EXHIBIT 10 (a)
SEVENTH AMENDMENT TO LEASE AGREEMENT
THIS SEVENTH AMENDMENT TO LEASE AGREEMENT (this "Amendment") is entered
into as of the 7th day of June, 2000, by and between THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("Landlord") and
AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS, a Texas corporation
("Tenant").
WHEREAS, pursuant to that certain Office Lease Agreement dated
September 12, 1994, by and between Landlord and Tenant, as amended by that
certain First Amendment to Lease Agreement dated as of October 10, 1994,
that certain Second Amendment to Lease dated as of May 25, 1995, that
certain Third Amendment to Lease Agreement (the "Third Amendment") dated as
of June 12, 1995, that certain Fourth Amendment to Lease Agreement dated as
of August 11, 1995, that certain Fifth Amendment to Lease Agreement dated as
of January 16, 1996 and that certain Sixth Amendment to Lease Agreement
dated as of March 2, 1999 (such Office Lease Agreement, as amended, herein
called the "Lease"), Landlord leased to Tenant certain space (the
"Premises") in the building known as The Princeton (the "Building") more
particularly described therein;
WHEREAS, the Premises (excluding the Storage Premises [as defined in
the Third Amendment]) currently consist of 23,641 square feet of rentable
area on the ninth (9th) and second (2nd) floors of the Building;
WHEREAS, the Term of the Lease expires on November 30, 2000 and Tenant
desires to extend the Term for an additional seven (7) years to November 30,
2007;
WHEREAS, Tenant desires to lease from Landlord an additional 1,304
square feet of Agreed Rentable Area located on the first (1st) floor of the
Building, and shown as the "Expansion Space" on Exhibit A attached hereto
(such space, the "Expansion Space");
WHEREAS, subject to the terms and conditions set forth herein, Landlord
has agreed to extend the Term of the Lease to November 30, 2007 and lease
the Expansion Space to Tenant; and
WHEREAS, Landlord and Tenant desire to amend the Lease to reflect their
agreements as to the terms and conditions governing the extension of the
Term of the Lease to November 30, 2007 and Tenant's lease of the Expansion
Space.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants between the parties herein contained, Landlord and Tenant hereby
agree as follows:
1. Premises. Landlord shall lease to Tenant and Tenant shall lease from
Landlord the Expansion Space on December 1, 2000. Therefore, effective
December 1, 2000, Item 2 of the Basic Lease Provisions shall be deleted in
its entirety and the following shall be substituted in lieu thereof:
2. Premises:
Suite(s) #: 900, 205, 215 and 123; Floor(s): a portion of the
first, second and ninth floors.
Agreed Rentable Area: 24,945 square feet.
Notwithstanding the foregoing, Tenant shall have the right to lease the
Expansion Space prior to December 1, 2000 by delivering notice of such
election to Landlord prior to December 1, 2000. In the event Tenant elects
to lease the Expansion Space prior to December 1, 2000, Landlord and Tenant
shall enter into a temporary space agreement covering the period prior to
December 1, 2000 that Tenant leases the Expansion Space.
2. Rent. Effective December 1, 2000, Item 3 of the Basic Lease
Provisions shall be amended by adding the following at the end of the
existing Basic Rent schedule:
Rate Per Square Basic Basic
Rental Foot of Agreed Annual Monthly
Period Rentable Area Rent Rent
------ --------------- ------ -------
12/1/00 - 11/30/03 $20.00 $498,900.00 $41,575.00
12/1/03 - 11/30/07 $23.50 $586,207.56 $48,850.63
3. Tenant's Pro Rata Percentage. Effective December 1, 2000, Item 4 of
the Basic Lease Provisions shall be amended to read as follows:
Tenant's Pro Rata Share Percentage: 6.7196% (the Agreed Rentable Area
of the Premises divided by the Agreed Rentable Area of the Building,
expressed in a percentage).
4. Operating Expense Stops. Effective December 1, 2000, Items 5 and 6 of
the Basic Lease Provisions shall be amended to read as follows:
Tenant's Operating Expense Stop. Equal to actual Operating Expenses
for the calendar year 2001, grossed up in accordance with subsection
2.202 of the Supplemental Lease Provisions (see Article 2, Supplemental
Lease Provisions).
