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EXHIBIT 10.3.7
COMMERCIAL REAL ESTATE LEASE
This lease is entered into as of the first day of October 1, 1996, by and
between the Landlord and the Tenant hereinafter named, superseding all previous
leases.
ARTICLE I, 1.1
(a) "Landlord": Quad Corners Investments,
Ltd., a Texas Limited
Partnership.
(b) Landlord's address: 0000 Xxxxx Xxxx, Xxxxxx,
Xxxxx, 00000
(c) "Tenant": The Company Doctor, a
Delaware Corporation. The
Physician Group, P.A., a
Texas Professional
Association.
(d) Tenants' address: 0000 Xxxxx X'Xxxxxx Xxxx.,
Xxxxx 0000, Xxxxxx, Xxxxx
00000
(e) Tenant's Trade Name: The Company Doctor
(f) "Demised Premises":... in the City of
Farmers Branch, County of
Dallas, State of Texas, and
being 0000 Xxxx Xxxx Xxxx;
Xxx 0, Xxxxx 0, Xxxxxxxxxx
Xxxxxxxx Xxxx, Xxxxx 0.
(g) Lease Term: Commencing on the first day of
October, 1996, except as may
be modified by exhibits
attached to this lease (the
"Commencement Date") and
continuing for ten (10) years
and no months.
(h) Minimum guaranteed rental: Eight Thousand
Dollars ($ 8,000.00) per
month, payable in advance,
adjusted annually by the most
recently calculated CPI for
the previous twelve months.
(i) Prepaid rental: Sixteen Thousand Dollars
($16,000.00), being the first
and last months of the lease
term.
(j) Security deposit: Five Thousand Dollars
($5,000), being a deposit by
Tenant to Landlord as
security for the performance
of Tenant's obligations under
this lease. If Landlord
applies any part of the
deposit to cure any default
of Tenant, Tenant shall on
demand, deposit the amount so
applied so that Landlord
shall have a full deposit on
hand at all times during the
term of this lease.
(k) Permitted use: Medical practice.
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1.2 Each of the foregoing definitions and basic provisions shall
be construed in conjunction with and limited by the references thereto in the
other provisions of this lease.
ARTICLE II. 2.1 In consideration of the obligation of Tenant
to pay rent as herein provided and in consideration of the other terms,
covenants and conditions hereof, Landlord hereby demises and leases to Tenant,
and Tenant hereby takes from Landlord, the Demised Premises as described in
Section I.1 (f), TO HAVE AND TO HOLD said premises for the lease term specified
in Section 1.1 (g), all upon the terms and conditions set forth in this lease.
Landlord further agrees that if Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant. Tenant shall, subject to
the terms of this lease, at all times during the continuance of this lease have
peaceful and quiet possession of the Demised Premises.
ARTICLE III. 3.1 By occupying the Demised Premises, Tenant
shall be deemed to have accepted the same and to have acknowledged that the
same comply fully with Landlord's covenants and obligations hereunder.
3.2 If this lease is executed before the Demised Premises become
vacant, if any present tenant or occupant of the premises holds over, and
Landlord cannot acquire possession of the Demised Premises prior to the
Commencement Date of this lease, as above defined, Landlord shall not be deemed
to be in default hereinunder, and Tenant agrees to accept possession of the
Demised Premises at such time as Landlord is able to tender the same. Landlord
hereby waives the payment of rent covering any period prior to tender of
possession to Tenant hereinunder.
3.3 Landlord and Tenant each agree that at the request of either
they will execute and deliver a short form lease in recordable form containing
the basic provisions of this agreement, acknowledging that Tenant has accepted
possession and reciting the exact Commencement Date and termination date of
this lease.
ARTICLE IV. 4.1 Rental shall accrue hereunder from the
Commencement Date, and shall be payable to Landlord at the address specified in
Section 1.1 (b) above.
4.2 Tenant shall pay to Landlord minimum guaranteed rental in
monthly installments in the amounts specified in Section 1.1 above. The first
such monthly installment shall be due and payable on or before the Commencement
Date, and subsequent installments shall be due and payable on or before the
first day of each succeeding calendar month during the hereby demised term;
provided that if the Commencement Date is a date other than the first day of a
calendar month, there shall be due and payable on or before such date as
minimum guaranteed rental for the balance of such calendar month a sum equal to
that proportion of the rent specified for the first full calendar month as
herein provided, which the number of days from the Commencement Date to the end
of the calendar month during which the Commencement Date shall fall bears to
the total number of days in such month.
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4.3 It is understood that the minimum guaranteed rental is payable
on or before the first day of the month (in accordance with Section 4.2 above).
In the event any rental is not received within ten (10) days after its due date
for any reason whatsoever, it is agreed that the amount thus due shall bear
interest at the maximum contractual rate which could legally be charged in the
event of a loan of such rental to Tenant in the state where the Demised
Premises are located (but in no event to exceed 1.5% per month), such interest
to accrue continuously on any unpaid balance due to Landlord by Tenant during
the period commencing with the aforesaid due date and terminating with the
date on which Tenant makes full payment of all amounts owing to Landlord at the
time of said payment. Any such increase shall be payable as additional rent
hereunder and shall be payable immediately on demand.
4.4 If Tenant fails in two (2) consecutive months to make rental
payments within ten (10) days after due, Landlord in order to reduce its
administrative costs, may require, by giving written notice to Tenant (and in
addition to any interest accruing pursuant to Section 4.3 above, as well as any
other rights and remedies accruing pursuant to Article XVII or Article XVIII
below, or any other term, provision of covenant of this lease), that minimum
guaranteed rentals are to be paid quarterly in advance instead of monthly and
that all future rental payments are to be made on or before the due date by
cash, cashier's check, or money order, and that the delivery of Tenant's
personal or corporate check will no longer constitute a payment of rental as
provided in this lease. Any acceptance of a monthly rental payment or of a
personal or corporate check thereafter by Landlord shall not be construed as a
subsequent waiver of said rights.
