EXHIBIT 10.5
IMPROVED PROPERTY COMMERCIAL LEASE
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1. PARTIES:
The parties to this lease are the owner of the Property, XXXX X. XXXXXX.
(Landlord) and the tenant, TEXAS PHARMACY CO-OP dba LEGEND PHARMACIES S.W.
(Tenant).
2. LEASED PREMISES:
Landlord leases to Tenant the following described real property, known as the
"leased premises," along with all its improvements:
Number C & D containing approximately 2480 square feet of rentable area, except
that individual office occupied by Xxxx Heal, located in the building described
and located at 1800 Xxxxxxxxx, Austin, Texas. "Property" means the building or
complex in which the leased premises are located, inclusive of any common areas,
drives, parking areas, and walks. The parties agree that the rentable area of
the leased premises may not equal the actual or useable area within the leased
premises and may include an allocation of common areas in the Property.
3. TERM:
A. Term: The term of this lease is 36 months, commencing on January 1.
2000. (Commencement Date) and ending on DECEMBER 31, 2002 (Expiration
Date.)
X. Xxxxx of Occupancy: If Tenant is unable to occupy the leased premises
on the Commencement Date because of construction on the leased
premises to be completed by Landlord that is not substantially
complete or a prior tenant's holding over of the leased premises,
Landlord will not be liable to Tenant for such delay and this lease
will remain enforceable. In the event of such a delay. the
Commencement Date will automatically be extended to the date Tenant is
able to occupy the Property and the Expiration Date will also be
extended by a like number of days, so that the term of this lease
remains unchanged. If Tenant is unable to occupy the leased premises
after the 30th day after the Commencement Date because of construction
on the leased premises to be completed by Landlord that is not
substantially complete or a prior tenant's holding over of the leased
premises, Tenant may terminate this lease by giving written notice to
Landlord before the Leased premises become available to be occupied by
Tenant and Landlord will refund to Tenant any amounts paid to Landlord
by Tenant. This Paragraph 3B does not apply to any delay in occupancy
caused by cleaning or repairs.
4. RENT AND EXPENSES:
A. Base Monthly Rent: On or before the first day of each month during
this lease. Tenant will pay Landlord base monthly rent in the amount
of $3,200.00. The first full base monthly rent is due on or before the
5th day of each month.
B. Prorated Rent: If the Commencement Date is on a day other than the
first day of a month. Tenant will pay Landlord as prorated rent, an
amount equal to the base monthly rent multiplied by the following
fraction: the number of days from the Commencement Date to the first
day of the following month divided by the number of days in the month
in which this lease commences. The prorated rent is due on or before
the Commencement Date.
C. Additional Rent: In addition to any base monthly rent or prorated
rent, Tenant will pay Landlord all other amounts as provided below:
---Pro rata share of any increase in taxes over 1999 tax rate.
D. Place of Payment: Tenant will remit all amounts due Landlord under
this lease to the office of Xxxx X. Xxxxxx at 1800 Xxxxxxxxx, Austin,
Texas, or to such other person or at such other place as Landlord may
designate in writing.
E. Method of Payment: Tenant must pay all rent timely without demand,
deduction, or offset, except as permitted by law or this lease. Time
is of the essence for the payment of rent. If Tenant fails to timely
pay any amounts due under this lease or if any check of Tenant is
returned to Landlord by the institution on which it was drawn,
Landlord may require Tenant to pay, in addition to an other available
remedy. All amounts due under this lease by certified funds by
providing written notice to Tenant.
F. Late Charges: If Landlord does not actually receive a rent payment at
the designated place of payment within 5 days after the date the rent
is due, Tenant will pay Landlord a late charge equal to 5% of the base
monthly rent. The mailbox is not the agent for receipt for Landlord.
The late charge is a cost associated with the collection of rent and
Landlord's acceptance of a late charge does not waive Landlord's
rights to exercise remedies under Paragraph 17.
G. Returned Checks: Tenant will pay S25.00 for each check Tenant tenders
to Landlord which is returned by the institution on which it is drawn
for any reason, plus any late charges until Landlord receives payment.
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5. TAXES:
Unless otherwise agreed by the parties, Landlord will pay all real property ad
valorem taxes assessed against the leased premises.
