(LEASE 3)
COMMERCIAL LEASE AGREEMENT
▇▇▇▇▇▇▇-▇▇▇▇ TECHNOLOGY CENTER II, LTD.,
Landlord
to
▇▇▇▇▇ GOLF, INC.,
Tenant
TABLE OF CONTENTS
1. LANDLORD 4
2. TENANT 4
3. LEASED PREMISES 4
4. TERM 5
5. BASE RENT AND SECURITY DEPOSIT 6
6. ADDITIONAL RENTAL 7
7. TENANT REPAIRS AND MAINTENANCE 10
8. LANDLORD'S REPAIRS 11
9. UTILITY SERVICE 12
10. SIGNS 12
11. USAGE 12
12. INSURANCE 12
13. (INTENTIONALLY DELETED) 13
14. COMPLIANCE WITH LAWS, RULES AND REGULATIONS 13
15. ASSIGNMENT AND SUBLETTING 13
16. ALTERATIONS AND IMPROVEMENTS 14
17. CONDEMNATION 15
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18. FIRE AND CASUALTY 16
19. CASUALTY INSURANCE 17
20. WAIVER OF SUBROGATION 17
21. HOLD HARMLESS 18
22. QUIET ENJOYMENT 18
23. LANDLORD'S RIGHT OF ENTRY 18
24. ASSIGNMENT OF LANDLORD'S INTEREST IN LEASE 18
25. LANDLORD'S LIEN 19
26. DEFAULT BY TENANT 19
27. REMEDIES FOR TENANT'S ▇▇▇▇▇▇▇ ▇▇
▇▇. TERMINATION OF OPTIONS 21
29. WAIVER OF DEFAULT OR REMEDY 21
30. CHOICE OF LAW; VENUE; ATTORNEY'S FEES 22
31. HOLDING OVER 22
32. RIGHTS OF MORTGAGEE 22
33. ESTOPPEL CERTIFICATES 23
34. SUCCESSORS 23
35. REAL ESTATE COMMISSION 24
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36. DEFAULT BY LANDLORD 24
37. MECHANIC'S LIENS 24
38. HAZARDOUS WASTE 24
39. ENTIRE AGREEMENT AND LIMITATION OF WARRANTIES 25
40. FINANCIAL STATEMENTS 25
41. FORCE MAJEURE 26
42. MISCELLANEOUS 26
43. NOTICE 27
44. LIMITATION ON TENANT'S DAMAGES 28
COMMERCIAL LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into by and between:
1. LANDLORD: ▇▇▇▇▇▇▇-▇▇▇▇ TECHNOLOGY CENTER II, LTD., a Texas Limited
Partnership ("Landlord"), and
2. TENANT: ▇▇▇▇▇ GOLF, INC., a Texas Corporation ("Tenant").
3. LEASED PREMISES: In consideration of the rents, terms and covenants of
this Commercial Lease Agreement (this "Lease"), Landlord hereby leases to
Tenant certain premises (the "Leased Premises") consisting of approximately
32,996 square feet within the 67,372 square foot building (the "Building")
located at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ____, ▇▇▇▇▇, ▇▇▇▇▇ together with the
non-exclusive right to use, in common with other tenants, the common areas of
the Project, which are all areas neither exclusively leased to another tenant
nor expressly reserved to or by Landlord. The land upon which the Building
is located is described in the attached Exhibit A and, together with the
Building, landscaping, parking and driveway areas, sidewalks, and other
improvements thereon, shall be referred to in this Lease as the "Project."
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4. TERM:
(a) The term of this Lease shall be seventy (70) months commencing on
June 15, 1998, the "Commencement Date" and terminating on the 14th day of June
in the seventieth (70th) month following the Commencement Date (the
"Termination Date"). This Commencement Date may be subject to change, however,
pursuant to Paragraphs 4(b) and (c) below.
(b) Tenant acknowledges that it accepts the Leased Premises as suitable
for Tenant's purposes subject only to Paragraph 4(c) below, if applicable. If
this Lease is executed before the Leased Premises become available for
occupancy, or if Landlord cannot acquire possession of the Leased Premises
prior to the Commencement Date stated above, Tenant agrees to accept possession
of the Leased Premises at such time as Landlord is able to tender the same,
which date shall then be the Commencement Date of the Lease term.
(c) Landlord agrees to install at its cost and expense the improvements,
if any, described in the plans and specifications described in Exhibit B. If
such improvements are not completed and the Leased Premises are not ready for
occupancy on the Commencement Date stated above, other than as a result of the
omission, delay or default by Tenant or anyone acting under or on behalf of
Tenant, the rent under this Lease shall not commence until substantial
completion of the work described in said plans and specifications, and the
Commencement Date of the Lease term shall be the date of such substantial
completion. Landlord shall notify Tenant in writing as soon as such
improvements are substantially completed and ready for occupancy. If Tenant
believes that such improvements have not been substantially completed as
aforesaid, Tenant shall notify Landlord in writing of its objections within
three (3) days after receipt of the completion notice from Landlord. Landlord
shall have a reasonable time after receipt of such notice (but in no event more
than 10 days) in which to commence such corrective action as may be necessary
and shall notify Tenant in writing as soon as it deems such corrective action
has been completed so that the Leased Premises are completed and ready for
occupancy. In the event of any dispute as to substantial completion or work
performed or required to be performed by Landlord, the certificate of a
registered architect shall be conclusive and binding on all parties.
(d) Tenant acknowledges that no representations or promises regarding
construction, repairs, alterations, remodeling, or improvements to the Leased
Premises have been made by Landlord, its agents, employees, or other
representatives, unless such are expressly set forth in this Lease or any
Exhibit hereto. Tenant is solely responsible for applying for and obtaining a
Certificate of Occupancy for the Leased Premises and will satisfy itself as to
the business park restrictions and all zoning and similar restrictions and
regulations prior to commencement of any construction. Failure of Tenant to
provide written notice of such objections prior to commencement of construction
shall be deemed acceptance by Tenant. Tenant agrees that if its occupancy of
the Leased Premises is delayed under the circumstances described in Paragraphs
4(b) and (c) above, this Lease shall nonetheless continue in full force and
effect. Adjustment of the rent commencement date as above provided shall
constitute full settlement of all claims by Tenant against Landlord by reason
of any such delay in possession of the Leased Premises. Tenant's taking
possession of the Leased Premises shall conclusively establish that the
improvements, if any, to be
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made by Landlord under the terms of this Lease have been completed in
accordance with the plans and specifications therefor and that the Leased
Premises are in good and satisfactory condition as of the date of Tenant's
possession, unless Tenant notifies Landlord in writing specifying any bona
fide deficiencies after taking possession (i) within 270 days, for the
heating and air conditioning systems, and (ii) within ninety (90) days, for
all other matters, after the Commencement Date. Landlord shall use
reasonable diligence to repair promptly such items but Tenant shall have no
claim for damages or rebate or abatement of rent by reason thereof. In
conjunction with, or at any time after, the Commencement Date, Tenant shall,
upon demand, execute and deliver to Landlord an Estoppel letter (as referred
to in paragraph 33 herein) to acknowledge the Commencement Date.
5. BASE RENT AND SECURITY DEPOSIT:
(a) Tenant agrees to pay to Landlord the following rental amounts
(sometimes referred to in this Lease as the "Base Rent" or "Base Rental"):
MONTHS 1 THROUGH 22, $230,976.00 PER YEAR PAYABLE IN MONTHLY INSTALLMENTS OF
$19,248.00 EACH; AND MONTHS 23 THROUGH 46, $247,476.00 PER YEAR PAYABLE IN
MONTHLY INSTALLMENTS OF $20,263.00 EACH; MONTHS 47 - 70, $263,976.00 PER YEAR
PAYABLE IN MONTHLY INSTALLMENTS OF $21,998.00. Payment of rent is subject to
proration for partial months and to adjustment for early or delayed occupancy
under the terms hereof, and, if the area of the Leased Premises is, on the
Commencement Date, different than the area stated in Paragraph 3 above, then
Base Rent shall be adjusted to reflect $7.00 per gross square foot. Base Rent
shall be payable to Landlord monthly, in advance, without demand, deduction or
offset, in lawful money of the United States of America at the address stated
below. The first month's Base Rent payment of $19,248.00 shall be due upon the
date Tenant executes the Lease Agreement, and all other installments of Base
Rent shall be due and payable on or before the first (1st) day of each month
during the Lease term.
