COMMERCIAL LEASE AGREEMENT
MEPC QUORUM PROPERTIES II INC.,
as LANDLORD,
and
MANNATECH, INC.
as TENANT
pertaining to 110,157 square feet
in Xxxxxxxx Xxxxx Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxx
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (this LEASE) is made and entered into by
and between MEPC Quorum Properties II Inc., a Delaware corporation (LANDLORD),
and Mannatech, Inc., a Texas (TENANT).
1. PREMISES/LEASE TERM. In consideration of the mutual obligations of
Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant
hereby takes from Landlord, approximately 110,157 square feet (the PREMISES) in
the approximate 280,000 square foot warehouse building structure (the BUILDING)
owned by Landlord on the land (the LAND) consisting of approximately 14.3978
acres located in the city of Coppell, Dallas County, Texas, as such Land is more
particularly described on EXHIBIT "A" attached hereto and incorporated herein by
reference, together with the non-exclusive use of all rights, privileges,
easements, appurtenances, and amenities belonging to or in any way pertaining to
the Land for a term (the LEASE TERM or the TERM OF THIS LEASE) beginning on the
date of this Lease (hereinafter defined) and ending at 11:59 p.m. on January 19,
2007. The Land, the Building (including the Premises Comprising a part thereof)
and the other Improvements (hereinafter defined) are collectively referred to
herein as the PROJECT. The location of the Premises within the Building and the
configuration of the Project is illustrated by the Site Plan (herein so called)
attached hereto as EXHIBIT "B" and incorporated herein by reference.
2. CONDITION OF PREMISES/AS IS ACCEPTANCE. TENANT REPRESENTS AND
WARRANTS THAT IT HAS HAD AMPLE OPPORTUNITY TO INSPECT, AND THAT IT HAS ACTUALLY
INSPECTED, THE PREMISES AND THE PROJECT AND THAT TENANT HAS FOUND THE PREMISES
AND THE PROJECT TO BE SUITABLE FOR TENANT'S PURPOSES AND IN GOOD AND
SATISFACTORY CONDITION. TENANT ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT
MADE ANY REPRESENTATIONS, AGENTS OR PROMISES WITH RESPECT TO THE CONDITION OF
THE PREMISES OR THE PROJECT, INCLUDING THE ENVIRONMENTAL CONDITION, THE
PREMISES' AND THE PROJECT'S STATE OF REPAIR, OR THEIR SUITABILITY FOR ANY
PURPOSE OF TENANT AND THAT LANDLORD HAS MADE NO PROMISES TO ALTER, REMODEL OR
IMPROVE OR REPAIR THE LAND, THE PREMISES OR THE PROJECT OR ANY PORTION THEREOF.
TENANT ACCEPTS THE PREMISES IN ITS "AS IS", "WHERE IS" CONDITION AND "WITH ALL
FAULTS". LANDLORD HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS, INCLUDING
IMPLIED REPRESENTATIONS, AND SPECIFICALLY INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION REGARDING HABITABILITY, REPAIR, WORKMANSHIP OR SUITABILITY FOR
ANY INTENDED PURPOSE.
3. RENT.
A. BASE MONTHLY RENT. Tenant agrees to pay to Landlord the sum of
$3,855,495.00 as rent for the Premises, which sum shall be payable in advance,
as follows (BASE MONTHLY RENT):
- On January 20, 1997 (the RENT COMMENCEMENT DATE), the sum of
$11,543.72; and
- Beginning on February 1, 1997 and continuing through December 31,
2001, the amount of $29,834.19 per month; and
- On January 1, 2002, the sum of $31,610.91; and
- Beginning on February 1, 2002 and continuing through December 31,
2006, the amount of $34,424.06 per month; and
- On January 1, 2007, the sum of $21,098.62.
Each installment of Base Monthly Rent shall be due and payable on the first day
of each calendar month during the Lease Term; provided that one (1) full
installment of Base Monthly Rent is due and payable on the date of this Lease,
such to be applied to the first installment of Base Monthly Rent due on January
20, 1997 and thereafter applied to Base Monthly Rent until fully applied.
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B. ADDITIONAL RENT. Tenant agrees to reimburse Landlord for
Tenant's Proportionate Share (hereinafter defined) of (i) Real Property Taxes
(hereinafter defined), (ii) Landlord's cost of obtaining and maintaining
Landlord's Insurance (hereinafter defined), and (iii) the cost of any
maintenance performed by Landlord under Paragraph 11A(2) below or which, in
Landlord's reasonable discretion, is for the benefit of the Project as a whole
and not reasonably allocable to any specific tenant or tenants (collectively,
the ADJUSTMENTS). During each month of the term of this Lease, on the same day
that Base Monthly Rent is due hereunder, Tenant shall pay to Landlord as
additional Rent an amount equal to 1/12 of Tenant's proportionate Share of the
estimated total annual cost of the Adjustments, as determined by Landlord.
Tenant authorizes Landlord to use such funds to pay such costs. The initial
monthly payments of Adjustments are based upon the estimated amounts for the
current Lease Year (hereinafter defined) and shall be increased or decreased
each Lease Year to reflect the projected actual cost of all Adjustments. If
Tenant's total payments are less than Tenant's proportionate Share of the actual
costs of all such items, Tenant shall pay the difference to Landlord within ten
(10) days after demand. If the total payments of Tenant are more than Tenant's
proportionate Share of the actual costs of all such items, Landlord shall retain
such excess and credit it against Tenant's next monthly estimated payments of
Adjustments. The amount of the Base Monthly Rent and the estimated monthly
payments (based upon a complete calendar month) of Tenant's proportionate Share
of the Adjustments for the Lease Year in which the date of this Lease occurs are
as follows:
(1) Base Monthly Rent $29,834.19
(2) Real property Taxes $ 4,589.88
(3) Insurance $ 458.99
(4) Maintenance $ 917.98
---------
Monthly Payment Total $35,801.04
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Tenant's PROPORTIONATE SHARE, as used in this Lease, shall mean a fraction,
the numerator of which is the number of square feet of rentable area contained
in the Premises and the denominator of which is the entire number of square feet
of rentable area contained in the Building (as to costs which do not materially
vary based on the occupancy of the Building) or is the entire rented area
contained in the Building (as to costs which do materially vary based on the
occupancy of the Building). If the Premises is part of a larger development (the
DEVELOPMENT) owned by Landlord and the Building and one or more other buildings
on parts of the Development other than the Land share the benefit of or may
properly be allocated a portion of any expense, Landlord shall reasonably
allocate any such expense among the Building and such other building(s) prior to
applying Tenant's Proportionate Share to such expense.
C. AUDIT OF ADJUSTMENTS. Within ninety (90) days after the end of
each Lease Year, Landlord will provide to Tenant a statement of Adjustments paid
by Landlord for the just ended Lease Year. Tenant may at any time within thirty
(30) days after its receipt of Landlord's statement, but in any event upon ten
(10) days advance written notice to Landlord, audit, inspect and copy the books
and records of Landlord with respect to the Adjustments. Landlord shall
cooperate with Tenant in providing Tenant reasonable access to its books and
records during normal business hours for this purpose. If the results of any
inspection or audit show an overcharge to Tenant of more than five percent (5%)
of the actual amount of Adjustments owed by Tenant, then Landlord shall pay the
reasonable costs of such audit (assuming the audit is performed by a third party
unaffiliated with Tenant and not including the travel, meal or incidental
expenses of the auditor), and Landlord shall credit or refund to Tenant any
overcharge of such items as discovered by the inspection or audit within thirty
(30) days of completion of such inspection or audit. In the event such audit
discloses an overcharge to Tenant of up to but no more than five percent, there
will be no credit or refund to Tenant, and Tenant will pay the cost of the
audit. In the event such audit discloses an undercharge of Adjustments billed
to Tenant, Tenant shall pay Landlord the amount of such undercharge within
thirty (30) days of the completion of such audit and the cost of the audit. In
the event Landlord disputes the amount of Adjustments or Tenant's Proportionate
Share thereof, as determined by Tenant's audit,
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Landlord shall have a period of thirty (30) days from its receipt of Tenant's
audit results to have its own independent auditor inspect Tenant's audit and the
books and records pertaining to the Adjustments and deliver the results thereof
to Tenant. Landlord's failure to conduct such an audit and deliver the results
thereof to Tenant within such thirty (30) day period shall constitute acceptance
by Landlord of the results of Tenant's audit. If Landlord delivers Tenant
Landlord's audit within such thirty (30) day period, Tenant shall have fifteen
(15) days to review and object to the results thereof. The results of
Landlord's audit shall be conclusive and binding upon Tenant unless Tenant
objects in writing, such objections to be specific, to such results within such
fifteen (15) day period.
D. LEASE YEAR. A LEASE YEAR shall mean a twelve (12) month period
commencing each January 1st and ending on the following December 31st; provided,
however, Landlord may from time to time (but no more often than once every
eighteen (18) months) change the twelve (12) month period designated as a Lease
Year by notice thereof to Tenant, in which event the obligations of Tenant
measured by Lease Years shall be prorated as appropriate during any Lease Year
of less than twelve (12) months based on the number of days in any such Lease
Year divided by 365; and provided, further, the first and last Lease Years, and
all obligations of Tenant measured by such Lease Years, shall be prorated as
appropriate based upon the number of days in the applicable Lease Year during
the term of this Lease divided by 365.
E. DEFINITION OF RENT. As used in this Lease, RENT shall mean the
Base Monthly Rent and all other amounts provided for in this Lease to be paid by
Tenant to Landlord, all of which shall constitute rental in consideration for
this Lease and the leasing of the premises. The Rent shall be paid at the times
and in the amounts provided for herein in legal tender of the United States of
America to Landlord at the address specified in Paragraph 31 hereof or to such
other person or at such other address as Landlord may from time to time
designate in writing. Rent shall be paid without notice, demand, abatement,
deduction or offset (unless expressly provided for elsewhere in this Lease) and
shall be a covenant of Tenant independent of any obligation of landlord under
this Lease. Tenant's obligation to pay any installment of Rent shall not be
deemed satisfied until such installment of Rent has actually been received by
Landlord.
F. INTEREST ON DELINQUENT RENT. Any Rent due from Tenant to
Landlord which is not paid when cue shall bear interest at the lower of (i)
eighteen percent (18%) per annum or (ii) the highest rate from time to time
allowed by applicable law, from the date such payment is due until paid, but the
payment of such interest shall not excuse or cure the default. This provision
for default interest shall be in addition to all of Landlord's other rights and
remedies hereunder or at law or equity and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. Any assessed default
interest will be additional Rent owed hereunder.
4. COMPLIANCE WITH LAWS. Tenant shall comply with all Applicable Laws in
connection with Tenant's use and occupancy of the Premises and Tenant's
performance of its obligations under this Lease, all at Tenant's expense. As
used herein the term APPLICABLE LAWS means and includes any and all federal,
state and local laws, ordinances, orders, deed restrictions (specifically
including the Declaration of Protective Covenants dated May 18, 1995 and
recorded in Volume 95098, Page 924, ET SEQ. of the Official Public Records of
Real Property in Dallas County, Texas (as amended, modified, supplemented,
restated and assigned from time to time, the DECLARATION)), easements of record,
rules, and regulations of all governmental bodies (state, federal, and
municipal) applicable to or having jurisdiction over the use, occupancy,
operation and maintenance of the Project, including without limitation, the
Americans With Disabilities Act of 1990, as amended from time to time (ADA), and
Environmental Laws (hereinafter defined), as such may be amended or modified
from time to time.
