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EXHIBIT 10.1
Execution Copy
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of the 21st
day of August, 2000, by and between CIIF Associates II Limited Partnership, a
Delaware limited partnership ("Seller"), and Royal BodyCare, Inc., a Nevada
corporation, the current tenant of the Property ("Buyer"), and is joined in for
the limited purposes set forth herein by Stewart Title Guaranty Company, as
escrow agent ("Escrow Agent").
BACKGROUND
A. This Agreement is made with reference to the following real and
personal property (collectively, the "Property"):
(1) All that certain real property consisting of 6.953 acres,
more or less, located in Irving, Texas, as more particularly described in
EXHIBIT A hereto, together with all easements, rights and privileges appurtenant
thereto, and together with all right, title and interest of Seller, if any, in
and to all strips or gores, if any, between the aforesaid real property and
abutting properties (collectively, the "Land");
(2) The buildings (the "Buildings") containing approximately
119,192 square feet, together with all improvements appurtenant thereto (the
Buildings and such improvements being hereinafter collectively referred to as
the "Improvements," and the Land and the Improvements being hereinafter
collectively referred to as the "Real Property");
(3) All fixtures, equipment, furniture, furnishings,
appliances, supplies and other personal property of every nature and description
attached or pertaining to, or otherwise used in connection with, the Real
Property, if any, owned by Seller and located within the Real Property
(collectively, the "Personalty"); and
(4) All intangible property used or useful in connection with
the foregoing, including, without limitation, all contract rights, guarantees,
licenses, permits and warranties.
B. Seller is prepared to sell, transfer and convey the Property to
Buyer, and Buyer is prepared to purchase and accept the same from Seller, all
for the purchase price and on the other terms and conditions hereinafter set
forth.
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TERMS AND CONDITIONS
In consideration of Fifty Dollars ($50.00) paid by Buyer to Seller and
the mutual covenants and agreements herein contained, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree:
1. Sale and Purchase. Seller hereby agrees to sell, transfer and convey
the Property to Buyer, and Buyer hereby agrees to purchase and accept the
Property from Seller, in each case for the Purchase Price and on and subject to
the other terms and conditions set forth in this Agreement.
2. Purchase Price. The purchase price for the Property (the "Purchase
Price") shall be Three Million Five Hundred Thousand Dollars ($3,500,000),
which, subject to the terms and conditions hereinafter set forth, shall be paid
to Seller by Buyer as follows:
2.05. Deposit. Concurrent with the execution and delivery of
this Agreement by Buyer, Buyer shall deliver to Escrow Agent, in immediately
available funds, to be held in escrow and delivered in accordance with this
Agreement, a cash deposit in the amount of One Hundred Five Thousand Dollars
($105,000.00) (together with interest earned thereon, the "Deposit").
2.1. Loan Amount and Cash Amount. The Purchase Price shall be
comprised of two components, the Loan Amount and the Cash Amount. The "Loan
Amount" shall be Two Hundred Fifty Thousand Dollars ($250,000) and the "Cash
Amount" shall be Three Million Two Hundred Fifty Thousand Dollars ($3,250,000).
2.2. Payment of Loan Amount. At the consummation of the
transaction contemplated hereby ("the Closing"), Buyer shall pay the Loan Amount
to Seller by delivering to Seller, through the Title Company acting as escrow
agent, the Note and the other Loan Documents, the Stock Certificates and the
Attorney Opinion Letter (as such terms are hereinafter defined). Upon Seller's
receipt of such documents, Seller shall be deemed to have made a loan (the
"Loan") to Buyer in the amount of the Loan Amount, Buyer shall be deemed to have
received the Loan Amount, and Buyer shall be deemed to have delivered the Loan
Amount to Seller as payment of the Loan Amount portion of the Purchase Price.
The Loan shall have an interest rate equal to 250 basis points above the two
year U.S. Treasury Bill rate in effect on the day prior to the date of Closing
(as published in the Wall Street Journal). The term of the Loan shall be two
years, and the Loan shall provide for equal monthly payments in an amount
sufficient to pay all interest due and payable on the outstanding principal
balance of the Loan plus a sufficient portion of principal to fully amortize the
loan over a period of ten years.
The Loan Documents shall be comprised of (a) the Non-Negotiable
Promissory Note (the "Note") by Buyer in favor of Seller, in the amount of the
Loan Amount, in the exact form attached hereto at Exhibit B; (b) the Personal
Guaranty (the "Guaranty") by Clinton H. Howard, President and CEO of Buyer
("Howard"), in favor of Seller, guarantying the obligations of Buyer under the
Loan, in the exact form attached hereto at Exhibit B; (c) the Pledge Agreement
(the "Pledge Agreement") by Howard in favor of Seller with respect to the
Collateral (as hereinafter defined), in the exact form attached hereto at
Exhibit B; and (d) the Irrevocable Stock Power (the "Stock Power") by Howard, in
blank, in the exact form attached hereto at Exhibit B. The
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"Collateral" shall be a sufficient number of shares of the common stock in the
Buyer held by the Howard such that on the date of Closing, the value of such
Collateral, as determined using the share price published in the Wall Street
Journal on the last business day immediately preceding the date of Closing, is
two times the Loan Amount. The "Stock Certificates" shall be the original stock
certificates constituting the Collateral, which shall be delivered to Seller at
Closing. The "Attorney Opinion Letter" shall have the meaning given to it in
Section 6.3.
2.3. Payment of Cash Amount. At the Closing, Buyer shall
deliver to Seller, through the Title Company acting as escrow agent, the Cash
Amount less the Deposit (which Deposit shall be delivered to Seller by Escrow
Agent at Closing), subject to adjustments and apportionments as set forth
herein. The Cash Amount shall be paid at Closing by wire transfer of immediately
available federal funds, transferred to the order or account of Seller or such
other person as Seller may designate in writing.
3. Representations and Warranties of Seller. Subject to all matters
disclosed in any document delivered to Buyer by Seller or on any exhibit
attached hereto, and subject to any information discovered by Buyer or other
information disclosed to Buyer by Seller or any other person before or after the
date hereof and prior to the Closing (all such matters being referred to herein
as "Exception Matters"), Seller represents and warrants to Buyer as follows
(which representations and warranties shall survive Closing to the extent
expressly set forth in Section 16.8):
3.1. Authority. Seller is a limited partnership duly organized
and validly existing under the laws of the State of Delaware and has all
requisite power and authority to enter into this Agreement and perform its
obligations hereunder. Subject to the provisions of Section 16.10, the execution
and delivery of this Agreement have been duly authorized.
3.2. No Conflict. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder on the part of
Seller do not and will not conflict with or result in the breach of any material
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge, or encumbrance upon any of the Property or
assets of the Seller by reason of the terms of any contract, mortgage, lien,
lease, agreement, indenture, instrument or judgment to which Seller is a party
or which is or purports to be binding upon Seller or which otherwise affects
Seller, which will not be discharged, assumed or released at Closing. No action
by any federal, state or municipal or other governmental department, commission,
board, bureau or instrumentality is necessary to make this Agreement a valid
instrument binding upon Seller in accordance with its terms.
3.3. Leases. To the best of Seller's actual knowledge, there
are no leases or occupancy agreements currently in effect which affect the
Property other than the lease listed on EXHIBIT C hereto.
3.4. No Condemnation. To the best of Seller's actual
knowledge, Seller has not received any written notice of any pending or
contemplated condemnation, eminent domain or similar proceeding with respect to
all or any portion of the Real Property.
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3.5. Contracts. To the best of Seller's actual knowledge,
there are no construction, management, leasing, service, equipment, supply,
maintenance or concession agreements or other agreements of any type or nature
to which Seller is a party in effect with respect to the Real Property except as
set forth in EXHIBIT D hereto (collectively, the "Contracts"). Not later than
ten (10) days after the full execution and delivery of this Agreement, Seller
shall deliver a copy of each Contract to Buyer. Except as to Contracts that
Buyer notifies Seller to continue, all Contracts shall be terminated by Seller
as of Closing. Buyer shall give notice to Seller, not later than 25 days prior
to Closing, of the Contracts which shall continue after Closing, and such
Contracts, if assignable by Seller (collectively, the "Assigned Contracts"),
shall be assigned to and assumed by Buyer at Closing.
3.6. Warranties and Permits. Not later than ten (10) days
after the full execution and delivery of this Agreement, Seller shall deliver to
Buyer a copy of each guaranty or warranty and each license or permit
(collectively, "Warranties and Permits") in effect as of the date of Seller's
execution of this Agreement which relates to the design or construction of the
Improvements or the use or operation thereof or the installation, use or repair
of any Personalty, and which are in Seller's actual possession.
3.7. Compliance. To the best of Seller's actual knowledge,
Seller has not received written notice of any existing violations of any
federal, state, county or municipal laws, ordinances, orders, codes, regulations
or requirements affecting the Property which have not been cured.
3.8. Litigation. To the best of Seller's actual knowledge,
there is no material action, suit or proceeding pending or threatened against or
affecting the Property, or arising out of the ownership, management or operation
of the Property, this Agreement or the transactions contemplated hereby.
3.9. FIRPTA. Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Internal Revenue Code.
3A. Limitations Regarding Representations and Warranties. As used in
this Agreement, or in any other agreement, document, certificate or instrument
delivered by Seller to Buyer, the phrase "to the best of Seller's actual
knowledge", "to the best of Seller's knowledge", "to Seller's knowledge" or any
similar phrase shall mean the actual, not constructive or imputed, knowledge of
Alfred DellaPorta and Richard Greer of AEW Capital Management, L.P., without any
obligation on his part to make any independent investigation of the matters
being represented and warranted, or to make any inquiry of any other persons, or
to search or examine any files, records, books, correspondence and the like.
Seller represents and warrants that Alfred DellaPorta and Richard Greer are the
individuals at AEW Capital Management, L.P. with primary asset management
responsibilities for the Property.
Seller shall have no liability whatsoever to Buyer with respect to any
Exception Matters. If Buyer obtains knowledge of any Exception Matters before
the Closing, Buyer may consummate the acquisition of the Property subject
thereto if Buyer determines to proceed with the purchase of the Property
pursuant to Article 6; provided, however, if Buyer obtains knowledge of any
Exception Matters between the date hereof and the Closing, which Exception
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Matters materially and adversely affect the value to Buyer of the transactions
contemplated by this Agreement, Buyer may terminate this Agreement and receive a
refund of the Deposit upon written notice within five (5) business days after
Buyer learns of such Exception Matters. Upon any such termination of this
Agreement, neither party shall have any further rights or obligations hereunder
except as expressly provided for herein.
Buyer agrees to inform Seller promptly in writing if it discovers that
any representation or warranty of Seller is inaccurate in any material respect,
or if it believes that Seller has failed to deliver to Buyer any document or
material which it is obligated to deliver hereunder.
3B. Seller's Pre-Closing Covenants.
3B.1 Between the date hereof and Closing, Seller shall not
enter into any new maintenance, management or other contracts with respect to
the Property which survive the Closing without the prior written approval of
Buyer.
3B.2 Between the date hereof and Closing, Seller shall
continue to maintain and operate the Property in a manner consistent with its
general business practice and past operation and maintenance of the Property.
4. Conditions Precedent to Buyer's Obligations. All of Buyer's
obligations hereunder are expressly conditioned on the satisfaction at or before
the time of Closing hereunder, or at or before such earlier time as may be
expressly stated below, of each of the following conditions (any one or more of
which may be waived in writing in whole or in part by Buyer, at Buyer's option):
4.1. Accuracy of Representations. All of the representations
and warranties of Seller contained in this Agreement shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects on the date of Closing with the same effect as if made on and
as of such date.
4.1.(a) Material Adverse Change. Between the date hereof and
Closing, except as set forth in Article 8, there shall have been no material
adverse change in the financial or physical condition of the Property, except to
the extent the same is caused by Buyer.
4.2. Performance. Seller shall have performed, observed and
complied with all material covenants, agreements and conditions required by this
Agreement to be performed, observed and complied with on its part prior to or as
of Closing hereunder.
4.3. Documents and Deliveries. All instruments and documents
required on Seller's part to effectuate this Agreement and the transactions
contemplated hereby shall be delivered to Buyer and shall be in form and
substance consistent with the requirements herein.
4.4. Purchase "As Is".
4.4.1. BUYER ACKNOWLEDGES THAT IT HAS BEEN THE TENANT OF THE
PROPERTY SINCE AUGUST 1, 1998, HAS HAD AMPLE OPPORTUNITY TO INVESTIGATE, INSPECT
AND TEST THE PROPERTY IN ALL RESPECTS, HAS
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CONDUCTED ALL INVESTIGATIONS, INSPECTIONS AND TESTS OF THE PROPERTY AS IT DEEMS
ADVISABLE, IS FAMILIAR WITH THE PROPERTY IN ALL RESPECTS, AND IS SATISFIED WITH
THE PROPERTY AND THE CONDITION THEREOF IN ALL RESPECTS.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND
AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS
AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND
CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL
FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, ANY PROSPECTUS DISTRIBUTED WITH RESPECT TO THE
PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGERS OF THE PROPERTY, OR ANY REAL
ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO
WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS
SPECIFICALLY SET FORTH IN THIS AGREEMENT. BUYER ALSO ACKNOWLEDGES THAT THE
PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD
"AS-IS."
BUYER ACKNOWLEDGES RECEIPT OF THE ENVIRONMENTAL REPORTS LISTED ON
EXHIBIT E (AND ACKNOWLEDGES THAT THE REPORTS REFERRED TO THEREIN WERE MADE
AVAILABLE TO BUYER), AND REPRESENTS TO SELLER THAT BUYER, AS THE CURRENT TENANT
AT THE PROPERTY, HAS CONDUCTED PRIOR TO THE DATE HEREOF SUCH INVESTIGATIONS OF
THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS
TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE
ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY
INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH
RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, BUYER SHALL
ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION
DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN
REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL
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BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY
AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT),
LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH
BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR
ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS,
VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS,
CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.
THE PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING OR ANY TERMINATION
OF THIS AGREEMENT. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY, NOTHING
CONTAINED IN THIS AGREEMENT SHALL WAIVE OR BAR ANY CLAIM TO THE EXTENT BASED ON
FRAUD.
4.4.2. Buyer hereby agrees that, if at any time after the
Closing, any third party or any governmental agency seeks to hold Buyer
responsible for the presence of, or any loss, cost or damage associated with,
Hazardous Materials (as hereinafter defined) in, on, above or beneath the Real
Property or emanating therefrom, then the Buyer waives any rights it may have
against Seller in connection therewith including, without limitation, under
CERCLA (defined below), and Buyer agrees that it shall not (i) implead the
Seller, (ii) bring a contribution action or similar action against the Seller or
(iii) attempt in any way to hold the Seller responsible with respect to any such
matter. The provisions of this Section 4.4.2 shall survive the Closing. As used
herein, "Hazardous Materials" shall mean and include, but shall not be limited
to any petroleum product and all hazardous or toxic substances or wastes, any
substances which because of their quantitated concentration, chemical, active,
flammable, explosive, infectious or other characteristics, constitute or may
reasonably be expected to constitute or contribute to a danger or hazard to
public health, safety or welfare or to the environment, including, without
limitation, any hazardous or toxic waste or substances which are included under
or regulated by any law, code, regulation or ordinance (whether now existing or
hereafter enacted or promulgated, as they may be amended from time to time)
including, without limitation, the Comprehensive and Liability Act of 1980, 42
U.S.C. Section 9601 et seq. ("CERCLA"), the Federal Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., similar state laws and regulations
adopted thereunder.
4.5. Survey. Within thirty (30) days after the full execution
and delivery of this Agreement, Buyer may, at Buyer's cost and expense, obtain
an "as-built" survey of the Property (the "Survey"). Within 10 business days
following the date hereof, Seller shall deliver to Buyer a copy of the most
recent survey of the Real Property or Land in Seller's possession or under its
control. Buyer shall have a period of ten (10) days from the date of Buyer's
receipt of the Survey within which to approve or disapprove matters disclosed by
the Survey and to give written notice to Seller of any disapproval thereof,
indicating in reasonable detail the nature and reasons for Buyer's objection.
Any survey matters not timely disapproved pursuant to the preceding sentence
shall be deemed approved by Buyer. In the event Buyer timely notifies
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Seller of Buyer's disapproval of the Survey, Seller shall attempt to cure any
disapproved matter within thirty (30) days from receipt of such notice (the
"Survey Cure Period"), provided Seller shall not be required to spend any money
or suffer any expense in connection therewith, and, the Closing, if it otherwise
is scheduled to occur earlier, shall be extended until the earlier of three (3)
business days following the expiration of the Survey Cure Period or three (3)
business days after such matter is cured. In the event Seller fails to actually
effectuate a cure of the matters objected to within the Survey Cure Period,
Buyer's sole rights with respect thereto shall be to terminate this Agreement
and receive a refund of the Deposit within three (3) business days after the
expiration of the Survey Cure Period, provided if Buyer does not so terminate
this Agreement within three (3) business days after the expiration of the Survey
Cure Period, Buyer shall be deemed to have waived objection to any such survey
matter and agreed to accept title subject thereto, without reduction in the
Purchase Price.
4.6. Title. Within ten (10) days after the full execution and
delivery of this Agreement, Seller shall order from Stewart Title Guaranty
Company (the "Title Company") a complete title report or commitment with respect
to the Property (with copies of all instruments listed as exceptions to title).
Seller shall promptly deliver the same to Buyer upon Seller's receipt of the
same. Buyer shall have a period of ten (10) business days after receipt of the
title report within which to examine said title report. If Buyer objects to any
matters disclosed in the title report or commitment, or Buyer is otherwise not
satisfied with the title report or commitment, Buyer shall, within said period,
notify Seller in writing, specifying the objectionable matters. Without limiting
the generality of the foregoing, the title matters to which Buyer may object
pursuant to the preceding sentence shall include any manner in which the title
report or commitment does not comply with the title policy requirements set
forth on EXHIBIT L. Any title matters not timely objected to pursuant to the
preceding sentence shall be deemed approved by Buyer. In the event Buyer timely
notifies Seller of Buyer's disapproval of any matters disclosed in the title
report, Seller shall attempt to cure any disapproved matter within thirty (30)
days from receipt of such notice (the "Title Cure Period"), provided Seller
shall not be required to spend any money or suffer any expense in connection
therewith, and, the Closing, if it otherwise is scheduled to occur earlier,
shall be extended until the earlier of three (3) business days following the
expiration of the Title Cure Period or three (3) business days after such matter
is cured. In the event Seller fails to actually effectuate a cure of the matters
objected to within the Title Cure Period, Buyer's sole rights with respect
thereto shall be to terminate this Agreement and receive a refund of the Deposit
within three (3) business days after the expiration of the Title Cure Period,
provided that if Buyer does not so terminate this Agreement within three (3)
business days after the expiration of the Title Cure Period, Buyer shall be
deemed to have waived objection to any such title matter and agreed to accept
title subject thereto, without reduction in the Purchase Price. Obtaining a
commitment from the Title Company to issue an endorsement insuring over a matter
objected to shall be deemed a cure of such matter.
4.7. Financing Contingency. It shall be a condition to Buyer's
obligation to close the transaction contemplated hereby that Buyer shall have
been able to obtain an unconditional and irrevocable commitment for acquisition
financing in the amount of $3,000,000.00 upon commercially reasonable terms and
conditions, as determined by Buyer in Buyer's reasonable discretion, on or
before October 20, 2000. If Buyer is unable to obtain such a commitment on or
before October 20, 2000, it may terminate this Agreement by written notice to
Seller on or before October 20, 2000. In the event this Agreement is so
terminated, the Deposit
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shall be returned to Buyer and all obligations, liabilities and rights of the
parties under this Agreement shall terminate except as expressly set forth
herein. In the event Buyer does not give timely notice to Seller terminating
this Agreement as aforesaid, this Agreement shall continue in full force and
effect and the contingency provided for in this Section 4.7 shall be deemed
waived and of no force and effect.
4.8. Title Policy. It shall be a condition to Buyer's
obligation to close the transaction contemplated hereunder, that the Title
Company shall be unconditionally and irrevocably prepared, upon the payment of
the premium therefor, to issue the Buyer a Standard Texas Owner's Title
Insurance Policy covering the Real Property in the full amount of the Purchase
Price, subject only to such matters as are approved by Buyer pursuant to
Sections 4.5 and 4.6; and it shall be a further condition to Buyer's obligation
to close the transaction contemplated hereunder, that such title insurance
policy shall be on the standard form in use in the State of Texas, shall insure
good and indefeasible title to the Real Property in Buyer and shall meet the
following additional requirements:
(a) The exception relating to restrictions against the Real
Property shall be deleted unless restrictive covenants are included in
the matters approved by Buyer pursuant to Sections 4.5 and 4.6;
(b) The exception relating to discrepancies, conflicts or
shortages in area or boundary lines, or any encroachments or
protrusions or any overlapping of improvements shall be modified to
delete such exception, except as to "shortages in area" (provided the
Buyer pays any additional premium therefor and obtains an appropriate
survey);
(c) The exception relating to ad valorem taxes shall except
only standby fees, taxes and assessments by any taxing authority for
the current and subsequent years and subsequent taxes and assessments
by any taxing authority for prior years due to change in land usage or
ownership;
(d) There shall be no exception for "easements or rights which
a survey might show" or "lack of a right of access to and from the
land" or similar matters (provided Buyer obtains an appropriate
survey);
(e) There shall be no exception for "rights of parties in
possession", but rather only an exception for "rights of tenants, as
tenants only, under written but unrecorded leases"; and
(f) All exceptions, conditions and/or requirements described
in Schedule C of the Title Commitment shall have been released and or
satisfied prior to or at Closing and such items and requirements shall
not be exceptions to such title policy.
4A. Failure of Conditions. In the event Seller shall not be able to
convey title to the Property on the date of Closing in accordance with the
provisions of this Agreement or any other condition to Buyer's obligation
hereunder has not been satisfied or deemed satisfied or waived or deemed waived,
then Buyer shall have the sole option, exercisable by written notice to Seller
at or prior to Closing or such earlier time as specified herein, of (1)
accepting at Closing such title as Seller is able to convey and/or waiving any
unsatisfied condition precedent, with no deduction
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from or adjustment of the Purchase Price, or (2) declining to proceed to Closing
and terminating this Agreement. In the latter event, except as expressly set
forth herein, the Deposit shall be refunded to Purchaser and all obligations,
liabilities and rights of the parties under this Agreement shall terminate.
5. Conditions Precedent to Seller's Obligations. All of Seller's
obligations hereunder are expressly conditioned on the satisfaction at or before
the time of Closing hereunder, or at or before such earlier time as may be
expressly stated below, of each of the following conditions (any one or more of
which may be waived in writing in whole or in part by Seller, at Seller's
option):
5.1. Accuracy of Representations. All of the representations
and warranties of Buyer contained in this Agreement shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects on the date of Closing with the same effect as if made on and
as of such date. All of the representations and warranties of Buyer and Howard
contained in the Loan Documents shall be true and correct in all material
respects as of the date of Closing.
5.2. Performance. Buyer shall have performed and observed and
complied with all material covenants, agreements and conditions required by this
Agreement to be performed, observed and complied with on its part prior to or as
of the Closing hereunder. Buyer and Howard shall have performed and observed and
complied with all material covenants, agreements and conditions required by the
Loan Documents to be performed, observed and complied with on the part of the
Buyer and/or Howard as of the date of Closing thereunder.
5.3. Documents and Deliveries. All instruments and documents
required on Buyer's part to effectuate this Agreement and the transactions
contemplated hereby shall be delivered to Seller and shall be in form and
substance consistent with the requirements herein. Without limiting the
generality of the foregoing, all instruments and documents required on Buyer's
and Howard's part to effectuate the Loan and the transactions contemplated in
the Loan Documents shall be delivered to Seller and shall be in form and
substance consistent with the requirements herein and therein.
5A. Failure of Conditions. In the event any of the foregoing conditions
to Seller's obligations hereunder are not timely satisfied, in addition to the
other remedies of Seller, Seller shall have the option, exercisable by written
notice to Buyer, of terminating this Agreement, whereupon all obligations,
liabilities and rights of the parties under this Agreement shall terminate,
except as expressly set forth herein and except for Seller's remedies hereunder.
6. Closing; Deliveries.
6.1. Time of Closing. The Closing shall take place on November
20, 2000 (subject, however, to extension pursuant to Sections 4.5 or 4.6) at the
offices of the Title Company in Dallas, Texas, which shall act as Escrow Agent.
Closing shall be consummated through an escrow administered by Escrow Agent and
all documents required for Closing shall be deposited with Escrow Agent. If any
date on which the Closing would occur by operation of
<PAGE> 11
this Agreement is not a business day in Irving, Texas, or Boston, Massachusetts,
the Closing shall occur on the next succeeding business day.
