF PLUMBING, HEATING OR AIR-CONDITIONING
EQUIPMENT, ELECTRIC WIRING OR INSTALLATION THEREOF, GAS, WATER, AND STEAM
PIPES, STAIRS, PORCHES, RAILINGS OR WALKS; (D) BROKEN GLASS; (E) THE BACKING UP
OF ANY SEWER PIPE OR DOWNSPOUT; (F) THE BURSTING, LEAKING OR RUNNING OF ANY
TANK, TUB, WASHSTAND, WATER, SNOW OR ICE UPON THE PREMISES OR THE PROJECT; (G)
THE FALLING OF ANY FIXTURE, PLASTER OR STUCCO; (H) DAMAGE TO OR LOSS BY THEFT
OR OTHERWISE OF PROPERTY OF TENANT OR OTHERS; (I) ACTS OR OMISSIONS OF OTHER
PERSONS IN THE PREMISES, OTHER TENANTS IN THE PROJECT, OCCUPANTS OF NEARBY
PROPERTIES, OR ANY OTHER PERSONS; AND (J) ANY ACT OR OMISSION OF OWNERS OF
ADJACENT OR CONTIGUOUS PROPERTY. ALL PROPERTY OF TENANT KEPT IN THE PREMISES
SHALL BE SO KEPT AT TENANT’S RISK ONLY AND TENANT SHALL INDEMNIFY, DEFEND AND
SAVE LANDLORD HARMLESS FROM CLAIMS ARISING OUT OF DAMAGE TO THE SAME, INCLUDING
SUBROGATION CLAIMS BY TENANT’S INSURANCE CARRIER, EXCEPT CLAIMS CAUSED BY OR
RESULTING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, ITS AGENTS OR
EMPLOYEES,


 


14.5                       
Indemnification.  Tenant shall indemnify,
defend and save harmless Landlord from and against any and all liability,
liens, claims, demands, damages, expenses, fees, costs, fines, penalties,
suits, proceedings, actions and causes of action of any and every kind and
nature arising or growing out of or in any way connected with the use,
occupancy, management or control of the Premises by Tenant, its agents,
employees, contractors or invitees or the operations, conduct or activities in
the Premises or the Project by Tenant, its agents, employees, contractors or
invitees, including without limitation: (i) liability for damage resulting from
the personal injury or death of an employee of Tenant, regardless of whether
the Tenant has paid such employee under the Workman’s Compensation law of any
state or other similar federal or state program for the protection of
employees, (ii) liability arising from any entrance upon the Land, the Project,
or the Premises by any person through any means for the purpose of selling or
solicitation, including but not limited to, the marketing of edible or potable
products,


 


8





















 


and
(iii) damage to any real or personal property of Tenant, Landlord or any third
parties. Tenant authorizes Landlord (although expressly recognizing that
Landlord is under no obligation to do so) to defend, settle or compromise any
claims, demands, suits, proceedings or the like which may represent an
indemnifiable obligation of Tenant hereunder should Tenant choose not to so
act. Such action or inaction by Landlord shall in no way affect Tenant’s
indemnity obligations as provided herein. Tenants indemnity obligations under
this Section and elsewhere in this Lease shall survive the expiration or
earlier termination of this Lease. Landlord shall indemnify, defend and save
harmless Tenant from and against any and all liability, liens, claims, demands,
damages, expenses, fees, costs, fines, penalties, suits, proceedings, actions
and causes of action of any and every kind and nature arising or growing out of
or in any way directly connected with Landlord’s actions or omissions related
to the Project as a result of the negligence or willful misconduct of Landlord,
its agents or employees.


 


15.                              
Right of Entry.  Upon
reasonable prior notice (24 hours) unless in the case of an emergency,
Landlord, its agents and employees, shall have the right to enter the Premises
from time to time at reasonable times to examine, to show them to prospective
purchasers and other persons, and to make such repairs, alterations,
improvements or additions as Landlord deems desirable. Rent shall not abate
during any such entry by Landlord, including without limitation, during the
period of any such repairs, alterations, improvements, or addition. During the
last six (6) months of the term of this Lease, Landlord may exhibit the
Premises to prospective tenants and maintain upon the Premises notices deemed
advisable by Landlord. In addition, during any apparent emergency, Landlord,
its agents and employees, may enter the Premises forcibly without liability
therefor and without in any manner affecting Tenant’s obligations under this
Lease. Nothing herein contained, however, shall be deemed to impose upon
Landlord any obligation, responsibility or liability whatsoever, for any care,
maintenance or repair except as otherwise herein expressly provided.


 


16.                              
Subordination and
Attornment.  Tenant accepts
this Lease subject and subordinate to any mortgage, deed of trust, or other
lien presently existing on the Project or the Land or subsequently created on
the Project, and to any renewals and extensions thereof, provided that the
rights of Tenant shall remain in full force and effect during the term of this
Lease so long as Tenant shall continue to perform all of the covenants and
conditions of this Lease, but Tenant agrees that any such mortgagee shall have
the right at any time to subordinate such mortgage, deed of trust, or other
lien to this Lease. Landlord is hereby irrevocably vested with full power and
authority to subordinate this Lease to any mortgage, deed of trust, or other
lien hereafter placed on the Project or the Land, and Tenant agrees on demand,
and without charge to Landlord or any mortgagee, to execute such further
instruments subordinating this Lease as Landlord may reasonably request,
provided such subordination shall be on the express condition that this Lease
shall be recognized by the mortgagee, and that the rights of Tenant shall
remain in full force and effect during the term of this Lease so long as Tenant
shall continue to perform all of the covenants and conditions of this Lease. No
such mortgagee shall be required to assume any liabilities for defaults
occurring prior to its ownership of the Project. Tenant covenants and agrees
that upon foreclosure of any deed of trust, mortgage or other instrument of
security and the sale of the Project or the Land pursuant to any such document,
to attorn to any purchaser at such a sale and to recognize such purchaser as
the Landlord under this Lease. The agreement of Tenant to attorn to any
purchaser pursuant to such a foreclosure sale or trustee’s sale in the
immediately preceding sentence shall survive any such sale. Tenant’s rights
under this Lease shall remain in full force and effect so long as Tenant shall
continue to perform all of the covenants and conditions of this Lease and
Tenant is not in default under this Lease and Landlord owns the Project.