Tenant's Real Estate Taxes Stop. Equal to actual Real Estate Taxes for
the calendar year 2001 (see Article 2, Supplemental Lease Provisions).
5. Term. Item 7 of the Basic Lease Provisions is deleted in its entirety
and the following is substituted in lieu thereof:
7. Term: Approximately twelve (12) years and eleven (11) months (see
Article 1, Supplemental Lease Provisions).
6. Expiration Date. Item 9 of the Basic Lease Provisions is hereby
deleted in its entirety and the following is substituted in lieu thereof:
9. Expiration Date: November 30, 2007 (see Article 1, Supplemental
Lease Provisions).
7. Address for Notice. The address for notices to the Landlord set forth
in Item 15 of the Basic Lease Provisions is hereby amended in its entirety
to the following:
The Prudential Insurance Company of America
c/o ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties of Texas Ltd., Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
AND IF NOTICE OF DEFAULT, COPY TO:
The Prudential Insurance Company of America
Law Department
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
8. Additional Rent. Effective December 1, 2000, Subsection 2.201(a) shall
be amended to read as follows:
"Additional Rent", for a particular calendar year shall equal the
sum of (i) Tenant's Pro Rata Share Percentage (as set forth in Item 4
of the Basic Lease Provisions) multiplied by the amount by which Real
Estate Taxes (as hereinafter defined) for such year exceeds Tenant's
Real Estate Taxes Stop (as set forth in Item 6 of the Basic Lease
Provisions) plus (ii) Tenant's Pro Rata Share Percentage multiplied by
the amount by which Operating Expenses (as hereinafter defined) for
such calendar year exceed Tenant's Operating Expense Stop (as set forth
in Item 5 of the Basic Lease Provisions) plus (iii) Tenant's Pro Rata
Share Percentage multiplied by Additional Pass Through Costs (as
hereinafter defined) for such calendar year.
9. Parking. Effective December 1, 2000, Paragraphs 1 and 2 of Exhibit F to
the Lease shall be amended in its entirety to read as follows
Parking Spaces. So long as the Lease remains in effect, Tenant shall
rent in and on top of the Garage on (i) a reserved basis, (5) parking
spaces (the "Reserved Spaces") during the term of this Lease, and (ii)
an unreserved and non-exclusive basis one hundred thirty-three (133)
parking spaces (the "Unreserved Space").
Parking Rental. The monthly rent for the Reserved Spaces through
November 30, 2007 shall equal $35.00 per space (inclusive of applicable
sales tax) and the monthly rent through November 30, 2007 for the
Unreserved Spaces shall be $17.00 per space (inclusive of applicable
sales tax). All payments of rent for parking spaces shall be made
(i) at the same time as Basic Monthly Rent is due under the Lease and
(ii) to Landlord or to such persons (for example but without
limitation, the manager of the Garage) as Landlord may direct from time
to time.
10. Amendment to Exhibit A. Effective December 1, 2000, Exhibit A attached
hereto shall be incorporated into and made a part of Exhibit A to the Lease.
11. Monument Sign. At such time as First American Bank Texas, SSB ("FAB")
is no longer entitled to have or use the monument sign currently located on
the east side of the Building and containing FAB's corporate name and logo
(the "FAB Monument Sign"), which date shall be the earlier of January 10,
2001 or the earlier termination of FAB's lease, Tenant shall have the
following signage rights:
Notwithstanding anything in the Lease to the contrary, and provided
that Tenant occupies and the Premises consist of at least 20,000 square
feet of Agreed Rentable Area, Tenant shall have the right, at Tenant's
expense, to install a monument sign in the same location as the FAB
Monument Sign containing Tenant's corporate identification (the
"Monument Sign"); provided that (i) Tenant obtains all necessary
approvals from the City of Dallas and all other governmental
authorities having jurisdiction over Tenant, the Property, or the
Monument Sign, (ii) the Monument Sign conforms to all applicable laws,
rules and regulations of any governmental authorities having
jurisdiction over the Monument Sign or the Property, and (iii) Tenant
delivers to Landlord certificates of insurance evidencing that Tenant's
contractors, agents, workmen, engineers or other persons installing the
Monument Sign have in effect valid workmen's compensation, public
liability and builder's risk insurance in amounts and with such
companies and in such forms as Landlord may consider necessary or
appropriate for its protection. The design (including without