6.2. Seller Deliveries. At Closing, Seller shall deliver to
Escrow Agent (for delivery to Buyer at close of escrow) the following, and it
shall be a condition to Buyer's obligation to close that Seller shall have
delivered the same to Escrow Agent:
6.2.1. A special warranty deed to the Real Property from
Seller, duly executed and acknowledged by Seller and substantially in the form
of EXHIBIT F, subject to such title matters as are approved by Buyer pursuant to
Sections 4.5 and 4.6.
6.2.2. A Bill of Sale for the Personalty from Seller,
substantially in the form of EXHIBIT G, duly executed in counterpart by Seller.
6.2.3. A Lease Termination Agreement, terminating the Lease,
substantially in the form of EXHIBIT H, duly executed in counterpart by Seller.
6.2.4. An Assignment of Warranties and Permits from Seller,
substantially in the form of EXHIBIT I, duly executed in counterpart by Seller.
6.2.5. An Assignment and Assumption of Contracts, relating
solely to the Assigned Contracts from Seller, substantially in the form of
EXHIBIT J, duly executed in counterpart by Seller.
6.2.6. The Pledge Agreement, duly executed in counterpart by
Seller.
6.2.7. Such affidavits or letters of indemnity, duly executed
by Seller, as the title insurer shall require in order to issue, without extra
charge, an owner's policy of title insurance free of any exceptions for unfiled
mechanics' or materialmen's liens for work performed by Seller (but not any
tenants) prior to Closing, or for rights of parties in possession other than
pursuant to the Lease.
6.2.8. A Non-Foreign Affidavit as required by the Foreign
Investors in Real Property Tax Act ("FIRPTA"), as amended, in the form of
EXHIBIT K, duly executed by Seller.
6.2.9. A certification by Seller that all representations and
warranties made by Seller in Article 3 of this Agreement are true and correct in
all material respects on the date of Closing, except as may be set forth in such
certificate.
6.2.10. All architectural and engineering drawings and
specifications, utilities layout plans, topographical plans and the like in
Seller's possession or control and owned by Seller and used in the construction,
improvement, alteration or repair of the Land or the Improvements.
6.2.11. Originals or copies of all Contracts and other
materials identified in the Exhibits hereto, and all other books, records and
files maintained by Seller's property manager relating to the construction,
operation and maintenance of the Property.
<PAGE> 12
6.2.12. All other instruments and documents reasonably
required to effectuate this Agreement and the transactions contemplated thereby.
6.2.13. All keys to the Property in Seller's possession or
control.
6.2.14. Possession of the Property shall be surrendered to
Buyer at Closing.
6.3. Buyer Deliveries. At Closing, Buyer shall deliver or
cause to be delivered to Escrow Agent (for delivery to Seller at close of
escrow) the following, and it shall be a condition to Seller's obligation to
close that Buyer shall have delivered the same or caused the same to be
delivered to Escrow Agent:
6.3.1. In accordance with Seller's instructions, a wire
transfer in the amount required under Section 2.3 hereof (subject to the
adjustments provided for in this Agreement), transferred to the order or account
of Escrow Agent (for delivery to Seller at close of escrow).
6.3.2. A certification by Buyer that all representations and
warranties made by Buyer in Article 15 of this Agreement are true and correct in
all material respects on the date of Closing, except as may be set forth in such
certificate.
6.3.3. The Bill of Sale referred to in Section 6.2.2, duly
executed in counterpart by Buyer.
6.3.4. The Lease Termination Agreement referred to in Section
6.2.3, duly executed in counterpart by Buyer.
6.3.5. The Assignment of Warranties and Permits referred to in
Section 6.2.4, duly executed in counterpart by Buyer.
6.3.6. The Assignment and Assumption of Contracts referred to
in Section 6.2.5, duly executed in counterpart by Buyer.
6.3.7. The Note, duly executed by Buyer.
6.3.8. The Pledge Agreement, duly executed in counterpart by
Howard.
6.3.9. The Stock Certificates.
6.3.10. The Stock Power, duly executed by Howard.
6.3.11. The Guaranty, duly executed by Howard.
6.3.12. An Opinion of counsel to Buyer and Howard (the
"Attorney Opinion Letter"), subject to customary qualifications, exceptions and
assumptions, reasonably acceptable to Seller, (a) that the Loan Documents
executed by Buyer have been duly executed and delivered and constitute the
valid, legal and binding obligation of Buyer, enforceable in accordance with
their terms, subject only to bankruptcy laws and matters of equitable
jurisdiction, (b) that the Guaranty, the Pledge Agreement and any other Loan
Documents executed by Howard have been
<PAGE> 13
duly executed and delivered and constitute the valid, legal and binding
obligation of Howard, enforceable in accordance with their terms, subject only
to bankruptcy laws and matters of equitable jurisdiction, (c) that Seller has a
valid, enforceable and perfected, security interest in the Collateral, (d) that,
to the best of such counsel's knowledge, the execution, delivery and performance
by Buyer and Howard of the Loan Documents to which each is a party do not
conflict with, violate or breach any provision of the organizational documents
of Buyer or any agreement or indenture by which either Buyer or Howard may be
bound, or any judgments or awards specifically naming Buyer or Howard or
specifically applicable to their respective property, (e) that, to the best of
such counsel's knowledge, there is no action, suit or proceeding pending or
threatened against Buyer or Howard, which, if adversely determined, would impair
the validity or enforceability of the Loan Documents, and (f) that no approval,
consent, order or authorization of or filing with any governmental authorities
is required in connection with the valid execution and delivery of the Loan
Documents by Buyer and Howard.
6.3.13. All other instruments and documents reasonably
required to effectuate this Agreement and the transactions contemplated thereby.
7. Apportionments; Taxes; Expenses.
7.1. Apportionments.
7.1.1. Taxes and Operating Expenses. All real estate taxes,
charges and assessments affecting the Property ("Taxes"), all charges for water,
electricity, sewer rental, gas, telephone and all other utilities ("Operating
Expenses"), to the extent not paid directly by Buyer as the Tenant under the
Lease, and all common area maintenance and other charges billed to Buyer as the
tenant under the Lease on an estimated basis or otherwise ("Charges") shall be
prorated on a per diem basis as of the date of Closing. If any Taxes have not
been finally assessed as of the date of Closing for the current fiscal year of
the taxing authority, then the same shall be adjusted at Closing based upon the
most recently issued bills therefor, and shall be re-adjusted when and if final
bills are issued. If any Operating Expenses or Charges cannot conclusively be
determined as of the date of Closing, then the same shall be adjusted at Closing
based upon the most recently issued bills thus far. Buyer hereby agrees to
assume all non-delinquent assessments affecting the Property, whether special or
general.
7.1.2. Rent. All rental under the Lease shall be prorated on a
per diem bases as of the date of Closing and paid to Seller at Closing.
7.1.3. Charges under Assigned Contracts. The unpaid monetary
obligations of Seller with respect to any of the Assigned Contracts shall be
prorated on a per diem basis as of the date of Closing.
7.2. Expenses. Each party will pay all its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, (1) all costs and expenses stated herein
to be borne by a party, and (2) all of their respective accounting, legal and
appraisal fees. Buyer, in addition to its other expenses, shall pay at Closing
(1) all recording charges incident to the recording of the deed for the Real
Property, (2) premiums for any extended coverage and endorsements under the
policy of owner's title
<PAGE> 14
insurance issued to Buyer at Closing, to the extent in excess of the premiums
which would be due for a standard coverage policy of owner's title insurance,
(3) the cost of the survey and (4) one-half of the fees, costs and expenses of
Escrow Agent and the costs of any taxes assessed thereon. Seller, in addition to
its other expenses, shall pay at Closing (1) premiums for a standard coverage
policy of owner's title insurance, and (2) one-half of the fees, costs and
expenses of Escrow Agent and the costs of any taxes assessed thereon.
7.3. Contractual Expenses. Seller shall pay all sums due from
it pursuant to contracts related to the Property to which Seller is a party, to
the extent such payments accrued or are attributable to the period prior to
Closing. The provisions of this Section 7.3 shall not be subject to the cap on
Buyer's recovery set forth in Section 9.2.
8. Damage or Destruction; Condemnation; Insurance.
If at any time prior to the date of Closing there is damage or
destruction to the Property, or if all or any portion of the Property is
condemned or taken by eminent domain proceedings by any public authority and, in
any such case, as a result of such damage, destruction or taking, the Lease is
terminated pursuant to its terms, then this Agreement shall terminate, the
Deposit shall be returned to Buyer and except as expressly set forth herein,
neither party shall have any further liability or obligation to the other
hereunder.
If at any time prior to the date of Closing there is any
damage or destruction or taking, and the Lease is not terminated pursuant to its
terms, then this Agreement shall continue in full force and effect and (1) in
the case of a taking, all condemnation proceeds paid or payable to Seller shall
belong to Buyer and shall be paid over and assigned to Buyer at Closing; and (2)
in the case of a casualty, Seller shall assign to Buyer all rights to any
insurance proceeds paid or payable under the applicable insurance policies, less
any costs of collection and any sums expended in restoration.
9. Remedies.
9.1. Buyer Default. In the event Buyer breaches or fails,
without legal excuse to complete the purchase of the Property or to perform its
obligations under this Agreement, then Seller shall, as its sole remedy
therefor, be entitled to receive the Deposit, plus all interest earned and
accrued thereon, as liquidated damages (and not as a penalty) in lieu of, and as
full compensation for, all other rights or claims of Seller against Buyer by
reason of such default. Thereupon this Agreement shall terminate and the parties
shall be relieved of all further obligations and liabilities hereunder, except
as expressly set forth herein. Buyer and Seller acknowledge that the damages to
Seller resulting from Buyer's breach would be difficult, if not impossible, to
ascertain with any accuracy, and that the liquidated damage amount set forth in
this Section represents both parties' best efforts to approximate such potential
damages.
9.2. Seller Default. In the event Seller breaches or fails,
without legal excuse, to complete the sale of the Property or to perform its
obligations under this Agreement, Buyer may, as its sole remedy therefor,
subject to the next paragraph of this Section 9.2, either (i) enforce specific
performance of this Agreement against Seller (unless specific performance is
unavailable to Buyer because Seller conveyed the Property to a third party, in
which event Buyer
<PAGE> 15
shall be entitled to recover its out of pocket expenses in connection with this
transaction, or (ii) terminate this Agreement and receive a return of the
Deposit, except that in the case of any breach of a representation, warranty or
covenant of Seller which survives the closing, if Buyer closes, Buyer shall be
entitled, as its sole remedy, to recover its actual damages therefor.
Notwithstanding anything to the contrary contained in this Agreement,
Buyer agrees that its recourse against Seller under this Agreement or under any
other agreement, document, certificate or instrument delivered by Seller to
Buyer, or under any law applicable to the Property or this transaction, shall be
strictly limited to Seller's interest in the Property (or upon consummation of
the transaction contemplated hereunder, to the net proceeds of the sale thereof
actually received by Seller), and that in no event shall Buyer seek or obtain
any recovery or judgment against any of Seller's other assets (if any) or
against any of Seller's partners (or their constituent partners) or any
director, officer, employee or shareholder of any of the foregoing. Buyer agrees
that Seller shall have no liability to Buyer for any breach of Seller's
covenants, representations or warranties hereunder or under any other agreement,
document, certificate or instrument delivered by Seller to Buyer, or under any
law applicable to the Property or this transaction unless the valid claims for
all such breaches collectively aggregate more than Twenty Thousand Dollars
($20,000), in which event the full amount of such valid claims shall be
actionable, up to the cap set forth in the following sentence. Further, Buyer
agrees that any recovery against Seller for any breach of Seller's covenants,
representations or warranties hereunder or under any other agreement, document,
certificate or instrument delivered by Seller to Buyer, or under any law
applicable to the Property or this transaction, shall be limited to Buyer's
actual damages not in excess of $175,000 in the aggregate, and that in no event
shall Buyer be entitled to seek or obtain any other damages of any kind,
including, without limitation, consequential, indirect or punitive damages.
Notwithstanding the foregoing, no claim shall be subject to any cap on damages
to the extent it is based upon fraud.
10. Confidentiality. Buyer agrees to keep confidential and not to use,
other than in connection with its determination whether to proceed with the
purchase of the Property in accordance with Sections 4.5 and 4.6 hereof, any of
the documents, material or information regarding the Property supplied to Buyer
by Seller or by any third party at Seller's request (except that Buyer shall be
entitled to disclose the same to Buyer's consultants, employees representatives
and lenders on a "need to know" basis provided such consultants agree to keep
the same confidential), unless Buyer is compelled to disclose such documents,
material or information by law or by subpoena. Buyer agrees to indemnify and
hold harmless Seller from and against any and all losses, damages, claims and
liabilities of any kind (including, without limitation, reasonable attorneys'
fees) arising out of Buyer's breach of this Section 10. In the event that the
Closing does not occur in accordance with the terms of this Agreement, Buyer
shall return to Seller all of the documents, material or information regarding
the Property supplied to Buyer by Seller or at the request of Seller. The
provisions of this Section 10 shall survive the termination of this Agreement
but shall no longer be applicable following Closing in accordance with the terms
of this Agreement.
11. Possession. Possession of the Property shall be surrendered to
Buyer at Closing.
12. Notices. All notices and other communications provided for herein
shall be in writing and shall be sent to the address set forth below (or such
other address as a party may
<PAGE> 16
hereafter designate for itself by notice to the other parties as required
hereby) of the party for whom such notice or communication is intended:
12.1. If to Seller:
CIIF Associates II Limited Partnership
c/o AEW Capital Management, L.P.
225 Franklin Street
Boston, Massachusetts 02110
Fax No.: (617) 261-9555
Attention: General Counsel
With a copy to: CIIF Associates II Limited Partnership
c/o AEW Capital Management, L.P.
225 Franklin Street
Boston, Massachusetts 02110
Fax No.: (617) 261-9555
Attention: Mr. Alfred DellaPorta
and: Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Fax No.: (617) 526-5000
Attention: Joseph J. Christian, Esq.
Douglas L. Burton, Esq.
12.2. If to Buyer:
Royal BodyCare, Inc.
2301 Crown Court
Irving, Texas 75038
Fax No.: (972) 893-4111
Attention: Mr. Clinton H. Howard, President and CEO
With a copy to: Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Fax No.: (214) 745-5390
Attention: J. Kenneth Kopf, Esq.
Any such notice or communication shall be sufficient if sent by registered or
certified mail, return receipt requested, postage prepaid; by hand delivery; by
overnight courier service; or by telecopy, with an original by regular mail. Any
such notice or communication shall be effective when delivered to the applicable
address or fax number or when delivery is refused.
<PAGE> 17
13. Brokers. Buyer and Seller each represents to the other that it has
not dealt with any broker or agent in connection with this transaction other
than Cushman and Wakefield ("Broker"). Seller shall pay Broker a commission
pursuant to a separate agreement, if, as and when the Closing occurs, but not
otherwise. Each party hereby indemnifies and holds harmless the other party from
all loss, cost and expense (including reasonable attorneys' fees) arising out of
a breach of its representation or undertaking set forth in this Section 13. The
provisions of this Section 13 shall survive Closing or the termination of this
Agreement.
14. Escrow Agent. Escrow Agent shall hold the Deposit in accordance
with the terms and provisions of this Agreement, subject to the following:
14.1. Obligations. Escrow Agent undertakes to perform only
such duties as are expressly set forth in this Agreement and no implied duties
or obligations shall be read into this Agreement against Escrow Agent.
14.2. Reliance. Escrow Agent may act in reliance upon any
writing or instrument or signature which it, in good faith, believes, and any
statement or assertion contained in such writing or instrument, and may assume
that any person purporting to give any writing, notice, advice or instrument in
connection with the provisions of this Agreement has been duly authorized to do
so. Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner and execution, or validity of any instrument
deposited in escrow, nor as to the identity, authority, or right of any person
executing the same, and Escrow Agent's duties under this Agreement shall be
limited to those provided in this Agreement.
14.3. Indemnification. Unless Escrow Agent discharges any of
its duties under this Agreement in a negligent manner or is guilty of willful
misconduct with regard to its duties under this Agreement, Seller and Buyer
shall indemnify Escrow Agent and hold it harmless from any and all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or other
expenses, fees, or charges of any character or nature, which it may incur or
with which it may be threatened by reason of its acting as Escrow Agent under
this Agreement; and in such connection Seller and Buyer shall indemnify Escrow
Agent against any and all expenses including reasonable attorneys' fees and the
cost of defending any action, suit or proceeding or resisting any claim in such
capacity.
14.4. Disputes. If the parties (including Escrow Agent) shall
be in disagreement about the interpretation of this Agreement, or about their
respective rights and obligations, or the propriety of any action contemplated
by Escrow Agent, or the application of the Deposit, Escrow Agent shall hold the
Deposit until the receipt of written instructions from both Buyer and Seller or
a final order of a court of competent jurisdiction. In addition, in any such
event, Escrow Agent may, but shall not be required to, file an action in
interpleader to resolve the disagreement. Escrow Agent shall be indemnified for
all costs and reasonable attorneys' fees in its capacity as Escrow Agent in
connection with any such interpleader action and shall be fully protected in
suspending all or part of its activities under this Agreement until a final
judgment in the interpleader action is received.
14.5. Counsel. Escrow Agent may consult with counsel of its
own choice and have full and complete authorization and protection in accordance
with the opinion of such
<PAGE> 18
counsel. Escrow Agent shall otherwise not be liable for any mistakes of fact or
errors of judgment, or for any acts or omissions of any kind, unless caused by
its negligence or willful misconduct.
14.6. Interest. All deposits into the escrow shall be held by
the Escrow Agent in an interest bearing account. All interest earned on the
Deposit shall be deemed to be part of the Deposit and shall accrue to the
benefit of Buyer except to the extent the Deposit becomes payable to Seller
pursuant to Section 9.1. In such event the interest earned on the Deposit shall
accrue to the benefit of the Seller.
15. Representations of Buyer. Buyer represents and warrants that:
15.1. Authority. Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of the state of Nevada and
has all requisite power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by Buyer has been duly authorized.
15.2. No Conflict. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereunder on the
part of Buyer does not and will not violate any applicable law, ordinance,
statute, rule, regulation, order, decree or judgment, conflict with or result in
the breach of any material terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge, or
encumbrance upon any of the property or assets of the Buyer by reason of the
terms of any contract, mortgage, lien, lease, agreement, indenture, instrument
or judgment to which Buyer is a party or which is or purports to be binding upon
Buyer or which otherwise affects Buyer, which will not be discharged, assumed or
released at Closing. No action by any federal, state or municipal or other
governmental department, commission, board, bureau or instrumentality is
necessary to make this Agreement a valid instrument binding upon Buyer in
accordance with its terms.
15.3. ERISA Matters. Buyer is not: (i) a plan which is subject
to Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), as defined in Section 3(3) of ERISA, nor a plan as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (each of the
foregoing hereinafter referred to collectively as a "Plan"); (ii) a
"governmental plan" as defined in Section 3(32) of ERISA; or (iii) a "party in
interest," as defined in Section 3(14) of ERISA, to a Plan, except with respect
to plans, if any, maintained by Buyer, nor do the assets of Buyer constitute
"plan assets" of one or more of such Plans within the meaning of Department of
Labor Regulations Section 2510.3-101. Buyer is acting on its own behalf and not
on account of or for the benefit of any Plan. Buyer has no present intent to
transfer the Property to any entity, person or Plan which will cause a violation
of ERISA. Buyer shall not assign its interest under this Agreement to any
entity, person or Plan which will cause a violation of ERISA.
15.4. Intentionally Omitted.
15.5. No Right to Purchase or Acquire the Collateral is
Authorized or Outstanding. Howard owns and holds the Collateral beneficially and
of record, free and clear of any liens, pledges and encumbrances of any kind
whatsoever and free of any rights of
<PAGE> 19
assignment of any third party. Upon Closing, a good, valid and indefeasible
first priority security interest to the Collateral shall be vested in Seller,
free and clear of any lien, claim, charge, pledge, encumbrance, limitation,
agreement or instrument whatsoever. This representation and warranty shall
survive Closing until the Note has been paid and satisfied in full.
16. Miscellaneous.
16.1. Assignability. Subject to the provisions of this Section
16.1, the terms and provisions of this Agreement are to apply and bind to the
permitted successors and assigns of the parties hereto. Buyer may not assign or
transfer all or any portion of its rights or obligations under this Agreement to
any other individual, entity or other person without first obtaining Seller's
written approval, which approval may be given or withheld in Seller's sole
discretion; provided, however, that Buyer shall be permitted to assign its
rights under this Agreement to an entity controlled by Buyer without Seller's
consent, but with notice given to Seller pursuant to this Section. In the event
Buyer desires to assign its rights hereunder, (a) Buyer shall send Seller
written notice of its intent or request, as applicable, at least 10 business
days prior to Closing, which notice shall include the legal name and structure
of the proposed Assignee, as well as any other information that Seller may
reasonably request, and (b) Buyer and the proposed assignee shall execute an
assignment agreement in a form reasonably acceptable to Seller, and (c) in no
event shall any assignment of this Agreement release or discharge the Buyer
named herein from any liability or obligation hereunder.
16.2. Governing Law; Bind and Inure. This Agreement shall be
governed by the law of the State of Texas and shall bind and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors, assigns and personal representatives.
16.3. Recording. This Agreement or any notice or memorandum
hereof shall not be recorded in any public record. A violation of this
prohibition shall constitute a material breach of the violating party, entitling
the other party to terminate this Agreement and exercise its other remedies
hereunder.
16.4. Time of the Essence. Time is of the essence of this
Agreement.
16.5. Headings. The headings preceding the text of the
paragraphs and subparagraphs hereof are inserted solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
16.6. Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
16.7. Exhibits. All Exhibits which are referred to herein and
which are attached hereto or bound separately and initialed by the parties are
expressly made and constitute a part of this Agreement.
16.8. Survival. Unless otherwise expressly stated in this
Agreement, each of the warranties and representations of Seller and Buyer set
forth herein shall survive the Closing and
<PAGE> 20
delivery of the deed and other closing documents by Seller to Buyer, and shall
not be deemed to have merged therewith; provided, however, that any suit or
action for breach of any of the representations or warranties set forth herein
(other than any representation or warranty of Buyer in any way related to or
made in connection with the Loan Documents, the Loan or the security therefor)
must be commenced within two hundred fifteen (215) days after the Closing or any
claim based thereon shall be deemed irrevocably waived. Unless expressly made to
survive, all obligations and covenants of Seller contained herein shall be
deemed to have been merged into the deed and shall not survive the Closing.
16.9. Use of Proceeds to Clear Title. To enable Seller to make
conveyance as herein provided, Seller may, at the time of Closing, use the
Purchase Price or any portion thereof to clear the title of any or all
encumbrances or interests, provided that provision reasonably satisfactory to
Buyer's attorney is made for prompt recording of all instruments so procured in
accordance with conveyancing practice in the jurisdiction in which the Property
is located.
16.10. Seller's Condition Precedent. Seller's obligations
under the Agreement shall be conditioned upon the approval of the Investment
Committee of AEW Capital Management, L.P., within 5 business days following the
date hereof, in its sole and absolute discretion. Seller shall promptly notify
Buyer upon obtaining such approval. If approval has not been obtained within 5
business days following the date hereof, this Agreement shall be automatically
terminated, in which event (a) the Deposit shall be refunded to Buyer, and (b)
Seller shall reimburse Buyer for its out-of-pocket expenses incurred in
connection with this transaction.
16.11. Submission not an Offer or Option. The submission of
this Agreement or a summary of some or all of its provisions for examination or
negotiation by Buyer or Seller does not constitute an offer by Seller or Buyer
to enter into an agreement to sell or purchase the Property, and neither party
shall be bound to the other with respect to any such purchase and sale until a
definitive agreement satisfactory to the Buyer and Seller in their sole
discretion is executed and delivered by both Seller and Buyer.
16.12. Entire Agreement; Amendments. This Agreement and the
Exhibits hereto set forth all of the promises, covenants, agreements, conditions
and undertakings between the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as contained herein. This Agreement may not be changed orally but only by
an agreement in writing, duly executed by or on behalf of the party or parties
against whom enforcement of any waiver, change, modification, consent or
discharge is sought.