 


17.                              
Estoppel Certificate.  Tenant shall at any time but
not more often than three (3) times per year, upon the reasonable request of
Landlord and without charge to Landlord or any third party requesting same of
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
modified stating the nature of such modification and certifying that the Lease
as modified is in full force and effect), the dates to which the rent and other
charges are paid in advance, if any, and acknowledging that there are not, to
Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, or
specifying such defaults if any are claimed. The parties hereto agree that any
such statement may be relied upon by any prospective purchaser or encumbrancer
of all or any portion of the Project or the Land. Tenant’s failure to deliver
such statement within ten (10) days after Landlord’s request for the same,
shall be conclusive upon Tenant that: (i) this Lease is in full force and
effect; (ii) this Lease has not been modified or amended other than expressly
stated; (iii) there are no uncured defaults in Landlord’s performance; and (iv)
not more than one month’s rent or other charge has been paid in advance.


 


18.                              
Damage and
Destruction.  If the Premises
are hereafter partially damaged or destroyed or rendered partially untenantable
(i.e., less than 30% of the Premises are damaged or untenantable) for their


 


9





















 


accustomed
use by fire or other casualty and such fire or other casualty is not caused
directly or indirectly by the fault or negligence of Tenant, its agents,
employees, contractors or invitees, Landlord shall, unless the Lease is
terminated as provided below, promptly repair the same to substantially the
condition which they were in immediately prior to the happening of such
casualty (excluding stock in trade, fixtures, furniture, furnishings,
carpeting, floor covering, wall covering, drapes and equipment), and from the date
of such casualty until the Premises are so repaired and restored, the monthly
rent payments hereunder shall abate in such proportion as the part of said
Premises thus destroyed or rendered untenantable bears to the total Premises.
Provided, however, Landlord shall not be obligated to expend for such repair or
restoration an amount in excess of the insurance proceeds received by Landlord
as a result of such damage. Landlord’s obligation to rebuild is contingent upon
its receipt of insurance proceeds sufficient to make such repairs. In the event
any mortgagee or lender requires such sums to be applied to any debt, Landlord
will not be deemed to have received the proceeds. Notwithstanding the above, if
the Premises or any material portion of the Project is wholly or substantially
damaged (i.e., more than 30% of the Premises are damaged or untenantable),
destroyed or rendered untenantable for their accustomed use by fire or other
casualty then Landlord shall have the right to terminate this Lease effective as
of the date of such casualty by giving to Tenant, within ninety (90) days after
the happening of such casualty, written notice of such termination. If such
notice is given, this Lease shall terminate and provided Tenant is not in
default hereunder, Landlord shall promptly repay to Tenant any rent theretofore
paid in advance which was not earned at the date of such casualty. If said
notice is not given and Landlord is required or elects to repair or restore the
Premises as herein provided, then Tenant shall promptly repair or replace its
stock in trade, fixtures, furnishings, furniture, carpeting, wall covering,
floor covering, drapes and equipment to the same condition as they were in
immediately prior to the casualty. If the Premises or any portion of the Project
are damaged by fire or other casualty caused directly or indirectly by the
fault or negligence of Tenant or its agents, employees, contractors, or
invitees, the rent under this Lease will not abate and Tenant shall be liable
to Landlord for the cost and expense of the repair and restoration of the
Premises or the Project caused thereby to the extent that such cost and expense
is equal to or less than the deductible amount covered by the insurance
proceeds described in Section 14.1.


 


19.                              
Eminent Domain.


 


19.1                       
Eminent Domain.  If 30% or more of the
Premises or any portion of the Project shall be acquired, condemned or damaged
as a result of the exercise of any power of eminent domain, condemnation or
sale under threat thereof, or in lieu thereof, then Landlord at its election
may terminate this Lease by giving notice to the Tenant of its election, within
180 days of the date the condemning authority shall have the right to
possession of the Premises or portion of the Project condemned. Moreover, if
any portion of the Project is taken and in Landlord’s judgment such taking
would materially interfere with or impair its ownership or operation of the
Project, Landlord may terminate this Lease. If the Lease shall not be
terminated as aforesaid, then it shall continue in full force and effect, and
Landlord shall within a reasonable time after possession is physically taken by
the condemning authority (subject to delays due to shortage of labor, materials
or equipment, labor difficulties, breakdown of equipment, governmental
restrictions, fires, other casualties or other causes beyond the reasonable
control of Landlord) restore the remaining portion of the Premises to the
extent reasonably possible, to render it reasonably suitable for the use
permitted by Section 6.1. Provided, however,
Landlord shall not be obligated to expend an amount greater than the proceeds
received from the condemning authority less all expenses incurred in connection
therewith (including attorney’s fees) for the restoration. Base rent as
provided in Section 5.1, shall be reduced in
the proportion that the area of the Premises so taken bears to the total
Premises, No taking of the Common Area shall entitle Tenant to an abatement.


 


19.2                       
Damages.  Landlord reserves and Tenant
assigns to Landlord, all rights to damages on account of any taking or
condemnation or sale under threat or in lieu thereof or any act of any public
or quasi-public authority for which damages are payable. Tenant shall execute
such instruments of assignment as Landlord reasonably requires, join with
Landlord at Landlord’s cost and expense in any action for the recovery of
damages if requested by Landlord, and turn over to Landlord any damages recovered
in any proceeding. If Tenant fails to execute instruments required by Landlord
or to undertake such other steps as requested, Landlord may impose a fine on
Tenant equal to the daily Base Rent amount, plus compounded interest at the
rate of 10% per day, for each day that Tenant fails to execute such
instruments. However, Landlord does not reserve any damages payable for trade
fixtures installed by Tenant at its own cost which are not part of the realty.


 


20.                              
Assignment and
Subletting.  Tenant shall
not assign this Lease or any interest therein, whether voluntarily, by
operation of law, or otherwise, and shall not sublet the Premises or any part
thereof, including but not limited to all concession vending, except by written
permission and consent of Landlord being first had and obtained.