ARTICLE V. 5.1 The Demised Premises may be used only for the
purpose or purposes specified in Section 1.1 (k) above, and for no other
purposes without the prior written consent of Landlord. Tenant shall not at any
time leave the Demised Premises vacant, but shall in good faith continuously
throughout the term of this lease conduct and carry on in the entire Demised
Premises the type of business for which the Demised Premises are leased.
5.2 Tenant shall not, without Landlord's prior written consent,
keep anything within the premises or on the property or use the premises for
any purpose which increases the insurance premium cost or invalidates any
insurance policy carried on the Demised Premises. All property kept, stored or
maintained within the premises by Tenant shall be at Tenant's sole risk.
5.3 Tenant shall take good care of the Demised Premises and keep
the same free from waste at all times. Tenant shall keep the Demised Premises,
parking lot and sidewalks of the premises in good repair, as well as neat,
clean and free from dirt or rubbish at all times, and shall store all trash and
garbage at Tenant's expense. Tenant will arrange for regular pickup of such
trash and garbage at Tenant's expense. Tenant shall also maintain the lawn and
landscaped areas of the property, including the existing sprinkler system, at
Tenant's expense. Should Tenant fail to comply with the above maintenance
within ten (10) days after written notice delivered to Tenant by Landlord,
Landlord may at its option make such maintenance without liability to Tenant
for any loss or damage which may result to its stock or business by reason of
such maintenance; and Tenant shall pay to Landlord upon demand, as additional
rent hereunder, the cost of such maintenance, plus interest at the maximum
contractual rate which could legally be charged in the event of a loan of such
payment to Tenant in the
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state where the Demised Premises are located (but in no event to exceed 1.5%
per month), such interest to accrue continuously from the date of payment by
Landlord until repayment by Tenant. At the expiration of this lease, Tenant
shall surrender the Demised Premises in good condition, excepting reasonable
wear and tear and losses required to be restored by Landlord in Section 6.1,
Article XIV and Article XV of this lease.
5.4 Tenant shall procure at its sole expense any permits and
licenses required for the transaction of business in the Demised Premises and
otherwise comply with all applicable laws, ordinances, and governmental
regulations.
ARTICLE VI. 6.1 Landlord shall keep the foundation, the
exterior walls, (except plate glass windows, doors, door closure devices and
other exterior openings; window and door frames, molding, locks and hardware;
lighting, heating, air conditioning, plumbing, and other electrical, mechanical
and electromotive installation, equipment and fixtures; signs, placards,
decorations or advertising and media of any type; and interior painting or
other treatment of exterior walls) and roof of the Demised Premises in good
repair. Landlord, however, shall not be required to make any repairs occasioned
by the act or negligence of Tenant, its agents, employees, subtenants,
licensees and the provisions of the previous sentence are expressly recognized
to be subject to the provisions of Article XIV. In the event that the Demised
Premises should become in need of repairs required to be made by Landlord
hereunder, Tenant shall give immediate written notice thereof to Landlord; and
Landlord shall not be responsible in any way for failure to make any such
repairs until a reasonable time shall have elapsed after receipt by Landlord of
such written notice.
6.2 Tenant shall keep the Demised Premises in good, clean and
habitable condition and shall at its sole cost and expense keep the premises
free of insects, rodents vermin and other pests and make all needed repairs and
replacements, including replacement of cracked or broken glass, except for
repairs and replacements required to be made by landlord under the provisions
of Section 6.1, Article XIV and Article XV. Without limiting the coverage of
the previous sentence, it is understood that Tenant's responsibilities therein
include the repair and replacement of all lighting, heating, air conditioning,
plumbing and other electrical mechanical and electromotive installation,
equipment and fixtures and also include all utility repairs in ducts, conduits,
pipes and wiring and any sewer stoppage located in, under and above the Demised
Premises. If any repairs required to be made by Tenant hereunder are not made
within ten (10) days after written notice delivered to Tenant by Landlord,
Landlord may at its option make such repairs without liability to Tenant for
any loss or damage which may result to its stock or business by reason of such
repairs; and Tenant shall pay to Landlord upon demand, as additional rent
hereunder, the cost of such repairs plus interest at the maximum contractual
rate which could legally be charged in the event of a loan of such payment to
Tenant in the state where the Demised Premises are located (but in no event to
exceed 1.5% per month), such interest to accrue continuously from the date of
payment by Landlord until repayment by Tenant. At the expiration of this lease,
Tenant shall surrender the Demised Premises in good condition, excepting
reasonable wear and tear and losses required to be restored by Landlord in
Section 6.1, Article XIV and Article XV of this lease.
6.3 Fixtures and appliances, including the tub whirlpool and
kitchen appliances not owned by the P.A. will be included in the lease of the
Demised Premises and shall
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remain on the premises. Personal property on the premises, such as artwork
throughout the Demised Premises are not included in this lease and can be
removed by the Landlord at their discretion.
ARTICLE VII. 7.1 Tenant shall not make any alterations,
additions or improvements to the Demised premises without the prior written
consent of Landlord, except for the installation of unattached, movable trade
fixtures which may be installed without drilling, cutting or otherwise defacing
the premises. All alterations, additions, improvements and fixtures (other than
Tenant's unattached, readily movable furniture and office equipment) which may
be made or installed by either party upon the Demised Premises shall remain
upon and be surrendered with the premises and become the property of Landlord
at the termination of this lease, unless Landlord requests their removal in
which event Tenant shall remove the same and restore the premises to their
original condition at Tenant's expense.
7.2 All construction work done by Tenant within the Demised
Premises shall be performed in a good and workmanlike manner, in compliance
with all governmental requirements. Tenant agrees to indemnify Landlord and
hold Landlord harmless against any loss, liability or damage resulting from
such work, and Tenant shall, if requested by Landlord, furnish bond or other
security satisfactory to Landlord against any such loss, liability or damage.
ARTICLE VIII. 8.1. Landlord shall have the right to enter upon
the Demised Premises at any time for the purpose of inspecting the same, or of
making repairs to the Demised Premises, or of showing the Demised Premises to
prospective purchasers, lessees or lenders.
