(LEASE 2)
COMMERCIAL LEASE AGREEMENT
XXXXXXX-XXXX TECHNOLOGY CENTER II, LTD.,
Landlord
to
XXXXX GOLF, INC.,
Tenant
TABLE OF CONTENTS
1. LANDLORD 4
2. TENANT 4
3. LEASED PREMISES 4
4. TERM 5
5. BASE RENT AND SECURITY DEPOSIT 6
6. ADDITIONAL RENTAL 7
7. TENANT REPAIRS AND MAINTENANCE 9
8. LANDLORD'S REPAIRS 11
9. UTILITY SERVICE 11
10. SIGNS 11
11. USAGE 12
12. INSURANCE 12
13. (INTENTIONALLY DELETED) 13
14. COMPLIANCE WITH LAWS, RULES AND REGULATIONS 13
15. ASSIGNMENT AND SUBLETTING 13
16. ALTERATIONS AND IMPROVEMENTS 14
17. CONDEMNATION 15
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18. FIRE AND CASUALTY 16
19. CASUALTY INSURANCE 17
20. WAIVER OF SUBROGATION 17
21. HOLD HARMLESS 17
22. QUIET ENJOYMENT 18
23. LANDLORD'S RIGHT OF ENTRY 18
24. ASSIGNMENT OF LANDLORD'S INTEREST IN LEASE 18
25. LANDLORD'S LIEN 18
26. DEFAULT BY TENANT 19
27. REMEDIES FOR TENANT'S XXXXXXX 00
00. TERMINATION OF OPTIONS 21
29. WAIVER OF DEFAULT OR REMEDY 21
30. CHOICE OF LAW; VENUE; ATTORNEY'S FEES 21
31. HOLDING OVER 22
32. RIGHTS OF MORTGAGEE 22
33. ESTOPPEL CERTIFICATES 23
34. SUCCESSORS 23
35. REAL ESTATE COMMISSION 23
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36. DEFAULT BY LANDLORD 23
37. MECHANIC'S LIENS 24
38. HAZARDOUS WASTE 24
39. ENTIRE AGREEMENT AND LIMITATION OF WARRANTIES 25
40. FINANCIAL STATEMENTS 25
41. FORCE MAJEURE 25
42. MISCELLANEOUS 26
43. NOTICE 27
44. LIMITATION ON TENANT'S DAMAGES 28
COMMERCIAL LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into by and between:
1. LANDLORD: XXXXXXX-XXXX TECHNOLOGY CENTER II, LTD., a Texas Limited
Partnership ("Landlord"), and
2. TENANT: XXXXX GOLF, INC., a Texas Corporation ("Tenant").
3. LEASED PREMISES: In consideration of the rents, terms and covenants of
this Commercial Lease Agreement (this "Lease"), Landlord hereby leases to
Tenant certain premises (the "Leased Premises") consisting of approximately
65,135 square feet within the 65,135 square foot building (the "Building")
located at 0000 X. Xxxxx Xxxxxxx, Xxxxx ____, Xxxxx, Xxxxx together with the
non-exclusive right to use, in common with other tenants, the common areas of
the Project, which are all areas neither exclusively leased to another tenant
nor expressly reserved to or by Landlord. The land upon which the Building
is located is described in the attached Exhibit A and, together with the
Building, landscaping, parking and driveway areas, sidewalks, and other
improvements thereon, shall be referred to in this Lease as the "Project."
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4. TERM:
(a) The term of this Lease shall be Six (6) years commencing on
February 1, 1998, the "Commencement Date" and terminating on the last day of
the same calendar month in the Sixth (6th) year following the Commencement
Date (the "Termination Date"). This Commencement Date may be subject to
change, however, pursuant to Paragraphs 4(b) and (c) below.
(b) Tenant acknowledges that it accepts the Leased Premises as suitable
for Tenant's purposes subject only to Paragraph 4(c) below, if applicable.
If this Lease is executed before the Leased Premises become available for
occupancy, or if Landlord cannot acquire possession of the Leased Premises
prior to the Commencement Date stated above, Tenant agrees to accept
possession of the Leased Premises at such time as Landlord is able to tender
the same, which date shall then be the Commencement Date of the Lease term.
(c) Landlord agrees to install at its cost and expense the
improvements, if any, described in the plans and specifications described in
Exhibit B. If such improvements are not completed and the Leased Premises
are not ready for occupancy on the Commencement Date stated above, other than
as a result of the omission, delay or default by Tenant or anyone acting
under or on behalf of Tenant, the rent under this Lease shall not commence
until substantial completion of the work described in said plans and
specifications, and the Commencement Date of the Lease term shall be the date
of such substantial completion. Landlord shall notify Tenant in writing as
soon as such improvements are substantially completed and ready for
occupancy. If Tenant believes that such improvements have not been
substantially completed as aforesaid, Tenant shall notify Landlord in
writing of its objections within three (3) days after receipt of the
completion notice from Landlord. Landlord shall have a reasonable time after
receipt of such notice (but in no event more than 10 days) in which to
commence such corrective action as may be necessary and shall notify Tenant
in writing as soon as it deems such corrective action has been completed so
that the Leased Premises are completed and ready for occupancy. In the event
of any dispute as to substantial completion or work performed or required to
be performed by Landlord, the certificate of a registered architect shall be
conclusive and binding on all parties.
(d) Tenant acknowledges that no representations or promises regarding
construction, repairs, alterations, remodeling, or improvements to the Leased
Premises have been made by Landlord, its agents, employees, or other
representatives, unless such are expressly set forth in this Lease or any
Exhibit hereto. Tenant is solely responsible for applying for and obtaining
a Certificate of Occupancy for the Leased Premises and will satisfy itself as
to the business park restrictions and all zoning and similar restrictions and
regulations prior to commencement of any construction. Failure of Tenant to
provide written notice of such objections prior to commencement of
construction shall be deemed acceptance by Tenant. Tenant agrees that if its
occupancy of the Leased Premises is delayed under the circumstances described
in Paragraphs 4(b) and (c) above, this Lease shall nonetheless continue in
full force and effect. Adjustment of the rent commencement date as above
provided shall constitute full settlement of all claims by Tenant against
Landlord by reason of any such delay in possession of the Leased Premises.
Tenant's taking possession of the Leased Premises shall conclusively
establish that the improvements, if any, to be
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made by Landlord under the terms of this Lease have been completed in
accordance with the plans and specifications therefor and that the Leased
Premises are in good and satisfactory condition as of the date of Tenant's
possession, unless Tenant notifies Landlord in writing specifying any bona
fide deficiencies after taking possession (i) within 270 days, for the
heating and air conditioning systems, and (ii) within ninety (90) days, for
all other matters, after the Commencement Date. Landlord shall use
reasonable diligence to repair promptly such items but Tenant shall have no
claim for damages or rebate or abatement of rent by reason thereof. In
conjunction with, or at any time after, the Commencement Date, Tenant shall,
upon demand, execute and deliver to Landlord an Estoppel letter (as referred
to in paragraph 33 herein) to acknowledge the Commencement Date.
5. BASE RENT AND SECURITY DEPOSIT:
(a) Tenant agrees to pay to Landlord the following rental amounts
(sometimes referred to in this Lease as the "Base Rent" or "Base Rental"):
MONTHS 1 THROUGH 24, $455,952.00 PER YEAR PAYABLE IN MONTHLY INSTALLMENTS OF
$37,996.00 EACH; AND MONTHS 25 THROUGH 48, $488,520.00 PER YEAR PAYABLE IN
MONTHLY INSTALLMENTS OF $40,710.00 EACH; MONTHS 49 - 72, $521,088.00 PER
YEAR PAYABLE IN MONTHLY INSTALLMENTS OF $43,424.00. Payment of rent is
subject to proration for partial months and to adjustment for early or
delayed occupancy under the terms hereof, and, if the area of the Leased
Premises is, on the Commencement Date, different than the area stated in
Paragraph 3 above, then Base Rent shall be adjusted to reflect $7.00 per
gross square foot. Base Rent shall be payable to Landlord monthly, in
advance, without demand, deduction or offset, in lawful money of the United
States of America at the address stated below. The first month's Base Rent
payment of $37,996.00 shall be due upon the date Tenant executes the Lease
Agreement, and all other installments of Base Rent shall be due and payable
on or before the first (1st) day of each month during the Lease term.
(b) Upon the date Tenant executes the Lease Agreement, there shall be
due and payable by Tenant a Security Deposit in the amount of $37,996.00.
