Document:

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

 

2

 

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.

 

3

 

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

 

4

 

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.

 

5

 

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.

 

12

 

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.

 

13

 

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,

 

14

 

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.

 

15

 

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.

 

16

 

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

 

17

 

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

4Exhibit
10.14

 

 

STANDARD
FORM

INDUSTRIAL
BUILDING LEASE

(MULTI-TENANT)

 

1.                                     
BASIC TERMS.  This Section 1 contains the Basic Terms of this
Lease between Landlord and Tenant, named below.  Other Sections of the
Lease referred to in this Section 1 explain and define the Basic Terms and are to be read in
conjunction with the Basic Terms.

 

1.1.                           
Date
of Lease:  March 21, 2003

 

1.2.                           
Landlord: 
First Industrial LP

 

1.3.                           
Tenant: 
The Wornick Company

 

1.4.                           
Premises: 
“Phase I Premises” consisting of
approximately 25,336 square feet designated as the “Tenant 8” space on Exhibit
A-2 attached hereto, together with approximately 3,240 square feet designated
as the “Tenant 2” space on Exhibit A-2 to be used by Tenant for office and
employee welfare, containing a total of approximately 28,576 square feet; the “Phase II Premises” containing
approximately 31,740 square feet as shown on Exhibit A-2 attached hereto; and
the “Phase III
Premises” containing approximately 100,621 square feet as shown on Exhibit A-2
attached hereto, totaling 160,937 square feet, in the building commonly known
as the Creek Road Business Park, 4700-4750 Creek Road, Cincinnati, OH 45242
(the “Building”).  As used in
this Lease, the term “Premises,” when the context so requires, means whatever
portion of the Phase I Premises, Phase II Premises, and Phase III Premises is
being leased by Tenant hereunder from time to time.

 

Landlord shall complete the Phase I Improvements,
Phase II Improvements, and Phase III Improvements (as described on Exhibit B
attached hereto) prior to the Phase I Premises Commencement Date, Phase II
Premises Commencement Date and, Phase III Premises Commencement Date,
respectively.  Landlord shall also complete the Additional Improvements
(as described on Exhibit B) to the Phase I Premises, Phase II Premises, and
Phase III Premises prior to the Phase I Premises Commencement Date, Phase II
Premises Commencement Date, Phase III Premises Commencement Date, respectively.

 

Nitrogen Tanks:  Beginning on the Phase III
Premises Commencement Date and continuing thereafter during the Term of this
Lease, Tenant shall be permitted to install, store and use for its business
purposes two nitrogen tanks on the west end or in the rear of the Building in a
location mutually agreed upon by Landlord and Tenant but in any event
sufficiently close to the Premises that the same are practically and economically
useable in the business of Tenant being conducted on the Premises.

 

Parking Spaces:  During all periods in which
Tenant is leasing the Phase I Premises, Landlord shall provide Tenant with 60
allocated parking spaces at the Building.  During all periods in which
Tenant is leasing the Phase I Premises and Phase II Premises, Landlord shall
provide Tenant with 90 allocated parking spaces at the Building.  During
all periods in which Tenant is leasing the Phase I Premises, Phase II Premises
and Phase III Premises, Landlord shall provide Tenant with 275 allocated
parking spaces at the Building.  During all periods in which Tenant is
leasing only the Phase I Premises and Phase III Premises, Landlord shall
provide Tenant with 225 allocated parking spaces at the Building.  If
Tenant leases Adjacent Space pursuant to Rider No. 3 attached hereto, Landlord
shall provide Tenant with the allocated parking spaces associated with each of
the Adjacent Spaces leased, as outlined on the attached Exhibit A-2.

 

 

Sears Termination Fee:  Landlord and Tenant
acknowledge that the Phase II Premises and Phase III Premises are presently
leased to Sears and that Landlord is in the process of negotiating an early
termination of Sears’ lease of such space, including a fee to be paid by Sears
in consideration for such early termination (the “Termination Fee”).  At such time as Landlord has received
payment from Sears of the full amount of the Termination Fee and Sears has
vacated such premises, net of any gross rents that Landlord was scheduled to
receive in 2003 from Sears for the Phase III Premises prior to the Commencement
Date for the lease of the Phase III Premises to Tenant as outlined in
Section 1.6, Landlord shall pay Tenant 100% of the amount of the
Termination Fee in excess of $100,000.00 and up to $200,000.00, for a total of
$100,000.00.  Landlord and Tenant shall each receive 50% of any
Termination Fee amount in excess of $200,000.00.

 

1.5.                           
Property: 
See Exhibit A-1, A-2.

 

1.6.                           
Lease
Term:  Approximately five (5) years four (4) months (“Term”), commencing, with respect to the Phase I
Premises, on March      , 2003 (the “Phase I Premises Commencement Date”), and commencing,
with respect to the Phase II Premises, on the later of March 1, 2004 or
completion of the Phase II Improvements (the “Phase II Premises Commencement Date”), and commencing,
with respect to the Phase III Premises, on the later of March 1, 2004 or
completion of the Phase III Improvements (the “Phase III Premises Commencement Date”) and ending on
July 31, 2008 (“Expiration
Date”). 
As used in this Lease, the “Term” means the initial Term, as the same may be
extended pursuant to Tenant’s exercise of the renewal option set forth on Rider
No. 4 attached hereto.

 

1.7.                           
Permitted
Uses:  (See Section 4.1) Food storage,
processing, assembly, packaging, warehousing, distribution, office and employee
facilities (including dining areas and break rooms), and related purposes.

 

1.8.                           
Tenant’s
Guarantor:  None

 

1.9.                           
Brokers: 
(See Section 23)

 

(A)                         
Tenant’s
Broker:  Colliers Turley Martin Tucker

 

(B)                           
Landlord’s
Broker:  None

 

1.10.                    
Security/Damage
Deposit:  Waived.

 

1.11.                    
Initial
Estimated Additional Rent Payable by Tenant:  $0.70 psf/year

 

1.12.                    
Tenant’s
Proportionate Share:  Subject to adjustment as hereafter set forth, the parties
hereto anticipate that the Tenant’s Proportionate Share shall be 10.78% from
and after the Phase I Premises Commencement Date, 22.76% from and after the
Phase II Premises Commencement Date, and 60.73% from and after the Phase III
Premises Commencement Date; provided that Tenant’s Proportionate Share shall be
calculated by taking the rentable area of the Premises and dividing it by the
total rentable area of the Building (the total rentable area of the Building
being 265,000 sq. ft.).

 

1.13.                    
Riders
to Lease:  The following riders are attached to and made a part of this
Lease.  (If none, so state): Rider No. 1 (Cancellation Option); Rider No.
2 (Termination Option); Rider No. 3 (Expansion Rights); Rider No. 4 (Renewal
Options).

 

2.                                     
LEASE OF PREMISES;
RENT.

 

2.1.                           
Lease of Premises for
Lease Term.  Landlord hereby leases the Premises to Tenant, and Tenant hereby
rents the Premises from Landlord, for the Term and subject to the conditions of
this Lease.

 

2

 

2.2.                           
Types of Rental
Payments.  Tenant shall pay net base rent to Landlord in monthly
installments, in advance, on the first day of each and every calendar month
during the Term of this Lease (the “Base Rent”) in the amounts and for the
periods set forth below for each of the Premises described herein:

 

PHASE 1 PREMISES 

 

(28,576 sq. ft.)

 

	
  Lease
  Period

  	
   

  	
  Annual
  Base Rent

  	
   

  	
  Monthly
  Base Rent

  	
   

  	
  Annual
  Amt. PSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/16/03-3/31/04

  	
   

  	
  $

  	
  65,724.80

  	
   

  	
  $

  	
  5,477.07

  	
   

  	
  $

  	
  2.30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4/1/04-3/31/05

  	
   

  	
  $

  	
  71,440.00

  	
   

  	
  $

  	
  5,953.33

  	
   

  	
  $

  	
  2.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4/1/05-3/31/06

  	
   

  	
  $

  	
  77,155.20

  	
   

  	
  $

  	
  6,429.60

  	
   

  	
  $

  	
  2.70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4/1/06-3/31/07

  	
   

  	
  $

  	
  82,870.40

  	
   

  	
  $

  	
  6,905.87

  	
   

  	
  $

  	
  2.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4/1/07-7/31/08

  	
   

  	
  $

  	
  88,585.60

  	
   

  	
  $

  	
  7,382.13

  	
   

  	
  $

  	
  3.10

  	
   

  

 

 

PHASE II PREMISES

 

(31,740 sq. ft.)

 

	
  Lease
  Period

  	
   

  	
  Annual
  Base Rent

  	
   

  	
  Monthly
  Base Rent

  	
   

  	
  Annual
  Amt. PSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phase II
  Premises Commencement Date – 4/30/06

  	
   

  	
  $

  	
  88,872.00

  	
   

  	
  $

  	
  7,406.00

  	
   

  	
  $

  	
  2.80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5/1/06 – 7/31/08

  	
   

  	
  $

  	
  95,220.00

  	
   

  	
  $

  	
  7,935.00

  	
   

  	
  $

  	
  3.00

  	
   

  

 

 

PHASE III PREMISES

 

(100,621 sq. ft.)

 

	
  Lease
  Period

  	
   

  	
  Annual
  Base Rent

  	
   

  	
  Monthly
  Base Rent

  	
   

  	
  Annual
  Amt. PSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phase III Premises
  Commencement Date – 7/31/04

  	
   

  	
  $

  	
  276,707.76

  	
   

  	
  $

  	
  23,058.98

  	
   

  	
  $

  	
  2.75

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/04-7/31/05

  	
   

  	
  $

  	
  281,738.76

  	
   

  	
  $

  	
  23,478.23

  	
   

  	
  $

  	
  2.80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/05-7/31/06

  	
   

  	
  $

  	
  286,769.88

  	
   

  	
  $

  	
  23,897.49

  	
   

  	
  $

  	
  2.85

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/06-7/31/07

  	
   

  	
  $

  	
  291,800.88

  	
   

  	
  $

  	
  24,316.74

  	
   

  	
  $

  	
  2.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/07-7/31/08

  	
   

  	
  $

  	
  296,832.00

  	
   

  	
  $

  	
  24,735.00

  	
   

  	
  $

  	
  2.95

  	
   

  

 

 

Tenant shall also pay Tenant’s Proportionate Share (as
set forth in Section 1.12) of
Operating Expenses (as hereinafter defined) and any other amounts owed by
Tenant hereunder [collectively, “Additional
Rent”].  In the

 

3

 

event any monthly installment of Base Rent or
Additional Rent, or both, is not paid within five (5) business days after
Tenant’s receipt of notice from Landlord that such payment is past due,
Landlord may charge Tenant a late charge equal to 4% of the then delinquent
installment of Base Rent and/or Additional Rent [the “Late Charge”; the Late Charge, Default
Interest (as defined in Section 22.3
below), Base Rent and Additional Rent shall collectively be referred to as “Rent”) shall be paid by Tenant to Landlord
as Additional Rent.  Tenant shall pay Rent to Landlord at the following
address: c/o First Industrial, L.P., 75 Remittance Drive, Suite 1444, Chicago,
IL 60675-1444, or if sent by overnight courier, Northern Trust Receipt &
Dispatch, 350 N. Orleans Street, 8th Floor, Suite 1444, Chicago, IL 60654,
Attention:  First Industrial L.P., Lockbox #1444, (or such other entity
designated as Landlord’s management agent, if any, and if Landlord so appoints
such a management agent, the “Agent”),
or pursuant to such other directions as Landlord shall designate in this Lease
or otherwise in writing.  The foregoing notwithstanding, Tenant shall be
entitled to receive notices from Landlord under this paragraph on only the
first occasion of nonpayment of Rent in each calendar year and, on the second
and each succeeding occasion of nonpayment of Rent in such calendar year,
Tenant shall not be entitled to the above-described 5-business day written
notice and cure period and, thereafter during such calendar year, the Late
Charge shall be due in the event any monthly installment of Base Rent or
Additional Rent, or both, is not paid within 10 days of the date when due.

 

2.3.                           
Covenants Concerning
Rental Payments.  Tenant shall pay the Rent promptly when due, without
notice or demand, and without any abatement, deduction or setoff, except as may
otherwise be expressly and specifically provided in this Lease.  No payment
by Tenant, or receipt or acceptance by Agent or Landlord, of a lesser amount
than the correct Rent shall be deemed to be other than a payment on account,
nor shall any endorsement or statement on any check or letter accompanying any
payment be deemed an accord or satisfaction, and Agent or Landlord may accept
such payment without prejudice to its right to recover the balance due or to
pursue any other remedy available to Landlord.  If the Commencement Date
occurs on a day other than the first day of a calendar month, the Rent due for
the first calendar month of the Term shall be prorated on a per diem basis and
paid to Landlord on the Commencement Date.