16.13. Deferred Maintenance; Price Adjustment. Buyer has
asserted that certain deferred maintenance should be performed to the foundation
and structural elements of the exterior walls of the Building. Within ten (10)
days after full execution and delivery of this Agreement, Seller shall deliver
to Buyer certain engineering and other reports in connection therewith. Seller
will not be required to perform any such deferred maintenance prior to Closing,
whether in its capacity as Seller or landlord under the Lease (but if the
Closing fails to occur for any reason, Buyer does not waive any of its rights or
claims, if any, to which Buyer may be entitled as tenant under the Lease in
respect to any such deferred maintenance, nor does it release
<PAGE> 21
the Landlord under the Lease from any such rights or claims, if any). Instead,
Buyer and Seller will mutually endeavor to agree upon a reasonable and
appropriate reduction in the Purchase Price equal to the cost of any deferred
maintenance to the foundation and structural elements of the exterior walls of
the Building which is necessary or would be commercially customary to have
performed at this time, if any. In the event the parties do not (a) agree upon
the amount of such a reduction to the Purchase Price, if any, and (b) execute an
instrument memorializing such amount, if any, on or prior to September 19, 2000,
then Buyer may, at Buyer's sole option, elect to terminate this Agreement by
delivering notice of such election to terminate to Seller on or before the date
which is September 20, 2000 (provided that if Buyer fails to deliver such notice
on or before such date, then Buyer shall be deemed to have waived such option to
terminate and shall be required to close in accordance herewith without
reduction in the Purchase Price and without further claim as to such deferred
maintenance, subject to any right of Buyer to terminate pursuant to any other
provisions of this Agreement). In the event this Agreement is so terminated, the
Deposit shall be refunded to Buyer and, except as expressly set forth otherwise,
all obligations, liabilities and rights of the parties under this Agreement
shall terminate. Notwithstanding the foregoing, no reduction in the Purchase
Price, or any portion thereof, shall be based upon or attributable to any
maintenance or repairs required to be performed by the tenant under the Lease.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
SELLER: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By: /s/ J. Christopher Meyer
----------------------------
Name:
----------------------
Title:
---------------------
BUYER: ROYAL BODYCARE, INC., a Nevada corporation
By: /s/ Clinton H. Howard
----------------------------
Name: Clinton H. Howard
----------------------
Title: President
---------------------
ESCROW AGENT: STEWART TITLE GUARANTY COMPANY
By: /s/ Terrance P. Miklas
----------------------------
Name: Terrance P. Miklas
----------------------
Title: Vice President
---------------------
<PAGE> 22
EXHIBIT A
Description Of The Land
(Follows this page)
<PAGE> 23
Legal description of land:
Lot 1 in Block 4, LAS COLINAS, WALNUT HILL DISTRIBUTION CENTER, FOURTH
INSTALLMENT, an addition to the city of Irving, Dallas County, Texas,
according to the plat recorded in Volume 77097, Page 406, of the Deed
Records of Dallas County, Texas, and being more particularly described by
metes and bounds, as follows:
BEGINNING at a 1/2" iron rod set, at the most Easterly Southeast corner of
said Lot 1, being the intersection of the West right-of-way line of Hurd
Drive (a 60 foot wide public right-of-way), with the North right-of-way
line of Crown Court (a 60 foot wide public right-of-way);
THENCE along the South boundary line of said Lot 1, and the North
right-of-way line of said Crown Court as follows:
1. S 89(degree)43'20" W 300.00 feet. to 1/2" iron rod set, at the
beginning of a curve to the left;
2. SOUTHWESTERLY 188.91 feet, along said curve to the left having a
radius of 70.00 feet, a central angle of 154(degree)37'20", and a
chord bearing S 77(degree)02'22" W 136.58 feet to an "X" cut in
concrete set, at the most Southerly Southeast corner of said Lot 1,
lying in the North boundary line of Lot 1, Block B-R, LAS COLINAS
WALNUT HILL DISTRIBUTION CENTER, an addition to the City of Irving,
Dallas County, Texas, according to the plat recorded in Volume 93150,
Page 3935 of the Deed records of Dallas County, Texas;
THENCE S 89(degree)43'20" W 255.98 feet, along a chain link fence and the
common boundary line between said Lot 1, Block 4, and said Lot 1, Block
B-R, to a 1/2" iron rod found, at the Southwest corner of Lot 1, Block 4;
THENCE N 00(degree)17'33" E 465.01 feet, along the West boundary line of
said Lot 1, Block 4, and the East boundary line of aforesaid Lot 1, Block
B-R, to a 1/2" iron rod found, at the Northwest corner of said Lot 1, Block
4, being the Southwest corner of Lot 3, LAS COLINAS WALNUT HILL
DISTRIBUTION CENTER, an addition to the City of Irving, Dallas County,
Texas, according to the plat recorded in Volume 80188, Page 1906 of the
Deed Records of Dallas County, Texas;
THENCE N 89(degree)43'20" E 684.60 feet, along the North boundary line of
said Lot 1, Block 4, and the south boundary line of said Lot 3, lying in
the West right-of-way line of aforesaid Hurd Drive;
THENCE S 00(degree)16'40" E 435.00 feet, along the East boundary line of
said Lot 1, Block 4, and the West right-of-way line of said Hurd Drive, to
THE PLACE OF BEGINNING, containing 6.953 acres (302,850 square feet) of
land, more or less
<PAGE> 24
EXHIBIT B
Loan Documents
(Follows this page)
<PAGE> 25
PROMISSORY NOTE
$250,000.00 Texas
_____________, 2000
FOR VALUE RECEIVED, the undersigned, ROYALBODYCARE, INC., a Nevada
corporation, having a mailing address at 2301 Crown Court, Irving, Texas 75038.
with, for the purpose of any notice hereunder, a copy to Clinton H. Howard, 3917
Fox Glen Drive, Irving, Texas 75062 (the "maker"), promises to pay to the order
of CIIF ASSOCIATES II LIMITED PARTNERSHIP, a Delaware limited partnership, at
its office at c/o AEW Capital Management, L.P., 225 Franklin Street, Boston,
Massachusetts 02110 (the payee and each successor holder of this Note being
herein called the "holder"), or to such other person or at such other place as
the holder may from time to time designate in writing, the principal sum of TWO
HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) or so much thereof as shall have
been advanced to the maker with interest from the date hereof payable in arrears
on so much thereof as shall from time to time be outstanding at an annual rate
of _____________ (___%) per cent, calculated on the basis of a 360 day year but
accruing on the unpaid principal balance for the actual number of days elapsed.
Principal and interest evidenced by this Note shall be paid as
follows:
a. If the date hereof is not the first day of a month, on the first
day of the month next following the date hereof, interest only at the rate set
forth above shall be paid upon the principal balance outstanding hereon from the
date hereof through such date of payment.
b. Commencing on the first day of the second month after the date
hereof, or if the date hereof is the first day of a month then commencing on the
first day of the first month after the date hereof, and continuing on the first
day of each of the next successive twenty-three (23) months, there shall be paid
the sum of $____________, which shall be first applied to interest at the rate
set forth above and any remainder to principal.
c. The entire remaining principal balance and interest thereon shall be
due and payable ____________________, 2000.
If any installment of principal or interest or both is not paid when
due, there shall also be immediately due and payable, without notice or cure
period, a late charge at the rate of (i) four cents ($.04) for each dollar of
such delinquent payment or (ii) one percent (1%) of such delinquent payment for
each whole or partial month of delinquency, whichever is greater.
At the option of the holder the entire indebtedness evidenced by this
Note shall become immediately due and payable without notice or demand upon the
occurrence at any time of any of the following events of default: (1) failure to
pay in full any installment of principal or interest when due, and the
continuance thereof for ten (10) days following written notice from holder to
maker (provided that if such notice is given twice in any 12 month period, no
such notice or cure period shall be provided for any subsequent monetary
default), or default of maker or any endorser or guarantor hereof under any
liability, obligation or undertaking, hereunder or otherwise, to the holder
beyond any applicable grace or cure periods; (2) any default or breach in
<PAGE> 26
the covenants, conditions or agreements of the Guaranty from Clinton H. Howard
dated as of the date hereof (the "Guaranty") or the Pledge Agreement from
Clinton H. Howard dated as of the date hereof (the "Pledge Agreement") or any
other instrument given to secure this Note or the Guaranty shall occur and
continue after the applicable notice required therein and the expiration of any
applicable grace and/or cure period provided for therein, (3) the liquidation,
termination or dissolution of the organization of the maker or any endorser or
guarantor hereof, or any of such ceasing to carry on actively its present
business, or the appointment of a receiver for the property of any of such, if
the maker or any endorser or guarantor hereof is a corporation, trust or
partnership; (4) the death of any endorser or guarantor hereof, and if any
endorser or guarantor hereof is a partnership, the death of any general partner;
(5) the institution by or against the maker or any endorser or guarantor hereof
of any proceedings under the Bankruptcy Code, or any other law in which the
maker or any endorser or guarantor hereof is alleged to be insolvent or
generally not paying his respective debts as they become due, or the making by
the maker or any endorser or guarantor hereof of any assignment or trust
mortgage for the benefit of creditors (provided that in the event of any
involuntary proceedings filed against maker, the same shall not have been
dismissed within 60 days of the filing thereof).
At the option of the holder, upon the occurrence of any event of
default hereunder, the rate of interest stated above shall be increased by an
additional five (5%) percent per year. Said increased rate of interest shall
remain in effect for such time as the default continues.
The maker agrees to pay all costs of collection, including reasonable
fees and expenses of holder's attorneys, upon any default in the payment of
principal or interest when due, and all costs including reasonable fees and
expenses of holder's attorneys in case it becomes necessary to protect the
security hereof, whether or not suit is commenced.
This Note may be prepaid in whole or in part (provided that no partial
prepayment shall be less than $50,000.00) without premium or penalty.
In the event the payments required to be made hereunder, whether such
payments are characterized as interest or otherwise, shall at any time exceed
the limits permitted by any law governing usury or any other law applicable to
the loan evidenced hereby, all such excess sums paid by the maker for the period
in question shall, without further agreement or notice between or by any party
hereto, be applied to the principal balance as a prepayment thereof without
premium.
The maker hereof and all endorsers and guarantors of this Note hereby
severally waive presentment for payment, protest and demand, notice of protest,
demand and dishonor and nonpayment of this Note and the maker's (and any
endorser's or guarantor's) liability hereunder shall remain unimpaired,
notwithstanding any extension of the time of payment or other indulgence granted
by the holder hereof, or the release of all or any part of the security for the
payment hereof or the liability of any party which may assume the obligation to
make payment of the indebtedness evidenced hereby or the performance of the
obligations of the maker. The obligations of each of the makers, endorsers and
guarantors hereof shall be joint and several.
Whenever notice, demand or a request under this Note may properly be
given to the maker or the holder, the same shall be in writing and delivered to
the party intended to receive
<PAGE> 27
the same at the address given in this Note, or such other address as either
party shall furnish to the other by notice pursuant to this paragraph, sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the maker or the holder (with a copy to Clinton H. Howard) at the
address given in this Note, or to such other address as either party shall
furnish to the other by notice pursuant to this paragraph; and any such notice,
demand or request shall be treated as having been given three (3) business days
after the same is deposited with the U.S. Postal Service.
This note has been negotiated and is being delivered in and shall be
governed by and construed in accordance with the laws of the State of Texas,
without regard to conflict of law principles, to the maximum extent the parties
may so lawfully agree.
EXECUTED AS A SEALED INSTRUMENT, as of the day and year first above
written.
MAKER
ATTEST: ROYAL BODYCARE, INC., a Nevada corporation
By:
---------------------------------- --------------------------------------
Name:
Title:
[Corporate Seal]
<PAGE> 28
GUARANTY
THIS GUARANTY is made as of ___________, 2000 by Clinton H. Howard,
with an address at 3917 Fox Glen Drive, Irving, Texas 75062 ("Guarantor"), to
CIIF Associates II Limited Partnership, a Delaware limited partnership, with an
address c/o AEW Capital Management, L.P., 225 Franklin Street, Boston,
Massachusetts 02110 ("Creditor"), with respect to obligations of Globenet
International I, Inc., a Delaware corporation, with an address at 2301 Crown
Court, Irving, Texas 75038 ("Debtor").
Introduction
A. Creditor is, on or about the date of this Guaranty, making a loan to
Debtor (the "Loan") evidenced by a promissory note from Debtor to Creditor dated
_____________, 2000 in the principal amount of $250,000.00 (the "Note").
B. Guarantor desires to induce Creditor to make the Loan in order to
enhance and protect Guarantor's financial interest in Debtor.
IN CONSIDERATION of the foregoing matters, and for other valuable
consideration, the receipt and sufficiency of which is acknowledged, Guarantor
covenants and agrees as follows:
1. Guaranty. Guarantor hereby absolutely and unconditionally guarantees
the full and punctual payment, performance and observance of all debts,
obligations and liabilities of Debtor to Creditor under, in connection with or
related to the Note, whether now existing or subsequently arising, liquidated or
unliquidated, absolute or contingent, primary or secondary, now due or hereafter
falling due, falling due at maturity or upon acceleration, arising directly or
by assignment, purchase or other transfer, whether or not recourse thereon is
limited to specific property, together with all costs of collection, compromise
or enforcement, including without limitation reasonable attorneys' fees,
incurred with respect to any such debts, obligations or liabilities, or with
respect to this or any other guaranty of any of them, or with respect to any
proceeding under the federal bankruptcy laws or any moratorium, insolvency,
receivership, arrangement or reorganization law or an assignment for the benefit
of creditors concerning Debtor or Guarantor, together with interest on all such
costs of collection, compromise or enforcement from the date arising (all the
foregoing, collectively, are called the "Obligations"). The obligation of
Guarantor under this Agreement shall be deemed a liquidated obligation in the
amount of the maximum possible liability of Guarantor hereunder, and shall not
be deemed contingent or disputed, regardless of the credit of Debtor or any
other Guarantor or the value of any security.
2. Continuing Guaranty: Termination. This is a continuing guaranty,
which shall apply to all Obligations which now exist or subsequently arise,
whether or not notice of such Obligations is given to Guarantor, whether or not
any or all prior Obligations had been fully paid, performed and observed before
any such Obligation arose, and notwithstanding Guarantor's death, incapacity or
dissolution, or the death, incapacity or dissolution of any Other Guarantor (as
defined in Section 3 below).
This Guaranty shall remain in full force and effect until all
Obligations have been indefeasibly repaid in full in cash, notwithstanding any
intermediate or temporary payment or
<PAGE> 29
settlement of the whole or any part of the Obligations. This Guaranty shall
continue to be effective or be reinstated if at any time any payment made or
value received with respect to any Obligation is rescinded or must otherwise be
returned by Creditor upon the insolvency, bankruptcy or reorganization of Debtor
or Guarantor or otherwise, all as though such payment had not been made or value
had not been received.
3. Other Rights. Remedies, Security and Obligations. Guarantor's
liability is direct, primary and unconditional, and may be enforced by Creditor
without first resorting to any other right, remedy or security, including
without limitation any right or remedy against Debtor or against any other
person, partnership or entity which now is or may at any time become liable with
respect to any of the Obligations, whether as a co-maker, indorser, guarantor,
surety, indemnitor or otherwise or which now has or may hereafter have any
interest in property which is security for any of the Obligations ("Other
Guarantor"), or against any security given by Debtor, by Guarantor or by any
Other Guarantor. Guarantor's liability under this Guaranty shall not be
discharged or diminished by the release, discharge, modification or failure to
obtain (a) any security for any of the Obligations or (b) the primary or
secondary liability of any Other Guarantor ("Other Guaranty"). Guarantor's
liability shall not be discharged or diminished (w) by any waiver by Creditor of
any of the terms, covenants or conditions of any of the Obligations or of any
Other Guaranty thereof, (x) by the granting of any indulgence or extension of
time to Debtor or to any Other Guarantor, (y) by any modification, supplement or
extension of any of the Obligations, or (z) by any agreement or arrangement with
Debtor, any Other Guarantor or anyone else. Creditor shall be entitled, in its
sole discretion, without discharging or diminishing Guarantor's liability under
this Guaranty, (i) to apply any payment or transfer received from Debtor, from
Guarantor or from any Other Guarantor, to any of the Obligations, or to any
other debts, obligations or liabilities of Debtor or of the payor or transferor,
whether or not then due, or (ii) to apply any recovery from security to any of
the Obligations or to any other debts, obligations or liabilities secured
thereby, whether or not then due, or (iii) to hold any such payment, transfer or
recovery from security as additional security for any or all of the Obligations,
or for other debts, obligations or liabilities of the payor or transferor, or
which were secured by such security, whether or not then due.
4. Liability. Guarantor's liability hereunder is limited in amount to
the Obligations and the indemnities contained herein. Guarantor's liability
shall be joint and several with the liability of Debtor and with the liability
of any Other Guarantor.
5. Waiver of Notices. Etc. Creditor agrees to use reasonable efforts to
provide Guarantor (at the address and by the method set forth for notices
herein) with courtesy copies of all notices (including default notices) given to
Debtor, concurrently with the giving of such notice to Debtor; provided,
however, Guarantor agrees, to the greatest extent permitted by law, that
Creditor shall not be required to give Guarantor any notice pursuant to this
Guaranty, and that no failure to give any such notice (whether due to Creditor's
gross negligence, willful omission or otherwise) shall discharge or diminish the
liability which Guarantor would have had under this Guaranty if such notice had
been given. Guarantor waives, without limitation, to the extent permitted by
law: notice of acceptance of this Guaranty; notice of the incurring of
additional or increased Obligations; notice of the application of any payment,
transfer or recovery from security; presentment, demand and protest of any
instrument, and notice thereof; notice of nonpayment or other default under this
Guaranty, under any Obligation or under any
<PAGE> 30
Other Guaranty; any right to demand public foreclosure sale of any security;
notice of foreclosure; notice of any release, discharge, modification or failure
to obtain (a) any security for any of the Obligations or (b) the liability of
any Other Guarantor; notice of any waiver by Creditor of any of the terms,
covenants or conditions of any of the Obligations or of any Other Guaranty;
notice of the granting of any indulgence or extension of time to Debtor or to
any Other Guarantor; notice of any modification, supplement or extension of any
of the Obligations or of any Other Guaranty; notice of any agreement or
arrangement with Debtor, any Other Guarantor or anyone else; any right to
exoneration or to require election of remedies; and all suretyship defenses.
6. Acceleration. Guarantor shall, at Creditor's option, without notice,
immediately become liable for the outstanding balance of all Obligations,
whether or not then due, (a) in the event of any failure by Guarantor fully and
punctually to pay, perform or observe any debt, obligation or liability of
Guarantor under this Guaranty, or (b) in the event that Debtor or Guarantor
becomes insolvent, or attempts to make a composition, moratorium or similar
agreement with its creditors, or makes a general assignment for the benefit of
creditors or has a custodian or receiver appointed for a substantial portion of
its assets, or (c) if a petition under the federal bankruptcy laws or any
moratorium, insolvency, receivership, arrangement, or reorganization proceeding
is filed or commenced by Debtor or Guarantor, or (d) if a petition under the
federal bankruptcy laws or any moratorium, insolvency, receivership, arrangement
or reorganization proceeding is filed or commenced against or in respect of
Debtor or Guarantor and such petition or proceeding is not dismissed within 45
days thereafter, or (e) if Creditor would be entitled to accelerate any of the
Obligations but for the fact that acceleration has been stayed or enjoined, or
(f) in the event of a default by Debtor beyond applicable grace and cure periods
under any one or more of the Obligations, whether or not such default permits
acceleration of the maturity of the other Obligations according to their terms
or (g) if Guarantor dies.
7. Unenforceability. In the event that any Obligation is for any reason
not legal, valid or enforceable against Debtor, or if any Obligation is limited,
modified, voided, released or discharged in any proceeding under the federal
bankruptcy laws or in any moratorium, insolvency, receivership, arrangement or
reorganization proceeding, or if any Obligation is subject to any setoff, direct
or indirect counterclaim or defense by Debtor against Creditor, Guarantor's
liability hereunder shall be the same as if such Obligation were legal, valid
and enforceable, and had not been so limited, modified, voided, released or
discharged, and were not subject to such setoff, counterclaim or defense. If any
payment or transfer to Creditor or recovery from security by Creditor, which has
been credited against any Obligation, is voided or rescinded or required to be
returned by Creditor, whether or not in connection with any such proceeding,
this Guaranty and any security given by Guarantor for the Obligations or for
this Guaranty shall continue in effect or be reinstated as though such payment,
transfer or recovery had not been made.
8. Waiver of Subrogation; Subordination; Indemnity. Guarantor shall
have no right of subrogation, reimbursement or indemnity whatsoever, nor any
right of recourse to security for the Obligations, except when and so long as
all of the Obligations have been fully paid, performed and observed, and have
not been reinstated by reason of the avoidance of any transfer, the return of
any payment, or otherwise. All present and future debts, obligations and
liabilities
<PAGE> 31
of Debtor to Guarantor are hereby waived and postponed in favor of and
subordinated to the full payment, performance and observance of the Obligations,
and Guarantor agrees to assign and deliver to Creditor on request, as security
for this guaranty, (a) any such debts, obligations or liabilities, (b) any
instruments or documents evidencing the same, (c) any security therefor, and (d)
any payments or transfers with respect thereto, or recoveries on security
therefor, received by Guarantor after default under any of the Obligations.
Notwithstanding the foregoing or any other provision contained herein, payment
of the employment salary and employment benefits to be received by Guarantor
from Debtor shall not be waived, postponed or subordinated to the full payment,
performance and observance of the Obligations, to the extent such salary and
benefits are consistent in type and amount to the salary and benefits received
by Guarantor at the time of the execution hereof. Guarantor indemnifies and
holds harmless Creditor and its partners, stockholders, directors, officers,
trustees, beneficiaries, agents, employees and persons acting by, through, under
or in concert with any of them, and any of their successors, personal
representatives or assigns (collectively, the "Indemnitees") from and against
any liability, damage, loss, cost or expense, including reasonable attorneys'
fees, incurred in connection with any claim, suit or proceeding by Debtor or
anyone claiming through or under Debtor against any of the Indemnitees, arising
out of or relating to the Obligations, the loan pursuant to which the
Obligations were incurred, or any actions by any of the Indemnitees to enforce
the Obligations or to recover on security for the Obligations. Guarantor's
liability under this Guaranty shall constitute "Senior Indebtedness" or
"Superior Indebtedness" as those terms (or similar terms) are used in any
subordinated indebtedness of Guarantor now or subsequently outstanding, and
Guarantor shall take any and all action necessary to evidence and effect the
subordination of such subordinated indebtedness to Guarantor's liability under
this Guaranty.
9. Financial Statements. Guarantor agrees to furnish to Creditor from
time to time on reasonable demand, and annually without demand a true and
complete balance sheet and annual income statement of Guarantor in form
reasonably satisfactory to Creditor.
10. Legal Action. Any legal action to enforce this Guaranty may be
maintained alone, without first proceeding against Debtor, any Other Guarantor
or any security, or may be consolidated, at Creditor's election, with any action
or other proceeding against Debtor or any Other Guarantor. Creditor's books and
records showing the account between Creditor and Debtor shall be admissible in
any action or proceeding and shall constitute prima facie proof of the items
stated in such books and records. Creditor's rights are cumulative and shall not
be exhausted by the exercise of its rights against Guarantor in any number of
actions, except when and so long as all Obligations have been fully paid,
performed and observed, and have not been reinstated by reason of the avoidance
of any transfer, the return of any payment, or otherwise, in which event
Guarantor's liability under this Guaranty shall be likewise reinstated.
Guarantor waives any right to a jury trial in any action to enforce this
Guaranty, and Guarantor shall pay all costs and expenses, including attorney
fees, incurred by Creditor in connection with the enforcement of this Guaranty,
whether or not legal action is commenced.
11. Successors and Assigns. The benefit of this Guaranty shall run to
Creditor and its heirs, personal representatives, beneficiaries, successors and
assigns. In the event that any Obligation is assigned or otherwise transferred
by Creditor, all of Creditor's rights under this Guaranty may, at Creditor's
option, be assigned to the immediate and any subsequent assignees or transferees
of such Obligation and shall continue to run to Creditor with respect to any
<PAGE> 32
Obligations not so assigned or transferred. The burden of this Guaranty shall
bind Guarantor and its heirs, personal representatives, successors and assigns.
This Guaranty shall apply to the Obligations of Debtor and of Debtor's heirs,
personal representatives, successors and assigns, including without limitation
the successor to Debtor upon any merger, consolidation, liquidation or
dissolution of Debtor and, including without limitation any transferee of all or
substantially all of the assets of the Debtor and any partnership, person or
entity which carries on the business of Debtor.
12. Notices. Any notice under this Guaranty shall be in writing and
shall be deemed to have been duly given, (a) if to Guarantor, three business
days after being mailed by registered or certified mail, return receipt
requested, to Guarantor's address set forth above, or to such other one address
as Guarantor may designate from time to time by notice hereunder to Creditor,
(b) if to Creditor, three business days after being mailed by registered or
certified mail, return receipt requested, to Creditor at the address set forth
above, or at such other one or more addresses as Creditor may designate from
time to time by notice hereunder to Guarantor, and also by each heir, personal
representative, successor, assign or transferee of any Obligation of which
notice has been given hereunder to Guarantor, at the address or addresses
specified in such notice.