8.2. Tenant will permit Landlord to place and maintain "For Rent"
or "For Lease" signs on the Demised Premises during the last ninety days of the
lease term, it being understood that such signs shall in no way affect Tenant's
obligations pursuant to any provisions of this lease.
ARTICLE IX. 9.1 Tenant shall not, without Landlord's prior
written consent (a) make any changes to the building front or (b) install any
exterior lighting, decorations, paintings, awnings, or the like excepting only
dignified displays of customary type. All signs shall be subject to the prior
written approval of Landlord as to construction, method of attachment, size,
shape, height, lighting, and general appearance. All signs shall be kept in
good condition.
ARTICLE X. 10.1 Landlord shall not be liable for any
interruption whatsoever in utility services not furnished by him, nor for
interruptions in utility services furnished by him which are due to fire,
accident, strike, acts of God or other causes beyond the control of Landlord or
in order to make alterations, repairs or improvements.
ARTICLE XI. 11.1 Tenant agrees to transfer all utilities,
including water, electricity, natural gas, sewerage service, and telephone
service within three days of the signing of this contract. Tenant shall
promptly pay all charges for electricity, water, gas, telephone service,
sewerage service and other utilities furnished to the Demised Premises.
Landlord may if it so elects, furnish one or more utility services to Tenant,
and in such event, Tenant shall purchase the use of such services as are
tendered by
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Landlord, and shall pay on demand as additional rental the rates established
therefore by Landlord which shall not exceed the rates which would be charged
for the same services if purchased directly by the local public utility
companies. Landlord may at any time discontinue furnishing such service without
obligation to Tenant other than to connect Demised Premises to the public
utility.
ARTICLE XII. 12.1 Landlord shall not be liable to Tenant or to
Tenant's employees, agents, or visitors, or to any other person whomsoever, for
any injury to person or damage to property on or about the Demised Premises
including grounds outside of building, caused by the negligence or misconduct
of Tenant, its employees, subtenants, licensees or of any other person entering
the building under express or implied invitation of Tenant, or arising out of
the use of the premises by Tenant and the conduct of its business therein, or
arising out of any breach or default by Tenant in the performance of its
obligations hereunder; and Tenant hereby agrees to indemnify Landlord and hold
Landlord harmless from any loss, expense or claims arising out of such damage
or injury.
12.2. Tenant shall procure and maintain throughout the term of this
lease a policy or policies of insurance, at its sole cost and expense, insuring
both Landlord and Tenant against all claims, demands or actions arising out of
or in connection with Tenant's use or occupancy of the Demised Premises, or by
the condition of Demised Premises, the limits of such policy or policies to be
in an amount not less than One Million Dollars ($1,000,000) in respect of
injuries to or death of any one person, and in an amount not less than One
Million Dollars ($1,000,000) in respect of any one accident or disaster, and in
an amount not less than Nine Hundred Fifty Five Thousand Dollars ($955,000) in
respect of property damage or destruction, and to be written by insurance
companies satisfactory to Landlord. Tenant shall obtain a written obligation on
the part of each insurance company to notify Landlord at least ten (10) days
prior to cancellation of such insurance. Such policies or duly executed
certificates of insurance shall be promptly delivered to Landlord and renewals
thereof as required shall be delivered to Landlord at least thirty (30) days
prior to the expiration of the respective policy terms. If tenant should fail
to comply with the foregoing requirements relating to insurance, Landlord may
obtain such insurance and Tenant shall pay to Landlord on demand as additional
rent hereunder the premium cost thereof plus interest at the maximum
contractual rate (but in no event to exceed 1.5% per month) from the date of
payment by Landlord until repaid by Tenant.
ARTICLE XIII. 13.1 Landlord and Landlord's agents and
employees shall not be liable to Tenant for any injury to person or damage to
property caused by the Demised Premises or any portions of the property
becoming out of repair or by defect or failure of any structural element of the
Demised Premises or of any equipment, pipes or wiring, or broken glass, or by
the backing up of drains, or by gas, water, steam, electricity or oil leaking,
escaping or flowing into the Demised Premises (except where due to Landlord's
willful failure to make repairs required to be made hereunder, after the
expiration of a reasonable time after written notice to Landlord of the need
for such repairs), nor shall Landlord be liable to Tenant for any loss or
damage that may be occasioned by or through the acts or omissions of other
tenants of the property or of any other persons whomsoever, excepting only duly
authorized employees and agents of Landlord.
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ARTICLE XIV. 14.1 Tenant shall give immediate written notice
to Landlord of any damage caused to the Demised Premises by fire or other
casualty.
14.2 In the event that the Demised Premises shall be damaged or
destroyed by fire or other casualty insurable under standard fire and extended
coverage insurance and Landlord does not elect to terminate this lease as
hereinafter provided, Landlord shall proceed with reasonable diligence and at
its sole cost and expense to rebuild and repair the Demised Premises. In the
event (a) the building in which the Demised Premises are located shall be
destroyed or substantially damaged by casualty not covered by Landlord's
insurance or (b) such building shall be destroyed or rendered untenantable to
an extent in excess of fifty (50) per cent of the floor area by a casualty
covered by Landlord's insurance, or (c) the holder of a mortgage, deed of trust
or other lien on the Demised Premises at the time of the casualty elects,
pursuant to such mortgage, deed of trust or other lien, to require the use of
all or part of Landlord's insurance proceeds in satisfaction of all or part of
the indebtedness secured by the mortgage, deed of trust or other lien, then
Landlord may elect either to terminate this lease or to proceed to rebuild and
repair the Demised Premises. Landlord shall give written notice to Tenant of
such election within sixty (60) days after the occurrence of such casualty and
if it elects to rebuild and repair shall proceed to do so with reasonable
diligence and at its sole cost and expense.
14.3 Landlord's obligation to rebuild and repair under this Article
XIV shall in any event be limited to restoring (a) the Demised Premises to
substantially the condition in which the same existed prior to such casualty,
exclusive of any alterations, additions improvements, fixtures and equipment
installed by Tenant, or (b) Landlord's work to substantially the same condition
in which the same existed prior to the casualty, as the case may be. Tenant
agrees that promptly after completion of such work by Landlord, Tenant will
proceed with reasonable diligence and at Tenant's sole cost and expense to
restore, repair and replace all alterations additions, improvements, fixtures,
signs, and equipment installed by Tenant or, if an Exhibit C is attached
hereto, all items of Tenant's Work as described in Exhibit C as the case may
be.
14.4 Tenant agrees that during any period of reconstruction or
repair of the Demised Premises it will continue the operation of its business
within the Demised Premises to the extent practicable. During the period from
the occurrence of the casualty until Landlord's repairs are completed, the
minimum guaranteed rental shall be reduced to such extent as may be fair and
reasonable under the circumstances; however, there shall be no abatement of
other charges provided for herein.
14.5 If more than thirty (30) percent of the floor area of the
Demised Premises should be 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 terminate and the rent shall
be abated during the unexpired portion of this lease, effective on the date
physical possession is taken by the condemning authority.
14.6 If less than thirty (30) per cent of the floor area of the
Demised Premises should be taken as aforesaid, this lease shall not terminate;
however, the minimum guaranteed rental (but not percentage rental) payable
hereinunder during the unexpired portion of this lease shall be reduced in
proportion to the current utilized area taken, effective on
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the date physical possession is taken be the condemning authority. Following
such partial taking, Landlord shall make all necessary repairs or alterations
to the remaining premises or, if an Exhibit B is attached hereto, all necessary
repairs or alterations within the scope of Landlord's Work as described in
Exhibit B, as the case may be, required to make the remaining portions of the
Demised Premises an architectural whole.
14.7 All compensation awarded for any taking (or the proceeds of
private sale in lieu thereof) of the demised premises, shall be the property of
Landlord, and Tenant hereby assigns its interests in any such award to
Landlord; provided, however, Landlord shall have no interest in any award made
to Tenant for Tenant's moving and relocation expenses or for the loss of
Tenant's fixtures and other tangible personal property if a separate award for
such items are made to Tenant.
ARTICLE XV. 15.1 Tenant shall not assign or in any manner
transfer this lease or any estate or interest therein, or sublet the Demised
Premises or any part thereof, or grant any license, concession or other right
of occupancy of any portion of the Demised Premises without the prior written
consent of Landlord. Consent by Landlord to one or more assignments or
sublettings shall not operate as a waiver of Landlord's rights as to any
subsequent assignments and sublettings.
15.2 If tenant is a corporation and if at any time during the
primary term of this lease or any renewal or extension thereof, the person or
persons who own a majority of either the outstanding voting shares or all
outstanding shares of capital stock of Tenant at the time of execution of this
lease cease to own a majority of such shares (except as the result of transfers
by devise or descent), the loss of a majority of such shares shall be deemed as
assignment of this lease by Tenant and therefore subject in all respects to the
provisions of Section 15.1 above. The previous sentence shall not apply,
however, if at the time of the execution of this lease the outstanding voting
shares of capital stock of Tenant are listed on a recognized security exchange
or over-the-counter market.
15.3 Notwithstanding any assignment or subletting, Xxxxx and any
guarantor of Tenant's obligations under this lease shall at all times remain
fully responsible and liable for the payment of the rent herein specified and
for compliance with all of its other obligations under this lease (even if
future assignments and sublettings occur subsequent to the assignments or
sublettings by Tenant, and regardless of whether or not Tenant's approval has
been obtained for such future assignments and sublettings). Moreover, in the
event that the rental due and payable by a sublessee (or a combination of the
rental payable under such sublease plus any bonus or other consideration
therefor or incident thereto) exceeds the rental payable under this lease, or
if with respect to a permitted assignment, permitted license or other transfer
by Tenant permitted by Landlord, the consideration payable to Tenant by the
assignee, licensee or other transferee exceeds the rental payable under this
lease, then Tenant shall be bound obligated to pay Landlord all such excess
rental and other excess consideration within ten (10) days following receipt
thereof by Tenant from such sublessee, assignee, licensee or other transferee,
as the case may be. Finally, in any event of assignment or subletting it is
understood and agreed that all rentals paid to Tenant by an assignee or
sublessee shall be received by Tenant in trust for Landlord, to be forwarded
immediately to Landlord without offset or reduction of any kind; and upon
election by Landlord such rentals shall be paid directly to Landlord as
specified in
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Section 4.1 of this lease (to be applied as a credit and offset to Tenant's
rental obligations).
15.4 Tenant shall not mortgage, pledge or otherwise encumber its
interest in this lease or in the Demised Premises.
15.5 In the event of the transfer and assignment by Landlord of its
interest in this lease and in the building containing the Demised Premises to a
person expressly assuming Landlord's obligations under this lease, Landlord
shall thereby be released from any further obligations hereunder, and Tenant
agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be assigned and transferred by
Landlord to such successor in interest, and Landlord shall thereby be
discharged of any further obligation relating thereto.
ARTICLE XVI 16.1 Tenant shall be liable for all taxes levied
against personal property and trade fixtures placed by Tenant in the Demised
Premises. If any such taxes are levied against Landlord or Landlord's property
and if Landlord elects to pay the same or if the assessed value of Landlord's
property is increased by inclusion of personal property and trade fixtures
placed by Tenant in the Demised Premises and Landlord elects to pay the taxes
based on such increase, Tenant shall pay to Landlord upon demand that part of
such taxes from which Tenant is primarily liable hereunder.
16.2 Except as provided in Sections 16.1 and 16.3, Landlord shall
pay or cause to be paid all general real estate taxes, general and special
assessments and other governmental charges (hereinafter collectively referred
to as "the general taxes") levied against the Demised Premises for each real
estate tax year; provided, however, Tenant shall pay to Landlord, upon demand,
and in addition to the rentals and other charges prescribed in this lease, all
of the general taxes attributable to the Demised Premises. The payments to be
made by Tenant shall be monthly payments of that portion for the total real
estate tax year in which this lease commences or terminates and shall bear the
same ratio to the payment which would be required to be made for the full tax
year as the number of days of such tax year included within the lease term
bears to a full tax year, divided into equal monthly installments. Such monthly
installments will be based upon the total real estate taxes paid for the
previous year and will be due and payable at the first of each month, as is
each minimal guaranteed lease payment. Any increase in the annual tax over the
previous year's total tax will be added to the December tax payment to be paid
by Tenant.
16.3 If at any time during the primary term of this lease or any
renewal or extension thereof a tax or excise on rents, or other tax however
described (except any franchise, estate, inheritance, capital stock, income or
excess profits tax imposed upon Landlord) is levied or assessed against
Landlord by any lawful taxing authority on account of Landlord's interest in
this lease or the rents or other charges reserved hereunder, as a substitute in
whole or in part, or in addition to the general taxes described in Section 16.2
above. Tenant agrees to pay to Landlord upon demand, and in addition to the
rentals and other charges prescribed in this lease, the amount of such tax or
excise. In the event any such tax or excise is levied or assessed directly
against Tenant, then Tenant shall be responsible for and shall pay the same at
such times and in such manner as the taxing authority shall require.
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16.4 The premiums for any fire and extended coverage insurance
maintained by Landlord covering the Demised Premises (thereinafter referred to
as the "insurance premiums") shall be paid by Landlord; provided however,
Tenant shall pay to Landlord upon demand, and in addition to the rental and
other charges prescribed in this lease, all of the insurance premiums
attributable to the Demised Premises. The payment to be made by Tenant for the
insurance term in which this lease commences or terminated shall bear the same
ratio to the payment which would be required to be paid for the full insurance
term as the number of days of such term within the term of this lease bears to
the full insurance term.
16.5 If at any time during the primary term of this lease or any
renewal or extension thereof, Landlord has reason to believe that at some time
within the immediately succeeding twelve-month period Tenant will owe Landlord
a payment pursuant to one or more of the preceding sections of this Article
XVI, Landlord may direct that Tenant prepay monthly a pro rata portion of the
prospective future payment (i.e., the prospective future payment divided by the
number of months before the prospective future payment will be due). Tenant
agrees that any such prepayment directed by Landlord shall be due and payable
monthly on the same day that minimum guaranteed rental is due.
ARTICLE XVII. 17.1 The following events shall be deemed to be
events of default by Tenant under this lease:
(1) Tenant shall fail to pay any installment of rent or any other
obligation hereunder involving the payment of money and such failure shall
continue for a period of ten (10) days after the date due.
(2) Tenant shall fail to comply with any term, provision or
covenant of this lease, other than as described in subsection (1) above, and
shall not cure such failure within fifteen (15) days after written notice
thereof to Tenant.
(3) Tenant or any guarantor of Tenant's obligations under this
lease shall become insolvent, or shall make a transfer in fraud of creditors,
or shall make an assignment for the benefit of creditors.
(4) Tenant or any guarantor of Tenant's obligations under this
lease shall file a petition under any section or chapter of the National
Bankruptcy Act, as amended, or under any similar law or statute of the United
States or any State thereof; or Tenant or any guarantor of Tenant's obligations
under this lease shall be adjudged bankrupt or insolvent in proceedings filed
against Tenant or any guarantor of Tenant's obligations under this lease
thereunder.
(5) A receiver or Trustee shall be appointed for the Demised
Premises or for all or substantially all of the assets of Tenant or any
guarantor of Tenant's obligations under this lease.
(6) Tenant shall desert or vacate or shall commence to desert or
vacate the Demised Premises or any substantial portion of the Demised Premises
or shall remove or attempt to remove, without the prior written consent of
Landlord, all or a substantial value of Tenant's goods, wares, equipment,
fixtures, furniture, or other personal property.
(7) Tenant shall do or permit to be done anything which creates a
lien upon the premises.
(8) Tenant defaults on that one certain Registration Rights
Agreement entered into on September 19, 1996, by The Company Doctor and Xxxxxx
X. Xxxxxxxxxxxx, M.D.
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(9) Tenant defaults on that one certain Secured Promissory Note
dated September 19, 1996, in the principal amount of Eight Hundred Forty Three
Thousand Seven Hundred Fifty Dollars ($843,750.00), wherein The Physician
Group, P.A., (AKA Xxxxxx X. Angle, M.D., P.A.) is the maker, Xxxxxx X.
Xxxxxxxxxxxx, M.D. is the Payee, and The Company Doctor is a Guarantor of the
Note.
Upon the occurrence of any such events of default, Landlord shall have the
option to pursue either of the following alternative remedies:
A. Without any notice or demand whatsoever, Landlord may take any
one or more of the actions permissible at law to insure performance by Tenant
or Tenant's covenants and obligations under this lease. In this regard, it is
agreed that if Tenant deserts or vacates the Demised Premises, Landlord may
enter upon and take possession of such premises in order to protect them from
deterioration and continue to demand from Tenant the monthly rentals and other
charges provided in this lease, without any obligation to relet; but that if
Landlord does, at its sole discretion, elect to relet the Demised Premises,
such action by Landlord shall not be deemed as an acceptance of Tenant's
surrender of the Demised Premises unless Landlord expressly notifies Tenant of
such acceptance in writing pursuant to subsection B of this Section 17.1,
Tenant hereby acknowledging that Landlord shall otherwise be reletting as
Tenant's agent and Tenant furthermore hereby agreeing to pay to Landlord on
demand any deficiency that may arise between the monthly rental and other
charges provided in this lease and that actually collected by Landlord. It is
further agreed in this regard that in the event of any default described in
subsection (2) of this Section 17.1, Landlord shall have the right to enter
upon the Demised Premises by force if necessary 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; and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this lease, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to the
Tenant from such actions.
B. Landlord may terminate this lease by written notice to Tenant,
in which event Tenant shall immediately surrender the Demised Premises to
Landlord, and If Tenant fails to do so, Landlord may, without prejudice to any
other remedy which Landlord may have for possession or arrearages in rent
(including any interest which may have accrued pursuant to Section 4.3 of this
lease), enter upon and take possession of the Demised Premises and expel or
remove Tenant and any other person who may be occupying said premises or any
part thereof, by force if necessary, without being liable for prosecution or
any claim for damage therefor. Tenant hereby waives any statutory requirement
of prior written notice for filing eviction or damage suits for nonpayment of
rent. In addition, Tenant agrees to pay to Landlord on demand the amount of all
loss and damage which Landlord may suffer by reason of any termination effected
pursuant to this subsection B, said loss and damage to be determined by either
of the following alternative measures of damages:
(i) Until Landlord is able, through reasonable efforts,
the nature of which efforts shall be at the sole discretion of
Landlord, to relet the Demised Premises, Tenant shall pay to Landlord
on or before the first day of each calendar month, the monthly rentals
and other charges provided in this lease. After the Demise
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Premises have been relet by Landlord, Tenant shall pay to Landlord on
the 20th day of each calendar month, the difference between the
monthly rentals and other charges provided in this lease for the
preceding calendar month and that actually collected by Landlord for
such month. If it is necessary for Landlord to bring suit in order to
collect any deficiency Landlord shall have a right to allow such
deficiencies to accumulate and to bring an action on several or all of
the accrued deficiencies at one time. Any such suit shall not
prejudice in any way the right of Landlord to bring a similar action
for any subsequent deficiency or deficiencies. Any amount collected by
Landlord from subsequent tenants for any calendar month, in excess of
the monthly rentals and other charges provided in this lease, shall be
credited to Tenant in reduction of Tenant's liability for any calendar
month for which the amount collected by Landlord will be less than the
monthly rentals and other charges provided in this lease; but Tenant
shall have no right to such excess other than the above described
credit.
(ii) When Landlord desires, Landlord may demand a final
settlement. Upon demand for a final settlement, Landlord shall have a
right to, and Tenant hereby agrees to pay, the difference between the
total of all monthly rentals and other charges provided in this lease
for the remainder of the term and the reasonable rental value of the
Demised Premises for such period, such difference to be discounted to
present value at a rate equal to the rate of interest which is allowed
by law, in the State designated by Section XXIV, 24.7 of this lease.
If Landlord elects to exercise the remedy prescribed in subsection A above,
this election shall in no way prejudice Landlord's right at any time thereafter
to cancel said election in favor of the remedy prescribed in subsection B
above, provided that at the time of such cancellation, Tenant is still in
default. Similarly, if Landlord elects to compute damages in the manner
prescribed by subsection B(i) above, this election shall in no way prejudice
Landlord's right at any time thereafter to demand a final settlement in
accordance with subsection B(ii) above. Pursuant of any of the above remedies
shall not preclude pursuit of any other remedies prescribed in other sections
of this lease and any other remedies provided by law. Forbearance by Landlord
to enforce one or more of the remedies herein provided upon an event of default
shall not be deemed or construed to constitute a waiver of such default.
17.2 It is expressly agreed that in determining "the monthly
rentals and other charges provided in the lease", as that term is used
throughout subsection A and B or Section 17.1 above, there shall be added to
the minimum guaranteed rental (as in Section 1.1 (h) of this lease), the
charges for taxes and insurance (as specified in Article XVI of this lease).
17.3 It is further agreed that, in addition to payments required
pursuant to subsections A and B of Sections 17.1 above, Tenant shall compensate
Landlord for all expenses incurred by Landlord in repossession (including among
other expense, any increase in insurance premiums caused by the vacancy of the
Demised Premises), all expenses incurred by Landlord in reletting (including
among other expenses, repairs, remodeling, replacements, advertisements and
brokerage fees), all concessions granted to a new tenant upon reletting
(including among other concessions, renewal options), all losses incurred by
Landlord as a direct or indirect result of Tenant's default
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(including among other losses any adverse reaction by Landlord's mortgagee or
by other tenants or potential tenants) and a reasonable allowance for
Landlord's administrative efforts, salaries and overhead attributable directly
or indirectly to Tenant's default and Landlord's pursuing the rights and
remedies provided herein and under applicable law.
17.4 Landlord may restrain or enjoin any breach or threatened
breach of any covenant, duty or obligation of Tenant herein contained without
the necessity of proving the inadequacy of any legal remedy or irreparable harm.
The remedies of Landlord hereunder shall be deemed cumulative and not exclusive
of each other.
17.5 If on account of any breach or default by Tenant in its
obligations hereunder, Landlord shall employ an attorney to present, enforce or
defend any of Landlord's rights or remedies hereunder, Tenant agrees to pay any
reasonable attorney's fees incurred by Landlord in such connection.
17.6 Landlord hereby acknowledges receipt from Tenant of the sum
stated in Section 1.1(1) above, to be applied to installments of rent as
specified in such Section. Landlord further acknowledges receipt from Tenant of
the sum stated in Section 1.1(j) above to be held by Landlord without interest
as security for the performance by Tenant of Tenant's covenants and obligations
under this lease, it being expressly understood that such deposit may be
commingled with Landlord's other funds and is not an advance payment of rental
or a measure of Landlord's damages in case of default by Tenant. Upon the
occurrence of any event of default by Tenant, Landlord may, from time to time,
without prejudice to any other remedy provided herein or provided by law, use
such fund to the extent necessary to make good any arrears of rentals and any
other damage, injury, expense or liability caused to Landlord by such event of
default, and Tenant shall pay to Landlord on demand the amount so applied in
order to restore the security deposit to its original amount. If tenant is not
then in default hereunder, any remaining balance of such deposit shall be
returned by Landlord to Tenant upon termination of this lease (subject to the
provisions of Section 15.5 above).
ARTICLE XVIII. 18.1 In addition to the statutory Landlord's
lien, Landlord shall have at all times a valid security interest to secure
payment of all rentals and other sums of money becoming due hereunder from
Tenant, and to secure payment of any damages or loss which Landlord may suffer
by reason of the breach by Tenant of any covenant, agreement or condition
contained herein, upon all goods, wares, equipment, fixtures, furniture,
improvements and other personal property of Tenant presently, or which may
hereafter by situated on the Demised Premises, and all proceeds therefrom, and
such property shall not be removed without the consent of Landlord until all
arrearages in rent as well as any and all other sums of money then due to
Landlord or to become due to Landlord hereunder shall first have been paid and
discharged and all the covenants, agreements and conditions hereof have been
fully complied with and performed by Tenant. Upon the occurrence of an event of
default by Tenant, Landlord may, in addition to any other remedies provided
herein, enter upon the Demised Premises and take possession of any and all
goods, wares, equipment, fixtures, furniture, improvements and other personal
property of Tenant situated on the premises, without liability for trespass or
conversion, and sell the same at public or private sale, with or without having
such property at the sale, after giving Tenant reasonable notice of the time
and place of any public sale or of the time after which any
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private sale is to be made, at which sale the Landlord or its assigns may
purchase unless otherwise prohibited by law. Unless otherwise provided by law,
and without intending to exclude any other manner of giving Tenant reasonable
notice, the requirement of reasonable notice shall be met if such notice is
given in the manner prescribed in this lease at least seven (7) days before the
time of sale. Any sale made pursuant to the provision of this paragraph shall
be deemed to have been a public sale conducted in commercially reasonable
manner if held in the above-described premises or where the property is located
after the time, place and method of sale and a general description of the types
of property to be sold have been advertised in a daily newspaper published in
the county in which the property is located, for five (5) consecutive days
before the date of the sale. The proceeds from any such disposition, less any
and all expenses connected with the taking of possession, holding and selling
of the property (including reasonable attorney's fees and legal expenses),
shall be applied as a credit against the indebtedness secured by the security
interest granted in this paragraph. Any surplus shall be paid to Tenant or as
otherwise required by law; the Tenant shall pay any deficiencies forthwith.
Upon request by Landlord, Tenant agrees to execute and deliver to Landlord a
financing statement in form sufficient to perfect the security interest of
Landlord in the aforementioned property and proceeds thereof under the
provision of the Uniform Commercial Code (or corresponding state statute or
statutes) in force in the State in which the property is located, as well as
any other state the laws of which Landlord may at any time consider to be
applicable.
ARTICLE XIX. 19.1 In the event Tenant remains in possession of
the Demised Premises after the expiration of this lease and without the
execution of a new lease, it shall be deemed to be occupying said premises as a
tenant from month to month at a rental equal to the rental (including any
percentage rental) herein provided, plus fifty (50) per cent of such amount and
otherwise subject to all the conditions, provisions and obligations of this
lease insofar as the same are applicable to a month to month tenancy.
ARTICLE XX. 20.1 Tenant accepts this lease subject and
subordinate to any mortgage, deed of trust or other lien presently existing or
hereafter placed upon the Demised Premises, and to any renewals and extensions
thereof. Tenant agrees that any such mortgagee shall have the right at any
time to subordinate such mortgage, deed of trust or other lien to this lease;
provided, however, notwithstanding that this lease may be (or made to be)
superior to mortgage, deed of trust or other lien, the provisions of mortgage,
deed of trust or other lien relative to the rights of the mortgagee, with
respect to proceeds arising from an eminent domain taking (including a
voluntary conveyance by Landlord) and/or arising from insurance payable by
reason of damage to or destruction of the Demised Premises shall be prior and
superior to any contrary provisions contained in this instrument with respect
to the payment of usage thereof. Landlord is hereby irrevocably vested with
full power and authority to subordinate this lease to any mortgage, deed of
trust or other lien hereafter placed upon the Demised Premises and Tenant
agrees upon demand to execute such further instruments subordinating this lease
as Landlord may request; provided, however, that upon Tenant's written request
and notice to Landlord, Landlord shall use good faith efforts to obtain from
any such mortgagee, a written agreement that the rights of Tenant shall remain
in full force and effect during the term of this lease so long as Tenant shall
continue to recognize and perform all of the covenants and conditions of this
lease.
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20.2 At any time when the holder of an outstanding mortgage, deed
of trust or other lien covering Landlord's interest in the Demised Premises has
given Tenant written notice of its interest in this lease, Tenant may not
exercise any remedies for default by Landlord hereunder unless and until the
holder of the indebtedness secured by such mortgage, deed of trust or other
lien shall have received written notice of such default and a reasonable time
for curing such default shall thereafter have elapsed.
ARTICLE XXI. 21.1 Whenever any notice is required or permitted
hereunder such notice shall be in writing. Any notice or document required or
permitted to be delivered hereunder shall be deemed to be delivered when
actually received by the designated addressee or, if earlier and regardless of
whether actually received or not, when deposited in the United States Mail,
postage prepaid, Certified Mail, Return Receipt Requested, addressed to the
parties hereto at the respective addresses set out in Section 1.1 above (or at
Landlord's option, to Tenant at the Demised Premises), or at such other
addresses as they have theretofore specified by written notice.
21.2 If and when included within the term "Landlord", as used in
this instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such notice
specifying some individual at some specific address for the receipt of notices
and payments to the Landlord; if and when included within the term "Tenant" as
used in this instrument, there are more than one person, firm or corporation,
all shall jointly arrange among themselves for their joint execution of such
notice specifying some individual at some specific address for the receipt of
notices and payments to Tenant. All parties included within the terms
"Landlord" and "Tenant", respectively, shall be bound by notices and payments
given in accordance with the provisions of this Article to the same effect as
if each had received such notice or payment.
ARTICLE XXII. 22.1 Landlord and Tenant acknowledge that there
are in effect federal, state, county and municipal laws, orders, rules,
directives and regulations (collectively referred to hereinafter as the
"Regulations") and that additional Regulations may hereafter be enacted or go
into effect, relating to or affecting the Demised Premises and concerning the
impact on the environment of construction, land use, maintenance and operation
of structures, and conduct of business. Subject to the express rights granted
to Tenant under the terms of this lease, Tenant will not cause, or permit to be
caused, any act or practice by negligence, omission, or otherwise, that would
adversely affect the environment, or do anything or permit anything to be done
that would violate any of said laws, regulations, or guidelines. Moreover,
Tenant shall have no claim against Landlord by reason of any changes Landlord
may make in the Demised Premises pursuant to said Regulations or any charges
imposed upon customers or other invitees pursuant to same.
22.2 If by reason of any federal, state, county or municipal law,
order, rule, directive or regulation (collectively referred to hereinafter as
the "Regulations"), the payment to, or collection by, Landlord of any rental or
other charge (collectively referred to hereinafter as "Lease Payments") payable
by Tenant to Landlord pursuant to the provisions of this lease is in excess of
the amount (the "Maximum Charge") permitted therefore by the Regulations, then
Tenant during the period (the "Freeze Period") when the Regulations shall be in
for force and effect shall not be required to pay, nor shall
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Landlord be permitted to collect any sum in excess of the Maximum Charge. Upon
the earlier of (i) the expiration of the Freeze Period, or (ii) the issuance of
a final order or judgment of a court of competent jurisdiction declaring the
Regulations to be invalid or not applicable to the provisions of this lease,
Tenant, to the extent not then proscribed by law, and commencing with the first
day of the month immediately following, shall pay to Landlord, as additional
rental, in equal monthly installments during the balance of the term of this
lease, a sum equal to the cumulative difference between the Maximum Charges and
the Lease Payments during the Freeze Period. If any provisions of this
section, or the application thereof, shall to any extent be declared to be
invalid and unenforceable, the same, shall not be deemed to affect any of the
other provisions of this section or of this lease, all of which shall be deemed
valid and enforceable to the fullest extent permitted by law.
ARTICLE XXIII. 23.1 Nothing herein contained shall be deemed
or construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of computation of rent, nor any other provision contained herein, nor
any acts of the parties hereto, shall be deemed to create any relationship
between the parties hereto other than the relationship of landlord and tenant.
23.2 Tenant shall not for any reason withhold or reduce Tenant's
required payments of rentals and other charges provided in this lease, it being
agreed that the obligation of Landlord hereunder are independent of Tenant's
obligations except as may be otherwise expressly provided. In this regard it is
specifically understood and agreed that in the event Landlord commences any
proceedings against Tenant for nonpayment of rentals or any other sum due and
payable by Tenant hereunder, Tenant will not interpose any counter-claim or
other claim against Landlord of whatever nature or description in any such
proceedings; and in the event that Tenant stipulate and agree that, in addition
to any other lawful remedy of Landlord, upon motion of Landlord, such
counter-claim or other claim asserted by Tenant shall be severed out of the
proceedings instituted by Landlord and the proceedings instituted by Landlord
may proceed to final judgment separately and apart from and without
consolidation with or reference to the status of such counter-claim or any
other claim asserted by Tenant.
23.3 Except as may be otherwise herein provided, in all
circumstances under this lease where prior consent or permission of one party
("first party"), whether it be Landlord or Tenant, is required before the other
party ("second party") is authorized to take any particular type of action, the
matter of whether to grant such consent or permission shall be within the sole
and exclusive judgment and discretion of the first party; and it shall not
constitute any nature of breach by the first party hereunder or any defense to
the performance of any covenant, duty or obligation of the second party
hereunder that the first party delayed or withheld the granting of such consent
or permission, whether or not the delay or withholding of such consent or
permission was, in the opinion of the second party, prudent or reasonable or
based on good cause.
23.4 One or more waivers of any covenant, term or condition of this
lease by either party shall not be construed as a waiver of a subsequent breach
of the same covenant, term or condition. The consent or approval by either
party to or of any act by the other
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party requiring such consent or approval shall not be deemed to waive or render
unnecessary consent to or approval of any subsequent similar act.
23.5 Whenever a period of time is herein prescribed for action to
be taken by Landlord, Landlord shall not be liable or responsible for, and
there shall be excluded from the computation of any such period of time, any
delays due to strikes, dots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions or any other causes of any kind
whatsoever which are beyond the reasonable control of Landlord.
23.6 Tenant agrees that it will from time to time upon request by
Landlord execute and deliver to Landlord a statement in recordable form
certifying that this lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as so
modified).
23.7 The laws of the State in which the Demised Premises are
located shall govern the interpretation, validity, performance and enforcement
of this lease. If any provision of this lease should be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this lease shall not be affected thereby. Venue for any action under this
lease shall be the county in which rentals are due pursuant to section 4.1 and
Section 1.1 of this lease.
23.8 The captions used herein are for convenience only and do not
limit or amplify the provisions hereof.
23.9 Whenever herein the singular number is used, the same shall
include the plural, and words of any gender shall include each other gender.
23.10 The terms, provisions and covenants contained in this lease
shall apply to, inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors in interest and legal representatives
except as otherwise herein expressly provided.
23.11 This lease contains the entire lease agreement between the
parties, and no agreement shall be effective to change, modify, or terminate
this lease in whole or in part unless such is in writing and duly signed by
the party against whom enforcement of such change, modification or termination
is sought. Tenant hereby acknowledges that it is not relying on any
representation or promise of Landlord or of Agent, except as may be expressly
sent forth in this lease.
(THIS SPACE INTENTIONALLY LEFT BLANK, SIGNATURES ARE ON NEXT PAGE.)
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EXECUTED as of the date hereinabove stated.
QUAD CORNERS INVESTMENTS, Ltd.
By
-----------------------------------
----------------------------------- Xxxxxx Xxxx Xxxxxxxxxxxx,
Attest or Witness General Partner
Date:
--------------------------------
By
-----------------------------------
----------------------------------- Xxxxxx X. Xxxxxxxxxxxx,
Attest or Witness General Partner
Date:
--------------------------------
THE COMPANY DOCTOR
By: /s/ XXXXXX X. XXXXX
-----------------------------------
----------------------------------- Xxxxxx X. Xxxxx, Vice President
Attest or Witness for Business Development
Date: 20 Sep 1996
--------------------------------
THE PHYSICIAN GROUP, P.A.
By:
-----------------------------------
----------------------------------- Xxxxxx X. Angle, M.D., President
Attest or Witness
Date:
--------------------------------
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