PAGE 3
5. ALTERATIONS AND IMPROVEMENTS BY TENANT
A. CONDITIONS PRECEDENT TO ALL ALTERATIONS AND IMPROVEMENTS. Except
as expressly permitted by this Xxxxxxxxx 0, Xxxxxx may not make or permit any
alterations, improvements, or additions in or to the Premises or the Project
without Landlord's prior written consent. All alterations and improvements
desired by Tenant are subject to the following conditions/requirements:
(1) Subject to subparagraph 5B below, all alterations,
improvements and additions will be at the sole cost and expense of Tenant;
(2) All alterations, improvements and additions in and to the
Premises requested by Tenant must be made in accordance with plans and
specifications first approved in writing by Landlord;
(3) Tenant's contractors and subcontractors are subject to
Landlord's prior approval. In addition, each of Tenant's contractor(s) and
subcontractor(s) must deliver evidence satisfactory to Landlord that the
insurance specified on EXHIBIT "C" (attached hereto and incorporated herein
by reference) is in force prior to commencing work;
(4) All alterations, improvements and additions made by Tenant
must comply with all Applicable Laws including, specifically, the ADA, and
applicable building permits and certificates of occupancy. Landlord's
approval of Tenant's plans and specifications for the alterations or
improvements will not act as a confirmation or agreement by Landlord that
the improvements and alterations comply with Applicable Laws;
(5) Tenant must deliver to Landlord evidence that Tenant has
obtained all necessary governmental permits and approvals for the
improvements, alterations and additions prior to starting any work;
(6) All alterations, improvements and additions must be done in
a good and workmanlike manner so as not to damage or alter the primary
structure or structural qualities or the utility or other systems of the
Premises or the Building and is subject to approval by Landlord during and
after construction, in its sole discretion. Tenant agrees to meet with
Landlord's project manager, who for purposes of this Lease shall be Xxx
Xxxxxx until further notice, as deemed reasonably necessary by such project
manager during any construction by Tenant pursuant to this Paragraph 5 so
that Landlord can evaluate the progress of such work and its impact on the
remainder of the Project;
(7) Lien releases from each of Tenant's contractor(s) and
subcontractor(s) satisfactory to Landlord must be submitted to Landlord
within thirty (30) days after completion of the work performed by the
contractor(s) or subcontractor(s); and
(8) Tenant shall be solely responsible for the safety and
security of all equipment and property installed or placed in, on or about
the Premises by Tenant or any of Tenant's agents, employees, officers,
partners or contractors (together with Tenant, collectively, the TENANT
PARTIES and individually a TENANT PARTY).
B. FINISH ALLOWANCE: notwithstanding subparagraph 5A(1) above,
Landlord grants Tenant an allowance in the amount of $330,471.00 (the FINISH
ALLOWANCE) to be utilized by Tenant in performing alterations and improvements
to the Premises to "finish-out" the Premises. Any improvements or alterations
performed by Tenant and paid for out of the Finish Allowance, including without
limitation, any work related thereto such as design, engineering, and
construction management services, is referred to herein as the TENANT FINISH
WORK. Landlord will pay such invoices up to, but not in excess of, the Finish
Allowance conditioned upon:
PAGE 4
(1) Tenant shall submit all invoices received in connection with
the Tenant Finish Work to Landlord for payment not less than fifteen
(15) days prior to the due date of such invoice. Landlord, at its
option, will not be obligated to pay any invoice not received by such
date; and
(2) Landlord having satisfied itself that all
conditions/requirements set forth in subparagraph 5A above have been
satisfied; and
(3) Landlord having inspected and approved of the work for which
payment is sought, such approval not to be unreasonably withheld; and
(4) The Finish Allowance may not be used or allocated for any
materials or property, or for the labor incurred in constructing or
installing same, that would be characterized as Tenant's Property
under subparagraph 5C below, it being the intention of both parties
hereto that, without limiting subparagraph 5D below, all improvements
and alterations paid for with the Finish Allowance will in all events
and circumstances be Landlord's property.
Any decision to pay or not pay any invoice will be made within ten (10)
business days after receiving the subject invoice; provided, however, that
Landlord may further condition such approval upon the satisfaction of any of the
conditions/requirements of Paragraph 5A or this Paragraph 58 that may not have
been satisfied within such ten (10) day period (I.E., lien waivers). All
invoices will be paid within fifteen (15) days after Landlord has approved the
invoice and is satisfied that all conditions and requirements set forth in
Paragraph 5A and this Paragraph 5B have been satisfied. All cost and expenses
incurred by Tenant in making any alterations or improvements to the Premises or
the Project in excess of the Finish Allowance will be Tenant's sole cost and
expense. If the Finish Allowance has not been fully utilized within one (1)
year after the Commencement Date, and provided that Tenant is not then in
default under this Lease, the remaining balance will be applied to Base Monthly
Rent and Adjustments until the Finish Allowance is exhausted.
C. TENANT'S PROPERTY. Tenant, at its own cost and expense, may
erect such shelves, racks, bins and trade fixtures (collectively, TENANT'S
PROPERTY) within the Premises as it desires and without Landlord's prior
consent provided that (a) such items do not alter the basic character of the
Premises or the Building; (b) such items do not overload or damage the
Premises or the Building or the utility or other systems serving same;
(c) such items may be removed without material injury to the Premises and the
Building; and (d) the construction, erection or installation thereof complies
with all Applicable Laws, applicable building permits and certificates of
occupancy; and (e) provided that Tenant's installation of Tenant's Property
prior to the Commencement Date will be subject to Paragraph 5B above. All of
Tenant's Property shall remain the property of Tenant and shall be removed on
or before the earlier to occur of the date of termination of this Lease or
Tenant's vacating of the Premises. Tenant shall promptly repair any damage
to the Project or the Premises caused by the removal of any of Tenant's
Property. Any of Tenant's Property not so removed and any other property of
Tenant not removed prior to the termination of this Lease or Tenant's
vacating of the Premises shall thereupon be conclusively presumed to have
been abandoned by Tenant, and Landlord may, at its option, take over
possession of any and all of the foregoing and either (i) declare the same to
be the property of Landlord by written notice to Tenant at the address
provided herein or (ii) at the sole cost and expense of Tenant, remove,
store, and/or dispose of the same or any part thereof, all at Tenant's cost,
in any manner that Landlord shall choose without incurring liability to
Tenant or any other person.
D. LANDLORD'S PROPERTY/RESTORATION OF PREMISES BY TENANT. Except as
provided in Xxxxxxxxx 0X above, all alterations, additions, and improvements
made to, or fixtures or other improvements placed in or on, the Premises,
whether temporary or permanent in character are a part of the Premises and are
the property of Landlord when they are made to or placed in or on the Premises,
without compensation to Tenant;
PAGE 5
provided that, at Landlord's option, upon the termination of this Lease,
Landlord may require Tenant, at Tenant's cost, to remove any improvements, other
than the Tenant Finish Work, made to the Premises or Project by Tenant and
restore the Premises to substantially the condition it was in upon the
completion of the Tenant Finish Work, reasonable wear and tear excepted.
E. ADDITIONAL PARKING AREA. Tenant has informed Landlord that
possible improvements that Tenant may desire include the construction of an
additional parking area in the Adjacent Area (the Adjacent Area is illustrated
on the Site Plan). Landlord agrees not to unreasonably withhold its consent to
such additional parking provided, however, that (i) any construction by Tenant
of an additional parking area shall be subject to all of the requirements and
conditions set forth in Paragraph 5A(1)-(E) above, and (ii) Tenant may not alter
or damage any of the perimeter berms in the Adjacent Area. Plans and
specifications for any additional parking area, as required pursuant to
paragraph 5A(2) above, must include, without limitation, contemplated lighting
systems, landscaping, irrigation/sprinkler systems and striping design for the
new parking area and a restriping design for the existing parking area located
within the Adjacent Area.
F. INDEMNITY. Tenant hereby indemnifies and holds Landlord harmless
from any claims, demands, actions, losses, and damages arising from activities
of Tenant or any Tenant Party, or any of their invitees, in connection with any
alterations, improvements or additions made or contracted for by Tenant.
6. USE. Subject to Applicable Laws, the Premises shall be used only for
the purpose of manufacturing, receiving, storing, shipping and selling (other
than retail) products, materials and merchandise made and/or distributed by
Tenant, and for such other lawful purposes as may be incidental thereto.
Provided that such use is permitted by Applicable Laws, any manufacturing
performed by Tenant at the Premises shall be limited to the manufacture and/or
assembly of pharmaceutical, diet supplement and/or other human health related
products. Outside storage, including without limitation, storage of trucks and
other vehicles, is prohibited without Landlord's prior written consent. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise
or vibrations to emanate from the Premises, nor take any other action that would
constitute a health or environmental hazard or nuisance or that would disturb,
interfere with, or endanger Landlord or the occupant of any other land or
buildings in the vicinity of the Project or any other tenant of the Project.
Tenant's use of the Premises must in any event comply with all Applicable Laws
including, without limitation, the Declaration. TENANT ACKNOWlEDGES AND AGREES
THAT LANDLORD HAS MADE NO REPRESENTATIONS OR WARRANTIES, AND LANDLORD HAS
DISCLAIMED AND HEREBY DOES DISCLAIM, ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, THAT THE PREMISES ARE SUITABLE FOR ANY INTENDED PURPOSE OF TENANT,
INCLUDING, WITHOUT LIMITATION, THE MANUFACTURE AND/OR ASSEMBLY, STORAGE,
DISTRIBUTION OR SALE OF PHARMACEUTICAL, DIET SUPPLEMENT AND/OR OTHER HUMAN
HEALTH RELATED PRODUCTS. TENANT SHALL MAKE ITS OWN DETERMINATIONS AS TO THE
SUITABILITY OF THE PREMISES FOR ITS INTENDED USE. BY ENTERING INTO THIS LEASE,
TENANT REPRESENTS AND WARRANTS THAT IT HAS INVESTIGATED AND SATISFIED ITSELF AS
TO WHETHER OR NOT APPLICABLE LAWS PERMIT ITS INTENDED USE OF THE PREMISES AND
THAT TENANT IS RELYING SOLELY UPON SUCH INVESTIGATIONS, AND NOT UPON ANY
REPRESENTATIONS OF LANDLORD, IN ENTERING INTO THIS LEASE. If Tenant's particular
use Of the Premises requires that additional improvements or modifications be
made to the Premises or the Project by Landlord so that the Premises and the
Project complies in all respects with Applicable Laws, Tenant shall be solely
responsible for such costs.
7. HAZARDOUS MATERIALS
A. HAZARDOUS MATERIALS DEFINED. As used in this Lease, the term
HAZARDOUS MATERIALS means and includes (i) any hazardous, toxic or dangerous
waste, substance or material, as defined for purposes of the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, or any other
Applicable Laws applicable to the Premises and establishing liability,
standards, or regulating or requiring action as to the industrial hygiene, use,
generation, treatment, discharge, spillage, storage,
PAGE 6
uncontrolled loss, seepage, filtration, disposal, removal, or existence of a
hazardous, toxic or dangerous waste, substance or material (collectively,
ENVIRONMENTAL LAWS) and (ii) any waste, substance or material which, even if not
so regulated, is known to pose a hazard to the health and safety of persons or
property, specifically including, without limitation, oil and petroleum products
and by-products and asbestos.
B. PROHIBITION OF HAZARDOUS MATERIALS/TENANT'S LIABILITY.
Except for Hazardous Materials that are used only as an incidental part of
Tenant's day-to-day business operations and not as an integral part thereof
(E.G., fuel for forklifts and similar equipment, office supplies, cleaning
solvents), Tenant may not use, treat, handle, store, generate, dispose of or
release or cause or permit any Tenant Party, or any of their invitees, to use,
handle, store, generate, treat, dispose of or release, in, on, under or from the
Premises or the Project any Hazardous Materials. Without limiting any of the
above:
(1) Tenant covenants and agrees that it shall at its own expense
procure, maintain in effect and comply with all conditions of any and all
permits, licenses and other governmental and regulatory approvals required
for Tenant's use of the Premises and any operations or conduct of Tenant
involving the use, handling, generation, treatment, storage, disposal,
management or release of any Hazardous Materials. Tenant shall cause any
and all Hazardous Materials that are to be removed from the Premises to be
transported solely by duly licensed haulers and to duly licensed facilities
for final disposal of such Hazardous Materials. Tenant shall in all
respects, handle, treat, deal with and manage any and all Hazardous
Materials in, on, under or about the Premises as a result of the actions,
conduct or any part of the business operations of Tenant or any Tenant
Party, or any of their invitees, in complete conformity with all Applicable
Laws and prudent industry practices regarding the management of such
Hazardous Materials. All reporting obligations relating to Hazardous
Materials in, on, under or about the Premises as a result of the actions,
conduct or any part of the business operations of Tenant or any Tenant
Party, or any of their invitees, are solely the responsibility of Tenant.