13. Governing Law. This Guaranty, all acts and transactions hereunder,
and the rights and duties of the parties hereto shall be governed by, and
construed and enforced according to the laws of the State of Texas, without
regard to conflict of law principles.
14. Integration, Amendment and Waiver. This Guaranty sets forth the
entire agreement between Guarantor and Creditor, and supersedes any prior or
contemporaneous agreements, understandings or representations, oral or written,
with respect to the subject matter hereof, but is supplementary to and does not
supercede any prior guaranty, subordination agreement or grant of security
unless expressly so stated herein. No amendment or waiver of any provision of
this Guaranty shall be effective unless evidenced in a writing signed by the
Creditor and Guarantor.
15. Titles: Gender and Number. Section titles are inserted for
convenience only and are not to be construed as part of this Guaranty. Whenever
the neuter, masculine or feminine gender or the plural or singular number is
used in this Guaranty, it shall be deemed to represent whatever gender or number
the context or circumstances require.
16. Severability. If any provision of this Guaranty shall be held by
any court to be illegal or unenforceable, all other provisions of this Guaranty
shall remain in full force and effect.
17. Intentionally Omitted.
18. Security Interest. Simultaneously herewith, Guarantor has granted
to Creditor, as security for the full and punctual payment, performance and
observance of this Guaranty, a security interest in the following property,
including proceeds and products thereof and after acquired property of similar
types: ___ shares of common stock in Debtor. The grant of such security interest
shall be governed by a Pledge Agreement by Guarantor of even date herewith.
19. Representations and Warranties. Guarantor represents and warrants
that:
<PAGE> 33
(a) Guarantor is an individual citizen and resident of the
State of Texas;
(b) Guarantor has a substantial financial interest in Debtor;
(c) As of the date hereof, Guarantor owns ________ shares
of ________ stock in Debtor, with a value of $________;
(d) Guarantor has full legal competence to execute and deliver
this Guaranty and to perform its obligations hereunder;
(e) the execution and delivery of this Guaranty by Guarantor
does not, and the performance of this Guaranty by it will not, violate any law,
regulation or ordinance, or any judicial order or decree, or any agreement,
indenture, note or other instrument to which it is a party or by which it or any
of its property may be bound;
(f) there is no pending or threatened litigation, arbitration
or administrative proceeding which would have a material adverse effect on the
financial condition of Guarantor or on the rights and remedies of Creditor under
this Guaranty; and
(g) this Guaranty is legal, valid and binding, and is
enforceable in accordance with its terms.
EXECUTED in any number of counterparts as a sealed instrument,
effective as of the date first above written.
Signed, sealed and delivered
in the presence of: GUARANTOR:
Attest:
--------------------------------- -----------------------------------
Typed Name: Clinton H. Howard
Title:
<PAGE> 34
STATE OF TEXAS
_______________ County, Section:
The above-named Clinton H. Howard personally appeared before me this ____ day of
______________, 2000, and acknowledged the foregoing Guaranty to be his free act
and deed.
--------------------------------
Notary Public
My Commission Expires:
----------
<PAGE> 35
PLEDGE AGREEMENT
This is a pledge agreement made as of the ____ day of ___________, 2000 between
Clinton H. Howard, an individual residing at 3917 Fox Glen Drive, Irving, Texas
75062 ("Pledgor"), and CIIF Associates II Limited Partnership, a Delaware
limited partnership ("Pledgee").
WITNESSETH:
WHEREAS, Pledgor has issued that certain Guaranty (the "Guaranty") to
Pledgee of even date herewith guarantying certain obligations with respect to
that certain Promissory Note (the "Note") of even date from Royal BodyCare,
Inc., a Nevada corporation having its principal place of business at 2301 Crown
Court, Irving, Texas 75038 (the "Company"), to Pledgee in the original principal
amount of $250,000, as more particularly set forth therein; and
WHEREAS, as collateral security for the obligations of Pledgor under
the Guaranty, Pledgor has agreed to pledge and grant to Pledgee a first priority
security interest in ____ shares of common stock which Pledgor owns in the
Company, as more fully set forth herein;
NOW THEREFORE, the parties hereto agree and acknowledge that the
foregoing recitals are true and correct and to the following:
1. Pledge of Collateral. As collateral security for the performance of
the obligations of Pledgor under the Guaranty (the "Obligations"), Pledgor
hereby pledges and grants to Pledgee a security interest in and to ___ shares of
the common stock of the Company held by Pledgor, as identified in Exhibit A
annexed hereto, and any and all stock rights, powers and other distributions,
dividends or proceeds thereof (the "Shares"). In addition, any stock rights,
dividends, powers or other distributions or proceeds received by Pledgor on
account of the Shares shall be held in trust for and delivered to Pledgee to be
held in accordance with the terms of this Pledge Agreement, and shall be
included in the Shares described above.
2. Delivery of the Shares. The stock certificates evidencing the Shares
have been delivered to Pledgee on the date hereof, together with undated stock
powers executed in blank. Upon payment in full of the Note and satisfaction of
all of Pledgor's obligations under the Guaranty, Pledgee shall return to Pledgor
such certificates and undated stock powers as well as such other instruments,
documents, stock certificates, money and goods as may come into Pledgee's
possession from time to time pursuant to this Pledge and remain in Pledgee's
possession at the time of such payment in full and satisfaction, except to the
extent Pledgee is entitled to retain or dispose of the same pursuant to the
terms hereof.
3. Pledgee's Rights and Duties with Respect to the Collateral.
Pledgee's only duty with respect to the Shares shall be to exercise reasonable
care to secure the safe custody thereof, all other duties being hereby expressly
disclaimed. Pledgee shall have the right, but not the obligation, to (a) demand,
sue for, receive and collect all money or money damages payable on account of
any Shares, (b) protect, preserve or assert any other rights of Pledgor or take
any other action with respect to the Shares, and (c) pay any taxes, liens,
assessments, insurance premiums or other charges pertaining to the Shares. Any
expenses incurred by Pledgee under the preceding sentence shall be paid by
Pledgor within five business days after Pledgor's receipt or deemed
<PAGE> 36
receipt of a demand therefor, become part of the Obligations secured by the
Shares and bear interest until paid at a per annum rate equal to the greater of
(a) 15% or (b) 5% over the prime rate as then announced by the Wall Street
Journal. Pledgee shall be relieved of all responsibility for the Shares upon
surrendering them to Pledgor. Notwithstanding the provisions of this Paragraph
3, so long as Pledgor is not in default hereunder, it shall have the rights
granted to it in Paragraphs 5 and 6 hereof.
4. Pledgor's Warranties and Indemnity.
4.1 Pledgor represents, warrants and covenants (a) that
Pledgor is the lawful record and beneficial owner of the Shares, (b) that the
Shares are fully paid and nonassessable, (c) that as of the date hereof, the
Shares are free and clear of all liens, encumbrances and security interests,
other than the security interest granted by Pledgor hereunder, and this pledge
constitutes a valid and perfected first priority security interest in the Shares
enforceable against Pledgor, (d) that the Shares are not subject to any
outstanding rights of redemption or options to purchase or sell, (e) that
Pledgor has the sole right and lawful authority to pledge the Shares and
otherwise to comply with the provisions hereof, (f) that no litigation is
pending or, to the best of Pledgor's actual knowledge, threatened against
Pledgor, which if adversely determined, would have a material adverse effect
against Pledgor or Pledgee's rights in respect of the Shares, (g) that the
execution, delivery and performance of this Pledge will not violate any
provision of any requirement of law or contractual obligation of Pledgor and
will not result in the creation or imposition of any lien on any of the
properties or revenues of Pledgor pursuant to any requirement of law or
contractual obligation of Pledgor, (h) that Pledgor agrees to defend Pledgee's
interest in the Shares and the security interest therein against any and all
claims and demands, and (i) that this Pledge Agreement constitutes the legal,
valid and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms.
4.2 If any adverse claim is asserted in respect of the Shares
or any portion thereof, except as such may arise from the wanton, reckless or
unauthorized acts of Pledgee, Pledgor agrees to indemnify Pledgee and hold
Pledgee harmless from and against any liabilities or damages, including
reasonable attorney's fees, incurred by Pledgee in exercising any right, power
or remedy of Pledgee hereunder. Any such loss, liability or expense so incurred
shall be paid by Pledgor within five business days after the giving of a demand
therefor, become part of the Obligations secured by the Shares and bear interest
at a per annum rate equal to the greater of (a) 15% or (b) 5% over the prime
rate as then announced by the Wall Street Journal.
5. Voting of Collateral. While Pledgor is not in default hereunder,
Pledgor may vote the Shares, provided that said voting shall be in conformity
with Pledgor's performance under this Pledge Agreement and the Guaranty.
6. Dividends and Other Distributions. While Pledgor is not in default
hereunder, Pledgor may receive all cash dividends, payments of principal and
interest, and other cash distributions payable with respect to Shares, provided,
however, that Pledgor shall immediately inform Pledgee of the receipt of any
such dividend, payment or other distribution and shall hold the amount thereof
in trust for Pledgee unless and until Pledgee shall in writing release Pledgor
from such trust. Pledgor shall cause all non-cash dividends and distributions
with respect to Shares to be distributed directly to Pledgee, to be held by
Pledgee as part of the Shares, and if
<PAGE> 37
any such distribution is made to Pledgor he shall receive such distribution in
trust for Pledgee and shall immediately transfer it to Pledgee.
7. Pledgor's Default. Pledgor shall be in default hereunder upon the
occurrence of any of the following events:
(a) Any event of default shall occur under the Note or Pledgor
shall default in any of its obligations under the Guaranty;
(b) If Pledgor is not paying his debts as they become due,
becomes insolvent, files or has filed against him a petition under any chapter
of the United States Bankruptcy Code, 11 U.S.C. SECTION 101 et seq. (or any
similar petition under any insolvency law of any jurisdiction) (provided that
any involuntary proceedings against Pledgor have not been dismissed within 60
days of the filing thereof), proposes any liquidation, composition or financial
reorganization with his creditors, makes an assignment or trust mortgage for the
benefit of creditors, or if a receiver, trustee, custodian or similar agent is
appointed or takes possession with respect to any property or business of
Pledgor;
(c) If any lien, encumbrance or adverse claim of any nature
whatsoever is asserted with respect to any Shares and is not immediately
discharged, dismissed or stayed;
(d) If any warranty of Pledgor hereunder is or shall become
false;
(e) If Pledgor fails to fulfill any obligation hereunder; or
(f) If Pledgor fails to pay or perform any of the Obligations
when such payment or performance is due.
8. Pledgee's Rights upon Default. Upon the occurrence of any default as
defined in Section 7 hereof, Pledgee may, if Pledgee so elects in its sole
discretion, take any one or more of the following actions:
(a) at any time and from time to time sell, assign and deliver
all or any part of the Shares, or any interest therein, at any public or private
sale, for cash, on credit or for other property, for immediate or future
delivery, without any assumption of credit risk, and for such price or prices
and on such terms as Pledgee in its absolute discretion may determine; provided
that at least five (5) days' written notice of the time and place of any such
sale shall be given to Pledgor. Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than if sold at
public sales and that private sales shall be deemed to be made in a commercially
reasonable manner notwithstanding that such a private sale may result in a lower
sale price.
(b) exercise the right to vote, the right to receive cash
dividends and other distributions, and all other rights with respect to the
Shares as though Pledgee were the absolute owner thereof, whether or not such
rights were retained by Pledgor as against Pledgee before default; and
<PAGE> 38
(c) exercise all other rights available to a secured party
under the Uniform Commercial Code as adopted in the State of Texas and other
applicable law.
(d) the rights and remedies available pursuant to this Pledge
Agreement are cumulative and not exclusive of any other rights or remedies
otherwise available to Pledgee.
9. Application of Sale Proceeds. In the event of a sale of Shares, the
proceeds shall first be applied to the payment of the actual expenses of the
sale, including brokers' commissions, reasonable counsel fees, any taxes or
other charges imposed by law upon the Shares or the transfer thereof and all
other charges paid or incurred by Pledgee pertaining to the sale; and, second,
to satisfy outstanding Obligations, in the order in which Pledgee elects in its
sole discretion; and, third, the surplus (if any) shall be paid to Pledgor.
10. Notices. All notices made or required to be made hereunder shall be
sent by United States certified or registered mail, return receipt requested,
with postage prepaid, addressed to Pledgee or Pledgor at the address first above
written. Notice by mail shall be deemed to have been given and received three
business days following the date when the notice, so addressed with postage
prepaid, is deposited in the mail.
11. Heirs, Successors, Etc. This Pledge Agreement and all of its terms
and provisions shall benefit and bind the heirs, successors, assigns,
transferees, executors and administrators of each of the parties hereto.
12. Pledgee's Forbearance. Any forbearance, failure or delay by Pledgee
in exercising any right, power or remedy hereunder shall not be deemed a waiver
of such right, power or remedy. Any single or partial exercise of any right,
power or remedy of Pledgee shall continue in full force and effect until such
right, power or remedy is specifically waived in writing by Pledgee.
13. Further Assurances. Pledgor covenants and agrees to execute and
deliver, or cause to be executed or delivered, all such other stock powers,
proxies, instruments and documents, and to take such other action or actions as
Pledgee may reasonably request from time to time in order to carry out the
provisions and purposes hereof.
14. Termination. This Pledge Agreement and the pledge and security
interest represented hereby shall terminate upon the indefeasible payment in
full of the Note and the satisfaction of all of Pledgor's obligations under the
Guaranty.
15. Miscellaneous.
(a) This Pledge Agreement or any part hereof may not be
changed, waived or amended except by a written instrument signed by Pledgee and
Pledgor, and no waiver by Pledgee or Pledgor on any one occasion of any rights
hereunder shall operate as a waiver on any other occasion.
(b) The construction and enforcement of this Pledge Agreement
shall be governed by the laws of the State of Texas without regard to conflict
of laws principles.
<PAGE> 39
(c) Pledgee shall pay all actual costs and expenses, including
reasonable attorney fees, incurred by Pledgor in connection with the enforcement
of this Pledge Agreement, whether or not legal action is commenced.
(d) If any part of this Pledge Agreement or any agreement,
document or instrument executed in connection herewith shall be deemed invalid
or unenforceable by a court of competent jurisdiction, the remaining provisions
shall remain in full force and effect and shall continue to be binding upon the
parties.
(e) This Pledge Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute one and the same instrument.
(f) Nothing in this Pledge Agreement shall be construed to
waive or postpone the payment of employment salary and employment benefits to be
received by Pledgor from the Company or to subordinate the payment the same to
the full satisfaction of the Company's obligations under the Note, in each case
to the extent such salary and benefits are consistent in type and amount to the
salary and benefits received by Pledgor at the time of the execution hereof.
16. Intentionally Omitted.
THE PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING IN CONNECTION WITH ALL MATTERS CONTEMPLATED HEREBY AND
DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
EXECUTED under seal as of the date first above written.
PLEDGOR:
-------------------------------------------------
Clinton H. Howard
PLEDGEE: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as Copley
Advisors, Inc.), a Massachusetts corporation,
its general partner
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE> 40
EXHIBIT C
Lease
(Follows this page)
<PAGE> 41
EXHIBIT C
2301 Chovanetz Court
Irving, TX
ADDENDUM TO STANDARD INDUSTRIAL LEASE AGREEMENT
THIS ADDENDUM TO STANDARD INDUSTRIAL LEASE AGREEMENT (this "Option
Agreement") is to be attached to and shall form a part of that certain Standard
Industrial Lease Agreement (the "Lease") dated June 19th, 1998, between CIIF
ASSOCIATES II LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord")
and GLOBENET INTERNATIONAL I, INC., a Delaware corporation ("Tenant"),
concerning the demised premises as defined in the Lease and more particularly
described on Exhibit "A" attached hereto, together with all improvements
thereon and all rights and appurtenances pertaining thereto, including any
right, title and interest of Landlord in and to adjacent streets, alleys and
rights-of-way (collectively the "Property").
1. Landlord hereby grants to Tenant an option (the "Option") to purchase
the Property Option on the terms and conditions set forth in this Option
Agreement.
2. The Option shall commence on the date hereof and may be exercised
until and shall terminate on the date two (2) years thereafter (the "Expiration
Date") unless sooner terminated in accordance with the provisions hereof.
Provided that Tenant is not in default of any of the terms, covenants and
conditions of the Lease, and the Lease has not been assigned or the Premises
(or a part thereof) sublet, except as provided by Paragraph 14 of the Lease,
Tenant may exercise the Option by delivering written notice to Landlord that
Tenant has elected to purchase the Property pursuant to the provisions hereof.
The notice must be delivered to Landlord at Landlord's address for notices set
forth in the Lease. The notice must set forth the date on which Tenant desires
to close the acquisition of the Property (the "Closing Date") which date shall
not be later than the Expiration Date, as defined in this Paragraph. In the
event that the Option is not exercised prior to the Expiration Date, the Option
shall terminate.
3. In consideration of the Option set forth herein, Tenant shall pay to
Landlord, in addition to any rent and other sums payable by Tenant to Landlord
under the Lease, a non-refundable option payment in the amount of $100.00, the
receipt and sufficiency of which is hereby acknowledged.
4. The purchase price ("Purchase Price") for the Property shall be Three
Million Five Hundred Thousand Dollars ($3,500,000).
5. Prior to the Closing Date, Landlord shall, (i) at Tenant's expense,
deliver to Tenant a copy of a current survey of the Property prepared by a
Registered Professional Land Surveyor, and (ii) at Landlord's expense deliver
to Tenant a title commitment ("Title Commitment") covering the Property binding
the issuing title company to issue a Texas Owner Policy of Title Insurance on
the standard form prescribed by the Texas State Board of Insurance at the
Closing in the full amount of the Purchase Price, insuring Tenant's fee simple
title to the Property to be good and indefeasible, subject only to the
Permitted Exceptions (as hereinafter defined), together with copies of all
recorded instruments affecting the Property and recited as exceptions in the
Title Commitment (the "Title Documents"), and a current tax certificate. Tenant
shall have ten (10) days after the receipt of the
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT - Page 1
<PAGE> 42
latter of the survey, the Title Commitment or the Title Documents, to review
same and to deliver in writing to Landlord such objections as Tenant may have to
anything contained in them. Any such item to which Tenant shall not object
shall be deemed a "Permitted Exception". If there are objections by Tenant, or a
third party lender, Landlord shall, in good faith, attempt to satisfy such
objections prior to Closing, but Landlord shall not be required to incur any
cost to do so. If Landlord delivers written notice to Tenant on or before the
Closing Date that Landlord is unable to satisfy such objections, Tenant may
either waive such objections and accept such title as Landlord is able to convey
or terminate Tenant's election to exercise the Option by written notice to
Landlord.
6. The closing of the sale (the "Closing") shall take place on the
Closing Date at a location and at a time mutually acceptable to Landlord and
Tenant. At the Closing: (i) Landlord shall deliver to Tenant a general warranty
deed and bill of sale conveying good and indefeasible title in fee simple to
the Property, subject, however, only to the lien for taxes for the year of
Closing not yet due and payable, and the Permitted Exceptions; and (ii) Tenant
shall deliver to Landlord in readily available funds the full amount of the
Purchase Price. Each party shall pay its share of all other closing costs which
are customarily paid by a seller or purchaser in a transaction of this
character in Dallas County, Texas. Each party shall pay its own attorneys' fees
in connection with the closing of Tenant's acquisition. In the event that the
Closing does not occur prior to the Expiration Date, then the Option shall
terminate, be void, and Tenant's rights under this Option Agreement shall be
null and void.
7. The provisions of this Option Agreement and the Option shall
terminate, without notice, demand or any other action being taken by Landlord,
all of which are hereby expressly waived by Tenant, upon the earlier to occur
of the following: (i) the termination of the Lease; or (ii) the Expiration
Date.
8. Tenant, at its election, may file this Option Agreement of record.
Executed effective this 12 day of June, 1998.
TENANT: LANDLORD:
GLOBENET INTERNATIONAL I, INC., CIIF ASSOCIATES II LIMITED
a Delaware corporation PARTNERSHIP,
a Delaware limited partnership
By: /s/ CLINTON H. HOWARD
--------------------------- By: AEW Advisors, Inc.,
Name: Clinton H. Howard a Massachusetts corporation,
------------------------- Managing General Partner
Title: President
------------------------ By: /s/ MARK A. ALBERTSON
----------------------
Name: Mark A. Albertson
--------------------
Title: Vice President
-------------------
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT-Page 2
<PAGE> 43
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for the State
of Texas, on this day personally appeared Howard, Clinton of GlobeNet
International I, Inc., a Delaware corporation, [known to me] or [proved to me
through his Texas Drivers License or other document] to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same as a duly authorized officer of such
corporation, for the purposes and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of June, 1998.
/s/ CHARLOTTE BURROWS
[SEAL] -----------------------------
Notary Public, State of Texas
THE STATE OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned authority, a Notary Public in and for the State
of Massachusetts, on this day personally appeared Mark A. Albertson of AEW
Advisors, Inc., a Massachusetts corporation, general partner of CIIF Associates
II Limited Partnership, a Delaware limited partnership, [known to me] or
[proved to me through his Texas Drivers License or other document] to be the
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same as a duly authorized officer of
such corporation, for the purposes and consideration therein expressed, and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 19th day of June, 1998.
Gail M. Tramontozzi, NOTARY PUBLIC /s/ GAIL M. TRAMONTOZZI
My Commission Expires Mar. 30, 2001 -------------------------------------
Notary Public, State of Massachusetts
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT - Page 3
<PAGE> 44
EXHIBIT "A"
LEGAL DESCRIPTION
Being an approximate 119,192 square foot lease space located at 2301 Chovanetz
Court, Irving, Dallas County, Texas, in an approximate 119,192 square foot
building known as 2301 Chovanetz Court and located on a tract being further
described as:
Metes and bounds description
BEING a 4.355 acre tract out of TRACT "K" in the Walnut Hill Distribution
Center North in the City of Irving, Texas as originally recorded in Volume
76081, page 296, Deed Records of Dallas County and corrected by Certificate of
Correction in Volume 77247, Page 0005, Deed Records of Dallas County, and being
more particularly described as follows:
BEGINNING at the intersection of the North line of Tract "K-1" (a 50 foot
private R.O.W. easement) and the East right-of-way line of Hurd Drive;
THENCE leaving Hurd Drive South 73(degree) 07' 00" East 22.28 feet along the
North line of said Tract "K-1" to a point for a corner; said point being the
point of curvature of a curve to the left with a central angle of 17(degree)
09' 40" and a radius of 739.65 feet;
THENCE with said curve to the left 221.54 feet to the point of tangency of said
curve;
THENCE continuing along the North line of Tract "K-1" North 89(degree) 43' 20"
East 360.24 feet to a point for a corner; said point being the Southwest corner
of an 8.019 acre tract conveyed by Las Colinas Corporation to E.I. DuPont
DeNemours and Company, Inc., as recorded in Volume 78012, Page 0685, Dallas
County Deed Records, January 17, 1978;
THENCE leaving the North line of Tract "K-1" North 00(degree) 16; 40" West
303.43 feet along the western boundary line of said 8.019 acre tract to a point
for a corner;
THENCE continuing along the western boundary line of said 8.019 acre tract,
North 44(degree) 46' 50" West 266.16 feet to a point for a corner; said point
being in the East right-of-way line of Hurd Drive; said point also being the
Northwest corner of said 8.019 acre tract;
THENCE along Hurd Drive South 45(degree) 13' 10" West 439.00 feet to a point
for a corner; said point being the point of curvature of a curve to the left
with a central angle of 28(degree) 20' 45" and a radius of 461.14 feet;
THENCE Southwesterly along Hurd Drive with said curve to the left through a
central angle of 22(degree) 08' 10" a distance of 178.16 feet to the POINT OF
BEGINNING.
CONTAINING 4.355 acres of land, more or less.
<PAGE> 45
[ILLEGIBLE] obligations of Landlord and Tenant set forth herein, Landlord leases
to Tenant, and Tenant takes from Landlord the approximately 119,192 square feet
more particularly outlined on the floor plan, attached as Exhibit "A-1" (the
"Premises"), which Premises are part of that approximately 119,192 square foot
building (the "Building") located on the real property situated within the
County of Dallas, State of Texas, which real property is more particularly
described on EXHIBIT "A" attached hereto and incorporated herein by reference
(the "Land"), together with all rights, privileges, easements, appurtenances,
and amenities belonging to or in any way pertaining to the Premises, to have
and to hold, subject to the terms, covenants and conditions in this Lease. If
more than one building is located on the Land, then all referenced herein to
"Building" shall be deemed to refer to all such buildings collectively unless
the context otherwise requires.