limitation, the color scheme and lettering size and type) and size of
the Monument Sign are all subject to the approval of Landlord in its
sole discretion. Tenant shall pay all costs associated with the
Monument Sign, including without limitation, installation expenses,
maintenance and repair costs, utilities (if Tenant elects to illuminate
the Monument Sign) and insurance. Tenant shall indemnify and hold
Landlord harmless from and against any and all claims, demands, fines,
liabilities, costs, expenses, damages, actions and causes of action
accruing from or related to the Monument Sign, EVEN IF CAUSED BY THE
NEGLIGENCE OF LANDLORD OR IF LANDLORD IS STRICTLY LIABLE THEREFOR;
provided that the foregoing indemnity shall not apply to any acts of
Landlord or Landlord's agents in connection with Landlord's removal or
replacement of the Monument Sign under Landlord's rights set forth
herein. Tenant agrees that, subject to Section 2.2 of the Lease,
Landlord shall have the right to temporarily remove and replace the
Monument Sign in connection with and during the course of any repairs,
changes, alterations, modifications, renovations or additions to the
Building or the Property. Tenant shall maintain the Monument Sign in
good condition. If Tenant is in default under the Lease or if Tenant
vacates a substantial portion of the Premises (which shall be presumed
if Tenant is absent from the Premises for one hundred eighty (180)
consecutive days or more), Tenant's rights with respect to the Monument
Sign shall terminate and Landlord shall have the option to remove such
signage at Tenant's sole cost and expense. Upon the earlier to occur
of (i) expiration or earlier termination of the Lease or (ii)
termination of Tenant's right to have the Monument Sign, Tenant shall,
at its sole cost and expense, remove the Monument Sign and repair all
damage caused by such removal. The right to install the Monument Sign
is personal to the Tenant listed in the first paragraph of the Lease
and Affiliates (as defined in Rider 1 to the Lease) thereof, and is not
assignable to any other tenant under this Lease other than an
Affiliate.
12. Refurbishment of the Premises and Construction of Improvements in the
Expansion Space. Landlord shall refurbish the Premises (including the
Expansion Space) in accordance with the Work Letter attached hereto as
Exhibit A. Except as set forth in the preceding sentence, Landlord shall
have no construction obligations with respect to the Premises or the
Expansion Space.
13. Delivery of Expansion Space and Acceptance of Premises. Subject to
Landlord's obligations set forth in Section 12 above, TENANT HEREBY ACCEPTS
THE PREMISES, INCLUDING THE EXPANSION SPACE AND THE BUILDING (INCLUDING THE
SUITABILITY OF THE EXPANSION SPACE FOR THE PERMITTED USE) IN "AS IS"
CONDITION WITH ANY AND ALL FAULTS AND LATENT OR PATENT DEFECTS AND WITHOUT
RELYING UPON ANY REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) OF LANDLORD
OR ANY REPRESENTATIVE OF LANDLORD. LANDLORD HAS NOT MADE AND DOES NOT
HEREBY MAKE AND HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR CHARACTER WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE BUILDING (INCLUDING THE EXPANSION SPACE), ITS CONDITION
(INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY REGARDING
QUALITY OF CONSTRUCTION, STATE OF REPAIR, WORKMANSHIP, MERCHANTABILITY,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE).
14. Acceptance of Expansion Space. Upon Substantial Completion of the
Tenant's Improvements in the Expansion Space, Landlord and Tenant shall
execute an Acceptance of Premises Memorandum in substantially the form of
the Acceptance of Premises Memorandum attached to the Lease as Exhibit E.
If Tenant occupies the Expansion Space without executing an Acceptance of
Premises Memorandum, Tenant shall be deemed to have accepted the Expansion
Space and Tenant's Improvements (as defined in the Work Letter) for all
purposes.
15. Storage Premises. From and after December 1, 2000 (assuming Tenant's
rights to use the Storage Premises is not terminated prior to such date),
Tenant shall be entitled to continue to use the Storage Premises for storage
purposes only on a month-to-month basis at no charge. Either Landlord or
Tenant shall be entitled terminate the lease of the Storage Premises by
delivering thirty (30) days prior notice of termination to the other.
16. Renewal Option. Tenant shall have the right to renew the Lease in
accordance with Exhibit C attached hereto. Except as set forth in Exhibit
C, Tenant shall have no renewal rights under the Lease.