Such deposit shall be held by Landlord (without any obligation to pay
interest thereon or segregate such money from Landlord's general funds except
as may be required by applicable law) as security for the performance of
Tenant's obligations under this Lease. Tenant agrees to increase such
Security Deposit from time to time so that it is at all times equal to one
monthly Base Rental installment plus the average monthly additional rentals
arising pursuant to Paragraph 6 below. Tenant shall deposit cash with
Landlord in an amount sufficient so to increase the Security Deposit to such
amount within five (5) days after written demand by Landlord. It is
expressly understood that the Security Deposit is not an advance payment of
rental or a measure of Landlord's damages in the event of Tenant's default
under this Lease. Upon the occurrence of any event of default by Tenant
under this Lease, Landlord may, from time to time, without prejudice to any
other remedy provided herein or provided by law, use, apply, or retain all or
part of the Security Deposit for the payment of (i) any Base Rent, (ii)
additional rentals arising under Paragraph 6 below, and (iii) other sums due
hereunder, including without limitation any amount which Landlord may spend
or become obligated to spend by reason of Tenant's default or to compensate
Landlord for any damage, injury, expense or liability caused to Landlord by
such default or breach (all of which items (i), (ii) and (iii) are sometimes
referred to in
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the aggregate as "Rent"). If any portion of the Security Deposit is so used
or applied, Tenant shall, within five (5) days after written demand thereof,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to the amount required by this Paragraph. Tenant's failure to do so
shall be an event of default under this Lease. The balance of the Security
Deposit shall be returned by Landlord to Tenant at such time after
termination of this Lease that all of Tenant's obligations have been
fulfilled.
(c) Other remedies for nonpayment of Rent notwithstanding, if the
monthly Base Rental payment is not received by Landlord on or before the
tenth (10th) day of the month for which such rent is due, or if any other
Rent payment due Landlord by Tenant hereunder is not received by Landlord
within ten (10) days of the due date three (3) times during any one (1) year
period, a service charge of two hundred ($200.00) dollars shall be
additionally due and payable by Tenant as an administrative charge for the
excess efforts necessitated by such tardiness in payment. Such service
charge shall be cumulative of any other remedies Landlord may have for
nonpayment of Rent and other sums payable under this Lease.
(d) If three (3) consecutive monthly Base Rental payments or any ten
(10) [in total, cumulative from the beginning of the Lease term] monthly Base
Rental payments during the Lease term (or any renewal or extension thereof)
are not received by Landlord within ten (10) days of the due date, the Base
Rent hereunder shall automatically become due and payable by Tenant in
advance in quarterly installments equal to three (3) months' Base Rent each.
The first of such quarterly Base Rent payments shall be due and payable on
the first day of the next succeeding month and on the first day of every
third (3rd) month thereafter. This remedy shall be cumulative of any other
remedies of Landlord under this Lease for nonpayment of Rent.
6. ADDITIONAL RENTAL:
(a) TAXES AND INSURANCE:
(1) "Tax and Insurance Costs" shall mean all of the following paid
or payable by Landlord with respect to the Project or any portion thereof:
(i) all federal, state and local sales, use, ad valorem, rental, value added,
and other taxes (other than Landlord's income or franchise taxes) and special
assessments and other governmental charges; and (ii) all insurance premiums,
including, without limitation, public liability, casualty, rental and
property damage insurance.
(2) Landlord shall pay all Tax and Insurance Costs; however,
Landlord may in its discretion defer such payment to the extent permitted by
applicable laws so long as contested by Landlord in good faith and so long as
Tenant's occupancy of the Premises is not lawfully disturbed.
(3) For each calendar year of the term of this Lease, Tenant shall
pay to Landlord as additional Rent hereunder its "pro rata portion" of the
Tax and Insurance Costs computed by multiplying the Tax and Insurance Costs
by a fraction, the numerator of which is the number of rentable square feet
in the Leased Premises, and the denominator of which is the number of
rentable square feet in the Building.
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(4) Tenant shall pay one-twelfth of its pro rata portion of
estimated Tax and Insurance Costs as estimated by Landlord, along with the
monthly Base Rental payment each month, during the term of this Lease. As
soon as available after the expiration of each calendar year during the term
of this Lease, Landlord shall submit a reconciliation statement to Tenant
setting forth (1) Tenant's pro rata portion of the Tax and Insurance Costs
due from Tenant for the preceding calendar year, (ii) the amount of Tax and
Insurance Costs paid by Tenant during such calendar year, and (iii) the
amount, if any, either overpaid or remaining due from Tenant to Landlord.
Within (10) days after receipt of such statement, Tenant shall remit to
Landlord the amount said statement shows to be due from Tenant or, if Tenant
has overpaid, Landlord shall credit the amount overpaid to Tenant's pro rata
portion of Tax and Insurance Costs next due. If Tenant is not in default and
this Lease terminated at the end of such prior year, Landlord shall refund
such overpayment to Tenant.
(5) For the calendar years in which this Lease commences and
terminates, Tenant's liability for its pro rata portion of the Tax and
Insurance Costs for such partial calendar years shall be subject to pro rata
adjustment based upon the number of days of the term elapsing during such
partial year. Where the applicable charges are not available prior to the
end of the term hereof, then the aforesaid adjustment shall be made between
Landlord and Tenant after Landlord shall have received the charges for such
period, it being specifically agreed that Landlord's and Tenant's obligations
under this Paragraph shall survive the expiration of the term of this Lease.
(6) The failure of Landlord to exercise its rights hereunder to
estimate Tax and Insurance Costs and require payment of same as additional
Rent shall not constitute a waiver of such rights which rights may be
exercised from time to time at Landlord's discretion.
(b) COMMON AREA MAINTENANCE:
(1) "Common Area Maintenance Expenses" shall mean any and all
expenses (other than the Tax and Insurance Costs described above) arising
from the maintenance, repair, replacement and operation of, and modifications
and improvements to comply with governmental mandate to, the Project's common
areas and any portions of the Project for which Landlord is responsible
hereunder (excluding only expenses associated with structural integrity of
the roof, foundation, and exterior walls) including, but not limited to,
management fees, utility expenses (if furnished by Landlord), wages and
fringe benefits payable to employees of Landlord 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, including without
limitation common areas and parking areas and roof, exterior wall and
foundation work that is not related to structural integrity. Any capitalized
expenditures included within the foregoing (together with reasonable finance
charges) will be amortized for purposes of this Paragraph over a three (3)
year period.
(2) The term "Common Area Maintenance Expenses" shall not include
repair, restoration or other work occasioned by fire, windstorm or other
casualty with respect to which
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Landlord actually receives insurance proceeds, income and franchise taxes of
Landlord, expenses incurred in leasing to or procuring of tenants, leasing
commissions, advertising expenses, expenses for the renovating of space for
new tenants, interest or principal payments or any mortgage or other
indebtedness of Landlord, compensation paid to any employee of Landlord above
the grade of building superintendent, or depreciation allowance or expense.
(3) Tenant agrees to pay as additional Rent its pro rata portion
(as defined in Paragraph 6(a)(3) above) of the Common Area Maintenance
Expenses. Tenant shall pay one-twelfth of its pro rata portion of estimated
Common Area Maintenance Expenses as estimated by Landlord, along with the
monthly Base Rental payment each month during the term of this Lease. As
soon as available after the expiration of each calendar year during the term
of this Lease, Landlord shall submit a statement to Tenant setting forth (i)
Tenant's pro rata portion of the Common Area Maintenance Expenses due from
Tenant for the preceding calendar year, (ii) the amount of Common Area
Expenses paid by Tenant during such calendar year, and (iii) the amount, if
any, either overpaid or remaining due from Tenant to Landlord. Within ten
(10) days after receipt of such statement, Tenant shall remit to Landlord the
amount said statement shows to be due from Tenant or, if Tenant has overpaid,
Landlord shall credit the amount overpaid to Tenant's pro rata portion of
Common Area Maintenance Expenses next due. If Tenant is not in default and
this Lease terminated at the end of such prior year, Landlord shall refund
such overpayment to Tenant.
(4) For the calendar years in which this Lease commences and
terminates, Tenant's liability for its pro rata portion of the Common Area
Maintenance Expenses for such partial calendar years shall be subject to pro
rata adjustment based upon the number of days of the term elapsing during
such partial year. Where the applicable expenses are not available prior to
the end of the term hereof, then the aforesaid adjustment shall be made
between Landlord and Tenant after Landlord shall have received all of the
expenses for such period, it being specifically agreed that Landlord's and
Tenant's obligations under this Paragraph shall survive the expiration of the
term of this Lease.
(5) The failure of Landlord to exercise its rights hereunder to
estimate expenses and require payment of same as additional Rent shall not
constitute a waiver of such rights which rights may be exercised from time to
time at Landlord's discretion.
(c) In any event, Tenant shall be responsible for insuring and paying
all taxes upon Tenant's furniture, machinery, goods, supplies, fixtures,
Alterations (below defined) or other improvements, and other property on the
Project.
7. TENANT REPAIRS AND MAINTENANCE:
(a) Tenant shall maintain all parts of the Leased Premises and their
appurtenances (except those for which Landlord is expressly responsible under
this Lease) in good, clean and sanitary condition, at its own expense.
Tenant shall promptly make all necessary repairs and replacements to the
Leased Premises, including but not limited to electric light lamps or tubes,
windows, glass and plate glass, interior and exterior doors, any special
office entry, interior walls and finish work,
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floors and floor coverings, downspouts, gutters, heating and air conditioning
systems, dock boards, truck doors, dock bumpers, and plumbing work and
fixtures. Replacement and repair parts, materials and equipment shall be of
quality equivalent to those initially installed within the Leased Premises,
and repair and maintenance work shall be done in a good and workmanlike
manner and in accordance with existing laws, rules, regulations and
ordinances.