B. The term of this Lease shall commence upon the later of: (i) August 1,
1998, or (ii) if Landlord is required to construct improvements in the Premises
pursuant to Paragraph 1.C. below, on the third day following the date of
substantial completion of any such alterations or improvements to the Premises
described in Paragraph 1.C. below (the "Commencement Date"). The term of this
Lease shall end on the last day of the calendar month that is 123 full calendar
months after the Commencement Date.
C. If an Exhibit "B" is attached hereto, then Landlord shall construct
and install in the Premises those improvements and alterations to be constructed
and installed by Landlord pursuant to the plans and specifications described on
such Exhibit "B" attached hereto and incorporated herein by reference (the
"Plans"). Landlord will entertain Tenant's suggestion of a general contractor to
complete construction of the Plans if such contractor meets with Landlord's
approval and Landlord's standard requirements for a contractor. As used herein,
the term "substantial completion" or "substantially completed" shall mean that,
in the opinion of the architect or space planner that prepared the Plans, such
improvements have been completed in accordance with the Plans and the Premises
are in good and satisfactory condition, subject only to completion of minor
punch list items. As soon as such improvements have been substantially
completed, Landlord shall notify Tenant in writing that the Commencement Date
has occurred. Within ten (10) days thereafter, Tenant shall submit to Landlord
in writing a punch list of items needing completion or correction. Landlord
shall use its best efforts to complete such items within thirty (30) days after
the receipt of such notice. In the event Tenant, its employees, agents or
contractors cause construction of such improvements to be delayed, the
Commencement Date shall be deemed to be the date that, in the reasonable
opinion of Landlord, substantial completion would have occurred if such delays
had not taken place.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.
A. Tenant agrees to pay to Landlord Base Rent (herein so called) for the
Premises, in advance, without demand, deduction or set off, at the rate, as set
forth in the Base Rent Schedule attached as Exhibit "C" attached hereto, per
month during the term hereof. One such monthly installment, plus the other
monthly charges set forth in Paragraph 2.C.(b) below, shall be due and payable
on the date hereof and a like monthly installment shall be due and payable on
or before the first day of each calendar month succeeding the Commencement
Date; provided, however, that should this Lease commence on a day other than
the first day of a calendar month or terminate on a day other than the last day
of a calendar month, the rental for such partial month shall be prorated.
See Paragraph 27.
B. In addition, Tenant shall deposit with Landlord on the date hereof
the sum of Fifty-Four Thousand Six Hundred Thirty and 00/100 Dollars
($54,630.00) (the "Security Deposit"), which shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease, it being
expressly understood and agreed that the Security Deposit is not an advance
rental deposit or a measure of Landlord's damages in case of an event of
default. Upon each occurrence of an event of default, Landlord may use all or
part of the Security Deposit to pay past due rent or other payments due
Landlord under this Lease, and the cost of any other damage, injury, expense or
liability, chargeable to Tenant hereunder, without prejudice to any other
remedy provided herein or provided by law. On demand, Tenant shall pay Landlord
the amount that will restore the Security Deposit to its original amount. The
Security Deposit shall be deemed the property of Landlord, but any remaining
balance of the Security Deposit shall be returned by Landlord to Tenant when
Tenant's obligations under this Lease have been fulfilled. The amount of the
Security Deposit will be decreased to the sum of Twenty Seven Thousand Three
Hundred Fifteen and 00/100 Dollars ($27,315.00) if Tenant performs all of the
following obligations: (1) Tenant meets all of its annual revenue projections
through December 1999 as set forth on Exhibit "D" attached hereto, and (2)
Tenant's annual revenue projections through December 1999 as set forth on
Exhibit D are verified in the annual 10-K filed with the Security Exchange
Commission. At no time shall the minimum balance of the Security Deposit be
less than the sum of Fifty Four Thousand Six Hundred Thirty and 00/100 Dollars
($54,630.00) unless Tenant meets the requirements set forth in the preceding
sentence and Landlord provides written notice of such reduction of the Security
Deposit, which notice shall not be unreasonably withheld.
See Paragraph 29.
C. Tenant agrees to pay, as additional rent, its Proportionate Share (as
defined in Paragraph 22.B. below) of (1) Taxes (hereinafter defined) payable to
Landlord pursuant to Paragraph 3.A. below, (2) the cost of any utilities used
in the Building which are not otherwise paid for by Tenant pursuant to
Paragraph 8. below or billed separately to another tenant of the Building, (3)
the cost of any insurance maintained by Landlord on the Building or operating
expenses required by this Lease, including, without limitation, those
<PAGE> 46
<TABLE>
<S> <C>
(c) Utilities, Insurance and other Operating Expenses
as set forth in Paragraphs 2.C.(2), and (3) $ 2,186.00
----------
$35,261.00
==========
</TABLE>
D. In calculating the annual cost of the items described in subparagraph
C above, if during any period during the relevant year the Building is less than
one hundred percent (100%) occupied, then in computing the amount of Tenant's
obligations Landlord shall "gross up" the amount of any of Landlord's expenses
which fluctuate with Building occupancy to the amount which, in Landlord's
reasonable estimation, such fluctuating expenses would have been if the Building
had been one hundred percent (100%) occupied for the entire year. Tenant will
then pay Tenant's Proportionate Share of such grossed-up amount so that the
actual amount paid by Tenant in respect of such fluctuating expenses is not
affected by occupancy or non-occupancy of the remainder of the Building.
3. TAXES
A. Landlord agrees to pay all taxes, assessments and/or governmental
charges of any kind and nature (collectively referred to herein as "Taxes") that
accrue against the Premises, the Land and/or the Building. If at any time during
the term of this Lease, there shall be levied, assessed or imposed on Landlord a
capital levy or other tax directly on the rents received hereunder and/or a
franchise tax, assessment, levy or charge measured by or based, in whole or in
part upon such rents from the Premises, the Land and/or the Building, then all
such taxes, assessments, levies or charges, or the part thereof so measured or
based, shall be deemed to be included within the term "Taxes" for the purposes
hereof. The Landlord shall have the right to, or upon Tenant's demand Landlord
shall, employ a tax consulting firm to attempt to assure a fair tax burden on
the Building and the Land within the applicable taxing jurisdiction. Tenant
agrees to pay its Proportionate Share of the cost of such consultant. In
addition, if the Building is a multiple occupancy Building and the cost of any
improvements constructed on the Premises is disproportionately higher than the
cost of improvements constructed on the premises of other tenants of the
Building, then the Landlord, at its option, may require that Tenant pay the
amount of Taxes attributable to such disproportionately more expensive
improvements in addition to its Proportionate Share of Taxes.
B. Prior to delinquency, Tenant shall (i) pay all taxes levied or
assessed against any personal property or fixtures placed in the Premises, and
(ii) upon the request of Landlord, deliver to Landlord receipts from the
applicable taxing authority or other evidence acceptable to Landlord to verify
that such taxes upon personal property and fixtures have been paid by Tenant. If
any such taxes are levied or assessed against Landlord or Landlord's property
and (i) Landlord pays the same or (ii) the assessed value of Landlord's property
is increased by inclusion of such personal property and fixtures and Landlord
pays the increased taxes, then, upon demand Tenant shall pay to Landlord such
taxes.
4. LANDLORD'S REPAIRS
A. Tenant understands and agrees that this Lease is intended to be a
"net" lease, and as such, Landlord's maintenance, repair and replacement
obligations are limited to those set forth in this Paragraph 4.A. Landlord, at
its own cost and expense, shall be responsible for repair and replacement of
only the roof, the foundation and the structural members of the exterior walls
of the Building. The terms "roof" and "walls" as used herein shall not include
skylights, windows, glass or plate glass, doors, special store fronts or office
entries. Tenant shall immediately give Landlord written notice of defect or need
for repairs, after which Landlord shall have reasonable opportunity to repair
same or cure such defect. Landlord's liability with respect to any defects,
repairs, replacement or maintenance for which Landlord is responsible hereunder
shall be limited to the cost of such repairs or maintenance or the curing of
such defect.
B. Landlord reserves the right to perform Tenant's maintenance, repair
and replacement obligations and any other items that are otherwise Tenant's
obligations under Paragraph 5.B., in which event, Tenant shall pay to Landlord
any cost or expense incurred by Landlord in making such repairs within ten (10)
days after demand.
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.
A. Tenant, at its own cost and expense, shall maintain all parts of the
Premises (except those for which Landlord is expressly responsible hereunder) in
good condition, ordinary wear and tear excepted, and promptly make all necessary
repairs and replacements to the Premises.
B. In addition to Tenant's obligations under the preceding subparagraph
A., if Tenant is the only tenant of the Building, Tenant shall be responsible
for causing the parking areas, driveways, alleys and grounds surrounding the
Premises to be maintained in a good, neat, clean and sanitary condition,
consistent with the operation of a first class office/warehouse building, which
includes, without limitation, prompt maintenance, repairs and replacements (1)
of any drill or spur track servicing the Premises, (2) of the parking area
associated with the Building, (3) of all grass, shrubbery and other landscape
treatments surrounding the Building, (4) of the exterior of the Building
(including painting), (5) of sprinkler systems and sewage lines, and (6) of any
other maintenance, repair or replacement items
<PAGE> 47
ILLEGIBLE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
costs, sewer, landscaping, trash and security (if furnished by Landlord), wages
and employee benefits payable to employees of Landlord whose duties are
connected with the operation and maintenance of the Building, amounts paid to
contractors or subcontractors for work or services performed in connection with
the operation and maintenance of the Building, all service, supplies, repairs,
replacements or other expenses for maintaining and operating the Building, and
any other facilities or services provided for the common use of Tenant and
other Tenants of the Building.
E. Within ten days after the Commencement Date and continuing for the
entire term of this Lease, Tenant shall enter into a regularly scheduled
preventive maintenance/service contract with a maintenance contractor
reasonably acceptable to Landlord for servicing hot water, heating, air
conditioning, and/or other systems and equipment within the Premises with a
contractor, and Tenant shall be responsible for all costs and expenses required
thereunder. At least 14 days before the end of the Term, Tenant shall deliver
to Landlord a certificate from an engineer or licensed mechanical contractor
reasonably acceptable to Landlord certifying that the hot water equipment and
the HVAC System are then in good repair and working order.
F. Tenant agrees to sign a joint maintenance agreement with the railroad
company, if any, servicing the Premises if requested by the railroad company.
Landlord shall have the right to coordinate all repairs and maintenance of any
rail tracks serving or intended to serve the Premises and, if Tenant uses such
rail tracks, Tenant shall reimburse Landlord from time to time, upon demand,
for its Proportionate Share of the costs of such repairs and maintenance and
any other sums specified in any agreement respecting such tracks to which
Landlord is a party.
6. ALTERATIONS. Tenant shall not make any alterations, additions, or
improvement to the Premises without the prior written consent of Landlord,
Tenant, at its own cost and expense, may erect such shelves, bins, machinery and
trade fixtures as it desires provided that (a) such items do not alter the basic
character of the Premises or the Building; (b) such items do not overload or
damage the same; (c) such items may be removed without injury to the Premises;
and (d) the construction, erection or installation thereof complies with all
applicable governmental laws, ordinances, regulations and with Landlord's
specifications and requirements. All installations, removals and restoration
shall be performed in a good and workmanlike manner so as not to damage or alter
the primary structure or structural qualities of the Building or the Premises.
7. SIGNS. Tenant shall not place, install or attach any signage,
decorations, advertising media, blinds, draperies, window treatments, bars or
security installations to the Premises or the Building without Landlord's prior
written approval. Tenant shall repair, paint, and/or replace any portion of the
Premises or the Building damaged or altered as a result of its signage, upon the
earlier of vacation of the Premises by Tenant or the removal or alteration of
its signage, all of which shall be accomplished at Tenant's sole cost and
expense. Tenant shall not, (i) make any changes to the exterior of the Premises
or the Building, (ii) install any exterior lights, decorations, balloons, flags,
pennants, banners or painting, or (iii) erect or install any signs, windows or
door lettering, decals, window and storefront stickers, placards, decorations or
advertising media of any type that can be viewed from the exterior of the
Premises, without Landlord's prior written consent.
8. UTILITIES. Tenant shall obtain and pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler charges and other utilities and
services used on or at the Premises, together with any taxes, penalties,
surcharges or the like pertaining to the Tenant's use of the Premises, and any
maintenance charges for utilities. Landlord shall have the right to cause any of
said services to be separately metered to Tenant, at Tenant's expense. If any
such services are not separately metered to Tenant, Tenant shall pay on demand
to landlord a reasonable proportion, to be determined by landlord, of all
charges jointly metered with other premises in the Building. Landlord shall not
be liable for any interruption or failure of utility service on the Premises.
9. INSURANCE.
A. Landlord shall maintain insurance covering the Building and the
Premises in an amount not less than eighty percent (80%) of the "replacement
cost" thereof insuring against the perils and costs of Fire, Lightning, Extended
Coverage, Vandalism and Malicious Mischief, Liability and Rental Interruption
and such other insurance as Landlord shall deem necessary.
B. Tenant, at its own expense, shall maintain during the term of this
Lease (1) a policy or policies of worker's compensation and comprehensive
general liability insurance (with contractual liability endorsement), including
personal injury and property damage in the amount of Five Hundred Thousand
Dollars ($500,000.00) per occurrence for property damage and One Million Dollars
($1,000,000.00) per occurrence for personal injuries or deaths of persons
occurring in or about the Premises and (2) fire and extended coverage insurance
covering the replacement cost of (a) all alterations, additions, partitions and
improvements installed or placed on the Premises, (b) all of Tenant's personal
property contained within the Premises, and (c) business interruption insurance
insuring loss of profits in the event of an insured peril damaging the Premises,
and if requested in writing by Landlord based upon its reasonable assessment of
the risk of liability arising out of Tenant's activities or proposed activities
on or about the Premises. Said policies shall (i) name Landlord, as well as such
entities or firms as Landlord may engage from time to time as property managers
and/or asset or investment managers, as additional insureds (until further
notice, it is expressly agreed that The Industrial Group, The Industrial Group
Management Services, Inc., AEW Advisors, Inc., CIIF Associates II Limited
Partnership, Copley Advisors, Inc. and Copley Real Estate
<PAGE> 48
If the Premises or the Building should be totally destroyed by an insured peril,
or so damaged by an insured peril that, in Landlord's estimation, rebuilding or
repairs cannot be completed within one hundred eighty (180) days after the date
of Landlord's actual knowledge of such damage, then in either case this Lease
shall terminate and the rent shall be abated during the unexpired portion of
this Lease, effective upon the date of the occurrence of such damage.
B. If the Building or the Premises should be damaged but not totally
destroyed by any insured peril, and in Landlord's estimation, rebuilding or
repairs can be substantially completed within one hundred eighty (180) days
after the date of Landlord's actual knowledge of such damage, this Lease shall
not terminate, and Landlord shall restore the Premises to substantially its
previous condition, except that Landlord shall not be required to rebuild,
repair or replace any part of the partitions, fixtures, additions and other
improvements or personal property required to be covered by Tenant's insurance
pursuant to Paragraph 9.B. above. Effective upon the date of the occurrence of
such damage and ending upon the date of substantial completion (as defined in
Paragraph 1.C. above) of Landlord's repair or restoration work, if the Premises
are untenantable in whole or part during such period, then the rent shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances. If such repairs and rebuilding have not been substantially
completed within one hundred eighty (180) days after the date of such damage,
Tenant, as Tenant's exclusive remedy, may terminate this Lease by delivering
written notice of termination to Landlord, in which event the rights and
obligations hereunder shall cease and terminate, provided, however, that any
liabilities of Tenant which accrued prior to termination of this Lease shall
survive such termination.
C. In connection with any repair or reconstruction to the Premises
arising from or necessitated by fire or the casualty which is covered by the
insurance provided pursuant to Paragraph 9.A. above, Tenant shall pay Landlord
upon demand its Proportionate Share of the amount of any deductible of such
insurance.
D. Notwithstanding anything herein to the contrary, in the event the
Premises are destroyed or substantially damaged by any peril not covered by the
insurance required to be carried by Landlord pursuant to Paragraph 9.A. above,
or if the holder of any indebtedness secured by a mortgage or deed of trust
covering the Premises requires that insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made known by any such holder, whereupon all rights
and obligations hereunder shall cease and terminate, provided, however, that any
liabilities of Tenant which accrued prior to termination of this Lease shall
survive such termination.
E. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING, TO THE EXTENT
OF A RECOVERY OF LOSS PROCEEDS UNDER THE POLICIES OF INSURANCE DESCRIBED IN THIS
LEASE, LANDLORD AND TENANT HEREBY WAIVE AND RELEASE EACH OTHER AND ANY OF THEIR
RESPECTIVE RELATED PARTIES AND AFFILIATES OF AND FROM ANY AND ALL RIGHTS OF
RECOVERY, CLAIM, ACTION OR CAUSE OF ACTION, AGAINST EACH OTHER, THEIR AGENTS,
OFFICERS AND EMPLOYEES, FOR ANY LOSS OR DAMAGE THAT MAY OCCUR TO THE PREMISES,
THE BUILDING, OR PERSONAL PROPERTY WITHIN THE BUILDING AND/OR PREMISES ARISING
FROM OR CAUSED BY FIRE OR OTHER CASUALTY OR HAZARD COVERED OR REQUIRED TO BE
COVERED BY HAZARD INSURANCE UNDER THIS LEASE. UPON EXECUTION OF THIS LEASE,
LANDLORD AND TENANT SHALL NOTIFY THEIR RESPECTIVE INSURANCE COMPANIES OF THE
MUTUAL WAIVERS CONTAINED HEREIN AND, IF AVAILABLE, SHALL CAUSE EACH POLICY
DESCRIBED IN THIS LEASE TO BE SO ENDORSED.
11. LIABILITY AND INDEMNIFICATION.
A. TENANT AGREES THAT IT WILL INDEMNIFY, PROTECT, DEFEND AND HOLD
HARMLESS LANDLORD, ITS SUCCESSORS, ASSIGNS, AGENTS, EMPLOYEES, CONTRACTORS,
PARTNERS, DIRECTORS, OFFICERS AND AFFILIATES (AS THAT TERM IS DEFINED IN THE
SECURITIES ACT OF 1933) (COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM AND
AGAINST ALL FINES, SUITS, LOSSES, COSTS, LIABILITIES, CLAIMS, DEMANDS, ACTIONS
AND JUDGMENTS OF EVERY KIND OR CHARACTER (A) ARISING FROM ANY BREACH, VIOLATION
OR NON-PERFORMANCE OF ANY TERM, PROVISION, COVENANT, AGREEMENT OR CONDITION ON
THE PART OF TENANT HEREUNDER, (B) RECOVERED FROM OR ASSERTED AGAINST ANY OF THE
INDEMNIFIED PARTIES ON ACCOUNT OF INJURY OR DAMAGE TO PERSON OR PROPERTY TO THE
EXTENT THAT ANY SUCH DAMAGE OR INJURY MAY BE INCIDENT TO, ARISE OUT OF, OR BE
CAUSED, EITHER APPROXIMATELY OR REMOTELY, WHOLLY OR IN PART, BY ANY ACT,
OMISSION, NEGLIGENCE OR MISCONDUCT ON THE PART OF TENANT OR ANY OF ITS AGENTS,
SERVANTS, EMPLOYEES, CONTRACTORS, OR INVITEES OR OF ANY OTHER PERSON ENTERING
UPON THE PREMISES UNDER OR WITH THE EXPRESS OR IMPLIED INVITATION OR PERMISSION
OF TENANT, (C) ARISING FROM OR RELATING TO ANY ORDER, DIRECTIVE, REQUEST,
REQUIREMENT OR OTHER COMMUNICATION ISSUED BY A REGULATORY AGENCY WITH
JURISDICTION PERTAINING TO THE INVESTIGATION OR REMEDIATION OF HAZARDOUS
SUBSTANCES PRESENT OR SUSPECTED TO BE PRESENT IN THE SOIL OR GROUNDWATER ON,
UNDER, OR ABOUT THE BUILDING OR THE PREMISES CAUSED BY OR RELATING TO TENANT'S
USE, MANAGEMENT, STORAGE, GENERATION, TRANSPORTATION, DISPOSAL OR RELEASE OF
HAZARDOUS SUBSTANCES THEREUPON OR THEREUNDER (D) ARISING FROM OR OUT OF THE
OCCUPANCY OR USE BY TENANT, ITS AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS, OR
INVITEES
<PAGE> 49
incurred by or imposed upon any of the Indemnified Parties by virtue of any such
litigation and the amount of all such costs and expenses, including attorneys'
fees and court costs, shall be a demand obligation owing by Tenant to the
Indemnified Parties.
C. The provisions of this Paragraph shall survive the expiration or
termination of this Lease with respect to any claims or liability occurring
prior to or stemming from events or conditions occurring or existing prior to
such expiration or termination. The indemnification provided by this Paragraph
11. is subject to Landlord's waiver of recovery in the preceding Paragraph 10.,
to the extent of Landlord's recovery of loss proceeds under policies of
insurance described in Paragraph 10.
12. USE.
A. The Premises shall be used only for the purpose of receiving, storing,
shipping and selling (other than retail) products, materials and merchandise
made and/or distributed by Tenant and for such other lawful purposes as may be
incidental thereto. Tenant shall not use the Premises for the receipt, storage
or handling of any Hazardous Substance, unless such use is approved in writing
by Landlord and is in conformance in all respects with paragraph 24 of this
Lease. Outside storage, including without limitation, storage of trucks and
other vehicles, is prohibited without Landlord's prior written consent. Tenant
shall comply with all federal, state, and local governmental laws, ordinances
and regulations applicable to the use of the Premises including, without limit,
all licensing and permitting requirements and Environmental Laws, and promptly
shall comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances and Environmental Conditions in or upon,
or connected with, the Premises, all at Tenant's sole expense. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, light, noise or
vibrations to emanate from the Premises, nor take any other action that would
constitute a nuisance or create an Environmental Condition, or would disturb,
unreasonably interfere with, or endanger Landlord or any other Tenants of the
Building.
B. Tenant and its employees, customers and licensees shall have the
non-exclusive right to use, in common with others, any parking areas associated
with the Premises which Landlord has designated for such use, subject to (1)
all reasonable rules and regulations promulgated by Landlord and (2) rights of
ingress and egress of other Tenants and their employees, customers, agents and
invitees. Landlord shall not be responsible for enforcing Tenant's parking
rights against any third parties.
13. INSPECTION. Landlord and Landlord's agents and representatives shall
have the right to enter the Premises at any reasonable time during business
hours after prior notice to Tenant to inspect the Premises and to make such
repairs as may be required or permitted pursuant to this Lease. During the
period that is twelve (12) months prior to the end of the Lease term, Landlord
and Landlord's representatives may enter the Premises during business hours for
the purpose of showing the Premises. In addition, during the same twelve (12)
month period Landlord shall have the right to erect a suitable sign on the
Premises indicating that the Premises are available. Tenant shall notify
Landlord in writing at least thirty (30) days prior to vacating the Premises
and shall arrange to meet with Landlord for a joint inspection, then Landlord's
inspection of the Premises shall be deemed correct for the purposes of
determining Tenant's responsibility for repairs and restoration of the Premises.
14. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not have the right to sublet all or part of the Premises
or to assign, transfer or encumber this Lease, or any interest therein, without
the prior written consent of Landlord. Any attempted assignment, subletting,
transfer or encumbrance by Tenant in violation of the terms and covenants of
this Paragraph shall be void. No assignment, subletting or other transfer,
whether consented to by Landlord or not, or permitted hereunder, shall relieve
Tenant of its liability hereunder. If an event of default occurs while the
Premises or any part thereof are assigned or sublet, then Landlord, in addition
to any other remedies herein provided, or provided by law, may collect directly
from such assignee, subtenant or transferee all rents payable to the Tenant and
apply such rent against any sums due Landlord hereunder. No such collection
shall be construed to constitute a novation or a release of Tenant from the
further performance of Tenant's obligations hereunder.
B. If Tenant is a corporation, partnership, or other entity, for
purposes of subparagraph A. above, any transfer or series of related transfers
of equity ownership interests in Tenant (or any direct or indirect owners of
Tenant) that results in the change of the ultimate ownership of more than fifty
percent (50%) of the equity ownership of Tenant shall constitute an assignment
of this Lease. The foregoing provision shall not apply, however, if at the time
of execution of this Lease Tenant is a corporation the shares of which are
listed on a recognized security exchange or in the over-the-counter market.
C. Upon the occurrence of an assignment or subletting, whether consented
to by Landlord, or mandated by judicial intervention, Tenant hereby assigns,
transfers and conveys all rents or other sums received by Tenant under any such
assignment or sublease, which are in excess of the rents and other sums payable
by Tenant under this Lease, and Tenant agrees to pay to Landlord such amounts
within ten (10) days after receipt.