 

3.                                     
OPERATING EXPENSES.

 

3.1.                           
Definitional Terms
Relating to Additional Rent.  For purposes of this Section and other
relevant provisions of the Lease:

 

3.1.1.                 
Operating Expenses.  The term “Operating Expenses” shall mean all costs
and expenses paid or incurred with respect to the ownership, repair,
replacement, restoration, maintenance and operation of the Property, including,
without limitation, the following: (i) services provided directly by employees
of Landlord or Agent in connection with the operation, maintenance or rendition
of other services to or for the Property; (ii) to the extent not separately
metered, billed, or furnished, all charges for utilities and services furnished
to either or both of the Property and the Premises (including, without
limitation, the Common Areas [as hereinafter defined]), together with any taxes
on such utilities; (iii) all premiums for casualty, workers’ compensation,
liability, boiler, flood and all other types of insurance provided by Landlord
and relating to the Property, all third party administrative costs incurred in
connection with the procurement and implementation of such insurance policies,
and all deductibles paid by Landlord pursuant to insurance policies required to
be maintained by Landlord under this Lease; (iv) the cost of all supplies,
tools, materials and equipment utilized in the ownership and operation of the
Property, and sales and other taxes thereon; (v) amounts charged (including,
without limitation, those costs and expenses set forth in Section 13.2(i) below) by any or all
of contractors, materialmen and suppliers for services, materials and supplies
furnished to Landlord in connection with any or all of the operation, repair
and maintenance of any part of the Property, including, without limitation, the
structural elements of the Property and the Common Areas; (vi) an annual
management fee equal to four percent (4%) of the annual Rent payable hereunder
to Landlord or Agent or other persons or management entities actually involved
in the management and operation of the Property; (vii) any capital improvements
made by, or on behalf of, Landlord to the Property that are either or both (a)
designed to reduce Operating Expenses and (b) required to keep the Property in
compliance with all governmental laws, rules and regulations applicable
thereto, from time to time, the cost of which capital improvements shall be
reasonably amortized by Landlord over the useful life of the improvement, in
accordance with generally accepted accounting principles; (viii) all
professional fees incurred in connection with the operation, management and
maintenance of the Property; and (ix) Taxes, as hereinafter defined in Section 3.1.2. 
Notwithstanding the definitions set forth in section 3.1.1 and
section 3.1.2, the definitions of Operating Expenses and Taxes shall
exclude the following: costs of services provided exclusively to other tenants
and not to Tenant; late

 

4

 

fees
incurred by Landlord for late payments of bills not due to the acts or
omissions of Tenant, its employees, agents or representatives; any cost or
expense which Landlord incurs which is charged directly to the tenant on whose
behalf it is incurred (whether or not the same shall finally be paid) or for
which Landlord is otherwise reimbursed by insurance proceeds or condemnation
awards; income, profit, franchise, corporate, capital stock, estate,
inheritance and any other taxes imposed on, or measured by, the income of
Landlord from the operation of the Property; payments to subsidiaries or
affiliates of Landlord for services or materials to the extent such payments
would not have been made had the services or materials been provided by an
unaffiliated party on a competitive basis; legal fees, arbitration and
mediation expenses and other expenses incurred in connection with the
resolution of disputes between Landlord and tenants at the Property; costs
arising from the negligence or willful misconduct of Landlord or its agents,
employees, contractors or other tenants or occupants at the Property; costs
arising from a breach by any other tenant of its obligations under its lease;
costs incurred in Landlord’s leasing activities, including leasing fees,
commissions and other compensation paid to brokers or to Landlord’s employees
and agents, advertising costs, costs of renovations, tenant improvements, or
alterations made at the initiation or in connection with the renewal of tenant
leases, and legal fees incurred in negotiating and preparing lease documents;
salaries or other compensation paid to employees of Landlord above the grade of
building manager; costs of capital improvements (except to the extent expressly
permitted under this Section 3.1.1); cost of correcting defects in the original
construction of the improvements at the Property or related improvements; costs
of remediating or otherwise addressing environmental contamination at the
property; interest and principal payments on any mortgage, deed of trust or
indebtedness of Landlord; depreciation; payments made under any ground lease;
and construction and other costs related to any addition to or expansion of
improvements at the Property.

 

3.1.2.                 
Taxes.  The term “Taxes,” as referred to in Section 3.1.l(ix) above shall mean (i)
all governmental taxes, assessments, fees and charges of every kind or nature
(other than Landlord’s income taxes), whether general, special, ordinary or
extraordinary, due at any time or from time to time, during the Term and any
extensions thereof, in connection with the ownership, leasing, or operation of
the Property, or of the personal property and equipment located therein or used
in connection therewith; and (ii) any reasonable expenses incurred by Landlord
in contesting such taxes or assessments and/or the assessed value of the
Property.  For purposes hereof, Taxes for any year shall be Taxes that are
due for payment or paid in that year rather than Taxes that are assessed,
become a lien, or accrue during such year.

 

3.1.3.                 
Operating Year.  The term
“Operating Year” shall mean the calendar year commencing January 1st of
each year (including the calendar year within which the Commencement Date
occurs) during the Term.

 

3.2.                           
Payment of Operating
Expenses.  Tenant shall pay, as Additional Rent and in accordance with
the requirements of Section 3.3, Tenant’s
Proportionate Share of the Operating Expenses as set forth in Section 3.3.  Additional
Rent for the Phase I Premises, Phase II Premises, and Phase III Premises shall
commence to accrue upon the Phase I Premises Commencement Date, Phase II
Premises Commencement Date, and Phase III Premises Commencement Date,
respectively.  The Tenant’s Proportionate Share of Operating Expenses
payable hereunder for the Operating Years in which the Term begins and ends
shall be prorated to correspond to that portion of said Operating Years
occurring within the Term.  Tenant’s Proportionate Share of Operating
Expenses and any other sums due and payable under this Lease shall be adjusted
upon receipt of the actual bills therefor, and the obligations of this Section 3 shall survive the termination or
expiration of the Lease.

 

3.3.                           
Payment of Additional
Rent.  Landlord shall have the right to reasonably estimate the
Operating Expenses for each Operating Year.  Upon Landlord’s or Agent’s
notice to Tenant of such estimated amount, Tenant shall pay, on the first day
of each month during that Operating Year, an amount (the “Estimated Additional Rent”) equal to the estimate of the
Tenant’s Proportionate Share of Operating Expenses divided by 12 (or the
fractional portion of the Operating Year remaining at the time Landlord
delivers its notice of the estimated amounts due from Tenant for that Operating
Year).  If the aggregate amount of Estimated Additional Rent actually paid
by Tenant during any Operating Year is less than Tenant’s actual ultimate
liability for Operating Expenses for that particular Operating Year, Tenant
shall pay the deficiency within 30 days of Landlord’s written demand therefor.
 If the aggregate amount of Estimated Additional Rent actually paid by
Tenant during a given Operating Year exceeds Tenant’s actual liability for such
Operating Year, the excess shall be credited against the Estimated Additional
Rent next due from Tenant during the immediately subsequent Operating Year,
except that in the event that such excess is paid by Tenant during the final
Lease Year, then upon the expiration of the Term, Landlord or

 

5

 

Agent
shall pay Tenant the then-applicable excess promptly after determination
thereof.  No interest shall be payable to Tenant on account of payments of
Estimated Additional Rent and such payments may be commingled.

 

Within one hundred twenty
(120) days after the end of each calendar year during the Lease Term, Landlord
shall furnish to Tenant (i) annual statements itemizing the Operating Expenses
for the year just ended, which statements shall be reasonably detailed,
prepared in the ordinary course of Landlord’s business and certified by
Landlord as being true and complete, and (ii) Landlord’s calculations showing
Tenant’s Proportionate Share of the Operating Expenses for such year. 
Upon thirty (30) days prior notice and not more than once per year during the
Lease Term, Tenant shall have the right to inspect Landlord’s books and records
for the sole purpose of verifying the Operating Expenses and the calculation of
the Tenant’s Proportionate Share thereof.  If any such inspection reveals
that Tenant was overcharged and not otherwise properly reconciled pursuant to
this Section 3.3, Landlord
shall credit any such amounts to the next payment(s) of Additional Rent
becoming due or, in the final year, refund any such excess amount charged to
Tenant.  Tenant agrees to maintain in strict confidence any information
Tenant obtains or reviews pursuant to its inspections rights granted under this
Section 3.3 except that
Tenant shall be permitted to disclose such information to its attorneys and
advisors, provided Tenant informs such parties of the confidential nature of
such information and uses good faith and diligent efforts to cause such parties
to maintain such information as confidential.

 

4.                                     
USE OF PREMISES AND
COMMON AREAS; SECURITY DEPOSIT.

 

4.1.                           
Use of Premises and
Property.  The Premises shall be used by the Tenant for the purpose(s)
set forth in Section 1.7 above and for no
other purpose whatsoever.  Tenant shall not, at any time, use or occupy,
or suffer or permit anyone to use or occupy, the Premises, or do or permit
anything to be done in the Premises or the Property, in any manner that may (a)
violate any Certificate of Occupancy for the Premises or the Property; (b)
cause, or be liable to cause, injury to, or in any way impair the value or
proper utilization of, all or any portion of the Property (including, but not
limited to, the structural elements of the Property) or any equipment,
facilities or systems therein; (c) constitute a violation of the laws and
requirements of any public authority or the requirements of insurance bodies or
the rules and regulations of the Property, including any covenant, condition or
restriction affecting the Property, (d) exceed the load bearing capacity of the
floor of the Premises; (e) impair or tend to impair the character, reputation
or appearance of the Property; or (e) unreasonably annoy, inconvenience or
disrupt the operations or tenancies of other tenants or users of the
Property.  On or prior to the date hereof, Tenant has completed and
delivered for the benefit of Landlord a “Tenant Operations Inquiry Form” in the
form attached hereto as Exhibit
D
describing the nature of Tenant’s proposed business operations at the Premises,
which form is intended to, and shall be, relied upon by Landlord.

 

4.2.                           
Use of Common
Areas.  As used herein, “Common Areas” shall mean all areas within the
Property that are available for the common use of tenants of the Property and
that are not leased or held for the exclusive use of Tenant or other tenants or
licensees, including, but not limited to, parking areas, driveways, sidewalks,
loading areas, access roads, corridors, landscaping and planted areas. 
Tenant shall have the nonexclusive right to use the Common Areas for the
purposes intended, subject to such reasonable rules and regulations as Landlord
may uniformly establish from time to time.  Tenant shall not interfere
with the rights of any or all of Landlord, other tenants or licensees, or any
other person entitled to use the Common Areas.  Without limitation of the
foregoing, Tenant shall not park or store any vehicles or trailers on, or
conduct truck loading and unloading activities in, the Common Areas in a manner
that unreasonably disturbs, disrupts or prevents the use of the Common Areas by
Landlord, other tenants or licensees or other persons entitled to use the
Common Areas.  Landlord, from time to time, may change any or all of the
size, location, nature and use of any of the Common Areas although such changes
may result in inconvenience to Tenant, so long as such changes do not materially
and adversely affect Tenant’s use of the Premises.  In addition to the
foregoing, Landlord may, at any time, close or suspend access to any Common
Areas to perform any acts in the Common Areas as, in Landlord’s reasonable
judgment, are desirable to improve or maintain either or both of the Premises
and the Property, or are required in order to satisfy Landlord’s obligations
under either or both of Sections
13.2
and 18; provided, however,
that Landlord shall use reasonable efforts to limit any disruption of Tenant’s
use and operation of the Premises in connection therewith.

 

4.3.                           
Signage.  Tenant shall not affix
any sign of any size or character to any portion of the Property, without prior
written approval of Landlord, which approval shall not be unreasonably withheld
or delayed.

 

6

 

Tenant
shall remove all signs of Tenant upon the expiration or earlier termination of
this Lease and immediately repair any damage to either or both of the Property
and the Premises caused by, or resulting from, such removal.

 

4.4.                           
Intentionally
Omitted.

 

5.                                     
CONDITION AND
DELIVERY OF PREMISES.

 

5.1.                           
Conditions of
Premises.  Landlord presents and warrants to Tenant that, on the Phase I
Premises Commencement Date, Phase II Premises Commencement Date, and Phase III
Premises Commencement Date, respectively, and as applicable, all plumbing,
electrical, heating, ventilating, air-conditioning, ventilating and mechanical
systems, including the dock doors permitted to be used by Tenant hereunder,
located within the Premises, or located outside the Premises but which service
the Premises, shall be in good condition and repair and in proper working
order.  Tenant acknowledges that, except as set forth in this Lease,
neither Landlord or Agent, nor any representative of Landlord, has made any
representation as to the condition of the Premises or the suitability of the
Premises for Tenant’s intended use.  Neither Landlord nor Agent shall be
obligated to make any repairs, replacements or improvements (whether structural
or otherwise) of any kind or nature to the Premises in connection with, or in
consideration of, this Lease, except (a) as set forth in Sections 13.2 and 18 and (b) with respect to all (if any) repairs and
improvements expressly and specifically described in Exhibit B attached hereto (“Landlord Work Items”) and (c) as may be
required in order to deliver the Premises to Tenant in the condition required
under this paragraph.  Landlord shall enforce, or cause Agent to enforce,
upon Tenant’s request, all manufacturer’s or contractor’s warranties, if any,
issued in connection with any of the Landlord Work Items.  Landlord shall
perform, or caused to be performed, the Landlord Work Items in a good and
workmanlike manner.

 

5.2.                           
Delay in
Commencement.  Landlord shall not be liable to Tenant if Landlord does not
deliver possession of the Phase I Premises, Phase II Premises, or Phase III
Premises to Tenant on the Phase I Premises Commencement Date, Phase II Premises
Commencement Date, or Phase III Premises Commencement Date, respectively. 
The obligations of Tenant under the Lease shall not be affected thereby, except
that the applicable Commencement Date shall be delayed until Landlord delivers
possession of the Phase I Premises, Phase II Premises, or Phase III Premises
(as the case may be) to Tenant.  A delay in the Commencement Date shall
not change the Expiration Date.  Notwithstanding the foregoing provisions,
in the event any such premises are not delivered by Landlord as required herein
by September 1, 2003, Tenant may elect to terminate this Lease.

 

6.                                     
SUBORDINATION;
NOTICES TO SUPERIOR LESSORS AND MORTGAGEES; ATTORNMENT.

 

6.1.                           
Subordination.  Provided that Tenant
is provided with a reasonable and customary subordination, nondisturbance and
attornment agreement duly executed by the holder of any mortgage or deed of trust
or the landlord pursuant to any ground lease, this Lease shall be subject and
subordinate at all times to (a) all ground leases or underlying leases that may
now exist or hereafter be executed affecting either or both of the Premises and
the Property and (b) any mortgage or deed of trust that may now exist or
hereafter be placed upon, and encumber, any or all of (x) the Property; (y) any
ground leases or underlying leases for the benefit of the Property; and (z) all
or any portion of Landlord’s interest or estate in any of said items. 
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases that
benefit the Property or any such mortgage or deed of trust liens to this
Lease.  Tenant shall execute and deliver, upon demand by Landlord any
additional documents evidencing the priority of subordination of this Lease
with respect to any such ground leases or underlying leases for the benefit of
the Property or any such mortgage or deed of trust provided such documents are
in a commercially reasonable form.

