EXHIBIT 10.12
INDUSTRIAL PROPERTIES OF THE SOUTH
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LEASE AGREEMENT
This Lease Agreement dated as of the 1st day of JUNE, 2000 between INDUSTRIAL
PROPERTIES OF THE SOUTH (herein referred to as the "Lessor") and BENCHMARK
ELECTRONICS, INC. (herein referred to as the "Lessee").
WITNESSETH: That the Lessor hereby demises and leases unto the Lessee, from
the Lessor, for the term and upon the rentals-hereinafter specified, the
premises described herein and in Exhibit A
PREMISES
1. Square footage APPROXIMATELY 143,965 S.F.
Street Address ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ MADISON
State ALABAMA
Zip Code 35824
For purposes of this Lease Agreement the above described
premises shall be deemed the "Demised Premises." A legal
description of (and detailed information concerning) the
Demised Premises is attached hereto as Exhibit A, incorporated
herein by reference.
Lessor accepts the Demised Premises "as is," subject to the
Lessor improvements specified on Exhibit B; provided, however,
that Lessor represents and warrants that (i) the Demised
Premises is zoned for offices and contract manufacturing, and
there are no restrictive covenants imposed on the Demised
Premises (by the developer, owner or anyone else); and (ii) to
the best of its knowledge, the real property taxes on the
Demised Premises have been abated until August, 2013 and the
payment to the IDB is fixed at $12,000 per year until August,
2013.
TERM
2. The Initial Term of this Lease Agreement shall be FIVE (5)
YEARS commencing on JUNE 1, 2000 and terminating on MAY 31,
2005 unless sooner terminated, as provided herein. Lessee's
renewal options are set forth in Section 31. This Lease may be
extended by mutual written agreement of the parties'
authorized representatives, or upon exercise of any options
described herein.
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RENT
3. Rent is due the 1st of each month, and is late after the 5th
of each month. A LATE PAYMENT FEE OF ONE HUNDRED DOLLARS
($100.00) PER DAY will be charged to accounts RECEIVED after
the 5th of the month.
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Lessee Lessor
Lessee shall pay to the Lessor, without previous demand for
this rent by the Lessor rent in monthly installments and due
on the first of each month and forwarded via U.S. mail,
overnight courier, or by hand to the office of the Lessor as
provided herein or such other address as may otherwise be
directed by Lessor in writing; provided, that the Lessor has
performed all covenants contained herein and is not in default
hereof. If the term of this Lease Agreement shall commence or
terminate on a day other than the first day of the calendar
month, the rent for any partial month shall he prorated. For
the Initial Term the rent shall be an annual rent of
$633,446.00, payable in equal monthly installments of
$52,787.16.
Effective on and as of the commencement of any Renewal Term,
the rent last payable hereunder shall increase by the lesser
of (i) the Consumer Price Index over the prior term of the
lease or (ii) nine percent (9%). Thus, the maximum rent for
the first Renewal Term (if exercised) is $57,538.00 per month
($690,456.14 per year); the maximum rent for the second
Renewal Term (if exercised) is $62,716.42 per month
($752,597.20 per year); and the maximum rent for the third
Renewal Term (if exercised) is $68,360.90 per month
($820,330.94 per year).
In addition to the rent, Lessee will be responsible for those
charges delineated as "Lessee-paid charges" in Section 16.
QUIET ENJOYMENT
4. Lessor covenants that during the full term of this Lease
Agreement, upon the payment of the rent herein provided and
the performance by the Lessee of all covenants herein, Lessee
shall have and hold the Demised Premises, FREE from any
interference from the Lessor except as otherwise provided for
herein.
PEACEFUL POSSESSION
5. Lessor covenants that during the term of this Lease Agreement,
upon the payment of the rent herein provided and the
performance by the Lessee of all covenants herein, that the
Lessee shall peaceably and quietly have, hold, and enjoy
peaceful possession of tile Demised Premises. Lessor agrees to
defend Lessee's rights to quiet enjoyment of the Demised
Premises from the claims of all
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persons arising by, through or under Lessor during the term
of the lease.
PERMITTED USES
6. Lessee represents that it intends to use the Demised Premises
as an electronics manufacturing facility. Lessee, as well as
any permitted assignee or sublessee, shall be allowed to use
the Demised Premises for any other purpose that (i) is legal,
(ii) is not morally offensive (a distillery or cigarette
manufacturing facility), (iii) is in full compliance with all
applicable and governing zoning, business and use codes as
evidenced by the proper permits and certificates of occupancy,
and (iv) will not put excessive loads on the electrical,
mechanical, plumbing or other operating systems within the
building. Lessee shall provide Lessor with at least thirty
(30) days' advance written notice of any proposed change in
use of the Demised Premises.
SUBLETTING AND ASSIGNMENT
7. Lessee shall not sublet the Demised Premises nor any portion
thereof, nor shall this Lease Agreement be assigned by the
Lessee without the prior written consent of the Lessor, which
consent shall not be unreasonably withheld.
ATTORNMENT
8. In the event the Demised Premises are sold due to any
foreclosure sale or sales, by virtue of judicial proceedings
or otherwise, this Lease Agreement shall continue in full
force and effect, and Lessee agrees, upon request, to attorney
to and acknowledge the foreclosure purchaser or purchasers at
such sale as Lessor's hereunder; provided, however, that such
purchaser will accept all obligations of Lessor as contained
in this Lease Agreement.