6. UTILITIES:
Tenant will pay all charges for the use of all utility services to the leased
premises and any connection charges except the following which will be paid by
Landlord: utilities for outer common areas.
7. LEGAL COMPLIANCE:
A. Tenant may not use or permit any part of the leased premises to be
used for:
1. any activity which is a nuisance or is offensive, noisy, or
dangerous;
2. any activity that interferes with any other tenant's normal
business operations or Landlord's management of the Property;
3. any activity that violates any applicable law, regulation, zoning
ordinance, restrictive covenant, governmental order, owners
association rules, tenants' association rules, Landlord's rules
or regulations, or this lease;
4. any hazardous activity that would require any insurance premium
on the Property or leased premises to increase or that would void
any such insurance;
5. any activity that violated any applicable federal. state, or
local law. including but not limited to those laws related to air
quality, water quality, hazardous materials, wastewater, waste
disposal. air emissions, or other environmental matters: or;
6. the permanent or temporary storage of any hazardous material.
B. "Hazardous material" means any pollutant, toxic substance, hazardous
waste, hazardous material, hazardous substance, solvent, or oil as
defined by any federal, state, or local environmental law, regulation.
ordinance, or rule existing as of the date of this lease or later
enacted.
C. Landlord does not represent or warrant that the leased premises or
Property conform to applicable restrictions, zoning ordinances,
setback lines, parking
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requirements, impervious ground cover ratio requirements, and other
matters that may relate to Tenant's intended use. Tenant must satisfy
itself that the leased premises may be used as Tenant intends by
independently investigating all matters related to the use of the
leased premises or Property. Tenant agrees that it is not relying on
any warranty or representation made by Landlord, Landlord's agent, or
any broker concerning the use of the leased premises or Property.
8. SIGNS:
A. Tenant may not post or paint any signs at, on, or about the leased
premises or Property without Landlord's written consent. Landlord may
remove any unauthorized sign, and Tenant will promptly reimburse
Landlord for any expense related to the removal of any unauthorized
sign. Any authorized sign must comply with all laws, restrictions,
zoning ordinances, and any governmental order relating to signs on the
leased premises or Property. Landlord may temporarily remove any
authorized sign to complete repairs or alterations to the leased
premises or the Property.
B. By providing written notice to Tenant before this lease ends, Landlord
may require Tenant, upon move-out and at Tenant's expense to remove,
without damage to the Property or leased premises, any or all signs
that were placed on the Property or leased premises by or at the
request of Tenant. Any signs that Landlord does not require Tenant to
remove and that are fixtures become the property of the Landlord and
must be surrendered to Landlord at the time this lease ends.
9. ACCESS BY LANDLORD:
A. During Tenant's normal business hours Landlord may enter the leased
premises for any reasonable purpose, including but not limited to
purposes for repairs, maintenance, alterations, and showing the leased
premises to prospective tenants or purchasers. Landlord may access the
leased premises after Tenant's normal business hours with Tenant's
permission or to complete emergency repairs. Landlord will not
unreasonably interfere with tenant's business operations when
accessing the leased premises.
B. During the last 30 days of this lease. Landlord may place a "For
Lease" or similarly worded sign in the leased premises.
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10. MOVE-IN CONDITION:
Tenant has inspected the leased premises and accepts it in its present (as-is)
condition unless expressly noted otherwise in this Lease. Landlord and any agent
have made no express or implied warranties as to the condition or permitted use
of the leased premises or Property.
11. MOVE-OUT CONDITION AND FORFEITURE OF TENANT'S PERSONAL PROPERTY:
A. At the time this lease ends, Tenant will surrender the leased premises
in the same condition as when received, normal wear and tear excepted.
Tenant will leave the leased premises in a clean condition free of all
trash, debris, personal property, hazardous materials, and
environmental contaminants.
B. If Tenant leaves any personal property in the leased premises after
Tenant surrenders possession of the leased premises, Landlord may: (1)
require Tenant, at Tenant's expense, to remove the personal property
by providing written notice to Tenant; or (2) retain such personal
property as forfeited property to Landlord.