(b) Tenant shall not damage or disturb the integrity, structural
integrity, or support of any wall, roof, or foundation of the Building. Any
damage to these areas caused by Tenant or Tenant's Representatives (defined
in Paragraph 7(g)) shall be promptly repaired by Tenant at its sole cost and
expense.
(c) Landlord shall have the right to coordinate any repairs,
maintenance and replacement of any rail tracks serving or to serve the
Project, and if Tenant uses such rail tracks, Tenant shall reimburse Landlord
from time to time upon demand for a share of the cost of such repairs,
maintenance and replacement and any other sums specified in any agreement to
which Landlord is a party respecting such tracks. Tenant's share of such
costs shall be additional Rent and shall reflect a proration based on the
ratio that Tenant's use, in number of cars, bears to the total rail use, in
number of cars, by all rail users in the Project.
(d) Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance service contract with a maintenance
contractor for servicing all heating, ventilation and air conditioning
systems and equipment within, and any other equipment or machinery installed
by Landlord in, or to serve, the Leased Premises. The maintenance contractor
and the contract are subject to Landlord approval which shall not be
unreasonably withheld. The service contract must include all services
suggested by the equipment manufacturer within the operation/maintenance
manual and must become effective (and a copy delivered to Landlord) within
thirty (30) days of the date Tenant takes possession of the Leased Premises.
If Tenant fails to enter into such service contract as required, Landlord
shall have the right to do so on Tenant's behalf, and Tenant agrees to pay
Landlord the cost and expense of same upon demand, and such amount shall be
considered additional Rent.
(e) Tenant shall at its own expense keep the Leased Premises pest-free
and pay all charges for pest control and extermination within the Leased
Premises.
(f) At the termination of this Lease, Tenant shall deliver the Leased
Premises "broom clean" to Landlord in the same good order, configuration, and
condition as existed at the Commencement Date of this Lease, ordinary wear,
natural deterioration beyond the control of Tenant, and damage by fire,
tornado or other casualty excepted. Tenant shall give written notice to
Landlord at least thirty (30) days prior to vacating the Leased Premises and
shall arrange to meet with Landlord for a joint inspection of the Leased
Premises prior to vacating. In the event of Tenant's failure to give such
notice or arrange such joint inspection, Landlord's inspection at or after
Tenant's vacating the Leased Premises shall be conclusively deemed correct
for purposes of determining Tenant's responsibility for repairs and
restoration.
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(g) Not in limitation on the foregoing, it is expressly understood that
Tenant shall repair and pay for all damage caused by the negligence of Tenant,
Tenant's employees, officers, directors, partners, agents, invitees, licensees,
contractors, representatives, or others for whom Tenant is legally responsible
(all such persons and entities being herein collectively referred to as
"Tenant's Representatives") or caused by Tenant's default hereunder.
(h) If Landlord shall give Tenant written notice of defects or need for
repairs for which Tenant is responsible under this Lease, and if Tenant shall
fail to make or fails to commence to make repairs within 30 days of Landlord's
notification or such shorter time as is reasonable if expedited repair is
needed to avoid injury or damage, Landlord shall have the option to cure said
defect or repair, and Tenant shall pay to Landlord all costs and expenses
incurred on demand.
8. LANDLORD'S REPAIRS:
(a) Landlord shall be responsible, at its expense, for, but only for, the
structural integrity of the roof, foundation and exterior walls of the
Building. In further limitation on Landlord's responsibilities hereunder, (i)
the foregoing does not include maintenance and repair that are a result of
deterioration due to wear and tear or the passing of time; (ii) any repair to
the roof, foundation or exterior walls occasioned by the act of omission of
Tenant or Tenant's Representatives shall be the responsibility of Tenant; (iii)
the term "walls" as used in this Paragraph 8 shall not include windows, glass
or plate glass, interior doors, special store fronts, office entries or
exterior doors; and (iv) Landlord's liability with respect to any defects,
repairs or maintenance for which Landlord is responsible at its expense under
this Lease shall be limited to the cost of such repairs or maintenance or the
curing of such defect. Tenant shall promptly give Landlord written notice of
defects or need for repairs, after which Landlord shall have 30 days to
commence to repair or cure such defect.
(b) Landlord shall perform the work which gives rise to Common Area
Maintenance Expenses, subject to payment therefor by Tenant pursuant to the
provisions of Paragraph 6(b) above. If the need for any such work shall come
to the attention of Tenant, Tenant will promptly so notify Landlord in writing.
9. UTILITY SERVICE: Tenant shall pay the cost of all utility services
including, but not limited to, initial connection charges and deposits and all
charges for gas, water, trash disposal, sewer, telephone or other
telecommunications, and electricity used on the Leased Premises. Tenant shall
pay all costs caused by Tenant introducing excessive pollutants into the
sanitary or storm sewer system, including permits, fees, assessments, and
charges levied by any governmental subdivision for any pollutants or solids
other than ordinary human waste.
10. SIGNS: No sign, door plaques, advertisement, or notice shall be
displayed, painted or affixed by Tenant on any part of the Project, Building,
parking facilities, or Leased Premises without prior written consent of
Landlord. The color, size, character, style, material, placement and location
and method of attachment to the Building shall be subject to Landlord's
approval, and to any applicable governmental laws, ordinances, regulations,
project specifications, and other requirements.
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Landlord's notice of approval or disapproval shall be delivered to Tenant
within ten (10) days of Tenant's written request for same. Signs, if
approved by Landlord, shall be placed by a contractor approved by Landlord
and paid for by Tenant. Tenant shall remove all such signs at the
termination of this Lease. Such installations and removals shall be made in
such manner as to avoid injury or defacement of the Project and other
improvements, and Tenant, at its sole expense, shall repair any injury or
defacement, including, without limitation, any discoloration caused by such
installation and/or removal. Landlord may erect a sign or signs on the
Leased Premises indicating that the Leased Premises are for lease during the
six (6) month period prior to the expiration of this Lease.
11. USAGE: Tenant warrants and represents to Landlord that the Leased
Premises shall be used and occupied only for the purpose of: General office,
manufacturing and distribution of custom golf clubs and related activities.
Any change in the stated usage purposes shall be subject to the prior written
approval of Landlord. Tenant shall occupy the Leased Premises, conduct its
business, and control Tenant's Representatives in a lawful and reputable way
and as not to create any nuisance. Tenant shall not commit, or allow to be
committed, any waste on the Leased Premises or the Project. Tenant may not use
the Leased Premises for the use, storage, or distribution of hazardous or
environmentally offensive substances, for underground storage, or for any
unlawful purposes.
12. INSURANCE:
(a) Tenant shall not permit the Leased Premises to be used in any way
which would be hazardous or which would in any way increase the cost of or
render void any insurance on the improvements, and Tenant shall immediately, on
demand, cease any use which violates the foregoing or to which Landlord's
insurer or any governmental or regulatory authority objects. If at any time
during the term of this Lease Tenant's use or vacancy shall cause an increase
in premiums, and in particular, but without limitation, if the State Board of
Insurance or other insurance authority disallows any of Landlord's sprinkler
credits or imposes an additional penalty or surcharge in Landlord's insurance
premiums because of Tenant's original or subsequent placement or use of storage
racks or bins or method of storage or because of the nature of Tenant's
inventory or any other act of Tenant, Tenant agrees to pay as additional Rent
the increase in Landlord's insurance premiums.
(b) Tenant, at its sole cost and expense, shall procure and maintain
throughout the term of this Lease a policy or policies of insurance insuring
Landlord, Landlord's management company and lender, and Tenant against all
claims for property damages, personal injury or death of others occurring on or
in connection with: (i) the Leased Premises; (ii) the condition of the Leased
Premises; (iii) Tenant's operations in and maintenance and use of the Leased
Premises; (iv) Tenant's and Tenant's Representatives' use of the common areas
of the Project, and (v) Tenant's liability assumed under this Lease. The
limits of such policy or policies shall be not less than $ 2,000,000.00
combined single limit coverage per occurrence for injury to persons (including
death) and/or property damage or destruction, including loss of use.
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(c) All such policies shall be procured by Tenant from insurance
companies satisfactory to Landlord naming the following as co-insureds: (i)
Landlord; (ii) Landlord's management company, XXXXXXX-XXXX COMPANY; and, (iii)
Landlord's mortgage holder, if any. Certified copies of such policies together
with receipt for payment of premiums, shall be delivered to Landlord prior to
the Commencement Date of this Lease. Not less than fifteen (15) days prior to
the expiration date of any such policies, certified copies of renewal policies
and evidence of the payment of renewal premiums shall be delivered to Landlord.
All such original and renewal policies shall provide for at least thirty (30)
days written notice to Landlord before such policy may be canceled or changed
to reduce insurance coverage provided thereby. Upon request of Landlord,
Tenant further agrees to complete and return to Landlord an insurance
questionnaire (such form to be provided by Landlord) regarding Tenant's
insurance coverage and intended use of the Leased Premises. Tenant warrants
and represents that all information contained in such questionnaire shall be
true and correct as of the date thereof and shall be updated by Tenant from
time to time upon Landlord's request.