ESTOPPEL CERTIFICATE
9. The Lessee agrees to execute an Estoppel Certificate for the
benefit of Lessor's lender or lenders; provided, however,
that such Estoppel Certificate consists solely of an
acknowledgment of the terms and conditions of this Lease
Agreement.
RULES AND REGULATIONS
10. This section intentionally left blank.
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LESSOR INSURANCE
11. Lessor shall maintain fire and extended coverage insurance on
the Demised Premises, unless otherwise specified in this Lease
Agreement in sufficient amounts so as to be able to make all
necessary repairs to the Demised Premises in the event of a
fire in or other destruction of the Demised Premises, as well
as insurance sufficient to cover bodily injury and personal
injury in the event of a claim against Lessor for same.
Certificates of insurance may be issued at Lessee's request at
reasonable times during the term of the Lease Agreement.
Lessor shall be responsible for any roof repair attributable
to natural forces, disasters or acts of God (e.g., tornadoes,
hurricanes, hail, earthquakes).
LESSEE INSURANCE
12. Lessee agrees to procure and maintain at Lessee's expense
throughout the term of this Lease Agreement and any extension
thereof, a policy or policies of insurance as follows: (a)
workers' compensation (statutory); (b) Employers' Liability
($1,000,000 per occurrence, bodily injury by accident or
disease, including death); Commercial General Liability
($1,000,000 combined limit, bodily injury, personal injury and
property damage, including blanket contractual liability). The
Lessor shall be included as an additional insured under
Commercial General Liability as respects this Lease Agreement.
Certificates of insurance may be issued at Lessor's request at
reasonable times during the term of the Lease Agreement.
All personal property of Lessee in the Demised Premises or in
the building of which the Demised Premises is a part shall be
at the sole risk of Lessee. Lessor shall not be liable for any
damage thereto or for the theft or misappropriation thereof,
unless such damage, theft or misappropriation is directly
attributable to the negligence or intentional acts of Lessor,
its agents or employees. Lessor shall not be liable for any
accident to or damage to property of Lessee resulting from the
use or operation of mechanical, electrical or plumbing
apparatus, unless caused by and due to the negligence of
Lessor, its agents or employees.
WAIVER OF SUBROGATION
12A. Lessor and Lessee hereby waive any and all rights of recovery
against each other for the loss or damage to the Demised
Premises or any adjacent property or the contents contained
therein on account of fire or other casualty or for injury
sustained on such property, provided such loss or damage is
insured or would be insured under the policies required to be
carried by Lessor or Lessee hereunder.
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LESSEE'S AND LESSOR'S OBLIGATIONS AND INDEMNIFICATIONS
13. Lessor shall take all reasonable and necessary precautions to
prevent damage, injury, or loss of life in and around the
Demised Premises. Lessor agrees to indemnify and save Lessee
harmless from and against any and all claims, losses, actions,
damages, liability and expenses (collectively "Losses") in
connection with or arising out of (a) Lessee's use of the
Demised Premises occasioned wholly or in part by any willful
misconduct or negligent act or omission of Lessor, its agents,
clients, or customers and (b) contamination (environmental or
otherwise) of the Demised Premises caused or permitted by
Lessor or existing prior to Lessee's occupancy of the Demised
Premises. In case Lessee shall, without material fault on its
part, be made a party to any litigation commenced by or
against Lessor, Lessor shall protect and hold Lessee harmless
and shall pay all costs, expenses and reasonable attorneys'
fees incurred or paid by Lessee in connection with such
litigation. The aforementioned indemnification by Lessor of
Lessee shall not be effective as to any claim arising from
negligence or willful misconduct of the Lessee (to the extent
of such negligence or willful misconduct). Lessee agrees to
pay for environmental indemnity insurance up to a maximum of
$9,465.00 for the initial five-year term. If Lessee desires
the Lessor to continue to indemnify Lessee against
contamination of the Demised Premises existing prior to
Lessee's occupancy of the Demised Premises after the expiry of
the initial five-year term, Lessor shall use its best efforts
to renew the existing policy or to obtain an environmental
indemnification policy on substantially the same terms and
Lessee shall pay for the cost of such insurance.
Lessee shall take all reasonable and necessary precautions to
prevent damage, injury, or loss of life in and around the
Demised Premises. Lessee agrees to indemnify and save Lessor
harmless from and against any and all Losses in connection
with or arising out of (a) Lessee's use of the Demised
Premises occasioned wholly or in part by any willful
misconduct or negligent act or omission of Lessee, its agents,
clients, or customers and (b) contamination (environmental or
otherwise) of the Demised Premises caused or permitted by
Lessee (other than contamination existing prior to Lessee's
occupancy of the Demised Premises). In case Lessor shall,
without material fault on its part, be made a party to any
litigation commenced by or against Lessee, Lessee shall
protect and hold Lessor harmless and shall pay all costs,
expenses and reasonable attorneys' fees incurred or paid by
Lessor in connection with such litigation. The aforementioned
indemnification by Lessee of Lessor shall not be effective as
to any claim arising from negligence or willful misconduct of
the Lessor (to the extent of such negligence of willful
misconduct).
