Exhibit 10.4
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") is entered into as of July 1,
1999 (the "Effective Date"), between UNION PACIFIC RESOURCES GROUP, INC., a
Utah corporation ("Sublessor") and MILLERS AMERICAN GROUP, INC., a Texas
corporation ("Sublessee"), with reference to the following:
A. Crescent Real Estate Funding I, L.P., a Delaware limited partnership
("Landlord"), as Landlord, has entered into an Office Lease (the "Primary
Lease", as modified) with Union Pacific Resources Company, as tenant, dated
November 19, 1996, as modified by: (i) Letter Agreements relating thereto
dated November 22, 1996, January 31, 1997 and November 20, 1997; (ii) an
Assignment and Assumption Agreement dated December 4, 1996, assigning the
Primary Lease from Union Pacific Resources Company to Sublessor; and
(iii) a First Amendment to Lease dated February 3, 1998. The Primary Lease
covers certain premises (the "Premises") containing approximately 529,308
rentable square feet in the building commonly known as UPR Plaza and
located at 777 Main Street, Fort Worth, Texas (the "Building").
B. Sublessor desires to sublease a portion of the Premises to Sublessee,
and Sublessee wishes to sublease a portion of the Premises from Sublessor.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Sublessor and Sublessee agree as follows:
1. Sublease. Sublessor subleases to Sublessee, and Sublessee subleases
from Sublessor, upon the terms and conditions set forth herein, a portion
of the Premises consisting of the tenth (10th) floor, having approximately
27,808 rentable square feet as shown on the drawing attached hereto as
Exhibit "A" and incorporated herein by reference for all purposes (the
"Subleased Premises"). In addition, Sublessee is renting Sublessor's
modular walls and all or part of the furniture as shown on the floor plan
attached hereto as Exhibit "B" ("UPR Furniture"). Those items of UPR
Furniture described on Exhibit "C" attached hereto will be removed by
Sublessor and stored at Sublessor's expense for future use by Sublessee,
and the cost of moving and reinstalling such items in the future will be
borne by Sublessee. Sublessee will also be entitled to three
(3) unreserved parking spaces for each 1,000 square feet in the Subleased
Premises in the parking areas available to Sublessor under the Primary
Lease.
2. Term. The term of the Sublease shall be for a period of ten (10)
years commencing on November 19, 1999, and ending on November 18, 2009 (the
"Expiration Date"); provided, however, that this Sublease shall terminate
earlier upon: (1) termination, for any muse whatsoever, of the Primary
Lease; or (ii) the sixth (6th) anniversary date of this Sublease if either
Sublessor or Sublessee gives the other written notice by the fifth (5th)
anniversary date that it intends to cancel the Sublease. Sublessee may
have access to the Subleased Premises on and after October 19, 1999 for
purposes of completing tenant finishout and move in, subject to all rules
and regulations set forth in the Primary Lease.
3. Rent.
(a) Sublessee agrees to pay Sublessor for the use of the Subleased
Premises monthly rent per rentable square foot as follows, of
which $2.00 per rentable square foot is allocated to the UPR
Furniture rented by Sublessee ("Base Rent"):
Lease Years Rent
----------- -----
1 13.77
2 through 5 16.50
6 through 10 17.77
The Base Rent shall be paid in advance on or before the
first day of each calendar month without notice or demand.
Base Rent for any partial month shall be prorated.
(b) Sublessee further agrees to pay its pro rata share of the
Additional Rental (as set forth in Article VI of the Primary
Lease) over 1999 Operating Expenses. For the purposes hereof,
Sublessee's pro rata share shall be determined by multiplying:
(i) the fraction having as its numerator the number of rentable
square feet in the Subleased Premises and having as its
denominator the number of rentable square feet in the Premises;
times (ii) the amount of Operating Expenses owed by Sublessor to
Landlord under the Primary Lease over 1999 Operating Expenses.
Sublessee agrees to make all such payments to Sublessor at least
five (5) days prior to the date on which Sublessor is required to
make such payments to Landlord pursuant to the Primary Lease.
4. Primary Lease.
(a) The terms and conditions of the Primary Lease are incorporated
herein by reference for all purposes, and Sublessee, by
Sublessee's execution hereof, acknowledges that Sublessor has
furnished Sublessee with a copy of the Primary Lease and that
Sublessee has examined the Primary Lease and is familiar with the
terms thereof. Except as otherwise expressly provided in this
Sublease, Sublessee agrees to comply in all respects with the
terms and conditions of the Primary Lease insofar as the same are
applicable to the Subleased Premises. Sublessee hereby covenants
and agrees to promptly deliver to Sublessor copies of any and all
notices or other correspondence received by Sublessee from
Landlord that might affect Sublessor in any manner and further
agrees to so deliver same in the manner most appropriate to
insure that Sublessor will be able to respond to any of such
notices or other correspondence from the Landlord within any time
periods set forth in the Primary Lease.
(b) As between Sublessor and Sublessee, Sublessor shall be entitled
to all of the rights and remedies reserved by and granted to the
landlord in the Primary Lease as if Sublessor was the "Landlord"
under the Primary Lease and Sublessee was the "Tenant" under the
Primary Lease, and such rights and remedies are incorporated
herein by reference for all purposes; provided, however, that
Sublessor will not exercise any "lockout" remedies which would
cause Sublessee to be in violation of any local, state or federal
laws.
(c) This Sublease is subject and subordinate to all of the terms,
covenants and conditions of the Primary Lease and to all of the
rights of Landlord under the Primary Lease. If the Primary Lease
terminates for any reason prior to the expiration or earlier
termination of this Sublease, Sublessee shall not have any claim
whatsoever against Sublessor arising or resulting from such
termination of the Primary Lease, except as results from an Event
of Default by Sublessor, not caused by Sublessee's default,
under, and as defined in, the Primary Lease.
(d) Sublessee hereby acknowledges and agrees that the only services,
amenities and rights to which Sublessee is entitled under this
Sublease are those to which Sublessor is entitled under the
Primary Lease (subject to all provisions, restrictions and
conditions imposed of the Primary Lease); provided, however, that
Sublessor will allow Sublessee to use Sublessor's existing card
key system which will be maintained by Sublessor subject to the
limitations on liability, releases and indemnities by Sublessee
set forth in Section 5 below. If Sublessor fails to repair the
card key system within ten (10) days after written notice from
Sublessee, Sublessee may make such repairs, and Sublessor will
reimburse Sublessee for its reasonable costs upon demand.
Sublessor shall in no event be liable to Sublessee for Landlord's
failure to provide any other services, amenities and rights, nor
shall any such failure be construed as a breach hereof by
Sublessor or an eviction of Sublessee or entitle Sublessee to an
abatement of any of the rentals under this Sublease, except and
only to the extent that Sublessor receives an abatement under the
Primary Lease with respect thereto.
(e) Sublessee shall not have the right to exercise any of Sublessor's
options or elections permitted or authorized under the Primary
Lease, or to institute any action or proceeding against Landlord
for the enforcement of the Primary Lease. If Landlord shall
default in the performance of any of its obligations under the
Primary Lease, Sublessor shall, upon the written request of
Sublessee and at Sublessee's sole cost and expense, use its
diligent good faith efforts to enforce the Primary Lease and
obtain Landlord's compliance with its obligations thereunder.
(f) Sublessor warrants and represents to Sublessee that:
(i) It has not received any notice of default from Landlord and,
to its best knowledge without independent review or
investigation, the Primary Lease, with respect to the
Subleased Premises, is in full force and effect;
(ii) Sublessor is not in default, and to Sublessor's best
knowledge without independent review or investigation,
Landlord is not in default under the Primary Lease;
(iii) Sublessor has full authority to enter into this Sublease
and perform the obligations hereunder, including the rental
of the UPR Furniture, and no other consents or joinder from
or by any third party is required; and
(iv) Sublessor has delivered to Sublessee a correct and complete
copy of the Primary Lease and all modifications or
amendments thereto.
(g) Neither Sublessor, except as a result of Sublessee's default or
when contesting in good faith, nor Sublessee, without exception,
shall cause an Event of Default, under, and as defined in, the
Primary Lease or cause a default under Sublessor's lease of the
UPR Furniture from Mellon Capital.
5. Limitation of Liability, Release and Indemnity.
(a) Primary Lease Provisions. Notwithstanding any provision of the
Primary Lease to the contrary, neither Landlord, Sublessor, any
of their respective predecessors, successors, nor any of their
respective present, former, future corporate parents,
subsidiaries, affiliates, officers, directors, shareholders,
employees, partners, agents, representatives, assigns, invitees
and attorneys (collectively, the "Releasees") shall be liable to
Sublessee, its predecessors, successors, or any of its present,
former or future corporate parents, subsidiaries, affiliates,
officers, directors, shareholders, employees, volunteers,
partners, agents, representatives, assigns, invitees and
attorneys (collectively, the "Releasors") for any damage to
persons or property due to any reason, including, but not limited
to, the condition or design or any defect in the Building or its
mechanical systems which may exist or subsequently occur, and the
Releasors expressly assume all risks and damage to persons and
property, either proximate or remote, by the reason of the
present or future condition of the Subleased Premises or the
Building. In addition to the agreements made herein, all
indemnification, hold harmless and release provisions contained
in the Primary Lease running to the benefit of Landlord are
incorporated herein by reference for the benefit of Sublessor as
if Sublessor was the "Landlord" and Sublessee was the "Tenant"
under the Primary Lease. This Paragraph 5 is for the benefit of
the Releasees only, and no right of action shall accrue hereunder
to any third party by way of subrogation or otherwise.
(b) Release for Conduct of Releasees. THE RELEASORS HEREBY RELEASE,
WAIVE, FOREVER DISCHARGE AND COVENANT NOT TO SUE THE RELEASEES
FROM ANY AND ALL CLAIMS, DEMAND, DAMAGES, ACTIONS, CAUSES OF
ACTION AND SUITS IN EQUITY ON ACCOUNT OF DEATH OF OR INJURY TO
THE PERSON OR PROPERTY OF THE RELEASORS, CAUSED BY THE CONDUCT,
ACTIONS, OMISSIONS OR NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE AND
WILLFUL MISCONDUCT) OF THE RELEASEES, whether such injuries are
past, present, future, currently accrued, unaccrued, known,
unknown, permanent, continuing or otherwise, including, but not
limited to, injuries that relate in any way to the Releasors or
that allegedly occur or were caused on or around the Releasees'
premises at 777 Main Street, Fort Worth, Texas 76102, in transit
to or from such premises, or related in any way to such premises
or any of its uses.
(c) Release for Conduct of Releasors and Other Third Parties. THE
RELEASORS HEREBY RELEASE, WAIVE RELEASEES, FOREVER DISCHARGE AND
COVENANT NOT TO SUE THE FROM ANY AND ALL CLAIMS, DEMANDS,
DAMAGES, ACTIONS, CAUSES OF ACTION AND SUITS IN EQUITY ON ACCOUNT
OF THE DEATH OF OR INJURY TO THE PERSON OR PROPERTY OF THE
RELEASORS, CAUSED BY THE CONDUCT, ACTIONS, OMISSIONS OR
NEGLIGENCE (INCLUDING GROSS NEGLIGENCE AND WILLFUL MISCONDUCT) OF
THE RELEASORS or any other person, whether such injuries are
past, present, future, currently accrued, unaccrued, known,
unknown, permanent, continuing or otherwise, including, but not
limited to, injuries that relate in any way to the Releasors, or
that allegedly occur or were caused on or around the Releasees'
premises at 777 Main Street, Fort Worth, Texas 76102, in transit
to or from such premises, or related in any way to such premises
or any of it's uses.
(d) Assumption of Risk. THE RELEASORS HEREBY ASSUME FULL
RESPONSIBILITY FOR AND RISK OF BODILY INJURY, DEATH OR PROPERTY
DAMAGE DUE TO NEGLIGENCE OF THE RELEASEES (EXCLUDING GROSS
NEGLIGENCE AND WILLFUL MISCONDUCT OF RELEASEES), THE RELEASORS OR
ANY OTHER PERSON.
(e) Indemnification of Releasees. THE RELEASORS HEREBY AGREE TO
INDEMNIFY, DEFEND AND HOLD THE RELEASEES HARMELSS for any costs
and expenses (including attorneys' fees and litigation costs),
judgments, liabilities or other claims relating to any damage or
injury that the Releasors or other person allegedly caused to the
person or property of the Releasors or any other person,
including damage or injury allegedly caused by ACTS, OMISSIONS OR
NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE AND WILLFUL MISCONDUCT) of
the Releasors or any other person that relates in any way to the
Releasors, or that allegedly occur or were caused on or around
the Releasees' premises at 777 Main Street, Fort Worth, Texas
76102, in transit to or from such premises, or related in any way
to such premises or any of its uses.
(f) Savings Clause. It is expressly understood and agreed that the
foregoing releases and indemnities are not intended to include
losses, damages and any other consequences caused by the breach
by the Releasees of any of Sublessor's obligations hereunder or
under the Primary Lease, and Sublessor shall remain directly and
primarily liable to Sublessee therefor. In all other events,
Releasors acknowledge and agree that the foregoing release,
waiver and indemnity provisions are intended to be as broad and
inclusive as permitted by the law and, further, that any portion
thereof that is found to be invalid or unenforceable shall not
affect the validity or enforceability of the remaining portions.
6. Liability Insurance. Sublessee shall maintain a policy or policies of
comprehensive general liability insurance as required under the Primary
Lease, except that notwithstanding the policy limits required thereunder,
Sublessee will maintain liability limits in the amount of at least
$2,000,000.00.
7. Alterations. Sublessee may not make any alterations, improvements or
additions to the Subleased Premises without Sublessor's prior written
consent. In addition, installation, assembly, repair and removal of
modular walls, UPR Furniture, data and voice cabling and card key systems
(together hereinafter referred to as the "UPR Property") must be done by
authorized dealers approved by Sublessor. Sublessor approves and has
obtained Landlord's approval of the alterations to the Subleased Premises
described on Exhibit "C" attached hereto.
8. Default by Sublessee; Remedies of Sublessor. In case of any breach
hereof by Sublessee, in addition to all other rights of Sublessor hereunder
or available to Sublessor at law or equity, Sublessor shall have all rights
against Sublessee as would be available to the Landlord against Sublessor
under the Primary Lease if such breach were by Sublessor thereunder. In
addition, if any sum due under this Sublease is not received when due,
Sublessee will also pay Sublessor: (i) a late charge equal to one percent
(1.0%) of the unpaid amount due; plus (ii) interest at eighteen percent
(18%) per annum or the maximum then allowed by applicable law, whichever is
less, on the remaining unpaid balance, retroactive to the date originally
due until paid, but the interest accumulation shall stop after thirty (30)
days unless Sublessor gives Sublessee notice within thirty (30) days of the
date payment was due of Tenant's failure to pay such amount. In the event
Sublessee defaults in the performance of any of the terms and provisions
hereof and Sublessor places the enforcement of this Sublease in the hands
of an attorney, Sublessee agrees to reimburse Sublessor for all reasonable
expenses incurred by Sublessor as a result thereof, including, but not
limited to, reasonable attorneys' fees.
9. Landlord's Lien. Sublessor releases and waives any common law or
statutory landlord's lien covering Sublessee's property.
10. Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard
hereto shall be validly given, made or served, if in writing and delivered
personally or sent by United States, certified or registered mail, postage
prepaid, return receipt requested, to:
Sublessor: Union Pacific Resources Group, Inc.
777 Main Street
Fort Worth, Texas 76102
Attn: Matthew K. Loynachan
Copy To: Joseph A. LaSala, Jr.
Vice President and General Counsel
Union Pacific Resources Group, Inc.
777 Main Street
Fort Worth, Texas 76102
Sublessee: Millers American Group, Inc.
777 Main Street
Fort Worth, Texas 76102
or to such other addresses as any party hereto may, from time to time,
designate in writing delivered in a like manner.
11. Certificates. Sublessee agrees to furnish to Sublessor or to Landlord
certificates certifying as to any information reasonably requested by
either Sublessor or Landlord. Sublessor agrees to furnish to Sublessee
certificates certifying as to any information reasonably requested by
Sublessee. The reasonable expense for more than two (2) requests each
lease year made by Sublessor (not in connection with its obligations to
Landlord) or by Sublessee will be borne by the requesting party, not to
exceed $500.00.
12. Condition of Subleased Premises and UPR Property and Surrender of the
Subleased Premises. Sublessee acknowledges that: (i) Sublessee has fully
inspected the Subleased Premises and the UPR Property and accepts the same
in their present condition, "as is, where is", with all faults; and
(ii) Sublessor has made no warranties or representations to Sublessee
whatsoever with respect to the condition of the Subleased Premises or the
UPR Property. Upon the expiration or termination of this Sublease,
Sublessee agrees to return the Subleased Premises to Sublessor and Landlord
in the condition required by the Primary Lease. The UPR Property will be
returned to Sublessor in good condition and repair, normal wear and tear
excepted, but in no event in a condition at least equal to that of other
Sublessor property similar in kind, age and use.
13. Certificates Licenses and/or Permits. Sublessee shall, at Sublessee's
sole expense, obtain all necessary certificates, licenses or permits to do
business in the Subleased Premises, which may be required by any
governmental authorities.
14. Attorneys' Fees and Costs of Enforcement. If either party hereof
commences an action to enforce any of the provisions of this Sublease, the
prevailing party in such action shall be entitled to collect all of the
costs of such action (including, without limitation, attorneys' fees and
court costs) from the other party.
15. Cumulative Rights and Remedies. No right or remedy contained herein,
in the Primary Lease or provided by law is intended to be exclusive of any
other right or remedy, but shall be cumulative and in addition to every
other right or remedy.
16. Assignment and Subletting. Sublessee may not assign Sublessee's
rights under this Sublease or sublet all or any portion of the Subleased
Premises without the prior written consent of Landlord and Sublessor, not
to be unreasonably withheld or delayed.
17. General Provisions. This Sublease sets forth the complete agreement
between Sublessor and Sublessee regarding the subject matter hereof, and
this Sublease may not be terminated, amended or modified in any respect
except by agreement in writing executed by both Sublessor and Sublessee.
All duties and obligations of Sublessee under this Sublease that are
unperformed shall survive the termination or expiration of this Sublease.
Except as limited by this paragraph, this Sublease, and all the terms and
conditions hereof, shall be binding upon and inure to the benefit of both
Sublessor and Sublessee and their respective successors, representatives
and assigns. This Sublease will be governed by the laws of the State of
Texas, and all legal proceedings will be brought in the appropriate court
located in Tarrant County, Texas.
18. Brokerage Commissions. Sublessor has agreed to pay a brokerage
commission to Stoneleigh Huff Brous McDowell ("Broker") equal to four and
one-half percent (4.5%) of the following portion of the Base Rent:
Lease Years Rent
----------- -----
1 12.10
2 through 5 14.50
6 through 10 15.77
The commission for the first six (6) years will be due one-half (1/2)
on February 1, 2000, and one-half (1/2) on May 1, 2000, and the remaining
four (4) years, if and when Sublessor elects not to terminate this Sublease
as provided in Paragraph 2 above, will be due one-half (1/2) on February 1,
2006, and one-half (1/2) on May 1, 2006. Sublessor and Sublessee hereby
represent and warrant each to the other that they have not employed any
agents, brokers or other such parties in connection with this Sublease
other than Broker, and EACH AGREES THAT THEY SHALL HOLD THE OTHER HARMLESS
from and against any and all claims of all other agents, brokers or other
such parties claiming by, through or under the respective indemnifying
party.
19. Severability. If any term or provision of this Sublease, or the
application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Sublease, or the
application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby,
and each provision of this Sublease shall be valid and shall be enforceable
to the extent permitted by law.
20. Confidentiality. In addition to all other terms and conditions of the
Primary Lease, Sublessee will comply with the confidentiality provisions in
Paragraph 20.27 of the Primary Lease.
21. Interest. Interest charged under this Sublease for late payments
shall not exceed the maximum amount of nonusurious interest that may be
contracted for, taken, reserved, charged or received under law; any
interest in excess of that maximum amount shall be credited on future rent
or, if that has been fully paid, refunded. On any termination of this
Sublease, any such excess shall be canceled automatically as of the
termination or, if already paid, credited on the rent due or, if fully
paid, refunded.
22. Multiple Counterparts. This Sublease may be executed in multiple
counterparts, each of which when executed and delivered will be one
original, but such counterparts will together constitute one and the same
instrument. For convenience, the signature pages of all counterparts may
be attached to one counterpart to form one original.
ACCORDINGLY, the parties have executed this Sublease as of the date
first set forth above.
SUBLESSOR:
UNION PACIFIC RESOURCES GROUP, INC., a Utah
corporation
By: /s/ Morris B. Smith
---------------------------------------------
Name: Morris B. Smith
Title: Vice President - CFO
SUBLESSEE:
MILLERS AMERICAN GROUP, INC., a Texas
corporation
By: /s/ Joy J. Keller
---------------------------------------------
Name: Joy J. Keller
Title: Executive Vice President and CFO