13. (INTENTIONALLY DELETED)
14. COMPLIANCE WITH LAWS, RULES AND REGULATIONS: Tenant shall comply with all
applicable laws, ordinances, orders, rules and regulations of state, federal,
municipal, or other agencies or bodies relating to the use, condition and
occupancy of and business conducted on the Leased Premises, including without
limitation, the Americans with Disabilities Act, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response Act, and the rules,
regulations and directives of the U.S. Environmental Protection Agency.
15. ASSIGNMENT AND SUBLETTING: The Tenant agrees not to assign, transfer, or
mortgage this Lease or any right or interest therein or sublet the Leased
Premises or any part thereof, without the prior written consent of Landlord,
such consent not to be unreasonably withheld. No assignment or subletting
shall relieve Tenant of its obligations hereunder, and Tenant shall continue to
be liable as a principal (and not as a guarantor or surety) to the same extent
as though no assignment or subletting had been made. Consent by Landlord to
any one assignment or subletting shall not be construed to be consent to any
additional assignment or subletting. Each such successive act shall require
similar consent of Landlord. Landlord shall be reimbursed by Tenant for any
costs or expenses incurred as a result of Tenant's request for consent to any
such assignment or subletting, including legal costs. In the event Tenant
subleases the Leased Premises, or any portion thereof, or assigns this Lease
with the consent of the Landlord at an annual Base Rental exceeding that stated
herein, such excess shall be paid by Tenant to Landlord as additional Rent
hereunder within ten (10) days after receipt by Tenant. Upon the occurrence of
an "event of default" as defined below, if all or any part of the Leased
Premises is then assigned or sublet, Landlord may, in addition to any other
remedies provided by this Lease or provided by law, collect directly from the
assignee or subtenant all rents due to Tenant. Landlord shall have a security
interest in all property on the Leased Premises to secure payment of such sums.
Any collection directly by Landlord from the assignee or subtenant shall not be
construed, however, to constitute a novation or a release of Tenant from the
further performance of its obligations under this Lease. Notwithstanding the
foregoing, it is expressly agreed that if this Lease is assigned to any person
or
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entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. Sec. 101
et seq, as amended (the "Bankruptcy Code"), any and all monies or other
considerations payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Lessor, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant or
of the estate of Tenant within the meaning of the Bankruptcy Code. Any and all
monies or other considerations constituting Landlord's property under the
preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and be promptly paid or delivered to Landlord. 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 arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to
Landlord an instrument confirming such assumption.
*Should Tenant be acquired by a Corporation whose net worth is greater than
Tenant's, and whose use of the space is the same as Tenant's, then Landlord
will automatically approve an assignment of Tenant's interest in the Lease.
16. ALTERATIONS AND IMPROVEMENTS:
(a) Tenant shall not make or perform, or permit the making or performance
of, any initial or subsequent tenant finish work or any alterations,
installations, decorations, improvements, additions or other physical changes
in or about the Leased Premises (referred to collectively as "Alterations")
without Landlord's prior consent. Landlord shall be under no obligation to
allow Alterations of any kind and may withhold its consent without cause.
Notwithstanding the foregoing provisions or Landlord's consent to any
Alterations, all Alterations shall be made and performed in conformity with and
subject to the following provisions: All Alterations shall be made and
performed at Tenant's sole cost and expense in a good and workmanlike manner.
Alterations shall be made only by contractors or mechanics approved by
Landlord, such approval not to be unreasonably withheld. Tenant shall submit
to Landlord detailed plans and specifications (including architectural layout,
mechanical and structural drawings) for each proposed Alteration and shall not
commence any such Alteration without first obtaining Landlord's written
approval of such plans and specifications. Prior to the commencement of each
proposed Alteration, Tenant shall furnish to Landlord a certificate evidencing
worker's compensation insurance coverage for all persons to be employed in
connection with such Alterations, including those to be employed by all
contractors and subcontractors, and of comprehensive public liability insurance
(including property damage coverage) in which Landlord, its agents, and any
lessor under any ground or underlying lease, and any mortgagee of the Building
shall be named as parties insured, which policies shall be issued by companies
and shall be in form and amounts satisfactory to Landlord and shall be
maintained by Tenant until the completion of such Alteration. Tenant shall
cause its contractor and each subcontractor to provide Landlord with a
Certificate of Completion of the Alterations and a Bills Paid Affidavit and
full Lien Waiver. Tenant shall, if required by Landlord at the time of
Landlord's consent to the Alterations, agree to restore the Leased Premises at
the termination of this Lease to their condition prior to making such
Alterations. All permits, approvals and certificates required by all
governmental authorities shall be timely obtained by Tenant and submitted to
Landlord. Notwithstanding Landlord's approval of plans and specifications for
any Alterations, all Alterations shall be made and performed in full compliance
with all applicable laws, orders, rules,
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standards and regulations of Federal, State, County, and Municipal
authorities, including, without limitation, all directions, pursuant to law,
of all public officers, and with all applicable rules, orders, regulations
and requirements of the local Board of Fire Underwriters or any similar body
("Applicable Laws"). Landlord's approval shall not in any way be considered
an indication that the plans and specifications comply with Applicable Laws.
All materials and equipment to be incorporated in the Leased Premises as a
result of all Alterations shall be new and first quality. No such materials
or equipment shall be subject to any lien, encumbrance, chattel mortgage or
title retention or security agreement. Whether such Alterations are being
performed by Tenant in connection with Tenant's initial occupancy of the
Leased Premises or subsequently, Tenant agrees to make proper application
for, and obtain, a Building Permit and a Certificate of Occupancy from the
city in which the Leased Premises are located. Tenant shall furnish copies
of such permit and certificate to Landlord promptly after issuance of same.
(b) All appurtenances, fixtures, improvements, and other property
attached to or installed in the Leased Premises, whether by Landlord or Tenant
or others, and whether at Landlord's expense or Tenant's expense, or the joint
expense of Landlord and Tenant, shall be and remain the property of Landlord,
except that any such fixtures, improvements, additions, and other property
which have been installed at the sole expense of Tenant and which are removable
without material damage to the Leased Premises shall be and remain the property
of Tenant. If no event of default has occurred, Tenant may, and if Landlord so
elects Tenant shall, remove any property belonging to Tenant at the end of the
term hereof, and Tenant shall repair or, at Landlord's option, shall pay to
Landlord the cost of repairing any damage arising from such removal. Any
replacements of any property of Landlord, whether made at Tenant's expense or
otherwise, shall be and remain the property of Landlord.
17. CONDEMNATION:
(a) If, during the term (or extension or renewal) of this Lease, all or a
substantial part of the Leased Premises are taken for any public or quasi-
public use under any governmental law, ordinance or regulation, or by right of
eminent domain or by private purchase in lieu thereof, and the taking would
prevent or materially interfere with the then current use of the Leased
Premises, this Lease shall terminate and the Rent shall be prorated during the
unexpired portion of this Lease effective on the date physical possession is
taken by the condemning authority.
(b) If a portion of the Leased Premises is taken and this Lease is not
terminated as provided in Paragraph 17(a) above, if condemnation proceeds are
sufficient and if restoration is feasible, Landlord may, at its option restore
the Project (other than Alterations) in order to make it reasonably tenantable
and suitable for Tenant's approved use. During such restoration, Rent shall be
reduced by the amount of business or rent interruption insurance proceeds
actually received by Landlord, or Rent shall be paid based on the portion of
the Leased Premises Tenant can occupy. Upon completion of such restoration,
the Rent payable under this Lease during the unexpired portion of the term
shall be adjusted to such an extent as may be fair and reasonable under the
circumstances.
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(c) In the event of such taking or private purchase in lieu thereof,
Tenant may seek a separate award for any loss of improvements made or paid for
by Tenant, its personal property, and its moving expenses (so long as no such
claim diminishes Landlord's claim or award), but all other claims of any nature
shall belong to Landlord. In the event Tenant does not receive such a separate
award, Landlord shall be entitled to receive any and all sums awarded for the
taking.
(d) Notwithstanding anything herein to the contrary, if the holder of any
indebtedness secured by a mortgage or deed of trust covering the Building
and/or Project requires that the condemnation 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 imposed. All rights and obligations under this Lease
shall then cease. If Landlord does not receive condemnation proceeds sufficient
for restoration (such as when its mortgagee does not allow the proceeds to be
used for such purposes) and if restoration is economically reasonably feasible,
Tenant will have the option of supplementing available proceeds to allow
restoration, and Tenant's actual costs will be reimbursed through a monthly
prorata credit against rent beginning after Landlord's mortgage has been paid
in full.
18. FIRE AND CASUALTY:
(a) If the Building should be damaged or destroyed by fire, tornado, or
other casualty, Tenant shall give immediate verbal and written notice thereof
to Landlord.
