Texas-Farmers Branch-11420 Mathis Drive Sublease - Advanced Materials inc. and S-Line
INDUSTRIAL SUBLEASE AGREEMENT
1. BASIC SUBLEASE INFORMATION AND CERTAIN DEFINED TERMS.
Lease Date: September 1, 1997
Tenant: S-Line, a Texas corporation
Tenant's Address: 11414 Mathis Avenue
Dallas, TX 75239
Contact: Jerry Squyres
Telephone: 972-402-9000
Landlord: ADVANCED MATERIALS, INC., a California corp.
20211 S. Susana Road
Rancho Dominguez, CA 90221
Guarantor(s): N/A
Project: 11420 Mathis Drive
more specifically defined in Paragraph 2.
Description: Approximately 27,869 square feet
Premises: As indicated by the cross-hatched area designated
"Reduction Area" on Exhibit "A1" attached to this
lease, situated in the building constituting a part
of the Project and shown on Exhibit "A2" (the
"Building") located on the land described on Exhibit
"B" attached to this lease (the "land").
Permitted Use: Manufacturing, fabrication, assembly,
warehousing and distribution
Term: September 1st, 1997 through May 31st, 1999
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Base Rent:
Rate Per Square Foot of
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Net Rentable Area in the
Monthly Annual Premises Per Annum
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$7663.98 $91,967.70 $3.30
Security Deposit: $7663.98
Tenant's Proportionate
Share: 28%, which is the percentage obtained by dividing
(i) 27,869 square feet, which is the net rentable
area rented by Tenant hereunder by (ii) 100,000
square feet, which is the net rentable area in the
Building rented by Landlord.
Base Year: Calendar Year 1997
Broker or Agent: N/A
Sublease: It is understood and agreed that this Lease is in
fact a sublease, and that Tenant accepts this
Lease subject to all of the terms and conditions
of the underlying lease dated as of December,
1995, between New York Life and Annuity
Corporation, as Landlord, and Advanced Materials
Group, Inc., as tenant (the "Underlying Lease"), a
copy of which is attached hereto and made apart
hereof, under which Landlord hereunder holds the
leased premises as tenant. Tenant herein covenants
that it will do no act or thing which would
constitute a violation by Landlord here in of its
obligations under such Underlying Lease.
Underlying Lease: The terms and conditions of Sections 2 through 36
of the Underlying Lease are incorporated herein by
this reference, with references to any defined
terms herein, provided however that Sections 15,
l6, 18 and 22 are amended and restated in their
entirety herein.
Renewal Option: Landlord hereby grants to Tenant the right and
option to renew the lease on the same terms and
conditions. If exercised, the Lease will be
renewed
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for an additional eighteen (18) month term
ending on Nov 30, 2000.
4. RENT, SECURITY DEPOSIT, REIMBURSABLE EXPENSES AND ESCROW PAYMENTS.
C. In addition to Base Rent and Tenant's other obligations hereunder,
Tenant agrees to pay Tenant's proportionate share (as defined in PARAGRAPH 1)
of the following costs and expenses (collectively, the "REIMBURSABLE
EXPENSES") payable by Landlord as tenant under the Underlying Lease: (i)
Excess Common Area Charges (hereinafter defined) payable by Tenant in
accordance with PARAGRAPH 5, (ii) Excess Taxes (hereinafter defined) payable
by Tenant pursuant to PARAGRAPH 6, (iii) Excess Insurance Expenses
(hereinafter defined) payable by Tenant pursuant to PARAGRAPH 13, (iv) the
cost of any repair, replacement, or capital expenditures required under any
governmental law or regulation that was not applicable to the Building at
time of original construction, such costs to be amortized over such
reasonable period as Landlord shall determine, (v) the cost of any capital
improvements made to common areas of the Building after the date of this
Lease that is required under interpretations or regulations issued from time
to time under provisions of the Tex. Rev. Div. Stat. Ann. Art. 9102 and/or
the provisions of the Americans With Disabilities Act of 1990, 42 U.S.C.
Sections 12101-12213 (collectively, the "Disability Acts"), amortized over
such period as Landlord shall reasonably determine, together with interest at
the Prime Rate on the unamortized balance thereof, (vi) replacement reserves
for capital items and other operating expenses required by this Lease, and
(vii) Utility Payments (as such term is defined in Section 12. During each
month of the Term of this Lease, on the same day that Base Rent is due
hereunder, Tenant shall escrow with Landlord an amount equal to 1/12th of
Tenant's proportionate share of such Reimbursable Expenses, as estimated by
Landlord. Tenant authorizes Landlord to use the funds deposited with
Landlord under this PARAGRAPH 4C to pay such Reimbursable Expenses. On or
before December 31 of each calendar year during the Lease Term, or as soon
thereafter as reasonable practical, Landlord shall give Tenant written notice
of its estimate of Reimbursable Expenses for the ensuing calendar year
(provided Landlord's failure to do so shall not waive Tenant's obligations,
and until such estimate is provided the estimate of Reimbursable Expenses for
the prior year shall be used). Landlord shall be entitled to receive its
projection of such Reimbursable Expenses at any time and if Landlord so
revises such projection, Tenet shall pay to Landlord, on the same day as Base
Rent is due hereunder, an amount equal to 1/12th of Tenant's proportionate
share of such Reimbursable Expenses pursuant to Landlord's revised estimate
thereof. By April 30 of each calendar year (or as soon thereafter as may be
reasonably practicable) during the Term hereof Landlord shall determine the
actual Reimbursable Expenses for the preceding calendar year and shall notify
Tenant thereof. If the Tenant's total escrow payments are less than Tenant's
actual proportionate share of all such Reimbursable Expenses, Tenant shall
pay the difference to Landlord within ten (10) days after demand. If the
total escrow payments of Tenant are more than Tenant's actual proportionate
share of all such Reimbursable Expenses, Landlord shall retain such excess
and credit it against Tenant's next annual escrow payments.
5. EXCESS COMMON AREA CHARGES. In addition to other amounts required
to be paid by Tenant hereunder, each calendar year (other than the Base Year)
Tenant shall pay to Landlord Tenant's
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proportionate share of the amount by which the following costs and expenses
(collectively, the "COMMON AREA CHARGES") for such calendar year exceed the
Common Area Charge for the Base Year (such excess being referred to herein as
the "EXCESS COMMON AREA CHARGES") and are payable by Landlord as tenant under
the Underlying Lease:
A. The cost of repair, maintenance, and replacement of: (i) exterior of
the Building (including painting), other than structural repairs and
replacements for which landlord under the Underlying Lease is responsible
pursuant to PARAGRAPH 7 of the Underlying Lease; (ii) all mechanical,
electrical, plumbing, sewer, sprinkler and other life-safety equipment and
systems forming a part of the Project (including the cost of repair, replacement
and maintenance of the items which are tenant's responsibility pursuant to
PARAGRAPH B of the Underlying Lease which shall be paid entirely by tenant under
the Underlying Lease as provided in PARAGRAPH B of the Underlying Lease; (iii)
any spur or other track servicing the Project, including any amounts payable by
Landlord in any agreement relating to such tracks; and (iv) all other common
areas and facilities constituting a part of the Project (including, but not
limited to, all paved areas surrounding the Building).
B. The cost of maintenance and replacement of the grass, shrubbery and
other landscaping in and about the Project.
C. The cost of maintaining in a good, neat, clean and sanitary condition
all parking areas, driveways, alleys and grounds in and about the Project
(including trash removal).
D. The cost of maintaining and landscaping any property or facility that
is operated, maintained or landscaped by any property owner or community owner
association to which any of the Project is subject (including the cost of any
dues or other charges assessed by any such association).