 


10





















 


Consent
of Landlord to any such assignment or subletting shall not be unreasonably
withheld if: (i) at the time of such assignment or subletting Tenant is not in
default in the performance and observance of any of the covenants and
conditions of this Lease; (ii) the assignee or subtenant of Tenant shall
expressly assume in writing all of Tenant’s obligations hereunder; (iii) Tenant
shall provide proof to Landlord that the assignee or subtenant has a financial
condition which is satisfactory to Landlord and Landlord’s lender; (iv) the
Premises continue to be used solely for the purpose set forth in Section 6.1, and (v) Landlord is
furnished with and approves the form of the proposed sublease. In connection
with any such assignment or sublease, Tenant or the assignee or subtenant of
Tenant shall pay to Landlord any legal and administrative costs incurred by
Landlord in approving such assignment or subletting, not to exceed $5,000.00. Any
such assignment or sublease, even with the approval of Landlord, shall not
relieve Tenant from liability for payment of all forms of rental and other
charges herein provided or from the obligations to keep and be bound by the
terms, conditions and covenants of this Lease. The acceptance of rent from any
other person shall not be deemed to be a waiver of any of the provisions of
this Lease, or a consent to the assignment or subletting of the Premises.
Consent to any assignment or subletting shall not be deemed a consent to any
future assignment or subletting. Any merger, consolidation or transfer of
corporate shares of Tenant, if Tenant is a corporation, so as to result in a
change in the present voting control of the Tenant by the person or persons
owning a majority of said corporate shares on the date of this Lease, shall
constitute an assignment and be subject to the conditions of this Section. If
Tenant is a general partnership having one or more corporations as partners or
if Tenant is a limited partnership having one or more corporations as general
partners, the provisions of the preceding sentence shall apply to each of such
corporations as if such corporation alone had been the Tenant hereunder. If
Tenant is a partnership, the withdrawal of a general partner shall be an
assignment subject to the provisions hereof. Moreover, in the event that the
rental due and payable by a sublessee or assignee, or a combination of the
rental payable under such sublease or assignment plus any bonus or other
consideration therefor or incident thereto exceeds the rental payable under
this Lease, or if with respect to an assignment, sublease, license or other
transfer by Tenant permitted by Landlord, the consideration payable to Tenant
by the assignee, subtenant, licensee or other transferee exceeds the rental
payable under this Lease, then Tenant shall be bound and obligated to pay
Landlord, in addition to all rental required hereunder, such excess rental and
other excess consideration within ten (10) days following receipt thereof by
Tenant from such sublessee, assignee, licensee or other transferee, as the case
may be. Finally, in the event of any assignment or subletting it is understood
and agreed that all rentals paid to Tenant by an assignee or sublessee shall be
received by Tenant in trust for Landlord, to be forwarded immediately to
Landlord without reduction of any kind, and upon election by Landlord such
rentals shall be paid directly to Landlord. Without limitation on Landlord’s
approval rights as provided above, Tenant shall provide a copy of any executed
sublease to Landlord within ten (10) days of the execution thereof. Landlord
may assign this Lease at will and shall provide Tenant with a copy of such
assignment.


 


Notwithstanding the
foregoing subsection, Tenant shall have the right to assign this Lease or
sublet all or any portion of the Premises without the consent of, but with
prior written notice to, Landlord, to any corporation or entity which controls,
is controlled by or is under common control with Tenant, or to any corporation
resulting from the merger or consolidation with Tenant, or to any person or
entity which acquires substantially all of the assets of Tenant so long as such
assignee or sublessee or survivor entity has similar or better financial status,
and provided that no such assignment or sublease shall act as a release of
Tenant from any of the provisions, covenants and conditions on the part of
Tenant to be kept or performed under this Lease.


 


21.                              
Default by Tenant.


 


21.1                       
Events of Default.  The following
shall be considered for all purposes to be events of default under and a breach
of this Lease: (a) any failure of Tenant to pay any rent or other amount due
hereunder for more than ten (10) days after written notice thereof; (b) failure
of Tenant to maintain insurance in the amounts and in a form called for under
this Lease; (c) any failure by Tenant to perform or observe any of the other
terms, provisions, conditions and covenants of this Lease for more than thirty
(30) days after written notice of such failure; (d) Tenant shall become
bankrupt or insolvent, or file or have filed against it a petition in
bankruptcy or for reorganization or arrangement or for the appointment of a
receiver or trustee of all or a portion of Tenant’s property, or Tenant makes
an assignment for the benefit of creditors; (e) if Tenant abandons or vacates
the Premises; (f) this Lease, Tenant’s interest herein or in the Premises, any
improvements thereon, or any property of Tenant is executed upon or attached;
or (g) the Premises come into the hands of any person other than expressly
permitted under this Lease.


 


21.2                       
Landlord’s
Remedies.  Upon the
occurrence of any event of default specified in this Lease, Landlord, without
grace period, demand or notice (the same being hereby waived by Tenant), and in
addition


 


11





















 


to all
other rights or remedies Landlord may have for such default, shall have the
right to pursue any one or more of the following remedies:


 


(a)                                 
Terminate
this Lease in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying said Premises or any part thereof, by force if
necessary, without notice or the need to resort to legal process and without
being deemed guilty of trespass or becoming liable for any loss or damage
occasioned thereby; and Landlord may recover from Tenant the amount of all loss
and damage which Landlord may suffer by reason of such termination, including, without
limitation, all costs of retaking the Premises and the total rent and charges
reserved in this Lease for the remainder of the term of this Lease (i.e., the
duration of this Lease had it not been terminated) all of which shall be
immediately due and payable by Tenant to Landlord; and/or


 


(b)                                
Without
terminating this Lease, enter upon and take possession of the Premises, and
expel or remove Tenant and any other person who may be occupying said Premises,
or any part thereof, by force if necessary, without notice or the need to
resort to legal process and without being deemed guilty of trespass or becoming
liable for any loss or damage occasioned thereby. Landlord may make such
alterations and repairs as it deems advisable to relet the Premises, and relet
the Premises or any part thereof for such term or terms (which may extend
beyond the term of this Lease) and at such rentals and upon such other terms
and conditions as Landlord in its sole discretion deems advisable. Upon each
such reletting all rentals received by Landlord therefrom shall be applied:
first, to any indebtedness other than rent due hereunder from Tenant to
Landlord; second, to pay any costs and expenses of reletting, including
brokers’ and attorneys’ fees and costs of alterations and repairs; third, to
rent due hereunder; and fourth, the residue, if any, shall be held by Landlord
and applied in payment of future rent as it becomes due hereunder. No such
reletting shall relieve Tenant or any guarantors from their obligations
hereunder. If rentals received from such reletting during any month are less
than that to be paid during that month by Tenant hereunder, Tenant shall
immediately pay any such deficiency to Landlord. In no event shall Tenant be
entitled to any excess rent obtained by reletting the Premises over and above
the rent reserved herein.