D. If This Lease is assigned to any person or entity pursuant to the
provision of the Bankruptcy Code, 11 USC Section 101 et. seq. (the "Bankruptcy
Code"), any and all monies or other consideration payable or otherwise to be
delivered in connection with such
<PAGE> 50
a violation of the Employee Retirement Income Security Act of 1974, as amended
(ERISA). At least thirty (30) days prior to any proposed subtenancy or
assignment of the Lease Agreement, Tenant agrees to furnish Landlord in writing
with the name of the proposed subtenant or assignee, provided that said
sublessee or assignee assumes in full the obligations of Tenant under this Lease
and that, in the reasonable opinion of Landlord, such sublessee's or assignee's
use of the Premises is consistent with the use allowed under the Lease, and not
environmentally harmful as agreed to in Paragraph 24 of the Lease. Any such
sublease or assignment shall not in any way affect or limit the liability of
Tenant under the terms of this Lease. "Control" shall be deemed to mean
ownership of not less than a majority of all of the voting stock of Tenant or
such corporation, as the case may be.
15. CONDEMNATION. If more than fifty percent (50%) of the Premises are
taken for any public or quasipublic use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking prevents or materially interferes with the use of the
remainder of the Premises for the purpose for which they were leased to Tenant,
this Lease shall terminate and the rent shall be abated during the unexpired
portion of this Lease, effective on the date of such taking. If (i) less than
fifty percent (50%) of the Premises are taken for any a 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; or (ii) more than fifty percent
(50%) of the Premises are taken for any public or quasipublic use under
governmental law, ordinance or regulation, or by right of eminent domain, or by
private purchase in lieu thereof, but the taking does not prevent or materially
interfere with the use of the remainder of the Premises for the purpose for
which they were leased to Tenant, this Lease shall not terminate, but the rent
payable hereunder during the unexpired portion of this Lease shall be reduced to
such extent as may be fair and reasonable under all of the circumstances. All
compensation awarded in connection with or as a result of any of the foregoing
proceedings shall be the property of Landlord and Tenant hereby assigns any
interest in any such award to Landlord; provided, however, Landlord shall have
no interest in any award made to Tenant for loss of business or goodwill or for
the taking of Tenant's fixtures and improvements, if a separate award for such
items is made to Tenant.
16. SURRENDER OF PREMISES; HOLDING OVER
A. At the termination of this Lease, whether caused by lapse of time or
otherwise, Tenant shall at once surrender possession of the Premises and deliver
them to Landlord in as good repair and condition as existed at the Commencement
Date, reasonable wear and tear excepted, and shall deliver to Landlord all keys
(or other access control devices) the Premises and if such possession is not
immediately surrendered, Landlord may forthwith enter upon and take possession
of the Premises and expel or remove Tenant and any other person who may be
occupying them, or any part thereof, without having any civil or criminal
liability therefor.
B. All alterations, additions or improvements (whether temporary or
permanent in character) made to or fixtures installed in or upon the Premises,
either by Landlord or Tenant, shall be Landlord's property on termination of
this Lease and shall remain on the Premises. Notwithstanding the foregoing,
upon the termination of this Lease Landlord may direct Tenant, at Tenant's
expense, to remove all alterations, improvements, and additions installed by
Tenant and return the Premises to the condition that existed at the
Commencement Date. Subject to Paragraph 25 hereof and provided that all sums
owed by Tenant hereunder have been paid, all movable office furniture and
equipment not attached to the Building may be removed by Tenant at the
termination of this Lease. All such removals shall be accomplished in a good
workmanlike manner so as not to damage the Premises or the structural
components of the Building or the plumbing, electrical lines or other
utilities, and any damage resulting from such removals shall be repaired at
Tenant's expense.
C. All alterations, additions, and improvements directed by Landlord to be
removed and all movable office furniture and equipment not attached to the
Building not promptly removed after such termination shall thereupon be
conclusively presumed to have been abandoned by Tenant, and Landlord may, at
its option, take over possession of such property and either (a) declare same
to be the property of Landlord by written notice thereof to Tenant or (b) at
the sole costs and expense of Tenant remove and store the same or any part
thereof in any manner that Landlord shall choose without incurring liability to
Tenant or any other person (any such removal and storage costs and expenses
being payable by Tenant upon demand).
D. Should Tenant continue to hold the Premises after the termination of
this Lease, whether the termination occurs by lapse of time or otherwise, such
holding over shall, unless otherwise agreed by Landlord in writing, constitute
and be construed as a tenancy at will at a daily rental equal to one-thirtieth
of an amount equal to one hundred fifty percent (150%) of the amount of the
monthly rental payable during the last month prior to the termination of this
Lease, and upon and subject to all of the other terms, provisions, covenants
and agreements set forth herein except any right to renew this Lease. No
payments of money by Tenant to Landlord after the termination of this Lease
shall reinstate, continue or extend the term of this Lease and no extension of
this Lease after the termination hereof shall be valid unless and until the
same shall be reduced to writing and signed by both Landlord and Tenant. Tenant
shall be liable to Landlord for all damage which Landlord shall suffer by
reason of any holding over by Tenant and Tenant shall indemnify Landlord
against all claims made by any other tenant or prospective tenant against
Landlord resulting from delay by Landlord in delivering possession of the
Premises to such other tenant or prospective tenant.
17. QUIET ENJOYMENT. Landlord covenants that on or before the Commencement
Date it will have good title to the Premises, free and clear of all liens and
encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental
regulations relating
<PAGE> 51
B. Tenant shall fail to pay any amounts owed to contractors or
subcontractors for work or services performed in connection with the operation,
construction, management or maintenance of the Building as provided herein, and
such failure shall continue for a period of five (5) days after written notice
of such failure from Landlord to Tenant.
C. Tenant or any guarantor of the Tenant's obligations hereunder shall
(i) become insolvent; (ii) admit in writing its inability to pay its debts;
(iii) make a general assignment for the benefit of creditors; (iv) commence any
case, proceeding or other action seeking to have an order for relief entered on
its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganizations, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property; or (v) take any action to authorize or in
contemplation of any of the actions set forth above in this subparagraph C.
D. Any case, proceeding or other action against the Tenant or any
guarantor of Tenant's obligations hereunder shall be commenced seeking (i) to
have an order for relief entered against it as debtor or to adjudicate it a
bankrupt or insolvent; (ii) reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors (iii)
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property, and such case, proceeding or
other action (a) results in the entry of an order for relief against it which it
is not fully stayed within seven (7) business days after the entry thereof or
(b) shall remain undismissed for a period of forty-five (45) days.
E. Tenant shall (i) vacate all or a substantial portion of the Premises
or (ii) fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in default of the
rental payments due under this Lease. Tenant's vacating of the Premises shall
not constitute an Event of Default if, prior to vacating the Premises, Tenant
has made arrangements reasonably acceptable to Landlord to (i) insure that
Tenant's insurance for the Premises will not be voided or cancelled with
respect to the Premises as a result of such vacancy, (ii) insure that the
Premises are secured and not subject to vandalism, (iii) insure that the
Premises will be properly maintained after such vacation, and (iv) Tenant
continues to pay all rent and other sums due under this lease to Landlord.
Tenant shall inspect the Premises at lease once each month and report monthly
in writing to Landlord on the condition of the Premises.
F. Tenant shall fail to discharge or bond around any lien placed upon
the Premises in violation of Paragraph 21, hereof within twenty (20) days after
any such lien or encumbrance is filed against the Premises.
G. Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than those listed in this Paragraph 18.), and shall not cure
such failure within twenty (20) days after written notice thereof to Tenant.
19. REMEDIES.
A. Upon each occurrence of an event of default, and in addition to and
not in limitation of any other remedy permitted by law or equity or by this
Lease, Landlord shall have the option to pursue any one or more of the following
remedies without any notice or demand:
(1) Terminate this Lease; and/or
(2) Enter upon and take possession of the Premises without
terminating this Lease; and/or
(3) Alter all locks and other security devices at the Premises with
or without terminating this Lease, deny access to Tenant, and pursue, at
Landlord's option, one or more remedies pursuant to this Lease, Tenant hereby
specifically waiving any state or federal law to the contrary. This provision
shall control over any conflicting provisions of the Texas Property Code or any
successor statute governing the right of landlords to change the door locks of
commercial tenants to the extent permitted by applicable law.
B. Upon the occurrence of any event of default Tenant immediately shall
surrender the Premises to Landlord, and if Tenant fails so to do, Landlord,
without waiving any other remedy it may have, may enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying such Premises or any part thereof, without being liable for
prosecution or any claim of damages therefor.
C. If Landlord repossesses the Premises with or without terminating the
Lease, Tenant, at Landlord's option, shall be liable for and shall pay Landlord
on demand all rental and other payments owed to Landlord hereunder accrued to
the date of such repossession, plus all amounts required to be paid by Tenant
to Landlord until the date of expiration of the term as stated in Paragraph 1.
Actions to collect amounts due by Tenant to Landlord under this subparagraph
may be brought from time to time, on one or more
<PAGE> 52
[ILLEGIBLE]
be construed to be an election to terminate this Lease or relieve Tenant of its
obligation to pay rent hereunder and shall not be deemed to be an acceptance of
surrender of the Premises by Landlord, whether by agreement or by operation of
law, it being understood that such surrender can be effected only by the written
agreement of Landlord and Tenant. Tenant and Landlord further agree that
forbearance by Landlord to enforce its rights pursuant to the Lease at law or in
equity shall not be a waiver of Landlord's right to enforce one or more of its
rights in connection with any subsequent default.
F. In the event Tenant fails to make any payment due hereunder, taking
into account the notice provisions of Paragraph 18 herein, when payment is due,
to help defray the additional cost to Landlord for processing such late
payments, Tenant shall pay to Landlord on demand a late charge in an amount
equal to five percent (5%) of such installment; and the failure to pay such
amount within ten (10) days after demand therefore shall be an additional event
of default hereunder. The provision for such late charge shall be in addition
to all of Landlord's other rights and remedies hereunder or at law and shall
not be construed as liquidated damages or as limiting Landlord's remedies in
any manner.
G. If Landlord repossesses the Premises pursuant to the authority herein
granted, then Landlord shall have the right to (i) keep in place and use or (ii)
remove and store, at Tenant's expense, all of the furniture, fixtures and
equipment at the Premises, including that which is owned by or leased to Tenant
at all times prior to any foreclosure thereon by Landlord or repossession
thereof by any Landlord thereof or third party having a lien thereon. Landlord
also shall have the right to relinquish possession of all or any portion of such
furniture, fixtures, equipment and other property to any person ("Claimant") who
presents to Landlord a copy of any instrument represented by Claimant to have
been executed by Tenant (or any predecessor of Tenant) granting Claimant the
right under various circumstances to take possession of such furniture,
fixtures, equipment or other property, without the necessity on the part of
Landlord to inquire into the authenticity or legality of said instrument.
Landlord may at its sole option and without prejudice to, or waiver of any
rights it may have i) escort Tenant to the Premises to retrieve any personal
belongings of Tenant and/or its employees not covered by the Landlord's lien and
security interest described in Paragraph 25. hereof, or ii) obtain a list from
Tenant of the personal property of Tenant and/or its employees that is not
covered by the Landlord's lien and security interest described in Paragraph 25.
hereof, and make such property available to Tenant and or Tenant's employees;
provided, however, Tenant first shall pay in cash all costs and estimated
expenses to be incurred in connection with the removal of such property and
making it available. Any such property not removed by Tenant within five (5)
days after demand therefor by Landlord shall thereupon be conclusively presumed
to have been abandoned by Tenant to Landlord, and Landlord may, at its option,
take over possession of such property and declare same to be the property of
Landlord by written notice thereof to Tenant. The rights of Landlord herein
stated shall be in addition to any and all other rights that Landlord has or may
hereafter have at law or in equity, and Tenant stipulates and agrees that the
rights herein granted Landlord are commercially reasonable.
H. If Landlord fails to commence to perform any of its obligations
hereunder within thirty (30) days after written notice from Tenant specifying
such failure, Tenant's exclusive remedy shall be an action for damages or any
other legal remedy available at law. Unless and until Landlord fails to so cure
said default after such notice, Tenant shall not have any remedy or cause of
action by reason thereof. All obligations of Landlord hereunder will be binding
upon Landlord only during the period of its possession of the Premises and not
thereafter. The term "Landlord" shall mean only the owner, for the time being,
of the Premises and not thereafter. The term "Landlord" shall mean only the
owner, for the time being, of the Premises, and in the event of the transfer by
such owner of its interest in the Premises, such owner shall thereupon be
released and discharged from all covenants and obligations of the Landlord
thereafter accruing, but such covenants and obligations shall be binding during
the Lease term upon each new owner for the duration of such owner's ownership.
Notwithstanding any other provision hereof, Landlord shall not have any
personal liability hereunder. In the event of any breach or default by Landlord
in any term or provision of this Lease, and, as a consequence, if Tenant shall
recover a money judgment against Landlord, such judgment shall be satisfied
only out of the proceeds received at a judicial sale upon execution and levy
against the right, title and interest of Landlord in the Building, and neither
Landlord nor Landlord's owners, partners or ventures shall have any personal,
partnership, corporate or other liability hereunder.
20. MORTGAGES. Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a
lien or charge upon the Premises, the improvements situated thereon, the
Building or the Land, and to any and all increases, renewals, modifications,
consolidations, replacements and extensions of such mortgages and deeds of
trust; provided, however, that if the mortgagee, trustee, or holder of any such
mortgage or deed of trust elects to have Tenant's interest in this Lease
superior to any such instrument, then by notice to Tenant from such mortgagee,
trustee or holder, this Lease shall be deemed superior to such lien, whether
this Lease was executed before or after said mortgage or deed of trust. The
provisions of this Paragraph 20. shall be self-operative, and no further
instrument shall be required to effect such subordination of this Lease.
Tenant shall however, at any time hereafter, within ten (10) days after demand,
execute any instruments, releases or other documents that may be required by
any mortgagee for the purpose of subjecting and subordinating this Lease to the
lien of any such mortgage. If Tenant fails to execute the same within such ten
(10) day period, Landlord is hereby authorized to execute the same as
attorney-in-fact for Tenant. Tenant agrees to attorn upon demand to any
mortgagee, trustee under a deed of trust or purchaser at a foreclosure sale or
trustee's sale as Landlord under this Lease. The agreement of Tenant to attorn
upon demand contained in the immediately preceding sentence shall survive any
such foreclosure sale or trustee's sale. Tenant shall upon demand at any time
or times, before or after any such foreclosure sale or trustee's sale, execute,
acknowledge and deliver to any mortgagee, trustee under a deed of trust or
purchaser at a foreclosure sale or
<PAGE> 53
22. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed to
include any other gender, and works in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
B. In the event the Premises constitute a portion of a multiple
occupancy building, Tenant's "Proportionate Share," as used in this Lease,
shall mean a fraction, the numerator of which is the space contained in the
Premises and the denominator of which is the entire rentable space contained in
the Building.
C. The terms, provisions and covenants and conditions contained in this
Lease shall run with the land and shall apply to, inure to the benefit of, and
be binding upon, the parties hereto and upon their respective heirs, executors,
personal representatives, legal representatives, successors and assigns, except
as otherwise herein expressly provided. Landlord shall have the right to
transfer and assign, in whole or in part, its rights and obligations in the
Building and property that are the subject of this Lease. Each party agrees to
furnish to the other, promptly upon demand, a corporate resolution, proof of
due authorization by partners, or other appropriate documentation evidencing
the due authorization of such party to enter into this Lease.
D. Landlord shall not be held responsible for delays in the performance
of its obligations hereunder when caused by strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other cause of any kind whatsoever which are beyond the
control of Landlord.
E. Tenant agrees, from time to time, within ten (10) days after request
of Landlord, to deliver to Landlord, or Landlord's designee, a Certificate of
Occupancy for the Premises, financial statements for itself and any guarantor
of its obligations hereunder, and an estoppel certificate stating that this
Lease is in full force and effect, the date to which rent has been paid, the
unexpired term of this lease and such other factual matters pertaining to this
Lease as may be requested by Landlord. It is understood and agreed that
Tenant's obligation to furnish the above-described items in a timely fashion is
a material inducement for Landlord's execution of this Lease. If Tenant fails
to execute any such estoppel certificate within such ten (10) day period,
Landlord is hereby authorized to execute the same as attorney-in-fact for
Tenant.
F. This Lease constitutes the entire understanding and agreement of the
Landlord and Tenant with respect to the subject matter of this Lease, and
contains all of the covenants and agreement of Landlord and Tenant with respect
thereto. Landlord and Tenant each acknowledge that no representations,
inducements, promises or agreements, oral or written, have been made by
Landlord or Tenant, by anyone acting on behalf of Landlord or Tenant, which are
not contained herein, and any prior agreements, promises, negotiations, or
representations not expressly set forth in this Lease are of no force or
effect. This Lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.
G. All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof, including without
limitation, all payment obligations with respect to taxes and insurance and all
obligations concerning the condition and repair of the Premises. Upon the
expiration or earlier termination of the term hereof, and prior to Tenant
vacating the Premises, Tenant shall pay to Landlord any amount reasonably
estimated by Landlord as necessary to put the Premises, including without
limitation, all heating and air conditioning systems and equipment therein, in
good condition and repair, reasonable wear and tear excluded. Tenant shall
also, prior to vacating the Premises, pay to Landlord the amount, as estimated
by Landlord, of Tenant's obligation hereunder for real estate taxes and
insurance premiums for the year in which the Lease expires or terminates. All
such amounts shall be used and held by Landlord for payment of such obligations
of Tenant hereunder, with Tenant being liable for any additional costs therefor
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied as the case may be. Any
security deposit held by Landlord shall be credited against the amount due by
Tenant under this Paragraph 22.G.
H. Intentionally Deleted.
I. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added, as a
part of this Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
J. All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on
which all parties hereto have executed this Lease.
<PAGE> 54
M. TENANT ACKNOWLEDGES THAT (1) IT HAS INSPECTED AND ACCEPTS THE PREMISES
IN AN "AS IS, WHERE IS" CONDITION, (2) THE BUILDING AND IMPROVEMENTS COMPRISING
THE SAME ARE SUITABLE FOR THE PURPOSE FOR WHICH THE PREMISES ARE LEASED AND
LANDLORD HAS MADE NO WARRANTY, REPRESENTATION, COVENANT, OR AGREEMENT WITH
RESPECT TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
PREMISES, (3) THE PREMISES ARE IN GOOD AND SATISFACTORY CONDITION, (4) NO
REPRESENTATIONS AS TO THE REPAIR OF THE PREMISES, NOR PROMISES TO ALTER, REMODEL
OR IMPROVE THE PREMISES HAVE BEEN MADE BY LANDLORD (UNLESS AND EXCEPT AS MAY BE
SET FORTH IN EXHIBIT B ATTACHED TO THIS LEASE, IF ONE SHALL BE ATTACHED, OR AS
IS OTHERWISE EXPRESSLY SET FORTH IN THIS LEASE), AND (5) THERE ARE NO
REPRESENTATIONS OR WARRANTIES, EXPRESSED, IMPLIED OR STATUTORY, THAT EXTEND
BEYOND THE DESCRIPTION OF THE PREMISES.
N. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease, whether or not
expressly denominated as rent, shall constitute rent.
O. This is a contract under which applicable law excuses Landlord from
accepting performance from (or rendering performance to) any person or entity
other than Tenant.
P. If there is more than one Tenant, then the obligations hereunder
imposed upon Tenant shall be joint and several. If there is a guarantor of
Tenant's obligations hereunder, then the obligations hereunder imposed upon
Tenant shall be the joint and several obligations of Tenant and such guarantor,
and Landlord need not first proceed against Tenant before proceeding against
such guarantor nor shall any such guarantor be released from its guaranty for
any reason whatsoever.
23. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with
reference to the sending, mailing or delivering of notice or making of any
payment by Landlord to Tenant or with reference to the sending, mailing or
delivering of any notice or the making of any payment by Tenant to Landlord
shall be deemed to be complied with when and if the following steps are taken:
A. All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address for Landlord set forth
below or at such other address as Landlord may specify from time to time by
written notice delivered in accordance herewith. Tenant's obligation to pay rent
and any other amounts to Landlord under the terms of this Lease shall not be
deemed satisfied until such rent and other amounts have been actually received
by Landlord.
B. All payments required to be made by Landlord to Tenant hereunder shall
be payable to Tenant at the address set forth below, or at such other address
within the continental United States as Tenant may specify from time to time by
written notice delivered in accordance herewith.
C. Any written notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered upon the earlier to occur of (1)
tender of delivery (in the case of a hand-delivered notice) or (2) deposit in
the United States Mail, postage prepaid, Certified or Registered Mail,
addressed to the parties hereto at the respective addresses set out below, or
at such other address as they have theretofore specified by written notice
delivered in accordance herewith.
24. HAZARDOUS SUBSTANCES.
A. The term "Hazardous Substances" shall mean any chemical, substance,
product, merchandise, material, controlled substance, object, condition, waste,
living organism or combination thereof that is or may be hazardous to human
health or safety or to the environment due to its radioactivity, ignitability,
corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity,
phytotoxicity, infectiousness or other harmful or potentially harmful properties
or effects, including, without limitation, petroleum and petroleum products,
asbestos, polychlorinated biphenyls (PCBs) and all of those chemicals,
substances, products, merchandise, materials, controlled substances, objects,
conditions, wastes, living organisms or combinations thereof that are now or
hereafter become listed, defined or regulated in any manner by any Environmental
Law. The term "Environmental Law" shall mean any applicable federal, state or
local law, rule, regulation, ordinance, court decision, decree, order,
directive, guideline, permit or permit condition relating to pollution or
protection of the environment or other health and safety concern and whether now
in existence or hereafter enacted. The term "Environmental Condition" shall mean
any condition, circumstance, situation or obligation created by or related to
the violation or suspected violation of any Environmental Law or the presence or
suspected presence of Hazardous Substances on, about, or under the Building or
Premises.
B. Tenant hereby agrees that (i) no activity will be conducted on the
premises that will generate any Hazardous Substance, except for activities that
are part of the ordinary course of Tenant's business activities and
specifically described in Exhibit D (the "Permitted Activities"); provided said
Permitted Activities are conducted in strict compliance with all Environmental
Laws and have been approved in advance in writing by Landlord; (ii) the
premises will not be used in any manner for the storage of any Hazardous
Substances
<PAGE> 55
Substances, or other chemicals or substances (including without limitation, any
release required to be reported to a governmental authority pursuant to any
Environmental Law) and (ii) the receipt of any pertinent notices or
communications from any governmental authority. Tenant agrees to provide
Landlord with a letter of certification, one year from the date of execution
hereof and annually thereafter, certifying that Tenant has complied with (i)
the provisions of this subparagraph, (ii) all applicable Environmental Laws and
(iii) the requirements of all applicable governmental agencies and further
certifying that no soil or groundwater contamination has occurred at, under,
about or from the premises. Landlord reserves the right, but not the
obligation, and without in any way limiting the obligations of the Tenant, to
enter and inspect the premises and conduct any testing, sampling, borings, and
analyses as Landlord, in its sole discretion and at Tenant's sole cost, may
deem necessary or desirable. If such inspection or testing discloses the
presence of Hazardous Materials or other environmental conditions on the
premises in violation of this subparagraph, Tenant shall reimburse Landlord for
the cost of conducting the inspection and testing. Tenant agrees to cooperate
fully with Landlord during the course of Landlord's inspection and testing
activities. Tenant agrees to indemnify, defend (by counsel acceptable to
Landlord) and hold Landlord and its partners, directors, officers, employees,
shareholders, lenders, agents, contractors and each of their respective
successors and assigns harmless from and against any and all claims, demands,
actions, liabilities, costs, expenses, damages, penalties and obligations of
any nature arising from or as a result, either direct or indirect, of (x) the
breach of any of the covenants contained in this subparagraph, (y) the presence
of Hazardous Substances on, under or about the premises or other properties as
the direct or indirect result of Tenant's occupancy of the premises, or (z) the
use of the premises or surrounding area by Tenant, Tenant's agents, or Tenant's
assigns. The foregoing indemnification shall survive the termination or
expiration of this Lease. Any costs or expenses incurred by Landlord for which
Tenant is responsible under this provision shall be deemed Additional Rent that
is due and payable on notice from Landlord to Tenant.
Unless expressly identified on an addendum to this Lease, as of the date
hereof there are no "Permitted Activities" and/or "Permitted Materials" for
purposes of the foregoing provision and none shall exist unless and until
approved in writing by Landlord.
25. LANDLORD'S LIEN. To secure the payment of all rent and other sums of
money due or to become due hereunder from Tenant, Tenant hereby grants to
Landlord, in addition to any statutory lien for rent in Landlord's favor, a
continuing security interest in all goods, wares, equipment, fixtures,
furniture, inventory, and other personal property of Tenant now or hereafter
situated at 2301 Chovanetz Court, Irving, Texas, and all proceeds or products
thereof, of whatever kind or type, including equipment, inventory, instruments,
accounts, chattel paper or general intangibles, and the security interest shall
continue in such property and all proceeds and products regardless of location.