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EVENT OF DESTRUCTION
14. In the event of the whole or partial destruction of the
Demised Premises or of the building containing the Demised
Premises by fire, explosion, the elements or otherwise during
the term of this Lease Agreement or previous thereto as to
render the Demised Premises untenable or unfit for occupancy
in whole or in part, or should the Demised Premises be so
badly injured that the same cannot be repaired within ten days
from the occurrence to the Demised Premises of such
destruction and injury then the Lessee may, at its option,
terminate this Lease Agreement and surrender the Demised
Premises and all the Lessee's interest therein to the Lessor
as of the date of termination, and shall pay rent only to the
time of such event of destruction.
Should the Demised Premises be rendered untenable and unfit
for occupancy in whole or in part, but yet be repairable
within ten days from the happening of such injury, the Lessor
may enter and repair the same, and the rent shall not accrue
after such injury or while repairs are being made, but shall
recommence immediately after such repairs shall be completed;
provided such repairs are completed within the ten days. But
if the Demised Premises shall be so slightly injured as not to
be rendered untenable and unfit for occupancy in whole or in
part in the opinion of the Lessee, then the Lessor agrees to
repair the same with reasonable promptness and in that case
the rent accrued and accruing shall not cease. Nothing in this
clause, however, shall be construed as requiring the Lessor to
repair the Demised Premises in the event of their whole or
partial destruction. However, if the Lessor either does not
repair within the appropriate time limits or states his
intention not to repair, then the Lessee's rights shall be the
same as though the Demised Premises were injured beyond
repair.
In any event if the Lessor is unable to make repairs of such
damage or destruction within ten days of the occurrence of
such an event the Lessee may terminate the lease for other
than default (unless such damage or destruction was the result
of the willful misconduct or negligence of Lessor, its agents,
clients, or customers, in which case the termination shall be
deemed one for default) by written notice to the Lessor
without any further obligations hereunder from the date of the
occurrence of such destruction.
OBSERVATION OF LAWS
15. Lessee agrees to observe and comply with all laws, ordinances,
rules, and regulations of the Federal, State, County and
Municipal authorities applicable to the Demised Premises.
Lessee agrees not to do or permit anything to be done in the
Demised Premises or the building in which the Demised Premises
exist, or keep anything therein which would obstruct or
conflict with the regulations of the Fire Department.
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SERVICES AND UTILITIES
16. Services and utilities furnished to the Demised Premises
UTILITIES shall be provided and paid for as follows:
BY LESSEE ITEM BY LESSOR
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c Water & sewer charges
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c Electric, fuel oil, and/or gas
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c Plumbing mechanical and maintenance
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c Heating mechanical maintenance
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c Air conditioning mechanical &
maintenance
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c Interior building maintenance
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c Cleaning of the building exterior
entryways
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c Dock equipment, Dock Levelers,
Overhead Doors
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b Lease payment to the IDB Huntsville
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b,d,e Real estate taxes
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c Trash removal Janitorial service
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c Any security above "normally" locked
doors
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c Lawn care & landscaping maintenance
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c Driveway, parking lot & sidewalk
maintenance
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c Structural maintenance and replacement a
(building only)
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b*, c* Roof maintenance and replacement
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c Fire alarm and Fire Sprinklers
maintenance and inspections
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c Fire extinguishers, installation &
service
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c Lessee's signage, per code
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b Building Insurance
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- Roof maintenance and replacement as per Exhibit B. After the completion of
the re-roofing of the original structure, Lessee shall be responsible for
roof maintenance of the original structure provided that Lessee is
permitted to act
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under the warranty given to Lessor by the roofing contractor. Lessee shall
be responsible for roof maintenance of the annex structure from the start
of the Lease Agreement.
In each instance, the following key indicates how the cost of such services will
be paid by Lessee:
(a) Included in the annual rent amount;
(b) Actual amount charged, metered amounts or pro rated on square footage
amounts to be paid by Lessee to Lessor within thirty days of receipt
of written notice of a request to be reimbursed by the Lessor;
necessary records to support the amounts will be kept by the Lessor
and copies made available to Lessee upon request; Lessee may require
such records prior to payment;
(c) Actual cost of services or metered amounts to be paid by Lessee to the
provider of the service (e.g., the utility company or contractor).
(d) To be prorated based upon square footage ratio of Lessee's area to the
entire metered area or total building area as applicable.
Reimbursement will be made the same as (b) above.
(e) If at any time which the Lessee is obligated to pay the ad valorem
taxes as provided above and if Lessee shall at any time object to any
assessment of taxes as being excessive or otherwise unjust, Lessee
shall have the right, but not the obligation, to contest, at its
expense, said tax assessment in the manner provided by law. In any
proceeding or action to contest any such assessment, Lessor shall
cooperate in such efforts and assist Lessee in any manner reasonably
requested, including making available to Lessee detailed information
with respect to the Leased Premises. All of such proceedings shall be
under the direct control of Lessee and its counsel and, to the extent
that Lessor shall incur costs or expenses in conjunction therewith;
such reasonable actual costs or expenses shall be reimbursable upon
Lessor's submitting to Lessee its statement, subject to Lessee's audit
and approval, not more frequently than quarterly. Any tax savings
resulting from any such proceeding shall belong to and be retained by
Lessee if they had been paid or pre-paid by Lessee.