 

6.2.                           
Estoppel
Certificates.  Tenant agrees, from time to time and within 10 days after
request by Landlord, to deliver to Landlord, or Landlord’s designee, an
estoppel certificate stating such matters pertaining to this Lease as may be
reasonably requested by Landlord provided such certificate is in a commercially
reasonable form.  Failure by Tenant to timely execute and deliver such certificate
shall constitute an acceptance of the Premises and acknowledgment by Tenant
that the statements included therein are true and correct without
exception.  Landlord and Tenant intend that any statement delivered
pursuant to this section may be relied upon by any prospective purchaser
or mortgagee of the Property or of any interest therein or any other Landlord
designee.

 

7

 

6.3.                           
Transfer for
Landlord.  In the event of a sale or conveyance by Landlord of the
Property, the same shall operate to release Landlord from any future liability
for any of the covenants or conditions, express or implied, herein contained in
favor of Tenant to the extent such covenants and conditions are assumed by
Landlord’s successor-in-interest, and in such event Tenant agrees to look
solely to Landlord’s successor in interest with respect thereto and agrees to
attorn to such successor.

 

7.                                     
QUIET
ENJOYMENT.  Subject to the provisions of this Lease, so long as Tenant
pays all of the Rent and performs all of its other obligations hereunder,
Tenant shall not be disturbed in its possession of the Premises by Landlord,
Agent or any other person lawfully claiming through or under Landlord;
provided, however, in addition to Landlord’s rights under Section 16 and elsewhere in this
Lease, Landlord and Landlord’s agents, employees, contractors and
representatives shall be provided reasonable access to the Premises such that
Landlord and Landlord’s agents, employees, contractors and representatives may
perform the General Maintenance Services (as hereinafter defined) without undue
interruption, delay or hindrance.  This covenant shall be construed as a
covenant running with the Property and is not a personal covenant of Landlord. 
Tenant shall not unreasonably interrupt, delay, prevent or hinder the
performance of the General Maintenance Services by or on behalf of
Landlord.  Notwithstanding the foregoing, however, Tenant acknowledges and
agrees that Landlord shall have the unfettered and unilateral right to use
portions of the Common Areas (inclusive of the roof of the Building) for such
purposes and uses as Landlord may desire; provided, however, that in all events
and under all circumstances, Landlord’s use of any portion of the Common Areas
shall not interfere, in any material respect, with any or all of (a) Tenant’s
rights to occupy and use the Common Areas (in the manner and for the purposes
contemplated hereunder); (b) Tenant’s right to utilize the vehicular parking
areas located on the Common Areas; and (c) Tenant’s right of access, ingress
and egress to and from the Common Areas.

 

8.                                     
ASSIGNMENT,
SUBLETTING AND MORTGAGING.

 

8.1.                           
Prohibition.  Tenant acknowledges
that this Lease and the Rent due under this Lease have been agreed to by
Landlord in reliance upon Tenant’s reputation and creditworthiness and upon the
continued operation of the Premises by Tenant for the particular use described
in Section 4.1 above; therefore,
Tenant shall not, whether voluntarily, or by operation of law, or otherwise:
(a) assign or otherwise transfer this Lease; (b) sublet the Premises or any
part thereof, or allow the same to be used or occupied by anyone other than
Tenant; or (c) mortgage, pledge, encumber, or otherwise hypothecate this Lease
or the Premises, or any part thereof, in any manner whatsoever, without in each
instance obtaining the prior written consent of Landlord, which consent may be
given or withheld in Landlord’s sole, but reasonable, discretion.  Except
as otherwise specified herein, any purported assignment, mortgage, transfer,
pledge or sublease made without the prior written consent of Landlord shall be
absolutely null and void.  No assignment of this Lease shall be effective
and valid unless and until the assignee executes and delivers to Landlord any
and all documentation reasonably required by Landlord in order to evidence
assignee’s assumption of all obligations of Tenant hereunder.  Any consent
by Landlord to a particular assignment, sublease or mortgage shall not
constitute consent or approval of any subsequent assignment, sublease or
mortgage, and Landlord’s written approval shall be required in all such
instances.  No consent by Landlord to any assignment or sublease shall be
deemed to release Tenant from its obligations hereunder and Tenant shall remain
fully liable for performance of all obligations under this Lease.

 

8.2.                           
Rights of
Landlord.  If this Lease is assigned, or if the Premises (or any part
thereof) are sublet or used or occupied by anyone other than Tenant, whether or
not in violation of this Lease, Landlord or Agent may (without prejudice to, or
waiver of its rights), collect Rent from the assignee, subtenant or occupant. 
Landlord or Agent may apply the net amount collected to the Rent herein
reserved, but no such assignment, subletting, occupancy or collection shall be
deemed a waiver of any of the provisions of this Section 8.  With respect to the
allocable portion of the Premises sublet by Tenant to any person or entity not
affiliated with Tenant, in the event that the total rent and any other
considerations received under any sublease by Tenant is greater than the total
Rent required to be paid, from time to time, under this Lease, Tenant shall pay
to Landlord fifty percent (50%) of such excess as received from any such
subtenant (after deducting any brokerage commissions, tenant improvement costs
and other costs incurred by Tenant in connection with such subletting), and
such amount shall be deemed a component of the Additional Rent.

 

8.3.                           
Permitted
Transfers.  The provisions of Section 8.1(a) shall not apply to a transfer of a
majority (i.e. greater than 50% interest) of the voting stock of Tenant or to
any other change in voting control of

 

8

 

Tenant
(if Tenant is a corporation), or to a transfer of a majority of the general
partnership or membership interests in Tenant (if Tenant is a partnership or a
limited liability company) or to a change in the managerial control of Tenant,
or to transfer in connection with a merger, reorganization, or sale of all or
substantially all the assets of Tenant, and Tenant shall be permitted to assign
this Lease without Landlord’s consent in connection with any such transfer,
provided, in any of such events, the successor to Tenant (or any party
remaining liable for the obligations of Tenant hereunder) has a net worth equal
to or greater than $10,000,000.00.  Any such permitted transferee shall
execute and deliver to Landlord any and all documentation reasonably required
by Landlord in order to evidence assignee’s assumption of all obligations of
Tenant hereunder.

 

9.                                     
COMPLIANCE WITH LAWS.

 

9.1.                           
Compliance with
Laws.  Tenant shall, at its sole expense (regardless of the cost
thereof), comply with all local, state and federal laws, rules, regulations and
requirements now or hereafter in force and all judicial and administrative
decisions in connection with the enforcement thereof (collectively, “Laws”), pertaining to either or both of
the Premises and Tenant’s use and occupancy thereof.  If any license or
permit is required for the conduct of Tenant’s business in the Premises,
Tenant, at its expense, shall procure such license prior to the Commencement
Date, and shall maintain such license or permit in good standing throughout the
Term.  Tenant shall give prompt notice to Landlord of any written notice
it receives of the alleged violation of any Law or requirement of any
governmental or administrative authority with respect to either or both of the
Premises and the use or occupation thereof.  The judgment of any court of
competent jurisdiction, or the admission of Tenant in any action or proceeding
against Tenant, whether Landlord is a party thereto or not, that any such Law
pertaining to the Premises has been violated, shall be conclusive of that fact
as between Landlord and Tenant.  Landlord represents and warrants to
Tenant that, on the Phase I Premises Commencement Date, Phase II Premises
Commencement Date, and Phase III Premises Commencement Date, the Phase I
Premises, Phase II Premises, and Phase III Premises, respectively, shall, to
Landlord’s actual knowledge, be in compliance with all applicable Laws in all
material respects.  Landlord shall indemnify Tenant against all Tenant
Losses (as defined in Section 17.2.2 hereof) actually suffered by
Tenant as the direct result of the applicable portion of the Premises not being
in material compliance with Laws on the applicable Commencement Date.

 

9.2.                           
Hazardous
Materials.  If, at any time or from time to time during the Term (or
any extension thereof), any Hazardous Material (defined below) is generated,
transported, stored, used, treated or disposed of at, to, from, on or in either
or both of the Premises and the Property by, or as a result of any act or
omission of, any or all of Tenant and any or all of Tenant’s Parties (defined
below): (i) Tenant shall, at its own cost, at all times comply (and cause all
others to comply) with all laws (federal, state or local) relating to Hazardous
Materials, including, but not limited to, all Environmental Laws (defined
below), and Tenant shall further, at its own cost, obtain and maintain in full
force and effect at all times all permits and other approvals required in
connection therewith; (ii) Tenant shall promptly provide Landlord or Agent with
complete copies of all communications, permits or agreements with, from or issued
by any governmental authority or agency (federal, state or local) or any
private entity relating in any way to the presence, release, threat of release,
or placement of Hazardous Materials on or in the Premises or any portion of the
Property, or the generation, transportation, storage, use, treatment, or
disposal at, on, in or from the Premises, of any Hazardous Materials; (iii)
Landlord, Agent and their respective agents and employees shall have the right
to either or both (x) enter the Premises and (y) conduct appropriate tests for
the purposes of ascertaining Tenant’s compliance with all applicable laws
(including Environmental Laws), rules or permits relating in any way to the
generation, transport, storage, use, treatment, disposal or presence of Hazardous
Materials on, at, in or from all or any portion of either or both of the
Premises and the Property; and (iv) upon written request by Landlord or Agent
and only if Landlord has a reasonable basis for believing that Tenant’s
activities at the Premises are not in compliance with applicable Environmental
Laws, Tenant shall provide Landlord with the results of reasonably appropriate
tests of air, water or soil to demonstrate that Tenant complies with all
applicable laws, rules or permits relating in any way to the generation,
transport, storage, use, treatment, disposal or presence of Hazardous Materials
on, at, in or from all or any portion of either or both of the Premises and the
Property.  This Section 9.2 does not authorize
the generation, transportation, storage, use, treatment or disposal of any
Hazardous Materials at, to, from, on or in the Premises in contravention of
this Section 9.  Tenant
covenants to investigate, clean up and otherwise remediate, at Tenant’s sole
expense, any release of Hazardous Materials caused, contributed to, or created
by any or all of (A) Tenant and (B) any or all of Tenant’s officers, directors,
members, managers, partners, invitees, agents, employees, contractors or
representatives (“Tenant
Parties”) during the Term.  Such investigation and remediation shall be
performed only after Tenant has obtained Landlord’s prior written

 

9

 

consent;
provided, however, that Tenant shall be entitled to respond immediately to an
emergency without first obtaining such consent.  All remediation shall be
performed in strict compliance with Environmental Laws and to the reasonable
satisfaction of Landlord.  Tenant shall be liable for any and all
conditions covered hereby, and for all costs relating thereto, that are caused
or created by any or all of Tenant and any or all of Tenant’s Parties. 
Tenant shall not enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to any Hazardous Materials in
any way connected to the Premises without first obtaining Landlord’s written
consent (which consent may be given or withheld in Landlord’s sole, but
reasonable, discretion) and affording Landlord the reasonable opportunity to
participate in any such proceedings.  As used herein, the term (x) “Environmental Laws” shall mean any and
all laws pertaining to Hazardous Materials or that otherwise deal with, or
relate to, air or water quality, air emissions, soil or ground conditions or
other environmental matters of any kind; and (y) “Hazardous Materials” shall mean any waste, material or
substance (whether in the form of liquids, solids or gases, and whether or not
airborne) that is or may be deemed to be or include a pesticide, petroleum,
asbestos, polychlorinated biphenyl, radioactive material, urea formaldehyde or
any other pollutant or contaminant that is or may be deemed to be hazardous,
toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or that
presents a risk to public health or to the environment, and that is or becomes
regulated by any Environmental Law.  The undertakings, covenants and
obligations imposed on Tenant under this Section 9.2 shall survive the termination or
expiration of this Lease.  Notwithstanding anything in this Lease to the
contrary, Landlord hereby indemnifies, defends, and holds Tenant Indemnified
Parties (defined In Section 17.2.2 below) harmless from and against
any and all Tenant Losses (defined below) actually suffered or incurred by
Tenant or any Tenant Indemnified Parties as the direct result of the presence
of Hazardous Materials in existence as of, or prior to, the applicable
Commencement Date, or shown to have arisen subsequent to the applicable
Commencement Date as a result of the use of the Building by Landlord.

 

10.                              
INSURANCE.

 

10.1.                    
Insurance to be
Maintained by Landlord.  Landlord shall maintain (a)
“all-risk” property insurance policy covering the Property (at its full
replacement cost), but excluding Tenant’s Property (AS defined in Section 12.2 below), and (b) commercial general
public liability insurance covering Landlord for claims arising out of
liability for bodily injury, death, personal injury, advertising injury and
property damage occurring in and about the Property and otherwise resulting
from any acts and operations of Landlord, its agents and employees, and (c)
rent loss insurance, all of the above with limits that are required by any
lender(s) of Landlord, or as are otherwise reasonably determined by Landlord.

 

10.2.                    
Insurance to be
Maintained by Tenant.  Tenant shall purchase, at its own expense, and keep
in force at all times during this Lease the policies of insurance set forth
below in Sections
10.2.1 and 10.2.2 (collectively, “Tenant’s Policies”).  All Tenant’s
Policies shall (a) be issued by an insurance company with a Best rating of A-X
or better and otherwise reasonably acceptable to Landlord and shall be licensed
to do business in the state in which the Property is located; (b) provide that
said insurance shall not be canceled or materially modified unless 30 days’
prior written notice shall have been given to Landlord; and (c) otherwise be in
such form, and include such coverages, as Landlord may reasonably
require.  All Tenant’s Policies (or, at Landlord’s option, Certificates of
Insurance, in a form reasonably acceptable to Landlord, evidencing said
Tenant’s Policies), shall be delivered to Landlord by Tenant upon commencement
of the Lease and renewals thereof shall be delivered at least 30 days prior to
the expiration of each Tenant’s Policy.  Tenant shall give prompt notice
to Landlord and Agent of any bodily injury, death, personal injury, advertising
injury or property damage occurring in and about the Property.