(b) If the Building should be totally destroyed by fire, tornado, or
other casualty, or if it should be so damaged thereby that rebuilding or
repairs cannot reasonably be completed within one hundred eighty (180) days
after the date on which Landlord is notified by Tenant of such damage, at the
option of either Landlord or Tenant, this Lease shall terminate, and the Rent
shall be abated during the unexpired portion of this Lease effective upon the
date of occurrence of such damage.
(c) If the Building should be damaged by any peril that will be wholly
compensated (subject to deductibles) by the insurance maintained by Landlord or
if Landlord, in its sole discretion, so chooses notwithstanding a deficiency in
such proceeds, and if rebuilding or repairs can reasonably be completed within
one hundred eighty (180) days after the date on which Landlord is notified by
Tenant of such damage, this Lease shall not terminate, and Landlord shall then
proceed with reasonable diligence to rebuild and repair the Building to
substantially the same condition in which it existed prior to such damage.
Landlord shall not be required, however, to rebuild, repair, or replace
Tenant's furniture, fixtures, Alterations, inventory or other personal
property. If the Leased Premises are untenantable in whole or in part during
restoration, the Rent payable hereunder during the period in which they are
untenantable shall be reduced by the amount of business or rent interruption
insurance proceeds actually received by Landlord. If Landlord should fail to
complete such repairs and rebuilding within one hundred eighty (180) days after
the date on which Landlord is notified by Tenant of such damage, Tenant may
terminate this Lease by delivering written notice of termination to Landlord.
Such termination shall be Tenant's exclusive remedy and all rights and
obligations of the parties under the Lease shall then cease. Notwithstanding
the foregoing provisions of this Paragraph 18(c), Tenant agrees that if the
Leased
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Premises, the Building and/or Project are damaged by fire or other casualty
caused by the fault or negligence of Tenant or Tenant's Representatives,
Tenant shall have no option to terminate this Lease even if the damage cannot
be repaired within one hundred eighty (180) days, and the Rent shall not be
abated or reduced before or during the repair period.
(d) Notwithstanding anything herein to the contrary, if the holder of any
indebtedness secured by a mortgage or deed of trust covering the Building
and/or Project 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 imposed. All rights and obligations under this Lease
shall then cease. If Landlord does not receive insurance proceeds sufficient
for restoration (such as when its mortgagee does not allow the proceeds to be
used for such purposes) and if restoration is economically reasonably feasible,
Tenant will have the option of supplementing available proceeds to allow
restoration, and Tenant's actual costs will be reimbursed through a monthly
prorata credit against rent beginning after Landlord's mortgage has been paid
in full.
19. CASUALTY INSURANCE: Landlord shall at all times during the term of this
Lease maintain a policy or policies of business or rental interruption
insurance and a policy or policies of insurance insuring the Building against
eighty percent (80%) of full replacement cost for loss or damage by fire,
explosion, and other customary hazards. Such policies will not insure any
personal property (including, but not limited to any furniture, machinery,
goods, or supplies) of Tenant or which Tenant may have in the Leased Premises
or any fixtures installed by or paid for by Tenant upon or within the Leased
Premises or any Alterations or other improvements which Tenant may construct or
install on the Leased Premises or any signs identifying Tenant's business
located on the exterior of the Building, insurance for all of which shall be
Tenant's responsibility.
20. WAIVER OF SUBROGATION: To the extent that Landlord or Tenant receives
casualty insurance proceeds, such recipient hereby waives and releases any and
all rights, claims, demands and causes of action such recipient may have
against the other on account of any loss or damage occasioned to such recipient
or its businesses, real and personal properties, the Leased Premises, the
Building, the Project, or its contents, arising from any risk or peril covered
by any insurance policy carried by either party and for which such proceeds are
actually received. Inasmuch as the above mutual waivers will preclude the
assignment of any such claim by way of subrogation (or otherwise) to an
insurance company (or any other person), each party hereto agrees immediately
to give to its respective insurance companies written notice of the terms of
such mutual waivers and to have their respective insurance policies properly
endorsed, if necessary, to prevent the invalidation of such insurance coverages
by reason of such waivers. This provision shall be cumulative of Paragraph 21
below.
21. HOLD HARMLESS: Landlord shall not be liable to Tenant, Tenant's
Representatives, or any other person for any injury to person or damage to
property on or about the Leased Premises or the Project caused by the
negligence or misconduct of Tenant, or Tenant's Representatives, entering upon
the Leased Premises or the Project. Tenant agrees to indemnify and hold
Landlord harmless from any and all loss, attorney's fees, expenses, or claims
arising out of any such damage, loss or
COMMERCIAL LEASE AGREEMENT - PAGE 17
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injury. Tenant shall not be liable to Landlord, Landlord's employees,
agents, invitees, licensees or visitors for any injury to person or damage to
property on or about the Leased Premises or the Project caused by the
negligence or misconduct of Landlord, its agents, employees, agents,
invitees, licensees or visitors. Landlord agrees to indemnify and hold
Tenant harmless from any and all loss, attorney's fees, expenses, or claims
arising out of any such damage, loss or injury.
22. QUIET ENJOYMENT: Landlord warrants that it has full right to execute and
to perform this Lease and to grant the estate demised herein and that Tenant,
upon payment of the required Rent and performance of the covenants and
agreements contained in this Lease, shall peaceably and quietly have, hold, and
enjoy the Leased Premises during the full term of this Lease, including any
extensions or renewals thereof.
23. LANDLORD'S RIGHT OF ENTRY: Landlord shall have the right to enter the
Leased Premises for the following reasons: inspection, cleaning or making
repairs, making such alterations or additions as Landlord may deem necessary or
desirable; installation of utility lines servicing the Leased Premises or any
other space in the Building; determining Tenant's use of the Leased Premises,
or for determining if any event of default under this Lease has occurred.
Landlord shall attempt to give twenty-four (24) hours verbal notice to Tenant
prior to such entry during business hours, except in cases of emergency or when
an event of default has occurred in which cases Landlord may enter the Leased
Premises at any time and without prior notice. During the period that is six
(6) months prior to the end of the Lease term, Landlord and Landlord's agents
and representatives shall have the right to enter the Leased Premises at any
reasonable time during business hours, without notice, for the purpose of
showing the Leased Premises and shall have the right to erect on the Leased
Premises a suitable sign indicating the Leased Premises are available for
lease.
24. ASSIGNMENT OF LANDLORD'S INTEREST IN LEASE: Landlord shall have the right
to transfer and assign, in whole or in part, its rights and obligations with
respect to the Project, the Leased Premises, and this Lease, including Tenant's
Security Deposit. Upon and after such transfer, Landlord shall be released
from any further obligation under this Lease and Tenant agrees to look solely
to Landlord's successor for the performance of such obligations.
25. LANDLORD'S LIEN: In addition to any statutory lien for Rent in Landlord's
favor, Landlord shall have, and Tenant hereby grants to Landlord, a continuing
security interest for all Rent and other sums of money becoming due under this
Lease from Tenant upon all goods, wares, equipment, fixtures, furniture,
inventory, accounts, contract rights, and other personal property of Tenant
situated on or arising from the Leased Premises. Such property shall not be
removed without the consent of Landlord which consent may be withheld by
Landlord until all of Tenant's duties and obligations have been performed in
full. In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies provided in this Lease or by law, all rights and
remedies under the Texas Uniform Commercial Code, including without limitation
the right to sell the property described in this Paragraph at public or private
sale upon five (5) days notice to Tenant. Tenant hereby agrees to execute such
financing statements and other instruments necessary or desirable in Landlord's
discretion to perfect the security interest hereby created.
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*Upon written request, Landlord will subordinate its lien created herein to any
lender of Tenant.
26. DEFAULT BY TENANT: The following shall be events of default by Tenant
under this Lease:
(a) Tenant's failure to pay any installment of Rent or other payment
required pursuant to this Lease and the failure is not cured within ten (10)
days after it is due and after written notice to Tenant;
(b) Tenant's abandonment or vacation of any part of the Leased Premises,
whether or not Tenant is in default of the Rent payments due under this Lease;
(c) Tenant's failure to comply with any term, provision or covenant of
this Lease, other than the defaults listed in the other subparagraphs of this
Paragraph 26, and the failure is not cured within ten (10) days after written
notice thereof to Tenant;
(d) Tenant's filing of a petition or adjudication as a debtor or bankrupt
insolvent under the Bankruptcy Code or any similar law or statute of the United
States or any state; or appointment of a receiver or trustee for all or
substantially all of the assets of Tenant; or Tenant's transfer in fraud of
creditors or assignment for the benefit of creditors of all or substantially
all of Tenant's assets;
(e) Tenant doing or permitting to be done any act which results in a lien
being filed against the Leased Premises and the same is not removed within
sixty (60) days after Landlord's notice thereof to Tenant.