 


No re-entry or taking
possession of the Premises by Landlord shall be construed as an election to
terminate this Lease unless a written notice of such termination is given by
Landlord to Tenant. Notwithstanding any such reletting or re-entry or taking
possession, without termination, Landlord may at any time thereafter terminate
this Lease for any prior breach or default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any of the other remedies herein
provided or any other remedies provided by at law or in equity, nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of any
rent due to Landlord hereunder or of any damages accruing to Landlord.
Notwithstanding anything herein to the contrary, Landlord shall have no
obligation to relet or attempt to relet the Premises or any portion thereof
following termination of this Lease, re-entry or repossession of the Premises.
Provided, however, in the event Landlord is ever held to have such a duty,
Tenant agrees that Landlord shall, in connection with such efforts, not be
required to do anything more than list the Premises for lease with a licensed
real estate broker of Landlord’s choosing (which may be an affiliate of
Landlord) for a period of three (3) months. If no party acceptable to Landlord
executes a lease with Landlord on terms reasonably acceptable to Landlord
within this three (3) month period, Tenant agrees that Landlord shall
conclusively have satisfied any such duty to release or mitigate. In no event
will Landlord have any duty to lease the Premises before Landlord leases other
vacant space which it has in the Project or other buildings owned by Landlord
nor shall Landlord have any duty to lease to and Landlord will not be
considered to be acting unreasonably in refusing to lease to any party if: (i)
the prospective lessee has a financial condition which is unacceptable to
Landlord or Landlord’s lenders; (ii) the prospective lessee requires any
alterations which are unacceptable to the Landlord or Landlord’s lenders; (iii)
the prospective lessee requires tenant improvements to be paid by Landlord; or
(iv) the prospective lessee requires terms different from this Lease or which
are otherwise unacceptable to Landlord or Landlord’s lender.


 


21.3                       
Landlord’s
Performance for Account of Tenant.  If the Tenant shall continue in default in
the performance of any of the covenants or agreements herein contained after
the time limit for the curing thereof then Landlord may perform the same for
the account of Tenant. Any amount paid or expense or liability (together with
interest thereon at the Maximum Rate from the date upon which any such expense
shall have been incurred) incurred by Landlord in the performance of any such
matter for the account of Tenant shall be deemed to be additional rent and the
same (together with interest thereon at the Maximum Rate from the date upon
which any such expense shall have been incurred) may, at the option of
Landlord, be added to any rent then due or thereafter falling due hereunder or
shall be payable by Tenant to Landlord on demand.


 


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21.5                       
Waiver of Rights
of Redemption.  To the extent
permitted by law, Tenant waives any and all rights of redemption granted by or
under any present or future laws if Tenant is evicted or dispossessed for any
cause, or if Landlord obtains possession of the Premises due to Tenant’s
default hereunder or otherwise.


 


21.6                       
No Waiver.  No delay or omission in the
exercise of any right or remedy of Landlord on any default by Tenant shall
impair such a right or remedy or be construed as a waiver. The receipt and
acceptance by Landlord of delinquent rent shall not constitute a waiver of any
other default; it shall constitute only a waiver of timely payment for the
particular rent payment involved. No act or conduct of Landlord, including,
without limitation, the acceptance of the keys to the Premises, shall
constitute an acceptance of the surrender of the Premises by Tenant before the
expiration of the term. Only a notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of the
Lease. Landlord’s consent to or approval of any act by Tenant requiring
Landlord’s consent or approval shall not be deemed to waive or render
unnecessary Landlord’s consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord or any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.


 


22.                              
Landlord’s Lien.  To secure the performance of
Tenant’s obligations under this Lease, Tenant, as Debtor, and referred to in
this Section as “Debtor”, hereby grants to Landlord, as “Secured Party”, a
security interest in and an express contractual lien upon all of Debtor’s
equipment, furniture, furnishings, appliances, goods, trade fixtures, inventory,
chattels, and other personal property of Debtor which is now on the Premises or
which is placed on the Premises at some later date, and all proceeds from such
items. This property shall not be removed from the Premises without the consent
of Secured Party until all arrearages in rent and all other sums of money being
due to Secured Party under this Lease have been paid and discharged, and all
the covenants, agreements, and conditions of this Lease have been fully
complied with and performed by Debtor. Secured Party is authorized and Debtor
hereby irrevocably and throughout the term of this Lease (and any extensions or
renewals thereof) appoints Secured Party as its attorney-in-fact to prepare and
file financing statements signed only by Secured Party as attorney-in-fact on
behalf of Debtor covering the security described above; moreover, Debtor agrees
to sign the same upon request. Notwithstanding the foregoing, Secured Party is
hereby authorized to file a duplicate original or Xerox copy of this Lease as a
financing statement with the Office of the Secretary of State and with the
appropriate county clerk’s office for the county where the Premises are
located, as appropriate. Upon default under this Lease by Debtor, any or all of
Debtor’s obligations to Secured Party secured hereby shall, at Secured Party’s
option, be immediately due and payable without notice or demand. In addition to
all rights or remedies of Secured Party under this Lease and the law, including
the right to a judicial or nonjudicial foreclosure, Secured Party shall have
all the rights and remedies of a secured party under the Uniform Commercial
Code as enacted in the State of Texas. This security agreement and the security
interest hereby created shall survive the termination of this Lease if such
termination results from Debtor’s default. The above-described security
interest and lien are in addition to and cumulative of the Landlord’s lien
provided by the laws of the State of Texas. In the event Landlord sells
Tenant’s property at a judicial or nonjudicial foreclosure sale, Tenant hereby
expressly consents to and gives Landlord the authority to bid on and purchase
all or a portion of Tenant’s property at such sale.


 


23.                              
Default by
Landlord.  Landlord shall
in no event be charged with default in any of its obligations hereunder unless
and until Landlord shall have failed to perform such obligations within thirty
(30) days (or such additional time as is reasonably required to correct any
such default provided Landlord has commenced action to correct such default
within said 30 day period and continues to diligently prosecute such action to
completion) after written notice to Landlord by Tenant, specifically describing
such failure. All obligations of Landlord hereunder shall be construed as
covenants, not conditions; and, except as may be otherwise expressly provided
in this Lease, Tenant may not terminate this Lease for breach of Landlord’s
obligations hereunder. All obligations of Landlord under this Lease will be deemed
binding upon Landlord only during the period of its ownership of the Project
and not thereafter. The term “Landlord” in this Lease shall mean only the
owner, for the time being of the Project, and in the event of the transfer by
such owner of its interest in the Project, such owner shall thereupon be
released and discharged from all obligations of Landlord thereafter accruing,
but such obligations shall be binding during the Lease term upon each new owner
for the duration of such owner’s ownership. Any liability of Landlord under
this Lease shall be limited solely to its interest in the Project, and in no
event shall any personal liability be asserted against Landlord in connection
with this Lease nor shall any recourse be had to any other property or assets
of Landlord. In the event of an immediate necessary repair, Tenant may act for
Landlord if Landlord is unable to achieve immediate results, and Landlord shall
reimburse Tenant for all reasonable expense incurred by Tenant in such action
based on Landlord’s payment experience with such repair.