17. No Brokers. Tenant warrants that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this Amendment
other than The Staubach Company ("Tenant's Broker") and ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Properties of Texas Ltd., Inc. ("Landlord's Broker"), and that it knows of
no other real estate brokers or agents who are or might be entitled to a
commission in connection with this Amendment. Tenant agrees to indemnify
and hold harmless Landlord from and against any liability or claim arising
in respect to any brokers or agents claiming a commission in connection with
this Amendment other than Tenant's Broker and Landlord's Broker.
18. Authority. Tenant and each person signing this Amendment on behalf of
Tenant represents to Landlord as follows: (i) Tenant is a duly formed and
validly existing corporation under the laws of the State of Texas, (ii)
Tenant has and is qualified to do business in Texas, (iii) Tenant has the
full right and authority to enter into this Amendment, and (iv) each person
signing on behalf of Tenant was and continues to be authorized to do so.
19. Defined Terms. All terms not otherwise defined herein shall have the
same meaning assigned to them in the Lease.
20. Exhibits. Each exhibit attached hereto is made a part hereof for all
purposes.
21. Ratification of Lease. Except as amended hereby, the Lease shall
remain in full force and effect in accordance with its terms and is hereby
ratified. In the event of a conflict between the Lease and this Amendment,
this Amendment shall control.
22. No Representations. Landlord and Landlord's agents have made no
representations or promises, express or implied, in connection with the
Premises or this Amendment except as expressly set forth herein.
23. Entire Agreement. This Amendment, together with the Lease, contains
all of the agreements of the parties hereto with respect to any matter
covered or mentioned in this Amendment or the Lease, and no prior agreement,
understanding or representation pertaining to any such matter shall be
effective for any purpose.
24. Section Headings. The section headings contained in this Amendment are
for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several sections hereof.
25. Severability. A determination that any provision of this Amendment is
unenforceable or invalid shall not affect the enforceability or validity of
any other provision hereof and any determination that the application of any
provision of this Amendment to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such
provision as it may apply to any other persons or circumstances.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
LANDLORD: TENANT:
THE PRUDENTIAL INSURANCE AMERICAN HALLMARK INSURANCE
COMPANY OF AMERICA, a New COMPANY OF TEXAS, a Texas
Jersey corporation corporation
By: ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Properties of Texas
Ltd., Inc., its duly authorized agent
By: By:
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Managing Director Title:
EXHIBIT A
THE EXPANSION SPACE
This Exhibit is attached to and a part of that certain Seventh
Amendment to Lease Agreement dated as of June 7, 2000, executed by and
between The Prudential Insurance Company of America and American Hallmark
Insurance Company of Texas (the "Amendment"). Any capitalized term not
defined herein shall have the meaning assigned to it in the Amendment.
Landlord and Tenant mutually agree that the attached Floor Plan is the Floor
Plan for the Expansion Space:
EXHIBIT B
WORK LETTER
PLANS TO BE APPROVED/FINISH ALLOWANCE
This Exhibit is attached to and a part of that certain Seventh
Amendment to Lease dated as of June 7, 2000, executed by and between The
Prudential Insurance Company of America and American Hallmark Insurance
Company of Texas (the "Amendment"). Any capitalized term not defined herein
shall have the meaning assigned to it in the Amendment. Landlord and Tenant
mutually agree as follows:
1. Plans.
1.1 Space Plan. Landlord's designated space planner, at Tenant's expense,
shall prepare and deliver to Tenant a space plan for the Premises (including
the Expansion Space) showing, regardless of the quantities of such items,
the location of all partitions and doors and the lay-out of the Premises
(including the Expansion Space). Tenant will at all times cooperate with
Landlord's space planner, furnishing all reasonable information and material
concerning Tenant's organization, staffing, growth expectations, physical
facility needs (including, without limitation, needs arising by reason of
the Disability Acts), equipment, inventory, etc., necessary for the space
planner to efficiently and expeditiously arrive at an acceptable lay-out of
the Premises (including the Expansion Space). Tenant will approve or
disapprove in writing the space plan within three (3) business days after
receipt from Landlord and if disapproved, Tenant shall provide Landlord and
Landlord's space planner with specific reasons for disapproval. If Tenant
fails to approve or disapprove the space plan on or before the end of such
three (3) business day period, Tenant shall be deemed to have approved the
last submitted space plan. The foregoing process shall be repeated until
Tenant has approved (which shall include deemed approval) the space plan
(such space plan, when approved by Landlord and Tenant, is herein referred
to as the "Space Plan").