 

10.2.1.          
General Liability and
Auto Insurance.  Tenant shall purchase and maintain, throughout the Term, a
Tenant’s Policy(ies) of (i) commercial general or excess liability insurance,
including personal injury and property damage, in the amount of not less than
$2,000,000.00 per occurrence, and $5,000,000.00 annual general aggregate, per
location; (ii) comprehensive automobile liability insurance covering Tenant
against any losses arising out of liability for personal injuries or deaths of
persons and property damage occurring in or about the Premises in the amount of
not less than $1,000,000, combined single limit.  The Tenant’s Policies
required by this Section 10.2.1 shall (a) name
Landlord, Agent, and any party holding an interest to which this Lease may be
subordinated whose name shall have been furnished in writing to Tenant, as
additional insureds; (b) provide coverage on an occurrence basis; (c) provide
coverage for the indemnity obligations of Tenant under this Lease; (d) contain
a severability of insured parties provision and/or a cross liability
endorsement; (e) be primary, not

 

10

 

contributing
with, and not in excess of, coverage that Landlord may carry; and (f) provide
coverage with no exclusion for a pollution incident arising from a hostile
fire.

 

10.2.2.          
Property and Workers’
Compensation Insurance.  Tenant shall purchase and maintain,
throughout the Term, a Tenant’s Policy or Policies of (i) “all-risk” property
insurance covering Tenant’s Property and damage to other property resulting
from any acts or operations of Tenant, and (ii) workers’ compensation insurance
per the applicable state statutes covering all employees of Tenant.

 

10.3.                    
Waiver of
Subrogation.  Notwithstanding anything in this Lease to the contrary, and
to the extent permitted by law and without affecting the coverage provided by
insurance required to be maintained hereunder, Landlord and Tenant each waive
any right to recover against the other for (a) damages to property, (b) damages
to all or any portion of either or both of the Premises and the Property, (c)
claims arising by reason of the foregoing, to the extent such damages and
claims are insured against, or required to be insured against, by Landlord or
Tenant under this Lease, or (d) claims paid by Tenant’s workers’ compensation
carrier.  This provision is intended to waive, fully and for the benefit
of each party, any rights and/or claims which might give rise to a right of
subrogation by any insurance carrier.  The coverage obtained by each party
pursuant to this Lease shall include, without limitation, a waiver of
subrogation by the carrier which conforms to the provisions of this section.

 

11.                              
ALTERATIONS.

 

11.1.                    
Procedural
Requirements.  Tenant may, from time to time, at its expense, make
alterations or improvements in and to the Premises (hereinafter collectively
referred to as “Alterations”), provided that
Tenant first obtains the written consent of Landlord in each instance. 
Landlord’s consent to Alterations shall not be unreasonably withheld, provided
that: (a) the Alterations are non-structural and the structural integrity of
the Property shall not be affected; (b) the Alterations are to the interior of
the Premises; (c) the proper functioning of the mechanical, electrical,
heating, ventilating, air-conditioning (“HVAC”), sanitary and other service systems of the
Property shall not be affected and the usage of such systems by Tenant shall
not be increased; (d) the Alterations have no adverse effect on other leased
premises in the Property; (e) Tenant shall have appropriate insurance coverage,
reasonably satisfactory to Landlord, regarding the performance and installation
of the Alterations; (f) the Alterations shall conform with all other
requirements of this Lease; and (g) Tenant shall have provided Landlord with
reasonably detailed plans for such Alterations in advance of requesting
Landlord’s consent.  Additionally, before proceeding with any Alterations,
Tenant shall (i) at Tenant’s expense, obtain all necessary governmental permits
and certificates for the commencement and prosecution of Alterations; (ii)
submit to Agent, for Landlord’s written approval, working drawings, plans and
specifications and all permits for the work to be done and Tenant shall not
proceed with such Alterations until it has received said approval; and (iii)
cause those contractors, materialmen and suppliers engaged to perform the
Alterations to deliver to Landlord certificates of insurance (in a form
reasonably acceptable to Landlord) evidencing policies of commercial general
liability insurance (providing the same coverages as required in Section 10.2.1 above) and workers’
compensation insurance.  Such insurance policies shall satisfy the
obligations imposed under Section 10.2.1(a) through (d) and (f).  After obtaining Landlord’s approval to the
Alterations, Tenant shall give Landlord at least five days’ prior written
notice of the commencement of any Alterations at the Premises, and Landlord may
elect to record and post notices of non-responsibility at the Premises. 
Notwithstanding anything to the contrary contained in this Section 11.1, Landlord’s consent
shall not be required for Alterations satisfying clauses (a) through (f) above
and costing $25,000.00 or less in any one instance (up to an maximum aggregate
or $100,000 over the Term) provided that Tenant notifies Landlord of such
Alterations prior to commencing thereon and obtains all approvals and permits
from third parties necessary for the commencement and prosecution of such
Alterations.  Notwithstanding anything to the contrary contained in this Section 11.1, the dollar amounts
set forth above shall apply only to the cost of the alterations to or
improvements of the Premises and shall not apply to the value or cost of the
equipment Tenant elects to use or install at that Premises.

 

11.2.                    
Performance of
Alterations.  Tenant shall cause the Alterations to be performed in
compliance with all applicable permits, laws and requirements of public
authorities, and with Landlord’s reasonable rules and regulations or any other
restrictions that Landlord or Agent may impose on the Alterations.  Tenant
shall cause the Alterations to be diligently performed in a good and
workmanlike manner, using new materials and equipment at least equal in quality
and class to the standards for the Property established by Landlord or
Agent.  Tenant shall obtain all necessary permits and certificates for
final governmental approval of the Alterations and shall

 

11

 

provide
Landlord with “as built” plans, copies of all construction contracts,
governmental permits and certificates and proof of payment for all labor and
materials, including, without limitation, copies of paid invoices and final
lien waivers.  Notwithstanding anything in this Lease to the contrary,
with Landlord’s prior consent, which consent shall not be unreasonably
withheld, conditioned or delayed, Tenant shall be permitted to install
telecommunications and other lines and wires at the Property as may be reasonably
necessary in order to facilitate communications between Tenant’s property to
the north (or any other property used or occupied by Tenant) and the Premises
leased by Tenant hereunder.

 

11.3.                    
Lien
Prohibition.  Tenant shall pay when due all claims for labor and material
furnished to the Premises in connection with the Alterations.  Tenant
shall not permit any mechanics’ or materialmen’s liens to attach to the
Premises or the Property.  Tenant, at its expense, shall procure the
satisfaction or discharge of record of all such liens and encumbrances within
30 days after the filing thereof; or, within such thirty (30) day period,
Tenant shall provide Landlord, at Tenant’s sole expense, with endorsements
(satisfactory, both in form and substance, to Landlord and the holder of any
mortgage or deed of trust) to the existing title insurance policies of Landlord
and the holder of any mortgage or deed of trust, insuring against the existence
of, and any attempted enforcement of, such lien or encumbrance.  In the
event Tenant has not so performed, Landlord may, at its option, pay and
discharge such liens and Tenant shall be responsible to reimburse Landlord, on
demand and as Additional Rent under this Lease, for all costs and expenses
incurred in connection therewith, together with interest thereon at the rate
set forth in Section 22.3, which expenses shall include reasonable fees of
attorneys of Landlord’s choosing, and any costs in posting bond to effect
discharge or release of the lien as an encumbrance against the Premises or the
Property.

 

12.                              
LANDLORD’S AND
TENANT’S PROPERTY.

 

12.1.                    
Landlord’s
Property.  All fixtures, machinery, equipment, improvements and
appurtenances attached to, or built into, the Premises at the commencement of,
or during the Term, excluding Tenant’s Property (as defined below), shall
become and remain a part of the Premises; shall be deemed the property of
Landlord (the “Landlord’s
Property”), without compensation or credit to Tenant; and shall not be removed
by Tenant at the Expiration Date.  Further, any personal property in the
Premises on the Commencement Date, movable or otherwise, unless installed and
paid for by Tenant, shall be and shall remain the property of Landlord and
shall not be removed by Tenant.  In no event shall Tenant remove any of
the following materials or equipment without Landlord’s prior written consent
(which consent may be given or withheld in Landlord’s sole discretion): any
power wiring or power panels, lighting or lighting fixtures, wall or window
coverings, carpets or other floor coverings, heaters, air conditioners or any
other HVAC equipment, fencing or security gates, or other similar building
operating equipment and decorations.

 

12.2.                    
Tenant’s
Property.  All partitions, business and trade fixtures, machinery and
equipment, communications equipment, motor control centers, refrigeration
equipment and office equipment, any HVAC equipment installed by Tenant and
specific to Tenant’s use and occupancy of the Premises (excluding the HVAC
equipment presently installed at the Premises and any repairs or replacements
respecting such equipment) and other non-structural items that are installed in
the Premises by, or for the account of, Tenant and without expense to Landlord
and that can be removed without structural damage to the Property, and all
furniture, furnishings and other personal property owned by Tenant and located
in the Premises (collectively, the “Tenant’s Property”) shall be and shall remain the
property of Tenant and may be removed by Tenant at any time during the Term and
at the Expiration Date, provided Tenant repairs or pays the cost of repairing
any damage to the Premises or to the Property resulting from the installation
and/or removal thereof.  At or before the Expiration Date, or the date of
any earlier termination, Tenant, at its expense, shall remove from the Premises
all of Tenant’s Property and any Alterations (except such items thereof as
constitute Landlord’s Property; or as Landlord shall have expressly permitted,
in writing, to remain, which property shall become the property of Landlord),
and Tenant shall repair (to Landlord’s reasonable satisfaction) any damage to
the Premises or the Property resulting from any installation and/or removal of
Tenant’s Property.  Any other items of Tenant’s Property that shall remain
in the Premises after the Expiration Date, or following an earlier termination
date, may, at the option of Landlord, be deemed to have been abandoned by
Tenant, and in such case, such items may be retained by Landlord as its
property or be disposed of by Landlord, in Landlord’s sole and absolute
discretion and without accountability, at Tenant’s expense.

 

12

 

13.                              
REPAIRS AND
MAINTENANCE.

 

13.1.                    
Tenant Repairs and
Maintenance.  Tenant shall, at its expense, throughout the Term, (i)
maintain and preserve, in good condition and repair and in proper working order
(subject to normal and customary wear and tear), the Premises and the fixtures
and appurtenances therein which exclusively serve the Premises (including, but
not limited to, the Premises’ plumbing and HVAC systems, all doors, overhead or
otherwise, glass and levelers located in the Premises or otherwise available in
the Property for Tenant’s sole use; and excluding, however, those components of
the Premises for which Landlord is expressly responsible under Section 13.2); and (ii) except to
the extent Landlord elects to repair and maintain the HVAC systems as part of
General Maintenance Services (as hereinafter defined), maintain, in full force
and effect, a preventative maintenance and service contract with a reputable
service provider for maintenance of the HVAC systems of the Premises (a copy of
which service agreement shall be provided to Landlord within fifteen (15) days
after the Commencement Date).  Tenant shall also be responsible for all
costs and expenses incurred to perform any and all repairs and replacements
(whether structural or non-structural; interior or exterior; and ordinary or
extraordinary), in and to the Premises and the Property and the facilities and
systems thereof; if and to the extent that the need for such repairs or
replacements arises directly or indirectly from any or all of: (a) the
performance or existence of any Alterations, (b) the installation, use or
operation of Tenant’s Property in the Premises, (c) the moving of Tenant’s
Property in or out of the Property, and (d) any act, omission, misuse, or
neglect of Tenant, any of its subtenants, or others entering into the Premises
by act or omission of Tenant or any subtenant (except to the extent Landlord
has waived claims against Tenant therefor under Section 10.3
hereof).  Any repairs or replacements required to be made by Tenant to any
or all of the structural components of the Property and the mechanical,
electrical, sanitary, HVAC, or other systems of the Property or Premises shall
be performed by appropriately licensed contractors approved by Landlord, which
approval shall not be unreasonably withheld.  All such repairs or
replacements shall be subject to the supervision and control of Landlord, and
all repairs and replacements shall be made with materials of equal or better
quality than the items being repaired or replaced.  Notwithstanding any of
the foregoing, however, from time to time during the Term, Landlord may elect,
in its sole discretion and by delivery of written notice to Tenant and with
Tenant’s prior written consent, which shall not be unreasonably withheld, to
perform on behalf of Tenant, all or some portion of the repairs, maintenance,
restoration and replacement in and to the Premises required to be performed by
Tenant under this Lease (any such repairs, maintenance, restoration and/or
replacement activities that Landlord elects to perform on behalf of Tenant are
herein collectively referred to as “General Maintenance Services”).  Tenant shall
reimburse Landlord for the cost of all General Maintenance Services provided by
Landlord as Additional Rent simultaneously with the payment of Operating
Expenses as part of Estimated Additional Rent (on a monthly estimated basis
subject to annual reconciliation as described in Section 3.3 above).  Unless and until
Landlord affirmatively elects to provide General Maintenance Services, nothing
contained herein shall be construed to obligate Landlord to perform any General
Maintenance Services or, except as otherwise expressly provided in Section 13.2, to repair, maintain,
restore or replace any portion of the Premises.  Landlord may from time to
time, in its sole discretion, (x) reduce or expand the scope of the General
Maintenance Services that Landlord has elected to provide (provided Landlord
may not expand the scope thereof without Tenant’s prior written consent), or
(y) revoke its election to provide any or all of the General Maintenance
Services, in either event, upon delivery of not less than thirty (30) days’
prior written notice to Tenant.  If Landlord does not elect to repair,
maintain and/or replace the HVAC systems as part of General Maintenance
Services, or revokes such election at any time after having made such election,
Tenant shall enter into a preventative maintenance and service contract with a
reputable service provider for maintenance of the HVAC systems of the Premises,
a copy of which agreement shall be provided to Landlord.  Notwithstanding
the foregoing, Landlord shall be responsible for any cost or expense incurred
as a result of the Premises not being in the condition, repair and order specified
in Section 5 hereof as of the
Phase I Premises Commencement Date, Phase II Premises Commencement Date, and
Phase III Premises Commencement Date, respectively, as applicable.

 

13.2.                    
Landlord
Repairs.  Notwithstanding anything contrary herein, Landlord shall
maintain in good condition and repair and in working order, and shall repair,
replace and restore the foundation, exterior and interior load-bearing walls,
roof structure and roof covering and tuckpointing of the Property, the Common
Areas, and all base building fixtures, equipment, systems and facilities that
serve the Building and Property generally (as distinguished from those that
serve individual tenant spaces); provided, however, that (i) all costs and
expenses so incurred by Landlord to repair, replace and restore the above items
shall constitute Operating Expenses; provided, however, that with respect to
any costs incurred in the replacement context, those costs shall not constitute
an Operating Expense except to the extent that such costs so qualify under Section 3.1.1(vii); and (ii)
notwithstanding

 

13

 

(i)
above, in the event that any such repair, replacement or restoration is
necessitated by any or all of the matters set forth in Sections 13.1(a) through (d) above (collectively, “Tenant Necessitated Repairs”), then Tenant shall
be required to reimburse Landlord for all costs and expenses that Landlord
incurs in order to perform such Tenant Necessitated Repairs (except to the
extent Landlord has waived claims against Tenant therefor under
Section 10.3 hereof), and such reimbursement shall be paid, in full,
within 10 days after Landlord’s delivery of demand therefor.  Landlord
agrees to commence the repairs, replacements or restoration described in this Section 13.2 within a reasonable
period of time after receiving from Tenant written notice of the need for such
repairs.

 

14.                              
UTILITIES.  Tenant shall purchase
all utility services and shall provide for scavenger, cleaning and extermination
services.  As provided in Section 3.1.1 above, utility charges that are
not separately metered to the Premises shall be included within Operating
Expenses; therefore, when and as Tenant pays estimated Operating Expenses,
those estimated monthly payments shall include monthly estimated installments
of non-separately metered utility charges.  With regard to utility
services that are separately metered to the Premises, Tenant may pay such
utility charges directly to the utility or municipality providing such service,
and in that event: (a) all charges shall be paid by Tenant before they become
delinquent; and (b) utility charges for the Premises shall not be included in
estimated Operating Expenses.  Tenant shall be solely responsible for the
repair and maintenance of any meters necessary in connection with such
services.  Tenant’s use of electrical energy in the Premises shall not, at
any time, exceed the capacity of either or both of (i) any of the electrical
conductors and equipment in or otherwise servicing the Premises; and (ii) the
HVAC systems of either or both of the Premises and the Property.

 

15.                              
INVOLUNTARY CESSATION
OF SERVICES.  Landlord reserves the right, without any liability to Tenant
and without affecting Tenant’s covenants and obligations hereunder, to stop
service of any or all of the HVAC, electric, sanitary, elevator (if any), and
other systems serving the Premises, or to stop any other services required by
Landlord under this Lease, whenever and for so long as may be necessary by
reason of (i) accidents, emergencies, strikes, or the making of repairs or
changes which Landlord or Agent, in good faith, deems necessary or (ii) any
other cause beyond Landlord’s reasonable control.  Further, it is also
understood and agreed that Landlord or Agent shall have no liability or
responsibility for a cessation of services to the Premises or to the Property
that occurs as a result of causes beyond Landlord’s or Agent’s reasonable
control.  No such interruption of service shall be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises or any part thereof,
or render Landlord or Agent liable to Tenant for damages, or relieve Tenant
from performance of Tenant’s obligations under this Lease, including, but not
limited to, the obligation to pay Rent; provided, however, that if any
interruption of services persists for a period in excess of two (2) consecutive
business days Tenant shall, as Tenant’s sole remedy, be entitled to a
proportionate abatement of Rent to the extent, if any, of any actual loss of
use of the Premises by Tenant.

 

16.                              
LANDLORD’S
RIGHTS.  Landlord, Agent and their respective agents, employees and
representatives shall have the right to enter and/or pass through the Premises
at any time or times upon reasonable prior notice (except in the event of
emergency): (a) to examine and inspect the Premises and to show them to actual
and prospective lenders, prospective purchasers or mortgagees of the Property
or providers of capital to Landlord and its affiliates; and (b) to make such
repairs, alterations, additions and improvements in or to all or any portion of
either or both of the Premises and the Property, or the Property’s facilities
and equipment as Landlord is required or desires to make.  Landlord and
Agent shall be allowed to take all materials into and upon the Premises that
may be required in connection with any repairs, alterations, additions or
improvements, without any liability to Tenant and without any reduction or
modification of Tenant’s covenants and obligations hereunder; provided,
however, that Landlord shall use reasonable efforts to limit interference with
Tenant’s business operations and Tenant’s occupancy and use of the
Premises.  During the period of six months prior to the Expiration Date
(or at any time, if Tenant has vacated or abandoned the Premises or is
otherwise in default under this Lease), Landlord and its agents may exhibit the
Premises to prospective tenants.  Additionally, Landlord and Agent shall
have the following rights with respect to the Premises, exercisable without
notice to Tenant, without liability to Tenant, and without being deemed an
eviction or disturbance of Tenant’s use or possession of the Premises or giving
rise to any claim for setoff or abatement of Rent: (i) to designate and
approve, prior to installation, all types of signs; (ii) to have pass keys,
access cards, or both, to the Premises; and (iii) to decorate, remodel, repair,
alter or otherwise prepare the Premises for reoccupancy at any time after
Tenant vacates or abandons the Premises for more than 30 consecutive days or
without notice to Landlord of Tenant’s intention to reoccupy the Premises.

 

14

 

17.                              
NON-LIABILITY AND
INDEMNIFICATION.

 

17.1.                    
Non-Liability.  Except as provided in
Section 17.2.2, none of Landlord,
Agent, any other managing agent, or their respective affiliates, owners,
partners, directors, officers, agents and employees shall be liable to Tenant
for any loss, injury, or damage, to Tenant or to any other person, or to its or
their property, irrespective of the cause of such injury, damage or loss. 
Further, except as provided in Section 17.2.2, none of Landlord, Agent, any
other managing agent, or their respective affiliates, owners, partners,
directors, officers, agents and employees shall be liable to Tenant (a) for any
damage caused by other tenants or persons in, upon or about the Property, or
caused by operations in construction of any public or quasi-public work; (b)
with respect to matters for which Landlord is liable, for consequential or
indirect damages purportedly arising out of any loss of use of the Premises or
any equipment or facilities therein by Tenant or any person claiming through or
under Tenant; (c) any defect in the Premises or the Property (unless such
defect arises from a breach by Landlord of its obligations under this Lease);
(d) injury or damage to person or property caused by fire, or theft, or
resulting from the operation of heating or air conditioning or lighting
apparatus, or from falling plaster, or from steam, gas, electricity, water,
rain, snow, ice, or dampness, that may leak or flow from any part of the
Property, or from the pipes, appliances or plumbing work of the same (unless
such injury or damage arises from a breach by Landlord of its obligations under
this Lease).

 

Except as provided in Section 17.2.1, neither Tenant nor its
affiliates, owners, partners, directors, officers, agents or employees shall be
liable to Landlord for any loss, injury, or damage, to Landlord or to any other
person, or to its or their property, irrespective of the cause of such injury,
damage or loss.  Further, except as provided in Section 17.2.1, neither Tenant nor its affiliates,
owners, partners, directors, officers, agents or employees shall be liable to
Landlord (a) for any damage caused by other tenants or persons in, upon or
about the Property, or caused by operations in construction of any public or
quasi-public work; (b) with respect to matters for which Tenant is liable, for
consequential or indirect damages suffered by Landlord; (c) any defect in the
Premises or the Property (unless such defect arises from a breach by Tenant
under this Lease); (d) injury or damage to person or property caused by fire,
or theft, or resulting from the operation of heating or air conditioning or
lighting apparatus, or from falling plaster, or from steam, gas, electricity,
water, rain, snow, ice, or dampness, that may leak or flow from any part of the
Property, or from the pipes, appliances or plumbing work of the same (unless
such injury or damage arises from a breach by Tenant under this Lease).

 

17.2.                    
Indemnification.

 

17.2.1.          
Tenant
Indemnification.  Tenant hereby indemnifies, defends, and holds Landlord,
Agent and their respective affiliates, owners, partners, directors, officers,
agents and employees (collectively, “Landlord Indemnified Parties”) harmless from and
against any and all Losses (defined below) actually suffered or incurred by
Landlord or any Landlord Indemnified Parties arising from or in connection with
any or all of: (a) any act, omission or negligence of any or all of Tenant and
Tenant Parties (as defined in Section 9.2); (b) any accident, injury or
damage whatsoever (unless caused by Landlord’s negligence) occurring on the
Property or within the Premises or Common Areas and caused by any or all of
Tenant and Tenant Parties; (c) any breach by Tenant of any of its warranties
and representations under this Lease; (d) any violation or alleged violation by
any or all of Tenant and Tenant Parties of any Law including, without
limitation, any Environmental Law; (e) any breach of the provisions of Section 9 by any or all of Tenant and
Tenant’s Parties; (f) claims for work or labor performed or materials supplies
furnished to or at the request of any or all of Tenant and Tenant Parties; (g)
any Hazardous Materials used, exposed, emitted, released, discharged,
generated, manufactured, sold, transported, handled, stored, treated, reused,
presented, disposed of or recycled in, at, near or under all or any portion of
the Premises as a result of the acts or omissions of any or all of Tenant and
Tenant Parties; and (h) the violation of any Environmental Law or any permit,
application or consent required in connection with any Environmental Law by any
or all of Tenant and Tenant Parties with respect to the Premises during the
Term, excluding, however, any violation of any Environmental Law resulting
directly from the acts or omissions of Landlord and Landlord Indemnified
Parties (collectively, “Tenant
Indemnified Matters”).  In case any action or proceeding is brought
against any or all of Landlord and the Landlord Indemnified Parties by reason
of any of Tenant Indemnified Matters, Tenant, upon notice from any or all of
Landlord, Agent or any Superior Party (defined below), shall resist and defend
such action or proceeding by counsel reasonably satisfactory to Landlord. 
The term “Losses” shall mean all
claims, demands, expenses, actions, judgments, damages (actual, but not
consequential), penalties, fines, liabilities, losses of every kind and nature
(including, without limitation, property damage, diminution in value of
Landlord’s

 

15

 

interest
in the Premises or the Property, damages for the loss or restriction on use of
any space or amenity within the Premises or the Property, damages arising from
any adverse impact on marketing space in the Property, sums paid in settlement
of claims and any costs and expenses associated with injury, illness or death
to or of any person), suits, administrative proceedings, costs and fees,
including, without limitation, attorneys’ and consultants’ reasonable fees and
expenses, and the costs of cleanup, remediation, removal and restoration, that
are in any way related to any matter covered by the foregoing indemnity. 
The provision of this Section 17.2.1 shall survive the expiration or
termination of this Lease.

 

17.2.2.          
Landlord
Indemnification.  Landlord hereby indemnifies, defends, and holds Tenant and
Tenant Parties (herein collectively, “Tenant Indemnified Parties”) harmless from and against any
and all Tenant Losses (defined below) actually suffered or incurred by Tenant
or any Tenant Indemnified Parties arising from or in connection with any or all
of: (a) any act, omission or negligence of any or all of Landlord and
Landlord’s Indemnified Parties; (b) any accident, injury or damage whatsoever
(unless caused by Tenant negligence) occurring within the Building or Common
Areas and caused by any or all of Landlord and Landlord Indemnified Parties;
(c) any breach by Landlord of any of its warranties and representations under
this Lease; (d) any violation or alleged violation by any or all of Landlord
and Landlord Indemnified Parties of any Law including, without limitation, any
Environmental Law; (e) claims for work or labor performed or materials supplies
furnished to or at the request of any or all of Landlord and Landlord
Indemnified Parties; (f) any Hazardous Materials used, exposed, emitted,
released, discharged, generated, manufactured, sold, transported, handled,
stored, treated, reused, presented, disposed of or recycled in, at, near or
under all or any portion of the Property by any or all of Landlord and Landlord
Indemnified Parties; and (g) the violation of any Environmental Law or any
permit, application or consent required in connection with any Environmental
Law by any or all of Landlord and Landlord Indemnified Parties with respect to
the Property during the Term, excluding, however, any violation of any
Environmental Law resulting directly from the acts or omissions of Tenant and
Tenant Parties (collectively, “Landlord’s Indemnified Matters”).  In case any
action or proceeding is brought against any or all of Tenant and Tenant Parties
by reason of any of Landlord’s Indemnified Matters, Landlord, upon notice from
any or all of Tenant and Tenant Parties, shall resist and defend such action or
proceeding by counsel reasonably satisfactory to Tenant.  The term “Tenant Losses” shall mean all claims, demands,
expenses, actions, judgments, damages (actual, but not consequential),
penalties, fines, liabilities, losses of every kind and nature (including,
without limitation, property damage, diminution in value of Tenant interest in
the Premises, damages for the loss or restriction on use of any space or
amenity within the Premises or the Property, sums paid in settlement of claims
and any costs and expenses associated with injury, illness or death to or of
any person), suits, administrative proceedings, costs and fees, including,
without limitation, attorneys’ and consultants’ reasonable fees and expenses,
and the costs of cleanup, remediation, removal and restoration, that are in any
way related to any matter covered by the foregoing indemnity or Landlord’s
indemnity as outlined in Section 9.1 and 9.2, Notwithstanding anything to the contrary set forth in this Lease,
however, in all events and under all circumstances, the liability of Landlord
to Tenant shall be limited to the interest of Landlord in the Property, and
Tenant agrees to look solely to Landlord’s interest in the Property for the
recovery of any judgment or award against Landlord, it being intended that
Landlord shall not be personally liable for any judgment or deficiency. 
The provisions of this Section 17.2.2 shall survive the
expiration or termination of this Lease.

 

17.3.                    
Force Majeure.  The
obligations of Landlord and Tenant hereunder shall not be affected, impaired or
excused, and the non-performing party shall have no liability whatsoever to the
other party, with respect to any act, event or circumstance arising out of (a)
Landlord’s or Tenant’s failure (as the case may be) to fulfill, or delay in
fulfilling any of its respective obligations under this Lease by reason of
labor dispute, governmental preemption of property in connection with a public
emergency or shortages of fuel, supplies, or labor, or any other cause, whether
similar or dissimilar, beyond such party’s reasonable control; or (b) any
failure or defect in the supply, quantity or character of utilities furnished
to the Premises, or by reason of any requirement, act or omission of any public
utility or others serving the Property, beyond such party’s reasonable control.

 

18.                              
DAMAGE OR
DESTRUCTION.

 

18.1.                    
Notification and
Repair.  Tenant shall give prompt notice to Landlord and Agent of
(a) any fire or other casualty to the Premises or the Property, and (b) any
damage to, or defect in, any part or appurtenance of the Property’s sanitary,
electrical, HVAC, elevator or other systems located in or passing through the
Premises or any part thereof of which Tenant becomes aware.  Subject to
the provisions of Section 18.3 below, if either or
both of the Property and the Premises is damaged by fire or other insured
casualty, Landlord shall repair

 

16

 

(or
cause Agent to repair) the damage and restore and rebuild the Property and/or
the Premises (except for Tenant’s Property) with reasonable dispatch after (x)
notice to it of the damage or destruction and (y) the adjustment of the
insurance proceeds attributable to such damage.  Subject to the provisions
of Section 18.3 below, Tenant shall
not be entitled to terminate this Lease and no damages, compensation or claim
shall be payable by Landlord for purported inconvenience, loss of business or
annoyance arising from any repair or restoration of any portion of the Premises
or of the Property pursuant to this Section.  Landlord (or Agent, as the
case may be) shall use its diligent, good faith efforts to make such repair or
restoration promptly and in such manner as not to unreasonably interfere with
Tenant’s use and occupancy of the Premises, but Landlord or Agent shall not be required
to do such repair or restoration work except during normal business hours of
business days.

 

18.2.                    
Rental Abatement.  Provided that
any damage to either or both of the Property and the Premises is not caused by,
or is not the result of acts or omissions by, any or all of Tenant and Tenant’s
Parties, if (a) the Property is damaged by fire or other casualty thereby
causing the Premises to be inaccessible or (b) the Premises are partially
damaged by fire or other casualty, the Rent shall be proportionally abated to
the extent of any actual loss of use of the Premises by Tenant.

 

18.3.                    
Total
Destruction.  If the Property or the Premises shall be totally destroyed
by fire or other casualty, or if the Property shall be so damaged by fire or
other casualty that (in the reasonable opinion of a reputable contractor or
architect designated by Landlord): (i) its repair or restoration requires more
than 180 days or (ii) such repair or restoration requires the expenditure of
more than 50% of the full insurable value of the Property immediately prior to
the casualty or (iii) the damage [x] is less than the amount stated in (ii)
above, but more than 25% of the full insurable value of the Property; and [y]
occurs during the last two years of Lease Term, then in any such event,
Landlord and Tenant shall each have the option to terminate this Lease (by so
advising the other, in writing) within 10 days after said contractor or
architect delivers written notice of its opinion to Landlord and Tenant, but in
all events prior to the commencement of any restoration of the Premises or the
Property by Landlord.  In such event, the termination shall be effective
as of the date upon which either Landlord or Tenant, as the case may be, receives
timely written notice from the other terminating this Lease pursuant to the
preceding sentence.  If neither Landlord nor Tenant timely delivers a
termination notice, this Lease shall remain in full force and effect. 
Notwithstanding the foregoing, if (A) any holder of a mortgage or deed of trust
encumbering the Property or landlord pursuant to a ground lease encumbering the
Property (collectively, “Superior Parties”) or other party entitled to the insurance proceeds fails
to make such proceeds available to Landlord in an amount sufficient for
restoration of the Premises or the Property, or (B) the issuer of any casualty
insurance policies on the Property fails to make available to Landlord
sufficient proceeds for restoration of the Premises or the Property, then
Landlord may, at Landlord’s sole option, terminate this Lease by giving Tenant
written notice to such effect within 30 days after Landlord receives notice
from the Superior Party or insurance company, as the case may be, that such
proceeds shall not be made available, in which event the termination of this
Lease shall be effective as of the date Tenant receives written notice from
Landlord of Landlord’s election to terminate this Lease.  If Landlord does
not exercise such right of termination, Landlord shall, subject to
Section 18.4, repair the Premises and Property (excluding Tenant’s
Property) to the condition existing immediately prior to such casualty. 
Landlord shall have no liability to Tenant, and Tenant shall not be entitled to
terminate this Lease by virtue of any delays in completion of repairs and
restoration.  For purposes of this Section 18.3 only, “full insurable value” shall mean replacement cost, less
the cost of footings, foundations and other structures below grade.

 

18.4.                    
Insurance
Proceeds.  Landlord shall not be obligated to expend in repairs and
restoration an amount in excess of the proceeds of insurance recovered with
respect to any casualty.  In the event such insurance proceeds are
insufficient to fully restore the Property and Premises and as a result
Landlord elects not to so fully restore the Property and Premises, Landlord
shall notify Tenant thereof in writing, and Tenant have the right to terminate
this Lease by giving written notice thereof to Landlord within thirty (30) days
after receiving such notice from Landlord.  Tenant acknowledges that
Landlord shall be entitled to the full proceeds of any insurance coverage,
whether carried by Landlord or Tenant, for damage to either or both of the Premises
and the Property (excluding any proceeds for damage to Tenant’s
Property).  In the event that either or both of the Premises and the
Property are not repaired or reconstructed, all proceeds of insurance
(excluding any proceeds covering Tenant’s Property), whether carried by
Landlord or Tenant, shall be payable to Landlord.  Landlord’s duty to
repair the Premises and the Property (excluding Tenant’s Property) is limited
to repairing the Premises to the condition existing immediately prior to such
fire or other casualty.

 

17

 

19.                              
EMINENT DOMAIN. 
If
the whole, or any substantial (as reasonably determined by Landlord) portion,
of the Property is taken or condemned for any public use under any Law or by
right of eminent domain, or by private purchase in lieu thereof, and such
taking would prevent or materially interfere with the Permitted Use of the
Premises, this Lease shall terminate effective when the physical taking of said
Premises occurs.  If less than a substantial portion of the Property is so
taken or condemned, or if the taking or condemnation is temporary (regardless
of the portion of the Property affected), this Lease shall not terminate, but
the Rent payable hereunder shall be proportionally abated to the extent of any
actual loss of use of the Premises by Tenant.  Landlord shall be entitled
to any and all payment, income, rent or award, or any interest therein
whatsoever, which may be paid or made in connection with such a taking or
conveyance, and Tenant shall have no claim against Landlord for the value of
any unexpired portion of this Lease.  Notwithstanding the foregoing, any
compensation specifically and independently awarded to Tenant for loss of
business or goodwill, or for its personal property, or moving expenses, shall
be the property of Tenant.

 

20.                              
SURRENDER AND
HOLDOVER.  On the last day of the Term, or upon any earlier
termination of this Lease, or upon any re-entry by Landlord upon the Premises,
(a) Tenant shall quit and surrender the Premises to Landlord “broom-clean” and
in good order, condition and repair (as defined by Exhibit C, attached hereto and incorporated
herein by reference), except for ordinary wear and tear and such damage or
destruction as Landlord is required to repair or restore under this Lease, (b)
Tenant shall remove all of Tenant’s Property therefrom, except as otherwise
expressly provided in this Lease, and (c) Tenant shall surrender to Landlord
any and all keys, access cards, computer codes or any other items used to
access the Premises.  Landlord shall be permitted to inspect the Premises
in order to verify compliance with this Section 20 at any time prior to (x) the
Expiration Date, (y) the effective date of any earlier termination of this
Lease, or (z) the surrender date otherwise agreed to in writing by Landlord and
Tenant.  The obligations imposed under the first sentence of this Section 20 shall survive the
termination or expiration of this Lease.  If any repairs are required to
be performed in, to or at the Premises (pursuant to the first sentence of this Section 20 or any other
applicable provision of this Lease) upon the expiration or termination of the
Term, Tenant shall cause such repairs to be performed, to Landlord’s reasonable
satisfaction, within 10 business days after the date on which this Lease is
terminated or expired.  If Tenant fails to timely comply with the
preceding sentence, then Landlord shall have the right to cause the repairs to
be performed, at Tenant’s expense, and all such expenses so incurred by
Landlord shall bear interest (at the rate specified in the second sentence of Section 22.3) from the date the
expense is incurred until the date paid, in full, by Tenant (inclusive of
interest).  If Tenant remains in possession after the Expiration Date
hereof or after any earlier termination date of this Lease or of Tenant’s right
to possession: (i) Tenant shall be deemed a tenant-at-will; (ii) Tenant shall
pay 150% of the aggregate of the Base Rent then in effect under this Lease and 100%
of Additional Rent, and also shall pay all actual damages sustained by
Landlord, directly by reason of Tenant’s remaining in possession after the
expiration or termination of this Lease; (iii) there shall be no renewal or
extension of this Lease by operation of law; and (iv) the tenancy-at-will may
be terminated by either party hereto upon 30 days’ prior written notice given
by the terminating party to the non-terminating party.  The provisions of
this Section 20 shall not constitute
a waiver by Landlord of any re-entry rights of Landlord provided hereunder or
by law.

 

21.                              
EVENTS OF DEFAULT.

 

21.1.                    
Bankruptcy of
Tenant.  It shall be a default by Tenant under this Lease if Tenant
makes an assignment for the benefit of creditors, or files a voluntary petition
under any state or federal bankruptcy or insolvency law, or an involuntary
petition alleging an act of bankruptcy or insolvency is filed against Tenant
under any state or federal bankruptcy or insolvency law that is not dismissed
within 90 days, or whenever a petition is filed by or against (to the extent
not dismissed within 90 days) Tenant under the reorganization provisions of the
United States Bankruptcy Code or under the provisions of any state or federal
law of like import, or whenever a petition shall be filed by Tenant under the
arrangement provisions of the United States Bankruptcy Code or similar state or
federal law, or whenever a receiver of Tenant, or of, or for, the property of
Tenant shall be appointed, or Tenant admits it is insolvent or is not able to
pay its debts as they mature.

 

21.2.                    
Default
Provisions.  Each of the following shall constitute a default by Tenant
under this Lease: (a) if Tenant fails to pay Rent or any other payment when due
hereunder within five (5) business days after written notice from Landlord of
such failure to pay on the due date; or (b) if Tenant fails, whether by action
or inaction, to timely comply with, or satisfy, any or all of the obligations
imposed on Tenant under this Lease (other than the obligation to pay Rent) for
a period of 30 days after Landlord’s delivery to Tenant of written notice of
such

18

 

default
under this Section 21.2(b); provided, however,
that if the default cannot, by its nature, be cured within such 30 day period,
but Tenant commences and diligently pursues a cure of such default promptly
within the initial 30 day cure period, then Landlord shall not exercise its
remedies under Section 22 unless such default
remains uncured for more than 60 days after the initial delivery of Landlord’s
original default notice.

 

22.                              
RIGHTS AND REMEDIES.

 

22.1.                    
Landlord’s Cure
Rights Upon Default of Tenant.  If Tenant defaults in the
performance of any of its obligations under this Lease, and fails to cure such
default on a timely basis (pursuant to Section 21.2), Landlord, without thereby
waiving such default, may (but shall not be obligated to) perform the same for
the account, and at the expense of, Tenant.

 

22.2.                    
Landlord’s Remedies.  In the event
of any default by Tenant under this Lease, Landlord, at its option, and after
any applicable notice and cure period (as required pursuant to Section 21.2), but without
additional notice or demand from Landlord, if any, as provided in Section 21.2 has expired, may, in
addition to all other rights and remedies provided in this Lease, or otherwise
at law or in equity: (a) terminate this Lease and Tenant’s right of possession
of the Premises; or (b) terminate Tenant’s right of possession of the Premises
without terminating this Lease; provided, however, that Landlord may, whether
Landlord elects to proceed under Subsections (a) or (b) above, relet the
Premises, or any part thereof for the account of Tenant, for such rent and term
and upon such terms and conditions as are acceptable to Landlord.  In
addition, for purposes of any reletting, Landlord is authorized to decorate,
repair, alter and improve the Premises to the extent deemed necessary by
Landlord, in its sole discretion.  In the event of the termination of this
Lease by Landlord pursuant to (a) above, Landlord shall be entitled to recover
from Tenant (i) all damages and other sums that Landlord is entitled to recover
under any provision of this Lease or at law or in equity, including, but not
limited to, all fixed dollar amounts of Base Rent and Additional Rent accrued
and unpaid for the period up to and including such termination date; (ii) all
other additional sums payable by Tenant, or for which Tenant is liable, or in
respect of which Tenant has agreed to indemnify Landlord, under any of the
provisions of this Lease, that may be then owing and unpaid; (iii) all costs
and expenses (including, without limitation, court costs and attorneys’
reasonable fees) incurred by Landlord in the enforcement of its rights and
remedies under this Lease; and (iv) any damages provable by Landlord as a
matter of law including, without limitation, an amount equal to the positive difference,
if any, between (x) the discounted present value (at 6% per annum) of the Base
Rent provided to be paid for the remainder of the Term (measured from the
effective termination date of this Lease) and (y) the fair market rental value
of the Leased Premises (determined at the date of termination of this Lease)
after deduction (from such fair market rental value) of the projected costs and
expenses of reletting the Premises (including the anticipated costs of repairs,
alterations, improvements, additions, legal fees and brokerage commissions) as
reasonably estimated by Landlord.  If Landlord elects to pursue its rights
and remedies under Subsection (b) above, and the Premises are relet and a
sufficient sum is not realized therefrom, then to satisfy the payment, when
due, of Base Rent and Additional Rent reserved under the Lease for any monthly
period (after payment of all Landlord’s reasonable expenses of reletting),
Tenant shall pay any such deficiency monthly.  If Landlord elects to
pursue its rights and remedies under Subsection (b) above, and Landlord
fails to relet the Premises, then Tenant shall pay to Landlord all costs of
Landlord’s expenses of reletting (including the anticipated costs of repairs,
alterations, improvements, additions, legal fees and brokerage commissions) as
reasonably estimated by Landlord.  Tenant agrees that Landlord may file
suit to recover any sums due to Landlord hereunder from time to time and that
such suit or recovery of any amount due Landlord hereunder shall not be any defense
to any subsequent action brought for any amount not theretofore reduced to
judgment in favor of Landlord.  If Landlord elects to pursue its rights
and remedies under Subsection (b), then Landlord shall at any time have
the further right and remedy to rescind such election and pursue its rights and
remedies under Subsection (a).  In the event Landlord elects,
pursuant to clause (b) of this Section 22.2, to terminate Tenant’s right of
possession only, without terminating this Lease, Landlord may, at Landlord’s
option, enter into the Premises, remove Tenant’s Property, Tenant’s signs and
other evidences of tenancy, and take and hold possession thereof, as provided
in Section 20 hereof; provided,
however, that such entry and possession shall not terminate this Lease or
release Tenant, in whole or in part, from Tenant’s obligation to pay the Base
Rent and Additional Rent reserved hereunder for the full Term, or from any
other obligation of Tenant under this Lease.  Any and all property that
may be removed from the Premises by Landlord pursuant to the authority of the
Lease or of law, to which Tenant is or may be entitled, may be handled, removed
or stored by Landlord at the sole risk, cost and expense of Tenant, and in no
event or circumstance shall Landlord be responsible for the value, preservation
or safekeeping thereof.  Tenant shall pay to Landlord, upon demand, any
and all expenses incurred in such removal and all storage charges against such

 

19

 

property
so long as the same shall be in Landlord’s possession or under Landlord’s
control.  Any such property of Tenant not retaken from storage by Tenant
within 30 days after the end of the Term, however terminated, shall be
conclusively presumed to have been conveyed by Tenant to Landlord under this Lease
as in a bill of sale, without further payment or credit by Landlord to Tenant.

 

22.3.                    
Additional Rights of
Landlord and Tenant.  Any and all costs, expenses and disbursements, of
any kind or nature, incurred by Landlord or Agent in connection with the
enforcement of any and all of the terms and provisions of this Lease, including
attorneys’ reasonable fees (through all appellate proceedings), shall be due
and payable (as Additional Rent) Landlord’s submission of an invoice therefor. 
All sums advanced by Landlord or Agent on account of Tenant under this Section,
or pursuant to any other provision of this Lease, and all Base Rent and
Additional Rent, if delinquent or not paid by Tenant and received by Landlord
on or prior to the expiration of any applicable notice or cure period provided
for hereunder, shall bear interest at the rate of 4% per annum above the
“prime” or “reference” or “base” rate (on a per annum basis) of interest
publicly announced as such, from time to time, by the Bank One, or its
successor (“Default
Interest”), from the due date thereof until paid, and such interest shall be
and constitute Additional Rent and be due and payable upon Landlord’s or
Agent’s submission of an invoice therefor.  The various rights, remedies
and elections of Landlord reserved, expressed or contained herein are
cumulative and no one of them shall be deemed to be exclusive of the others or
of such other rights, remedies, options or elections as are now or may
hereafter be conferred upon Landlord by law.

 

22.4.                    
Event of Bankruptcy.  In addition
to, and in no way limiting the other remedies set forth herein, Landlord and
Tenant agree that if Tenant ever becomes the subject of a voluntary or
involuntary bankruptcy, reorganization, composition, or other similar type
proceeding under the federal bankruptcy laws, as now enacted or hereinafter
amended, then: (a) “adequate assurance of future performance” by Tenant
pursuant to Bankruptcy Code Section 365 will include (but not be limited
to) payment of an additional/new security deposit in the amount of three times
the then current Base Rent payable hereunder; (b) any person or entity to which
this Lease is assigned, pursuant to the provisions of the Bankruptcy Code,
shall be deemed, without further act or deed, to have assumed all of the
obligations of Tenant arising under this Lease on and after the effective date
of such assignment, and any such assignee shall, upon demand by Landlord,
execute and deliver to Landlord an instrument confirming such assumption of
liability; (c) notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this Lease, whether
or not expressly denominated as “Rent”, shall constitute “rent” for the
purposes of Section 502(b)(6) of the Bankruptcy Code; and (d) if this
Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations payable or
otherwise to be delivered to Landlord or Agent (including Base Rent, Additional
Rent and other amounts hereunder), shall be and remain the exclusive property
of Landlord and shall not constitute property of Tenant or of the bankruptcy
estate of Tenant.  Any and all monies or other considerations constituting
Landlord’s property under the preceding sentence not paid or delivered to
Landlord or Agent shall be held in trust by Tenant or Tenant’s bankruptcy
estate for the benefit of Landlord and shall be promptly paid to or turned over
to Landlord.

 

23.                              
BROKER.  Tenant covenants,
warrants and represents that the broker set forth in Section 1.9(A) was the only broker
to represent Tenant in the negotiation of this Lease (“Tenant’s Broker”).  Landlord covenants, warrants and
represents that the broker set forth in Section 1.9(B) was the only broker to represent
Landlord in the negotiation of this Lease (“Landlord’s Broker”).  Landlord shall be solely
responsible for paying the commission of Landlord’s Broker and Tenant’s Broker. 
Each party agrees to and hereby does defend, indemnify and hold the other
harmless against and from any brokerage commissions or finder’s fees or claims
therefor by a party claiming to have dealt with the indemnifying party and all
costs, expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys’ fees and expenses, for any breach of the
foregoing.  The foregoing indemnification shall survive the termination or
expiration of this Lease.

 

24.                              
MISCELLANEOUS.

 

24.1.                    
Merger.  All prior
understandings and agreements between the parties are merged in this Lease,
which alone fully and completely expresses the agreement of the parties. 
No agreement shall be effective to modify this Lease, in whole or in part,
unless such agreement is in writing, and is signed by the party against whom
enforcement of said change or modification is sought.

 

20

 

24.2.                    
Notices.  Any notice required to
be given by either party pursuant to this Lease, shall be in writing and shall
be deemed to have been properly given, rendered or made only if personally
delivered, or if sent by Federal Express or other comparable commercial
overnight delivery service, addressed to the other party at the addresses set
forth below (or to such other address as Landlord or Tenant may designate to
each other from time to time by written notice), and shall be deemed to have
been given, rendered or made on the day so delivered or on the first business
day after having been deposited with the courier service:

 

	
  If to Landlord: 

  	
  First Industrial LP

  
	
   

  	
  311 South Wacker Drive,
  Suite 4000

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attn: Vice President -
  Operations Management

  
	
   

  	
   

  
	
  With a copy to:

  	
  First Industrial Realty
  Trust, Inc.

  
	
   

  	
  4742 Creek Road

  
	
   

  	
  Cincinnati, OH 45242

  
	
   

  	
  Attn: Senior Regional
  Director

  
	
   

  	
   

  
	
  With a copy to:

  	
  Barack Ferrazzano
  Kirschbaum Perlman & Nagelberg

  
	
   

  	
  333 West Wacker Drive

  
	
   

  	
  Suite 2700

  
	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
  Attn: Jeremy T. Bunnow

  
	
   

  	
   

  
	
  If to Tenant:

  	
  The Wornick Company

  
	
   

  	
  10825 Kenwood Road

  
	
   

  	
  Cincinnati, OH 45242

  
	
   

  	
  Attn: Ron Davis

  

 

24.3.                    
Non-Waiver.  The failure of either
party to insist, in any one or more instances, upon the strict performance of
any one or more of the obligations of this Lease, or to exercise any election
herein contained, shall not be construed as a waiver or relinquishment for the
future of the performance of such one or more obligations of this Lease or of
the right to exercise such election, but the Lease shall continue and remain in
full force and effect with respect to any subsequent breach, act or
omission.  The receipt and acceptance by Landlord or Agent of Base Rent or
Additional Rent with knowledge of breach by Tenant of any obligation of this
Lease shall not be deemed a waiver of such breach.

 

24.4.                    
Legal Costs.  Any party in
breach or default under this Lease (the “Defaulting Party”) shall reimburse the other party
(the “Nondefaulting
Party”)
upon demand for any legal fees and court (or other administrative proceeding)
costs or expenses that the Nondefaulting Party incurs in connection with the
breach or default, regardless whether suit is commenced or judgment
entered.  Such costs shall include legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise. 
Furthermore, in the event of litigation, the court in such action shall award
to the party in whose favor a judgment is entered a reasonable sum as attorneys’
fees and costs, which sum shall be paid by the losing party.

 

24.5.                    
Parties Bound.  Except as otherwise
expressly provided for in this Lease, this Lease shall be binding upon, and
inure to the benefit of, the successors and assignees of the parties
hereto.  Tenant hereby releases Landlord named herein from any obligations
of Landlord for any period subsequent to the conveyance and transfer of
Landlord’s ownership interest in the Property.  In the event of such
conveyance and transfer, Landlord’s obligations shall thereafter be binding
upon each transferee (whether Successor Landlord or otherwise).  No
obligation of Landlord shall arise under this Lease until the instrument is
signed by, and delivered to, both Landlord and Tenant.

 

24.6.                    
Recordation of
Lease.  Tenant shall not record or file this Lease (or any
memorandum hereof) in the public records of any county or state.

 

21

 

24.7.                    
Survival of
Obligations.  Upon the expiration or other termination of this Lease,
neither party shall have any further obligation nor liability to the other
except as otherwise expressly provided in this Lease and except for such
obligations as, by their nature or under the circumstances, can only be, or by
the provisions of this Lease, may be performed after such expiration or other
termination.

 

24.8.                    
Governing Law;
Construction.  This Lease shall be governed by and construed in accordance
with the laws of the state in which the Property is located.  If any
provision of this Lease shall be invalid or unenforceable, the remainder of
this Lease shall not be affected but shall be enforced to the extent permitted
by law.  The captions, headings and titles in this Lease are solely for
convenience of reference and shall not affect its interpretation.  This
Lease shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Lease to be
drafted.  Each covenant, agreement, obligation, or other provision of this
Lease to be performed by Tenant, shall be construed as a separate and
independent covenant of Tenant, not dependent on any other provision of this
Lease.  All terms and words used in this Lease, regardless of the number
or gender in which they are used, shall be deemed to include any other number
and any other gender as the context may require.  This Lease may be
executed in counterpart and, when all counterpart documents are executed, the
counterparts shall constitute a single binding instrument.

 

24.9.                    
Time.  Time is of the essence
for this Lease.  If the time for performance hereunder falls on a
Saturday, Sunday or a day that is recognized as a holiday in the state in which
the Property is located, then such time shall be deemed extended to the next
day that is not a Saturday, Sunday or holiday in said state.

 

24.10.             
Authority of
Tenant.  If Tenant is a corporation, partnership, limited liability
company, association or any other entity, it shall deliver to Landlord,
concurrently with the delivery to Landlord of an executed Lease, certified
resolutions of Tenant’s directors or other governing person or body (i)
authorizing execution and delivery of this Lease and the performance by Tenant
of its obligations hereunder and (ii) certifying the authority of the party
executing the Lease as having been duly authorized to do so.

 

24.11.             
WAIVER OF TRIAL BY
JURY.  THE LANDLORD AND THE TENANT, TO THE FULLEST EXTENT THAT
THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BROUGHT BY ANY PARTY TO THIS LEASE WITH RESPECT TO THIS LEASE, THE PREMISES, OR
ANY OTHER MATTER RELATED TO THIS LEASE OR THE PREMISES.

 

24.12.             
Relocation.  Intentionally omitted.

 

24.13.             
Financial
Information.  From time to time during the Term, Tenant shall deliver to
Landlord unaudited financial statements concerning Tenant’s financial condition
within ten (10) days following Landlord’s written request therefor and Landlord
agrees that the information contained in such statements shall be treated
confidentially.

 

24.14.             
Confidential
Information.  Tenant agrees to maintain in strict confidence the economic
terms of this Lease and any or all other materials, data and information
delivered to or received by the parties either prior to or during the Term in
connection with the negotiation and execution hereof.  The provisions of
this Section 24.14 shall survive the
termination of this Lease.

 

24.15.             
Submission of
Lease.  Submission of this Lease to Tenant for signature does not
constitute a reservation of space or an option to lease.  This Lease is
not effective until execution by and delivery to both Landlord and Tenant.

 

24.16.             
Joint and Several
Liability.  All parties signing this Lease as Tenant shall be jointly
and severally liable for all obligations of Tenant hereunder.

 

24.17.             
Riders.  All Riders and
Exhibits attached hereto and executed (or initialed) both by Landlord and
Tenant shall be deemed to be a part hereof and hereby incorporated herein.

 

[Signature Page to
Follow]

 

22

 

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

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  First
  Industrial, L.P.,
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:  First
  Industrial Realty Trust, Inc.

  
	
   

  	
  Its:  Sole general
  partner

  
	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  
	
  Witness: 

  	
  /s/ Sandra McIntosh

  	
   

  	
  Signed: 

  	
  /s/ Ross Kirk

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
  Sandra McIntosh

  	
  Printed Name: 
  Ross Kirk

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness: 

  	
  /s/ Vann S. McCollough

  	
   

  	
  Its:  Managing
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name: 

  	
  Vann S. McCollough

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The
  Wornick Company,
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

	
  Witness: 

  	
  /s/ J.F. McQuay

  	
   

  	
  Signed: 

  	
  /s/ Larry Rose

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:  

  	
  J.F. McQuay

  	
  Printed Name: 
  Larry Rose

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness: 

  	
  /s/ Teresa Williams

  	
   

  	
  Its:  President
  and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Teresa Williams

  	
   

  	
   

  

 

S-1

 

STATE OF FLORIDA

 

COUNTY OF HILLSBOROUGH

 

Before me, the undersigned, a Notary Public for
Hillsborough County, personally appeared Ross Kirk, Managing Director, of First
Industrial, LP, the Landlord in the foregoing instrument who acknowledged the
signing of the foregoing instrument to be his free act and deed on behalf of
the Landlord for the uses and purpose set forth therein.

 

IN WITNESS WHEREOF, I have hereunto signed my name and
affixed my official seal on the 21st day of March, 2003.

 

	
   

  	
  /s/ Virginia Saclarides

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  Virginia Saclarides

  	
   

  
	
   

  	
  Type or Print Name

  

 

 

STATE OF TEXAS

 

COUNTY OF HIDALGO

 

Before me, the undersigned, a Notary Public for
Hidalgo County, personally appeared Larry Rose, President and CEO of The
Wornick Company, a Nevada corporation, the Tenant in the foregoing instrument
who acknowledged the signing of the foregoing instrument to be his free act and
deed on behalf of the Tenant for the uses and purposes set forth therein.

 

IN WITNESS WHEREOF, I have hereunto signed my name and
affixed my official seal on the 12th day of March, 2003.

 

	
   

  	
  /s/ Virginia Rocha

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  Virginia Rocha

  	
   

  
	
   

  	
  Type or Print Name

  

 

S-2

 

RIDER
NO. 1

CANCELLATION
OPTION

 

(Phase
II Premises and Tenant 2 Space)

 

RIDER
No. 1 attached to and made a part of the Lease dated March 21, 2003,
between FIRST INDUSTRIAL, L.P., as Landlord, and THE WORNICK COMPANY, as
Tenant, for Premises located at 4732, 4744 and 4750 Creek Road, Cincinnati,
Ohio.

 

Provided Tenant is not then in default under the Lease
and no condition then exists which with the passage of time or giving of
notice, or both, would constitute a default, Tenant shall have a one-time right
to (i) cancel the portion of the Lease for the Phase II Premises (31,740 sf)
effective as of the 31st day of December 2003, by giving
written notice to Landlord of such termination election no later than the 30th
day of November 2003 and/or (ii) cancel the portion of the Lease for
the Tenant 2 space (3,240 sf) effective as of the Commencement Date of the
Phase III Premises.  Tenant shall also have right to cancel the existing
Lease between Landlord and Tenant pertaining to the Tenant’s lease of the
approximately 3,000 square feet of space on the second floor on the south side
of the building as of the Commencement Date of the Phase III Premises, and
Tenant shall vacate the approximate 3,000 square feet within 30 days of the
Phase III Commencement Date.  If an event has occurred that with the
passage of time or the giving of notice, or both, would constitute an uncured
default under this Lease and Tenant has exercised its cancellation right
described in either or both of clauses (i) and/or (ii) under the terms of this
Rider No. 1, Landlord, in its sole discretion, shall have the right to declare
such exercise(s) voidable if such event ripens into an uncured default. 
No such termination(s) by Tenant shall relieve Tenant from the performance of
any obligations that have accrued but have not been fully performed as of the
effective date of such termination(s).

 

1

 

RIDER
NO. 2

TERMINATION
OPTION

 

RIDER
No. 2 attached to and made a part of the Lease dated March 21, 2003,
between FIRST INDUSTRIAL, L.P., as Landlord, and THE WORNICK COMPANY, as
Tenant, for Premises located at 4732, 4744 and 4750 Creek Road, Cincinnati,
Ohio.

 

Notwithstanding anything
to the contrary contained herein, Tenant shall have the option to terminate
this Lease (“Termination Option”)
in accordance with the following terms and conditions:

 

Tenant
Gives Notice. 
If Tenant desires to exercise the Termination Option, Tenant shall give
Landlord irrevocable written notice (“Termination
Notice”) of Tenant’s exercise of this Termination Option, which
shall be delivered by certified mail, which Termination Notice must be received
by Landlord no later than the date that is six full calendar months prior to
the Termination Date.  Time is of the essence with respect to Landlord’s
receipt of the Termination Notice and all other deadlines in this Clause.

 

Termination
Date.  If
Tenant gives the Termination Notice and complies with all the provisions in
this Clause, the Lease shall terminate at 11:59 p.m. on the last day of the thirty sixth (36th) full calendar
month after the Phase III Premises Commencement Date (the “Termination Date”).

 

Termination
Fee Must Accompany Notice.  In order for such Termination Notice to be effective, it must
be accompanied by the termination fee in the amount equal to six (6) monthly
installments of Annual Base Rent plus an amount equal to the unamortized cost
of the Phase I Improvements, Phase II Improvements and Phase III Improvements
(as defined on Exhibit B to this Lease) and unearned brokerage commissions,
which shall be payable only in cash or certified funds.  For purposes of
calculating the unamortized portion of the cost of such Improvements, the cost
of such Improvements shall be deemed amortized in equal monthly installments
without interest over a period of time beginning on the Phase I Premises
Commencement Date, Phase II Premises Commencement Date, and Phase III Premises
Commencement Date (as applicable) and ending on the scheduled Expiration Date.

 

Tenant’s
Obligation Survives Termination.  Tenant’s obligations to pay Rent, Additional Rent, and
any other costs or charges under this Lease, and to perform all other Lease
obligations for the period up to and including the Termination Date, shall
survive the termination of this Lease.

 

Landlord
May Cancel and Void Termination if Tenant in Default.  Notwithstanding the foregoing, if at any
time during the period on or after the date on which Tenant shall exercise its
Termination Option (in accordance with this Rider No. 2) up to and including
the Termination Date Tenant shall be in default under this Lease beyond any
applicable notice or cure period, then Landlord may elect, but is not
obligated, to cancel and declare null and void Tenant’s exercise of the
Termination Option by giving Tenant written notice thereof prior to the
Termination Date, whereupon this Lease shall continue in full force and effect
for the full Lease Term hereof unaffected by Tenant’s exercise of the
Termination Option.  If Landlord does not so cancel Tenant’s exercise of
the Termination Option, Tenant’s obligation to cure such default shall survive
the Termination Date.

 

Tenant
Shall Surrender Space by Termination Date.  In the event Tenant exercises the
Termination Option, Tenant covenants and agrees to surrender full and complete
possession of the Premises to Landlord on or before the Termination Date
vacant, broom-clean, in good order and condition, and, in accordance with the
provisions of this Lease, and thereafter the Premises shall be free and clear
of all leases, tenancies, and rights of occupancy of any entity claiming by or
through Tenant.

 

Failure
to Surrender Makes Tenant a Holdover.  If Tenant shall fail to deliver possession of the
Premises on or before the Termination Date in accordance with the terms hereof,
Tenant shall be deemed to be a holdover tenant from and after the Termination
Date, and in such event, Tenant shall be liable to Landlord for payments for
the use and occupancy of the Premises equal to the fair market value thereof,
and shall also be liable to Landlord for all costs and expenses incurred by
Landlord in securing possession of the Premises.  Landlord may accept any
such sums from Tenant without prejudice to Landlord’s right to evict Tenant
from the Premises by any lawful means.

 

Lease
Ceases After Termination.  If Tenant properly and timely exercises the
Termination Option and properly and timely satisfies all other monetary and
non-monetary obligations under this Lease, the Lease shall cease and expire on
the Termination Date with the same force and effect as if said Termination Date
were the date originally provided in this Lease as the expiration date of the
Term hereof.

 

2

 

RIDER
NO. 3

 

EXPANSION
RIGHTS

 

RIDER
No. 3 attached to and made a part of the Lease dated March 21, 2003,
between FIRST INDUSTRIAL, L.P., as Landlord, and THE WORNICK COMPANY, as
Tenant, for Premises located at 4732, 4744 and 4750 Creek Road, Cincinnati,
Ohio.

 

During such time as this
Lease is in effect and provided that Tenant is not in default under this Lease
(and no event has occurred with the passage of time or the giving of notice, or
both, would constitute a default under this Lease), Tenant shall have the right
to lease the immediately adjacent approximately 12,696-25,392 square feet of
the Building, as labeled “Expansion Premises” on attached Exhibit A-2 (referred
to in this Rider as the “Adjacent Space”), on the terms set forth in this
Rider.  If an event has occurred that with the passage of time or the
giving of notice, or both, would constitute an uncured default under this Lease
and Tenant has exercised its expansion option under the terms of this Rider No.
3, Landlord, in its sole discretion, shall have the right to declare such
exercise voidable if such event ripens into an uncured default.  Tenant’s
rights under this Rider are subordinate to any leases of the Adjacent Space
(including any rights of first offer and other expansion rights) and options to
renew or extend the lease term or any purchase options or agreements concerning
the Building or Property that Landlord has entered into as of the Date of
Lease.  This limited right to expand space shall operate as follows: (i)
if and when Landlord receives a bona fide third-party written offer to lease
all or any part of the Adjacent Space on terms and conditions that Landlord has
determined it is prepared to accept, Landlord shall, prior to accepting such
offer, notify Tenant in writing of such offer, together with a statement of the
terms and conditions of such offer; (ii) Tenant shall have five (5) days from
receipt of Landlord’s notice in which to deliver to Landlord Tenant’s written,
unconditional election and agreement to lease the entire Adjacent Space (x) at
a base rental rate equal to the base rental rate set forth in the third-party
offer; (y) for a term equal to the longer of the then remaining term under this
Lease or the term set forth in the third party offer, and (z) otherwise on all
the same terms and conditions of this Lease; (iii) if Tenant duly delivers its
written, unconditional election and agreement to lease the Adjacent Space, then
effective on the first day of the first calendar month immediately following
delivery by Tenant of its agreement to lease: (a) the Adjacent Space will be
deemed to be added to and become a part of the Premises for all purposes under
this Lease (and the term “Premises” shall be redefined to include the Adjacent
Space); (b) Tenant’s Proportionate Share shall increase to reflect the addition
of the entire Adjacent Space to the Premises; (c) Base Rent for the Adjacent
Space (which shall be in addition to the Base Rent due under this Lease for the
then existing Premises) shall be due from Tenant at the rate established by
clause (ii)(x) above; and (d) Tenant will not be entitled to any allowance or
other incentive or abatement with regard to the Adjacent Space and will accept
the Adjacent Space in its as-is condition, without representation or warranty,
and without any improvements, installations or other work items to be performed
by Landlord except those that would have been available to the third-party who
made the bona fide third-party written offer, which the Tenant is matching. 
Tenant shall promptly upon request of Landlord execute and deliver to Landlord
an amendment to this Lease consistent with the foregoing and otherwise
containing such provisions as are, in Landlord’s reasonable judgment, necessary
to evidence this expansion of Tenant’s occupancy of the Building, with the
execution and delivery by Tenant of such Lease amendment constituting a
condition precedent to Tenant’s right to occupy the Adjacent Space as
contemplated by this Rider (but not as a condition precedent to commencement of
the lease term (and Tenant’s resulting Rent payment and other obligations) for
the Adjacent Space).

 

3

 

RIDER
NO. 4

 

Renewal
Option

 

RIDER
No. 4 attached to and made a part of the Lease dated March 21, 2003,
between FIRST INDUSTRIAL, L.P., as Landlord, and THE WORNICK COMPANY, as
Tenant, for Premises located at 4732, 4744 and 4750 Creek Road, Cincinnati,
Ohio.

 

Provided that this Lease
is in full force and effect and Tenant is not in default of its obligations
hereunder (beyond any applicable notice or cure period) at the time the Renewal
Option (defined below) is exercised and at the commencement of the Renewal Term
(defined below), Landlord hereby grants to Tenant the option to extend the
initial Term of this Lease (“Renewal Option”)
for one (1) additional period of two (2) years (the “Renewal Term”), upon the same terms and conditions as are
contained in this Lease, except as provided below.  Landlord shall have no
obligation to make any improvements, decorations, repairs, alterations or
additions to the Premises as a condition to Tenant’s obligation to pay Rent for
the Renewal Term.  The Renewal Option granted herein shall be exercised,
if at all, by written notice (the “Renewal
Notice”) to Landlord given not later than 270 days prior to the
Expiration Date.  In the event that Tenant fails to deliver the Renewal
Notice on a timely basis, Tenant shall have no further right to extend the
Term.  Base Rent payable for the Premises during the Renewal Term shall be
in an amount equal to one hundred five percent (105%) of the amount of the Base
Rent payable for the Premises during the period immediately prior to the
commencement of the Renewal Term.

 

4

 

EXHIBIT
A-1

 

CREEK
ROAD BUSINESS CENTER

 

Situate in Section 17, Town 4, Entire Range 1,
Sycamore Township, City of Blue Ash, Hamilton County,

 

Ohio and being more particularly described as follows:

 

Beginning at the intersection of the centerlines
of Creek Road and Kenwood Road, the centerline of Kenwood Road also being the
east line of Section 17;

 

Thence along said centerline of Creek Road, North
81°15’40” West, 1072.48 feet to a point;

 

Thence North 08°44’20” East, 30.00 feet to a point in
the northerly right-of-way line of Creek Road and the real point of beginning
for this description;

 

Thence from said REAL POINT OF BEGINNING, North
08°44’20” East, 667.28 feet to a point;

 

Thence South 81°15’40” East, 970.64 feet to a point in
the westerly right-of-way line of Kenwood Road;

 

Thence along said westerly line of Kenwood Road, South
03°4l’00” West, 653.50 feet to a point;

 

Thence along an arc deflecting to the right, having a
radius of 15.00 feet, a distance of 24.89 feet, the chord of said arc bears
South 51°12’40” West 22.13 feet to a point in the aforesaid northerly right-of-way
of Creek Road;

 

Thence along said northerly line of Creek Road, North
81°15’40” West, 1013.28 feet to the real point of beginning.

 

Containing 15.319 acres of land.

Subject to all legal highways, easements, and
restrictions of record.

 

A-1

 

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, a Nevada corporation (“Assignor”); and The Wornick
Company, a Delaware corporation (“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 First Industrial LP, a Delaware limited partnership, as
“Landlord,” are parties to the Standard Form Industrial Building Lease
(Multi-Tenant) dated March 21, 2003 (the “Lease”), presently covering
certain premises (the “Premises”) located at 4700-4750 Creek Road, Cincinnati,
Ohio, a copy of which Lease is attached hereto as Exhibit A; and

 

WHEREAS, Assignor, as
“Seller,” and Assignee, as “Buyer,” are parties to an Asset Purchase Agreement
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 $7,944.86 per month.

 

(e)                                 
Landlord
is currently holding a security deposit with respect to the Lease in the amount
of $5,912.

 

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 Ohio.

 

(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, a
  Nevada

  	
  The Wornick Company, a
  Delaware

  
	
  corporation

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Larry L. Rose

  	
   

  	
  By: 

  	
  /s/ Robert B. McKeon

  	
   

  
	
  Larry L. Rose, President and

  	
  Robert B. McKeon, President

  
	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3

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