 


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24.                              
Application of
Payments Received From Tenant.  Landlord shall have the right at any time to
apply any payments made by Tenant to the satisfaction of any debt or obligation
of Tenant to Landlord according to Landlord’s sole discretion and regardless of
the instructions of Tenant as to application of any such sum, whether such
instructions be endorsed upon Tenant’s check or otherwise, unless otherwise
agreed upon by both parties in writing. The acceptance by Landlord of a check
or checks drawn by a party other than Tenant shall not affect Tenant’s
liability hereunder nor shall it be deemed an approval of any assignment or
sublease of this Lease by Tenant.


 


25.                              
Notices.  All notices required to be
given hereunder shall be in writing and shall (i) be served in person upon the
party to be notified or upon its agent, or (ii) be mailed by prepaid certified
or registered mail, or (iii) be deposited with a nationally recognized
overnight courier, charges prepaid, designated for next business day delivery,
or (iv) be sent via facsimile transmission to the appropriate number shown on
the signature page of this Lease, and shall be deemed given (i) upon hand
delivery to a competent agent, employee or officer of the party, or (ii) three
(3) days after deposit with the US Postal Service, or (iii) on the next
business day after deposit with an overnight courier, or (iv) upon verifiable
confirmation of transmission of the facsimile to the proper number. Either
party shall have the right to change its address for notice by notifying the
other party of such change in accordance with this Section.


 


26.                              
Sale of Project or
Land by Landlord.  In the event of
any sale of the Project or Land by Landlord, or any part thereof, Landlord
shall be and is hereby entirely freed and relieved of all liability under any
and all of its covenants and obligations contained in or derived from this Lease
arising out of any act, occurrence or omission occurring after the consummation
of such sale; and the purchaser, at such sale or any subsequent sale of the
Project or Land shall be deemed, without any further agreement between the
parties or their successors in interest or between the parties and any such
purchaser, to have assumed and agreed to carry out any and all of the covenants
and obligations of the Landlord under this Lease. Furthermore, in the event of
a sale or conveyance by Landlord of the Project or Land, this Lease shall not
be affected by any such sale, and Tenant agrees to attorn to the purchaser
thereof.


 


27.                              
Surrender, Holding
Over and Successors.


 


27.1                       
Surrender.  Upon the expiration or earlier
termination of this Lease, whether by forfeiture, lapse of time, or otherwise,
or upon the termination of Tenant’s right to possession of the Premises, Tenant
will at once surrender and deliver up the Premises, to Landlord in good and
broom-clean condition and repair, reasonable wear and tear and loss by fire or
other casualty excepted. All Tenant Additions will, following the expiration or
termination of this Lease, remain in the Premises as Landlord’s property unless
Landlord directs Tenant to remove all or any portion of same whereupon Tenant
agrees that it shall, at its expense, remove such Tenant Additions (or portion
thereof directed by Landlord). Provided Tenant is not in default, it will
remove its Trade Fixtures, inventory, and other personal property upon the
expiration of the Term. If Tenant is in default, it shall remove its Trade
Fixtures only if specifically directed to do so in writing by Landlord. Tenant
shall repair any damage to the Premises caused by the removal of such Tenant
Additions, Trade Fixtures, or other items. In no event will any fire
sprinklers, fire suppression equipment, HVAC System components, floor tiles,
carpeting, ceiling tiles, plumbing fixtures, or similar building system items
or any equipment or fixtures attached to the realty be considered “Trade
Fixtures” or be removed unless directed by Landlord to do so. Tenant agrees
that following an Event of Default, Landlord may, at its option, allow any
party claiming to be a lessor of Tenant to remove equipment, Trade Fixtures,
and similar items leased from such lessor. Landlord shall have no liability to
Tenant therefor. Landlord may condition its consent upon such lessor agreeing
to repair any damage to the Premises caused by such removal and providing
adequate financial assurances of its ability to pay for any such damages.
Provided, however, no such agreement by any such lessor, or Landlord’s failure
to obtain such an agreement, shall relieve Tenant of its obligations hereunder
including without limitation, Tenant’s obligation to repair said damage even if
the damage is caused by said lessor or its contractors or agents. Tenant shall
remove all Hazardous Materials. Any Trade Fixtures or Tenant Additions not
removed by Tenant as required herein shall be deemed abandoned and may be
stored, removed and disposed of by Landlord at Tenant’s expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord’s
retention or disposal of same. Moreover, any period following the termination
or expiration of this Lease during which there is Hazardous Material, Tenant
Alterations or Trade Fixtures which are not removed as herein required shall be
considered a holdover by Tenant and, in addition to all other remedies
available to Landlord hereunder, shall obligate Tenant to the increased rental
payments pursuant to Section 27.2. Tenant shall be
entitled to no payment or offset for the value of any such property (even if
sold by Landlord) and shall pay on demand all costs incurred by Landlord in
connection with such removal or disposal. No retention,


 


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disposal
or sale or such items shall limit remedies otherwise available to Landlord
hereunder for a breach by Tenant. All obligations of Tenant hereunder not fully
performed as of the termination or expiration of the Lease shall survive such
termination or expiration.


 


27.2                       
Holding Over.  If Tenant holds over or
occupies the Premises beyond the term of this Lease (it being agreed there
shall be no such holding over or occupancy without Landlord’s written consent),
Tenant shall pay Landlord for each day of such holding over a sum equal to
twice the monthly rent applicable hereunder at the expiration of the term
(including Operating Expenses), prorated for the number of days of such holding
over. In such event, Tenant shall occupy the Premises as a Tenant at
sufferance, and all of the terms and provisions of this Lease shall be
applicable, with the exception of the rent applicable during such holding over
period, which shall be increased as aforesaid. Tenant agrees that Landlord may
institute a forcible detainer or similar action against Tenant or any other
party in possession of the Premises without serving any demand for possession,
demand to vacate, notice of termination or similar demand or notice upon Tenant
or such party in possession.