Upon expiration or earlier termination of this Lease, Tenant covenants and
agrees to cause all Hazardous Materials existing in, on, or under the
Premises to be removed from the Premises and transported for use, storage
or disposal in accordance and in compliance with all Applicable Laws. In
addition, and unless Landlord instructs Tenant otherwise, at the expiration
of the term of this Lease, Tenant shall remove all tanks or fixtures which
were placed on the Premises by or on behalf of Tenant or any Tenant Party
during the term of this Lease and which contain, have contained or are
contaminated with, Hazardous Materials;
(2) Tenant shall immediately notify Landlord in writing of (i)
any Tenant Release (hereinafter defined), (ii) any enforcement, clean-up,
removal or other governmental or regulatory action instituted, completed or
threatened against Tenant, the Premises, the Project, or any part thereof
pursuant to any Applicable Laws; (iii) any claim made or threatened by any
person against Tenant, Landlord, the Premises, or the Project relating to
damage, contribution, cost recovery, compensation, loss or injury resulting
from or claimed to result from any Hazardous Materials; and (iv) any
reports made to any environmental agency arising out of or in connection
with any Hazardous Materials in, on or about or under the Premises or with
respect to any Hazardous Materials removed from the Premises, including,
any complaints, notices, warnings, reports or asserted violations in
connection therewith. Tenant shall also provide to Landlord, as promptly
as possible, and in any event within five (5) business days after Tenant
first received or sent the same, with copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to
the Premises or Tenant's use thereof. Tenant shall not take any remedial
action in response to the presence of any Hazardous Materials in, on, about
or under the Premises, nor enter into any settlement agreement, consent,
decree or other compromise in respect to any claims relating to or in any
way connected with the Premises without first notifying Landlord of
Tenant's intention to do so and affording Landlord ample opportunity to
appear, intervene or otherwise appropriately assert
PAGE 7
and protect Landlord's interest with respect thereto;
(3) Tenant shall indemnify, at Landlord's option, defend (with
counsel reasonably acceptable to Landlord), protect and hold Landlord and
each of Landlord's officers, directors, partners, employees, agents,
attorneys, successors and assigns free and harmless from and against any
and all claims, liabilities, damages, costs, penalties, forfeitures, losses
or expenses (including attorneys' fees) for death or injury to any person
or damage to any property whatsoever (including water tables and
atmosphere) arising or resulting in whole or in part, directly or
indirectly, from the presence, release or discharge of Hazardous Materials
in, on, under, upon or from the Premises to the extent that such presence,
release or discharge was caused or permitted by Tenant or any Tenant Party,
or any of their invitees, or from the transportation or disposal of
Hazardous Materials to or from the Premises or the Project by Tenant or any
Tenant Party, or any of their invitees (herein, a TENANT RELEASE). Tenant's
obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary
repairs, clean-up or detoxification or decontamination of the Premises or
the Project and any other land contaminated or adversely effected by the
Tenant Release and the presence and implementation of any closure, remedial
action or other required plans in connection therewith, and shall survive
the expiration of or early termination of this Lease;
(4) Landlord shall have the right from time, but not more than
once per year unless Landlord in good faith believes a Tenant Release or a
violation of Applicable Laws or this Paragraph 7 may have occurred, to
require Tenant to undertake and submit to Landlord, at Tenant's expense, an
environmental audit from an environmental company reasonably acceptable to
Landlord which audit shall evidence Tenant's compliance with this Paragraph
7. In addition, Landlord may, at its expense, commission an environmental
audit of the Premises at any time after prior written notice to Tenant. If
any lender or governmental agency requires testing to ascertain whether or
not a release of Hazardous Materials has occurred in, on or under the
Premises or the Project, and it its determined that a Tenant Release has in
fact occurred, then, without limitation of any other remedy Landlord may
have hereunder, Tenant shall reimburse the actual costs of the testing to
Landlord on demand as additional Rent (provided that such reimbursement
shall not be in limitation of any of Tenant's other obligations or
Landlord's remedies under this Paragraph 7).
(5) Tenant shall execute affidavits, representations, and the
like from time to time at Landlord's request concerning Tenant's actual
knowledge and belief regarding the presence of Hazardous Materials in, on
or under the Premises.
C. SURVIVAL. The respective covenants, rights. and obligations of
Landlord and Tenant under this Paragraph 7 shall survive the expiration or
earlier termination of this Lease.
8. SIGNAGE. Any signage Tenant desires for the Premises shall be subject
to Landlord's written approval and shall be submitted to Landlord prior to the
Commencement Date of this Lease. Tenant shall repair, paint and/or replace the
building facia surface to which its signs are attached upon vacation of the
Premises, or the removal or alteration of its signage. Tenant shall not (i)
make any changes to the exterior of the Building, (ii) install any exterior
lights, decorations, balloons, flags, pennants, banners or painting, or (iii)
erect or install any signs, windows or door lettering, placards, decorations or
advertising media of any type which can be viewed from the exterior of the
Building, without Landlord's prior written consent. All signs, decorations,
advertising media, blinds, draperies and other window treatment or bars or other
security installations visible from outside the Building shall conform in all
respects to the criteria established by Landlord and Applicable Laws.
PAGE 8
9. TAXES.
A. REAL PROPERTY TAXES. Subject to reimbursement by Tenant as
provided in Paragraph 3B above, Landlord shall pay all taxes, assessments and
governmental charges of any kind and nature and all assessments due to deed
restrictions and/or owner or community associations (collectively referred to
herein as REAL PROPERTY TAXES), that accrue against the Project, or any part
thereof. If at any time during the term of this Lease, there shall be levied,
assessed or imposed on Landlord a capital levy or other tax directly on the Rent
received under this Lease and/or a franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon Rent paid under this Lease, then
all such taxes, assessments, levies or charges, or the part thereof so measured
or based, shall be deemed to be included within the term REAL PROPERTY TAXES for
the purposes hereof. Landlord shall have the right to employ a tax consulting
firm to attempt to assure a fair tax burden on the Land and the Premises within
the applicable taxing jurisdiction. Tenant agrees to pay its Proportionate
Share of the cost of such consultant as additional Rent.
B. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes
levied or assessed against Tenant's Property and any other personal property or
fixtures placed or installed in the Premises or the Project by or on behalf of
Tenant. If any such taxes are levied or assessed against Landlord or Landlord's
property and (i) Landlord pays the same, or (ii) the assessed value of
Landlord's property is increased by inclusion of such personal property and
fixtures and Landlord pays the increased taxes, then, Tenant shall pay to
Landlord such taxes within ten (10) days after demand.
10. UTILITIES. Landlord agrees to provide water and electricity lines to
the outside of the exterior walls of the Building. Tenant shall pay for all
water, gas, heat, light, power, telephone, sewer, sprinkler charges and other
utilities and services used on or at the Premises, together with any taxes,
penalties, surcharges or the like pertaining to the Tenant's use of the
Premises, and any maintenance charges for utilities. Tenant shall pay its
Proportionate Share of all charges for jointly metered and common area utilities
as additional Rent. Landlord shall not be liable for any interruption or failure
of utility service at the Premises and all Rent owed pursuant to the terms of
this Lease shall continue to be due notwithstanding such interruption.
11. REPAIRS AND MAINTENANCE.
A. LANDLORD'S OBLIGATION TO REPAIR AND MAINTAIN.
(1) Landlord, at its own cost and expense, shall maintain the
structural soundness of the Building's roof, foundation and exterior walls
in good repair, except for reasonable wear and tear and except for damage
caused by any act or omission of Tenant or any Tenant Party or their
invitees. Landlord may elect to repair any damage caused by Tenant or any
Tenant Party or their invitees, and if Landlord so elects, Tenant shall pay
Landlord the cost or anticipated cost of such repair on demand, subject to
Paragraph 12C hereof. The term WALLS as used herein shell not include
windows, glass or plate glass, doors, special store fronts or office
entries. Tenant shall promptly give Landlord written notice of any defect
or need for repairs, after which Landlord shall make reasonable opportunity
to repair same or cure such defect.
(2) Landlord shall maintain or cause to be maintained all
exterior painting, parking areas and landscaped areas of the Project in
good condition and repair, other than those areas that are expressly
Tenant's obligations under Paragraph 11B below. Tenant shall reimburse
Landlord for Tenant's Proportionate Share of any costs incurred by Landlord
under this paragraph, net of the Adjustments being escrowed monthly for
maintenance under Paragraph 3B above. All such amounts shall be owed to
Landlord as additional Rent.
B. TENANT'S OBLIGATION TO REPAIR AND MAINTAIN. Except only for
maintenance, repair and replacement performed by Landlord pursuant to Paragraph
11A
PAGE 9
hereof, Tenant, at its own cost and expense, shall maintain in good condition
and promptly make all necessary repairs and replacements to (i) all parts of the
Premises, (ii) the water and electricity lines and appurtenances from the
outside of the exterior walls of the Building to and within the Premises, (iii)
any and all overhead doors, loading docks, loading dock levelers and loading
dock equipment, (iv) the walkways, parking areas and facilities, driveways and
alleys located within the Adjacent Area, as illustrated on EXHIBIT "B" attached
hereto, and (v) and any spur track servicing the Premises. Tenant shall also
keep the Adjacent Area in a clean and sanitary condition. If applicable and if
requested by the railroad company, Tenant agrees to sign a joint maintenance
agreement with the railroad company servicing the Premises. Without limitation
of any of the above, from and after the Commencement Date, and regardless of
whether or not Tenant is occupying the Premises, Tenant shall be responsible for
ensuring that the Premises are heated to the extent necessary to prevent any
freeze or cold weather associated damage to the Premises or the Building or any
of the Building systems (I.E., water pipes). Tenant shall be solely responsible
for any damage to the Premises or the Building, or any Building systems, as well
as any other property damage, associated with or resulting from Tenant's failure
to adequately heat the Premises during the Lease Term. Tenant, at its own cost
and expense, shall enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor approved by Landlord
for servicing all hot water, heating and air conditioning systems and equipment
within the Premises; which service contract must include all services suggested
by the equipment manufacturer in its operations/maintenance manual and must
become effective within thirty (30) days of the date Tenant takes possession of
the Premises.
Landlord reserves the right to perform any of Tenant's obligations set
forth under this paragraph including utility line maintenance and any other
items that are otherwise Tenant's obligations under this paragraph to the extent
that Tenant fails to perform its obligations thereunder within the time frames
set forth in Paragraph 18F. In such event, Landlord shall be entitled to an
administrative fee of ten percent (10%) of the costs and expense of all of the
foregoing, and Tenant shall be liable for the cost and expense of such repair,
replacement, maintenance and other such items, as well as the administrative
fee.
12. INSURANCE.
A. LANDLORD'S INSURANCE. Landlord shall maintain insurance covering
the Building (except that Landlord shall not be required to insure any part of
the partitions, fixtures, additions and other improvements that may have been
constructed, erected or installed in or about the Premises or for the benefit
of, or by or for Tenant) in an amount not less than one hundred percent (100%)
of the replacement cost thereof insuring against the perils or Fire, Lightning,
Extended Coverage, Vandalism and Malicious Mischief (collectively, LANDLORD'S
INSURANCE).
B. TENANT'S INSURANCE. Tenant, at its own expense, shall maintain
during the term of this Lease a policy or policies of worker's compensation
(or its equivalent provided such is approved by Landlord, such not to be
unreasonably withheld) and commercial general liability insurance, including
personal injury and property damage, with contractual liability endorsement,
in the amount of Five Hundred Thousand Dollars ($500,000.00) for property
damages and One Million Dollars ($1,000,000.00) per occurrence for personal
injuries or deaths of persons occurring in or about the Premises and the
Project; provided, such limits may be adjusted upward in Landlord's
reasonable discretion based upon inflation or upon the type of business
conducted by Tenant in the Premises. Said policies shall (i) name Landlord as
an additional insured and insure Landlord's contingent liability under this
Lease (except for the worker's compensation policy, which instead shall
include waiver of subrogation endorsement in favor of Landlord), (ii) be
issued on an occurrence (not claims made) basis, (iii) be issued by an
insurance company which is acceptable to Landlord, and (iv) provide that said
insurance shall not be cancelled unless sixty (60) days prior written notice
shall have been given to Landlord. In addition to the above, Tenant shall
maintain insurance insuring the interest of Tenant and covering all of
Tenant's property and all partitions, fixtures, additions and other
improvements that may have been constructed,
PAGE 10
erected or installed in or about the Premises or for the benefit of, or by or
for Tenant that Tenant is entitled to remove upon the termination of this Lease,
and covering all contents of the premises, in an amount not less than one
hundred percent (100%) of the replacement cost thereof insuring against the
perils of Fire, Lightning, Extended Coverage, Vandalism and Malicious Mischief.
Said policy or policies or certificates thereof shall be delivered to Landlord
by Tenant upon commencement of the term of the Lease and at least thirty (30)
days prior to the effective date of each renewal of said insurance.