Whenever the Lessee is required to pay ad valorem taxes on the Leased
Premises, Lessee shall pay said taxes to Lessor at least thirty (30)
days prior to the time said taxes are payable by Lessor to the proper
taxing authority. Lessee will be charged for ad valorem real estate
taxes for the term of this Lease Agreement (partial years to be
prorated accordingly).
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If lease termination is other than December 31 of any given year,
prorated ad valorem taxed will be due to Lessor at least thirty (30)
days prior to lease termination.
INTERRUPTION OF SERVICES
17. Notwithstanding anything contained herein to the contrary, Lessee
shall have the right upon written notification to the Lessor to
terminate this Lease Agreement for default if any stoppage in any of
the services listed in the immediately preceding paragraph as being
provided by the Lessor continues for twenty days for whatever reason.
HOLDING OVER BY LESSEE
18. Nothing contained herein shall constitute the consent of Lessor to the
holding over of Lessee after the expiration or earlier termination of
this Lease Agreement.
However, if Lessee shall for any reason remain in possession of any of
the Demised Premises after the expiration or earlier termination of
the Term hereof, except as specifically provided, such possession
shall be as a month-to-month Tenancy during which time Lessee shall
pay as rental, rent on the first day of each month at a rate equal to
one-twelfth the amount of annual rent payable monthly during the prior
year of the term of this Lease Agreement or the option rate, whichever
is higher. Unless evidenced otherwise in writing as the exercise of an
option stated herein or as a modification to this Lease Agreement, in
no event shall any holding over by the Lessee be construed as creating
any new tenancy other than a month to month tenancy.
CARE OF PREMISES
19. The Lessee agrees that it will take good care of the Demised Premises,
fixtures and appurtenances, and suffer no waste or injury, that it
will make all repairs to the Demised Premises, fixtures and
appurtenances necessitated by the fault of the Lessee, its agents,
employees or guests.
REPAIRS
20. As outlined in section 16, the Lessor agrees to make such repairs as
may be necessary to keep the Demised Premises and appurtenances in
good order and condition within a reasonable time after it knows or
should know of the need of such repairs; provided, however, when such
repairs are necessitated by the fault of the Lessee, its agents,
employees or guests, Lessee shall reimburse Lessor for its
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reasonable and actual out-of pocket expenses expended in making such
repairs plus 10% overhead (but excluding profit). Lessor shall make
available to Lessee copies of any and all records necessary to support
the costs levied against Lessee under this clause for which
reimbursement is being sought.
RESERVED PARKING
21. Lessor has provided Lessee with an "as built" civil survey which shows
the paved areas of the Demised Premises. Lessee may stripe the parking
in any manner it deems necessary. Nothing herein requires Lessor to
provide Lessee with an additional paved area.
IMPROVEMENTS
22. The Lessor and Lessee have agreed as to the extent of improvements to
be made to the Demised Premises, and the work will proceed in order to
meet the commitments herein provided. Such work to be completed by
Lessor is described in Exhibit B to this Lease Agreement. The parties
agree to cooperate in order for the work to proceed to be completed on
a timely basis. Should work beyond that required by Exhibit B be
required by Lessee, it shall be described in Exhibit C, and performed
and paid for by Lessee. Lessor hereby consents to all Alterations
denoted in Exhibit C.
NOTICES
23. Formal notices or communications pertaining to this Lease Agreement
shall be deemed to have been duly given if personally provided to the
other party in writing or if sent to the other by U.S. mail, or an
independent delivery service, postage and other costs prepaid. Until
otherwise specified in writing, the addresses and telephone numbers of
the parties hereto for the purpose of any such notice or
communications are:
LESSEE: LESSOR:
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BENCHMARK ELECTRONICS HUNTSVILLE INC. INDUSTRIAL PROPERTIES
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ OF THE SOUTH
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., #▇
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_______________________ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn: PLANT MANAGER Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to the attention of Legal
Counsel at the same address
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SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST
24. This Lease Agreement is subject and is hereby subordinated to all
present mortgages, deeds of trust and other encumbrances affecting the
Demised Premises or the property of which said premises are a part.
The Lessor agrees to cause the mortgagee to provide to the Lessee, if
requested, in recordable form, an agreement not to disturb Lessee's
right in or possession of the premises so long as Lessee is not in
default hereunder, in the event this Lease Agreement is subordinated
to mortgage deeds of trust or other encumbrances and the subordination
of this Lease Agreement is conditioned upon the Lessee receiving such
non-disturbance agreement from the mortgagee. Lessor represents that
the only encumbrance on the Demised Premises is a mortgage from
Southtrust Bank and agrees to provide Lessee with a nondisturbance
agreement signed by Southtrust Bank in substantially the form attached
hereto as Exhibit D.
LEASE BINDING ON HEIRS, SUCCESSORS, ETC.
25. All of the terms, covenants, and conditions of this Lease Agreement
shall inure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and assigns of the
parties hereto.
EMINENT DOMAIN, CONDEMNATION
26. If the entire property or any material part thereof wherein the
Demised Premises are located shall be taken by public or quasi-public
authority under any power of eminent domain or condemnation, this
Lease Agreement shall forthwith terminate and the Lessee shall have
the right through the Lessor to a claim for such taking, limited only
to loss or damage to Lessee's trade fixtures or removable personal
property, moving expenses, unamortized capital expenses and increased
rents.