Such property shall not be removed therefrom without the consent of Landlord,
unless at the time of removal all arrearages in rent as well as any and all
other sums of money then due to Landlord hereunder shall first have been paid
and discharged in full. Upon an event of default, in addition to all other
rights and remedies, Landlord shall have all rights and remedies under the
Uniform Commercial Code, including without limitation, the right to sell the
property described in this Paragraph at public or private sale upon five (5)
days notice by Landlord to Tenant at the Premises. Tenant hereby agrees to
execute such other instruments as may be necessary or desirable under applicable
law to perfect the security interest hereby created. Landlord and Tenant agree
that pages 11 & 12 of this Lease and security agreement may serve as a financing
statement and that a copy, photographic or other reproduction of this portion of
this Lease may be filed of record by Landlord and have the same force and effect
as the original. This Lease and security agreement and financing statement also
covers those fixtures located at the Premises described on Exhibit "A-1",
attached hereto and incorporated herein by reference, (if an Exhibit A-1 is
attached). This page, together with said Exhibit A, (if one is attached) may be
filed for record in the appropriate real estate records. The record owner of
this property is Landlord.
[Remainder of Page Intentionally Left Blank]
<PAGE> 56
BY:
--------------------------------
PRINTED NAME:
--------------------------------
TITLE:
--------------------------------
ADDRESS: c/o THE INDUSTRIAL GROUP
P.O. BOX 802047
DALLAS, TX 75380-2047
TELEPHONE: 972-661-0232
FAX: 972-661-0235
EXECUTED BY TENANT, this 12th day of June, 1998.
TENANT: GLOBENET INTERNATIONAL I, INC.
A DELAWARE CORPORATION
BY: /s/ CLINTON H. HOWARD
---------------------------------
PRINTED NAME: Clinton H. Howard
---------------------------------
TITLE: President
---------------------------------
BY:
---------------------------------
PRINTED NAME:
---------------------------------
TITLE:
---------------------------------
ADDRESS:
---------------------------------
---------------------------------
---------------------------------
TELEPHONE: 972-401-0052
---------------------------------
FAX: 972-869-1974
--------------------------------
<PAGE> 57
made part hereof for all purposes, Landlord will provide up to $238,384.00 (the
"Construction Allowance" as hereinafter defined in Exhibit B) to Tenant for the
construction of improvements to the Premises (the "Work" as hereinafter defined
as Exhibit B), inclusive of all architecture, engineering, space planning costs
and construction management fees. Such amounts shall be paid upon receipt by
Landlord of bona fide invoices for such costs from Tenant. Landlord will
advance additional amounts up to $137,071.00 for such costs, which advances
shall bear interest at eleven percent (11%) per annum and shall be repaid in
equal monthly installments of principal and interest over the remaining term of
this Lease commencing with the Rent Commencement Date.
29. LETTER OF CREDIT.
A. On or before the Commencement Date, Tenant shall deliver to Landlord
an executed original irrevocable standby letter of credit ("L.C.") in the
amount of $125,000 in favor of Landlord, such L.C. to have a term of one
hundred twenty-three (123) months from the Commencement Date of the Lease. The
L.C. may be drawn upon and used upon each occurrence of an event of default;
Landlord may use all or part of the L.C. to pay past due rent or other payments
due Landlord under this Lease, and the cost of any other damage, injury,
expense or liability caused by such event of default without prejudice to any
other remedy provided herein or provided by law. Such L.C. shall be issued in a
form and by a National Banking Association (located within the continental
United States of America) (hereinafter the "Issuer"), acceptable to Landlord.
With respect to any default occurring during the term of the Lease, Landlord
shall have the right to proceed against the total L.C. at the sole discretion
of Landlord regarding items and the amounts to be drawn upon relating to any
default by Tenant. If Tenant exercises either its extension option under
Paragraph 31 herein, then Tenant agrees that the L.C. will be extended in the
same amount and under the same terms for any additional term of this Lease.
B. Such L.C. shall contain the following terms and conditions:
(1) The L.C. shall be deemed to be automatically extended without
amendment from year to year, with renewal occurring annually from the date of
its issuance or any future expiration date unless at least 30 days prior to
any future expiration date the bank notifies Landlord, in writing, by
certified mail, return receipt requested, that the issuer intends not to renew
the L.C. for an additional year.
(2) In the event the L.C. will not be extended and has or will
expire by its terms and the Lease Agreement, by and between Tenant and
Landlord, including any or all extensions or renewals, has not expired,
then Landlord shall be allowed to draft upon Issuer for the full amount of the
L.C.
(3) The L.C. shall be subject to the "Uniform Customs and Practices
for Documentary Credits (1994 Revision), International Chamber of Commerce
Publication No. 400."
(4) The amount of the L.C. shall be payable at sight to Landlord
within three (3) days of presentation of the sight draft, in whole or partial
drawings, upon presentation to the Issuer of the following documents:
a. Landlord's written demand for payment making reference to the
date and number of the L.C.;
b. Landlord's signed certificate that the amount drawn is to meet
any event of default as set forth in the Lease Agreement by and between Tenant
and Landlord; and
c. The original L.C. for endorsement of the amount paid and if the
draft is for the full amount the L.C. is to be surrendered to the Issuer.
(5) The Issuer shall not have the right to assign the L.C. to any
other person, entity, National Banking Association, or financial institution
without Landlord's consent which shall not be unreasonably withheld.
(6) Any presentment by Landlord of the L.C. for the payment shall be
made at a national banking association located within the continental United
States of America.
(7) The Issuer shall not modify the L.C. without the prior written
consent of Landlord.
(8) Landlord shall have the right to assign and transfer its right
and interests in the L.C. to any other beneficiary/party acceptable to Landlord.
C. The Landlord will return the L.C. to the Tenant if Tenant performs
all of the following obligations: (1) Tenant meets all of its annual revenue
projections through December 1999 as set forth on Exhibit "D" attached hereto,
and (2) Tenant's annual revenue projections through December 1999 as set forth
on Exhibit D are verified in the annual 10-K filed with the Security Exchange
Commission. At no time shall the L.C. be returned to Tenant unless Tenant meets
the requirements set forth in the preceding sentence.
<PAGE> 58
Dallas County and corrected by Certificate of Correction in Volume 77247, Page
0005, Deed Records of Dallas County, and being more particularly described as
follows:
BEGINNING at the intersection of the North line of Tract "K-1" (a 50 foot
private R.O.W. easement) and the East right-of-way line of Hurd Drive;
THENCE leaving Hurd Drive South 73(degree) 07' 00" East 22.28 feet along the
North line of said Tract "K-1" to a point for a corner; said point being the
point of curvature of a curve to the left with a central angle of 17(degree) 09'
40" and a radius of 739.65 feet;
THENCE with said curve to the left 221.54 feet to the point of tangency of said
curve;
THENCE continuing along the North line of Tract "K-1" North 89(degree) 43' 20"
East 360.24 feet to a point for a corner; said point being the Southwest corner
of an 8.019 acre tract conveyed by Las Colinas Corporation to E.I. DuPont
DeNemours and Company, Inc., as recorded in Volume 78012, Page 0685, Dallas
County Deed Records, January 17, 1978;
THENCE leaving the North line of Tract "K-1" North 00(degree) 16; 40" West
303.43 feet along the western boundary line of said 8.019 acre tract to a point
for a corner;
THENCE continuing along the western boundary line of said 8.019 acre tract,
North 44(degree) 46' 50" West 266.16 feet to a point for a corner; said point
being in the East right-of-way line of Hurd Drive; said point also being the
Northwest corner of said 8.019 acre tract;
THENCE along Hurd Drive South 45(degree) 13' 10" West 439.00 feet to a point for
a corner; said point being the point of curvature of a curve to the left with a
central angle of 28(degree) 20' 45" and a radius of 461.14 feet;
THENCE Southwesterly along Hurd Drive with said curve to the left through a
central angle of 22(degree) 08' 10" a distance of 178.16 feet to the POINT OF
BEGINNING.
CONTAINING 4.355 acres of land, more of less.
<PAGE> 59
[ILLEGIBLE]
the Building's HVAC, electrical, mechanical, or plumbing systems, then the
working drawings pertaining thereto shall be prepared by the Building's
engineer of record, whom Tenant shall at its cost engage for such purpose.
Landlord's approval of such working drawings shall not be unreasonably withheld,
provided that (a) they comply with all applicable governmental laws, codes,
rules, and regulations, (b) such working drawings are sufficiently detailed to
allow construction of the improvements in a good and workmanlike manner, and
(c) the improvements depicted thereon conform to the rules and regulations
promulgated from time to time by the Landlord for the construction of tenant
improvements (a copy of which has been delivered to Tenant). As used herein,
"Working Drawings" shall mean the final working drawings approved by Landlord,
as amended from time to time by any approved changes thereto, and "Work" shall
mean all improvements to be constructed in accordance with and as indicated on
the Working Drawings. Approval by Landlord of the Working Drawings shall not be
a representation or warranty of Landlord that such drawings are adequate for
any use, purpose, or condition, or that such drawings comply with any
applicable law or code, but shall merely be the consent of Landlord to the
performance of the Work. Tenant shall, at Landlord's request, sign the Working
Drawings to evidence its review and approval thereof. All changes in the Work
must receive the prior written approval of Landlord, and in the event of any
such approved change Tenant shall, upon completion of the Work, furnish
Landlord with an accurate, reproducible "as-built" plan (e.g., sepia) of the
improvements as constructed, which plan shall be incorporated into this Lease
by this reference for all purposes.
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld. All contractors and subcontractors shall be required to procure and
maintain (a) insurance against such risks, in such amounts, and with such
companies as Landlord may reasonably require and (b) payment and performance
bonds, if Landlord requires, covering the cost of the Work and otherwise
reasonably satisfactory to Landlord. Certificates of such insurance, with paid
receipts therefor, and copies of such bonds must be received by Landlord before
the Work is commenced. The Work shall be performed in a good and workmanlike
manner that is free of defects and is in strict conformance with the Working
Drawings, and shall be performed in such a manner and at such times as to
maintain harmonious labor relations and not to interfere with or delay
Landlord's other contractors, the operation of the Building, and the occupancy
thereof by other tenants. All contractors and subcontractors shall contact
Landlord and schedule time periods during which they may use Building
facilities in connection with the Work (e.g., elevators, excess electricity,
etc.).
4. If a delay in the performance of the Work occurs (a) because of any
change by Tenant to the space plans or the Working Drawings, (b) because of any
specification by Tenant of materials or installations in addition to or other
than Landlord's standard finish-out materials, or (c) if Tenant, any contractor
or subcontractor, or Tenant's employees or agents otherwise delays completion
of the Work, then, notwithstanding any provision to the contrary in this Lease,
the Commencement Date shall be deemed to be the date that, in the reasonable
opinion of Landlord, substantial completion would have occurred if such delays
had not taken place. If the Premises are not ready for occupancy and the Work
is not substantially completed (as reasonably determined by Landlord) on the
scheduled Commencement Date for any reason other than the reasons specified in
the immediately preceding sentence, then the obligations of Landlord and Tenant
shall continue in full force and Base Rent shall be abated until the date the
Work is substantially completed, which date shall be the Commencement Date.
5. Tenant shall bear the entire cost of performing the Work (including,
without limitation, design of the Work and preparation of the Working Drawings,
costs of construction labor and materials, electrical usage during
construction, additional janitorial services, general tenant signage, related
taxes and insurance costs, all of which costs are herein collectively called
the "Total Construction Costs") in excess of the Construction Allowance
(hereinafter defined). Upon approval of the Working Drawings and selection of a
contractor, Tenant shall promptly (a) execute a work order agreement prepared
by Landlord which identifies such drawings, itemizes the Total Construction
Costs and sets forth the Construction Allowance, and (b) pay to Landlord 50% of
the sum of: the amount by which the estimated Total Construction Costs exceed
the Construction Allowance plus the amount, if any, up to the maximum amount of
$137,071.00, to be advanced by Landlord to Tenant pursuant to Paragraph 28 of
the Lease. If the Work will not be substantially completed before the
expiration of the first full calendar month after the approval of the Working
Drawings and selection of a contractor, the remaining portion of such excess
shall be payable in equal monthly installments on the first day of each month,
beginning the first day of the second full calendar month after approval of the
Working Drawings and selection of a contractor, and on the substantial
completion date. The monthly installments due on the first day of each month
shall equal the portion of such remaining excess divided by the number of
scheduled monthly installment payment dates (including the substantial
completion date) from the date hereof through the estimated substantial
completion date for the Work. Upon substantial completion of the Work and
before Tenant occupies the Premises to conduct business therein, Tenant shall
pay to Landlord an amount equal to the Total Construction Costs (as adjusted
for any approved changes to the Work), less (1) the amount of the payments
already made by Tenant, and (2) the amount of the Construction Allowance.
6. Landlord shall provide to Tenant a construction allowance (the
"Construction Allowance") up to $238,384.00 for the Work, inclusive of all
architecture, engineering, space planning costs, and construction management
fees, as set forth in Paragraph 28 of the Lease.
7. Landlord or its affiliate shall supervise the Work, make disbursements
required to be made to the contractor, and act as a liaison between the
contractor and Tenant and coordinate the relationship between the Work, the
Building, and the Building's systems.
<PAGE> 60
<TABLE>
<S> <C> <C> <C> <C>
Months 3 thru 14 119,192 x $2.75 = $ 327,778 $27,315 $ 327,778
Months 15 thru 18 119,192 x $3.00 = $ 357,576 $29,798 $ 446,970
Month 19 Free $ -0- $ 446,970
Months 20-27 119,192 x $3.00 = $ 357,576 $29,798 $ 685,354
Months 28 thru 39 119,192 x $3.00 = $ 357,576 $29,798 $1,042,930
Months 40 thru 51 119,192 x $3.25 = $ 387,374 $32,281 $1,430,304
Months 52 thru 63 119,192 x $3.25 = $ 387,374 $32,281 $1,817,678
Months 64 thru 75 119,192 x $3.25 = $ 387,374 $32,281 $2,205,052
Months 76 thru 87 119,192 x $3.50 = $ 417,172 $34,764 $2,622,224
Months 88 thru 99 119,192 x $3.50 = $ 417,172 $34,764 $3,039,396
Months 100 thru 111 119,192 x $3.50 = $ 417,172 $34,764 $3,456,568
Months 112 thru 123 119,192 x $3.50 = $ 417,172 $34,764 $3,873,740
----------
$3,873,740
</TABLE>
<PAGE> 61
[ILLEGIBLE]
<TABLE>
<S> <C> <C> <C>
EBITDA 1,191 6,124 21,462
Capital Expenditures (230) (600) (1,000)
Free Cash Flow 961 2,524 20,462
Cash 199 430 8,787
Net Worth 4,204 8,951 24,207
</TABLE>
<PAGE> 62
[ILLEGIBLE]
without affecting Guarantor's liability hereunder, from time to time,
compromise, extend or otherwise modify any or all of the terms of the Lease.
The undersigned further covenants and agrees that this Guaranty shall remain in
full force and effect as to any renewal, modification or extension, or any
holdover by Tenant thereunder, and as to any assignee of Tenant's interest or
interests under the Lease, whether or not known to or approved by the
undersigned and that no subletting, assignment, or other transfer of the Lease,
or any interest therein, shall operate to extinguish or diminish the liability
of the undersigned hereunder.
Whatever reference is made to the liability of Tenant in the Lease, such
reference shall be deemed likewise to refer to the undersigned, jointly and
severally, with Tenant. The liability of the undersigned for all obligations of
the Lease shall be primary; in any right of action which shall accrue to
Landlord under the Lease, Landlord may, at Landlord's option, proceed against
the undersigned and/or Tenant, jointly or severally, and may proceed against
the undersigned without having demanded performance of, commenced any action
against, exhausted any remedy against or obtained any judgment against Tenant.
This is a guaranty of payment and not of collection, and the undersigned hereby
waives any obligation on the part of Landlord to enforce the terms of the Lease
against Tenant as a condition to Landlord's right to proceed against the
undersigned hereunder.
The undersigned hereby waives, to the maximum extent permitted by law, all
defenses available to a surety, whether the waiver is specifically herein
enumerated or not.
It is further agreed that all of the terms and provisions hereof shall
inure to the benefit of the successors and assigns of the Landlord, and shall
be binding upon the respective heirs, executors, administrators, successors and
assigns of the undersigned.
Guarantor hereby waives all demands for performance, notices of
performance, and notices of acceptance of this Guaranty. The liability of
Guarantor under this Guaranty will not be affected by (1) the release or
discharge of Tenant from, or impairment, limitation or modification of,
Tenant's obligations under the Lease in any bankruptcy, receivership, or other
debtor relief proceeding, whether state or federal and whether voluntary or
involuntary; (2) the rejection or disaffirmance of the Lease in any such
proceeding; or (3) the cessation from any cause whatsoever of the liability of
Tenant under the Lease. Guarantor shall pay to Landlord all costs incurred by
Landlord in enforcing this Guaranty (including, without limitation, reasonable
attorneys' fees and expenses).
The Landlord and Tenant agree that this Guaranty will be of no further
effect, void, and returned by the Landlord to the Tenant if Tenant performs all
of the following obligations; (1) Tenant meets all of its annual revenue
projections through December 1999 as set forth on Exhibit "D" attached to the
Lease, and (2) Tenant's annual revenue projections through December 1999 as set
forth on Exhibit D are verified in the annual 10-K filed with the Security
Exchange Commission. At no time shall this Guaranty be returned to Tenant, and
the parties agree that the Guaranty shall remain in full force and effect,
unless Tenant meets the requirements set forth in the preceding sentence and
Tenant receives written notice of same from Landlord.
By: /s/ CLINTON H. HOWARD
--------------------------------
Clinton H. Howard
Home Address: 3917 Fox Glen Dr.
----------------------
Irving, TX 75062
----------------------
----------------------
Social Security No.: ###-##-####
----------------
Texas Driver's License No.: 02898715
---------
<PAGE> 63
EXHIBIT "A"
LEGAL DESCRIPTION
Being an approximate 119,192 square foot lease space located at 2301 Chovanetz
Court, Irving, Dallas County, Texas, in an approximate 119,192 square foot
building known as 2301 Chovanetz Court and located on a tract being further
described as:
Metes and bounds description
BEING a 4.355 acre tract out of TRACT "K" in the Walnut Hill Distribution
Center North in the city of Irving, Texas as originally recorded in Volume
76081, page 296, Deed Records of Dallas County and corrected by Certificate of
Correction in Volume 77247, Page 0005, Deed Records of Dallas County, and being
more particularly described as follows:
BEGINNING at the intersection of the North line of Tract "K-1" (a 50 foot
private R.O.W. easement) and the East right-of-way line of Hurd Drive;
THENCE leaving Hurd Drive South 73(degree) 07' 00" East 22.28 feet along the
North line of said Tract "K-1" to a point for a corner; said point being the
point of curvature of a curve to the left with a central angle of
17(degree) 09' 40" and a radius of 739.65 feet;
THENCE with said curve to the left 221.54 feet to the point of tangency of said
curve;
THENCE continuing along the North line of Tract "K-1" North 89(degree) 43' 20"
East 360.24 feet to a point for a corner; said point being the Southwest corner
of an 8.019 acre tract conveyed by Las Colinas Corporation to E.I. Dupont
DeNemours and Company, Inc., as recorded in Volume 78012, Page 0685, Dallas
County Deed Records, January 17, 1978;
THENCE leaving the North line of Tract "K-1" North 00(degree) 16; 40" West
303.43 feet along the western boundary line of said 8.019 acre tract to a point
for a corner;
THENCE continuing along the western boundary line of said 8.019 acre tract,
North 44(degree) 46' 50" West 266.16 feet to a point for a corner; said point
being in the East right-of-way line of Hurd Drive; said point also being the
Northwest corner of said 8.019 acre tract;
THENCE along Hurd Drive South 45(degree) 13' 10" West 439.00 feet to a point
for a corner; said point being the point of curvature of a curve to the left
with a central angle of 28(degree) 20' 45" and a radius of 461.14 feet;
THENCE Southwesterly along Hurd Drive with said curve to the left through a
central angle of 22(degree) 08' 10" a distance of 178.16 feet to the POINT OF
BEGINNING.
CONTAINING 4.355 acres of land, more of less.
<PAGE> 64
ADDENDUM TO STANDARD INDUSTRIAL LEASE AGREEMENT
THIS ADDENDUM TO STANDARD INDUSTRIAL LEASE AGREEMENT (this "Option
Agreement") is to be attached to and shall form a part of that certain
Standard Industrial Lease Agreement (the "Lease") dated June 18th, 1998,
between CIIF ASSOCIATES II LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord") and GLOBENET INTERNATIONAL I, INC., a Delaware
corporation ("Tenant"), concerning the demised premises as defined in the Lease
and more particularly described on Exhibit "A" attached hereto, together with
all improvements thereon and all rights and appurtenances pertaining thereto,
including any right, title and interest of Landlord in and to adjacent streets,
alleys and rights-of-way (collectively the "Property").
1. Landlord hereby grants to Tenant an option (the "Option") to purchase
the Property on the terms and conditions set forth in this Option Agreement.
2. The Option shall commence on the date hereof and may be exercised
until and shall terminate on the date two (2) years thereafter (the "Expiration
Date") unless sooner terminated in accordance with the provisions hereof.
Provided that Tenant is not in default of any of the terms, covenants and
conditions of the Lease, and the Lease has not been assigned or the Premises
(or a part thereof) sublet, except as provided by Paragraph 14 of the Lease,
Tenant may exercise the Option by delivering written notice to Landlord that
Tenant has elected to purchase the Property pursuant to the provisions hereof.
The notice must be delivered to Landlord at Landlord's address for notices set
forth in the Lease. The notice must set forth the date on which Tenant desires
to close the acquisition of the Property (the "Closing Date") which date shall
not be later than the Expiration Date, as defined in this Paragraph. In the
event that the Option is not exercised prior to the Expiration Date, the Option
shall terminate.
3. In consideration of the Option set forth herein, Tenant shall pay to
Landlord, in addition to any rent and other sums payable by Tenant to Landlord
under the Lease, a non-refundable option payment in the amount of $100.00, the
receipt and sufficiency of which is hereby acknowledged.
4. The purchase price ("Purchase Price") for the Property shall be Three
Million Five Hundred Thousand Dollars ($3,500,000).
5. Prior to the Closing Date, Landlord shall, (i) at Tenant's expense,
deliver to Tenant a copy of a current survey of the Property prepared by a
Registered Professional Land Surveyor, and (ii) at Landlord's expense deliver
to Tenant a title commitment ("Title Commitment") covering the Property binding
the issuing title company to issue a Texas Owner Policy of Title Insurance on
the standard form prescribed by the Texas State Board of Insurance at the
Closing, in the full amount of the Purchase Price, insuring Tenant's fee simple
title to the Property to be good and indefeasible, subject only to the
Permitted Exceptions (as hereinafter defined), together with copies of all
recorded instruments affecting the Property and recited as exceptions in the
Title Commitment (the "Title Documents"), and a current tax certificate. Tenant
shall have ten (10) days after the receipt of the
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT -- PAGE 1
<PAGE> 65
latter of the survey, the Title Commitment or the Title Documents, to review
same and to deliver in writing to Landlord such objections as Tenant may have
to anything contained in them. Any such item to which Tenant shall not object
shall be deemed a "Permitted Exception". If there are objections by Tenant, or
a third party lender, Landlord shall, in good faith, attempt to satisfy such
objections prior to Closing, but Landlord shall not be required to incur any
cost to do so. If Landlord delivers written notice to Tenant on or before the
Closing Date that Landlord is unable to satisfy such objections, Tenant may
either waive such objections and accept such title as Landlord is able to
convey or terminate Tenant's election to exercise the Option by written notice
to Landlord.
6. The closing of the sale (the "Closing") shall take place on the Closing
Date at a location and at a time mutually acceptable to Landlord and Tenant. At
the Closing: (1) Landlord shall deliver to Tenant a general warranty deed and
bill of sale conveying good and indefeasible title in fee simple to the
Property; subject, however, only to the lien for taxes for the year of Closing
not yet due and payable, and the Permitted Exceptions; and (ii) Tenant shall
deliver to Landlord in readily available funds the full amount of the Purchase
Price. Each party shall pay its share of all other closing costs which are
customarily paid by a seller or purchaser in a transaction of this character in
Dallas County, Texas. Each party shall pay its own attorneys' fees in
connection with the closing of Tenant's acquisition. In the event that the
Closing does not occur prior to the Expiration Date, then the Option shall
terminate, be void, and Tenant's rights under this Option Agreement shall be
null and void.