1.2 Compliance With Disability Acts. Tenant shall promptly provide
Landlord and Landlord's space planner and/or architect, as applicable, with
all information needed to cause the construction of Tenant's Improvements to
be completed such that Tenant , the Premises (including the Expansion Space)
and Tenant's Improvements (as constructed) will be in compliance with the
Disability Acts. Tenant shall be responsible for and shall indemnify and
hold harmless Landlord from and against any and all claims, liabilities and
expenses (including, without limitation reasonable attorneys' fees and
expenses) incurred by or asserted against Landlord by reason of or in
connection with any violation of the provisions of Tex. Rev. Civ. Stat. ▇▇▇.
art. 9102 and the Americans With Disabilities Act of 1990, 42 U.S.C.
[SS] 12101-12213 (collectively, the "Disability Acts") arising from or out
of (x) information or design and space plans furnished to Landlord by Tenant
(or the lack of complete and accurate information so furnished) concerning
Tenant's Improvements, (y) Tenant's employer-employee obligations, or (z)
after the Expansion Space Commencement Date, violations by Tenant and/or
Tenant's Improvements or the Expansion Space not being in compliance with
the Disability Acts as the result of changes in regulations or law or
interpretations thereof not in effect on December 1, 2000. The foregoing
indemnity shall not include any claims, liabilities or expenses (including
reasonable attorneys' fees and expenses) arising out of the negligence or
gross negligence of Landlord or Landlord's employees, agents or contractors.
Without limiting the foregoing, if Landlord constructs Tenant's
Improvements based on any special requirements or improvements required by
Tenant, or upon information furnished by Tenant that later proves to be
inaccurate or incomplete resulting in any violation of the Disability Acts,
Tenant shall be solely liable to correct such violations and to bring the
improvements into compliance with the Disability Acts as promptly as is
practicable.
1.3 Construction Plans. On or before thirty (30) days after approval of
the Space Plan, Landlord's space planner and engineer, at Tenant's expense,
will prepare construction plans (such construction plans, when approved, and
all changes and amendments thereto agreed to by Landlord and Tenant in
writing, are herein called the "Construction Plans") for all of Tenant's
improvements requested pursuant to the Space Plan (all improvements required
by the Construction Plans are herein called "Tenant's Improvements"),
complete detail and finish drawings for partitions, doors, reflected
ceiling, telephone outlets, electrical switches and outlets and Building
standard heating, ventilation and air conditioning equipment and controls.
Within five (5) business days after construction plans are delivered to
Tenant, Tenant shall approve (which approval shall not be unreasonably
withheld) or disapprove same in writing and if disapproved, Tenant shall
provide Landlord and Landlord's space planner and engineer specific reasons
for disapproval. The foregoing process shall continue until the
construction plans are approved by Tenant; provided that if Tenant fails to
respond in any five (5) business day period, Tenant shall be deemed to have
approved the last submitted construction plans.
1.4 Changes to Approved Plans. If any re-drawing or re-drafting of either
the Space Plan or the Construction Plans is necessitated by Tenant's
requested changes (all of which shall be subject to approval by Landlord
and, if applicable, the Texas Department of Licensing & Regulation and any
other governmental agency or authority to which the plans and specifications
are required to be submitted), the expense of any such re-drawing or
re-drafting required in connection therewith and the expense of any work and
improvements necessitated by such re-drawing or re-drafting will be charged
to Tenant.
1.5 Coordination of Planners and Designers. If Tenant shall arrange for
interior design services, whether with Landlord's space planner or any other
planner or designer, it shall be Tenant's responsibility to cause necessary
coordination of its agents' efforts with Landlord's agents to ensure that no
delays are caused to either the planning or construction of the Tenant's
Improvements.