A "material part" of the property is defined as taking which could
interfere with the Lessee's continued enjoyment and utilization of the
premises as described herein.
SEVERABILITY
27. Each covenant and agreement in this Lease Agreement shall for all
purposes be construed to be a separate and independent covenant or
agreement. If any provision in this Lease Agreement or the application
thereof shall to any extent be invalid, illegal or otherwise
unenforceable, the remainder of this Lease Agreement, and the
application of such provision other than as invalid, illegal or
unenforceable, shall not be affected thereby; and such provisions in
this Lease Agreement shall be valid and enforceable to the fullest
extent permitted by law.
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ADDITIONAL SIGNS
28. Lessor hereby grants Lessee the right to install whatever signage it
desires provided that such signage complies with all applicable laws
(including zoning ordinances). During the last two months of the Lease
term, Lessor may install "For Rent" or "For Sale" signs as necessary
provided that the placement of the signs does not interfere with the
placement of Lessee's signs.
LESSOR'S RIGHT TO ENTRY
29. Lessor and Lessor's agents may enter the Demised Premises for the
following purposes only: to make repairs, alterations, or improvements
necessary under the terms of this Lease Agreement; to perform Lessor's
covenants as set forth in this Lease Agreement; and, during the last
two months of the Lease Term, to show the Demised Premises to
prospective tenants. Such entry shall not be so frequent or of such a
type as to disturb Lessee's peaceful enjoyment of the Leased Premises.
Such entry shall only take place upon reasonable notice to and consent
of Lessee; consent shall not be unreasonably withheld. If Lessor or
its agent reasonably believes that an emergency exists which requires
immediate entry, such entry may be made without Lessee's consent
provided that Lessor has made reasonable attempts to contact Lessee
prior to such entry; Lessor shall so inform Lessee of such entry at
the earliest practicable time afterwards. In the event Lessor desires
to enter the Demised Premises in order to inspect the Demised
Premises, Lessor shall give Lessee at least 72 hours' prior written
notice. All persons who enter the Demised Premises at Lessor's request
must first obtain clearance from Lessee before entry (which Lessor
acknowledges will require it to sign Lessee's standard nondisclosure
agreement).
Notwithstanding anything in this Lease Agreement to the contrary, upon
any entry by Lessor or its duly authorized agents, servants, or
employees at any time during the Lease Term, such entry shall conform
to Lessee's security requirements as may be required by Lessee, the
federal government or any agency thereof, or any of Lessee's clients.
LESSEE'S ALTERATIONS, IMPROVEMENTS, OR ADDITIONS
30. Any alterations, improvements, or additions to the Demised Premises in
the form of fixtures to the Demised Premises (collectively referred to
as "Alterations") which cannot be removed without material damage to
the Demised Premises shall remain upon the Demised Premises at the
expiration of this Lease Agreement and shall become the property of
Lessor; provided however that Lessee shall have the right to remove at
the expiry of the Lease Agreement (i) any of Lessee's machinery,
equipment or fixtures which can be removed without material damage
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to the Demised Premises and (ii) any Alterations for which Lessee has
received prior written consent to remove. Lessee shall repair any
damage caused by such removal and restore the Demised Premises to
substantially the same condition in which it existed prior to the time
that any such Alterations were made.
Lessee shall not, without on each occasion first obtaining Lessor's
prior written consent (which shall not be unreasonably refused), make
any Alterations to the Demised Premises, except that Lessee may,
without the consent of the Lessor but with prior written notice to
Lessor, make minor improvements to the interior of the Demised Premises
provided that they do not impair the structural strength, operation, or
value of the building of which Demised Premises are a part, or violate
any zoning, fire or building code. The cost to correct any such
violation shall be the responsibility of the Lessee.
RENEWAL OPTION
31. Provided Lessee is not in default under any of the terms of this Lease
Agreement, Lessor hereby grants to Lessee the right and option to
extend the Initial Term for three (3) successive renewal terms of three
(3) years each (each a "Renewal Term") for an aggregate additional nine
(9) years, to begin upon the expiration of the Initial Term or the
preceding Renewal Term, as applicable. Lessee's exercise of each such
option shall be accomplished by delivering to Landlord written notice
of Lessee's election to renew no later than ninety (90) days prior to
the expiration of the preceding term. All of the other terms,
provisions and covenants of this Lease shall apply to the Renewal
Terms, including the rental adjustment set forth in Section 3.
LESSEE'S DEFAULT
32. The Lessee shall be considered in default of this Lease Agreement upon
failure to pay when due the rent or any other sum required by the
terms of this Lease; the failure to perform any material term,
covenant, or condition of this Lease Agreement; the commencement of
any action or proceeding for the dissolution, liquidation, or
reorganization under the Bankruptcy Act, of Lessee, or for the
appointment of a receiver or trustee of the Lessee's property; the
making of any assignment for the benefit of creditors by Lessee; the
suspension of business; or the abandonment of the Demised Premises by
the Lessee. In each case, Lessee shall only be in default if the
Lessee is given written notice by Lessor of the specific grounds for
the default termination and twenty business days from receipt of such
notice to correct such default and (i) Lessee fails to do so or (ii)
if the default is of the nature that it cannot be completely remedied
within such period, Lessee begins the correction of the default within
such twenty days and thereafter proceeds with reasonable diligence and
in good faith to effect the remedy as soon as practicable.