7. The provisions of this Option Agreement and the Option shall terminate,
without notice, demand or any other action being taken by Landlord, all of
which are hereby expressly waived by Tenant, upon the earlier to occur of the
following: (i) the termination of the Lease; or (ii) the Expiration Date.
8. Tenant, at its election, may file this Option Agreement of record.
Executed effective this 12 day of June, 1998.
TENANT: LANDLORD:
GLOBENET INTERNATIONAL I, INC., CIIF ASSOCIATES II LIMITED
a Delaware corporation PARTNERSHIP,
a Delaware limited partnership
By: /s/ CLINTON H. HOWARD
------------------------------- By: AEW Advisors, Inc.,
Name: CLINTON H. HOWARD a Massachusetts corporation,
------------------------------- Managing General Partner
Title: PRESIDENT
------------------------------- By: /s/ MARK A. ALBERTSON
-----------------------
Name: Mark A. Albertson
-----------------------
Title: Vice President
-----------------------
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT - Page 2
<PAGE> 66
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for the State
of Texas, on this day personally appeared Howard Clinton of GlobeNet
International I, Inc., a Delaware corporation, [known to me] or [proved to me
through his Texas Drivers License or other document] to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same as a duly authorized officer of such
corporation, for the purposes and consideration therein expressed, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 12th day of June, 1998.
/s/ CHARLOTTE BURROWS
-----------------------------
Notary Public, State of Texas
[SEAL]
THE STATE OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK )
BEFORE ME, the undersigned authority, a Notary Public in and for the State
of Massachusetts, on this day personally appeared Mark A. Albertson of AEW
Advisors Inc., a Massachusetts corporation, general partner of CIIF Associates
II Limited Partnership, a Delaware limited partnership, [known to me] or
[proved to me through his Texas Drivers License or other document] to be the
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same as a duly authorized officer of
such corporation, for the purposes and consideration therein expressed, and in
the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 19th day of June, 1998.
/s/ GAIL M. TRAMONTOZZI
-------------------------------------
Notary Public, State of Massachusetts
Gail M. Tramontozzi, NOTARY PUBLIC
My Commission Expires Mar. 30, 2001
ADDENDUM TO STANDARD
INDUSTRIAL LEASE AGREEMENT - Page 3
<PAGE> 67
EXHIBIT D
List of Contracts
(Follows this page)
<PAGE> 68
Service Contracts
2301 Crown Court
Irving, Texas
<TABLE>
<CAPTION>
Service Company Contract
------- ------- --------
<S> <C> <C>
Landscaping Metro Lawn Care, Inc. Handled directly by Tenant
Tax Consultant DeLoitte & Touche Handled directly by Tenant
Property Management The Industrial Group, Inc. 3% Management Fee on Gross Rentals
</TABLE>
<PAGE> 69
EXHIBIT E
List of Environmental Reports
(Follows this page)
NONE
<PAGE> 70
EXHIBIT F
FORM OF DEED
THE STATE OF TEXAS )
) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF DALLAS )
THAT, CIIF ASSOCIATES II LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as "Grantor"), for and in consideration of
the sum of Ten Dollars ($10.00) in hand paid to Grantor by ROYAL BODYCARE, Inc.,
a Nevada corporation (herein referred to as "Grantee," whether one or more),
whose mailing address is 2301 Crown Court, Irving, Texas 75038, and other good
and valuable consideration, the receipt and sufficiency of which consideration
are hereby acknowledged, has GRANTED, SOLD and CONVEYED and by these presents
does GRANT, SELL and CONVEY unto Grantee that certain tract of real property
located in Dallas County, Texas, as more particularly described on Exhibit A
attached hereto, incorporated herein and made a part hereof for all purposes,
together with (a) all buildings and other improvements owned by Grantor affixed
thereto or situated thereon and (b) all and singular any rights benefits,
privileges, easements, interests, hereditaments and appurtenances of Grantor
pertaining thereto, including any right, title and interest of Grantor, if any,
(but without warranty whether statutory, express or implied) in and to: land
lying under adjacent streets, alleys or rights-of-way and strips and gores
between the aforesaid real property and abutting property, if any (said real
property together with any and all of such related improvements, rights and
appurtenances being herein collectively referred to as the "Property").
TO HAVE AND TO HOLD the Property together with all and singular the
rights and appurtenances thereto in any way belonging unto Grantee, and
Grantee's heirs, executors, administrators, legal representatives, successors
and assigns forever, subject to the matters herein stated; and Grantor does
hereby bind itself and its successors and assigns to WARRANT AND FOREVER DEFEND
all and singular the Property unto Grantee and Grantee's heirs, executors,
administrators, legal representatives, successors and assigns, against every
person whomsoever lawfully claiming or to claim the same or any part thereof by,
through or under Grantor but not otherwise; provided that this conveyance and
the warranty of Grantor herein contained are subject to all matters identified
on Exhibit B attached hereto, incorporated herein and made a part hereof for all
purposes.
<PAGE> 71
EXECUTED on the date of the acknowledgment hereinbelow, to be effective
however as the _______ day of _______________, 2000.
GRANTOR:
CIIF ASSOCIATES II LIMITED PARTNERSHIP, a
Delaware limited partnership,
By: AEW Advisors, Inc., (formerly known as Copley
Advisors, Inc.), a Massachusetts corporation,
its managing general partner
By:
----------------------------------
Name:
Title:
<PAGE> 72
EXHIBIT G
Bill Of Sale
CIIF Associates II Limited Partnership, a Delaware limited partnership
("Seller"), for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby grants, bargains, sells, transfers and
delivers to Royal BodyCare, Inc., a Nevada corporation ("Buyer"), all of the
fixtures, equipment and personal property owned by Seller and located on and
used in connection with the real property described on Exhibit A (the "Real
Property") attached hereto, including, if any, all blinds, window shades,
screens, screen doors, storm windows and doors, awnings, shutters, furnaces,
heaters, heating equipment, air conditioning units, existing leasehold
improvements, stoves, ranges, oil and gas burners and fixtures appurtenant
thereto, hot water heaters, plumbing and bathroom fixtures, electric and other
lighting fixtures, trees, shrubs, plants, and air conditioning equipment and
ventilators, (collectively, the "Personal Property"), but specifically excluding
from the Personal Property (i) all property leased by Seller or owned by tenants
or others, if any, and (ii) all names and/or trade names used in connection with
the Real Property, to have and to hold the Personal Property unto Buyer, its
successors and assigns, forever.
Seller hereby represents and warrants to Buyer that Seller has the full
right, power and authority to sell the Personal Property and to make and execute
this Bill of Sale. Seller hereby agrees to warrant and defend the title to the
Personal Property conveyed hereby to Buyer against the lawful claims and demands
of all persons claiming by, through or under Seller. Except as set forth above
and in the Purchase and Sale Agreement by and between Seller and Buyer dated as
of _________________ (the "Purchase Agreement"), Seller grants, bargains, sells,
transfers and delivers the Personal Property in its "AS IS" condition, WITH ALL
FAULTS, IF ANY, and makes no representations or warranties, direct or indirect,
oral or written, express or implied, as to title, encumbrances and liens,
merchantability, condition or fitness for a particular purpose or any other
warranty of any kind, all of which representations and warranties are expressly
hereby disclaimed and denied.
Buyer agrees that the liability of Seller under this Bill of Sale, the
Purchase Agreement, and any other agreement, document, certificate or instrument
delivered by Seller to Buyer, or under any law applicable to the Property or
this transaction, shall be limited as provided in Section 9.2 of the Purchase
Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings given to such terms in the Purchase Agreement.
<PAGE> 73
Executed under seal this ____ day of __________, 2000.
SELLER: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 74
Acknowledgment of Buyer
The Buyer hereby accepts the Personal Property subject to all
conditions and limitations stated above.
BUYER: ROYAL BODYCARE, INC., a Nevada corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 75
EXHIBIT H
LEASE TERMINATION AGREEMENT
THIS LEASE TERMINATION AGREEMENT (this "Agreement") is made and entered
into between CIIF Associates II Limited Partnership, a Delaware limited
partnership ("Landlord"), and Royal BodyCare, Inc., formerly known as Globenet
International, Inc., a Nevada corporation ("Tenant"), as of the _____ day of
_____________, 2000.
RECITALS
1. Landlord and Tenant entered in that certain Lease dated June 19,
1998 in connection with premises (the "Premises") containing approximately
119,192 rentable square feet of space in the building commonly known and
numbered as 2301 Crown Court, Irving, Texas, as more particularly described
therein, as amended to date (as amended, the "Lease").
2. Tenant is purchasing the Premises from Landlord simultaneously
herewith and Landlord and Tenant desire to terminate the Lease.
3. Capitalized terms used herein and not otherwise defined herein shall
have the meaning set forth in the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Lease Termination. Landlord and Tenant hereby agree that effective as
of the date hereof (the "Termination Date"), the Lease shall terminate,
whereupon the term of the Lease shall cease and expire as if the
Termination Date were the expiration date originally set forth in the
Lease. Upon such termination, Tenant shall be released from all
liability under the Lease arising from and after the Termination Date,
including the obligation to pay rent; provided, however, that the
foregoing provisions of this paragraph shall not limit Tenant's
obligation to pay any base rent, any additional rent, or any other
charges accruing prior to the Termination Date in accordance with the
terms of the Lease.
2. Release. Tenant and its successors and assigns hereby release, acquit,
satisfy and forever discharge Landlord and its employees, agents,
officers, subsidiaries, affiliates, partners, trustees, beneficiaries,
members, successors and assigns from any and all actions, causes of
actions, claims, demands, rights, damages, losses, expenses,
occurrences and liabilities, of any kind whatsoever, both known and
unknown, arising out of any matter, happening or thing, from the
beginning of time relating to the Lease, except with respect to those
obligations of Landlord which survive the expiration of the Lease.
Landlord and its successors and assigns hereby release, acquit, satisfy
and forever discharge Tenant and its employees, agents, officers,
subsidiaries, affiliates, partners, trustees, beneficiaries, members,
successors and assigns from any and all actions, causes of actions,
claims, demands, rights, damages, losses, expenses, occurrences and
liabilities, of any kind
<PAGE> 76
whatsoever, both known and unknown, arising out of any matter,
happening or thing, from the beginning of time relating to the Lease,
except with respect to those obligations of Tenant which survive the
expiration of the Lease.
3. Tenant's Representations and Warranties. Each of Landlord and Tenant
hereby represents and warrants to the other that it has full authority
to execute this Agreement without the joinder or consent of any other
party and that such party has not assigned any of its rights, title or
interest in or to the Lease to any other party. Landlord's and Tenant's
representations and warranties contained in this paragraph shall
survive the termination of the Lease.
4. Survival of Covenants; Miscellaneous. The covenants and agreements of
Landlord and Tenant contained in this Agreement shall survive the
termination of the Lease. This Agreement shall be binding upon and
inure to the benefit of Tenant and Landlord and their respective heirs,
executors, administrators, personal and legal representatives,
successors and assigns. This Agreement embodies the entire agreement
between the parties relative to the subject matter hereof, and there
are no other oral or written agreements between the parties, nor any
representations made by either party relative to the subject matter
hereof, which are not expressly set forth herein. This Agreement may be
amended only by a written instrument executed by the party or parties
to be bound thereby.
5. Governing Law. This instrument shall be governed by the laws of the
State of Texas.
6. Enforcement. If either party hereto brings any action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any
such action, on trial or appeal, shall be entitled to payment of its
reasonable attorneys' fees and costs by the non-prevailing party.
EXECUTED AS A SEALED INSTRUMENT as of the date first set forth above.
LANDLORD: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
TENANT: ROYAL BODYCARE, INC., a Nevada corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 77
EXHIBIT I
Assignment Of Warranties And Permits
DATE: __________________________, 2000
ASSIGNOR: CIIF Associates II Limited Partnership, a Delaware limited partnership
ASSIGNEE: Royal BodyCare, Inc., a Nevada corporation
RECITALS:
A. Assignor presently owns the real property described in Exhibit "A"
to this Assignment and the improvements and certain personal property located
thereon (the "Property"). The Property is being conveyed to Assignee by Deed of
even date from Assignor.
B. WHEREAS, Assignor and Assignee have entered into that certain
Purchase and Sale Agreement dated as of _________________ (the "Purchase
Agreement"), wherein Assignor agreed to sell and Assignee agreed to buy the
Property;
C. Assignor desires to sell the Property to Assignee, and in connection
therewith, Assignor desires to assign to Assignee and Assignee desires to
acquire Assignor's interest, if any, in and to the following described rights,
interests and property inuring to the benefit of Assignor and relating to the
Property.
FOR VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, Assignor agrees as follows:
1. Assignment. Assignor assigns, transfers, sets over, and conveys to
Assignee, to the extent the same are assignable, all of Assignor's right, title,
and interest, if any, in and to (i) any warranties and/or guaranties, express or
implied, from contractors, builders, manufacturers, and/or suppliers inuring to
the benefit of Assignor and relating to the Property, (ii) any licenses or
permits relating to the Property.
2. Binding Effect. This Assignment shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
3. Construction; Definitions. This Assignment shall be construed
according to Texas law. Capitalized terms used and not otherwise defined herein
shall have the meanings given to such terms in the Purchase Agreement.
4. Counterparts. This Assignment may be executed in counterparts, which
taken together shall constitute one original instrument.
5. Governing Law. This instrument shall be governed by the laws of the
State of Texas.
<PAGE> 78
6. Non-Recourse. Assignee agrees that the liability of Assignor under
this Assignment, the Purchase Agreement, and any other agreement, document,
certificate or instrument delivered by Seller to Buyer, or under any law
applicable to the Property or this transaction, shall be limited as provided in
Section 9.2 of the Purchase Agreement.
DATED as of the day and year first above written.
ASSIGNOR: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
ASSIGNEE: ROYAL BODYCARE, INC., a Nevada corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 79
EXHIBIT J
Assignment And Assumption Of Contracts
DATE: ________________________, 2000
ASSIGNOR: CIIF Associates II Limited Partnership, a Delaware limited partnership
ASSIGNEE: Royal BodyCare, Inc., a Nevada corporation
RECITALS:
WHEREAS, Assignor and Assignee have entered into that certain Purchase
and Sale Agreement dated as of __________________ (the "Purchase Agreement"),
wherein Assignor agreed to sell and Assignee agreed to buy that certain real
property described on Exhibit "A" attached hereto and the improvements located
thereon (the "Property");
WHEREAS, pursuant to the Purchase Agreement, Assignor is conveying the
Property to Assignee by Deed of even date;
WHEREAS, Assignee desires to assume and Assignor desires to assign to
Assignee all of Assignor's right, title and interest in and to all of the
contracts and agreements, and all modifications and amendments thereof, which
concern or relate to the use, operation, alteration or renovation of the
Property set forth on Exhibit "B" attached hereto (collectively, the
"Contracts").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee agree as
follows:
1. Assignment. Assignor conveys and assigns to Assignee all of
Assignor's right, title and interest in and to the Contracts and claims and
causes of action now existing under the same as of the date of conveyance of the
Property by Assignor to Assignee (the "Conveyance Date"), subject to the
covenants, conditions and provisions mentioned in such Contracts.
2. Assumption. Assignee assumes and agrees to be bound by all of
Assignor's liabilities and obligations pursuant to the Contracts, if any, and
agrees to perform and observe all of the covenants and conditions contained in
the Contracts, arising or accruing from and after the Conveyance Date.
3. Indemnification. Assignee further covenants and agrees to indemnify
and hold harmless Assignor for, from and against any actions, suits, proceedings
or claims, and all costs and expenses, including, without limitation, reasonable
attorneys' fees, incurred in connection therewith, based upon or arising out of
any breach or alleged breach of any of the Contracts or out of any other facts
connected with the Contracts, occurring or alleged to have occurred from and
after the Conveyance Date. Assignor covenants and agrees to indemnify and hold
harmless Assignee for, from and against any actions, suits, proceedings or
claims, and all costs and expenses, including, without limitation, reasonable
attorneys' fees, incurred in connection
<PAGE> 80
therewith, based upon or arising out of any breach or alleged breach of any of
the Contracts or out of any other facts connected with the Contracts, occurring
or alleged to have occurred before the Conveyance Date.
4. Binding Effect. This Assignment shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
assigns.
5. Construction; Definitions. This Assignment shall be construed
according to Texas law. Capitalized terms used and not otherwise defined herein
shall have the meanings given to such terms in the Purchase Agreement.
6. Counterparts. This Assignment may be executed in counterparts, which
taken together shall constitute one original instrument.
7. Governing Law. This instrument shall be governed by the laws of the
State of Texas.
8. Non-Recourse. Assignee agrees that the liability of Assignor under
this Assignment, the Purchase Agreement, and any other agreement, document,
certificate or instrument executed in connection with the transaction
contemplated herein, or under any law applicable to the Property or this
transaction, shall be limited as provided in Section 9.2 of the Purchase
Agreement.
DATED as of the day and year first above written.
ASSIGNOR: CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
ASSIGNEE: ROYAL BODYCARE, INC., a Nevada corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 81
EXHIBIT K
NON-FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee, Royal BodyCare, Inc., that withholding of tax
is not required upon the disposition of a U.S. real property interest by CIIF
Associates II Limited Partnership, a Delaware limited partnership ("Seller"),
the undersigned hereby certifies the following:
1. Seller is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. Seller's U.S. taxpayer identification number is [___________]; and
3. Seller's address is c/o AEW Capital Management, L.P., 225 Franklin
Street, Boston, Massachusetts 02110.
The undersigned understands that this certification may be disclosed to
the Internal Revenue Service by the transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both. Under
penalties of perjury, the undersigned declares that it has examined this
certification and to the best of its knowledge and belief it is true, correct,
and complete, and further declares that it has authority to sign this document.
Date: As of _____________, 2000
CIIF ASSOCIATES II LIMITED PARTNERSHIP,
a Delaware limited partnership
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), a Massachusetts
corporation, its general partner
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
<PAGE> 82
EXHIBIT L
Title Requirements
(a) The exception relating to restrictions against the Real Property
shall be deleted unless restrictive covenants are included in the matters
approved by Buyer hereunder;
(b) The exception relating to discrepancies, conflicts or shortages in
area or boundary lines, or any encroachments or protrusions or any overlapping
of improvements shall be modified to delete such exception, except as to
"shortages in area".
(c) The exception relating to ad valorem taxes shall except only
standby fees, taxes and assessments by any taxing authority for the current and
subsequent years and subsequent taxes and assessments by any taxing authority
for prior years due to change in land usage or ownership; and
(d) There shall be no exception for "easements or rights which a survey
might show" or "lack of a right of access to and from the land" or similar
matters.
(e) There shall be no exception for "rights of parties in possession",
but rather only an exception for "rights of tenants, as tenants only, under
written but unrecorded leases".
<PAGE> 83
CIIF ASSOCIATES II LIMITED PARTNERSHIP
C/O AEW Capital Management, L.P.
World Trade Center East
Two Seaport Lane
Boston, MA 02210
September 19, 2000
BY FACSIMILE
Royal BodyCare, Inc.
2301 Crown Court
Irving, Texas 75038
Re: Purchase and Sale Agreement dated as of August 21, 2000 by and between
CIIF Associates II Limited Partnership ("Seller") and Royal BodyCare,
Inc. ("Buyer") for premises located at 2301 Crown Court, Irving,
Texas, as more particularly described therein (the "Purchase and Sale
Agreement")
Ladies and Gentlemen:
This letter shall serve as an amendment to the above Purchase and Sale
Agreement. All capitalized terms used but not defined herein shall have the
meanings given to them in the Purchase and Sale Agreement.
The parties hereby agree as follows:
1. Every instance of the date "October 20, 2000" in Section 4.7 of the
Purchase and Sale Agreement (Financing Contingency) is hereby
deleted, and the date "October 27, 2000" is inserted in place thereof.
2. Every instance of the date "September 19, 2000" in Section 16.13 of
the Purchase and Sale Agreement (Deferred Maintenance; Price
Adjustment) is hereby deleted, and the date "September 26, 2000" is
inserted in place thereof. Every instance of the date "September 20,
2000" in Section 16.13 of the Purchase and Sale Agreement is hereby
deleted, and the date "September 27, 2000" is inserted in place
thereof.
Except as expressly modified hereby, the Purchase and Sale Agreement shall
remain unmodified and in full force and effect. This letter amendment may be
executed in multiple counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument.
Telecopied signatures may be used in place of original signatures on this letter
amendment. Seller and Buyer intend to be bound by the signatures on the
telecopied document, are aware that the other party will rely on the telecopied
signatures and
<PAGE> 84
Royal BodyCare, Inc.
September 27, 2000
Page 2
Kindly acknowledge your agreement to the provisions of this letter
amendment by executing the same where indicated below and returning it to the
undersigned by facsimile.
Very truly yours,
CIIF ASSOCIATES II LIMITED PARTNERSHIP
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.), its general partner
By: /s/ [ILLEGIBLE]
---------------------------------------
Name: [ILLEGIBLE]
Its: Vice President
ACCEPTED AND AGREED:
ROYAL BODYCARE, INC.
By: /s/ STEVEN E. BROWN
----------------------------
Name: Steven E. Brown
Its: Vice President, Finance
<PAGE> 85
CIIF ASSOCIATES II LIMITED PARTNERSHIP
c/o AEW Capital Management, L.P.
World Trade Center East
Two Seaport Lane
Boston, MA 02210
November 6, 2000
BY FACSIMILE
Royal BodyCare, Inc.
2301 Crown Court
Irving, Texas 75038
Re: Purchase and Sale Agreement dated as of August 21, 2000, as
modified by letter amendment dated October 4, 2000, by and
between CIIF Associates II Limited Partnership ("Seller") and
Royal BodyCare, Inc. ("Buyer"), for premises located at 2301
Crown Court, Irving, Texas, as more particularly described
therein (collectively, the "Purchase and Sale Agreement")
Ladies and Gentlemen:
This letter shall serve as an amendment to the above Purchase and Sale
Agreement. All capitalized terms used but not defined herein shall have the
meanings given to them in the Purchase and Sale Agreement.
The parties hereby agree as follows:
1. Seller is endeavoring to have a geotechnical engineering study
conducted at the Property pursuant to, and subject to the
limitations set forth in, the letter amendment between Buyer
and Seller dated October 4, 2000 (the "October 4 Letter
Agreement").
2. Pursuant to the October 4 Letter Agreement, every instance of
the date "October 20, 2000" in Section 4.7 of the Purchase and
Sale Agreement (Financing Contingency) was extended to
December 6, 2000. Such date is hereby further extended to
December 13, 2000.
3. Pursuant to the October 4 Letter Agreement, every instance of
the date "September 19, 2000" in Section 16.13 of the Purchase
and Sale Agreement (Deferred Maintenance; Price Adjustment)
was extended to November 6, 2000. Such date is hereby further
extended to November 13, 2000. Pursuant to the October 4
Letter Agreement, every instance of the date "September 20,
2000" in Section 16.13 of the Purchase and Sale Agreement was
extended to November 7, 2000. Such date is hereby further
extended to November 14, 2000.
<PAGE> 86
Royal BodyCare, Inc.
November 6, 2000
Page 2
4. Pursuant to the October 4 Letter Agreement, every instance of
the date "November 20, 2000" in Section 6.1 of the Purchase
and Sale Agreement (Time of Closing) was extended to the date
which is "the earlier of (i) January 4, 2001 or (ii) thirty
(30) days following issuance of the financing commitment
referenced in Section 4.7" of the Purchase and Sale Agreement.
Such date is hereby further extended to "the earlier of (i)
January 11, 2001 or (ii) thirty (30) days following issuance
of the financing commitment referenced in Section 4.7" of the
Purchase and Sale Agreement. Buyer shall promptly notify
Seller following the issuance of such commitment.
Except as expressly modified hereby, the Purchase and Sale Agreement,
including the October 4 Letter Agreement, shall remain unmodified and in full
force and effect. This letter amendment may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Telecopied signatures may
be used in place of original signatures on this letter amendment. Seller and
Buyer intend to be bound by the signatures on the telecopied document, are aware
that the other party will rely on the telecopied signatures and hereby wave any
defense to the enforcement of the terms of this letter amendment based upon the
form of signature.
Kindly acknowledge your agreement to the provisions of this letter
amendment by executing the same where indicated below and returning it to the
undersigned by facsimile.
Very truly yours,
CIIF ASSOCIATES II LIMITED PARTNERSHIP
By: AEW Advisors, Inc. (formerly known as
Copley Advisors, Inc.),
its general partner
By: /s/ J. CHRISTOPHER MEYER
-----------------------------------
Name:J. Christopher Meyer
Its: Vice President
ACCEPTED AND AGREED:
ROYAL BODYCARE, INC.
By:
-------------------------------
Name:
Its:
