EXHIBIT 10.24
CITYPLACE CENTER EAST TOWER
OFFICE LEASE AGREEMENT
ZIX CORPORATION, a Texas corporation ("Lessee"), and 7-ELEVEN, INC., a
Texas corporation ("Lessor"), enter into this Lease Agreement (the "Lease")
dated December 29, 2003, on the following terms:
ARTICLE I - PROPERTY
1.1 Premises. This is a lease of the Premises (herein so called)
containing a total of approximately 42,912 square feet of Rentable Area, with
approximately 13,781 square feet of Rentable Area located on the south side of
floor twenty-two (22) (the "22nd Floor Space") of Cityplace Center East Tower,
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ (the
"Building"), and all of floor twenty-three (the "23rd Floor Space") of the
Building containing approximately 29,131 square feet of Rentable Area. As
contemplated in the Work Letter (hereinafter defined), if the 22nd Floor
Commencement Date (as defined in the Work Letter) has not occurred by the
Commencement Date (as defined in Section 2.1), then, beginning on the
Commencement Date until the 22nd Floor Commencement Date occurs, the Premises
shall consist of the 23rd Floor Space and the approximately 9,427 square feet of
Rentable Area occupied by Tenant as of the date of this Lease on floor
twenty-eight (28) (the "Temporary 28th Floor Space") of the Building pursuant to
a sublease with Rosewood Resources, Inc.; it being understood and agreed that
the Temporary 28th Floor Space shall, for such period of time, be considered
part of the Premises for all purposes and directly leased from Lessor to Lessee.
Floorplans of the Premises are attached as Exhibit A.
1.2 Project. The Building is located on the land (herein so called)
described on Exhibit B. The Building is part of the Project known as "Cityplace
Center" located on the Land. The term "Project" refers collectively to all
buildings (including the Building) now or hereafter located on the Land, the
Garage (herein so called) located under the surface of the Land, and all of the
Land owner's other improvements, fixtures, equipment, or other facilities now or
hereafter located on the Land, in the Garage, or in any of the buildings or
other improvements on the Land. The term "Property" refers collectively to the
Project and the Land.
1.3 Improvements. The Work Letter attached hereto as Addendum No. 1
states the terms under which any walls, doors, lights, or other improvements
intended to prepare the Premises for Lessee's occupancy (collectively, the
"Improvements") will be constructed.
1.4 Parking. The Parking Agreement attached hereto as Addendum No. 2
states Lessee's rights to parking in the Garage.
Zix Corporation Office Lease Agreement (R-57999.6)
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1.5 Rentable Area. Rentable Area (herein so called) has been or will be
calculated in accordance with the American National Standard Method for
Measuring Floor Area in Office Buildings published by the Building Owners and
Managers Association ("BOMA") (ANSI Z65.1-1980, reaffirmed 1989, approved June
21, 1989, and reprinted August 1990), with usable and rentable area calculations
conforming to 1996 BOMA standards. The Rentable Area in both the 23rd Floor
Space and the Temporary 28th Floor Space have been agreed upon by Lessor and
Lessee and will for all purposes be considered to contain the number of square
feet of Rentable Area specified in Section 1.1. Once final plans and
specifications for the 22nd Floor Space are completed, the Rentable Area in the
22nd Floor Space shall be determined in good faith and in accordance with
provisions of this Section 1.5 by Lessor. If, for any reason, Lessee shall at
any time disagree in writing with Lessor's determination of the Rentable Area of
any space that is to be included within the Premises as contemplated in this
Lease other than the 23rd Floor Space or the Temporary 28th Floor Space, then
the Rentable Area of such space shall be determined in good faith and in
accordance with provisions of this Section 1.5 by Lessor's architect (the
"Architect"), whose determination thereof shall be conclusive upon each of the
parties. Lessee shall pay Architect's fees and expenses in respect of any such
determination if such determination deviates by less than five percent (5%) from
the calculation to which Lessee disagreed; otherwise Lessor shall pay such fees
and expenses.
1.6 Reserved Rights. Lessor reserves all rights not expressly granted
to Lessee, including the unrestricted right (a) to change the name or street
address of the Building or of any other part of the Project; provided that
Lessor shall reimburse Lessee for up to Five Thousand and No/100 Dollars
($5,000.00) of Lessee's actual, out-of-pocket costs in reprinting Lessee's
existing stock of written materials affected by such change, including, without
limitation, Lessee's stationery and business cards, (b) so long as the Premises
remain reasonably accessible (when considering the number of elevators, number
and types of Building entrances, and the like), to change the design or
configuration of any part of the Project located outside the Premises, (c) to
control every aspect of parking and of traffic movement in the Garage and
elsewhere on the Property, (d) to prohibit, install, and otherwise control any
interior or exterior signs within the Property, and (e) to grant exclusive
rights to conduct business in, or render services to, the Project, subject to
any then pre-existing service contracts to which Tenant is a party that address
the provision of services to the Premises.
ARTICLE II - TERM
2.1 Commencement. The term of this Lease shall begin on October 1, 2004
(the "Commencement Date").
2.2 Length of Term. The term of this Lease shall begin on the
Commencement Date and end one hundred twenty (120) months after the Commencement
Date, unless the term is terminated or extended pursuant to other provisions of
this Lease.
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2.3 Grant of Leasehold. Lessor demises the Premises to Lessee for the
term of this Lease, and covenants that except as otherwise provided in this
Lease, Lessee may peaceably have, hold, and enjoy the Premises free of any
superior right or claim arising by, through or under Lessor, but not otherwise.
2.4 Acceptance and Surrender. Lessee (a) leases the Premises from
Lessor, (b) acknowledges that, as of the date of this Lease, Lessee has
possession of the 23rd Floor Space and the Temporary 28th Floor Space, (c)
agrees to take possession of 22nd Floor Space on the 22nd Floor Commencement
Date and (d) agrees to surrender (i) the Temporary 28th Floor Space on the 22nd
Floor Commencement Date, and (ii) the Premises at the end of the term, or
earlier on termination of this Lease or of Lessee's right to possession of the
Premises, free of waste and in as good a condition as on the Commencement Date
(or as on the 22nd Floor Commencement Date with respect to the 22nd Floor
Space), except for reasonable wear and tear and casualty damage that this Lease
does not require Lessee to repair. Lessee's possession of the Premises is hereby
deemed to constitute Lessee's agreement that the Premises are suitable for their
intended purpose and that the Premises and all other parts of the Property are
in good and satisfactory condition and free of defects (except for latent
defects and any "punch-list" items related to the Improvements, which will be
completed in accordance with the Work Letter).
2.5 Holding Over. If Lessee continues to occupy any part of the
Premises after the end of the term, Lessee shall be considered a holdover
tenant, and rent shall automatically increase by fifty percent (50%). During any
holdover period, the increased rent and all other obligations of Lessee under
this Lease shall continue to be payable and performable, but Lessor may at any
time refuse to accept rent or other performance, and may reenter, take
possession of, and change the locks on the doors of the Premises (without making
the keys to the changed locks available to Lessee), all without waiver of any
rental or other obligation of Lessee accrued prior to Lessor's taking possession
of the Premises. If, however, Lessor chooses to accept the increased rent and
other performance due, Lessee may remain in possession as a holdover tenant
during the period for which increased rent has been accepted, but not
thereafter, and acceptance of any rent or other performance on one occasion
shall not obligate Lessor to accept rent or other performance on any subsequent
occasion. No holding over, acceptance of rent, or increase in rent shall extend
the term, which may be extended, if at all, only pursuant to an express option
in this Lease or by a future written agreement of Lessor and Lessee. Lessee
shall indemnify and hold Lessor harmless against any loss, liability, damage,
cost, or expense, or any claim therefor, to the extent incurred by Lessor as a
result of Lessee's holding over, including liabilities to any person to whom
Lessor may have leased any part of the Premises.
2.6 Cancellation Option. Lessee shall have the one time option to
cancel this Lease effective as of the end of the sixtieth (60th) month of the
term of this Lease, by giving written notice to Lessor of its intention to so
terminate this
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Lease no later than the end of the forty-eighth (48th) month of the term of this
Lease. If Lessee timely exercises Lessee's cancellation option in accordance
with this Section 2.6, then, on or before any such termination date, Lessee
shall pay Lessor a cancellation fee equal to the sum of (i) Six Hundred
Fifty-Eight Thousand One Hundred Thirty-Five and 46/100 Dollars ($658,135.46),
which consists of the unamortized allowances (including construction,
refurbishment, space planning and decorating) and commissions shown on Exhibit
F, attached hereto and incorporated herein for all purposes, and paid or
incurred by Lessor in connection with this Lease, plus an interest factor on
such amount of eight percent (8%) per annum commencing on the date of payment by
Lessor, with amortization commencing on the Commencement Date, and (ii) a dollar
amount equal to all unamortized allowances, commissions and tenant finish costs
not shown on Exhibit F that are related to any space added to the Premises after
the Commencement Date, plus an interest factor equal to eight percent (8%) per
annum from the date of payment by Lessor, with amortization based on, in each
instance, the ratio of the number of months remaining in the unexpired term of
this Lease from the effective date of the addition of such space to the Premises
until the effective date of such cancellation, to the total number of months
remaining in the unexpired term of this Lease from the effective date of the
addition of such space to the Premises until the end of the stated term, without
regard to such cancellation option. If Lessee fails to make such payment when
due, such failure shall, at Lessor's sole option, nullify Lessee's notice of
cancellation and constitute an event of default under this Lease, entitling
Lessor to all of Lessor's remedies under this Lease, as well as all remedies
otherwise available to Lessor, including, without limitation, any and all rights
for recovery of the cancellation fee, reasonable attorney's fees and expenses
and, if necessary, eviction. The method of calculating the cancellation fee set
out in (i) above is shown on Exhibit F attached hereto and made a part hereof
and such methodology shall be applied to any calculations performed for purposes
of (ii) above. If Lessee does not give Lessor the notice required by this
Section 2.6 in a timely manner, this Lease shall remain in full force and effect
for the remaining sixty (60) months of the term.
ARTICLE III - RENT
3.1 Base Rent. Base Rent (herein so called) shall be as follows:
Annual Base Rent Annual Base Rent
Rate/RSF Rate/RSF Total Total
Months (Floor 22) (Floor 23) Annual Base Rent Monthly Base Rent
-------------------------------------------------------------------------------------------------------------
1 - 60 $20.35 $19.35 $844,128.20 $70,344.02
61 - 120 $21.35 $20.35 $887,040.20 $73,920.02
Base Rent shall be payable, beginning on the Commencement Date and throughout
the term, in the monthly installments shown above. The first full calendar
month's Base Rent installment shall be paid by Lessee on or prior to the
Commencement Date.
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For the period, if any, at the beginning of the term of this Lease that the
Premises include the Temporary 28th Floor Space instead of the 22nd Floor Space
as contemplated by Section 1.1, Lessee shall pay Base Rent for the Temporary
28th Floor Space at the rental rate per square foot of Rentable Area applicable
to the 23rd Floor Space for the same period.
3.2 Expense Rent. The rate used in calculating Base Rent includes an
Expense Stop (herein so called) of the dollar amount per square foot of Rentable
Area which is determined by dividing the total amount of Expenses for calendar
year 2005 (as calculated pursuant to Section 3.7 and 3.8) for the Building as
annualized to full occupancy by ninety-five percent (95%) of the number of
square feet of Rentable Area in the Building. Lessee shall pay additional rent
("Expense Rent") beginning as of January 1, 2006, equal to the product of the
number of square feet of Rentable Area in the Premises times a rate each
calendar year (the "Excess Expense Rate") that equals the amount in that year by
which Expenses per square foot of Rentable Area in the Building exceed the
Expense Stop. Expense Rent shall be payable in monthly installments based on
Lessor's then current estimate of the Excess Expense Rate. If such estimate is
not ready at the beginning of a calendar year, then Lessee shall continue to pay
the same amount of monthly Expense Rent as had been required for the preceding
year until Lessee receives Lessor's estimate for the then-current year, and
Lessor shall provide Lessee with written notice of such estimate no later than
July 1 of such calendar year and applied retroactively to January 1 of such
year. As soon as available each calendar year beginning in 2007, but in no event
later than June 1 of each year, Lessor shall furnish Lessee a written
reconciliation statement showing actual Expenses for the prior year and the
amount of any underpayment or overpayment of estimated Expense Rent by Lessee.
Any underpayment shall be payable within ten (10) days after delivery of the
reconciliation statement. Any overpayment shall be applied in a lump sum against
the next installment(s) of rent due from Lessee, or if Lessor chooses, shall be
refunded to Lessee.
3.3 Electrical Charges. Lessor shall periodically invoice Lessee (but
no more often than monthly) for Lessee's electrical consumption in the Premises
at the then-prevailing rate charged to Lessor by the utility company, which
shall include (i) a common area charge calculated in the manner set forth below,
plus (ii) actual electrical consumption for the Premises (which shall be
separately metered for each floor and, at Lessor's option, for Lessee's computer
room or other portions of the Premises in which above-Building standard
electrical consumption is reasonably anticipated by Lessor), and such invoice
shall separately show the common area electrical charge and the charges for
electrical consumption as determined by metered usage in the Premises. The
monthly common area electrical charge shall be calculated by multiplying the
annual Building Hours (3120 hours) by 5.75 ▇▇▇▇▇ per square foot of Rentable
Area in the Premises and dividing that amount by twelve (12) to reach ▇▇▇▇▇ per
square foot per month allocation of common area electrical charges. That amount
will be converted to kilowatt hours and then be multiplied by the average
utility company
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PAGE 6
kilowatt hour rate for the specific month to arrive at the common area
electrical charge for that month. Lessor and Lessee acknowledge and agree that
the intent of the formula for calculating the monthly common area electrical
charge is for Lessor to be reimbursed based on Lessor's actual common area
electrical charges and for Lessor to not profit as to same. Each monthly
electricity ▇▇▇▇ shall include a five percent (5%) administrative processing
fee.
3.4 Security Deposit. On or before the date by which Lessee is to
deliver Lessee's preliminary "Space Plans" to Lessor in accordance with Section
1.2 of the Work Letter (hereinafter defined), Lessee shall deposit a cash sum of
$74,453.77 with Lessor as security for the performance of Lessee's obligations
under this Lease. The security deposit shall never be considered an advance
payment of rent or liquidated damages. Should Lessee be in default of Lessee's
obligations under this Lease beyond any applicable notice and cure periods, then
Lessor may, if Lessor chooses and without prejudice to any other remedy, apply
the security deposit to the extent necessary to satisfy any and all current,
accrued, but unperformed or unpaid, obligations of Lessee under this Lease.
Following the application of any part of the security deposit, Lessee shall pay
Lessor, within three (3) days after written demand from Lessor, a sum sufficient
to restore the security deposit to its full amount. If Lessee is not in default
at the end of the term and if all amounts owed by Lessee have been paid
(including electrical charges, bills for any required repairs to the Premises,
and any final reconciliation of actual and estimated Expense Rent), the balance
of the security deposit shall be returned to Lessee in accordance with any
requirements of Section 93.005(a) of the Texas Property Code, as the same may be
amended. The security deposit shall be held without interest.
3.5 Time, Place, and Manner of Paying Rent. Installments of Base Rent
and estimated Expense Rent shall be due and payable in advance on the first day
of each calendar month without notice or demand, and shall be prorated on a
monthly basis and paid in advance for any partial calendar month. All sums
payable to Lessor by Lessee under any provision of this Lease, even if not
specifically referred to as "rent" or "additional rent," constitute rent for all
purposes. Unless otherwise specified in this Lease, all other monetary
obligations of Lessee shall be payable within ten (10) days after written demand
by Lessor, as evidenced by delivery of demand, ▇▇▇▇, invoice, or other written
notice. All rent shall be payable by cash (or other immediately available United
States funds) or check, without offset or deduction (except only to the extent
otherwise expressly provided in this Lease), at the address of Lessor specified
in this Lease or such other address Lessor may designate; provided that if
Lessor has customarily accepted checks, Lessor may nonetheless require payments
to be in cash at any time following Lessee's failure to make (a) Base Rent or
Expense Rent payments within ten (10) days after the date due, or (b) any other
payment to Lessor when due during the term of this Lease. No rent for which
Lessor accepts a check shall be
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considered paid until cash funds are actually paid and credited to Lessor's bank
account.
3.6 Administrative Fee. If Lessee fails to pay any sum within ten (10)
days after the date payment is due, or if a check delivered by Lessee to Lessor
in payment of any sum has not been paid and credited to Lessor's bank account
within ten (10) days after the date payment is due, an administrative fee of
five percent (5%) of the amount past due shall be payable. This fee is intended
only to compensate Lessor for extra administrative and other expenses and
difficulties resulting from late payment, and shall never be construed as
liquidated damages or as consideration for any waiver or forbearance by Lessor.
3.7 Expenses Defined. The term "Expenses" means all costs and expenses
related to the operation, maintenance, or ownership of the Property (whether
incurred by Lessor or by the owner of the Property). Expenses include the
following: (a) wages, salaries, employee benefits, and other costs for
operation, maintenance, engineering, management, security, or other types of
personnel; (b) cost of supplies, materials, and equipment used or rented; (c)
utility costs (exclusive of electrical costs which shall be paid in accordance
with Section 3.3); (d) property management fees and expenses, including
management office occupancy costs; (e) sums payable under any landscaping,
janitorial, maintenance, trash removal, security, or other service contract; (f)
repair and maintenance costs, including replacement costs other than those that
are capital in nature [which capital expenses shall be governed by item (i)
below]; (g) insurance premiums; (h) taxes, assessments, and other similar
charges levied or assessed against the Property, including sales taxes and
assessments by any property owners' association; (i) amortization of capital
expenditures required by code or law, incurred with Lessor's reasonable
expectation that other Expenses will be reduced, or to enhance the Project for
the general benefit of tenants or occupants thereof, or which are for
replacement of Building equipment needed to operate the Project at the same
quality levels as prior to the replacement; and (j) legal, accounting, auditing,
and other professional fees and expenses for the general use or benefit of the
Building. Expenses do not include the following: (1) leasing commissions,
marketing expenses, attorney's fees and other costs incurred in connection with
lease negotiations or disputes with other tenants or prospective tenants in the
Building or similar costs incurred in connection with Lessor's consultants,
management agents, purchasers or mortgagees of the Building; (2) capital
expenditures other than those described above; (3) depreciation; (4) principal,
interest or finance charges on any loan or with respect to the Master Lease,
except to the extent for ad valorem/real estate taxes, insurance premiums or
other items to be included within the term "Expenses" as described above; (5)
taxes on net income or franchise taxes; (6) electrical consumption charges or
any other expenses separately billed to any tenant; (7) expenses actually paid
by insurance proceeds or, if Lessor is not in compliance with Lessor's insurance
obligations under Section 6.1(b), expenses that would be payable by insurance
required to be so
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PAGE 8
carried by Lessor; (8) trustee's fees, partnership organizational expenses and
accounting fees to the extent relating to Lessor's general corporate overhead
charges and general administrative expenses; (9) amounts paid to affiliates in
excess of the cost for comparable goods or services provided by unaffiliated
parties; (10) allowances, concessions and other costs incurred in completing
tenant leasehold improvements; (11) costs incurred in connection with the sale,
financing, refinancing, mortgaging, selling or change of ownership of the
Building; (12) costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to Lessor's late payments of taxes, utility bills and
other costs to the extent arising from Lessor's failure to make such payments
when due, unless a result of Lessor's good faith and reasonable efforts in
contesting the amount of such payments; (13) costs of utilities directly metered
to tenants of the Building and payable separately by such tenants; or (14) costs
incurred to correct any violation by Lessor that exists as of the date of this
Lease of any law, rule, order or regulation that is applicable to the Building.
3.8 Expense Accounting. Accrual, cash, or other methods may be used in
accounting for Expenses, at Lessor's sole option. The fiscal year for expense
accounting shall be the calendar year. If there are other occupied buildings on
the Property, Expenses which relate exclusively to the Building shall be shared
pro rata by all lessees of the Building on the basis of relative floor area. If
there are other occupied buildings on the Land, Expenses of the Property that
relate to the common areas of the Land and Garage shall be allocated between the
Building and any other occupied buildings on the Land on a basis selected by
Lessor (such as relative floor area) that, in Lessor's reasonable judgment,
fairly reflects each building's share of such Expenses. If any Expenses are
incurred for a partial year or vary depending on occupancy, those Expenses shall
be adjusted on a basis selected by Lessor that reasonably approximates what each
of the Expenses would have been for the entire year at full occupancy. To
determine the Excess Expense Rate, Expenses as annualized to full occupancy
shall be divided by ninety-five (95%) of the Rentable Area of the Building.
Lessee may, at any time during Lessor's or Lessor's management company's normal
business hours between the sixth (6th) and the sixteenth (16th) day of any
month, audit and/or inspect Lessor's Expense accounting records for a calendar
year within ninety (90) days after receipt from Lessor of the annual statement
reconciling actual and estimated Expenses, or in lieu thereof, Lessor may, at
Lessor's option, furnish an audit of Expenses prepared by an independent
certified public accountant of Lessor's selection. If the final result of the
audit/inspection establishes that Lessee (a) overpaid for Expenses, then Lessee
shall be entitled to a credit against Lessee's subsequent monetary obligations
arising under this Lease in the amount of such overpayment (or, if no further
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PAGE 9
monetary obligations are to arise, Lessor shall reimburse Lessee the amount of
such overpayment in the form of a check within 30 days after the completion of
such audit/inspection), or (b) underpaid for Expenses, then Lessee shall pay
Lessor the amount of such underpayment at the same time as Lessee's
next-accruing monetary obligation under this Lease becomes due (or, if no
further monetary obligations are to arise, Lessee shall pay Lessor the amount of
such underpayment in the form of a check within 30 days after the completion of
such audit/inspection). All expenses relating to such audit and/or inspection
shall be borne solely by Lessee, unless the results thereof establish that
Lessor overstated actual Expenses by more than five percent (5%), in which event
Lessor shall pay Lessee's actual reasonable audit/inspection out-of-pocket fees
applicable to the audit/inspection.
3.9 Tax Protests. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAWS,
LESSEE WAIVES ALL RIGHTS PURSUANT TO ALL LAWS TO PROTEST APPRAISED VALUES OR
RECEIVE NOTICE OF REAPPRAISAL REGARDING THE BUILDING OR OTHER PROPERTY OF
LESSOR, INCLUDING, WITHOUT LIMITATION, ANY ARISING UNDER PROP. TAX CODE SECTIONS
41.413 OR 42.015, AS SUCH SECTION NOW EXISTS OR AS MAY BE HEREAFTER AMENDED OR
SUCCEEDED.
3.10 Reasonable Methods to Determine Charges. Lessor and Lessee
acknowledge and agree that the provisions set forth in this Lease for
determining Expenses and all additional rent and other charges and amounts
payable by Lessee under this Lease are commercially reasonable and valid even
though such methods may not state a precise mathematical formula for determining
such charges. ACCORDINGLY, LESSEE HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ALL
RIGHTS AND BENEFITS OF LESSEE UNDER TEXAS PROPERTY CODE SECTION 93.004, AS SUCH
SECTION NOW EXISTS OR AS MAY BE HEREAFTER AMENDED OR SUCCEEDED.
ARTICLE IV - USE AND OPERATION
4.1 Use. The Premises shall be used and occupied solely for office
purposes and all lawful related and consistent uses, including, without
limitation, the operation of Lessee's data center existing as of the date of
this Lease, and any permitted future expansion thereof. Except for supplies used
in the Premises, no goods or other merchandise may be stored in, or held for
sale at, the Premises. Lessee shall not use the Premises or any other part of
the Property for any activity that violates any law or ordinance, that violates
any private covenants or restrictions applicable to the Property and recorded as
of the Commencement Date, that is disreputable, that creates a nuisance, or that
unreasonably interferes with the use and enjoyment of the Property by Lessor or
others. Lessee shall not commit any waste to the Property. Lessee shall not
engage in any activity in the Premises or in any other part of the Property that
Lessor reasonably believes could increase premiums for fire, liability, or other
insurance coverage on the Property, or that Lessor reasonably believes could
void or make any such insurance coverage unobtainable. Lessee shall comply with
all laws and ordinances applicable to the use and occupancy of the Premises and
the conduct of Lessee's business therein, and shall obtain and keep in force all
permits and licenses related thereto. Lessee shall comply with the Project Rules
attached as Exhibit C and with any future amendments to the Project Rules that
Lessor reasonably deems are necessary for the safe, efficient and effective
operation of the Project; provided, however, that Lessor shall use commercially
reasonable
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PAGE 10
efforts to enforce the Project Rules and any future amendments uniformly as to
all tenants in the Building. Lessee shall cause its Personnel to comply with
each of the provisions of this Section, and shall be liable for any violation of
any provision of this Section by its Personnel. The term "Personnel" means,
collectively, employees, officers, agents, contractors, vendors, suppliers,
customers, licensees, invitees, visitors, or other persons with whom a party has
any legal or business relationship.
4.2 Building Services. As long as Lessee is entitled to possession of
the Premises (but not thereafter), the following services shall be furnished to
those parts of the Premises that have not been abandoned by Lessee:
(a) Electricity at points of supply selected by Lessor at such
voltage and power, and kilowatt-hour consumption levels as are "building
standard" for the Building as of the date of this Lease, and, except as
contemplated in "Exhibit G - Additional Generator Usage" attached hereto,
Lessee's use of electricity shall not exceed Building standard circuit
capacities or KWH consumption. Lessor may direct that submeters be installed in
portions of the Premises, as part of the Improvements, as defined in the Work
Letter. If Lessee requests electrical services in excess of Building standard,
Lessor may choose to consent only upon conditions that Lessor considers
reasonably appropriate (including the condition that additional submeters and/or
any additional risers, wiring, or other equipment be installed by Lessor at
Lessee's cost payable in advance).
(b) Central heating and air conditioning in season to provide
temperatures in the Premises during Building Hours that Lessor reasonably
considers suitable for an office environment at normal occupant densities under
normal outside weather conditions. Building Hours (herein so called) are 7:00
a.m. to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on
Saturday, exclusive of Building Holidays, and such hours may be amended from
time to time by Lessor upon notice to the tenants in the Building. Building
Holidays (herein so called) shall be the days which are listed on Exhibit D
attached hereto as amended from time to time by Lessor upon notice to all
lessees of the Building. If Lessee desires to have heating and air conditioning
service in the Premises during other than Building Hours, Lessee must request
that service in advance from the Building manager during Building Hours. By
requesting such service, Lessee agrees to pay Lessor's Building standard charge
based on the actual time used (including any Building standard minimum charge)
for the smallest heating or air conditioning zone that can accommodate the
requested service area in the Premises (as of the date of this Lease, Lessor's
charge for heating and air conditioning service during non-Building Hours is
$35.00 per hour, and Lessor shall provide Lessee with written notice of any
future increases in Lessor's charge therefor). If Lessee's computers or other
equipment generate heat or vapors that Lessor reasonably considers excessive or
require the maintenance of a range of temperatures or ventilation that Lessor
reasonably believes cannot be provided by Building
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 11
standard heating, ventilating and air conditioning, Lessor may prohibit the
operation of such computers or other equipment, until such time as Lessor elects
to install supplemental heating, ventilating and air conditioning equipment. If
Lessor elects to install supplemental heating, ventilating and air conditioning
equipment, Lessee shall pay all costs of acquiring, installing, maintaining, and
operating the supplemental equipment, including electrical and chilled water
consumption costs. Lessee may continue to maintain Lessee's supplemental
heating, ventilating and air conditioning equipment that exist within the
Premises as of the date of this Lease.
(c) Toilet facilities, hot and cold water as appropriate for
toilet and lavatory purposes, and cold water for drinking, all at points of
supply for the general use of Building occupants.
(d) Passenger and freight elevator service. The number of
passenger elevators operating after Building Hours may be restricted, and
dedicated freight elevator service shall be available only when reserved in
advance through the Building manager.
(e) Building standard routine maintenance of all public and
service areas of the Building and of the elevators, mechanical, electrical,
plumbing, and other standard component systems and equipment of the Building.
(f) Janitorial service, Monday through Friday, exclusive of
Building Holidays. If Lessee's floor coverings or other fixtures or improvements
require other than Building standard janitorial service, or if Lessee maintains
a lunchroom, coffee bar, or similar facility for its employees, Lessee shall pay
any additional cleaning costs. If at any time janitorial personnel cannot obtain
access to any part of the Premises when normally scheduled because of Lessee's
activities in that part of the Premises after Building Hours or because Lessee
has failed to comply with the provisions of this Lease relating to locks or
access to the Premises, Lessor shall not be required to furnish janitorial
service to that part of the Premises until the next normally scheduled time for
janitorial service at which janitorial personnel are able to obtain access.
(g) Replacement of Building standard bulbs in the public areas
of the Building and in the Premises.
(h) Security in the form of limited access to the Building
during other than Building Hours, regulated in the manner Lessor considers
appropriate. Lessor shall not be responsible for any other types of security.
Lessee shall cooperate fully with Lessor's efforts to maintain security in the
Building and elsewhere on the Property, and shall follow and cause its Personnel
to follow all security regulations established by Lessor. If Lessor regulates
access to the Building during other than Building Hours by use of key cards
issued to Lessee, Lessor may require payment of the Building standard deposit
for each card issued, and Lessee shall not make or permit any duplicate key
cards to be made. When Lessee's
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 12
right to possession of the Premises comes to an end, whether at the end of the
term or earlier, Lessee shall surrender all key cards to the Building. If Lessee
fails to surrender all key cards to the Building when required, or if Lessor
reasonably believes that Lessee has made or permitted duplicate key cards to be
made, Lessor may change the access system to the Building at Lessee's expense.
Lessor shall use reasonable diligence to restore any interrupted or terminated
service, or correct any fluctuations, as promptly as reasonably possible. In no
event shall the interruption, fluctuation, or termination of any of these
services resulting from causes beyond Lessor's reasonable control make Lessor
liable in any respect, be construed as an eviction of Lessee, work an abatement
of rent, or relieve Lessee from any obligation; provided, however, that, in the
event such interruption, fluctuation, or termination is within Lessor's
reasonable control and causes all or any material portion of the Premises to be
untenantable for a period of at least five (5) consecutive business days, then
Base Rent and Expense Rent shall be abated to the extent, and for so long as,
the Premises, or any material portion thereof, are so untenantable.
4.3 Improvements. Lessor shall have no obligation to construct or pay
for any improvements to the Premises other than as described in the Work Letter.
Lessee shall reimburse Lessor for any excessive or nonstandard operating,
maintenance, or other expenses (as reasonably determined by Lessor) attributable
to any future alterations, additions, or improvements to the Premises. To the
extent possible, Lessee shall cause any future alterations, additions, or
improvements to the Premises to be separately rendered and assessed for ad
valorem taxation, and in any event, Lessee shall pay or reimburse Lessor for any
ad valorem taxes thereon. Lessee shall reimburse Lessor for any insurance
premiums attributable to any future alterations, additions, or improvements to
the Premises.
4.4 Alterations and Additions by Lessee. Lessee shall not install or
allow the installation of any of the following in the Premises without Lessor's
prior written consent (which consent may not be unreasonably withheld and, if
given, may be conditioned on such conditions as Lessor reasonably chooses,
including conditions relating to approval of plans and specifications,
employment and bonding of contractors, insurance, aesthetic considerations, and
other matters as reasonably determined by Lessor): (a) any alterations,
additions, or improvements other than the Improvements; (b) any vending
machines, refrigerators, microwave ovens, or other food or drink preparation,
storage, or dispensing equipment; (c) any sign, window covering, decoration,
advertising media, or lighting that is visible from outside the Building or from
lobbies or other public areas within the Building, or (d) any safes, filing
cabinets, or other heavy items. Approval by Lessor of any of Lessee's drawings
and plans and specifications prepared in connection with any improvements in the
Premises shall not constitute a representation or warranty of Lessor as to the
adequacy or sufficiency of such drawings, plans and specifications, or the
improvements to which they relate, for
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 13
any use, purpose or condition, but such approval shall merely be the consent of
Lessor as required hereunder. All Improvements and any subsequent alterations,
additions, fixtures, and improvements that are attached to the Premises or
Building (including, without limitation, fiber optic cabling and computer
flooring) shall become part of the Building (and shall be the property of the
owner of the Building) upon installation (without compensation to Lessee) except
for Lessee's normal office equipment (such as telephones, computers, copying
machines, and the like) that can be removed without alteration of walls,
ceilings, floor covering, millwork, cabinets, or other parts of the Premises.
All of Lessee's furniture and moveable equipment that is not attached to the
Premises or Building shall remain Lessee's property, and Lessee shall pay when
due all taxes and assessments of any kind on Lessee's property. When Lessee's
right to possession of the Premises comes to an end, whether at the end of the
term or earlier, Lessee shall, at Lessee's expense, promptly remove (i) at
Lessor's written direction given to Lessee not later than ninety (90) days prior
to the stated expiration of the full term of this Lease (or within 30 days after
any earlier expiration or termination of Lessee's right to possession of the
Premises, as contemplated by this Lease) all or any part of the fiber optic
cable connected to the Premises through existing risers from the main Building
telephone room and any computer flooring located within the Premises, (ii) all
or any parts of any other Improvements or subsequent alterations, additions, and
improvements in the Premises that Lessor notifies Lessee, at the time of
Lessor's approval therefor, will be required to be removed by Lessee when
Lessee's right to possession of the Premises comes to an end, and (iii) all of
Lessee's property; and Lessee shall accomplish that removal in a good and
workmanlike manner and promptly repair any damage to the Premises or Project
resulting from the removal. Any property of Lessee remaining in the Premises
more than ten (10) days after Lessee's right to possession of the Premises ends
shall be considered abandoned, and Lessor may, at its option, assume ownership,
remove and store the abandoned property at Lessee's expense, or sell or
otherwise dispose of the abandoned property in whatever manner Lessor considers
appropriate, all without liability to Lessee.
4.5 Graphics and Signs. All letters, numerals, signs, and advertising
on doors to the Premises or that are otherwise visible from outside the
Premises, or the elevators servicing the Premises, shall be in the standard
graphics for the Building, and no others shall be used or permitted unless
approved by Lessor, which approval shall not be unreasonably withheld or
delayed. Any changes in such letters, numerals, signs, or advertising shall be
at Lessee's expense. No Building directory exists as of the date of this Lease,
but, if Landlord should elect, in Landlord's sole discretion, to install a
Building directory, Lessee shall be entitled to be listed thereon in a manner
consistently applied to tenants in the Building.
4.6 Keys and Locks. Lessee shall be furnished two (2) keys for the
corridor doors to the Premises at Lessor's expense. Any additional keys shall be
furnished at Lessee's expense. No
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 14
additional locks shall be allowed on any corridor or interior door of the
Premises without Lessor's approval (which approval shall not be unreasonably
withheld or delayed), and Lessee shall not make or permit any duplicate keys to
be made. If Lessor does approve additional locks, Lessee shall provide Lessor
with two (2) keys to each such lock. When Lessee's right to possession of the
Premises comes to an end, whether at the end of the term or earlier, Lessee
shall surrender all keys to the Premises and furnish Lessor the combination of
all locks on safes, cabinets, and vault doors, if any, remaining in the
Premises. If Lessee fails to do so, or if Lessor reasonably believes that Lessee
has made or permitted duplicate keys to be made, Lessor may change all of the
locks in the Premises at Lessee's expense.
4.7 Maintenance and Repairs. Lessee shall, at its expense, maintain the
Premises (including the Improvements and any subsequent alterations, additions,
or improvements) in a good and tenantable condition, making all needed repairs
and replacements (other than repairs needed as a result of a casualty to the
extent covered by Section 6.5, janitorial service, and repairs that would
otherwise be furnished as Building services that are not needed as a result of
any act or omission of Lessee or its Personnel). Repairs and replacements by
Lessee shall be of a quality as good as the original work, and shall be
performed in compliance with applicable laws and ordinances, in a good and
workmanlike manner, with contractors acceptable to Lessor, in Lessor's
reasonable discretion, and if Lessor elects, under Lessor's supervision. Lessee
shall, at its expense, maintain and repair all of Lessee's furniture, equipment,
and other property. Subject to the waiver of claims and subrogation set forth in
Section 6.2, Lessee shall reimburse Lessor for the costs of repairs and
replacements to parts of the Project other than the Premises relating to any
damages caused by any act or omission of Lessee or its Personnel, to the extent
any such act or omission of Lessee's Personnel is not outside the scope of their
employment.
4.8 Liens. Lessee shall not permit any lien on the Premises or any
other part of the Property for any work performed, materials furnished, or
obligation incurred by or at the request of Lessee; provided, however, that, if
any such lien is expressly limited, of record, to Lessee's leasehold estate
under this Lease, then Lessee may provide to Lessor a bond or other security
reasonably acceptable to Lessor therefor. Nothing in this Lease shall be
construed as constituting the consent or request of Lessor or of the owner of
the Building, express or implied, to the furnishing of any labor or materials or
as giving Lessee any right to contract for or permit the furnishing of any labor
or materials that might give rise to any lien against Lessor's interest in the
Premises or against any other part of the Property. If any such prohibited lien
or lien claim is filed or asserted, Lessee shall cause the lien or claim to be
released of record or, if applicable, bonded within ten (10) days of filing.
4.9 Entry by Lessor. Lessor, the owner of the Building, or their
Personnel may enter the Premises at all reasonable
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 15
hours (and in emergencies at all times) to inspect, show, clean, protect, or
repair the Premises and to gain access to pipes, other conduit or utilities
which affect areas of the Building outside the Premises; provided, however, that
(a) to the extent commercially reasonable, Lessor, the owner of the Building and
their Personnel shall endeavor to provide Lessee with advance telephonic notice
before any such entry during Building Hours, and (b) the Premises will not be
shown to prospective tenants more than nine (9) months prior to the expiration
of the term of this Lease. Such entry shall not constitute an eviction, nor
shall Lessee be entitled to any abatement of rent as a result.
4.10 Telecommunications Providers. If Lessee wishes to use, at anytime
during the term of this Lease other than the last twelve (12) months thereof,
the services of a telecommunications provider whose equipment or service is not
then in the Building, no such provider shall be entitled to enter the Building
or commence providing such service without first obtaining the prior written
consent of Lessor, which shall not be unreasonably withheld, conditioned or
delayed. Lessor may condition its consent on such matters as Lessor deems
appropriate including, without limitation, (a) Lessor having been provided a
fully executed service agreement between Lessee and such service provider, (b)
such provider agreeing to a non-exclusive easement or license agreement that
will automatically terminate upon termination or expiration of the Lease, in
form and substance satisfactory to Lessor, (c) Lessor having been provided and
approved the plans and specifications for the equipment to be installed in the
Building, (d) Lessor having received, before commencement of such work, such
indemnities, bonds or other financial assurances as Lessor may reasonably
require, (e) such provider agreeing to abide by all Building rules and
regulations, (f) such provider agreeing to provide to Lessor, at no cost to
Lessor, an "as-built" set of plans and specifications, (g) such provider
agreeing to pay Lessor the then Building standard charge for providers for the
use of any space utilized by such provider in the Building (including, without
limitation, to the extent available, the use of any existing riser space), and
(h) Lessor having determined that there is adequate space in the Building for
the placement of all of such provider's lines and equipment. It is the intention
of the parties that Lessee bear all risks relating to the installation, use,
maintenance, operation and removal of the communications equipment; therefore
Lessee shall defend, indemnify, and hold harmless Lessor, and its agents, and
their respective affiliates, from all losses, claims, costs and liabilities
arising in connection with or relating to the installation, maintenance, use,
operation, and removal of the communications equipment. Lessee, upon written
notice from Lessor given at least sixty (60) days prior to the termination of
this Lease, shall, at Lessee's expense, remove all communications equipment
installed by Lessee pursuant to this Section and return the Premises and the
Building to the same condition existing prior to the installation of such
communications equipment.
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 16
4.11 Accommodation Laws. Lessee shall be wholly responsible for any
accommodations or alterations that are required by applicable governmental
codes, ordinances, rules, regulations and laws to be made to the Premises to
accommodate disabled employees and customers of Lessee, including, without
limitation, compliance with the American with Disabilities Act (42 U.S.C.
Sections 12101 et seq.) and the Texas Architectural Barriers Act
(Tex.Rev.Civ.Stat. Art. 9201) (collectively, the "Accommodation Laws"). Except
to the extent provided below, Lessor shall be responsible for making all
accommodations and alterations to the Common Areas of the Building necessary to
comply with the Accommodation Laws. Notwithstanding the foregoing, Lessor may
perform, at Lessee's sole cost and expense, any accommodations or alterations
that are required by the Accommodation Laws to any area outside of the Premises
that are triggered by any alterations or additions to the Premises.
4.12 DART Station Access. Currently, the Building has access to a
subsurface Dallas Area Rapid Transit (DART) Station by underground tunnel.
Lessor makes no representation or warranty as to the continued use or
availability of, or access to, the DART Station, or any future use or
availability of, or access to, any other underground tunnel system. In no event
shall any revocation, curtailment, modification, addition or other change in
DART service or the DART Station, or both, subject Lessor to any liability or
obligations whatsoever, nor shall Lessee be entitled to any compensation,
diminution or abatement of rent, or any other rights or remedies relating to
Lessee's obligations under this Lease by virtue thereof.
4.13 Roof Access. To the extent available without Lessor being
obligated to incur any cost or expense to increase rooftop capacity, Lessor,
through Lessor's communications manager, will provide Lessee with a location on
the roof of the Building, as reasonably determined by Lessor (with consideration
given to, among other things, the aesthetics and structural integrity of the
Building as well as the operations requirements of other rooftop equipment), for
Lessee's installation of microwave dishes, antennae or other communication
devices (collectively, the "Communications Equipment"). The types of
Communications Equipment, and the specifications therefor, shall be subject to
Lessor's approval, which shall not be unreasonably withheld or delayed. All
costs or expenses (including license fees to Lessor's communications manager)
associated with the installation, maintenance and, if required by Lessor at the
end of the term of this Lease, removal of the Communications Equipment shall be
borne by Lessee. The portion of the Building upon which the Communications
Equipment is located shall not be part of the Premises and Lessee shall incur no
additional rental expense related thereto; provided, however, that Lessee shall
comply with any reasonable rules and regulations promulgated by Lessor's
communications manager relating to roof access and the safe, efficient and
effective operation of rooftop equipment.
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 17
ARTICLE V - TRANSFERS
5.1 Prohibited Transfers by Lessee. Lessee shall not, without the prior
written consent of Lessor in each instance, which consent shall, in each
instance, not be unreasonably withheld, delayed or conditioned, do any of the
following (collectively, "Transfers"): (a) assign or otherwise transfer this
Lease or any estate or interest therein, whether absolutely or collaterally as
security for any obligations; (b) permit any assignment of this Lease or any
estate or interest therein by operation of law; (c) during any period other than
when the outstanding voting shares of capital stock of Lessee are listed on a
recognized security exchange or over-the-counter market, permit the merger or
consolidation of Lessee with any other corporation or other entity, the sale or
other transfer of fifty percent (50%) or more of Lessee's capital stock or other
similar ownership interest, or the sale or other transfer of fifty percent (50%)
or more of Lessee's assets; (d) sublease any part of the Premises; (e) grant any
license, concession, or other right of occupancy for any part of the Premises;
or (f) permit the use of the Premises by any person other than Lessee and its
agents and employees; or (g) attempt any assignment or subletting to any
existing tenant in the Building or to any third party with whom Lessor has
commenced discussions with about the possible leasing of space in the Building.
Any attempted Transfer without Lessor's prior written consent is void.
5.2 Transfer Requests by Lessee. If Lessee requests Lessor's consent to
a Transfer, Lessor may, on whatever conditions Lessor reasonably considers
appropriate (including conditions related to the reconfiguration of access to,
and walls within, the Premises), either (a) approve the Transfer, (b) disapprove
the Transfer, or (c) terminate this Lease with respect to the part of the
Premises included in the proposed Transfer; provided, however, that, if Lessor
elects option (c) immediately above, Lessee may prevent Lessor's termination by
withdrawing the requested Transfer by giving written notice to Lessor no later
than five (5) days after Lessor's notice to Lessee of Lessor's exercise of
option (c). In connection with each Transfer request by Lessee, Lessee shall
obtain and furnish to Lessor all documents, financial reports, and other
information Lessor reasonably requires in order to evaluate the requested
Transfer. Lessee shall reimburse Lessor for Lessor's attorneys' fees and other
expenses incurred in connection with considering any request for its consent to
a Transfer. Lessor shall advise Lessee of Lessor's decision with respect to the
requested Transfer within thirty (30) days after receipt of Lessee's Transfer
request. If Lessor refuses to consent to a requested Transfer, this Lease shall
nonetheless remain in full force and effect. The consent of Lessor to one
requested Transfer shall never be construed to waive the requirement for
Lessor's consent to other Transfers, nor shall any consent by Lessor or Transfer
by Lessee discharge or release Lessee or any guarantor from any current or
future obligations to Lessor.
5.3 Relationship with Transferees. Unless Lessor otherwise specifically
agrees in writing, Lessee shall be obligated to pay to Lessor fifty percent
(50%) of all rent, cash or other proceeds of any Transfer actually received by
Lessee
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 18
(i.e., without including, or after deducting, as applicable, any free rent or
rent concessions) in excess of the rent payable under this Lease and all
reasonable costs incurred by Lessee in connection with such Transfer (including,
without limitation, leasing commissions, advertising costs and tenant finish
work), and Lessee hereby assigns to Lessor all rights it might have or ever
acquire to the excess proceeds. Any party to whom a Transfer is made (a
"Transferee"), by occupying the Premises and/or assuming Lessee's obligations,
shall be considered to have assumed liability to Lessor for all amounts so
assigned to Lessor but paid to Lessee or others. Unless Lessor otherwise
specifically agrees in writing, no Transferee of less than the entire Premises
or Lease shall ever be entitled to exercise any extension, expansion, or other
option provided in any Addendum to this Lease, nor shall any Transferee of any
part of the Premises or Lease be entitled to any allowance, payment or other
inducement provided in any Addendum to this Lease or to the return of any
security deposit. If a default by Lessee occurs after any Transfer, Lessor may,
at its option, collect rent directly from the Transferee, and Lessee hereby
authorizes any Transferee to pay rent directly to Lessor at all times after
receipt of notice from Lessor. No direct collection by Lessor from any
Transferee shall constitute a novation or release Lessee or any guarantor from
its obligations under this Lease.
5.4 Subordination to Mortgage. Lessee hereby subordinates this Lease
and all rights of Lessee hereunder to the lien of any mortgage or deed of trust
or any ground lease now or hereafter placed against the Premises, and all
renewals, substitutions and extensions thereof and all modifications and
amendments thereto, and all such liens and ground leases are superior to and
prior to this Lease; provided, however, that such subordination shall not be
effective with respect to mortgages, deeds of trust or ground leases hereafter
placed against the Premises unless the holders or ground lessors thereof agree
not to disturb Lessee's possession of the Premises for so long as Lessee
complies with Lessee's obligations under this Lease within any applicable notice
and cure periods. Lessee agrees to execute the Subordination, Attornment and
Nondisturbance Agreement (the "SNDA") attached hereto as Exhibit E. Lessee
further agrees to execute for any subsequent lienholder of the Building a
subordination and attornment agreement with terms substantially the same as
those contained in Exhibit E. If, within sixty (60) days after the date of this
Lease, Lessor shall not have obtained execution of (a) the Nondisturbance
Agreement attached to this Lease by the lessor under the Master Lease
(hereinafter defined), and (b) the SNDA by the lienholder identified therein,
then Lessee shall have the right to terminate this Lease upon written notice to
Lessor that must be received by Lessor before the earlier to occur of (i) the
date that is ten (10) days after the expiration of such sixty (60)-day period,
and (ii) the date that Lessee receives a copy of such Nondisturbance Agreement
that has been signed by the lessor under the Master Lease and the SNDA that has
been signed by the lienholder identified therein.
5.5 Estoppel Certificates. Lessee and Lessor shall, whenever requested
by the other, execute a statement certifying,
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 19
to the extent true, that Lessee is in possession of the Premises, that this
Lease is unmodified and in full effect (or if there have been modifications,
that this Lease is in full effect as modified, and setting forth the
modifications), the date to which the rent has been paid, that to the knowledge
of certifying party no default exists under this Lease or specifying each
default of which the certifying party may have knowledge, and such other matters
as may reasonably be requested. Any such statement by Lessee may be relied upon
by any prospective purchaser or mortgagee of the Building.
5.6 Transfers by Lessor. Lessor has the unrestricted right to sell,
mortgage, encumber, assign, or otherwise transfer its interest in this Lease in
whole or in part. Upon any change in ownership of Lessor's interest in this
Lease, Lessor shall be released from any subsequent obligations under this Lease
to the extent assumed by the successor to Lessor's interest, whether by written
agreement or otherwise, and Lessee shall look solely to the new owner for the
performance of such obligations, including, if applicable, any obligation for
the return of any security deposit. Upon written request by Lessee, Lessor will
send to Lessee a copy of any such written assumption agreement that Lessor has
obtained from such successor to Lessor's interest in this Lease.
ARTICLE VI - RISK MANAGEMENT
6.1 Insurance Policies.
(a) Lessee's Requirements. Lessee shall, at its expense, maintain
full replacement cost insurance on an "all-risk" basis covering all property
owned by Lessee in the Premises or elsewhere on the Property. Lessee shall, at
its expense, also maintain comprehensive general liability insurance with not
less than TWO MILLION DOLLARS ($2,000,000) combined single limit coverage (or
such greater amount of coverage as required by Lessor from time to time), and
with contractual liability coverage for the indemnity obligations of Lessee
under this Lease to the extent insurable. Finally, if required by law, Lessee
shall, at its expense, maintain workmen's compensation and employer's liability
insurance. All of Lessee's policies (except workmen's compensation) shall name
Lessor, the owner of the Building, and mortgagees of the Property as additional
insureds. All of Lessee's policies shall be underwritten by insurers licensed to
do business in Texas, which insurers shall be financially sound and reasonably
acceptable to Lessor, and shall contain an undertaking by the insurers to notify
Lessor, the owner of the Building, and mortgagees of the Property in writing not
less than thirty (30) days prior to any reduction in coverage, cancellation,
termination, or other material change. All liability policies that cover
multiple insured parties shall contain a provision stating that the policy will
apply to each insured just as if a separate policy had been issued to each,
except with respect to limits of liability. Certificates of insurance, or if
required by Lessor, the owner of the Building, or mortgagees of the Property,
certified copies of each policy, shall be delivered to Lessor as soon as
possible after the placing of the required insurance, but in no event later than
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 20
the Commencement Date, and renewal certificates or policies shall be delivered
not less than ten (10) days prior to the expiration of the previous policies.
(b) Lessor's Requirements. Lessor may maintain such insurance as
Lessor determines is advisable with respect to the Project, provided that, at a
minimum, Lessor complies in all material respects with any insurance
requirements imposed upon Lessor under any mortgage, deed of trust or ground
lease affecting the Project. All premiums and other costs of Lessor's insurance
shall be included in Expenses for all purposes under this Lease.
6.2 Waiver of Claims and Subrogation. Notwithstanding anything to the
contrary contained in this Lease, Lessee and Lessor each waive, on behalf of
itself, its Personnel, and its insurers (none of which shall ever acquire any
claim by subrogation or otherwise), all claims, rights of recovery, and causes
of action against the other, the owner of the Building, and their Personnel for
any loss or damage (even if caused by fault or negligence) that should be
covered by the minimum insurance required to be maintained by Lessee and Lessor
under this Lease (even if not actually so covered) or any insurance actually
maintained (even if not so required). If required to be effective, all of
Lessee's and Lessor's insurance policies shall contain (and, upon request by the
other, each of Lessee and Lessor shall furnish the other with satisfactory
evidence that the policies actually do contain) appropriate provisions or
endorsements effectuating the foregoing waiver.
6.3 Risk of Loss. Neither Lessor nor the owner of the Building shall
have any liability to Lessee or others for any injury, loss, or damage to
persons or property resulting from (a) any defect or breakdown of any part of
the Project or its component systems or equipment, except to the extent caused
by Lessor's gross negligence or willful misconduct, (b) any act or omission of
other tenants or of any other persons on the Property, (c) any theft or burglary
or any other loss or injury resulting from the presence of unauthorized persons
on the Property, or (d) any act of God, war, governmental order, or other matter
beyond the reasonable control of Lessor. All of Lessee's property shall be at
Lessee's risk only, and Lessor shall have no liability for loss or damage to
Lessee's property.
6.4 Indemnities. Subject to the waiver of claims and subrogation in
Section 6.2, Lessee and Lessor agree as follows:
(a) Lessee's Indemnity. Lessee shall indemnify and hold Lessor,
the owner of the Building, and their Personnel harmless against any loss,
liability, damage, cost, or expense, or any claim therefor, (a) resulting to any
extent from the violation or nonperformance of any provision of this Lease by
Lessee or Lessee's Personnel, (b) resulting to any extent from any tax, fine,
assessment, or other charge of any governmental body related in any way to
Lessee's business, to occupancy of the Premises, or to the noncompliance with or
violation of any law or ordinance by Lessee or Lessee's Personnel, or (c)
related in any way to any damage or injury to persons or property caused to
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 21
any extent by the noncompliance with or violation of any law or ordinance, by
the occupancy or use of the Premises, or by any act or omission within the
Premises or elsewhere on the Property by Lessee or Lessee's Personnel. The
foregoing obligations shall not be affected by any act or omission of Lessor,
the owner of the Building, or their Personnel.
(b) Lessor's Indemnity. Lessor shall indemnify and hold Lessee and
Lessee's Personnel harmless against any loss, liability, damage, cost, or
expense, or any claim therefor, (a) resulting to any extent from the violation
or nonperformance of any provision of this Lease by Lessor or Lessor's
Personnel, (b) resulting to any extent from any tax, fine, assessment, or other
charge of any governmental body related in any way to Lessor's business or to
the noncompliance with or violation of any law or ordinance by Lessor or
Lessor's Personnel, or (c) related in any way to any damage or injury to persons
or property caused to any extent by the noncompliance with or violation of any
law or ordinance, by the use of the common areas of the Building, or by any act
or omission on the Property outside of the Premises by Lessor or Lessor's
Personnel. The foregoing obligations shall not be affected by any act or
omission of Lessee or Lessee's Personnel.
To the extent that the indemnities set forth in this Section 6.4 relate to acts
or omissions by the Personnel of either party hereto, the indemnities shall be
effective only to the extent that such acts or omissions by the Personnel are
not outside the scope of their employment.
6.5 Casualty Damage. If any part of the Premises is damaged by fire or
other casualty, Lessee shall give prompt notice to Lessor. If damage by fire or
other casualty reasonably precludes occupancy of any substantial part of the
Premises, or if the Project is so damaged that in Lessor's sole judgment,
substantial alteration or reconstruction of the Project is required (whether or
not the Premises have been damaged by the casualty), or if any mortgagee of the
Property requires application of the insurance proceeds to the reduction of the
mortgage debt, or if any material uninsured loss occurs, Lessor may, at its
option, terminate this Lease by notifying Lessee within sixty (60) days after
the date of the casualty. If Lessor does not elect to terminate this Lease, it
shall, within sixty (60) days after the date of the casualty, notify Lessee of
that decision and of the estimated repair time. If the damage reasonably
precludes occupancy of any substantial part of the Premises and if the estimated
repair time to restore that part of the Premises to a condition that reasonably
permits occupancy will extend beyond six (6) months after the date of the
casualty, Lessee may elect to terminate this Lease by so notifying Lessor within
ten (10) days after receipt of notice of Lessor's decision not to terminate this
Lease. If Lessor elects not to terminate this Lease (or if Lessor is not
entitled to terminate this Lease), and if Lessee does not elect to terminate
this Lease (if Lessee has that option under the preceding sentence), Lessor
shall restore (or shall cause the owner of the Building to restore) the Project
and the Improvements to substantially their former condition as soon as
reasonably
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 22
possible; provided, however, that, if the repair and restoration is not
substantially completed within six (6) months after the date of the casualty,
then Lessee may thereafter terminate this Lease on thirty (30) days' prior
written notice to Lessor unless such repair and restoration is substantially
completed within such thirty (30)-day period. However, in no event shall Lessor
be required to (i) restore any part of the Improvements in excess of Building
standard quantities or qualities unless proceeds of Lessee's fire and extended
coverage insurance are made available to Lessor for that purpose, or (ii) spend
any amount in excess of the insurance proceeds actually received by Lessor (or
by the owner of the Building, as the case may be) as a result of the casualty.
Lessor shall allow Lessee a fair reduction of rent (including, without
limitation, Expense Rent) during the time and to the extent the Premises are
unfit for occupancy.
6.6 Condemnation. If all or substantially all of the Property is
condemned or is sold in lieu of condemnation, then this Lease shall terminate on
the date the condemning authority takes possession of the Property. If less than
all of the Property is so condemned or sold (whether or not the Premises are
affected) and Lessor terminates all similarly-situated leases in the Building
that Lessor has the right to terminate as a result of such condemnation, then
Lessor may terminate this Lease by notice to Lessee effective on the date the
condemning authority takes possession of the applicable part of the Property. If
this Lease is not so terminated by Lessor and if the condemnation will
reasonably preclude occupancy of any substantial part of the Premises for a
period in excess of nine (9) months, Lessee may terminate this Lease by notice
to Lessor effective on the date the condemning authority takes possession of the
affected part of the Premises. If this Lease is not so terminated by Lessor or
Lessee, Lessor shall, to the extent Lessor deems feasible, restore (or cause the
owner of the Building to restore) the Project and the Improvements to
substantially their former condition. Restoration work shall not exceed the
scope of the work done in originally constructing the Project, nor shall Lessor
(or the owner of the Building, as the case may be) ever be required to spend in
excess of the amount it receives as compensation for the condemnation. If the
size of the Premises is reduced by the condemnation, rent shall be diminished
proportionately. All condemnation awards shall belong exclusively to Lessor (or
to the owner of the Building, as the case may be), and Lessee shall not be
entitled to, and expressly waives, all claims for any compensation for
condemnation; provided, however, that Lessee may pursue Lessee's own separate
claim for moving costs and unamortized leasehold improvements to the extent paid
for by Lessee.
ARTICLE VII - DEFAULTS AND REMEDIES
7.1 Default by Lessee. Each of the following is a default by Lessee:
(a) Lessee fails or refuses to pay rent (including any sum payable under this
Lease even if not expressly designated as rent) when due, and the failure or
refusal continues for a period of five (5) days after notice from Lessor;
provided, however, that Lessee shall not be entitled to
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 23
receive such notice from Lessor more than one (1) time in any consecutive twelve
(12)-month period during the term of this Lease and, during any such period when
Lessee is not entitled to such notice from Lessor, a default by Lessee shall
occur if the failure or refusal continues for a period of five (5) days after
the due date; (b) Lessee fails or refuses to comply with any provision of this
Lease or any other agreement between Lessor and Lessee not requiring the payment
of money (all of which provisions are material), and the failure or refusal
continues for a period of thirty (30) days after notice from Lessor; (c)
Lessee's leasehold estate is taken on execution or other process of law in any
action against Lessee; (d) Lessee becomes insolvent or unable to pay its debts
as they become due, or Lessee notifies Lessor that it anticipates either
condition; (e) Lessee takes any action to, or notifies Lessor that it intends
to, file a petition under any section or chapter of the United States Bankruptcy
Code, as amended, or under any similar law or statute of the United States or
any State, or a petition is filed against Lessee under any such statute, or
Lessee or any creditor of Lessee notifies Lessor that it knows such a petition
will be filed, or Lessee notifies Lessor that it expects such a petition to be
filed; or (f) a receiver or trustee is appointed for Lessee's leasehold estate
or for any substantial part of the assets of Lessee. If Lessee's obligations
under this Lease are guaranteed, the occurrence of any of the foregoing events
with respect to any guarantor shall also be a default by Lessee.
7.2 Lessor's Remedies. If a default by Lessee occurs, Lessor shall be
entitled to do any one or more of the following at Lessor's option: (a)
terminate this Lease, in which event Lessee shall immediately surrender
possession of the Premises to Lessor, or without terminating this Lease,
terminate Lessee's right to possession of the Premises, and in either case,
reenter, take possession of, and change the locks on the doors of the Premises
(and Lessor need not make keys to the changed locks available to Lessee); (b)
enter the Premises if need be, and/or do whatever Lessee is obligated to do
under the terms of this Lease (and in that event Lessee shall reimburse Lessor
on demand for any expenditures by Lessor in effecting compliance with Lessee's
obligations under this Lease); (c) if Lessor has terminated this Lease, recover
all rent owing and unpaid as of the date of termination plus damages measured by
the difference in the rental value of the Premises if this Lease had been fully
performed for the balance of the term and the rental value of the Premises
following the default (taking into account probable remodeling, lease
commission, allowance, inducement, and other costs of reletting); (d) if Lessor
has not terminated this Lease (whether or not Lessor has terminated Lessee's
right to possession of the Premises or actually retaken possession), recover (in
one or more suits from time to time or at any time before or after the end of
the term) all rent owing and unpaid and all costs, if any, incurred in reletting
the Premises (including remodeling, lease commission, allowance, inducement, and
other costs) less all rent, if any, actually received from any reletting of the
Premises; (e) recover all costs of retaking possession of the Premises and any
other damages incidental to Lessee's default; (f) terminate all of Lessee's
rights to any allowances or under any renewal, extension, expansion, refusal,
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 24
or other options granted to Lessee by this Lease; and/or (g) exercise any and
all other remedies available to Lessor at law or in equity, including injunctive
relief of all varieties. Forbearance by Lessor to enforce one or more of its
remedies shall not constitute a waiver of any default or an election of
remedies. If Lessor elects to retake possession of the Premises without
terminating this Lease, it may nonetheless at any subsequent time elect to
terminate this Lease. In addition to the remedies set forth in this Section 7.2,
on the occurrence of a default by Lessee with respect to which Lessor elects
either to terminate this Lease or, without terminating this Lease, to terminate
Lessee's right to possession of the Premises, (i) Lessee shall pay to Lessor in
cash on demand an amount equal to all "Reimbursable Costs" (as defined below)
for which Lessee has not yet vested (as defined below), and (ii) any remaining
rental abatement and/or other concessions that have not yet accrued under this
Lease shall terminate. As used herein, the term "Reimbursable Costs" means the
total of (i) the aggregate dollar value of all rental abatements that Lessee has
received under this Lease; (ii) any amount paid by Lessor for tenant leasehold
improvements in the Premises; and (iii) the aggregate dollar amount which has
been paid to or on behalf of Lessee under this Lease, including, without
limitation, any moving allowance or brokerage commission paid and/or payable by
Lessor in connection with the execution of this Lease. Because the Reimbursable
Costs were incurred by Lessor in reliance on Lessee's fully performing Lessee's
obligations under this Lease, Lessee hereby acknowledges that Lessor will be
damaged on a default by Lessee in an amount equal to the aggregate dollar value
of the Reimbursable Costs for which Lessee has not yet vested, in addition to
(and not in lieu of) any other damages suffered by Lessor. Lessee shall vest as
to Reimbursable Costs at the rate of (A) one hundred percent (100%) divided by
the number of months in the initial Term for which Lessee is obligated to pay
full rent, (B) multiplied by the number of months for which Lessee has paid full
rent and is not otherwise in default hereunder. No vesting shall occur with
respect to any month for which Lessee has not paid rent or in which Lessee is
otherwise in default hereunder. (For example, if Lessee is obligated to pay full
rent for fifty [50] months, then Lessee shall vest hereunder at the rate of two
percent [2%] for each month for which it pays full rent.) Lessee agrees that,
upon Lessor's right to repossess the Premises, Lessor may alter or change the
door locks or other security devices on all entry doors of the Premises thereby
excluding Lessee and Lessee's agents, employees, contractors, directors,
invitees, licensees and patrons, and Lessor shall have no liability in
connection therewith.
7.3 Possession, Surrender and Mitigation. Nothing done by Lessor or its
agents shall be considered an acceptance of any attempted surrender of the
Premises unless Lessor specifically so agrees in writing. No reentry or taking
of possession of the Premises by Lessor, nor any reletting of the Premises,
shall be considered an election by Lessor to terminate this Lease unless Lessor
gives Lessee written notice of termination; and any reletting of the Premises
without such termination of this Lease shall be considered to be for Lessee's
account. Lessee hereby
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 25
waives any requirement for notice in the event of its default (other than any
notice required in Section 7.1), including any notice of reentry or repossession
or of Lessor's intent to reenter or retake possession. Lessor may, without
prejudice to any other remedy that it may have for Lessee's default, expel or
remove Lessee and any other person who may be occupying any part of the
Premises; and Lessor may do so without judicial process and without any
liability to Lessee or any other person. To the extent, and only to the extent,
Lessor is obligated by applicable laws to attempt to mitigate damages in the
event Lessor regains possession of the Premises following Lessor's termination
of Lessee's right to possession due to a default by Lessee, Lessee acknowledges
and agrees, to the maximum extent allowed by law, that Lessor shall have no
obligation to relet the Premises: prior to reletting any other space in the
Building; at below-market rates; to any tenant that does not have what Lessor
considers to be an adequate financial condition; for a use other than the
permitted use hereunder or otherwise inconsistent with the terms and conditions
of this Lease; if to do so, Lessor would be required to alter other portions of
the Project.
7.4 Landlord's Lien Waiver. Lessor hereby waives any and all landlord's
liens and security interests, whether statutory, contractual or otherwise, on or
in the property of Lessee now or hereafter placed in the Premises.
7.5 Default by Lessor. It shall be a default by Lessor if Lessor has
not begun the cure of any failure of Lessor to perform its obligations under
this Lease within thirty (30) days of the receipt by Lessor of notice from
Lessee of the alleged failure to perform and thereafter pursued such cure with
reasonable diligence.
7.6 Lessee's Remedies. If a default by Lessor occurs, Lessee shall be
entitled to do any one or more of the following at Lessee's option: (a) recover
damages actually sustained as the result of the default (but Lessor shall never
be liable for any indirect or consequential damages to Lessee or its business as
the result of any default); or (b) compel the correction of Lessor's
nonperformance by injunction or other equitable remedy. Lessee's obligation to
pay rent is an independent covenant, and the occurrence of a default by Lessor
shall not entitle Lessee to withhold rent or offset alleged damages against
rent. Lessee waives any claim for rescission or termination of the Lease based
on any alleged misrepresentation, breach of warranty, or other default by Lessor
that does not cause the eviction of Lessee from the Premises. Before exercising
any remedies or abandoning any part of the Premises as the result of any alleged
actual or constructive eviction, Lessee shall afford Lessor's mortgagees (to the
extent the identity and addresses of those parties have been communicated to
Lessee) notice and reasonable time to cure the alleged default by Lessor.
7.7 Personal Liability. The liability of Lessor for any default by
Lessor under this Lease is limited to (a) the interest of Lessor in the Property
(including any proceeds received by Lessor from any insurance policies, in the
event of
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 26
a casualty, and any net proceeds received by Lessor from any sale, in the event
of a sale), and (b) for so long as the Master Lease exists and the lessor
thereunder is a wholly-owned subsidiary of Lessor, the interest of the lessor
under the Master Lease in the Property (including any proceeds received by the
lessor under the Master Lease from any insurance policies, in the event of a
casualty, and any net proceeds received by Lessor from any sale, in the event of
a sale), and Lessee agrees to look solely thereto for the recovery of any
judgment from Lessor. Neither Lessor nor the lessor under the Master Lease shall
ever be personally liable for any judgment or deficiency. This Section does not
preclude the enforcement of an injunction or other equitable remedy against
Lessor.
7.8 Attorneys' Fees. If a party defaults, the nondefaulting party shall
be entitled to recover reasonable attorneys' fees and expenses incurred in
exercising and enforcing its remedies under this Lease. All indemnities include
attorneys' fees and other costs of defending indemnified claims, and if
requested by the indemnitee, the indemnitor shall defend such claims using
counsel reasonably satisfactory to the indemnitees.
7.9 Interest on Past-Due Sums. All past-due sums shall bear interest
from the date due until paid at the lesser of eighteen percent (18%) per annum
or maximum lawful rate in effect.
7.10 No Implied Waiver. The failure of a party to insist upon the
strict performance of an agreement or to exercise any remedy for default shall
not be construed as a waiver. The waiver of any default shall not prevent a
subsequent similar act from being a default. No waiver shall be effective unless
expressed in writing signed by the waiving party. No waiver shall affect any
condition other than the one specified in the waiver and then only for the time
and in the manner stated. Lessor's receipt of any rent with knowledge of default
by Lessee shall not be considered a waiver of the default. No payment by Lessee
of a lesser amount than the full amount then due shall be considered to be other
than on account of the earliest amount due. No endorsement or statement on any
check or any letter accompanying any check or payment shall be considered an
accord and satisfaction, and Lessor may accept that check or payment without
prejudice to Lessor's right to recover the balance owing and to pursue any other
available remedies.
ARTICLE VIII - MISCELLANEOUS
8.1 Notice. Any notice contemplated by this Lease shall be in writing,
and may be given by depositing the notice in the United States mail, postage
prepaid and certified and addressed to the party to be notified with return
receipt requested, or delivering the same in person to the party. Notices shall
be effective upon the earlier of (a) actual receipt, or (b) the third (3rd) day
after such notice is deposited in the mail in the manner described above, even
if not received. The notification addresses of the parties are specified on the
signature page of this Lease. On the Commencement Date, Lessee's notification
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 27
address shall automatically become the address of the Premises unless Lessee
otherwise notifies Lessor. Each party has the right to change its address by at
least ten (10) days' notice to the other party.
8.2 Captions. The captions appearing in this Lease are included solely
for convenience and shall never be given any effect in construing this Lease.
References to Addenda and Exhibits are references to the exhibits and addenda
attached to this Lease.
8.3 Use of Terms. All pronouns include the other genders, however used,
and the singular includes the plural whenever it is appropriate. The word
"include" and other forms of that word do not denote an exhaustive or complete
list or enumeration. The word "shall" is mandatory, and the word "may" is
permissive.
8.4 Entirety and Amendments. This document embodies the entire contract
between the parties, and supersedes all prior agreements and understandings
between the parties related to the Premises, including all lease proposals,
letters of intent, and similar documents. All representations, warranties, or
agreements of an inducement nature, if any, are merged with, and stated in this
document. This Lease may be amended only by a written instrument executed by
duly authorized representatives of the parties. Lessee is not a beneficiary of
any other contract or agreement relating to the Property to which Lessor may be
a party, and Lessee shall have no right to enforce any such other contract or
agreement on behalf of itself, Lessor, or any other party.
8.5 Consents and Approvals. No consent or approval by either party
shall be effective unless given in writing signed by such party or its duly
authorized representative. Any consent or approval by either party shall extend
only to the matter specifically stated in writing.
8.6 Counterparts and Inclusion. This Lease is being executed in
multiple counterparts, each of which shall be considered an original for all
purposes. The pages of this Lease, including any exhibits, addenda, or other
attachments may be initialed by the parties for identification. The circumstance
that any page is not initialed is not evidence that that page is not a part of
the Lease, nor does the process of initialing pages preclude introduction of
other evidence whether any page is or is not a part of this Lease.
8.7 Severability. If any provision of this Lease is invalid or
unenforceable, the remainder of this Lease shall not be affected. Each separate
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
8.8 Binding Effect. This Lease binds not only Lessor and Lessee, but
also their respective heirs, personal representatives, successors, and assigns.
8.9 Governing Law. This Lease is governed by the laws of the State of
Texas.
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 28
8.10 Building Standard. The use of the terms "Building standard" or
"standard for the Building," or of other similar phrases, designates a standard
selected by Lessor from time to time for use throughout the Building. If there
is a dispute or question about the standard, any written statement of the
standard maintained in the Building manager's office shall be conclusive
evidence of the standard.
8.11 Reimbursement. Whenever this Lease requires Lessee to pay or
reimburse Lessor for costs or expenses in connection with any matter, such
payment or reimbursement shall include costs and expenses payable by Lessor for
related legal, architectural, engineering, and other consulting services as well
as any administrative processing fee, construction management or coordination
fee, or other applicable Building standard fee or charge for services related
thereto; provided, however, if any such amounts are payable by Lessor to any
affiliate of Lessor, then such amounts shall be limited to the amount that would
reasonably be expected to have been incurred had such services been obtained
from an unaffiliated third party. Whenever this Lease requires Lessor's consent
to or approval of any item, Lessor may condition such consent or approval on
payment or reimbursement of all costs and expenses incurred by Lessor (including
legal, architectural, engineering, and other consulting services) and of any
applicable Building standard fee or charge for services related thereto. Any
sales taxes on goods or services furnished pursuant to this Lease shall be paid
or reimbursed by Lessee.
8.12 Survival. The expiration or other termination of the Lease or of
Lessee's right to possession does not terminate obligations relating to rent
previously accrued (including any Expense Rent reconciliation under Section 3.2
or any electrical bills under Section 3.3) or relating to the condition of the
Premises or other obligations performable then or thereafter, all of which shall
survive such expiration or other termination.
8.13 Recordation. Lessee agrees not to record this Lease or any
memorandum of this Lease.
8.14 Commissions. By separate agreements, Lessor has agreed to pay a
commission in connection with this Lease to each of ▇▇▇▇▇▇▇▇ Properties
Management, L.P. and The Staubach Company Each party (the "Indemnifying Party")
shall indemnify and hold the other party harmless against any loss, liability,
damage, costs, or expense, or any claim therefor, relating to any other
commissions or brokerage fees on account of the execution of this Lease or on
account of any renewal or expansion claimed by any other broker or agent with
whom the Indemnifying Party may have dealt or contracted.
8.15 Effect of Delivery of this Lease. Lessor has delivered a copy of
this Lease solely for Lessee's review, and that delivery does not constitute an
offer to Lessee or an option reserving the Premises. This Lease shall not be
effective until a counterpart executed by both Lessor and Lessee is delivered to
and accepted by Lessor, and then only if the
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 29
owner of the Building and all of owner's and Lessor's mortgagees have
unconditionally approved this Lease in its entirety in writing.
8.16 Relocation. INTENTIONALLY OMITTED.
8.17 Master Lease. Lessor is not the owner of the Property. Instead,
Lessor is the owner of the tenant's leasehold estate under the Amended and
Restated Lease Agreement (as the same may be hereafter modified, the "Master
Lease") dated December 21, 1990, between Cityplace Center East Corporation, as
owner of the Building and landlord, and Lessor, as tenant, with respect to
leased premises that include the entire Building and Property. Notwithstanding
anything to the contrary contained in this Lease, this Lease constitutes a
sublease (and terms such as "lease," "let," "demise," and other words of similar
import are to be construed as denoting subleasing or subletting), and is
subordinate and inferior to the Master Lease and to the leasehold estate of
Lessor thereunder. The circumstance that this Lease is a sublease subordinate to
the Master Lease does not, however, release or discharge Lessor from any express
duty or obligation to Lessee under this Lease, but any such duty or obligation
of Lessor may be performed and discharged by the owner of the Building or its
Personnel. Except as provided in the Nondisturbance Agreement, no privity of
contract or estate exists or shall exist between Lessee and the owner of the
Building, and Lessee shall not have any rights or options (including those that
may otherwise arise from any renewal or expansion options) under the Master
Lease, but the owner of the Building shall be an intended third-party
beneficiary of any agreements in this Lease naming, or relating to the rights
of, the owner of the Building. If the term of this Lease should extend beyond
the then effective primary or renewal term of the Master Lease, Lessor shall not
be obligated to exercise any renewal or extension option, or to otherwise renew
or extend the term of the Master Lease. To the extent not inconsistent in any
material and adverse manner with the rights granted to Lessee in, or Lessee's
obligations under, this Lease, Lessor and the owner of the Building shall have
the unrestricted right to modify or amend the Master Lease.
8.18 Force Majeure. Whenever a period of time is herein prescribed for
the taking of any action by Lessor or Lessee other than the payment of money,
Lessor or Lessee, as appropriate, shall not be liable or responsible for, and
there shall be excluded from the computation of such period of time, any delays
due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions, or any act, omission, delay or
neglect of the other or any of the other's employees or agents, or any other
cause whatsoever beyond the control of Lessor or Lessee, as appropriate.
8.19 Essence of Time. Time is of the essence of this Lease.
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 30
8.20 Exhibits and Addenda. The following Exhibits and Addenda are
attached to the Lease and are incorporated into and made a part of the Lease for
all purposes:
Exhibit A - Floorplan
Exhibit B - Legal Description
Exhibit C - Project Rules
Exhibit D - Building Holidays
Exhibit E - Subordination, Attornment and
Nondisturbance Agreement
Exhibit F - Cancellation Fee Calculation
Exhibit G - Additional Generator Usage
Addendum No. 1 - Work Letter
Addendum No. 2 - Parking Agreement
Addendum No. 3 - First Right of Lease
Addendum No. 4 - Options to Extend
8.21 DISCLAIMER; COMPLIANCE. TO THE FULLEST EXTENT ALLOWED BY LAW, (A)
LESSOR AND LESSEE EXPRESSLY ACKNOWLEDGE AND AGREE THAT LESSOR IS NOT MAKING AND
HAS NOT MADE ANY IMPLIED WARRANTY HEREUNDER (INCLUDING, WITHOUT LIMITATION, THAT
THE PREMISES ARE SUITABLE FOR LESSEE'S INTENDED COMMERCIAL PURPOSE), (B) LESSOR
AND LESSEE AGREE THAT LESSEE'S OBLIGATIONS TO ABIDE BY THE TERMS AND PROVISIONS
HEREOF (INCLUDING, WITHOUT LIMITATION, LESSEE'S OBLIGATION TO PAY RENT
HEREUNDER) ARE NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LESSOR OF ITS OBLIGATIONS HEREUNDER, AND (C) EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, LESSEE AGREES TO COMPLY WITH THE TERMS AND PROVISIONS
HEREOF (INCLUDING, WITHOUT LIMITATION, LESSEE'S OBLIGATION TO PAY RENT, WITHOUT
ABATEMENT, SETOFF OR DEDUCTION) NOTWITHSTANDING ANY BREACH BY LESSOR OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED. IN NO EVENT,
HOWEVER, SHALL THE FOREGOING PROVISIONS OF THIS SECTION BE CONSTRUED TO RELIEVE
LESSOR OF ITS OBLIGATIONS EXPRESSLY SET FORTH HEREIN.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOLLOWS.]
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 31
To witness their agreement, Lessor and Lessee have executed this Lease
below.
LESSOR:
Address: 7-ELEVEN, INC.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a Texas corporation
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department By /s/▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
-----------------------------------
Title Executive Vice President
Attest:
By /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
----------------------------
LESSEE:
Address: ZIX CORPORATION,
The Premises a Texas corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title SVP
Attest:
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Zix Corporation Office Lease Agreement (R-57999.6)
PAGE 32