2. Construction and Costs of Tenant's Improvements.
2.1 Construction Obligation and Finish Allowance.
(a) Landlord shall solicit bids from at least three (3) contractors to
construct the Tenant's Improvements, and unless otherwise approved
by Tenant, shall select the lowest qualified bidder to perform the
construction. Landlord agrees to construct Tenant's Improvements,
at Tenant's cost and expense; provided, however, Landlord shall
provide Tenant with an allowance equal to $8.00 per square foot of
Agreed Rentable Area in the Premises (including the Expansion
Space) (i.e., $199,560.00) (the "Finish Allowance"), which
allowance shall be disbursed by Landlord, from time to time, for
payment of (in the following priority) the following costs
(collectively referred to as the "Permitted Costs"): (i) the
contract sum required to be paid to the general contractor engaged
to construct Tenant's Improvements (the "Contract Sum"), (ii) the
fees of the preparer of the Space Plan and Construction Plans
(such fees, the "Planning Fees"); and (iii) such other costs
related to the leasehold improvements (such as equipment,
appliances and furnishings) incurred by Tenant, including without
limitation, data and telephone cabling costs, security costs,
furniture, fixture and equipment costs, and relocation costs.
Landlord shall not charge any fee in connection with Landlord's
administration of the construction of Tenant's Improvements and
Landlord shall not require a payment or performance bond in
connection with construction of the Tenant's Improvements. In the
event any Finish Allowance remains unexpended after payment of the
Permitted Costs, such unexpended amount shall be applied against
Tenant's obligation to pay Basic Rent under the Lease.
(b) Title to any equipment, appliances, furnishings or personalty
installed in the Expansion Space and purchased with any portion of
the Finish Allowance shall pass to Landlord upon payment of the
invoice cost thereof and Tenant shall not remove any such
equipment, appliances, furnishings or personalty from the
Expansion Space without Landlord's express, prior written consent
or unless requested by Landlord in connection with the expiration
or earlier termination of the Lease.
2.2 Excess Costs. If the sum of the Permitted Costs exceeds the Finish
Allowance, then Tenant shall pay all such excess costs ("Excess Costs"),
provided, however, Landlord will, prior to the commencement of construction
of Tenant's Improvements, advise Tenant of the Excess Costs, if any, and the
Contract Sum. Tenant shall have two (2) business days from and after the
receipt of such advice within which to approve or disapprove the Contract
Sum and Excess Costs. If Tenant fails to approve same by the expiration of
the second such business day, then Tenant shall be deemed to have approved
the Proposed Contract Sum and Excess Costs. If Tenant disapproves the
Contract Sum and Excess Costs within such two (2) business day period, then
Tenant shall either reduce the scope of Tenant's Improvements such that
there shall be no Excess Costs or, at Tenant's option, Landlord shall obtain
two (2) additional bids, provided that if Tenant requests Landlord to obtain
two (2) additional bids and Tenant fails to approve the Excess Costs within
three (3) business days after Landlord's notification of the Excess Costs
taking such additional bids into consideration, Tenant shall be deemed to
have approved the Contract Sum and Excess Costs as determined by reference
to the lowest submitted bid. Landlord and Tenant must approve (or be deemed
to have approved) the Contract Sum for the construction of Tenant's
Improvements in writing prior to the commencement of construction.
2.3 Construction Deposit. Tenant shall remit to Landlord an amount (the
"Prepayment") equal to one-half (1/2) of the projected Excess Costs, if any,
within five (5) working days after commencement of construction by Landlord.
On or prior to the Expansion Space Commencement Date, Tenant shall deliver
to Landlord the actual Excess Costs, minus the Prepayment previously paid.
Failure by Tenant to timely tender to Landlord the full Prepayment shall
permit Landlord to stop all work until the Prepayment is received. All sums
due Landlord under this Section 2.3 shall be considered Rent under the terms
of the Lease and nonpayment shall constitute a default under the Lease and
entitle Landlord to any and all remedies specified in the Lease.
2.4 Liens Arising from Excess Costs. Tenant agrees to keep the Premises
(including the Expansion Space) free from any liens arising out of
nonpayment of Excess Costs. In the event that any such lien is filed and
Tenant, within ten (10) days following such filing fails to cause same to be
released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein and by law, the
right, but not the obligation, to cause the same to be released by such
means as it in its sole discretion deems proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by
Landlord in connection therewith shall constitute Rent under the Lease and a
demand obligation of Tenant to Landlord and such obligation shall bear
interest at the rate provided for in Section 15.10 of the Supplemental Lease
Provisions from the date of payment by Landlord until the date paid by
Tenant.