Tenant will not permit the Premises to be used for any purpose or in any
manner that would (i) void the insurance thereon, (ii) increase the insurance
risk, or (iii) cause the disallowance of any sprinkler credits, including
without limitation, use of the Premises for the receipt, storage or handling of
any product, material or merchandise that is explosive or highly inflammable.
If any increase in the cost of any insurance on the Premises or the Building is
caused by Tenant' s use of the Premises, or because Tenant vacates the Premises,
then Tenant shall pay the amount of such increase to landlord upon demand.
C. WAIVER OF SUBROGATION. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS LEASE, LANDLORD AND TENANT HEREBY WAIVE ANY RIGHTS EACH MAY HAVE AGAINST
THE OTHER ON ACCOUNT OF ANY LOSS OR DAMAGE OCCASIONED TO LANDLORD OR TENANT, AS
THE CASE MAY BE (WHETHER OR NOT SUCH LOSS OR DAMAGE IS CAUSED BY THE FAULT OR
NEGLIGENCE OF THE OTHER PARTY), TO THEIR RESPECTIVE PROPERTY, THE PREMISES, ITS
CONTENTS OR TO ANY OTHER PORTION OF THE BUILDING OR THE PROJECT ARISING FROM ANY
RISK THAT WOULD BE COVERED BY ANY INSURANCE REQUIRED TO BE CARRIED UNDER THIS
LEASE. THE PARTIES HERETO EACH, ON BEHALF OF THEIR RESPECTIVE INSURANCE
COMPANIES INSURING THE PROPERTY OF EITHER LANDLORD OR TENANT AGAINST ANY SUCH
LOSS, WAIVE ANY RIGHT OF SUBROGATION THAT IT MAY HAVE AGAINST LANDLORD OR
TENANT, AS THE CASE MAY BE. EACH PARTY TO THIS LEASE AGREES IMMEDIATELY TO GIVE
TO EACH SUCH INSURANCE COMPANY WRITTEN NOTIFICATION OF THE TERMS OF THE MUTUAL
WAIVERS CONTAINED IN THIS PARAGRAPH, AND TO HAVE SAID INSURANCE POLICIES
PROPERLY ENDORSED, IF NECESSARY, TO PREVENT THE INVALIDATION OF SAID INSURANCE
COVERAGES BY REASON OF SAID WAIVERS.
13. LIABILITY/INDEMNIFICATION.
A. LANDLORD'S LIABILITY AND INDEMNITY. Except as otherwise
expressly provided in this Lease, and unless such is due to the gross negligence
or willful misconduct of Landlord, Landlord will not be liable to Tenant or any
Tenant Party for, and Tenant hereby releases Landlord and agrees to hold
Landlord harmless from and against, any injury to person or damage to property
on or about the Premises caused by (i) the Premises becoming out of repair, (ii)
the leakage of gas, oil, water or steam or by electricity emanating from any
part of the Premises, or (iii) any other cause. Except for any claims, rights of
recovery and causes of action that Tenant has expressly herein waved or released
or for which Landlord is not responsible for hereunder, Landlord shall indemnify
and hold Tenant harmless from and against any and all fines, suits, losses,
costs, liabilities, claims, demands, action and judgments of every kind and
character for any injury to any person or damage to any property in, on, or
about the Premises or any part thereof, when such injury or damage shall be
caused by the gross negligence or willful misconduct of Landlord, together with
reasonable court costs and attorneys fees incurred by Tenant in defending same.
Upon the occurrence of an event which Landlord is required to indemnify Tenant
against, and upon demand by Tenant, Landlord shall employ counsel reasonably
acceptable to Tenant and defend Tenant against any liability for such event, all
at Landlord's cost. The provisions of this Section 13A shall survive the
expiration or termination of this Lease with respect to any claims or liability
occurring prior to such expiration or termination.
B. TENANT'S LIABILITY AND INDEMNITY. Tenant shall indemnify and
hold Landlord harmless from and against any and all fines, suits, losses, costs,
liabilities, claims, demands, actions and judgments of every kind and character
(i) arising by reason of any breach, violation or non-performance by Tenant of
any term, provision, covenant, condition or agreement to be performed or abided
by Tenant
PAGE 11
hereunder, and (ii) all claims, demands, actions, damages, losses, costs,
liabilities, expenses and judgments suffered by, recovered from, or asserted
against Landlord or any Landlord Party on account of death, injury or damage to
person or property where such death, injury or damage is caused, in whole or in
part, by Tenant or any Tenant Party or their invitees, together with reasonable
court costs and attorneys fees incurred by Landlord in defending same. Upon the
occurrence of an event which Tenant is required to indemnify Landlord against,
and upon demand by Landlord, Tenant shall employ counsel reasonably acceptable
to Landlord and defend Landlord against any liability for such event, all at
Tenant's cost. The indemnities and covenants of Tenant in this Paragraph 148
are in addition to, and not in limitation of, and other indemnities made by
Tenant elsewhere in this Lease. The provisions of this Section 13B shall
survive the expiration or termination of this Lease with respect to any claims
or liability occurring prior to such expiration or termination.
14. CASUALTY.
A. TERMINATION OF LEASE. If the Premises should be damaged or
destroyed by fire or other peril, Tenant immediately shall give written notice
to Landlord. If: (i) the Building should be totally destroyed by any peril
covered by the insurance to be provided by Landlord under Paragraph 12A above;
or if (ii) the Premises should be so damaged thereby that, in Landlord's
estimation, rebuilding or repairs cannot be completed within one hundred eighty
(180) days after the date of such damage; or if (iii) the Premises should be so
damaged thereby that, in Landlord's estimation, rebuilding or repairs of the
portion thereof required to be insured by Landlord can be substantially
completed within one hundred eighty (180) days after the date of such damage,
but the insurance proceeds available to Landlord will not, in Landlord's
estimation, be sufficient to complete such rebuilding or repairs (due to such
insurance proceeds being applied to mortgage debt or otherwise) and Landlord is
either unable or unwilling to advance sufficient funds to complete such
rebuilding or repairs; then in any of such events this Lease shall cease and
terminate as if and to the extent the effective date of such termination had
been the date originally scheduled for the expiration of the term of this Lease,
and the Rent shall be abated during the previously unexpired term of this Lease,
effective upon the date of the occurrence of such damage.
B. RESTORATION OF PREMISES BY LANDLORD. Subject to the provisions
of Section 14A above, if the Premises should be damaged by any peril covered by
the insurance to be provided by Landlord under Paragraph 12A above, and in
Landlord's estimation, rebuilding or repairs of the portion thereof required to
he insured by Landlord can be substantially completed within one hundred eighty
(180) days after the date of such damage, this Lease shall not terminate, and
Landlord shall restore the Premises to substantially its previous condition,
except that Landlord shall not be required to rebuild, repair or replace any
part of the partitions, fixtures, additions and other improvements that may have
been constructed, erected or installed in, or about the Premises or for the
benefit of, or by or for Tenant. During any period of rebuilding, repair and
restoration, Landlord shall allow Tenant a fair diminution in Rent. Subject to
Force Majeure, if such repairs and rebuilding of the Premises have not been
substantially completed within one hundred eighty (180) days after the date of
such damage, Tenant, as Tenant's exclusive remedy, say give Landlord notice of
Tenant's intention to terminate the Lease effective as of the date specified in
such notice, which date shall be not less that thirty (30) days after the
notice. If the repairs and rebuilding have not been substantially completed by
the date specified in such notice, Tenant, as Tenant's exclusive remedy, may
immediately terminate this Lease by delivering written notice of termination to
Landlord, in which event the rights and obligations hereunder shall cease and
terminate as if and to the extent the effective date of such termination had
been the date originally scheduled for the expiration of the term of this Lease,
and Rent shall be abated during the previously unexpired term of this Lease,
effective upon the date of the termination.
15. CONDEMNATION. If more than eighty percent (80%) of the Premises are
taken for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof and the taking
PAGE 12
prevents or materially interferes with the use of the Premises for the purpose
for which they were leased to Tenant, this Lease shall terminate and the Rent
shall be abated during the unexpired portion of this Lease, effective on the
date of such taking. If less than eighty percent (80%) of the 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, this Lease shall not terminate, but the Rent payable hereunder during
the unexpired portion of this Lease shall be reduced to such extent as may be
fair and reasonable under all of the circumstances. All compensation awarded in
connection with or as a result of any of the foregoing proceedings shall be the
property of Landlord, and Tenant hereby assigns any interest in any such award
to Landlord; provided, however, Landlord shall have no interest in any award
made to Tenant for loss of business or goodwill or for the taking of Tenant's
fixtures and improvements, if a separate award for such items is made to Tenant.
16. ASSIGNMENT AND SUBLETTING.
A. PROHIBITION ON ASSIGNMENT AND SUBLETTING. Tenant shall not have
the right to assign, sublet, transfer or encumber this Lease, or any interest
therein, without the prior written consent of Landlord. Any attempted
assignment, subletting, transfer or encumbrance by Tenant in violation of the
terms and covenants of this paragraph shall be void. If Tenant requests
Landlord's consent to an assignment of this Lease or subletting of all or a part
of the Premises, it shall submit to Landlord, in writing, the name of the
proposed assignee or subtenant, the commencement date of such assignment or
subletting, the nature and character of the business of the proposed assignee or
subtenant and the proposed rates, terms and other pertinent conditions of such
assignment or subletting. Upon receipt of a request for consent to an
assignment or subletting, and unless such request pertains to an assignment or
sublease governed by Paragraph 168 below, Landlord shall have the option (to be
exercised within thirty (30) days from the submission of Tenant's written
request) to (i) cancel this Lease (or the applicable portion thereof as to a
partial subletting) as of the commencement date stated in the above-mentioned
notice of subletting or assignment, unless Tenant withdraws the proposal to
sublet or assign within ten (10) days after Landlord's notice of cancellation is
given, (ii) permit such assignment or subletting, or (iii) reasonably withhold
its consent to such assignment or subletting. If Landlord elects to cancel this
Lease and Tenant does not withdraw the proposal to sublet or assign, then the
term of this Lease (as to the applicable portion of the Premises), and the
tenancy and occupancy of the applicable portion of the Premises by Tenant
hereunder, shall cease, terminate, expire, and come to an end as if the
cancellation date was the original termination date of this Lease with respect
to the applicable portion of the Premises. In the event Landlord consents to a
proposed assignment or subletting and the rent due and payable by any such
assignee or sublessee under any such permitted assignment or sublease (or a
combination of the rent payable under such assignment or sublease plus any bonus
or any other consideration therefor or any payment, incident thereto) exceeds
the Base Monthly Rent payable under Paragraph 3 of this Lease for the applicable
space, net of Tenant's actual reasonable costs incurred in connection with such
assignment or subletting (E.G. attorneys' fees, marketing costs (but not
Tenant's internal costs)) and net of any finish out allowance granted by Tenant
in connection with any assignment or sublease not in excess of market (E.G.,
Tenant may not recover any finish out allowance in excess of that which would
granted to a similarly situated tenant for similar space in similar properties
in the Dallas/Forth Worth area), Tenant shall pay to Landlord all such excess
rent and other excess consideration within ten (10) days following receipt
thereof by Tenant, whether or not such assignment or subletting pertains to an
assignment or subletting permitted under Paragraph 16B below.
B. PERMITTED ASSIGNMENTS/SUBLEASES.
(1) Notwithstanding the provisions of Paragraph 16A, Tenant may,
without the consent of Landlord, at any time assign or otherwise transfer
this Lease or any portion thereof to any Affiliate (hereinafter defined);
or any corporation resulting from the consolidation or merger of Tenant
into or with any other entity; or to any person, firm, entity or
corporation acquiring a majority of Tenant's issued and outstanding capital
stock or substantially all of Tenant's
PAGE 13
assets. As used herein, the term AFFILIATE shall mean a person or entity,
corporate or otherwise, that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with Tenant. The term CONTROL means the right and power, direct or
indirect, to direct or cause the direction of the management and policies
of a person or business entity, corporation or otherwise, through ownership
or voting securities, by contract or otherwise; provided, however, that in
the event of an assignment, the assignee shall assume in writing the terms
and conditions set forth herein to be observed and performed by the Tenant
in a form reasonably approved by Landlord. A sublease or assignment
pursuant to this Paragraph 163(1) shall not be subject to.Landlord's
recapture rights set forth in Paragraph 16A above.