 


27.3                       
Successors.  All rights and liabilities
herein given or imposed upon the respective parties hereto shall bind and inure
to the several respective heirs, successors, administrators, executors and
assigns of the parties and if Tenant is more than one person, they shall be
bound jointly and severally by this Lease. No rights, however, shall inure to
the benefit of any assignee of Tenant unless the assignment is approved by Landlord
as required herein.


 


28.                              
Brokers or
Finders.  Other than the Broker named in Section 1, Tenant represents
and warrants to Landlord, that it has engaged no broker or finder and that no
claims for brokerage commissions or finders’ fees will arise in connection with
the execution of this Lease and agrees to indemnify, defend and hold Landlord
harmless from any liability or expense (including attorney’s fees) arising from
any such claim.


 


29.                              
Environmental
Issues.


 


29.1                       
Tenants Compliance
with Environmental Laws.  Tenant shall not cause or permit any Hazardous Material to be
brought upon, kept or used in or about the Premises by Tenant, its agents,
employees, contractors or invitees without the prior written consent of
Landlord, which Landlord shall not unreasonably withhold provided Tenant
demonstrates to Landlord’s satisfaction that such Hazardous Material is
necessary or useful to Tenant’s business. All Hazardous Materials will be used,
kept and stored in a manner that complies with all laws regulating any such
Hazardous Material so brought upon or used or kept in or about the Premises.
Landlord represents that the Premises was free of Hazardous Materials prior to
Tenant’s move-in.


 


29.2                       
Indemnification.  In addition to,
and without limitation on the general indemnity obligations of Tenant under
this Lease, Tenant specifically agrees that it shall indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages, penalties,
fines, costs, injuries, liabilities or losses (including, without limitation,
diminution in value of the Premises or the Project, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises or the Project, and sums paid in settlement of claims, attorneys’
fees, consultant fees and expert fees arising from related claims or suits)
which arise during or after the Lease term, or prior to the Lease Term if
Tenant had access to and use of the Premises or the Project during that time,
as a result of any breach by Tenant of its obligations under this
Section or any contamination of the Premises or the Project resulting from
the presence of Hazardous Materials on or about the Premises or the Project
caused or permitted by Tenant. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, detoxification, remediation,
removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Material
present in the soil or air or ground water on, over or under the Premises or
the Project. Without limiting the foregoing, if the presence of any Hazardous
Material on the Premises or the Project caused or permitted by Tenant results
in any contamination of the Premises or the Project, Tenant shall promptly take
all actions at its sole expense as are necessary to return the Premises or the
Project to the condition existing prior to the introduction of any such
Hazardous Material to the Premises or the Project, provided that Landlord’s
approval of such actions shall first be obtained. Tenant further agrees to
defend Landlord, its agents, employees, and assigns in any administrative or
judicial proceeding commenced by private individuals or governmental entities
seeking recovery of damages for personal or bodily injury or property damage,
or recovery of civil penalties or fines arising out of, connected with, or
relating to any breach by Tenant of its obligations under this Section or
any contamination of the Premises or the Project resulting from the presence of
Hazardous Materials on or about the Premises or the Project caused or permitted
by Tenant. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.


 


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29.3                       
Hazardous Material.  As used herein, the term
“Hazardous Material” means any pollutant, toxic substance, hazardous waste,
hazardous material, hazardous substance, oil hydrocarbon, asbestos or similar
item as defined in or pursuant to the Resource Conservation and Recovery Act,
as amended, the Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, the Federal Clean Water Act, as amended, the Safe
Drinking Water Act, as amended, the Federal Water Pollution Control Act, as
amended, the Texas Water Code, as amended, the Texas Solid Waste Disposal Act,
as amended, or any other federal, state or local environmental or health and/or
safety related law, regulation, ordinance, rule, or bylaw, whether existing as
of the date hereof, previously enforced or subsequently enacted (collectively
the “Environmental Laws”).


 


29.4                       
Notice of Certain
Events.  Tenant and Landlord
shall immediately advise each other in writing of (a) any governmental or
regulatory actions instituted or threatened under any Environmental Law
affecting either party or the Premises, (b) all claims made or threatened by
any third party against either Tenant or Landlord or the Premises relating to
damage, contribution, cost recovery, compensation, loss or injury resulting
from any Hazardous Materials, (c) the discovery of any occurrence or condition
on any real property adjoining or in the vicinity of the Premises that could
cause the Premises or the Project or Land to be classified in a manner which
may support a claim under any Environmental Law, and (d) the discovery of any
occurrence or condition on the Premises, the Project or Land or any real
property adjoining or in the vicinity of the Premises, the Project or Land
which could subject Tenant or Landlord, the Premises, the Project or the Land
to any restrictions in ownership, occupancy, transferability or use of the
Premises, the Project or the Land under any Environmental Law. Landlord may
elect to join and participate in any settlements, remedial actions, legal
proceedings or other actions initiated in connection with any claims under any
Environmental Law caused or alleged to have been caused by Tenant, it agents,
employees, contractors or invitees and to have its reasonable attorney’s fees
paid by Tenant. Landlord represents that it is the sole owner of the Premises
and the Project. At its sole cost and expense, Tenant agrees when applicable or
upon request of Landlord to promptly and completely cure and remedy every
violation of an Environmental Law caused by Tenant, its agents, employees,
contractors or invitees.


 


29.5                       
Environmental
Review.  In the event
reasonable evidence exists of the occurrence or existence of the violation of
any Environmental Law or the presence of any Hazardous Material on the
Premises, the Project or the Land, caused by Tenant, its agents, employees, contractors,
or invitees, Landlord (by its officers, employees and agents) at any time and
from time to time may contract for the services of persons (the “Site
Reviewers”) to perform environmental site assessments (“Site Assessments”) on
the Premises, the Project, Land or neighboring properties for the purpose of
determining whether there exists on the Premises, the Project, Land or
neighboring properties any environmental condition which could reasonably be
expected to result in any liability, cost or expense to Landlord. The Site
Reviewers are hereby authorized to enter upon the Premises for purposes of
conducting Site Assessments. The Site Reviewers are further authorized to
perform both above and below the ground testing for environmental damage or the
presence of Hazardous Materials and such other tests on the Premises, the
Project, Land or neighboring properties as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers. Tenant agrees to
supply to the Site Reviewers such historical and operational information
regarding the Premises as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments and will make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters. The
results of Site Assessments shall be furnished to Tenant upon request. The cost
of performing such Site Assessments shall be paid by Tenant if such reports
establish Tenant as the liable party.


 


30.                              
Miscellaneous.


 


30.1                       
Partial Invalidity.  If any term, covenant,
condition or provision of this Lease is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby.