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LESSOR'S DEFAULT
33. The Lessor shall be considered in default of this Lease Agreement upon
the failure to perform any material term, covenant, or condition of
this Lease Agreement; the commencement of any action or proceeding for
the dissolution, liquidation, or reorganization under the Bankruptcy
Act, of Lessor, or for the appointment of a receiver or trustee of the
Lessor's property; the making of any assignment for the benefit of
creditors by Lessor; the suspension of business; or any other reason
provided for herein. In each case, Lessor shall only be in default if
the Lessor is given written notice by Lessee of the specific grounds
for the default termination and twenty business days from receipt of
such notice to correct such default and (i) Lessor fails to do so or
(ii) if the default is of the nature that it cannot be completely
remedied within such period, Lessor begins the correction of the
default within such twenty days and thereafter proceeds with
reasonable diligence and in good faith to effect the remedy as soon as
practicable.
REMEDIES UPON DEFAULT
34. Upon the happening of any Lessee event of default, Lessor, if Lessor
shall elect, may (1) collect each installment of rental hereunder as
and when the same matures and this Agreement shall remain in effect
except that the Lessee shall not be allowed to continue to possess the
Demised Premises and the Lessor shall be free to lease the Demised
Premises to a third party, or (2) terminate the term of this Agreement
without further liability to Lessee hereunder, or (3) terminate
Lessee's right to possession and occupancy of the Demised Premises
without terminating the term of this Agreement, and in the event
Lessor shall exercise such right of election the same shall be
effective as of the date of written notice of Lessor's election given
by the latter to Lessee at any time after the date of such event of
default. Upon any termination of the term hereof, whether by lapse of
time or otherwise, or upon any termination of Lessee's right to
possession or occupancy of the Demised Premises without terminating
the term thereof, Lessee shall promptly surrender possession and
vacate the Demised Premises and deliver possession thereof to Lessor.
If Lessor shall elect to terminate Lessee's right to possession only,
without terminating the term of this Agreement, Lessor at Lessor's
option may enter onto the Demised Premises, remove Lessee's property
and other evidence of tenancy and take and hold possession thereof
without such entry and possession terminating the term of this
Agreement or otherwise releasing Lessee in whole or in part from
Lessee's obligation to pay the rent herein reserved for the full term
hereof and in such case Lessee shall be liable for the difference in
the rent received by Lessor and the rent due under his agreement for
the remainder of said term. Upon and after entry into possession
without
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termination of the term hereof, Lessor shall use reasonable efforts to
relet the Demised Premises or any part thereof for the account of
Lessee to any person, firm or corporation other than Lessee for such
rent, for such time, and upon such terms as Lessor in Lessor's
reasonable discretion shall determine or if Lessor chooses, Lessor may
operate the Demised Premises for its own account holding the Lessee
liable for the difference between the rental described herein and the
fair market rental of the Demised Premises at the time of the event of
default. The Lessee agrees to pay Lessor, or on Lessor's behalf, a
reasonable attorney's fee in the event Lessor employs an attorney to
collect any amounts due hereunder by Lessee, or to protect the interest
of Lessor in the event the Lessee is adjudged bankrupt, or legal
process is levied upon the goods, furniture, effects or personal
property of the Lessee upon the said Demised Premises, or in the event
the Lessee violated any of the terms, conditions, or covenants on the
part of the Lessee herein contained. Notwithstanding anything to the
contrary herein contained, (x) Lessor shall use commercially reasonable
efforts to mitigate its damages and (y) Lessor's damages shall be
reduced to the extent they could have been mitigated through the
exercise of commercially reasonable efforts and to the extent they are
duplicative and (z) Lessor shall not be entitled to any consequential,
incidental or special damages.
34A. Upon the happening of any Lessor event of default that results in the
Demised Premises being untenantable, Lessee, if Lessee shall elect may
(1) terminate the Lease in which case Lessee shall immediately
surrender possession of the Demised Premises to Lessor and shall be
entitled to recover from Lessor all actual damages incurred by Lessee
by reason of Lessor's default, including (a) the difference between
the rent Lessee would have paid under the Lease and the rent Lessee is
obligated to pay under any lease entered to replace this Lease that is
for comparable space and located in an area comparable to the area
surrounding the Demised Premises for the remainder of the current term
only and not for any additional options; (b) all reasonable expenses
incurred in vacating the premises, searching for a new facility,
entering into a new lease, and moving into a new facility; and (c) any
other amount necessary to compensate Lessee for all the actual damages
proximately caused by Lessor's failure to perform its obligations
under the Lease or which the ordinary course of things would be likely
to result therefrom; (2) maintain its right to possession, in which
case this Lease shall continue in effect and Lessee shall have the
right to remedy any Lessor's default and deduct the cost of remedying
any such default from any rent due. Notwithstanding anything to the
contrary herein contained, (x) Lessee shall use commercially
reasonable efforts to mitigate its damages and (y) Lessee's damages
shall be reduced to the extent they could have been mitigated through
the exercise of commercially reasonable efforts and to the extent they
are duplicative and (z) Lessee shall not be entitled to any
consequential, incidental or special damages. Alternatively, Lessee
shall have the right to remedy Lessor's breach at its expense and to
invoice Lessor for the cost of any repairs made. The Lessor agrees to
pay
15
Lessee a reasonable attorney's fee in the event Lessee employs an
attorney to collect any amounts due hereunder by Lessee, or to protect
the interest of Lessee in the event the Lessor is adjudged bankrupt or
in the event the Lessor violated any of the terms, conditions, or
covenants on the part of the Lessor herein contained. Upon the
happening of any other Lessor event of default, the Lessee shall have
all the rights and remedies provided by the law of the State of
Alabama.