E. The cost of operating and maintaining any property, facilities or
services provided for the common use of Tenant and other tenants of the
Project, which costs shall include, without limitation,
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management fees and security (if furnished by Landlord or the landlord under the
Underlying Lease), wages and employee benefits payable to employees of Landlord
or the landlord under the Underlying Lease whose duties are connected with the
operation and maintenance of the Project, amounts paid to contractors or
subcontractors for work or services performed in connection with the operation
and maintenance of the Project, all service, supplies, repairs, replacements and
other expenses for maintaining and operating the Project, and any other
facilities or services provided for the common use of Tenant and other tenants
of the Project.
6. TAXES.
A. Landlord agrees to be responsible for all taxes, assessments and
governmental charges of any kind and nature that accrue against any of the
Project (collectively referred to herein as "TAXES"). If at any time during
the Term of this Lease, there shall be levied, assessed or imposed on
Landlord or the landlord under the Underlying Lease a capital levy or other
tax directly on the rents received herefrom and/or a franchise tax,
assessment, levy or charge measured by or based, in whole or in part, upon
such rents from the Project, then all such taxes, assessments, levies or
charges, or the part thereof so measured or based, shall be deemed to be
included within the term "Taxes" for the purposes hereof, or the landlord
under the Underlying Lease. The landlord under the Underlying Lease has the
right pursuant to the Underlying Lease to employ a tax consulting firm to
attempt to assure a fair tax burden on the Project within the applicable
taxing jurisdiction. Tenant agrees to pay its proportionate share of the
cost of any such consultant incurred by Landlord in any year following the
Base Year.
B. In addition to other amounts required to be paid by Tenant hereunder,
each calendar year Tenant shall pay to Landlord Tenant's proportionate share of
the amount by which Taxes for such calendar year exceed Taxes for the Base Year
(such excess being referred to herein as the "EXCESS TAXES").
C. Tenant shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Landlord or the landlord under the Underlying Lease
their respective property and (i) Landlord pays the same or (ii) the assessed
value of their respective property is increased by inclusion of such personal
property and fixtures and Landlord or the landlord under the Underlying Lease
pays the increased taxes, then, upon demand Tenant shall pay to Landlord the
amount of such increase in taxes. In addition, if the Building is a multiple
occupancy building and the cost of any improvements constructed to the Tenant's
Premises is disproportionately higher than the cost of improvements constructed
to the premises of other tenants of the Building, then upon demand Tenant shall
pay the amount of Taxes attributable to such disproportionately more
expensive improvements, in addition to Tenant's proportionate share of Taxes.
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7. LANDLORD AND TENANT INSURANCE.
A. The landlord under the Underlying Lease must maintain insurance
covering the Building in an amount not less than eighty percent (80%) of the
"replacement cost" thereof insuring against the perils and costs of Fire,
Lightning, Extended Coverage, Vandalism and Malicious Mischief and such other
insurance as Landlord shall deem necessary. In addition to other amounts
required to be paid by Tenant hereunder, each calendar year (other than the Base
Year) Tenant shall pay to Landlord Tenant's proportionate share of the amount
payable by Landlord as tenant under the Underlying Lease, pursuant to paragraph
13A thereof; being the amount by which the cost of procuring insurance under
such PARAGRAPH 13A for such calendar year exceeds the cost of procuring such
insurance for the Base Year (such excess being referred to herein as the "EXCESS
INSURANCE EXPENSES").
8. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building should be damaged or destroyed by fire
or other peril, Tenant immediately shall give written notice to Landlord. If
the Building of which the Premises are a part should be totally destroyed by any
peril covered by the insurance to be provided by the landlord under the
Underlying Lease, or if they should be so damaged thereby that, in the
landlord's estimation, rebuilding or repairs cannot be completed within one
hundred eighty (180) days after the date of the landlord's actual knowledge of
such damage, this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective upon the date of the occurrence of
such damage.
B. If the Building of which the Premises are a part, should be damaged
by any peril covered by the insurance to be provided by the landlord under
the Underlying Lease, and in the landlord's estimation, rebuilding or repairs
can be substantially completed within one hundred eighty (180) days after the
date of the landlord's actual knowledge of such damage, this Lease shall not
terminate, and the landlord has agreed to restore the Premises to
substantially its previous condition, except that the landlord shall not be
required to rebuild, repair or replace any part of the partitions, fixtures,
additions and other improvements that may have been constructed, erected or
installed in, or about the Premises for the Benefit of, or by or for Tenant
effective upon the date of the occurrence of such damage and ending upon
substantial completion, if the Premises are untenantable in whole or in part
during such period, the rent shall be reduced to such extent as may be fair
and reasonable under all of the circumstances. If such repairs and
rebuilding have not been substantially completed within one hundred eighty
(180) days after the date of the landlord's actual knowledge of such damage
(subject to Force Majeure Delays (hereinafter defined), either Landlord or
Tenant may terminate this Lease by delivering written notice of termination
to the other party in which event the rights
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[ILLEGIBLE]
and obligations hereunder shall cease and terminate (except as expressly
provided to the contrary herein).
C. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made known to Landlord, whereupon all rights and obligations hereunder shall
cease and terminate (except as expressly provided to the contrary herein).
9. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of
recovery and causes of action that Tenant has released, Landlord shall hold
Tenant harmless and defend Tenant against any and all claims or liability for
any injury or damage to any person in, on or about the Premises, when such
injury or damage shall be caused by an affirmative act of negligence by such
landlord, its agents, servants and employees (unless the indemnified loss is
caused wholly or in part by Tenant's or any other party's negligence, in
which event this indemnity shall not apply to the allocable share of such
loss resulting from Tenant's or such other party's negligence). Except for
any claims, rights of recovery and causes of action that Landlord has
released, Tenant shall indemnify, protect, hold harmless and defend Landlord,
its agents, employees, contractors, partners, directors, officers and any
affiliates of the above-mentioned parties (collectively the "LANDLORD
AFFILIATES") from and against any and all obligations, suits, losses,
judgments, actions, damages, claims or liability (including, without
limitation, all costs, attorneys' fees, and expenses incurred in connection
therewith) in connection with any loss, injury or damage (i) to any person or
property whatsoever occurring in, on or about the Project, when such injury
or damage shall be caused by the act, neglect, fault of, or omission of any
duty with respect to the same by Tenant, its agents, servants, employees, or
invitees (ii) arising from the conduct of management of any work done by or
for Tenant in or about the Project, (iii) arising from transactions of the
Tenant, or (iv) arising from a breach, violation or non-performance of any
term, provision, covenant or agreement of Tenant hereunder, or a breach or
violation by Tenant of any court order or any law, regulation, or ordinance
of any federal, state or local authority (collectively, the "LOSSES"). If
any claim is made against Landlord or Landlord Affiliates, Tenant, at its
sole cost and expense, shall defend any such claim, suit or proceeding by or
through attorneys satisfactory to Landlord. The provisions of this paragraph
9 shall survive the expiration or termination of this Lease with respect to
any claims or liability occurring prior to such expiration or termination.
10. INSPECTION. Landlord and Landlord's agents and representatives
(including Landlord and its agents and affiliates under the Underlying Lease)
shall have the right to enter the Premises during business hours, upon prior
reasonable notice except in the event of an emergency, to (i) inspect the
Premises, (ii) make such repairs as may be required or permitted pursuant to
this Lease, and (iii) show the Premises to prospective purchasers of, or parties
who are anticipated to provide financing with respect to, the Building.
Notwithstanding the foregoing, Landlord and landlord under the Underlying Lease
shall have the right to enter the Premises at any time, without notice to
Tenant, in case of an emergency posing a threat to persons or property
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During the period that is six (6) months prior to the end of the Term, upon
telephonic notice to Tenant, Landlord and Landlord's representatives may
enter the Premises stating the Premises are available. Tenant shall notify
Landlord in writing at least thirty (30) days prior to vacating the Premises
and shall arrange to meet with Landlord for a joint inspection of the
Premises prior to vacating. If Tenant fails to give such notice or to
arrange for such inspection, then Landlord's inspection of the Premises shall
be deemed correct for the purpose of determining Tenant's responsibility for
repairs and restoration of the Premises.
11. QUIET ENJOYMENT. This Lease is a sublease, and Tenant agrees to
take the Premises subject to the provisions of the prior leases. Landlord
represents that it has the authority to enter into this Lease and that so
long as Tenant pays all amounts due hereunder and performs all other
covenants and agreements herein set forth, Tenant shall peaceably and quietly
have, hold and enjoy the Premises for the Term hereof without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
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[GRID]
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12. LANDLORD'S REPAIRS.
Landlord's maintenance, repair and replacement obligations are limited
to those set forth in this PARAGRAPH 12. The landlord under the Underlying
Lease, at its own cost and expense, is responsible for roof replacement and for
repair and replacement of the foundation and the structural members of the
exterior walls of the Building, reasonable wear and tear excluded. The terms
"roof" and "walls" as used herein shall not include skylights, windows, glass or
plate glass, doors, special store fronts or office entries. Tenant shall
immediately give Landlord written notice of defect or need for repairs after
which Landlord shall have reasonable opportunity to demand the landlord under
the Underlying Lease repair same or cure such defect. Landlord shall cause
landlord under the Underlying Lease to maintain and repair the common area in
and about the Building in a reasonable and prudent manner including any spur
track, with the cost thereof being a part of the Common Area Charges.
13. TENANT'S REPAIRS AND MAINTENANCE.
In addition to Tenant's other obligations hereunder, Tenant, at its
own cost and expense, shall enter, or pay its proportionate share for
Landlord to enter, into a regularly scheduled preventive maintenance/service
contract with a maintenance contractor approved by Landlord for servicing all
hot water, heating and air conditioning systems and equipment within or
serving the Premises. The service contract must include all services
suggested by the equipment manufacturer in its operations/maintenance manual
and an executed copy of such contract must be provided to Landlord prior to
the date Tenant takes possession of the Premises.
14. UTILITIES. The landlord under the Underlying Lease has agreed to
provide normal water, sewer, gas and electricity service as same may be
available to the Premises. Tenant shall timely pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler charges and other utilities and
services used on or at the Premises, together with any taxes, penalties,
deposits, surcharges or the like pertaining to the Tenant's use of the Premises,
and any maintenance charges for utilities. Tenant shall pay all impact fees
associated with utility hook-ups, meter installations or services to the
Premises. If the Tenant has given Landlord prior written consent, Landlord
shall have the right to cause any of said services to be separately metered to
Tenant, with the expense of the additional metering to be equally shared
between the Landlord and the Tenant. Tenant shall pay its proportionate share,
as reasonably determined by Landlord, of all charges for jointly metered
utilities (including those utilities jointly metered between Landlord hereunder
and landlord under the Underlying Lease, and including, but not limited to the
cost of utilities consumed in connection with providing electrical power for the
Building's canopy lighting, the lighting of the parking facilities and other
common areas and facilities associated with the Building, the Building's fire
pump room and irrigation system, as well as other electricity gauged by the
"house meter"). Landlord shall not be liable for any interruption or failure of
utility service on the premises.
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Landlord:
ADVANCED MATERIALS, INC.
a California corporation
By: /s/ DAVE LASNIER
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Title: Sr.V. Pres. / GM
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Date of Execution: 8-10-97
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Tenant:
S-LINE
a Texas corporation
By: /s/ Liz Squyres
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Name: Liz Squyres
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Title: V.P.
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Date of Execution: 8-19-97
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PROPERTY OWNER:
New York Life Insurance Corp.
A Delaware Corporation
By: Bradford Co., its
Authorized Representative
By:
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Date:
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