(2) Notwithstanding the provisions of Paragraph 16A, and without
limiting the provisions of Paragraph 163(1) above, Landlord agrees not to
unreasonably withhold its consent to a one (1) time sublease of all or a
portion of the Premises by the Tenant named herein provided that such sub
lease has a term not to exceed one (1) calendar year, inclusive of any
renewal or extension rights, and the term of such sublease shall in any
event expire no later than the ninth (9th) anniversary of the Rent
Commencement Date. The subtenant under such sublease shall have no right to
occupy any portion of the Premises in excess of one (1) calendar year. A
sublease pursuant to this Paragraph 16B(2) shall not be subject to
Landlord's recapture rights set forth in Paragraph 16A above. This
Paragraph 16B(2) will only apply to the first sublease having a full term,
inclusive of extension and renewal rights, of one (1) year or less for
which Tenant requests Landlord's consent, and any additional requests for a
consent to any sublease shall be governed solely by the provisions of
Paragraph 16A and 16B(1) above.
C. ASSIGNMENTS IN BANKRUPTCY.
(1) If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et. seq.
(the BANKRUPTCY CODE), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid
or delivered to Landlord, 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.
(2) 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.
D. EFFECT OF ASSIGNMENT. Any assignee, sublessee or transferee of
Tenant's interest in this Lease (all such assignees, sublessees and transferees
being hereinafter referred to as TRANSFEREES), by assuming Tenant's obligations
hereunder, shall assume liability to Landlord for all amounts paid to persons
other than Landlord by such Transferees in contravention of this Paragraph 16.
No assignment, subletting or other transfer, whether consented to by Landlord or
not or permitted hereunder shall relieve the Tenant named herein of any
liability hereunder for the obligations of the "Tenant". If an event of default
occurs while the Premises or any part thereof are assigned or sublet, then
Landlord, in addition to any other remedies herein provided, or provided by law,
may collect directly from such Transferee all rents payable to the Tenant and
apply such rent against any sum due Landlord hereunder. No such collection
shall be construed to constitute a novation or a release of Tenant from the
further performance of Tenant's obligations hereunder.
PAGE 14
17. DEFAULT BY TENANT. The following events (herein individually referred
to as EVENT OF DEFAULT) each shall be deemed to be events of default by Tenant
under this Lease:
A. Tenant shall fail to pay any installment of the Rent herein
reserved when due, or any other payment or reimbursement to Landlord required
herein when due, and such failure shall continue for a period of five (5) days
from the date such payment was due.
B. Tenant or any guarantor of the Tenant's obligations hereunder
shall (i) become insolvent; (ii) admit in writing its inability to pay its
debts; (iii) make a general assignment for the benefit of creditors; (iv)
commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as a debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or of any substantial part of its property; or (v) take any action to
authorize or in contemplation of any of the actions set forth above in this
paragraph.
C. Any case, proceeding or other action against the Tenant or any
guarantor of the Tenant's obligations hereunder shall be commenced seeking (i)
to have an order for relief entered against it as debtor or to adjudicate it a
bankrupt or insolvent; (ii) reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors; (iii)
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property, and such case, proceeding or
other action (a) results in the entry of an order for relief against it which it
is not fully stayed within seven (7) business days after the entry thereof or
(b) shall remain undismissed for a period of forty-five (45) days.
D. Tenant shall (i) vacate all or a substantial portion of the
Premises or (ii) fail to continuously operate its business at the Premises for
the permitted use set forth herein, whether or not Tenant is in default of the
rental payments due under this Lease.
E. Tenant shall fail to discharge any lien placed upon the Premises
or the Project, or any portion thereof, in violation of Paragraph 27 hereof
within twenty (20) days after any such lien or encumbrance is filed.
F. Tenant shall fail to comply with any other terms in this Lease
other than those for which an event of default has been described in this
Paragraph 17, and such failure is not cured within thirty (30) days after
written notice thereof to Tenant, or if such failure cannot reasonably be cured
in thirty (30) days, such time as is reasonable under the circumstances, not to
exceed ninety (90) days, and provided that Tenant must diligently proceed to
cure the default.
18. LANDLORD'S REMEDIES. Upon the occurrence of any event of default
specified in this Lease, Landlord, at its option, may exercise one (1) or more
of the following remedies, in addition to all other rights and remedies provided
at law or in equity.
A. Landlord may, without judicial process, terminate this Lease
(whereupon all obligations and liabilities of Landlord hereunder shall
terminate) and without further notice repossess the Premises without having
any liability therefor (including specifically any liability or duty under
Section 93.002 of the Texas Property Code which is specifically superseded by
this Paragraph 18A) and be entitled to recover all loss and damage Landlord
may suffer by reason of such termination, whether through inability to relet
the Premises on satisfactory terms or otherwise, including without
limitation, accrued Rent and interest thereon, accrued late charges and
interest thereon, the unamortized cost of the Improvements made at Landlord's
expense pursuant to Paragraph 2 hereof or otherwise, broker's fees and
commissions, attorneys' fees,
PAGE 15
moving allowance and any other costs incurred by Landlord in connection with
making or executing this Lease, the cost of recovering the Premises and the
costs of reletting the Premises (including without limitation advertising costs,
brokerage fees, leasing commissions, reasonable attorneys' fees and refurbishing
costs). If such termination is caused by the failure to pay Rent and/or the
abandonment of any substantial portion of the Premises, Landlord may elect, by
sending written notice thereof to Tenant, to receive liquidated damages in an
amount equal to the product of (i) the sum of the all Rent and other charges
payable hereunder for the month during which this Lease is terminated multiplied
by (ii) the lesser of (x) the product of sixty percent (60%) multiplied by the
number of full calendar months which would have remained in the term of this
Lease but for such termination or (y) twenty-four (24). Such liquidated damages
shall be in lieu of the payment of loss and damage accruing after the date of
such termination, but shall not be in lieu of or reduce in any way any amounts
or damages payable by Tenant to Landlord and accruing prior to the date of
termination, which for all purpose shall include, but not be limited to, accrued
Rent and interest thereon, late charges and interest thereon the unamortized
cost of Tenant's improvements, broker's fees, and commissions, attorneys' fees,
any moving allowances and any other costs incurred by Landlord in connection
with making or executing this Lease. Nothing contained in this Lease shall limit
or prejudice the right of Landlord to prove for and obtain in proceedings for
bankruptcy or insolvency by reason of the termination of this Lease, an amount
equal to the maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, the damages are to be proved,
whether the amount be greater, equal to, or less than the amount of the loss or
damages referred to above.
B. Landlord may, without judicial process, immediately terminate
Tenant's right of possession of the Premises by delivering to Tenant written
notice of such termination (whereupon all obligations and liability of Landlord
hereunder shall terminate), but not terminate this Lease, and, without notice or
demand, enter upon the Premises or any part thereof and take absolute possession
of the same, expel or remove Tenant and any other person or entity who may be
occupying the Premises, by force if necessary, change the locks, without having
any liability therefor (including specifically any liability or duty under
Section 93.002 of the Texas Property Code which is specifically superseded by
this Xxxxxxxxx 00X) and at Landlord's option, Landlord may relet the Premises or
any part thereof for such terms and such rents as Landlord may in its sole
discretion elect. In the event of a termination of Tenant's possession of the
Premises under this Part B and notwithstanding anything in Section 93.002 of the
Texas Property Code to the contrary, Landlord shall have no obligation
whatsoever to tender to Tenant a key for new locks installed in the Premises and
Tenant shall have no further right to possession of the Premises. In the event
Landlord shall elect so to relet, then rent received by Landlord from such
reletting shall be applied first, to the payment of any indebtedness other than
Rent due hereunder from Tenant to Landlord (in such order as Landlord shall
designate), second, to the payment of any cost of such reletting, including,
without limitation, refurbishing coats, reasonable attorneys' fees, advertising
costs, brokerage fees and leasing commissions, and third, to the payment of Rent
due and unpaid hereunder (in such order as Landlord shall designate), and Tenant
shall satisfy and pay any deficiency upon demand thereof from time to time.
Landlord shall not be responsible or liable for any failure, and Tenant hereby
waives any obligation on the part of Landlord, to relet the Premises or any part
thereof or to collect any rent due upon any such reletting. No re-entry or
taking of possession of the Premises by Landlord pursuant to this Paragraph 18B
shall be construed as an election on Landlord's part to terminate this Lease
unless a written notice of such termination is given to Tenant pursuant to
Paragraph 18A above and, notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach. If Landlord relets the Premises (it being understood and
agreed that Landlord shall have no obligation whatsoever to relet the Premises),
either before or after the termination of this Lease for a rental rate greater
than the Rent provided in this Lease, then for that portion of the Premises that
is subject to such new lease, all such excess rentals shall be and remain the
exclusive property of Landlord, and Tenant shall not be, at any time, entitled
to recover said excess rental.
PAGE 16
C. Landlord may, without judicial process enter upon the Premises,
by force if necessary, without having any civil or criminal liability therefor
(including specifically any liability or duty under Section 93.002 of the Texas
Property Code which is superseded by this Paragraph 18C), and do whatever Tenant
is obligated to do under the terms of this Lease, and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in effecting
compliance with Tenant's obligations under this Lease plus an administrative fee
equal to ten percent (10%) of the amount of such reimbursement. Tenant further
agrees that Landlord shall not be liable for any damages resulting to Tenant
from such action, whether caused by the negligence of Landlord or otherwise.
D. Any repossession of or re-entering on the Premises by Landlord
under this Article shall be without liability or responsibility for damages to
Tenant. No repossession of or re-entering upon the Premises or any part thereof
pursuant to Paragraphs 18B or 18C or otherwise and no reletting of the Premises
or any part thereof pursuant to Paragraph 18B shall relieve Tenant or any
guarantor of its liabilities and obligations hereunder, all of which shall
survive such repossession or re-entering. In the event of any such repossession
of or re-entering upon the Premises or any part thereof by reason of the
occurrence of an event of default, Tenant will continue to pay to Landlord Rent
required to be paid by Tenant.
E. No right or remedy herein conferred upon or reserved to Landlord
is intended to be exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any other right or
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. In addition to the other remedies provided in this Lease, Landlord
shall be entitled, to the extent permitted by applicable law, to injunctive
relief in case of the violation, or attempted or threatened violation, of any of
the covenants, agreements, conditions or provisions of this Lease, or to a
decree compelling performance of any of the covenants, agreements, conditions or
provisions of this Lease, or to any other remedy allowed to Landlord at law or
in equity. Tenant shall indemnify and hold Landlord harmless from any and all
costs, expenses (including reasonable attorneys' fees), claims and causes of
action arising from or in connection with any default by Tenant under this
Lease.
F. If Landlord repossesses the Premises pursuant to the authority
herein granted or provided at law or in equity, then Landlord shall have the
right to (i) keep in place and use or (ii) remove and store all of the
furniture, fixtures and equipment at the Premises, including that which is owned
by or leased to Tenant at all times prior to any foreclosure thereon by Landlord
or repossession thereof by any lessor thereof or third party having a superior
lien thereon. Landlord also shall have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other property to
any person (CLAIMANT) who presents to Landlord a copy of any instrument
represented by Claimant to have been executed by Tenant (or any predecessor of
Tenant) granting Claimant the right under various circumstances to take
possession of such furniture, fixtures, equipment or other property, without the
necessity on the part of Landlord to inquire into the authenticity or legality
of said instrument. The rights of Landlord herein stated shall be in addition
to any and all other rights that Landlord has or may hereafter have at law or in
equity; and Tenant stipulates and agrees that the rights herein granted Landlord
are commercially reasonable.
19. DEFAULT BY LANDLORD AND TENANT'S REMEDIES. If Landlord fails to
perform any of its obligations hereunder within thirty (30) days after written
notice from Tenant specifying such failure, or if such obligations cannot
reasonably be accomplished in thirty (30) days, Landlord has not commenced
performance within such thirty (30) day period and thereafter diligently
prosecutes performance through completion, Tenant's exclusive remedy shall be an
action for actual damages. In no event shall Landlord be liable to Tenant for
consequential, punitive or special damages (or any similar types of damages) by
reason of a failure to perform (or a default) by Landlord hereunder or
otherwise. Unless and until Landlord fails to so cure any default after such
notice, Tenant shall not have any remedy or cause of action by
PAGE 17
reason thereof. All obligations of Landlord hereunder will be construed as
covenants, not conditions; and all such obligations will be binding upon
Landlord only during the period of its ownership of the Premises and not
thereafter. The term "Landlord" shall mean only the owner, for the time being,
of the Premises, and in the event of the transfer by such owner of its interest
in the Premises, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the term of this Lease upon
each new owner for the duration of such owner's ownership. Notwithstanding any
other provisions hereof, Landlord shall not have any personal liability
hereunder. In the event of any breach or default by Landlord in any term or
provision of this Lease, Tenant agrees to look solely to the equity or interest
then owned by Landlord in the Project or the Building of which the Premises are
a part; however, in no event, shall any deficiency judgment or any money
judgment of any kind be sought or obtained against Landlord.