(b) Upon the date Tenant executes the Lease Agreement, there shall be due
and payable by Tenant a Security Deposit in the amount of $19,248.00. Such
deposit shall be held by Landlord (without any obligation to pay interest
thereon or segregate such money from Landlord's general funds except as may be
required by applicable law) as security for the performance of Tenant's
obligations under this Lease. Tenant agrees to increase such Security Deposit
from time to time so that it is at all times equal to one monthly Base Rental
installment plus the average monthly additional rentals arising pursuant to
Paragraph 6 below. Tenant shall deposit cash with Landlord in an amount
sufficient so to increase the Security Deposit to such amount within five (5)
days after written demand by Landlord. It is expressly understood that the
Security Deposit is not an advance payment of rental or a measure of Landlord's
damages in the event of Tenant's default under this Lease. Upon the occurrence
of any event of default by Tenant under this Lease, Landlord may, from time to
time, without prejudice to any other remedy provided herein or provided by law,
use, apply, or retain all or part of the Security Deposit for the payment of
(i) any Base Rent, (ii) additional rentals arising under Paragraph 6 below, and
(iii) other sums due hereunder, including without limitation any amount which
Landlord may spend or become obligated to spend by reason of Tenant's default
or to compensate Landlord for any damage, injury, expense or liability caused
to Landlord by such default or breach (all of which items (i), (ii) and (iii)
are sometimes referred to in
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the aggregate as "Rent"). If any portion of the Security Deposit is so used
or applied, Tenant shall, within five (5) days after written demand thereof,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to the amount required by this Paragraph. Tenant's failure to do so
shall be an event of default under this Lease. The balance of the Security
Deposit shall be returned by Landlord to Tenant at such time after
termination of this Lease that all of Tenant's obligations have been
fulfilled.
(c) Other remedies for nonpayment of Rent notwithstanding, if the monthly
Base Rental payment is not received by Landlord on or before the tenth (10th)
day of the month for which such rent is due, or if any other Rent payment due
Landlord by Tenant hereunder is not received by Landlord within ten (10) days
of the due date three (3) times during any one (1) year period, a service
charge of two hundred ($200.00) dollars shall be additionally due and payable
by Tenant as an administrative charge for the excess efforts necessitated by
such tardiness in payment. Such service charge shall be cumulative of any
other remedies Landlord may have for nonpayment of Rent and other sums payable
under this Lease.
(d) If three (3) consecutive monthly Base Rental payments or any ten (10)
[in total, cumulative from the beginning of the Lease term] monthly Base Rental
payments during the Lease term (or any renewal or extension thereof) are not
received by Landlord within ten (10) days of the due date, the Base Rent
hereunder shall automatically become due and payable by Tenant in advance in
quarterly installments equal to three (3) months' Base Rent each. The first of
such quarterly Base Rent payments shall be due and payable on the first day of
the next succeeding month and on the first day of every third (3rd) month
thereafter. This remedy shall be cumulative of any other remedies of Landlord
under this Lease for nonpayment of Rent.
6. ADDITIONAL RENTAL:
(a) TAXES AND INSURANCE:
(1) "Tax and Insurance Costs" shall mean all of the following paid
or payable by Landlord with respect to the Project or any portion thereof: (i)
all federal, state and local sales, use, ad valorem, rental, value added, and
other taxes (other than Landlord's income or franchise taxes) and special
assessments and other governmental charges; and (ii) all insurance premiums,
including, without limitation, public liability, casualty, rental and property
damage insurance.
(2) Landlord shall pay all Tax and Insurance Costs; however,
Landlord may in its discretion defer such payment to the extent permitted by
applicable laws so long as contested by Landlord in good faith and so long as
Tenant's occupancy of the Premises is not lawfully disturbed.
(3) For each calendar year of the term of this Lease, Tenant shall
pay to Landlord as additional Rent hereunder its "pro rata portion" of the Tax
and Insurance Costs computed by multiplying the Tax and Insurance Costs by a
fraction, the numerator of which is the number of rentable square feet in the
Leased Premises, and the denominator of which is the number of rentable square
feet in the Building.
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(4) Tenant shall pay one-twelfth of its pro rata portion of
estimated Tax and Insurance Costs as estimated by Landlord, along with the
monthly Base Rental payment each month, during the term of this Lease. As soon
as available after the expiration of each calendar year during the term of this
Lease, Landlord shall submit a reconciliation statement to Tenant setting forth
(1) Tenant's pro rata portion of the Tax and Insurance Costs due from Tenant
for the preceding calendar year, (ii) the amount of Tax and Insurance Costs
paid by Tenant during such calendar year, and (iii) the amount, if any, either
overpaid or remaining due from Tenant to Landlord. Within (10) days after
receipt of such statement, Tenant shall remit to Landlord the amount said
statement shows to be due from Tenant or, if Tenant has overpaid, Landlord
shall credit the amount overpaid to Tenant's pro rata portion of Tax and
Insurance Costs next due. If Tenant is not in default and this Lease
terminated at the end of such prior year, Landlord shall refund such
overpayment to Tenant.
(5) For the calendar years in which this Lease commences and
terminates, Tenant's liability for its pro rata portion of the Tax and
Insurance Costs for such partial calendar years shall be subject to pro rata
adjustment based upon the number of days of the term elapsing during such
partial year. Where the applicable charges are not available prior to the end
of the term hereof, then the aforesaid adjustment shall be made between
Landlord and Tenant after Landlord shall have received the charges for such
period, it being specifically agreed that Landlord's and Tenant's obligations
under this Paragraph shall survive the expiration of the term of this Lease.
(6) The failure of Landlord to exercise its rights hereunder to
estimate Tax and Insurance Costs and require payment of same as additional Rent
shall not constitute a waiver of such rights which rights may be exercised from
time to time at Landlord's discretion.
(b) COMMON AREA MAINTENANCE:
(1) "Common Area Maintenance Expenses" shall mean any and all
expenses (other than the Tax and Insurance Costs described above) arising from
the maintenance, repair, replacement and operation of, and modifications and
improvements to comply with governmental mandate to, the Project's common areas
and any portions of the Project for which Landlord is responsible hereunder
(excluding only expenses associated with structural integrity of the roof,
foundation, and exterior walls) including, but not limited to, management fees,
utility expenses (if furnished by Landlord), wages and fringe benefits payable
to employees of Landlord whose duties are connected with the operation and
maintenance of the Project, amounts paid to contractors or subcontractors for
work or services performed in connection with the operation and maintenance of
the Project, including without limitation common areas and parking areas and
roof, exterior wall and foundation work that is not related to structural
integrity. Any capitalized expenditures included within the foregoing
(together with reasonable finance charges) will be amortized for purposes of
this Paragraph over a three (3) year period.
(2) The term "Common Area Maintenance Expenses" shall not include
repair, restoration or other work occasioned by fire, windstorm or other
casualty with respect to which
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Landlord actually receives insurance proceeds, income and franchise taxes of
Landlord, expenses incurred in leasing to or procuring of tenants, leasing
commissions, advertising expenses, expenses for the renovating of space for
new tenants, interest or principal payments or any mortgage or other
indebtedness of Landlord, compensation paid to any employee of Landlord above
the grade of building superintendent, or depreciation allowance or expense.
(3) Tenant agrees to pay as additional Rent its pro rata portion (as
defined in Paragraph 6(a)(3) above) of the Common Area Maintenance Expenses.
Tenant shall pay one-twelfth of its pro rata portion of estimated Common Area
Maintenance Expenses as estimated by Landlord, along with the monthly Base
Rental payment each month during the term of this Lease. As soon as available
after the expiration of each calendar year during the term of this Lease,
Landlord shall submit a statement to Tenant setting forth (i) Tenant's pro rata
portion of the Common Area Maintenance Expenses due from Tenant for the
preceding calendar year, (ii) the amount of Common Area Expenses paid by Tenant
during such calendar year, and (iii) the amount, if any, either overpaid or
remaining due from Tenant to Landlord. Within ten (10) days after receipt of
such statement, Tenant shall remit to Landlord the amount said statement shows
to be due from Tenant or, if Tenant has overpaid, Landlord shall credit the
amount overpaid to Tenant's pro rata portion of Common Area Maintenance
Expenses next due. If Tenant is not in default and this Lease terminated at
the end of such prior year, Landlord shall refund such overpayment to Tenant.
(4) For the calendar years in which this Lease commences and
terminates, Tenant's liability for its pro rata portion of the Common Area
Maintenance Expenses for such partial calendar years shall be subject to pro
rata adjustment based upon the number of days of the term elapsing during such
partial year. Where the applicable expenses are not available prior to the end
of the term hereof, then the aforesaid adjustment shall be made between
Landlord and Tenant after Landlord shall have received all of the expenses for
such period, it being specifically agreed that Landlord's and Tenant's
obligations under this Paragraph shall survive the expiration of the term of
this Lease.
(5) The failure of Landlord to exercise its rights hereunder to
estimate expenses and require payment of same as additional Rent shall not
constitute a waiver of such rights which rights may be exercised from time to
time at Landlord's discretion.
(6) Notwithstanding anything contained in this Lease to the
contrary, Tenant shall have the right, at its own expense and within a
reasonable time, to audit Landlord's books relevant to the additional rent due
under this Lease. Tenant's right to audit the books and records of Landlord
shall be limited to one time per calendar year. If any such audit reveals an
overpayment of Common Area Maintenance Expenses and/or Tax and Insurance Costs
for the period covered by such annual statement, the amount of such overpayment
shall be credited against the next installment of base rent and all other sums
due from Tenant. If Landlord is found to have been in error by a factor which
would be in excess of ten percent (10%) of the actual Common Area Maintenance
Expenses and/or Tax and Insurance Costs, then Landlord shall pay for the cost
of the audit which cost shall not exceed $1,000.00. If such audit reveals an
underpayment by Tenant, then Tenant shall pay the same with its next monthly
base rent payment.
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(c) In any event, Tenant shall be responsible for insuring and paying all
taxes upon Tenant's furniture, machinery, goods, supplies, fixtures,
Alterations (below defined) or other improvements, and other property on the
Project.