MECHANICS' LIENS
35. In the event that any mechanics' lien is filed against the Demised
Premises as a result of alterations, additions or improvements made by
the Lessee, the Lessor shall have the option, if the Lessee shall be
unable to procure effective cancellation, bonding or discharge of the
lien within 30 days following written notice of the existence of such
condition, to take such steps and pay such monies as may be necessary
to obtain an effective cancellation or discharge of such notice or
claim, in which event such monies as shall be expended by the Lessor
shall be considered additional rent hereunder and shall be due and
payable on the first day of the next month succeeding such payment by
the Lessor.
ENVIRONMENTAL
36. Lessor warrants and represents to Lessee that: (a) Lessor, its agents,
employees, representatives, tenants, and (to the best of its knowledge
as indicated in the Phase I and Phase II environmental studies dated
March 10, 2000 and March 14, 2000 and the environmental study provided
to Lessor by Intergraph Corporation in February, 2000) its
predecessors in interest in the Premises did not discharge, release,
or dispose of, in any form, any hazardous material or substance into
or onto the Premises and that no condition exists in or on the
Premises that may result in any violation of any federal, state or
local laws, regulations or ordinances relating to the protection of
the environment or the public health and welfare (collectively
hereinafter called "Environmental Laws"); and (b) Lessor has no
liability and there are no outstanding claims against Lessor for the
clean up of any hazardous material Or substance deposited in the
environment, either directly on the premises or elsewhere, that
resulted from ownership of the Premises.
Lessee warrants and represents to Lessor that (a) Lessee, its agents,
employees, representatives and sublessees, if any, will not discharge,
release, or dispose of in any form any hazardous materials or
substances into or onto the Premises and that Lessee, will not create,
or permit to be created, any condition in or on the Premises that may
result in any violation of any environmental laws; and (b) Lessee will
not allow any hazardous material or substance to exist or be stored,
located, discharged, possessed, managed, processed or otherwise handled
on the Premises except those customarily used in the conduct of
Lessee's normal business activities, and that Lessee shall comply with
all Environmental Laws
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affecting the Premises; and (c) Lessee shall immediately notify Lessor
should Lessee become aware of (i) any hazardous material or substance
or any other environmental problem or liability with respect to the
Premises, (ii) any lien, action or notice related to any such
environmental problem or liability, or (iii) any material or substance
or any other problem with respect to or arising out of or in connection
with the premises.
Lessee acknowledges the receipt of a recent Phase I and Phase II
environmental study by Qore Property Sciences, dated March 10, 2000 and
March 14, 2000 respectively, and the receipt of a copy of the
environmental study provided by the Intergraph Corporation to
Industrial Properties in February, 2000. These reports will be used to
document the environmental status of the facilities upon acceptance and
beginning occupancy by Lessee. Lessee Agrees to provide a new Phase I
at least thirty (30) days prior to vacating and to correct or address
any environmental concerns prior to lease termination.
COMMISSION AGREEMENT
37. An agreed to and acknowledged copy of the Commission Agreement between
Chase Commercial Real Estate Services, Inc., Lessor and Lessee is
attached as Exhibit E and incorporated by reference into this Lease
Agreement.
GENERAL
38. a. This Lease Agreement shall be governed by and under the laws
of the State of ALABAMA.
b. Each party acknowledges that it has read this Lease Agreement,
understands it, and agrees to be bound by its terms, and
further agrees that this is the complete and exclusive
statement of the Lease Agreement between the parties, which
supersedes and merges all prior proposals, understandings, and
all other agreements, oral or written, between the parties
relating to this Lease Agreement. Any change in this Lease
Agreement must be made in writing and signed by authorized
representatives of both the Lessee and the Lessor.
c. If either party cannot perform any or all of its respective
obligations under this Lease Agreement because of the
occurrence of any event which is beyond its reasonable control
and not caused by such party or its agents or employees, then
the non-performing party shall (i) notify the other party,
(ii) take reasonable steps to resume performance as soon as
possible, and (iii) not be considered in breach during the
period performance is beyond
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the party's reasonable control.
d. The failure of either party at any time to require performance
by the other party of any provision hereof shall not affect in
any way the full right to require such performance at any time
thereafter. The waiver by either party of a portion of a
provision herein shall not be taken or held by the other party
to be a waiver of the provision itself unless such a waiver
shall be express and in writing.
e. In the event of any inconsistency between its component parts,
this Lease Agreement shall be construed with the following
order of precedence:
(1) The Basic Lease Agreement (This document)
(2) Exhibit A
(3) Exhibit B
(4) Exhibits C and D
(5) Other Exhibits (if any)
f. The titles of the clauses in this Lease Agreement, including
all Exhibits thereto, shall be read as references only and
shall not be read as affecting, contradicting, negating, or
explaining the meaning or interpretation of this Lease
Agreement.
g. Each party represents and warrants that it has the right and
authority to enter into this Lease Agreement.
h. Unless otherwise specifically noted, "days" shall mean
calendar days.