20. BANKRUPTCY.
A. Notwithstanding anything in this Lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this Lease, whether
or not expressly denominated as Rent, shall constitute rent for the purposes of
Section 502(b)(6) of the Bankruptcy Code.
B. This a contract under which applicable law excuses Landlord from
accepting performance from (or rendering performance to) any person or entity
other than Tenant within the meaning of Sections 365(c) and 365(e)(2) of the
Bankruptcy Code.
21. SECURITY DEPOSIT.
A. Tenant agrees to deposit with Landlord on the date hereof an
initial amount equal to $358,010.25 (the SECURITY DEPOSIT), which shall be
held by Landlord as security for the performance of Tenant's obligations
under this Lease, it being expressly understood and agreed that this deposit
is not an advance rental deposit or a measure of Landlord's damages in case
of Tenant's default. Upon each occurrence of an EVENT OF DEFAULT BY TENANT,
Landlord may use all or part of the Security Deposit to pay past cue Rent or
other payments due Landlord under this Lease, and the cost of any other
damage, injury, expense or liability caused by such event of default without
prejudice to any other remedy provided herein or provided by law. On demand,
Tenant shall pay Landlord the amount that will RESTORE the Security Deposit
to the amount required on the immediately preceding anniversary of the Rent
Commencement Date. The Security Deposit shall be deemed the property of
Landlord, but any remaining balance of such deposit shall be returned by
Landlord to Tenant when Tenant's obligations under this Lease have been
fulfilled and this Lease terminated. Notwithstanding the above, on each
anniversary of the Rent Commencement Date, and provided that Tenant is not
then in default under this Lease and no event has occurred that, if uncured
with the passage of time, would result in an event of default, the Security
Deposit will be reduced by ten percent (10%) and Landlord will remit to
Tenant within fifteen (15) days after such anniversary date (the REDUCTION
PAYMENT DATE) an amount equal to such ten percent (10%) reduction.
B. Landlord agrees to place the Security Deposit in a Certificate of
Deposit in Landlord's name (the CD) with Nations Bank, Dallas, N.A. (branch to
be designated by Landlord). The initial CD shall have a maturity date of not
later than the first anniversary of the Rent Commencement Date and shall
thereafter be renewed for one (1) year terms throughout the Lease Term. All
interest accruing from year-to-year on such CD shall be for the benefit of
Tenant and shall be paid to Tenant by Landlord on the Reduction Payment Date
unless during any one year period beginning and ending on each anniversary of
the Rent Commencement Date (except that the first one year period shall be
deemed to begin on the Commencement Date and end on the first anniversary of the
Rent Commencement Date) there has occurred an event of default by Tenant under
this Lease and Landlord has utilized the Security Deposit, thereby cashing or
drawing down upon the CD, to cure Tenant's default or to recover Landlord's
damages as set forth in subparagraph A above. If during the Lease Term there
occurs an event
PAGE 18
of default due to which Landlord cashes in or draws down upon the CD, Landlord
shall thereafter be relieved and released from any obligation to maintain the
Security Deposit in a certificate of deposit or to otherwise account to Tenant
for any interest on the Security Deposit. Instead, the Security Deposit will be
thereafter held by Landlord, without obligation for interest, in such account or
accounts as Landlord, in its sole discretion, may elect, including commingling
the Security Deposit with other funds of Landlord. TENANT HEREBY RELEASES AND
AGREES TO HOLD LANDLORD HARMLESS FROM ANY LIABILITY, DAMAGES OR LOSSES SUFFERED
OR INCURRED BY TENANT AS A RESULT OF ANY "FAILURE" OF THE INSTITUTION HOLDING
THE SECURITY DEPOSIT (IN THE FORM OF A CD OR CASH).
22. SECURITY INTEREST. In addition to, and without limitation of, the
security for Tenant's performance of its obligations set forth in Paragraph 21
above, to assure payment of all sums due hereunder and the faithful performance
of all other covenants of this Lease, Tenant hereby grants to Landlord an
express contract lien on and security interest in and to the Security Deposit.
On the date this Lease is executed or at any time thereafter upon the request of
Landlord, Tenant shall execute and deliver to Landlord two (2) multiple
originals of a financing statement in form sufficient to perfect the security
interest granted hereunder. A carbon, photographic or other reproduction of
this Lease is sufficient and may be filed as a financing statement. Landlord
shall have all the rights and remedies of a secured party under the Texas
Business and Commerce Code and this lien and security interest may be foreclosed
by process of law. Landlord otherwise waives and negates any and all
contractual liens and security interests, statutory liens and security interests
or constitutional liens and security interests arising by operation of law or
otherwise to which Landlord might now or hereafter be entitled on all property
of Tenant now owned or hereafter placed in or upon the Premises (except for
judgment liens which may hereafter arise in favor of Landlord).
23. SURRENDER UPON TERMINATION. At the termination of this Lease, by its
expiration or otherwise, Tenant immediately shall deliver possession of the
Premises to Landlord with all repairs and maintenance required herein to be
performed by Tenant completed. Prior to Tenant vacating the Premises, Tenant
shall pay to Landlord any amount reasonably estimated by Landlord as necessary
to put the Premises, including without limitation, all heating and air
conditioning systems and equipment therein, in good condition and repair,
reasonable wear and tear excluded. All such amounts shall be used and held by
Landlord for payment of such obligation of Tenant hereunder, with Tenant being
liable for any additional costs therefor upon demand by Landlord, or with any
excess to be returned to Tenant after all such obligations have been determined
and satisfied as the case may be. Any security deposit held by Landlord shall
be credited against the amount due from Tenant under this Paragraph 23. All
obligations of Tenant hereunder not fully performed as of the expiration or
earlier termination of the term of this Lease shall survive the expiration or
earlier termination of the term hereof, including without limitation, all
payment obligations with respect to taxes and insurance and all obligations
concerning the condition and repair of the Premises.
24. HOLDING OVER. If, for any reason, Tenant retains possession of the
Premises after the expiration or termination of this Lease, unless the parties
hereto otherwise agree in writing, such possession shall be subject to
termination by either Landlord or Tenant at any time upon not less than ten (10)
days advance written notice, and all of the other terms and provisions of this
Lease shall be applicable during such period, except that Tenant shall pay
Landlord from time to time, upon demand, as rental for the period of such
possession, an amount equal to 150% of the Base Monthly Rent in effect on the
termination date, computed on a daily basis for each day of such period. No
holding over by Tenant, whether with or without consent of Landlord, will shall
operate to extend this Lease except as otherwise expressly provided. The
preceding provisions of this Paragraph 24 shall not be construed as consent for
Tenant to retain possession of the Premises in the absence of written consent
thereto by Landlord. In addition to the above, Tenant shall be liable to
Landlord for Landlord's actual damages resulting as a result of any holdover by
Tenant.
PAGE 19
25. QUIET ENJOYMENT. Landlord covenants that on or before the Commencement
Date it will have good title to the Premises, free and clear of all liens and
encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental regulations
relating to the use of such property, and easements, restrictions and other
conditions of record. Landlord agrees that so long as Tenant pays all amounts
due hereunder and performs all other covenants and agreements herein set forth,
Tenant shall peaceably and quietly have, hold and enjoy the Premises for the
term of this Lease without hindrance or molestation from Landlord, subject to
the terms and provisions of this Lease.
26. ENTRY BY LANDLORD. Landlord and Landlord's agents and representatives
shall have the right to enter the Premises at any reasonable time during
business hours, to inspect the Premises and to make such repairs as may be
required or permitted pursuant to this Lease or to make such repairs or
installations as are necessary for other tenants in the Building. During the
period that is nine (9) months prior to the end of the term of this Lease, upon
telephonic notice to Tenant, Landlord and Landlord's representatives may enter
the Premises during business hours for the purpose of showing the Premises. In
addition, Landlord shall have the right to erect a suitable sign on the Premises
stating the Premises are available. Landlord shall also have the right (but not
the obligation) to enter the Premises at any time, and by force if necessary, in
the case of an emergency. Tenant shall notify Landlord in writing at least
thirty (30) days prior to vacating the Premises and shall arrange to meet with
Landlord for a joint inspection of the Premises prior to vacating. If Tenant
fails to give such notice or to arrange for such inspection, then Landlord's
inspection of the Premises shall be deemed correct for the purpose of
determining Tenant's responsibility for repairs and restoration of the Premises.
27. MECHANICS LIENS. Tenant has no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any mariner to bind the interest of Landlord or Tenant in the 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. 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 at the Premises or the Project and that it will indemnify and
hold Landlord harmless from and against any and all loss, cost or expense based
on or arising out of asserted claims or liens against the leasehold estate or
against the right, title and interest of Landlord in the Premises or the Project
or under the terms of this Lease. Tenant agrees to give Landlord immediate
written notice of the placing of any lien or encumbrance against the Premises or
the Project.
28. WAIVER. No waiver by Landlord of any provision of this Lease or of any
default, event of default or breach of Tenant hereunder shall be deemed to be a
waiver of any other provision of this Lease, or of any subsequent default, event
of default or breach by Tenant of the same or any other provision. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant. No act or thing done by
Landlord or Landlord's agents during the term of this Lease shall be deemed an
acceptance of a surrender of the Premises, unless done in writing signed by
Landlord. The delivery of the keys to any employee or agent of Landlord shall
not operate as a termination of this Lease or a surrender of the Premises. The
acceptance of any Rent by Landlord following a default, event of default or
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such
default, event of default or breach or any other default, event of default or
breach unless such waiver is expressly stated in writing and signed by Landlord.
29. SUBORDINATION. Tenant accepts this Lease subject and subordinate to
any mortgages and/or deeds of trust now or at any time hereinafter constituting
a lien or charge upon the Premises, provided, however, that if the mortgagee,
trustee, or holder of any such mortgage or deed of trust elects to have Tenant's
interest in this Lease superior to any such instrument, then by notice to Tenant
from such mortgagee, trustee
PAGE 20
or holder, this Lease shall be deemed superior to such lien, whether this Lease
was executed before or after said mortgage or deed of trust. Tenant, at any time
hereafter on demand, shall execute any instruments, releases or other documents
that may be required by any mortgagee for the purpose of subjecting and
subordinating this Lease to the lien of any such mortgage.
30. TENANT ESTOPPELS. Tenant agrees, from time to time, within ten (10)
days after request of Landlord, to deliver to Landlord, or Landlord's designee,
a certificate of occupancy and an estoppel certificate stating that this Lease
is in full force and effect, the date to which Rent has been paid, the unexpired
term of this Lease and such other factual matters pertaining to this Lease as
may be requested by Landlord. It is understood and agreed that Tenant's
obligation to furnish such estoppel certificates in a timely fashion is a
material inducement for Landlord's execution of this Lease.
31. NOTICES. All notices, requests, approvals, and other communications
required or permitted to be delivered under this Lease must be in writing and
are effective (i) on the business day sent if sent by telecopier during normal
business hours and the sending telecopier generates a written confirmation of
sending; (ii) the next business day after delivery to a
nationally-recognized-overnight-courier service for prepaid overnight delivery;
(iii) if orderly delivery of the mail is not then disrupted or threatened, in
which event some method of delivery other than the mail must be used, three (3)
days after being deposited in the United States mail, certified, return receipt
requested, postage prepaid; or (iv) upon actual receipt by the addressee if
delivered personally or by any method other than by telecopier (with written
confirmation), nationally-recognized-overnight-courier service, or mail; in each
instance addressed to Landlord or Tenant, as the case may be, addressed:
if to Landlord, as follows:
MEPC Quorum Properties II Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000, XX 10
Xxxxxx, Xxxxx 00000
Attn: Property Manager
Telecopy: (000) 000-0000
and, if to Tenant, as follows:
Mannatech, Inc.
0000 Xxxxx Xxxxxxx 000
Xxxxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
or to such other address or to the attention of such other person as shall be
designated by the applicable party and on fifteen (15) days notice from time to
time in writing and sent in accordance herewith.