7. TENANT REPAIRS AND MAINTENANCE:
(a) Tenant shall maintain all parts of the Leased Premises and their
appurtenances (except those for which Landlord is expressly responsible under
this Lease) in good, clean and sanitary condition, at its own expense. Tenant
shall promptly make all necessary repairs and replacements to the Leased
Premises, including but not limited to electric light lamps or tubes, windows,
glass and plate glass, interior and exterior doors, any special office entry,
interior walls and finish work, floors and floor coverings, downspouts,
gutters, heating and air conditioning systems, dock boards, truck doors, dock
bumpers, and plumbing work and fixtures. Replacement and repair parts,
materials and equipment shall be of quality equivalent to those initially
installed within the Leased Premises, and repair and maintenance work shall be
done in a good and workmanlike manner and in accordance with existing laws,
rules, regulations and ordinances.
(b) Tenant shall not damage or disturb the integrity, structural
integrity, or support of any wall, roof, or foundation of the Building. Any
damage to these areas caused by Tenant or Tenant's Representatives (defined in
Paragraph 7(g)) shall be promptly repaired by Tenant at its sole cost and
expense.
(c) Landlord shall have the right to coordinate any repairs, maintenance
and replacement of any rail tracks serving or to serve the Project, and if
Tenant uses such rail tracks, Tenant shall reimburse Landlord from time to time
upon demand for a share of the cost of such repairs, maintenance and
replacement and any other sums specified in any agreement to which Landlord is
a party respecting such tracks. Tenant's share of such costs shall be
additional Rent and shall reflect a proration based on the ratio that Tenant's
use, in number of cars, bears to the total rail use, in number of cars, by all
rail users in the Project.
(d) Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance service contract with a maintenance contractor
for servicing all heating, ventilation and air conditioning systems and
equipment within, and any other equipment or machinery installed by Landlord
in, or to serve, the Leased Premises. The maintenance contractor and the
contract are subject to Landlord approval which shall not be unreasonably
withheld. The service contract must include all services suggested by the
equipment manufacturer within the operation/maintenance manual and must become
effective (and a copy delivered to Landlord) within thirty (30) days of the
date Tenant takes possession of the Leased Premises. If Tenant fails to enter
into such service contract as required, Landlord shall have the right to do so
on Tenant's behalf, and Tenant agrees to pay Landlord the cost and expense of
same upon demand, and such amount shall be considered additional Rent.
(e) Tenant shall at its own expense keep the Leased Premises pest-free
and pay all charges for pest control and extermination within the Leased
Premises.
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(f) At the termination of this Lease, Tenant shall deliver the Leased
Premises "broom clean" to Landlord in the same good order, configuration, and
condition as existed at the Commencement Date of this Lease, ordinary wear,
natural deterioration beyond the control of Tenant, and damage by fire,
tornado or other casualty excepted. Tenant shall give written notice to
Landlord at least thirty (30) days prior to vacating the Leased Premises and
shall arrange to meet with Landlord for a joint inspection of the Leased
Premises prior to vacating. In the event of Tenant's failure to give such
notice or arrange such joint inspection, Landlord's inspection at or after
Tenant's vacating the Leased Premises shall be conclusively deemed correct
for purposes of determining Tenant's responsibility for repairs and
restoration.
(g) Not in limitation on the foregoing, it is expressly understood that
Tenant shall repair and pay for all damage caused by the negligence of
Tenant, Tenant's employees, officers, directors, partners, agents, invitees,
licensees, contractors, representatives, or others for whom Tenant is legally
responsible (all such persons and entities being herein collectively referred
to as "Tenant's Representatives") or caused by Tenant's default hereunder.
(h) If Landlord shall give Tenant written notice of defects or need for
repairs for which Tenant is responsible under this Lease, and if Tenant shall
fail to make or fails to commence to make repairs within 30 days of
Landlord's notification or such shorter time as is reasonable if expedited
repair is needed to avoid injury or damage, Landlord shall have the option to
cure said defect or repair, and Tenant shall pay to Landlord all costs and
expenses incurred on demand.
8. LANDLORD'S REPAIRS:
(a) Landlord shall be responsible, at its expense, for, but only for,
the structural integrity of the roof, foundation and exterior walls of the
Building. In further limitation on Landlord's responsibilities hereunder,
(i) the foregoing does not include maintenance and repair that are a result
of deterioration due to wear and tear or the passing of time; (ii) any repair
to the roof, foundation or exterior walls occasioned by the act of omission
of Tenant or Tenant's Representatives shall be the responsibility of Tenant;
(iii) the term "walls" as used in this Paragraph 8 shall not include windows,
glass or plate glass, interior doors, special store fronts, office entries or
exterior doors; and (iv) Landlord's liability with respect to any defects,
repairs or maintenance for which Landlord is responsible at its expense under
this Lease shall be limited to the cost of such repairs or maintenance or the
curing of such defect. Tenant shall promptly give Landlord written notice of
defects or need for repairs, after which Landlord shall have 30 days to
commence to repair or cure such defect.
(b) Landlord shall perform the work which gives rise to Common Area
Maintenance Expenses, subject to payment therefor by Tenant pursuant to the
provisions of Paragraph 6(b) above. If the need for any such work shall come
to the attention of Tenant, Tenant will promptly so notify Landlord in
writing.
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9. UTILITY SERVICE: Tenant shall pay the cost of all utility services
including, but not limited to, initial connection charges and deposits and
all charges for gas, water, trash disposal, sewer, telephone or other
telecommunications, and electricity used on the Leased Premises. Tenant
shall pay all costs caused by Tenant introducing excessive pollutants into
the sanitary or storm sewer system, including permits, fees, assessments, and
charges levied by any governmental subdivision for any pollutants or solids
other than ordinary human waste.
10. SIGNS: No sign, door plaques, advertisement, or notice shall be
displayed, painted or affixed by Tenant on any part of the Project, Building,
parking facilities, or Leased Premises without prior written consent of
Landlord. The color, size, character, style, material, placement and
location and method of attachment to the Building shall be subject to
Landlord's approval, and to any applicable governmental laws, ordinances,
regulations, project specifications, and other requirements. Landlord's
notice of approval or disapproval shall be delivered to Tenant within ten
(10) days of Tenant's written request for same. Signs, if approved by
Landlord, shall be placed by a contractor approved by Landlord and paid for
by Tenant. Tenant shall remove all such signs at the termination of this
Lease. Such installations and removals shall be made in such manner as to
avoid injury or defacement of the Project and other improvements, and Tenant,
at its sole expense, shall repair any injury or defacement, including,
without limitation, any discoloration caused by such installation and/or
removal. Landlord may erect a sign or signs on the Leased Premises
indicating that the Leased Premises are for lease during the six (6) month
period prior to the expiration of this Lease.
11. USAGE: Tenant warrants and represents to Landlord that the Leased
Premises shall be used and occupied only for the purpose of: General office,
manufacturing and distribution of custom golf clubs and related activities.
Any change in the stated usage purposes shall be subject to the prior written
approval of Landlord. Tenant shall occupy the Leased Premises, conduct its
business, and control Tenant's Representatives in a lawful and reputable way
and as not to create any nuisance. Tenant shall not commit, or allow to be
committed, any waste on the Leased Premises or the Project. Tenant may not
use the Leased Premises for the use, storage, or distribution of hazardous or
environmentally offensive substances, for underground storage, or for any
unlawful purposes.
12. INSURANCE:
(a) Tenant shall not permit the Leased Premises to be used in any way
which would be hazardous or which would in any way increase the cost of or
render void any insurance on the improvements, and Tenant shall immediately,
on demand, cease any use which violates the foregoing or to which Landlord's
insurer or any governmental or regulatory authority objects. If at any time
during the term of this Lease Tenant's use or vacancy shall cause an increase
in premiums, and in particular, but without limitation, if the State Board of
Insurance or other insurance authority disallows any of Landlord's sprinkler
credits or imposes an additional penalty or surcharge in Landlord's insurance
premiums because of Tenant's original or subsequent placement or use of
storage racks or bins or method of storage or because of the nature of
Tenant's inventory or any other act of Tenant, Tenant agrees to pay as
additional Rent the increase in Landlord's insurance premiums.
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(b) Tenant, at its sole cost and expense, shall procure and maintain
throughout the term of this Lease a policy or policies of insurance insuring
Landlord, Landlord's management company and lender, and Tenant against all
claims for property damages, personal injury or death of others occurring on
or in connection with: (i) the Leased Premises; (ii) the condition of the
Leased Premises; (iii) Tenant's operations in and maintenance and use of the
Leased Premises; (iv) Tenant's and Tenant's Representatives' use of the
common areas of the Project, and (v) Tenant's liability assumed under this
Lease. The limits of such policy or policies shall be not less than
$2,000,000.00 combined single limit coverage per occurrence for injury to
persons (including death) and/or property damage or destruction, including
loss of use.
(c) All such policies shall be procured by Tenant from insurance
companies satisfactory to Landlord naming the following as co-insureds: (i)
Landlord; (ii) Landlord's management company, ▇▇▇▇▇▇▇-▇▇▇▇ COMPANY; and,
(iii) Landlord's mortgage holder, if any. Certified copies of such policies
together with receipt for payment of premiums, shall be delivered to Landlord
prior to the Commencement Date of this Lease. Not less than fifteen (15)
days prior to the expiration date of any such policies, certified copies of
renewal policies and evidence of the payment of renewal premiums shall be
delivered to Landlord. All such original and renewal policies shall provide
for at least thirty (30) days written notice to Landlord before such policy
may be canceled or changed to reduce insurance coverage provided thereby.
Upon request of Landlord, Tenant further agrees to complete and return to
Landlord an insurance questionnaire (such form to be provided by Landlord)
regarding Tenant's insurance coverage and intended use of the Leased
Premises. Tenant warrants and represents that all information contained in
such questionnaire shall be true and correct as of the date thereof and shall
be updated by Tenant from time to time upon Landlord's request.
13. (INTENTIONALLY DELETED)
14. COMPLIANCE WITH LAWS, RULES AND REGULATIONS: Tenant shall comply with
all applicable laws, ordinances, orders, rules and regulations of state,
federal, municipal, or other agencies or bodies relating to the use,
condition and occupancy of and business conducted on the Leased Premises,
including without limitation, the Americans with Disabilities Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Act, and the rules, regulations and directives of the U.S.
Environmental Protection Agency.
15. ASSIGNMENT AND SUBLETTING: The Tenant agrees not to assign, transfer,
or mortgage this Lease or any right or interest therein or sublet the Leased
Premises or any part thereof, without the prior written consent of Landlord,
such consent not to be unreasonably withheld. No assignment or subletting
shall relieve Tenant of its obligations hereunder, and Tenant shall continue
to be liable as a principal (and not as a guarantor or surety) to the same
extent as though no assignment or subletting had been made. Consent by
Landlord to any one assignment or subletting shall not be construed to be
consent to any additional assignment or subletting. Each such successive act
shall require similar consent of Landlord. Landlord shall be reimbursed by
Tenant for any costs or expenses incurred as a result of Tenant's request for
consent to any such
COMMERCIAL LEASE AGREEMENT - PAGE 13
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assignment or subletting, including legal costs. In the event Tenant
subleases the Leased Premises, or any portion thereof, or assigns this Lease
with the consent of the Landlord at an annual Base Rental exceeding that
stated herein, such excess shall be paid by Tenant to Landlord as additional
Rent hereunder within ten (10) days after receipt by Tenant. Upon the
occurrence of an "event of default" as defined below, if all or any part of
the Leased Premises is then assigned or sublet, Landlord may, in addition to
any other remedies provided by this Lease or provided by law, collect
directly from the assignee or subtenant all rents due to Tenant. Landlord
shall have a security interest in all property on the Leased Premises to
secure payment of such sums. Any collection directly by Landlord from the
assignee or subtenant shall not be construed, however, to constitute a
novation or a release of Tenant from the further performance of its
obligations under this Lease. Notwithstanding the foregoing, it is expressly
agreed that if this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Sec. 101 et seq, as amended (the
"Bankruptcy Code"), any and all monies or other considerations payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Lessor, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any and all monies or other
considerations constituting Landlord's property under the preceding sentence
not paid or delivered to Landlord shall be held in trust for the benefit of
Landlord and be promptly paid or delivered to Landlord. Any person or entity
to which this Lease is assigned pursuant to the provisions of the Bankruptcy
Code shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to
Landlord an instrument confirming such assumption.
*Should Tenant be acquired by a Corporation whose net worth is greater than
Tenant's, and whose use of the space is the same as Tenant's, then Landlord
will automatically approve an assignment of Tenant's interest in the Lease.
16. ALTERATIONS AND IMPROVEMENTS:
(a) Tenant shall not make or perform, or permit the making or
performance of, any initial or subsequent tenant finish work or any
alterations, installations, decorations, improvements, additions or other
physical changes in or about the Leased Premises (referred to collectively as
"Alterations") without Landlord's prior consent. Landlord shall be under no
obligation to allow Alterations of any kind and may withhold its consent
without cause. Notwithstanding the foregoing provisions or Landlord's consent
to any Alterations, all Alterations shall be made and performed in conformity
with and subject to the following provisions: All Alterations shall be made
and performed at Tenant's sole cost and expense in a good and workmanlike
manner. Alterations shall be made only by contractors or mechanics approved
by Landlord, such approval not to be unreasonably withheld. Tenant shall
submit to Landlord detailed plans and specifications (including architectural
layout, mechanical and structural drawings) for each proposed Alteration and
shall not commence any such Alteration without first obtaining Landlord's
written approval of such plans and specifications. Prior to the commencement
of each proposed Alteration, Tenant shall furnish to Landlord a certificate
evidencing worker's compensation insurance coverage for all persons to be
employed in connection with such Alterations, including those to be employed
by all contractors and subcontractors, and of comprehensive public liability
insurance (including property
COMMERCIAL LEASE AGREEMENT - PAGE 14
LEASE 3
damage coverage) in which Landlord, its agents, and any lessor under any
ground or underlying lease, and any mortgagee of the Building shall be named
as parties insured, which policies shall be issued by companies and shall be
in form and amounts satisfactory to Landlord and shall be maintained by
Tenant until the completion of such Alteration. Tenant shall cause its
contractor and each subcontractor to provide Landlord with a Certificate of
Completion of the Alterations and a Bills Paid Affidavit and full Lien
Waiver. Tenant shall, if required by Landlord at the time of Landlord's
consent to the Alterations, agree to restore the Leased Premises at the
termination of this Lease to their condition prior to making such
Alterations. All permits, approvals and certificates required by all
governmental authorities shall be timely obtained by Tenant and submitted to
Landlord. Notwithstanding Landlord's approval of plans and specifications
for any Alterations, all Alterations shall be made and performed in full
compliance with all applicable laws, orders, rules, standards and regulations
of Federal, State, County, and Municipal authorities, including, without
limitation, all directions, pursuant to law, of all public officers, and with
all applicable rules, orders, regulations and requirements of the local Board
of Fire Underwriters or any similar body ("Applicable Laws"). Landlord's
approval shall not in any way be considered an indication that the plans and
specifications comply with Applicable Laws. All materials and equipment to
be incorporated in the Leased Premises as a result of all Alterations shall
be new and first quality. No such materials or equipment shall be subject to
any lien, encumbrance, chattel mortgage or title retention or security
agreement. Whether such Alterations are being performed by Tenant in
connection with Tenant's initial occupancy of the Leased Premises or
subsequently, Tenant agrees to make proper application for, and obtain, a
Building Permit and a Certificate of Occupancy from the city in which the
Leased Premises are located. Tenant shall furnish copies of such permit and
certificate to Landlord promptly after issuance of same.
(b) All appurtenances, fixtures, improvements, and other property
attached to or installed in the Leased Premises, whether by Landlord or
Tenant or others, and whether at Landlord's expense or Tenant's expense, or
the joint expense of Landlord and Tenant, shall be and remain the property of
Landlord, except that any such fixtures, improvements, additions, and other
property which have been installed at the sole expense of Tenant and which
are removable without material damage to the Leased Premises shall be and
remain the property of Tenant. If no event of default has occurred, Tenant
may, and if Landlord so elects Tenant shall, remove any property belonging to
Tenant at the end of the term hereof, and Tenant shall repair or, at
Landlord's option, shall pay to Landlord the cost of repairing any damage
arising from such removal. Any replacements of any property of Landlord,
whether made at Tenant's expense or otherwise, shall be and remain the
property of Landlord.
17. CONDEMNATION:
(a) If, during the term (or extension or renewal) of this Lease, all or
a substantial part of the Leased Premises are taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by private purchase in lieu thereof, and the
taking would prevent or materially interfere with the then current use of the
Leased Premises, this Lease shall terminate and the Rent shall be prorated
during the unexpired portion of this Lease effective on the date physical
possession is taken by the condemning authority.
COMMERCIAL LEASE AGREEMENT - PAGE 15
LEASE 3
(b) If a portion of the Leased Premises is taken and this Lease is not
terminated as provided in Paragraph 17(a) above, if condemnation proceeds are
sufficient and if restoration is feasible, Landlord may, at its option
restore the Project (other than Alterations) in order to make it reasonably
tenantable and suitable for Tenant's approved use. During such restoration,
Rent shall be reduced by the amount of business or rent interruption
insurance proceeds actually received by Landlord, or Rent shall be paid based
on the portion of the Leased Premises Tenant can occupy. Upon completion of
such restoration, the Rent payable under this Lease during the unexpired
portion of the term shall be adjusted to such an extent as may be fair and
reasonable under the circumstances.
(c) In the event of such taking or private purchase in lieu thereof,
Tenant may seek a separate award for any loss of improvements made or paid
for by Tenant, its personal property, and its moving expenses (so long as no
such claim diminishes Landlord's claim or award), but all other claims of any
nature shall belong to Landlord. In the event Tenant does not receive such a
separate award, Landlord shall be entitled to receive any and all sums
awarded for the taking.