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i. In no event shall either party be liable to the other for
indirect, consequential, incidental or special damages, even
if it has been made aware of the possibility of such.
IN WITNESS WHEREOF, the parties hereto have signed this Agent as of
the day and year first written above.
LESSEE LESSOR
BENCHMARK ELECTRONICS INDUSTRIAL PROPERTIES
HUNTSVILLE INC. OF THE SOUTH
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.▇▇▇▇▇ #▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------- ---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Partner
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EXHIBIT A
DESCRIPTION OF DEMISED PREMISES
[THIS IS TO BE PROVIDED BY LESSOR]
20
EXHIBIT B
ALTERATIONS TO BE MADE BY LESSOR
The following Alterations shall be made by Lessor on or before the
date(s) set forth below at Lessor's sole cost and expense and, except as
provided in Section (3), without recovery from Lessee through increased rent or
otherwise:
1. Fully fire sprinkle the approximately 44,800 s.f. Annex
building with class III wet fire sprinkler system. Work to be
completed within 30 days of the execution of the Lease
Agreement.
2. Pressure wash, paint and caulk the exterior of the building
in a color mutually acceptable to Lessor and Lessee. Work to
be completed within 30 days from notice to proceed to paint
contractor.
3. Remove old air conditioning units from roof, cap roof curbs
and re-roof over existing Trocal roof material with new
Firestone EDPM material and insulation. Existing ballasts
will be re-used to anchor membrance to the building. Lessee
has reviewed and hereby approves the attached quotes from
mechanical and roofing contractor in the total amount of
$232,267.00.
Lessee agrees to pay for $30,000 of this cost within ten (10)
days of invoice and upon delivery of roofing material to the
site.
Lessee has read the attached proposed sample warranty from
Firestone and agrees to accept the maintenance of the roof of
the entire facility per Section 16 upon completion of the
re-roofing of the original structure by the roofing contractor
Lessor represents and warrants that any alterations will be done in a
professional manner and will comply with applicable federal, state and
local laws.
21
EXHIBIT C
ALTERATIONS TO BE MADE BY LESSEE
Benchmark will install, at its own expense, the following items
Compressor System
Card Reader System
Power Protection System
Vacuum Pump System
PA System
Camera System
Time Card System
Kitchen Facility
ESD Flooring
In addition, Tenant will replace the lighting in the old portion of
the building with lighting sufficient for its needs.
Lessor consents to these Alterations and agrees that Tenant shall have
the right to remove these Alterations in accordance with this Lease Agreement
(i.e., provided that Tenant restore the building to its condition at the
inception of this Lease, normal wear and tear excluded).
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EXHIBIT D
FORM OF NON-DISTURBANCE AGREEMENT
WHEREAS, SOUTHTRUST BANK, a national banking association with
principal offices in __________________, Alabama, (hereinafter referred to as
"Mortgagee") is the Holder of the Mortgage issued under and pursuant to that
certain Mortgage dated as of March_, 2000, between Industrial Properties of the
South, an Alabama corporation, and SouthTrust Bank, an Alabama public
corporation (the "Mortgagee"), of record in Book ____ page_, Office of the Judge
of Probate of Madison County, Alabama (the "Mortgage"; capitalized terms used
but not otherwise defined shall have the same meanings as in the Mortgage); and
WHEREAS, the Mortgagor, Industrial Properties of the South, will lease
or has leased a portion of the Project to Benchmark Electronics Huntsville Inc.
(the "Tenant") pursuant to a Lease Agreement dated June 1, 2000 by and between
the Mortgagor and the Tenant (the "Lease"), a copy of which is attached hereto
as Exhibit "A";
WHEREAS, the Lease is subsequent in time and subordinate to the liens,
security titles and security interests of the mortgage; and
WHEREAS, Tenant has requested the assurance of Mortgagee that Tenant's
possession under the Lease will not be disturbed as a result of the occurrence
of certain events pursuant to or in connection with the mortgage.
NOW, THEREFORE, FOR VALUE RECEIVED, Mortgagee hereby agree, for
themselves and their respective successors, that Tenant's possession under the
Lease will not be disturbed by foreclosure of the Mortgage, exercise of any
power of sale thereunder, acceptance of a deed in lieu of foreclosure or
exercise of any other remedy provided in the Mortgage or any assignment of
leases in connection therewith; provided that Tenant is not in default (beyond
the expiration of any applicable cure period) in the payment of rent or other
charges pursuant to, or in the performance of any of the other terms, covenants
or conditions of, the Lease.
IN WITNESS WHEREOF, Mortgagee have caused this instrument to be
executed by their duly authorized officers on the 1st day of June, 2000.
SouthTrust Bank, Mortgagee
By:
-------------
Senior Vice President (Title)
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Personally appeared before me, the undersigned, a Notary Public having
authority within the State and county aforesaid, _____________________, with
whom I am personally acquainted, and who acknowledged that he executed the
within instrument for the purposes therein contained, and who further
acknowledged that he is the/a(n) ______________________ of Southtrust Bank, a
national banking association, and is authorized by the bank to execute this
instrument on behalf of the bank in its capacity as Mortgagee.
WITNESS my hand, at office, this _____ day of ______________, 2000.
My Commission Expires:
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