27. REMEDIES FOR TENANT'S DEFAULT: Upon the occurrence of any event of
default, Landlord shall have the option to pursue any one or more of the
following remedies without any prior notice or demand:
(a) Landlord may terminate this Lease, in which event Tenant shall
immediately surrender the Leased Premises to Landlord, and if Tenant fails to
do so, Landlord may, without prejudice to any other remedy which it may have,
enter upon and take possession of the Leased Premises, and expel or remove
Tenant and any other person who may be occupying all or any part of the Leased
Premises. Landlord shall not be liable for prosecution or any claim for
damages as a result of such actions. Tenant agrees to pay on demand the amount
of all losses, costs, expenses, deficiencies, and damages, including, without
limitation, reasonable reconfiguration expenses, rental concessions and other
inducements to new tenants, advertising expenses and broker's commissions,
which Landlord may incur or suffer by reason of Tenant's default or the
termination of this Lease under this subparagraph, whether through inability to
rent the Leased Premises on satisfactory terms or otherwise. Tenant
acknowledges that its obligation to pay Base Rent and all additional Rent
hereunder is not only compensation for use of the Leased Premises but also
compensation for sums already expended and/or being expended by Landlord with
respect to its obligations hereunder and with respect to the Leased Premises,
and Tenant acknowledges that Tenant's default in timely payment of all sums due
hereunder shall constitute significant financial loss to Landlord. Tenant
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further acknowledges that any failure to pay any sum due hereunder shall
evidence Tenant's inability to meet its debts as they become due. In such
event, in addition to Landlord's other remedies hereunder, Landlord shall be
entitled to accelerate all Base Rental remaining unpaid hereunder, the entirety
of which shall at the option of Landlord be immediately due and payable to the
extent allowed by law.
(b) Without termination of this Lease, Landlord may enter upon and take
possession of the Leased Premises and expel or remove Tenant and any other
person who may be occupying all or any part of the Leased Premises (without
being liable for prosecution or any claim for damages therefor) and relet the
Leased Premises on behalf of Tenant and receive directly the rent from the
reletting. Tenant agrees to pay Landlord on demand any deficiency that may
arise by reason of any reletting of the Leased Premises and to reimburse
Landlord on demand for any losses, costs, and expenses, including without
limitation, reconfiguration expenses*, rental concessions and other inducements
to new tenants, advertising costs or broker's commissions, which Landlord may
incur or suffer as a result of Tenant's default or in reletting the Leased
Premises.
*Reconfiguration expenses shall not exceed the unpaid amortized portion of
Tenant's original tenant improvement costs.
(c) Without terminating this Lease, Landlord may enter upon the Leased
Premises (without being liable for prosecution or any claim for damages
therefor) and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to reimburse Landlord on demand for any losses, costs and
expenses which Landlord may incur in effecting compliance with Tenant's
obligations under this Lease. Tenant further agrees that Landlord shall not be
liable for any damages resulting to Tenant from effecting compliance with
Tenant's obligations under this subparagraph.
(d) With respect to Landlord's entry upon the Leased Premises under the
provisions of subparagraphs (a), (b), and (c) above, no restriction of, or
obligation imposed upon Landlord by, Texas Property Code Section 93.002 shall
apply, such Section being superseded hereby. In particular, but without
limitation, Landlord will have no duty or responsibility to Tenant to tender a
key in the event of a change of locks, and Tenant will have no further right of
possession except as otherwise expressly agreed by Landlord in writing. If
Landlord changes the locks, Tenant shall be allowed to retrieve its business
records from the Leased Premises.
(e) Landlord may pursue any remedy provided at law or in equity.
(f) Landlord shall have no duty to relet the Premises, and the failure of
Landlord to do so shall not release or affect Tenant's liability for Rent and
other charges due hereunder or for damages.
(g) No re-entry or reletting of the Premises or any filing or service of
an unlawful detainer action or similar action shall be construed as an election
by Landlord to terminate this Lease unless a written notice of such intention
is given by Landlord to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
and Tenant's right to possession hereunder.
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(h) To the extent allowed by law, Tenant hereby waives the protections
and rights provided by Texas Property Code Section 93.002.
28. TERMINATION OF OPTIONS: If there exist any options or special rights
which Landlord may have granted Tenant under this Lease including, but not
limited to, options or rights regarding extensions of the term, expansion of
the Leased Premises, or acquisition of any other interest in the Leased
Premises, the Building, or the Project, then all such options and rights are
independent of the leasehold estate hereby granted to Tenant by Landlord.
Landlord and Tenant agree and acknowledge that the negotiated consideration for
any such options or special rights is Tenant's entry into this Lease and that
no portion of any sums due and payable by Tenant to Landlord hereunder is
attributable thereto. In addition to, and not in lieu of, the above remedies
of Landlord for Tenant's default, any and all such options or special rights
shall be automatically terminated upon the occurrence of the following events:
(a) Tenant shall have failed to pay when due any installment of Rent or
other sums payable under this Lease for any three (3) consecutive months during
the Lease term or any renewal or extension thereof, or for any ten (10) months
during the Lease term or any renewal or extension thereof, whether or not said
defaults are cured by Tenant; or
(b) Tenant shall have received two (2) or more notices of default under
Paragraph 26(c) within any one calendar year with respect to any other covenant
of this Lease, whether or not such default(s) is/are cured; or
(c) Tenant shall have committed or suffered to exist any other event of
default described under Paragraph 26 above, whether or not such default is
cured by Tenant.
29. WAIVER OF DEFAULT OR REMEDY: Failure of Landlord to declare a default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not be a waiver of the default. Landlord shall
have the right to declare the default at any time and take such action as its
lawful or authorized under this Lease. Pursuit of any one or more of the
remedies set forth in Paragraphs 27 or 28 above shall not preclude pursuit of
any one or more of the other remedies provided therein or elsewhere in this
Lease or as provided by law, nor shall pursuit of any remedy be a forfeiture or
waiver of any Rent or damages accruing to Landlord by reason of the violation
of any of the terms of this Lease. Failure by Landlord to enforce one or more
of its remedies upon an event of default shall not be construed as a waiver of
the default or of any other violation or breach of any of the terms contained
in this Lease.
30. CHOICE OF LAW; VENUE; ATTORNEY'S FEES: It is specifically stipulated that
this Lease shall be interpreted and construed according to the laws of the
State in which the Leased Premises are located, and any suit brought on this
Lease shall be maintained in the county in which the Leased Premises are
located. Further, the prevailing party in any such litigation between the
parties shall be entitled to recover, as a part of its judgment, reasonable
attorney's fees and costs and expenses incurred therein.
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31. HOLDING OVER: Tenant will, at the termination of this Lease by lapse of
time or otherwise, surrender immediate possession to Landlord. If Landlord
agrees in writing that Tenant may hold over after the expiration or termination
of this Lease and if the parties do not otherwise agree, the hold over tenancy
shall be subject to termination by Landlord at any time upon not less than
thirty (30) days advance written notice, or by Tenant at any time upon not less
than thirty (30) days advance written notice. Further, all of the terms and
provisions of this Lease shall be applicable during the hold over period,
except that Tenant shall pay Landlord from time to time upon demand, as Base
Rent for the period of any hold over, an amount equal to one and one-half times
(1-1/2) the Base Rent in effect on the date of termination, computed on a daily
basis for each day of the hold over period, plus all additional Rent and other
sums due hereunder. If Tenant shall fail immediately to surrender possession
of the Leased Premises to Landlord upon termination of this Lease, by lapse of
time or otherwise, and Landlord has not agreed to such continued possession, as
above provided, then, until Landlord can dispossess Tenant under the terms
hereof or otherwise, Tenant shall pay Landlord from time to time upon demand,
as Base Rent for the period of any such hold over, an amount equal to twice the
Base Rent in effect on the date of termination, computed on a daily basis for
each day of the hold over period, plus all additional Rent and other sums due
hereunder. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
agreed by the parties. The preceding provisions of this Paragraph shall not be
construed as Landlord's consent for Tenant to hold over.
32. RIGHTS OF MORTGAGEE: Tenant accepts this Lease subject and subordinate to
any recorded mortgage, deed of trust or other lien (a "Mortgage") presently
existing or hereafter to exist with respect to the Leased Premises. Further,
but without limiting the preceding sentence, Landlord is hereby irrevocably
vested with full power and authority to subordinate and/or to evidence such
subordination of Tenant's interest under this Lease to any Mortgage hereafter
placed on the Leased Premises, and Tenant agrees upon demand to execute such
additional instruments subordinating this Lease, and further defining the terms
of such subordination, as well as the attornment discussed below, as Landlord
or the holder of any such Mortgage, may require. Tenant agrees to provide to
the holder of any such Mortgage, whose name and address have been provided to
Tenant (a "Mortgagee"), a copy of each notice to Landlord which alleges any
act, omission, or condition that might constitute a default by Landlord
hereunder and Mortgagee, in its sole discretion, shall have all rights of
Landlord hereunder to cure any such default. If the interests of Landlord
under this Lease shall be transferred by reason of foreclosure or other
proceedings for enforcement of any Mortgage on the Leased Premises, at the
election of the transferee (sometimes called the "Purchaser") Tenant shall be
bound to the Purchaser under the terms and conditions of this Lease for the
balance of the remaining Lease term, including any extensions or renewals, with
the same force and effect as if the Purchaser were Landlord under this Lease;
provided, however, that such Purchaser shall not be liable or bound to Tenant
(i) for any act or omission of any prior landlord, (ii) for any offsets or
defenses which Tenant might have against any prior landlord, (iii) for or by
any Rent which Tenant might have paid for more than the current month, (iv) by
any amendment or modification of, or consensual termination agreement with
respect to, the Lease made without the Mortgagee's consent, (v) for any
Security Deposit given by Tenant to a prior landlord unless such
COMMERCIAL LEASE AGREEMENT - PAGE 22
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deposit is actually received by such Purchaser, (vi) for any repairs or
replacements required by this Lease arising prior to the date Purchaser takes
possession of the Leased Premises, or (vii) for any moving, relocation or
refurbishment allowance or any construction of or payment or allowance for
tenant improvements to the Leased Premises or any part thereof for the
benefit of Tenant except as set forth in this Lease. Tenant further agrees
at the election of the Purchaser to attorn to the Purchaser, including the
Mortgagee if it be the Purchaser, as its Landlord. Such attornment shall be
effective without the execution of any further instruments upon the
Purchaser's succeeding to the interest of Landlord under this Lease. The
respective rights and obligations of Tenant and the Purchaser upon the
attornment, to the extent of the then remaining balance of the term of this
Lease and any extensions and renewals, shall be and are the same as those set
forth in this Lease, but Tenant agrees upon demand to execute such additional
instruments defining the terms of such attornment as Landlord or the
Purchaser may require. Each such Mortgagee and each such Purchaser shall be
a third-party beneficiary of the provisions of this Paragraph.
*Upon written request by Tenant and provided Tenant is not in default of any
terms, conditions, or provisions of the Lease, Landlord agrees to use best
efforts to obtain a non-disturbance agreement from any lender or purchaser.
33. ESTOPPEL CERTIFICATES: Tenant agrees to furnish on the Commencement Date
of this Lease and from time to time within ten (10) days of request by Landlord
or Landlord's mortgagee, a statement certifying that the Tenant is in
possession of the Leased Premises; the Leased Premises are acceptable; this
Lease is in full force and effect; this Lease is unmodified; Tenant claims no
present charge, lien, or claim of offset against Rent; the Rent is paid for the
current month but is not paid and will not be paid for more than one month in
advance (except estimated additional Rent under Paragraph 6); there is no
existing default under this Lease; and such other matters as may be reasonably
required by Landlord or Landlord's mortgagee.
34. SUCCESSORS: This Lease shall be binding upon and inure to the benefit of
Landlord and Tenant and their respective heirs, personal representatives,
successors and assigns. It is hereby covenanted and agreed that should
Landlord's interest in the Leased Premises cease to exist for any reason during
the term of the Lease, then notwithstanding the happening of such event, at the
election of Landlord's successor herein, this Lease shall nevertheless remain
unimpaired and in full force and effect and Tenant hereunder agrees to attorn
to the then owner of the Leased Premises.
35. REAL ESTATE COMMISSION: Tenant represents and warrants that is has dealt
with no broker, agent, or other person other than Bradford Realty Services of
Dallas, Inc., Xxxx Xxxxx, in connection with this transaction, and that no
other broker, agent, or other person brought about this transaction. Landlord
and Tenant each agree to indemnify and hold the other harmless from and against
any claims by any broker, agent, or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant or Landlord
respectively with regard to this transaction. The provisions of this Paragraph
shall survive the termination of this Lease.
36. DEFAULT BY LANDLORD: Landlord shall not be in default, and Tenant shall
have no right to any remedy at law or in equity, unless the act, omission, or
condition allegedly giving rise to such default shall have continued uncured or
unabated for a period of thirty (30) days following
COMMERCIAL LEASE AGREEMENT - PAGE 23
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written notice to Landlord (with a copy to any Mortgagee as provided in
Paragraph 32 above) or, if such cure or abatement cannot be accomplished
within said 30-day period, then, so long as Landlord or Mortgagee has
commenced such cure or abatement within such 30-day period and diligently
pursues same, such period shall be extended a reasonable time to allow
completion of the cure or abatement.
37. MECHANIC'S LIENS: Tenant shall have no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord in the Leased Premises or
the Project or to charge the Rent payable hereunder for any claim in favor of
any person dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs. Each such claim shall affect,
and each such lien shall attach to, if at all, only the leasehold interest
granted to Tenant by this Lease. Tenant covenants and agrees that it will pay
or cause to be paid all sums legally due and payable by it on account of any
labor performed or materials furnished in connection with any work performed on
the Leased Premises on which any lien is or can be validly and legally asserted
against its leasehold interest in the Leased Premises or the improvements
thereon. Tenant further agrees to save and hold Landlord harmless from any and
all loss, cost, or expense based on or arising out of claims or liens asserted
by parties by virtue of their dealings with Tenant and encumbering the
leasehold estate or the right, title and interest of the Landlord in the Leased
Premises or the Project. Under no circumstances shall Tenant be or hold itself
out to be the agent or representative of Landlord with respect to any
Alterations of the Leased Premises whether or not consented to or approved by
Landlord hereunder.
38. HAZARDOUS WASTE: The term "Hazardous Substances," as used in this Lease
shall mean petroleum and petroleum products and by-products, crude oil,
pollutants, contaminants, toxic or hazardous wastes, or any other substances,
the use of which is regulated, restricted, prohibited or penalized, or the
removal or disposal of which is required, by any "Environmental Laws," which
term shall mean any and all federal, state or local law, ordinance or other
statute of a governmental or quasi-governmental authority relating to the
pollution or protection of the environment. Tenant hereby agrees that (i) no
activity will be conducted on the Leased Premises that will produce any
Hazardous Substances; (ii) the Leased Premises will not be used in any manner
not in compliance with local and federal laws for the storage of any Hazardous
Substances; (iii) no portion of the Leased Premises will be used as a landfill
or a dump; (iv) Tenant will not install any underground tanks of any type; (v)
Tenant will not allow any surface or subsurface conditions to exist or come
into existence that constitute, or with the passage of time may constitute, a
public or private nuisance; and (vi) Tenant will not permit any Hazardous
Substances to be brought onto the Leased Premises, and if so brought thereon,
then the same shall be stored and used in compliance with all local and federal
laws regarding same. Landlord or Landlord's representative shall have the
right but not the obligation to enter the Leased Premises for the purpose of
ensuring compliance with all Environmental Laws. If Tenant in any manner
contaminates the Leased Premises, then Tenant shall promptly and diligently
institute proper and thorough clean-up procedures at Tenant's sole cost.
Landlord hereby agrees to defend, indemnify and hold Tenant, its employees,
partners, agents, contractors, officers and directors and their heirs,
successors, and assigns harmless from any and all costs (including costs of
litigation), reasonable attorneys' fees, expenses, liabilities, claims,
COMMERCIAL LEASE AGREEMENT - PAGE 24
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damages or judgements arising or alleged to occur, and that result, or are
alleged to result from the actual, or threatened discharge, dispersal,
disposal, release or escape of Hazardous Substances or other wastes or
pollutants (including, but not limited to asbestos, solid, liquid, gaseous or
thermal irritants or contaminants, smoke, vapor, soot, fumes, acids, alkalis,
chemicals, and water materials to be recycled, reconditioned or reclaimed),
but only as the same are a direct result of any act or omission of Landlord
or its agents, employees, contractors or subcontractors. Tenant hereby
agrees to defend, indemnify and hold Landlord, its employees, agents,
partners, contractors, officers and directors and their heirs, successors,
and assigns harmless from any and all costs (including costs of litigation),
reasonable attorneys' fees, expenses, liabilities, claims, damages or
judgements arising or alleged to occur, and that result, or are alleged to
result from the actual, or threatened discharge, dispersal, disposal, release
or escape of Hazardous Substances or other wastes or pollutants (including,
but not limited to asbestos, solid, liquid, gaseous or thermal irritants or
contaminants, smoke, vapor, soot, fumes, acids, alkalis, chemicals, and water
materials to be recycled, reconditioned or reclaimed), but only as the same
are a direct result of any act or omission of Tenant or Tenant's
Representatives.
39. ENTIRE AGREEMENT AND LIMITATION OF WARRANTIES: It is expressly agreed by
Tenant, as a material consideration for the execution of this Lease, that this
Lease is the entire agreement of the parties and that there are and were no
verbal representations, warranties, understandings, stipulations, agreements,
or promises pertaining to this Lease not incorporated in this Lease. Tenant
expressly agrees that there are and shall be no implied warranties of
merchantability, fitness, habitability, or of any other kind and that Tenant's
acceptance of the Leased Premises shall be "as is". It is likewise agreed that
this Lease may not be altered, waived, amended, or extended except by an
instrument in writing signed by both Landlord and Tenant. Not in limitation
upon the foregoing, Landlord agrees that to the extent assignable, all
warranties, if any shall exist, from contractors or suppliers with respect to
the improvements to the Leased Premises hereunder are hereby partially assigned
to Tenant to the extent necessary to avail Tenant of the benefits thereof with
respect to its leasehold estate and property located at the Leased Premises.