C. "Surrender" means vacating the leased premises and returning all keys
and access devices to Landlord. "Normal wear and tear" means
deterioration that occurs without negligence, carelessness, accident,
or abuse.
D. By providing written notice to Tenant before this lease ends, Landlord
may require Tenant, upon move-out and at Tenant's expense, to remove,
without damage to the Property or leased premises, any or all fixtures
that were placed on the Property or leased premises by or at the
request of Tenant. Any fixtures that Landlord does not require Tenant
to remove become the property of the Landlord and must be surrendered
to Landlord at the time this lease ends.
12. MAINTENANCE AND REPAIRS:
A. Cleaning: Tenant must keep the leased premises clean and sanitary and
promptly dispose of all garbage in appropriate receptacles. Landlord
will provide, at its expense, reasonable janitorial services to the
leased premises.
B. Repairs of Conditions Caused by a Party: Each party must promptly
repair a condition caused, either intentionally or negligently, by
that party or that party's guests, patrons, invitees, contractors or
permitted subtenants.
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C. Repair and Maintenance Responsibility: Except as provided in Paragraph
12B, the party designated below, at its expense, is responsible to
maintain and repair the following specified items in the leased
premises. The specified items must be maintained in: (i) clean
condition; (ii) good repair; and (iii) operable condition. If, a
modification to any of the specified items is required by law or
governmental regulation or order, the party designated to maintain the
item must complete and pay the expense of the modification. The
specified items include and relate only to real property in the leased
premises. Tenant is responsible for the repair and maintenance of its
personal property.
Landlord Tenant
(1) Foundation, exterior walls, roof, and other structural
components X
(2) Glass and windows X
(3) Fire protection equipment and fire sprinkler systems X
(4) Exterior & overhead doors, including closure devices,
molding, locks, and hardware X
(5) Grounds maintenance, including landscaping and
ground sprinklers X
(6) Interior doors, including closure devices, frames,
molding, locks and hardware X
(7) Parking areas and walks X
(8) Plumbing systems, drainage systems, electrical
systems (including ballast and lamp replacement)
& mechanical systems, except those specifically
designated otherwise X
(9) Heating Ventilation and Air Conditioning (HVAC) systems X
(10) Signs X
(11) Extermination and pest control, excluding
wood-destroying insects X
(12) Storage yards and storage buildings X
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D. Common Areas: Landlord will maintain any common areas in the Property
in a manner as Landlord determines to be in the best interest of the
Property. Landlord will maintain any elevator and signs in the common
area. Landlord may change the size, dimension, and location of any
common areas, provided that such change does not materially impair
Tenant's use and access to the leased premises. If a modification to
the common areas is required by law or governmental regulation or
order, Landlord will modify the item. Tenant has the non-exclusive
license to use the common areas in compliance with Landlord's rules
and restrictions. Tenant may not solicit any business in the common
areas or interfere with any other person's right to use the common
areas.
E. Notice of Repairs: Tenant must promptly notify Landlord of any item
that is in need of repair and that is Landlord's responsibility to
repair. All requests for repairs to Landlord must be in writing.
F. Failure to Repair: Landlord must make a repair for which Landlord is
responsible within a reasonable period of time after Tenant provides
Landlord written notice of the needed repair. If Tenant fails to
repair or maintain an item for which Tenant is responsible within 10
days after Landlord provides Tenant written notice of the needed
repair or maintenance, Landlord may: (1) repair or maintain the item,
without liability for any damage or loss to Tenant, and Tenant must
immediately reimburse Landlord for the cost to repair or maintain: or
(2) exercise Landlord's remedies under Paragraph 17.
13. ALTERATIONS:
A. Tenant may not alter, improve, or add to the Property or the leased
premises without Landlord's written consent. Landlord will not
unreasonably withhold consent for the Tenant to make reasonable
alterations, modifications, or improvements to the leased premises.
B. Tenant may not alter any locks or any security devices on the Property
or the leased premises without Landlord's consent. If Landlord
authorizes the changing, addition, or rekeying of any locks or other
security devices, Tenant must immediately deliver the new keys and
access devices to Landlord.
C. If a governmental order requires alteration or modification to the
leased premises, the party obligated to maintain and repair the item
to be modified or altered as designated in Paragraph 12 will, at its
expense, modify or alter the item in compliance with the order.
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D. Any alterations, improvements, fixtures or additions to the Property
or leased premises installed by either party during the term of this
lease will become Landlord's property and must be surrendered to
Landlord at the time this lease ends, except for those fixtures
Landlord requires Tenant to remove under Paragraph 11 or if the
parties agree otherwise in writing.
14. LIENS:
Tenant may not do anything that will cause the title of the Property or leased
premises to be encumbered in any way. If Tenant causes a lien to be filed
against the Property or leased premises, Tenant will within 20 days after
Landlord demands Tenant to take action to remove the lien, pay the lien or take
whatever action is necessary to cause the lien to be released of record. Tenant
will provide Landlord a copy of any release Tenant obtains pursuant to this
paragraph.
15. LIABILITY:
To the extent permitted by law, Landlord is NOT responsible to Tenant or
Tenant's employees, patrons, guests, or invitees for any damages, injuries, or
losses to person or property caused by:
A. an act, omission or neglect of: Tenant; Tenant's agent; Tenant's
guest; Tenant's employees; Tenant's patrons; Tenant's invitees; or any
other tenant on the Property:
B. fire, flood, water leaks, ice, snow, hail, winds, explosion, smoke,
riot, strike, interruption of utilities, theft, burglary, robbery,
assault, vandalism, other persons, environmental contaminants, or
other occurrences or casualty losses.
16. INDEMNITY:
Tenant will indemnify and hold Landlord harmless from any property damage,
personal injury, suits, actions, liabilities, damages, cost of repairs or
service to the leased premises or Property, or any other loss caused,
negligently or otherwise, by Tenant or Tenant's employees, patrons, guests or
invitees.
17. DEFAULT:
A. If Landlord fails to comply with this lease within 30 days after
Tenant notifies Landlord of Landlord's failure to comply, Landlord
will be in default and Tenant may seek any remedy provided by Law. If,
however, Landlord's non-compliance reasonably requires more than 30
days to cure, Landlord will not be in default if the cure is commenced
within the 30 day period and is diligently pursued.
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B. If Landlord does not actually receive at the place designated for
payment any rent due under this lease within 5 days after it is due,
Tenant will be in default. If Tenant fails to comply with this lease
for any other reason within 10 days after Landlord notifies Tenant of
its failure to comply, Tenant will be in default.
C. If Tenant is in default, Landlord may: (i) terminate Tenant's right to
occupy the leased premises by providing Tenant with at least 3 days
written notice; and (ii) accelerate all rents which are payable during
the remainder of this lease or any renewal period without notice or
demand. Landlord will attempt to mitigate any damage or loss caused by
Tenant's breach. If Tenant is in default, Tenant will be liable for:
(1) any lost rent;
(2) Landlord's cost of reletting the leased premises, including
brokerage fees, advertising fees, and other fees necessary to
relet the leased premises;
(3) repairs to the leased premises for use beyond normal wear and
tear;
(4) all Landlord's costs associated with eviction of Tenant, such as
attorney's fees, court costs, and prejudgment interest;
(5) all Landlord's costs associated with collection of rent such as
collection fees, late charges, and returned check charges;
(6) cost of removing any equipment and trade-fixtures left on the
leased premises' by Tenant;
(7) cost to remove any trash, debris, personal property, hazardous
materials, or environmental contaminants left by Tenant or
Tenant's employees, patrons, guests, or invitees in the leased
premises or Property; and
(8) any other recovery to which Landlord may be entitled by law.
18. ABANDONMENT, INTERRUPTION OF UTILITIES, REMOVAL OF TENANT'S PROPERTY, AND
LOCKOUT:
Chapter 93 of the Texas Property Code governs the rights and obligations of the
parties with regard to: (a) abandonment of the leased premises; (b) interruption
of utilities; (c) removal of Tenant's personal property; and (d) "lock-out" of
Tenant.
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19. HOLDOVER:
If Tenant fails to vacate the leased premises at the time this lease ends,
Tenant will become a tenant-at-will and must vacate the leased premises
immediately upon receipt of demand from Landlord. No holding over by Tenant,
with or without the consent of Landlord, will extend this lease. Tenant will
indemnify Landlord and any prospective tenants for any and all damages caused by
the holdover. Rent for any holdover period will be 2 times the base monthly rent
plus any additional rent calculated on a daily basis and will be immediately due
and payable daily without notice or demand.
20. LANDLORD'S LIEN AND SECURITY INTEREST:
To secure Tenant's performance under this lease, Tenant grants to Landlord a
lien and security interest against all of Tenant's nonexempt personal property
that is in the leased premises or Property. This lease is a security agreement
for the purposes of the Uniform Commercial Code. Landlord may file a copy of
this lease as a financing statement.
21. ASSIGNMENT AND SUBLETTING:
Tenant may not assign this lease or sublet any part of the leased premises
without Landlord's written consent. An assignment of this lease or subletting of
the leased premises without Landlord's written consent is voidable by Landlord.
If Tenant assigns this lease or sublets any part of the leased premises, Tenant
will remain liable for all of Tenant's obligations under this lease regardless
if the assignment or sublease is made with or without the consent of Landlord.
22. RELOCATION:
By providing Tenant with not less than 90 days advanced written notice, Landlord
may require Tenant to relocate to another location in the Property, provided
that the other location is equal in size or larger than the leased premises then
occupied by Tenant and contains similar leasehold improvements. Landlord will
pay Tenant's reasonable out-of-pocket moving expenses for moving to the other
location. "Moving expenses" means expenses payable to professional movers,
utility companies for connection and disconnection fees, wiring companies for
connecting and disconnecting Tenant's office equipment required by the
relocation, and printing companies for reprinting Tenant's stationary and
business cards. A relocation of Tenant will not change or affect any other
provision of this lease that is then in effect, including rent and reimbursement
amounts, except that the description of the suite or unit number will
automatically be amended.
23. SUBORDINATION:
A. This lease and Tenant's leasehold interest are and will be subject,
subordinate, and inferior to:
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(1) any lien, encumbrance, or ground lease now or hereafter placed on
the leased premises or the Property by Landlord;
(2) all advances made under any such lien, encumbrance, or ground
lease;
(3) the interest payable on any such lien or encumbrance;
(4) any and all renewals and extensions of any such lien,
encumbrance, or ground lease;
(5) any restrictive covenant affecting the leased premises or the
Property; and
(6) the rights of any owners' association affecting the leased
premises or Property.
B. Tenant must, on demand, execute any instrument subordinating this
lease as Landlord may request, provided that such subordination is
made on the condition that this lease and Tenant's rights under this
lease are recognized by the lien-holder.
24. CASUALTY LOSS:
A. Tenant must immediately notify Landlord of any casualty loss in the
leased premises. Within 20 days after receipt of Tenant's notice of a
casualty loss, Landlord will notify Tenant if the leased premises are
less than or more than 50% unusable, on a per square foot basis, and
if Landlord can substantially restore the leased premises within 120
days after Tenant notifies Landlord of the casualty loss.
B. If the leased premises are less than 50% unusable and Landlord can
substantially restore the leased premises within 120 days after Tenant
notifies Landlord of the casualty, Landlord will restore the leased
premises to substantially the same condition as before the casualty.
If Landlord fails to substantially restore within the time required,
Tenant may terminate this lease.
C. If the leased premises are more than 50% unusable and Landlord can
substantially restore the leased premises within 120 days after Tenant
notifies Landlord of the casualty, Landlord may: (1) terminate this
lease; or (2) restore the leased premises to substantially the same
condition as before the casualty. If Landlord chooses to restore and
does not substantially restore the leased premises within the time
required, Tenant may terminate this lease.
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D. If Landlord notifies Tenant that Landlord cannot substantially restore
the leased premises within 120 days after Tenant notifies Landlord of
the casualty loss, Landlord may: (1) choose not to restore and
terminate this lease; or (2) choose to restore, notify Tenant of the
estimated time to restore, and give Tenant the option to terminate
this lease by notifying Landlord within 10 days.
E. If this lease does not terminate because of a casualty loss, rent will
be reduced from the date Tenant notifies Landlord of the casualty loss
to the date the leased premises are substantially restored by an
amount proportionate to the extent the leased premises are unusable.
25. CONDEMNATION:
If after a condemnation or purchase in lieu of condemnation the leased premises
are totally unusable for the purposes stated in this lease, this lease will
terminate. If after a condemnation or purchase in lieu of condemnation the
leased premises are partially unusable for the purposes stated in this lease,
this lease will continue and rent will be reduced in an amount proportionate to
the extent the leased premises are unusable. Any condemnation award or proceeds
in lieu of condemnation are the property of Landlord and Tenant has no claim to
such proceeds or award. Tenant may seek compensation from the condemning
authority for its moving expenses and damages to Tenant's personal property.
26. ATTORNEY'S FEES:
Any person who is a prevailing party in any legal proceeding brought under or
related to the transaction described in this lease is entitled to recover
prejudgment interest, reasonable attorney's fees, and all other costs of
litigation from the nonprevailing party.
27. REPRESENTATIONS:
Tenant's statements in this lease and any application for rental are material
representations relied upon by Landlord. Each party signing this lease
represents that he or she is of legal age to enter into a binding contract and
is authorized to sign the lease. If Tenant makes any misrepresentation in this
lease or in any application for rental, Tenant is in default. Landlord is not
aware of any material defect on the Property that would affect the health and
safety of an ordinary person or any environmental hazard on or affecting the
Property that would affect the health or safety of an ordinary person.
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28. ADDENDA:
Incorporated into this lease are any addenda, exhibits and other information
attached to the lease. If Landlord's Rules and Regulations are made part of this
lease, Tenant agrees to comply with the Rules and Regulations as Landlord may,
at its discretion, amend from time to time.
29. AGREEMENT OF PARTIES:
A. Entire Agreement: This lease contains the entire agreement between
Landlord and Tenant and may not be changed except by written
agreement.
B. Binding Effect: This lease is binding upon and inures to the benefit
of the parties and their respective heirs, executors, administrators,
successors, and permitted assigns.
C. Joint and Several: All Tenants are jointly and severally liable for
all provisions of this lease. Any act or notice to, or refund to, or
signature of. any one or more of the Tenants regarding any term of
this lease, its renewal, or its termination is binding on all Tenants.
D. Controlling Law: The laws of the State of Texas govern the
interpretation. performances and enforcement of this lease.
E. Severable Clauses: If any clause in this lease is found invalid or
unenforceable by a court of law, the remainder of this lease will not
be affected and all other provisions of this lease will remain valid
and enforceable.
F. Waiver: Landlord's delay, waiver, or non-enforcement of acceleration,
contractual or statutory lien, rental due date, or any other right
will not be deemed a waiver of any other or subsequent breach by
Tenant or any other term in this lease.
G. Quiet Enjoyment Provided that Tenant is not in default of this lease,
Landlord covenants that Tenant will enjoy possession and use of the
leased premises free from serious interference.
H. Force Majeure: If Landlord's performance of a term in this lease is
delayed by strike, lock-out, shortage of material, governmental
restriction, riot, flood, or any cause outside Landlord's control, the
time for Landlord's performance will be abated until after the delay.
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30. NOTICES:
All notices under this lease must be in writing and are effective when
hand-delivered, sent by mail, or sent by facsimile transmission to:
TENANT LANDLORD
at the address of the leased premises. at: 0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Fax: (512)
With a copy to: With a copy to:
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Fax: _________________________ Fax: _______________________
Real estate brokers are not qualified to render legal advice, property
inspections, surveys, engineering studies (e.g. studies of the structures,
drainage, and soil conditions), environmental assessments, tax advice, financial
advice, or inspections to determine compliance with zoning, governmental
regulations, or any law (e.g., ADA, Texas Architectural Barriers Statute, etc.).
The parties should seek experts to render such services. Selection of such
experts is the responsibility of the parties and not the real estate broker. The
terms of this lease are negotiable among the parties. This is intended to be a
legal agreement binding upon final acceptance. READ IT CAREFULLY. If you do not
understand the effect of this Lease, consult your attorney BEFORE signing.
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LANDLORD TENANT
By______________________________
as _______________________ for Landlord _______________________________
Date
--------------------------------
Date
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