 


30.2                       
Captions.  The various headings and
numbers herein and the grouping of the provisions of this Lease into Sections
are for the purpose of convenience only and shall not be considered a part
hereof unless expressly stated to the contrary.


 


30.3                       
Gender; Number.  Words of any gender used in
this Lease shall be held and construed to include any other gender, and words
in the singular number shall be held to include the plural, and vice versa,
unless the context otherwise requires.


 


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30.4                       
Corporation as
Tenant.  If a
corporation executes this Lease as Tenant, it shall promptly furnish Landlord
with copies of certified corporate resolutions attesting to the authority of
the officers executing this Lease on behalf of such corporation.


 


30.5                       
Applicable Law.  This Lease
shall be governed by the laws of the State of Texas.


 


30.6                       
Time.  Time is of the essence of
this Lease.


 


30.7                       
Joint and Several
Liability.  If Tenant is a partnership or other business
organization the members of which are subject to personal liability, the
liability of each such member shall be deemed to be joint and several.


 


30.8                       
Accord and
Satisfaction.  Landlord is
entitled to accept, receive and cash or deposit any payment made by Tenant for
any reason or purpose or in any amount whatsoever, and apply the same at
Landlord’s option to any obligation of Tenant and the same shall not constitute
payment of any amount owed except that to which Landlord has applied the same.
No endorsement or statement on any check or letter of Tenant shall be deemed an
accord and satisfaction or otherwise recognized for any purpose whatsoever. The
acceptance of any such check or payment shall be without prejudice to
Landlord’s right to recover any and all amounts owed by Tenant hereunder and
the Landlord’s right to pursue any other available remedy.


 


30.9                       
Entire Agreement.  There are no
representations, covenants, warranties, promises, agreements, conditions or
undertaking, oral or written, between Landlord and Tenant other than herein set
forth. Except as otherwise provided herein, no subsequent alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless in writing and signed by them. The normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of the Lease or any exhibits or
addendums hereto. The person(s) executing this Lease represent that they are
duly authorized to execute it in the capacity indicated.


 


30.10                
No Partnership.  Landlord does not, in any
way or for any purpose, become a partner, employer, principal, master, agent or
joint venturer of or with Tenant.


 


30.11                
Force Majeure.  If either party hereto shall
be delayed or hindered in or prevented from the performance of any act required
hereunder by reason of acts of God, unavoidable casualties, the elements,
inclement weather preventing work, strikes, lockouts, labor troubles, inability
to procure material, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war or other reason of a like nature, not the
fault of the party delayed in performing work or doing acts required under this
Lease, the period for the performance of any such act shall be extended for a
period equivalent to the period of such delay. Tenant shall not be excused from
any obligations for payment of rent, percentage rent, additional rent or any
other payments required by the terms of this Lease when same are due, and all
such amounts shall be paid when due.


 


30.12                
Financial
Statements.  Tenant shall,
within ten (10) days of request of Landlord or Landlord’s lender, furnish
Tenant’s most recent audited financial statements in reasonable detail and
certified as complete and correct by an authorized officer or a principal of
Tenant.


 


30.13                
Determining
Charges.  Landlord and
Tenant are knowledgeable and experienced in commercial transactions and agree
that the provisions of this Lease for determining charges, amounts and
additional rental payable by Tenant (including without limitation, payments
under Sections 1, 3 and 5 hereof regarding operating expenses, taxes, and
utilities, etc.) are commercially reasonable and valid, and as to each such
charge or amount, constitute a “method by which the charge is to be computed”
for purposes of Section 93.004 of the Texas Property Code, as enacted by
House Bill 2186, 77th Legislature.


 


30.14                
Attorney’s Fees
and Waiver of Jury Trial.  In the event the Landlord finds it necessary
to retain an attorney in connection with the default by Tenant in any of the
agreements or covenants contained in this Lease, Tenant shall pay reasonable
attorney’s fees to said attorney. In the event of any litigation regarding this
Lease, the losing party shall pay to the prevailing party reasonable attorney’s
fees. Without limitation on the foregoing, Tenant agrees that should Landlord
ever file a forcible detainer action or a forcible entry and detainer action,
Landlord shall be entitled to its reasonable attorney’s fees and costs in such
action, and Landlord shall not be required to give Tenant written notice to
vacate or any other notice in order to recover such attorney’s fees and costs


 


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as
provided in Section 24.006 of the Texas Property Code, as amended, or
similar statutes. Landlord
and Tenant acknowledge the delay, expense and uncertainty associated with a
jury trial involving a complex commercial lease of this nature, and in recognition
of these inherent problems hereby waive their rights to a jury trial and agree
that any litigation regarding this Lease will be tried without a jury.


 


30.15                
Exhibits.  The following Exhibits are
attached to this Lease and are incorporated herein by reference:


 


Exhibit “A” = Premises/Site Plan


Exhibit “B” = Legal Description of Project


Exhibit “C” = Sign Criteria


 


30.16                
Additional
Provisions.


 


a)                                  
Project Condition.  Tenant’s acceptance of occupancy from Landlord
shall constitute acknowledgment by Tenant that Tenant has inspected the
Premises and the Project of which the Premises are a part and that same are
suitable for Tenant’s intended use thereof as stated in this Lease. Tenant recognizes
and agrees that Landlord is making no warranties, expressed or implied, as to
the suitability of the Premises or the Project for any particular use. Tenant
accepts the space “AS IS” with all faults. Landlord represents that the
Premises and the Project comply with all applicable laws and regulations of
pertinent governmental authorities as of completion of construction and as of
the date of Tenant move-in.


 


b)                                  
Flex Provision.  If after the expiration of thirty-six (36)
months of the Initial Term of the Lease Tenant desires to terminate this Lease,
Landlord will allow Tenant to terminate this Lease with six (6) months’ prior
written notice from Tenant to Landlord provided such notice is received by
Landlord during the thirty (30) day period immediately preceding the six (6)
months’ notice period.


 


30.17                
Addenda.  The following
addendums are attached hereto and incorporated herein for all purposes (check
as applicable):


 


ý
Construction Addendum


o
Guaranty


ý
Existing Rules and Regulations


 


IN
WITNESS WHEREOF,
Landlord and Tenant have signed this Lease as of the day and year first above
written.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  270
  SHARYLAND, L.P.