(d) Notwithstanding anything herein to the contrary, if the holder of
any indebtedness secured by a mortgage or deed of trust covering the Building
and/or Project requires that the condemnation proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is imposed. All rights and obligations under this
Lease shall then cease. If Landlord does not receive condemnation proceeds
sufficient for restoration (such as when its mortgagee does not allow the
proceeds to be used for such purposes) and if restoration is economically
reasonably feasible, Tenant will have the option of supplementing available
proceeds to allow restoration, and Tenant's actual costs will be reimbursed
through a monthly prorata credit against rent beginning after Landlord's
mortgage has been paid in full.
18. FIRE AND CASUALTY:
(a) If the Building should be damaged or destroyed by fire, tornado, or
other casualty, Tenant shall give immediate verbal and written notice thereof
to Landlord.
(b) If the Building should be totally destroyed by fire, tornado, or
other casualty, or if it should be so damaged thereby that rebuilding or
repairs cannot reasonably be completed within one hundred eighty (180) days
after the date on which Landlord is notified by Tenant of such damage, at the
option of either Landlord or Tenant, this Lease shall terminate, and the Rent
shall be abated during the unexpired portion of this Lease effective upon the
date of occurrence of such damage.
(c) If the Building should be damaged by any peril that will be wholly
compensated (subject to deductibles) by the insurance maintained by Landlord
or if Landlord, in its sole discretion, so chooses notwithstanding a
deficiency in such proceeds, and if rebuilding or repairs can reasonably be
completed within one hundred eighty (180) days after the date on which
Landlord is notified by Tenant of such damage, this Lease shall not
terminate, and Landlord shall
COMMERCIAL LEASE AGREEMENT - PAGE 16
LEASE 3
then proceed with reasonable diligence to rebuild and repair the Building to
substantially the same condition in which it existed prior to such damage.
Landlord shall not be required, however, to rebuild, repair, or replace
Tenant's furniture, fixtures, Alterations, inventory or other personal
property. If the Leased Premises are untenantable in whole or in part during
restoration, the Rent payable hereunder during the period in which they are
untenantable shall be reduced by the amount of business or rent interruption
insurance proceeds actually received by Landlord. If Landlord should fail to
complete such repairs and rebuilding within one hundred eighty (180) days
after the date on which Landlord is notified by Tenant of such damage, Tenant
may terminate this Lease by delivering written notice of termination to
Landlord. Such termination shall be Tenant's exclusive remedy and all rights
and obligations of the parties under the Lease shall then cease.
Notwithstanding the foregoing provisions of this Paragraph 18(c), Tenant
agrees that if the Leased Premises, the Building and/or Project are damaged
by fire or other casualty caused by the fault or negligence of Tenant or
Tenant's Representatives, Tenant shall have no option to terminate this Lease
even if the damage cannot be repaired within one hundred eighty (180) days,
and the Rent shall not be abated or reduced before or during the repair
period.
(d) Notwithstanding anything herein to the contrary, if the holder of
any indebtedness secured by a mortgage or deed of trust covering the Building
and/or Project requires that the insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is imposed. All rights and obligations under this
Lease shall then cease. If Landlord does not receive insurance proceeds
sufficient for restoration (such as when its mortgagee does not allow the
proceeds to be used for such purposes) and if restoration is economically
reasonably feasible, Tenant will have the option of supplementing available
proceeds to allow restoration, and Tenant's actual costs will be reimbursed
through a monthly prorata credit against rent beginning after Landlord's
mortgage has been paid in full.
19. CASUALTY INSURANCE: Landlord shall at all times during the term of this
Lease maintain a policy or policies of business or rental interruption
insurance and a policy or policies of insurance insuring the Building against
eighty percent (80%) of full replacement cost for loss or damage by fire,
explosion, and other customary hazards. Such policies will not insure any
personal property (including, but not limited to any furniture, machinery,
goods, or supplies) of Tenant or which Tenant may have in the Leased Premises
or any fixtures installed by or paid for by Tenant upon or within the Leased
Premises or any Alterations or other improvements which Tenant may construct
or install on the Leased Premises or any signs identifying Tenant's business
located on the exterior of the Building, insurance for all of which shall be
Tenant's responsibility.
20. WAIVER OF SUBROGATION: To the extent that Landlord or Tenant receives
casualty insurance proceeds, such recipient hereby waives and releases any
and all rights, claims, demands and causes of action such recipient may have
against the other on account of any loss or damage occasioned to such
recipient or its businesses, real and personal properties, the Leased
Premises, the Building, the Project, or its contents, arising from any risk
or peril covered by any insurance policy carried by either party and for
which such proceeds are actually received. Inasmuch as the above mutual
waivers will preclude the assignment of any such claim by way of subrogation
(or
COMMERCIAL LEASE AGREEMENT - PAGE 17
LEASE 3
otherwise) to an insurance company (or any other person), each party hereto
agrees immediately to give to its respective insurance companies written
notice of the terms of such mutual waivers and to have their respective
insurance policies properly endorsed, if necessary, to prevent the
invalidation of such insurance coverages by reason of such waivers. This
provision shall be cumulative of Paragraph 21 below.
21. HOLD HARMLESS: Landlord shall not be liable to Tenant, Tenant's
Representatives, or any other person for any injury to person or damage to
property on or about the Leased Premises or the Project caused by the
negligence or misconduct of Tenant, or Tenant's Representatives, entering
upon the Leased Premises or the Project. Tenant agrees to indemnify and hold
Landlord harmless from any and all loss, attorney's fees, expenses, or claims
arising out of any such damage, loss or injury. Tenant shall not be liable
to Landlord, Landlord's employees, agents, invitees, licensees or visitors
for any injury to person or damage to property on or about the Leased
Premises or the Project caused by the negligence or misconduct of Landlord,
its agents, employees, agents, invitees, licensees or visitors. Landlord
agrees to indemnify and hold Tenant harmless from any and all loss,
attorney's fees, expenses, or claims arising out of any such damage, loss or
injury.
22. QUIET ENJOYMENT: Landlord warrants that it has full right to execute
and to perform this Lease and to grant the estate demised herein and that
Tenant, upon payment of the required Rent and performance of the covenants
and agreements contained in this Lease, shall peaceably and quietly have,
hold, and enjoy the Leased Premises during the full term of this Lease,
including any extensions or renewals thereof.
23. LANDLORD'S RIGHT OF ENTRY: Landlord shall have the right to enter the
Leased Premises for the following reasons: inspection, cleaning or making
repairs, making such alterations or additions as Landlord may deem necessary
or desirable; installation of utility lines servicing the Leased Premises or
any other space in the Building; determining Tenant's use of the Leased
Premises, or for determining if any event of default under this Lease has
occurred. Landlord shall attempt to give twenty-four (24) hours verbal notice
to Tenant prior to such entry during business hours, except in cases of
emergency or when an event of default has occurred in which cases Landlord
may enter the Leased Premises at any time and without prior notice. During
the period that is six (6) months prior to the end of the Lease term,
Landlord and Landlord's agents and representatives shall have the right to
enter the Leased Premises at any reasonable time during business hours,
without notice, for the purpose of showing the Leased Premises and shall have
the right to erect on the Leased Premises a suitable sign indicating the
Leased Premises are available for lease.
24. ASSIGNMENT OF LANDLORD'S INTEREST IN LEASE: Landlord shall have the
right to transfer and assign, in whole or in part, its rights and obligations
with respect to the Project, the Leased Premises, and this Lease, including
Tenant's Security Deposit. Upon and after such transfer, Landlord shall be
released from any further obligation under this Lease and Tenant agrees to
look solely to Landlord's successor for the performance of such obligations.
COMMERCIAL LEASE AGREEMENT - PAGE 18
LEASE 3
25. LANDLORD'S LIEN: In addition to any statutory lien for Rent in
Landlord's favor, Landlord shall have, and Tenant hereby grants to Landlord,
a continuing security interest for all Rent and other sums of money becoming
due under this Lease from Tenant upon all goods, wares, equipment, fixtures,
furniture, inventory, accounts, contract rights, and other personal property
of Tenant situated on or arising from the Leased Premises. Such property
shall not be removed without the consent of Landlord which consent may be
withheld by Landlord until all of Tenant's duties and obligations have been
performed in full. In the event of a default under this Lease, Landlord
shall have, in addition to any other remedies provided in this Lease or by
law, all rights and remedies under the Texas Uniform Commercial Code,
including without limitation the right to sell the property described in this
Paragraph at public or private sale upon five (5) days notice to Tenant.
Tenant hereby agrees to execute such financing statements and other
instruments necessary or desirable in Landlord's discretion to perfect the
security interest hereby created.
*Upon written request, Landlord will subordinate its lien created herein to
any lender of Tenant.
26. DEFAULT BY TENANT: The following shall be events of default by Tenant
under this Lease:
(a) Tenant's failure to pay any installment of Rent or other payment
required pursuant to this Lease and the failure is not cured within ten (10)
days after it is due and after written notice to Tenant;
(b) Tenant's abandonment or vacation of any part of the Leased
Premises, whether or not Tenant is in default of the Rent payments due under
this Lease;
(c) Tenant's failure to comply with any term, provision or covenant of
this Lease, other than the defaults listed in the other subparagraphs of this
Paragraph 26, and the failure is not cured within ten (10) days after written
notice thereof to Tenant;
(d) Tenant's filing of a petition or adjudication as a debtor or
bankrupt insolvent under the Bankruptcy Code or any similar law or statute of
the United States or any state; or appointment of a receiver or trustee for
all or substantially all of the assets of Tenant; or Tenant's transfer in
fraud of creditors or assignment for the benefit of creditors of all or
substantially all of Tenant's assets;
(e) Tenant doing or permitting to be done any act which results in a
lien being filed against the Leased Premises and the same is not removed
within sixty (60) days after Landlord's notice thereof to Tenant.
27. REMEDIES FOR TENANT'S DEFAULT: Upon the occurrence of any event of
default, Landlord shall have the option to pursue any one or more of the
following remedies without any prior notice or demand:
(a) Landlord may terminate this Lease, in which event Tenant shall
immediately surrender the Leased Premises to Landlord, and if Tenant fails to
do so, Landlord may, without prejudice to any other remedy which it may have,
enter upon and take possession of the Leased Premises, and
COMMERCIAL LEASE AGREEMENT - PAGE 19
LEASE 3
expel or remove Tenant and any other person who may be occupying all or any
part of the Leased Premises. Landlord shall not be liable for prosecution or
any claim for damages as a result of such actions. Tenant agrees to pay on
demand the amount of all losses, costs, expenses, deficiencies, and damages,
including, without limitation, reasonable reconfiguration expenses, rental
concessions and other inducements to new tenants, advertising expenses and
broker's commissions, which Landlord may incur or suffer by reason of
Tenant's default or the termination of this Lease under this subparagraph,
whether through inability to rent the Leased Premises on satisfactory terms
or otherwise. Tenant acknowledges that its obligation to pay Base Rent and
all additional Rent hereunder is not only compensation for use of the Leased
Premises but also compensation for sums already expended and/or being
expended by Landlord with respect to its obligations hereunder and with
respect to the Leased Premises, and Tenant acknowledges that Tenant's default
in timely payment of all sums due hereunder shall constitute significant
financial loss to Landlord. Tenant further acknowledges that any failure to
pay any sum due hereunder shall evidence Tenant's inability to meet its debts
as they become due. In such event, in addition to Landlord's other remedies
hereunder, Landlord shall be entitled to accelerate all Base Rental remaining
unpaid hereunder, the entirety of which shall at the option of Landlord be
immediately due and payable to the extent allowed by law.
(b) Without termination of this Lease, Landlord may enter upon and take
possession of the Leased Premises and expel or remove Tenant and any other
person who may be occupying all or any part of the Leased Premises (without
being liable for prosecution or any claim for damages therefor) and relet the
Leased Premises on behalf of Tenant and receive directly the rent from the
reletting. Tenant agrees to pay Landlord on demand any deficiency that may
arise by reason of any reletting of the Leased Premises and to reimburse
Landlord on demand for any losses, costs, and expenses, including without
limitation, reconfiguration expenses*, rental concessions and other
inducements to new tenants, advertising costs or broker's commissions, which
Landlord may incur or suffer as a result of Tenant's default or in reletting
the Leased Premises.
*Reconfiguration expenses shall not exceed the unpaid amortized portion of
Tenant's original tenant improvement costs.
(c) Without terminating this Lease, Landlord may enter upon the Leased
Premises (without being liable for prosecution or any claim for damages
therefor) and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to reimburse Landlord on demand for any losses, costs
and expenses which Landlord may incur in effecting compliance with Tenant's
obligations under this Lease. Tenant further agrees that Landlord shall not
be liable for any damages resulting to Tenant from effecting compliance with
Tenant's obligations under this subparagraph.
(d) With respect to Landlord's entry upon the Leased Premises under the
provisions of subparagraphs (a), (b), and (c) above, no restriction of, or
obligation imposed upon Landlord by, Texas Property Code Section 93.002 shall
apply, such Section being superseded hereby. In particular, but without
limitation, Landlord will have no duty or responsibility to Tenant to tender
a key in the event of a change of locks, and Tenant will have no further
right of possession except as otherwise expressly agreed by Landlord in
writing. If Landlord changes the locks, Tenant shall be allowed to retrieve
its business records from the Leased Premises.
COMMERCIAL LEASE AGREEMENT - PAGE 20
LEASE 3
(e) Landlord may pursue any remedy provided at law or in equity.
(f) Landlord shall have no duty to relet the Premises, and the failure
of Landlord to do so shall not release or affect Tenant's liability for Rent
and other charges due hereunder or for damages.
(g) No re-entry or reletting of the Premises or any filing or service
of an unlawful detainer action or similar action shall be construed as an
election by Landlord to terminate this Lease unless a written notice of such
intention is given by Landlord to Tenant. Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate
this Lease and Tenant's right to possession hereunder.
(h) To the extent allowed by law, Tenant hereby waives the protections
and rights provided by Texas Property Code Section 93.002.
28. TERMINATION OF OPTIONS: If there exist any options or special rights
which Landlord may have granted Tenant under this Lease including, but not
limited to, options or rights regarding extensions of the term, expansion of
the Leased Premises, or acquisition of any other interest in the Leased
Premises, the Building, or the Project, then all such options and rights are
independent of the leasehold estate hereby granted to Tenant by Landlord.
Landlord and Tenant agree and acknowledge that the negotiated consideration
for any such options or special rights is Tenant's entry into this Lease and
that no portion of any sums due and payable by Tenant to Landlord hereunder
is attributable thereto. In addition to, and not in lieu of, the above
remedies of Landlord for Tenant's default, any and all such options or
special rights shall be automatically terminated upon the occurrence of the
following events:
(a) Tenant shall have failed to pay when due any installment of Rent or
other sums payable under this Lease for any three (3) consecutive months
during the Lease term or any renewal or extension thereof, or for any ten
(10) months during the Lease term or any renewal or extension thereof,
whether or not said defaults are cured by Tenant; or
(b) Tenant shall have received two (2) or more notices of default under
Paragraph 26(c) within any one calendar year with respect to any other
covenant of this Lease, whether or not such default(s) is/are cured; or
(c) Tenant shall have committed or suffered to exist any other event of
default described under Paragraph 26 above, whether or not such default is
cured by Tenant.
29. WAIVER OF DEFAULT OR REMEDY: Failure of Landlord to declare a default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not be a waiver of the default. Landlord
shall have the right to declare the default at any time and take such action
as its lawful or authorized under this Lease. Pursuit of any one or more of
the remedies set forth in Paragraphs 27 or 28 above shall not preclude
pursuit of any one or
COMMERCIAL LEASE AGREEMENT - PAGE 21
LEASE 3
more of the other remedies provided therein or elsewhere in this Lease or as
provided by law, nor shall pursuit of any remedy be a forfeiture or waiver of
any Rent or damages accruing to Landlord by reason of the violation of any of
the terms of this Lease. Failure by Landlord to enforce one or more of its
remedies upon an event of default shall not be construed as a waiver of the
default or of any other violation or breach of any of the terms contained in
this Lease.
30. CHOICE OF LAW; VENUE; ATTORNEY'S FEES: It is specifically stipulated
that this Lease shall be interpreted and construed according to the laws of
the State in which the Leased Premises are located, and any suit brought on
this Lease shall be maintained in the county in which the Leased Premises are
located. Further, the prevailing party in any such litigation between the
parties shall be entitled to recover, as a part of its judgment, reasonable
attorney's fees and costs and expenses incurred therein.
31. HOLDING OVER: Tenant will, at the termination of this Lease by lapse of
time or otherwise, surrender immediate possession to Landlord. If Landlord
agrees in writing that Tenant may hold over after the expiration or
termination of this Lease and if the parties do not otherwise agree, the hold
over tenancy shall be subject to termination by Landlord at any time upon not
less than thirty (30) days advance written notice, or by Tenant at any time
upon not less than thirty (30) days advance written notice. Further, all of
the terms and provisions of this Lease shall be applicable during the hold
over period, except that Tenant shall pay Landlord from time to time upon
demand, as Base Rent for the period of any hold over, an amount equal to one
and one-half times (1-1/2) the Base Rent in effect on the date of
termination, computed on a daily basis for each day of the hold over period,
plus all additional Rent and other sums due hereunder. If Tenant shall fail
immediately to surrender possession of the Leased Premises to Landlord upon
termination of this Lease, by lapse of time or otherwise, and Landlord has
not agreed to such continued possession, as above provided, then, until
Landlord can dispossess Tenant under the terms hereof or otherwise, Tenant
shall pay Landlord from time to time upon demand, as Base Rent for the period
of any such hold over, an amount equal to twice the Base Rent in effect on
the date of termination, computed on a daily basis for each day of the hold
over period, plus all additional Rent and other sums due hereunder. No
holding over by Tenant, whether with or without consent of Landlord, shall
operate to extend this Lease except as otherwise expressly agreed by the
parties. The preceding provisions of this Paragraph shall not be construed
as Landlord's consent for Tenant to hold over.
32. RIGHTS OF MORTGAGEE: Tenant accepts this Lease subject and subordinate
to any recorded mortgage, deed of trust or other lien (a "Mortgage")
presently existing or hereafter to exist with respect to the Leased Premises.
Further, but without limiting the preceding sentence, Landlord is hereby
irrevocably vested with full power and authority to subordinate and/or to
evidence such subordination of Tenant's interest under this Lease to any
Mortgage hereafter placed on the Leased Premises, and Tenant agrees upon
demand to execute such additional instruments subordinating this Lease, and
further defining the terms of such subordination, as well as the attornment
discussed below, as Landlord or the holder of any such Mortgage, may require.
Tenant agrees to provide to the holder of any such Mortgage, whose name and
address have been provided to Tenant (a "Mortgagee"), a copy of each notice
to Landlord which alleges any act, omission, or condition that
COMMERCIAL LEASE AGREEMENT - PAGE 22
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might constitute a default by Landlord hereunder and Mortgagee, in its sole
discretion, shall have all rights of Landlord hereunder to cure any such
default. If the interests of Landlord under this Lease shall be transferred
by reason of foreclosure or other proceedings for enforcement of any Mortgage
on the Leased Premises, at the election of the transferee (sometimes called
the "Purchaser") Tenant shall be bound to the Purchaser under the terms and
conditions of this Lease for the balance of the remaining Lease term,
including any extensions or renewals, with the same force and effect as if
the Purchaser were Landlord under this Lease; provided, however, that such
Purchaser shall not be liable or bound to Tenant (i) for any act or omission
of any prior landlord, (ii) for any offsets or defenses which Tenant might
have against any prior landlord, (iii) for or by any Rent which Tenant might
have paid for more than the current month, (iv) by any amendment or
modification of, or consensual termination agreement with respect to, the
Lease made without the Mortgagee's consent, (v) for any Security Deposit
given by Tenant to a prior landlord unless such deposit is actually received
by such Purchaser, (vi) for any repairs or replacements required by this
Lease arising prior to the date Purchaser takes possession of the Leased
Premises, or (vii) for any moving, relocation or refurbishment allowance or
any construction of or payment or allowance for tenant improvements to the
Leased Premises or any part thereof for the benefit of Tenant except as set
forth in this Lease. Tenant further agrees at the election of the Purchaser
to attorn to the Purchaser, including the Mortgagee if it be the Purchaser,
as its Landlord. Such attornment shall be effective without the execution of
any further instruments upon the Purchaser's succeeding to the interest of
Landlord under this Lease. The respective rights and obligations of Tenant
and the Purchaser upon the attornment, to the extent of the then remaining
balance of the term of this Lease and any extensions and renewals, shall be
and are the same as those set forth in this Lease, but Tenant agrees upon
demand to execute such additional instruments defining the terms of such
attornment as Landlord or the Purchaser may require. Each such Mortgagee and
each such Purchaser shall be a third-party beneficiary of the provisions of
this Paragraph.
*Upon written request by Tenant and provided Tenant is not in default of any
terms, conditions, or provisions of the Lease, Landlord agrees to use best
efforts to obtain a non-disturbance agreement from any lender or purchaser.
33. ESTOPPEL CERTIFICATES: Tenant agrees to furnish on the Commencement
Date of this Lease and from time to time within ten (10) days of request by
Landlord or Landlord's mortgagee, a statement certifying that the Tenant is
in possession of the Leased Premises; the Leased Premises are acceptable;
this Lease is in full force and effect; this Lease is unmodified; Tenant
claims no present charge, lien, or claim of offset against Rent; the Rent is
paid for the current month but is not paid and will not be paid for more than
one month in advance (except estimated additional Rent under Paragraph 6);
there is no existing default under this Lease; and such other matters as may
be reasonably required by Landlord or Landlord's mortgagee.
34. SUCCESSORS: This Lease shall be binding upon and inure to the benefit
of Landlord and Tenant and their respective heirs, personal representatives,
successors and assigns. It is hereby covenanted and agreed that should
Landlord's interest in the Leased Premises cease to exist for any reason
during the term of the Lease, then notwithstanding the happening of such
event, at the election of Landlord's successor herein, this Lease shall
nevertheless remain unimpaired and in full force and effect and Tenant
hereunder agrees to attorn to the then owner of the Leased Premises.
COMMERCIAL LEASE AGREEMENT - PAGE 23
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35. REAL ESTATE COMMISSION: Tenant represents and warrants that is has dealt
with no broker, agent, or other person other than Bradford Realty Services of
Dallas, Inc., ▇▇▇▇ ▇▇▇▇▇, in connection with this transaction, and that no
other broker, agent, or other person brought about this transaction. Landlord
and Tenant each agree to indemnify and hold the other harmless from and against
any claims by any broker, agent, or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant or Landlord
respectively with regard to this transaction. The provisions of this Paragraph
shall survive the termination of this Lease.
36. DEFAULT BY LANDLORD: Landlord shall not be in default, and Tenant shall
have no right to any remedy at law or in equity, unless the act, omission, or
condition allegedly giving rise to such default shall have continued uncured or
unabated for a period of thirty (30) days following written notice to Landlord
(with a copy to any Mortgagee as provided in Paragraph 32 above) or, if such
cure or abatement cannot be accomplished within said 30-day period, then, so
long as Landlord or Mortgagee has commenced such cure or abatement within such
30-day period and diligently pursues same, such period shall be extended a
reasonable time to allow completion of the cure or abatement.
37. MECHANIC'S LIENS: Tenant shall have no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord in the Leased Premises or
the Project or to charge the Rent payable hereunder for any claim in favor of
any person dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs. Each such claim shall affect,
and each such lien shall attach to, if at all, only the leasehold interest
granted to Tenant by this Lease. Tenant covenants and agrees that it will pay
or cause to be paid all sums legally due and payable by it on account of any
labor performed or materials furnished in connection with any work performed on
the Leased Premises on which any lien is or can be validly and legally asserted
against its leasehold interest in the Leased Premises or the improvements
thereon. Tenant further agrees to save and hold Landlord harmless from any and
all loss, cost, or expense based on or arising out of claims or liens asserted
by parties by virtue of their dealings with Tenant and encumbering the
leasehold estate or the right, title and interest of the Landlord in the Leased
Premises or the Project. Under no circumstances shall Tenant be or hold itself
out to be the agent or representative of Landlord with respect to any
Alterations of the Leased Premises whether or not consented to or approved by
Landlord hereunder.
38. HAZARDOUS WASTE: The term "Hazardous Substances," as used in this Lease
shall mean petroleum and petroleum products and by-products, crude oil,
pollutants, contaminants, toxic or hazardous wastes, or any other substances,
the use of which is regulated, restricted, prohibited or penalized, or the
removal or disposal of which is required, by any "Environmental Laws," which
term shall mean any and all federal, state or local law, ordinance or other
statute of a governmental or quasi-governmental authority relating to the
pollution or protection of the environment. Tenant hereby agrees that (i) no
activity will be conducted on the Leased Premises that will produce any
Hazardous Substances; (ii) the Leased Premises will not be used in any manner
not in compliance with local and federal laws for the storage of any Hazardous
Substances; (iii) no portion of the
COMMERCIAL LEASE AGREEMENT - PAGE 24
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Leased Premises will be used as a landfill or a dump; (iv) Tenant will not
install any underground tanks of any type; (v) Tenant will not allow any
surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute, a public or private
nuisance; and (vi) Tenant will not permit any Hazardous Substances to be
brought onto the Leased Premises, and if so brought thereon, then the same
shall be stored and used in compliance with all local and federal laws
regarding same. Landlord or Landlord's representative shall have the right
but not the obligation to enter the Leased Premises for the purpose of
ensuring compliance with all Environmental Laws. If Tenant in any manner
contaminates the Leased Premises, then Tenant shall promptly and diligently
institute proper and thorough clean-up procedures at Tenant's sole cost.
Landlord hereby agrees to defend, indemnify and hold Tenant, its employees,
partners, agents, contractors, officers and directors and their heirs,
successors, and assigns harmless from any and all costs (including costs of
litigation), reasonable attorneys' fees, expenses, liabilities, claims,
damages or judgements arising or alleged to occur, and that result, or are
alleged to result from the actual, or threatened discharge, dispersal,
disposal, release or escape of Hazardous Substances or other wastes or
pollutants (including, but not limited to asbestos, solid, liquid, gaseous or
thermal irritants or contaminants, smoke, vapor, soot, fumes, acids, alkalis,
chemicals, and water materials to be recycled, reconditioned or reclaimed),
but only as the same are a direct result of any act or omission of Landlord
or its agents, employees, contractors or subcontractors. Tenant hereby
agrees to defend, indemnify and hold Landlord, its employees, agents,
partners, contractors, officers and directors and their heirs, successors,
and assigns harmless from any and all costs (including costs of litigation),
reasonable attorneys' fees, expenses, liabilities, claims, damages or
judgements arising or alleged to occur, and that result, or are alleged to
result from the actual, or threatened discharge, dispersal, disposal, release
or escape of Hazardous Substances or other wastes or pollutants (including,
but not limited to asbestos, solid, liquid, gaseous or thermal irritants or
contaminants, smoke, vapor, soot, fumes, acids, alkalis, chemicals, and water
materials to be recycled, reconditioned or reclaimed), but only as the same
are a direct result of any act or omission of Tenant or Tenant's
Representatives.
39. ENTIRE AGREEMENT AND LIMITATION OF WARRANTIES: It is expressly agreed by
Tenant, as a material consideration for the execution of this Lease, that this
Lease is the entire agreement of the parties and that there are and were no
verbal representations, warranties, understandings, stipulations, agreements,
or promises pertaining to this Lease not incorporated in this Lease. Tenant
expressly agrees that there are and shall be no implied warranties of
merchantability, fitness, habitability, or of any other kind and that Tenant's
acceptance of the Leased Premises shall be "as is". It is likewise agreed that
this Lease may not be altered, waived, amended, or extended except by an
instrument in writing signed by both Landlord and Tenant. Not in limitation
upon the foregoing, Landlord agrees that to the extent assignable, all
warranties, if any shall exist, from contractors or suppliers with respect to
the improvements to the Leased Premises hereunder are hereby partially assigned
to Tenant to the extent necessary to avail Tenant of the benefits thereof with
respect to its leasehold estate and property located at the Leased Premises.
40. FINANCIAL STATEMENTS: From time to time Landlord may need to obtain
financing or renew financing on the Project, or perform calculations for
various reasons regarding the value of the Project. Tenant hereby agrees to
provide to Landlord financial statements on its business when
COMMERCIAL LEASE AGREEMENT - PAGE 25
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requested, but not more than once annually, indicating the most current year
end and quarterly financial status of the business. Landlord will not
deliver such financial statement to any third party except in confidence and
only as required by Landlord's lenders or in conjunction with appraisals of
the Project.
41. FORCE MAJEURE:
(a) Landlord shall not be required to perform any covenant or obligation
of this Lease or be liable in damages to Tenant for that time period during
which the performance or non-performance of the covenant or obligation is
delayed, caused by, or prevented by Tenant or Tenant's Representatives or by an
act of God or force majeure.
(b) Except with respect to the payment of Rent or any other sum due
hereunder, Tenant shall not be required to perform any covenant or obligation
of this Lease or be liable in damages to Landlord for that time period during
which the performance or non-performance of the covenant or obligation is
delayed, caused by, or prevented by Landlord or Landlord's Representatives or
by an act of God or force majeure.
(c) An "act of God" or "force majeure" is defined for purposes of this
Lease as strikes, lockouts, sit-downs, material or labor restrictions by any
governmental authority, riots, floods, washouts, explosions, earthquakes, fire,
storms, acts of the public enemy, wars, insurrections and any other similar
cause not reasonably within the control of Landlord and which by the exercise
of due diligence Landlord is unable, wholly or in part, to prevent or overcome.
42. MISCELLANEOUS:
(a) Words of any gender used in this Lease shall be held and construed to
include any other gender; and words in the singular number shall be held to
include the plural, unless the context otherwise requires.
(b) Each party agrees to furnish to the other, promptly upon demand, a
corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization and power of such
party to enter into this Lease and the empowerment and authority of the
individual signing below to bind his or her principal.
(c) The captions inserted in this Lease are for convenience only and in
no way define, limit, or otherwise describe the scope or intent of this Lease
or any provision hereof, or in any way affect the interpretation of this Lease.
(d) If any clause or provision of this Lease is illegal, invalid, or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby; and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid, or unenforceable there be added as a
part of this Lease a clause as similar in
COMMERCIAL LEASE AGREEMENT - PAGE 26
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terms to such illegal, invalid, or unenforceable clause or provision as may
be possible and be legal, valid, and enforceable.
(e) Intentionally deleted
(f) All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on
which all parties hereto have executed this Lease.
(g) In the event that Tenant shall fail to perform any duty or obligation
hereunder, whether maintenance, repair or replacement of the Leased Premises,
maintenance of insurance, or otherwise, then Landlord may, but shall in no
event be obligated to, without notice of any kind, take such actions as
Landlord deems necessary or appropriate to remedy such Tenant failure, and any
sums expended by Landlord together with fair and just compensation for the time
and effort of Landlord in such efforts shall be deemed additional Rent
hereunder due and payable by Tenant on demand.
(h) If Tenant shall fail to pay, when the same is due and payable, any
Rent or any other sum due hereunder, such unpaid amount shall bear interest
from the tenth (10th) day after the due date thereof to the date of remittance
at the rate of the lesser of 18% per annum and the maximum rate allowed by law.
(i) Landlord does not in any way or for any purpose become a partner with
Tenant in the conduct of its business or otherwise, nor a member of a joint
venture with Tenant.
(j) Tenant shall not record this Lease without the prior written consent
of Landlord. However, upon the request of either party hereto, the other party
shall join in the execution of a memorandum or so-called "short form" of this
Lease for the purposes of recordation.
(k) Time is of the essence in the performance of all the covenants,
conditions, and agreements contained in this Lease.
(l) Any duty, obligation, or debt and any right or remedy arising
hereunder and not otherwise consummated and/or extinguished by the express
terms hereof at or as of the time of termination of this Lease, whether at the
end of the term hereof or otherwise, shall survive such termination as
continuing duties, obligations, and debts of the obligated party to the other
or continuing rights and remedies of the benefited party against the other.
(m) This Agreement may be executed in one or more counterparts, each of
which counterpart shall for all purposes be deemed to be an original; but all
such counterparts together shall constitute but one instrument.
(n) Attached hereto, marked Exhibit "A" through Exhibit "__", are certain
exhibits to this Lease all of which are hereby incorporated herein by
reference.
43. NOTICE:
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(a) All Rent and other payments required to be made by Tenant to Landlord
shall be payable to Landlord at the address set forth below or any other
address that Landlord may specify from time to time by written notice delivered
to Tenant.
(b) All payments, if any, required to be made by Landlord to Tenant shall
be payable to Tenant at the address set forth below or at any other address
that Tenant may specify from time to time by written notice delivered to
Landlord.
(c) Any notice or document required or permitted to be delivered by this
Lease shall be deemed to be delivered (whether or not actually received) when
deposited in the United States Mail, postage prepaid, certified mail return
receipt requested, addressed to the parties at the respective addresses set
forth below or such other address as hereinafter specified by notice given in
accordance with this paragraph.
44. LIMITATION ON TENANT'S DAMAGES: Tenant agrees that any liability of
Landlord under this Lease shall be limited solely to Landlord's interest in the
Project, and no other assets of Landlord shall be subject to levy or execution.
Executed by Landlord and Tenant as of the below dates.
LANDLORD TENANT
▇▇▇▇▇▇▇-▇▇▇▇ TECHNOLOGY ▇▇▇▇▇ GOLF, INC., A TEXAS CORPORATION
CENTER II, LTD.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By:▇▇▇▇▇▇▇-▇▇▇▇/Texas, Inc., By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
General Partner ----------------------------
By : J. ▇▇▇▇▇▇▇ ▇▇▇▇ Its: V.P. Operations
------------------ ----------------------
Its: Vice President
------------------
Date: April 6, 1998 Date: April 3, 1998
-------------------- ----------------------
EXHIBIT "A"
LEGAL DESCRIPTION
COMMERCIAL LEASE AGREEMENT - PAGE 28
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EXHIBIT "B"
TENANT IMPROVEMENTS
Landlord agrees, at Landlord's expense, to install the tenant improvements per
the attached plans and specifications provided such plans and specifications
have been approved by Landlord and Tenant. Landlord's estimate of the cost of
these improvements is $461,944.00 ($14.00 per square foot). Should the actual
construction costs exceed $461,944.00, Tenant shall pay such excess to
Landlord prior to the commencement of the construction. This construction
allowance is based on the cost to duplicate Tenant's finishes and space
allocation in its current Leased Premises.
COMMERCIAL LEASE AGREEMENT - PAGE 29
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ADDENDUM
This Addendum is entered into this ______day of March, 1998, between ▇▇▇▇▇▇▇-
▇▇▇▇ TECHNOLOGY CENTER II, LTD., as Landlord, and ▇▇▇▇▇ GOLF, INC., as Tenant.
This Addendum is an integral part of that certain Commercial Lease Agreement
dated as of the date hereof between Landlord and Tenant to which it is attached
(the "Lease"). If the terms and provisions of this Addendum conflict with those
of the Lease, those of this Addendum shall prevail.
1) RENEWAL OPTION: Tenant is granted the option to extend the term of this
Lease for one (1) extended term of five (5) years, provided no event of default
exists at the time of exercise of the option and no condition exists which with
the giving of notice or the passage of time or both would constitute an event
of default, and Tenant gives written notice of its exercise of the option at
least one hundred eighty (180) days prior to the expiration of the original
term. The extension term shall be upon the same terms and conditions as set
forth herein, except Tenant shall have no further right of renewal after the
extension term prescribed above, and the Base Rental will be equal to the then
prevailing rate for comparable space for a comparable term.
2) PARKING: Tenant shall be entitled to the non-exclusive use of the 115
parking spaces directly adjacent to the Leased Premises as shown on the
attached site plan.
3) EXPANSION: If during the term of this Lease agreement, Landlord leases to
or sells to Tenant a space or building of a size larger than the present Leased
Premises in any development owned by Landlord or any affiliate of Landlord,
Tenant's then remaining obligations due under this Lease agreement shall be
terminated upon the commencement date of the new lease or purchase agreement.
Not withstanding the above-stated, Tenant shall remain obligated to pay for any
Rents or other sums due Landlord as a result of Tenant's tenancy hereunder, and
such obligation shall survive the termination of this Lease pursuant to this
Paragraph 3.
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