40. FINANCIAL STATEMENTS: From time to time Landlord may need to obtain
financing or renew financing on the Project, or perform calculations for
various reasons regarding the value of the Project. Tenant hereby agrees to
provide to Landlord financial statements on its business when requested, but
not more than once annually, indicating the most current year end and quarterly
financial status of the business. Landlord will not deliver such financial
statement to any third party except in confidence and only as required by
Landlord's lenders or in conjunction with appraisals of the Project.
41. FORCE MAJEURE:
(a) Landlord shall not be required to perform any covenant or obligation
of this Lease or be liable in damages to Tenant for that time period during
which the performance or non-performance of the covenant or obligation is
delayed, caused by, or prevented by Tenant or Tenant's Representatives or by an
act of God or force majeure.
COMMERCIAL LEASE AGREEMENT - PAGE 25
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(b) Except with respect to the payment of Rent or any other sum due
hereunder, Tenant shall not be required to perform any covenant or obligation
of this Lease or be liable in damages to Landlord for that time period during
which the performance or non-performance of the covenant or obligation is
delayed, caused by, or prevented by Landlord or Landlord's Representatives or
by an act of God or force majeure.
(c) An "act of God" or "force majeure" is defined for purposes of this
Lease as strikes, lockouts, sit-downs, material or labor restrictions by any
governmental authority, riots, floods, washouts, explosions, earthquakes, fire,
storms, acts of the public enemy, wars, insurrections and any other similar
cause not reasonably within the control of Landlord and which by the exercise
of due diligence Landlord is unable, wholly or in part, to prevent or overcome.
42. MISCELLANEOUS:
(a) 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, unless the context otherwise requires.
(b) Each party agrees to furnish to the other, promptly upon demand, a
corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization and power of such
party to enter into this Lease and the empowerment and authority of the
individual signing below to bind his or her principal.
(c) The captions inserted in this Lease are for convenience only and in
no way define, limit, or otherwise describe the scope or intent of this Lease
or any provision hereof, or in any way affect the interpretation of this Lease.
(d) If any clause or provision of this Lease is illegal, invalid, or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby; and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid, or unenforceable there be added as a
part of this Lease a clause as similar in terms to such illegal, invalid, or
unenforceable clause or provision as may be possible and be legal, valid, and
enforceable.
(e) Intentionally deleted
(f) All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on
which all parties hereto have executed this Lease.
(g) In the event that Tenant shall fail to perform any duty or obligation
hereunder, whether maintenance, repair or replacement of the Leased Premises,
maintenance of insurance, or otherwise, then Landlord may, but shall in no
event be obligated to, without notice of any kind, take such actions as
Landlord deems necessary or appropriate to remedy such Tenant failure, and any
sums
COMMERCIAL LEASE AGREEMENT - PAGE 26
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expended by Landlord together with fair and just compensation for the time
and effort of Landlord in such efforts shall be deemed additional Rent
hereunder due and payable by Tenant on demand.
(h) If Tenant shall fail to pay, when the same is due and payable, any
Rent or any other sum due hereunder, such unpaid amount shall bear interest
from the tenth (10th) day after the due date thereof to the date of remittance
at the rate of the lesser of 18% per annum and the maximum rate allowed by law.
(i) Landlord does not in any way or for any purpose become a partner with
Tenant in the conduct of its business or otherwise, nor a member of a joint
venture with Tenant.
(j) Tenant shall not record this Lease without the prior written consent
of Landlord. However, upon the request of either party hereto, the other party
shall join in the execution of a memorandum or so-called "short form" of this
Lease for the purposes of recordation.
(k) Time is of the essence in the performance of all the covenants,
conditions, and agreements contained in this Lease.
(l) Any duty, obligation, or debt and any right or remedy arising
hereunder and not otherwise consummated and/or extinguished by the express
terms hereof at or as of the time of termination of this Lease, whether at the
end of the term hereof or otherwise, shall survive such termination as
continuing duties, obligations, and debts of the obligated party to the other
or continuing rights and remedies of the benefited party against the other.
(m) This Agreement may be executed in one or more counterparts, each of
which counterpart shall for all purposes be deemed to be an original; but all
such counterparts together shall constitute but one instrument.
(n) Attached hereto, marked Exhibit "A" through Exhibit "__", are certain
exhibits to this Lease all of which are hereby incorporated herein by
reference.
43. NOTICE:
(a) All Rent and other payments required to be made by Tenant to Landlord
shall be payable to Landlord at the address set forth below or any other
address that Landlord may specify from time to time by written notice delivered
to Tenant.
(b) All payments, if any, required to be made by Landlord to Tenant shall
be payable to Tenant at the address set forth below or at any other address
that Tenant may specify from time to time by written notice delivered to
Landlord.
(c) Any notice or document required or permitted to be delivered by this
Lease shall be deemed to be delivered (whether or not actually received) when
deposited in the United States Mail, postage prepaid, certified mail return
receipt requested, addressed to the parties at the
COMMERCIAL LEASE AGREEMENT - PAGE 27
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respective addresses set forth below or such other address as hereinafter
specified by notice given in accordance with this paragraph.
44. LIMITATION ON TENANT'S DAMAGES: Tenant agrees that any liability of
Landlord under this Lease shall be limited solely to Landlord's interest in the
Project, and no other assets of Landlord shall be subject to levy or execution.
Executed by Landlord and Tenant as of the below dates.
LANDLORD TENANT
XXXXXXX-XXXX TECHNOLOGY XXXXX GOLF, INC., A TEXAS CORPORATION
CENTER II, LTD.
0000 X. Xxxxxxxxx Xxxxxxx 0000 X. Xxxxx Xxxxxxx
Xxxxx 000 Xxxxx
Xxxxxx, Xxxxx 00000 ----------------------
Xxxxx, Xxxxx 00000
By: Xxxxxxx-Xxxx/Texas, Inc., By: X.X. Xxxxx
-------------------------- -----------------------
General Partner Its: CEO
By: J. Xxxxxxx Xxxx ----------------------
-----------------------
Its: Vice President
----------------------
Date: December 5, 1997 Date: December 5, 1997
--------------------- ----------------------
COMMERCIAL LEASE AGREEMENT - PAGE 28
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EXHIBIT "A"
LEGAL DESCRIPTION
COMMERCIAL LEASE AGREEMENT - PAGE 29
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EXHIBIT "B"
TENANT IMPROVEMENTS
Landlord agrees, at Landlord's expense, to install the tenant improvements per
the attached plans and specifications provided such plans and specifications
have been approved by Landlord and Tenant. Landlord's estimate of the cost of
these improvements is $911,890.00 ($14.00 per square foot). Should the actual
construction costs exceed $911,890.00, Tenant shall pay such excess to
Landlord prior to the commencement of the construction. This construction
allowance is based on the cost to duplicate Tenant's finishes and space
allocation in its current Leased Premises.
COMMERCIAL LEASE AGREEMENT - PAGE 30
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ADDENDUM
This Addendum is entered into this ______day of November, 1997, between XXXXXXX-
XXXX TECHNOLOGY CENTER II, LTD., as Landlord, and XXXXX GOLF, INC., as Tenant.
This Addendum is an integral part of that certain Commercial Lease Agreement
dated as of the date hereof between Landlord and Tenant to which it is attached
(the "Lease"). If the terms and provisions of this Addendum conflict with those
of the Lease, those of this Addendum shall prevail.
1) RENEWAL OPTION: Tenant is granted the option to extend the term of this
Lease for one (1) extended term of five (5) years, provided no event of default
exists at the time of exercise of the option and no condition exists which with
the giving of notice or the passage of time or both would constitute an event
of default, and Tenant gives written notice of its exercise of the option at
least one hundred eighty (180) days prior to the expiration of the original
term. The extension term shall be upon the same terms and conditions as set
forth herein, except Tenant shall have no further right of renewal after the
extension term prescribed above, and the Base Rental will be equal to the then
prevailing rate for comparable space for a comparable term.
2) PARKING: Tenant shall be entitled to the non-exclusive use of the 217
parking spaces directly adjacent to the Leased Premises as shown on the
attached site plan.
3) EXPANSION: If during the term of this Lease agreement, Landlord leases to
or sells to Tenant a space or building of a size larger than the present Leased
Premises in any development owned by Landlord, Tenant's then remaining
obligations due under this Lease agreement shall be terminated upon the
commencement date of the new lease or purchase agreement. Not withstanding the
above-stated, Tenant shall remain obligated to pay for any Rents or other sums
due Landlord as a result of Tenant's tenancy hereunder, and such obligation
shall survive the termination of this Lease pursuant to this Paragraph 3.
4) SIGNAGE: Landlord shall pay for the cost of one (1) tenant identification
sign for the Leased Premises. Such sign shall be in accordance to the sign
criteria established for the Building.
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5) EARLY OCCUPANCY: Tenant shall be granted occupancy to the Leased Premises
upon the substantial completion of the tenant improvements. The first two (2)
weeks of Tenant's occupancy shall be considered to be Early Occupancy with
all terms and conditions of the Lease in full force and effect except the
base rent due for this two week early occupancy period shall be abated.
COMMERCIAL LEASE AGREEMENT - PAGE 32
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