32. PARKING. Tenant and its employees, customers and licensees shall have
the exclusive right to use any parking areas that have been specifically
designated for such exclusive use by Landlord on the site plan for the Land
attached hereto as EXHIBIT "B" and incorporated herein by reference, subject to
(i) all rules and regulations promulgated by Landlord in its reasonable
discretion, and (ii) rights of ingress and egress of other lessees of the Land
or the Development, as applicable. Tenant and its employees, customers and
licensees shall not have the right to use any parking area that are from time to
time specifically designated by Landlord for exclusive use by another lessee,
except to the extent necessary for ingress and egress. Landlord shall not be
responsible for enforcing Tenant's parking rights against any third parties.
Tenant agrees not to use more spaces than so provided.
PAGE 21
33. OPTION TO RENEW.
A. If Tenant is not in default under this Lease at the time of the
exercise of this option or at the commencement of the applicable Lease Term
extension, Tenant is granted the option (the OPTION) to extend the Lease Term
for one (1) extension term of five (5) years commencing on the next day after
the expiration of the initial Lease Term by giving Landlord an extension notice
at least twelve (12) months, but not more than fifteen (15) months, prior to the
expiration of the initial Lease Term. Tenant's lease of the Premises during the
extended Lease Term will be upon the same terms as in the Lease for the initial
Lease Term, except that (i) Base Monthly Rent will adjust on the first day of
the extended Lease Term to the Market Rate (defined below), (ii) during the
extended Lease Term Tenant will have no further options or rights to extend the
Lease Term, and (iii) Paragraph 5B shall be deemed omitted.
B. Within thirty (30) days after Landlord receives Tenant's written
notice of its exercise of the Option, Landlord shall deliver a notice to Tenant
(the MARKET RATE NOTICE) specifying the Market Rate for the extended Lease Term,
such to be based upon Landlord's determination of rents being charged for
comparable space in similar properties in the Dallas/Fort Worth area for terms
commensurate with the extended Lease Term and for tenants similarly situated.
Tenant shall have fifteen (15) days (the EXAMINATION PERIOD) from its receipt of
the Market Rate Notice to accept or reject Landlord's designation of the Market
Rate. If Tenant accepts Landlord's designation of the Market Rate, the MARKET
RATE will be as set forth in the Market Rate Notice. If Tenant fails to reject
in writing Landlord's designation of the Market Rate set forth in the market
Rate Notice during the Examination Period, Tenant shall be deemed to have
accepted Landlord's designation of the Market Rate, and Tenant's election to
exercise the Option shall be irrevocable. If Tenant timely rejects Landlord's
designation of the Market Rate prior to the expiration of the Examination Period
and Landlord and Tenant cannot agree in writing on the Market Rate within
fifteen (15) days after the date Landlord receives Tenant's timely rejection of
Landlord's designation of the Market Rate set forth in the Market Rate Notice
(the NEGOTIATION PERIOD), Tenant shall have the right to revoke its exercise of
the Option by written notice to Landlord within five (5) days after the
expiration of the Negotiation Period. If Tenant fails to revoke its exercise of
the Option within this five (5) day period, then Tenant's exercise of the Option
will be irrevocable and the Base Monthly Rent for the extended Lease Term will
be based upon the Market Rate set forth in the Market Rate Notice.
C. Tenant may not assign the Option to any assignee of the Lease.
No sublessee and no assignee may exercise the Option.
D. If the Lease Term is extended under this Xxxxxxxxx 00, Xxxxxxxx
shall prepare, and Landlord and Tenant will execute and deliver an amendment to
the Lease extending the Lease Term within fifteen (15) days after the Market
Rate is determined but in no event later than the date that the applicable
extension term commences; provided, however, that the failure of the parties to
enter into such an amendment will not affect the validity of Tenant's exercise
of the Option or the obligations of the parties during the extended Lease Term.
34. MISCELLANEOUS.
A. FINANCIAL STATEMENTS. During each Lease Year, Tenant shall
provide to Landlord true, correct and complete copies of Tenant's year end
financial statements audited by a third party certified public accountant on or
before the sixtieth day after the expiration of Tenant's just completed fiscal
year. In addition, Tenant shall provide other financial data or statements, such
as the most recent quarterly financial statements of Tenant, upon Landlord's
request; provided, however, that Landlord may not request such additional
statements more than once per Lease Year.
B. CONFIDENTIALITY. Tenant shall keep the terms and provisions of
this Lease confidential at all times and not disclose the terms and provisions
hereof to any
PAGE 22
party without Landlord's prior written consent, which may be withheld by
Landlord in its sole discretion. Landlord hereby consents to the disclosure of
the terms and provisions of this Lease to employees of Tenant, Tenant's
attorneys and to any financial institution Tenant is seeking financing from in
connection with this Lease and/or Tenant's operations at the Premises. The
terms of this paragraph and Tenant's agreement thereto are a material inducement
to Landlord entering into this Lease, and Tenant agrees that Landlord may be
severely damaged by a breach of this paragraph and the confidentiality
obligations herein contained. Tenant agrees that in the event of a breach of
this paragraph, Landlord may, in addition to any other remedies it may have
under this Lease or at law or equity, seek injunctive relief against Tenant
and/or recover damages from Tenant.
C. HEADINGS/GENDER. 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. 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. RUN WITH THE LAND. The terms, provisions and covenants and
conditions contained in this Lease shall run with the land and shall apply to,
inure to the benefit of, and be binding upon, the parties hereto and upon their
respective heirs, executors, personal representatives, legal representatives,
successor and assigns, except as otherwise herein expressly provided. Landlord
shall have the right to transfer and assign, in whole or in part, its rights and
obligations in the Premises, Building and/or Land that are the subject of this
Lease. 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 of such party to
enter into this Lease.
E. ORGANIZATION AND AUTHORITY. Tenant represents and warrants to
Landlord that (i) Tenant is a duly organized and existing TEXAS corporation and
has the full right and authority to enter into this Lease and to perform all of
its obligations hereunder, (ii) all requisite authorizing actions have been
taken by Tenant in connection with the entering into of this Lease, (iii) this
Lease is the valid, legally binding obligation of and enforceable against Tenant
in accordance with its terms, and (iv) each of the persons signing this Lease on
behalf of Tenant is authorized to do so. Upon request by Landlord, Tenant will
provide a certified copy of the resolutions of the board of directors of Tenant
authorizing the entering into of this Lease by Tenant and the execution hereof
by the persons who sign this Lease on behalf of Tenant.
F. RECORDING. Tenant may not record this Lease or any memorandum
thereof.
G. ENTIRE AGREEMENT. This Lease constitutes the entire
understanding and agreement of the Landlord and Tenant with respect to the
subject matter of this Lease, and contains all of the covenants and agreements
of Landlord and Tenant with respect thereto. Landlord and Tenant each
acknowledge that no representations, inducements, promises or agreements, oral
or written, have been made by Landlord or Tenant, or anyone acting on behalf of
Landlord or Tenant, which are not contained herein, and any prior agreements,
promises, negotiations, or representations not expressly set forth in this Lease
are of no force or effect. This Lease may not be altered, changed or amended
except by an instrument in writing signed by both parties hereto.
H. FORCE MAJEURE. As used in this Lease, FORCE MAJEURE shall mean a
delay caused by reason of fire, acts of God, unreasonable delays in
transportation, embargo, weather (I.E., rain and rain related conditions,
humidity, temperature, wind, etc.), strike, other labor disputes, governmental
preemption of priorities or other controls in connection with a national of
other public emergency, governmental delays in permitting, delays caused by any
governmental disapproval of, or required revisions to, the Finish Plans, or
shortages of fuel, supplies or labor or any similar cause not within Landlord's
reasonable control. Landlord shall not be held responsible for
PAGE 23
delays in the performance of its obligations hereunder caused by Force Majeure,
and such delays shall be excluded from the computation of the tire allowed for
the performance of such obligations. It is expressly agreed that the number of
delay days may include not only the day or days upon which the event of Force
Majeure occurred but the number of days thereafter that work could not resume
due to the occurrence of such event of Force Majeure. By way of example only,
rain on a Sunday, which is not scheduled as a normal work day, may prevent work
for several days thereafter due to mud conditions.
I. SEVERABILITY. 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 or provision as similar in
terms to such illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.
J. DATE OF LEASE. 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.
K. BROKERS.
(1) Tenant represents and warrants that, except for The Amend
Group (BROKER), Tenant has not dealt with any broker, agent or other person
in connection with this transaction and that, except for Broker, no broker,
agent or other person brought about this transaction through the acts of or
employment by Tenant, and, except with respect to any commission or fee
owed to Broker, Tenant agrees to indemnify and hold Landlord 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 with regard to this leasing transaction.
(2) Landlord represents and warrants that, except for Broker,
Landlord has not dealt with any broker, agent or other person in connection
with this transaction and that, except for Broker, no broker, agent or
other person brought about this transaction through the acts of or
employment by Landlord. Landlord has agreed to pay Broker a commission
pursuant to a separate written agreement between Landlord and Broker, and
Landlord agrees to indemnify and hold Tenant harmless from and against any
claims by Broker or any broker, agent or other person claiming a commission
or other form of compensation by virtue of having dealt with Landlord with
regard to this leasing transaction.
L. COUNTERPARTS. This Lease may be executed in counterparts, each
being deemed an original, but together constituting only one instrument.
M. TIME FOR PERFORMANCE TIME IS OF THE ESSENCE WITH RESPECT TO ALL
PERFORMANCE OBLIGATIONS CONTAINED IN THIS LEASE.
N. ATTORNEYS FEES. In the event it becomes necessary for either
party hereto to file a suit to enforce this Lease or any provisions contained
herein, the party prevailing in such action shall be entitled to recover, in
addition to all other remedies or damages, reasonable attorneys fees incurred in
such suit.
O. LAW GOVERNING. This Lease shall be construed and interpreted in
accordance with the laws of the State of Texas and the obligations of the
parties hereto are and shall be performable in, and venue for any claim or cause
of action shall reside in, Dallas County, Texas.
PAGE 24
P. AMENDMENTS. This Lease may not be modified or amended, except by
an agreement in writing signed by Landlord and Tenant. The parties may waive
any of the conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in writing and
signed by the party waiving such conditions or obligations, except as
specifically set forth herein.
EXECUTED BY Landlord, this 7th day of November, 1996.
MEPC QUORUM PROPERTIES II INC.,
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: XXXXXX XXXXXXXX
-----------------------------------
Title: VICE PRESIDENT
----------------------------------
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
----------------------------------
EXECUTED BY Tenant, this 7th day of November, 1996.
MANNATECH, INC., a TEXAS corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------
Title: Chief Executive Officer
----------------------------------
Exhibits:
--------
Exhibit A: Land
Exhibit B: Site Plan
Exhibit C: Contractor Insurance Requirements
PAGE 25
EXHIBIT "A"
THE LAND
Being Lot 4R of Replat of a portion of "Freeport North," an addition to the City
of Coppell, Texas, according to the Map thereof recorded in Volume 95245, Page
2050, Map Records of Dallas County, Texas.
EXHIBIT "B"
SITE PLAN
[MAP]
Map illustrates the leased premises.
EXHIBIT "C"
CONTRACTOR INSURANCE REQUIREMENTS
All contractors, subcontractors, suppliers, service providers, moving companies,
and others performing work of any type for Tenant at the Premises shall:
- carry the insurance listed below with companies acceptable to
Landlord; and
- furnish Certificates of Insurance to Landlord evidencing required
coverages at least ten (10) days prior to entry in the Premises and
Renewal Certificates at least thirty (30) days prior to the expiration
dates of Certificates previously furnished.
Certificates of Insurance must provide for thirty (30) days' prior written
notice of cancellation or materiaL change to Landlord.
(1) WORKERS COMPENSATION: Statutory workers compensation insurance covering
full liability under applicable Workers Compensation Laws at the required
statutory limits.
(2) EMPLOYERS' LIABILITY: Employers' liability insurance with the following
minimum limits of liability:
$100,000 Each Accident
$500,000 Disease-Policy Limit
$100,000 Disease-Each Employee
(3) COMMERCIAL GENERAL LIABILITY: This insurance policy must:
(a) Be written on a standard liability policy form (sometimes known as
commercial general liability insurance) BUT WITHOUT exclusionary
endorsements that may delete coverage for products/completed
operations, personal and advertising injury, blanket contractual, fire
legal liability, or medical payments.
(b) Be endorsed to provide that:
- aggregate limits, if any, apply separately to each of the
insured's jobs or projects away from premises owned by or rented
to the insured;
- the insurance is primary and non-contributory to any insurance
provided by Landlord; and
- include the following minimum limits:
$1,000,000 General Aggregate
$1,000,000 Products-Completed Operations Aggregate
$1,000,000 Personal & Advertising Injury
$1,000,000 Each Occurrence
$ 50,000 Fire Damage (Any one fire)
$ 5,000 Medical Expense (Any one person)
(4) AUTOMOBILE LIABILITY: Automobile liability insurance for claims of
ownership, maintenance, or use of owned, non-owned, and hired motor
vehicles at, upon, or away from the Premises with the following minimum
limits:
$500,000 Combined Single Limit Bodily Injury and Property Damage per
Occurrence
(5) EXCESS LIABILITY: Following form excess liability insurance with coverages
at least as broad as the required commercial general liability insurance
with the following minimum limits:
$1,000,000 Each Occurrence
$2,000,000 Aggregate
(6) GENERAL REQUIREMENTS: All policies must be:
- written on an occurrence basis and not on a claims-made basis;
- endorsed to name as additional insureds Landlord, and its respective
officers, directors, employees, agents, partners, and assigns;
- endorsed to waive any rights of subrogation against Landlord and its
respective officers, directors, employees, agents, partners, and
assigns; and primary and non-contributing with, and not in excess of,
any other insurance available to Tenant and Landlord (or any other
entity named as an additional insured).
FIRST AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS FIRST AMENDMENT TO COMMERCIAL LEASE AGREEMENT (THIS "AMENDMENT") is
entered into by and between MEPC Quorum Properties II Inc., a Delaware
corporation (LANDLORD) and Mannatech, Inc., a Texas corporation TENANT)
effective as of May 29, 1997.
A. Landlord and Tenant have heretofore entered into a Commercial Lease
Agreement (the LEASE) pursuant to which Landlord leased to Tenant approximately
110,157 square feet in the Building (as defined in the Lease) located on the
Land described on EXHIBIT "A" attached hereto and located in the Freeport North
Industrial Park, Coppell, Texas;
B. Landlord and Tenant now wish to amend the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. Paragraph 17A of the Lease is deleted and replaced with the following:
"A. Tenant shall fail to pay any installment of the Rent herein
reserved when due, or any other payment or reimbursement to Landlord
required herein when due, and such failure shall continue for a period of
ten (10) days after receipt of written notice from Landlord; provided
however, that an event of default will occur without any obligation of
Landlord to deliver any notice if Landlord has given Tenant written notice
under this Paragraph 18A on two (2) or more occasions during the twelve
(12) month period preceding the current failure by Tenant to timely pay
Rent (though Tenant in such instances is grated a five (5) day grace period
from the date upon which the subject payment was due)."
2. Paragraph 22 of the Lease is deleted and replaced with the following:
"22. WAIVER OF SECURITY INTEREST. Landlord hereby waives and negates
any and all contractual liens and security interests, statutory liens and
security interests or constitutional liens and security interests arising
by operation of law or otherwise to which Landlord might now or hereafter
be entitled on all property of Tenant now owned or hereafter placed in or
upon the Premises (except for judgment liens which may hereafter arise in
favor of Landlord)."
3. Paragraph 29 of the Lease is deleted and replaced with the following:
"29. SUBORDINATION. Conditioned upon the beneficiary of any mortgages
and/or deeds of trust now existing or hereafter placed upon the Premises
entering into an agreement (herein an ATTORNMENT AGREEMENT with Tenant in
which such beneficiary agrees not to disturb the possession and other
rights of Tenant under this Lease so long as Tenant is not in default in
the performance of its obligations hereunder, and, in the event of the
acquisition of title by such beneficiary through foreclosure proceedings or
a deed in lieu of foreclosure, to accept Tenant as tenant of the Premises
under the terms and conditions of this Lease, Tenant accepts this Lease
subject and subordinate to any mortgages and/or deeds of trust now or
hereafter constituting a lien or charge upon the Premises, provided,
however, that if the mortgagee, trustee, or holder of any such mortgage or
deed of trust elects to have Tenant's interest in this Lease superior to
any such instrument, then by notice to Tenant from such mortgagee, trustee
or holder, this Lease shall be deemed superior to such Lien, whether this
Lease was executed before or after said mortgage or deed of trust. Subject
to the foregoing, Tenant at any time hereafter on demand, shall execute any
instruments, releases or other documents that may be required by any
mortgagee for the purpose of subjecting and
subordinating this Lease to the lien of any such mortgage. For purposes of
this section, Landlord will be deemed to have satisfied the condition of
obtaining an Attornment Agreement if the form thereof required by the
mortgagee is a type or form that is customarily given by institutional
lenders; provided that Tenant shall have the right to attempt to negotiate
more favorable terms:"
4. COUNTERPARTS. This Amendment may be executed in counterparts.
Facsimile signatures will have the same effect as originals.
5. RATIFICATION. The Lease, as amended hereby, is ratified and confirmed
by the parties as being in full force and effect. To the event of any conflict
between the terms of the Lease and this Amendment, this Amendment shall govern.
All capitalized terms herein shall have the same meaning as set forth in the
Lease unless otherwise noted herein. This Amendment is binding on the parties
and their successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
effective as of the date and year first above written.
LANDLORD: MEPC QUORUM PROPERTIES II INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxxxx
----------------------------------
Name: XXXXX XXXXXXX
--------------------------------
Title: Executive Vice President
-------------------------------
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: XXXXX X. XXXXXXX
--------------------------------
Title: VICE PRESIDENT
-------------------------------
TENANT: MANNATECH, INC., a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Chairman of the Board
-------------------------------
2
EXHIBIT "A"
THE LAND
Being Lot 4R of Replat of a portion of "Freeport North," and addition to the
City of Coppell, Texas, according to the Map thereof recorded in Volume 95245,
Page 2050, Map Records of Dallas County, Texas.
SECOND AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS SECOND AMENDMENT TO COMMERCIAL LEASE AGREEMENT (this "AMENDMENT")
is entered into by and between MEPC Quorum Properties II Inc., a Delaware
corporation (LANDLORD) and Mannatech, Inc., a Texas corporation (TENANT)
effective as of November 13, 1997.
A. Landlord and Tenant have heretofore entered into a Commercial Lease
Agreement (as previously amended, the LEASE) pursuant to which Landlord
leased to Tenant approximately 110,157 square feet in the Building (as
defined in the Lease) located on the Land described in the Lease, such being
located in the Freeport Xxxxx Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx;
and
B. Landlord and Tenant now wish to again amend the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, Landlord and Tenant hereby
agree as follows:
1. APPROVAL OF ALTERATIONS. Landlord hereby consents to Tenant's
alteration of the interior of the Premises to include additional office space
of approximately 17,000 square foot as described in the plans and
specifications prepared by The Amend Group, Project No.7069, dated August 6,
1997, Revision No. 1 [Phase IIA] (the PLANS). The improvements and
modifications to be made pursuant to the Plans are herein called the
EXPANSION IMPROVEMENTS). The Expansion Improvements must be constructed in
accordance with the Plans, subject to design/build of the electrical service
in lieu of the design depicted on/in the Plans to be agreed upon by Landlord
and Tenant. Additionally, Landlord's approval of the expansion and of the
Plans notwithstanding, Tenant's alteration of the Premises will be subject to
all other terms, conditions and provisions of Paragraph 5 of the Lease.
2. ADDITIONAL PARKING AREA. Landlord agrees to construct, at its cost
and expense, an additional parking area on the plans and specifications
therefore prepared by the Amend Group, Project No. 6034, dated April 14,
1997, Revision No. 16, subject to the following modifications:
(i) The retaining wall is deleted. The earthen berm will be
reshaped.
(ii) Fencing is excluded.
(iii) Generator pads and bollards are excluded.
(iv) The (17) Savannah Holly and (2,352) Wintercreeper are
excluded.
3. BASE MONTHLY RENT. Paragraph 3A of the Lease shall be, and hereby is,
deleted and replaced with the following new Paragraph 3A.
"A. BASE MONTHLY RENT. Tenant agrees to pay to Landlord the sum of
$4,206,679.30 as rent for the Premises, which sum shall be payable in
advance, as follows (BASE MONTHLY RENT):
- On January 20, 1997 (the RENT COMMENCEMENT DATE), the sum of
$11,548.72; and
- Beginning on February 1, 1997 and continuing through December
31, 1997, the amount of $29,834.19 per month; and
- On January 1, 1998, the sum of $31,077.89; and
- Beginning on February 1, 1998 and continuing through December 31,
2001, the amount of $33,047.10 per month; and
- On January 1, 2002, the sum of $35,001.49; and
- Beginning on February 1, 2002 and continuing through December 31,
2006, the amount of $38,095.96 per month; and
- On January 1, 2007, the sum of $23,349.14.
Each installment of Base Monthly Rent shall be due and payable on the first
day of each calendar month during the Lease Term, provided that one (1) full
installment of Base Monthly Rent is due and payable on the date of this
Lease, such to be applied to the first installment of Base Monthly Rent due
on January 20, 1997 and thereafter applied to Base Monthly Rent until fully
applied."
4. OFF-SITE PARKING. Landlord's execution hereof constitutes its
approval of Tenant entering to an off-site parking lease for purpose of
satisfying any parking requirement imposed by Applicable Laws or as is
necessary for Tenant to obtain a certificate of occupancy for the Premises.
Landlord's consent notwithstanding, such off-site parking lease shall be the
sole obligation of Tenant, and Tenant shall give notice to the lessor under
such lease that Landlord has no obligations with respect thereto. Tenant
further indemnifies and holds Landlord and each Landlord Party harmless from
and against all losses, liabilities, costs (including reasonable attorneys'
fees and court costs), expenses, damages, settlements, judgments, claims,
lease payments, causes of action and demands of every kind or character,
known or unknown, contingent or otherwise, arising out of or in connection
with any such off-site parking leases. Additionally, Landlord makes no
representations or warranties that such leases will be adequate for Tenant's
purposes or will satisfy Applicable Laws pertaining to parking requirements.
Landlord's consent in this paragraph to the off-site parking lease in no way
constitutes a representation by Landlord that the availability of additional
off-site parking will enable Tenant to obtain a certificate of occupancy or
that the Premises will thereafter comply with Applicable Laws. Specifically,
if any applicable governmental authority concludes that the Premises or the
Project does not comply with Applicable Laws due to an insufficiency of
parking as a result of the Expansion Improvements, Landlord may, at its cost,
require that the Expansion Improvements be demolished and the Premises
restored to its condition immediately prior to the construction of the
Expansion Improvements. Other than the for the costs of rehabilitating and
restoring the Premises as contemplated in this paragraph, Tenant indemnifies
Landlord and each Landlord Party harmless from and against all losses,
liabilities, costs (including reasonable attorneys' fees and court costs),
expenses, damages, settlements, judgements, claims, causes of action and
demands of every kind or character, known or unknown, contingent or
otherwise, arising out of or in connection with the fact that the Project
and/or the Premises is not in compliance with Applicable Laws due to the
number of square feet in the Premises designated as office space. Tenant
further releases Landlord and each Landlord Party from any and all damages
suffered or incurred by Tenant of whatever nature, actual, consequential or
speculative, due to the fact that the Project, Building or Premises may not
comply with Applicable Laws due to insufficient parking. Such non-compliance
shall not constitute a default by Landlord under the Lease, constitute a
constructive eviction of Tenant or allow Tenant to terminate the Lease.
5. COUNTERPARTS. This Amendment may be executed in counterparts.
Facsimile signatures will have the same effect as originals.
6. RATIFICATION. The Lease, as amended hereby, is ratified and
confirmed by the parties as being in full force and effect. To the extent of
any conflict between the terms of the Lease and this Amendment, this
Amendment shall govern. All capitalized terms herein, shall have the same
meaning as set forth in the Lease unless otherwise noted herein. This
Amendment is binding on the parties and their successors and assigns.
[SIGNATURES ON FOLLOWING PAGE]
2
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
effective as of the date and year first above written
LANDLORD: MEPC QUORUM PROPERTIES II INC., a
Delaware corporation
By: /s/ Xx Xxxxxx
--------------------------------------
Name: Xx Xxxxxx
------------------------------------
Title: Senior Vice President
-----------------------------------
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
------------------------------------
Title: Senior Vice President
-----------------------------------
TENANT: MANNATECH, INC., a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: C.O.O.
-----------------------------------