  
	
   

  	
  By:  F-Star
  Management, L.L.C., General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Jerry C. Ayoub

  	
   

  
	
   

  	
   

  	
   

  	
  Jerry C. Ayoub,
  President

  	
   

  
	
   

  	
  Address: 12190 Rojas
  Drive, El Paso, Texas 79936

  
	
   

  	
  Phone: 915-860-4500
  Fax: 915-860-4504

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  THE
  WORNICK COMPANY RIGHT AWAY DIVISION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Keith Frase

  	
   

  
	
   

  	
  Name & Title:

  	
  Keith Frase, President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 200 N. 1st
  Street, McAllen, Texas 78501

  
	
   

  	
  Phone & Fax:
  956-687-9401; 956-631-0857

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


18





















 


ASSIGNMENT
AND ASSUMPTION OF LEASE


 


ASSIGNMENT AND ASSUMPTION
OF LEASE (this “Agreement”), entered into as of June 30, 2004, by and
among The Wornick Company Right Away Division, L.P., a Texas limited
partnership (“Assignor”); and The Wornick Company Right Away Division, L.P., a
Delaware limited partnership (“Assignee”). Assignor and Assignee are referred
to collectively herein as the “Parties.”


 


W I  T  N  E  S
S  E  T  H:


 


WHEREAS, Assignor, as
“Tenant,” and 270 Sharyland, L.P., a Texas limited partnership, as “Landlord,”
are parties to the Standard Industrial Lease dated March 4, 2003 (the
“Lease”), presently covering certain premises (the “Premises”) located at 5700
South International Parkway, Suites B & C, McAllen, Texas, a copy of which
Lease is attached hereto as Exhibit A; and


 


WHEREAS, Assignor, as
“Seller,” and Assignee, as “Buyer,” are parties to an Assets Purchase and Sale
Contract dated December 3, 2003 (the “Purchase Agreement”), pursuant to
which, subject to the terms and conditions set forth therein, Assignee will
purchase substantially all of the assets (and assume certain of the
liabilities) of Assignor, including all of Seller’s right, title and interest
in, under and to the Lease; and


 


WHEREAS, simultaneously
with the closing of the transactions contemplated by the Purchase Agreement,
the Parties mutually desire (a) that Assignor assign all of its right, title
and interest in, under and to the Lease to Assignee, (b) that Assignee accept
such assignment from Assignor and assume all of Assignor’s obligations as
Tenant under the Lease, and (c) that Landlord consent to the assignment
contemplated hereby, all on the terms and conditions hereinafter set forth.


 


NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other valuable
consideration, the receipt and adequacy of which are expressly acknowledged,
the Parties agree as follows:


 


1.                                      
Effective Date. For all purposes under this Agreement,
the term “Effective Date” shall mean that date, if any, on which the closing of
the transactions contemplated by the Purchase Agreement is consummated.


 


2.                                      
Assignment and
Assumption.


 


(a)                                 
Effective as of the
Effective Date, Assignor hereby assigns, transfers and sets over unto Assignee
all of Assignor’s right, title and interest in, under and to (i) the Lease and
(ii) the aggregate security deposit heretofore made by Assignor pursuant to the
Lease. Assignor will deliver possession of the Premises to Assignee on the
Effective Date.


 


(b)                                
Assignee hereby
accepts the foregoing assignment and hereby agrees to perform all of the terms
and conditions of the Lease to be performed on the part of Assignor and assumes
all of the liabilities and obligations of Assignor under the Lease, as amended
hereby, arising or accruing on or after the Effective Date, including, without
limitation, liability for the


 





















 


payment of rent and for the due performance of all the
terms, covenants and conditions of the tenant pursuant to the Lease as amended
hereby.


 


3.                                      
Consent to
Assignment.
Effective as of the Effective Date, Landlord has consented to the assignment
effected hereby.


 


4.                                      
Representation of
Assignor. The
Assignor hereby represents to the Assignee and agrees as follows:


 


(a)                                 
The Lease attached
hereto as Exhibit A is a true, correct and complete copy of the Lease, the
Lease has not been amended or modified except as set forth above and the same
is the only agreement between the Landlord and the Assignor with respect to the
subject matter thereof.


 


(b)                                
The Lease is in full
force and effect with no defaults (or events which, with the passage of time,
would become defaults) thereunder on the part of either party in the
performance of its obligations under such Lease.


 


(c)                                 
The minimum or base
rent and all other rentals and other payments due, owing and accruing under the
Lease have been paid through the due date thereof immediately preceding the
Effective Date.


 


(d)                                
The current amount of
tenant’s expense and tax contribution is $82,249.98 per month.


 


(e)                                 
Landlord is currently
holding a security deposit with respect to the Lease in the amount of
$59,912.65.


 


5.                                      
Miscellaneous.


 


(a)                                 
Headings. The section headings used herein
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.


 


(b)                                
Governing law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.


 


(c)                                 
Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.


 


2





















 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.


 


 


	
  ASSIGNOR

  	
  ASSIGNEE

  	
   

  
	
   

  	
   

  	
   

  
	
  The Wornick Company
  Right Away

  Division, L.P., a Texas limited

  partnership

  	
  The Wornick Company
  Right Away Division, L.P., a Delaware limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  By: Right Away
  Management Corporation,

  	
  By: Right Away
  Management Corporation,

  	
   

  
	
  a Texas corporation,

  	
  a Delaware corporation,

  	
   

  	
   

  
	
  its general partner

  	
  its general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Keith
  E. Frase

  	
   

  	
  By:

  	
  /s/ Robert B. McKeon 

  	
   

  	
   

  
	
   

  	
   

  	
  Keith E. Frase,
  President

  	
   

  	
   

  	
   

  	
  Robert B. McKeon,
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3





















 


	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  



 


This instrument was
acknowledged before me on June 30, 2004, by Keith E. Frase, President of
Right Away Management Corporation, a Texas corporation, the general partner of
The Wornick Company Right Away Division, L.P., a Texas limited partnership.


 


	
     /s/
  Janna Gabriel

  	
   

  
	
  Notary Public

  
	
  Printed Name: 

  	
  Janna Gabriel

  	
   

  
	
  My Commission Expires:

  
	
  9/24/05

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  



 


This instrument was
acknowledged before me on June 30, 2004 by Robert B. McKeon, President of
Right Away Management Corporation, a Delaware corporation, the general partner
of The Wornick Company Right Away Division, L.P., a Delaware limited
partnership.


 


	
     /s/
  Elaine Gerace

  	
   

  
	
  Notary Public

  
	
  Printed Name:

  	
    Elaine
  Gerace

  	
   

  
	
  My Commission Expires:

  
	
  5/18/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


4