3. Substantial Completion and Punch List. When Landlord has sufficiently
completed the Tenant's Improvements in the Expansion Space in accordance
with the Construction Plans so that Tenant can reasonably use the Expansion
Space for the Permitted Use (as described in Item 10 of the Basic Lease
Provisions), Landlord will notify Tenant and within two (2) business days
thereafter, Landlord's representative and Tenant's representative shall
conduct a walk-through of the Expansion Space and identify any necessary
touch-up work, repairs and minor completion items as are necessary for final
completion of Tenant's Improvements. Neither Landlord's representative nor
Tenant's representative shall unreasonably withhold his agreement on punch
list items. Landlord will use reasonable efforts to cause the contractor to
complete all punch list items within thirty (30) days after agreement
thereon.
4. Tenant's Contractors. If Tenant should desire to enter the Expansion
Space or authorize its agent to do so prior to the Expansion Space
Commencement Date of the Lease, to perform approved work not requested of
the Landlord, Landlord shall permit such entry if:
(a) Tenant shall use only such contractors which Landlord shall
approve in its reasonable discretion; provided that any work
affecting the electrical systems of the Building or the HVAC
systems of the Building shall be performed by an electrician or
HVAC vendor listed on the Building approved contractors provided
by Landlord to Tenant; and
(b) Landlord shall have approved the plans to be utilized by Tenant,
which approval will not be unreasonably withheld; and
(c) Tenant, its contractors, workmen, mechanics, engineers, space
planners or such others as may enter the Expansion Space
(collectively, "Tenant's Contractors"), work in harmony with and
do not in any way disturb or interfere with Landlord's space
planners, architects, engineers, contractors, workmen, mechanics
or other agents or independent contractors in the performance of
their work (collectively, "Landlord's Contractors"), it being
understood and agreed that if entry of Tenant or Tenant's
Contractors would cause, has caused or is causing a material
disturbance to Landlord or Landlord's Contractors, then Landlord
may, with notice, refuse admittance to Tenant or Tenant's
Contractors causing such disturbance; and
(d) Tenant, Tenant's Contractors and other agents shall provide
Landlord sufficient evidence that each is covered under such
Worker's Compensation, public liability and property damage
insurance as Landlord may reasonably request for its protection.
All insurance maintained by any contractor performing work in the
Building must name Landlord and Property Manager as additional
insureds.
Landlord shall not be liable for any injury, loss or damage to any of
Tenant's installations or decorations made prior to substantial completion
of the Tenant's Improvements in the Expansion Space and not installed by
Landlord. Tenant shall indemnify and hold harmless Landlord and Landlord's
Contractors from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Premises (including the Expansion Space) by or on behalf of
Tenant (but excluding work performed by Landlord or Landlord's Contractors).
Such entry by Tenant and Tenant's Contractors pursuant to this Section 4
shall be deemed to be under all of the terms, covenants, provisions and
conditions of the Lease except the covenant to pay Rent.
5. Construction Representatives. Landlord's and Tenant's representatives
for coordination of construction and approval of change orders will be as
follows, provided that either party may change its representative upon
written notice to the other:
LANDLORD'S REPRESENTATIVE:
NAME: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ADDRESS: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
TENANT'S REPRESENTATIVE:
NAME: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ADDRESS: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PHONE: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT C
RENEWAL OPTION
This Exhibit is attached to and a part of that certain Seventh
Amendment to Lease dated as of June 7, 2000, executed by and between The
Prudential Insurance Company of America and American Hallmark Insurance
Company of Texas (the "Amendment"). Any capitalized term not defined herein
shall have the meaning assigned to it in the Amendment. Landlord and Tenant
mutually agree as follows:
1. If, and only if, on the Expiration Date and the date Tenant notifies
Landlord of its intention to renew the term of this Lease (as provided
below), (i) Tenant is not in default under this Lease, (ii) Tenant then
occupies and the Premises then consists of at least 23,641 rentable
square feet and (iii) this Lease is in full force and effect, then
Tenant, but not any assignee or subtenant of Tenant, shall have and may
exercise an option to renew this Lease for one (1) additional term of
five (5) years (the "Renewal Term") upon the same terms and conditions
contained in this Lease with the exceptions that (x) this Lease shall
not be further available for renewal and (y) the rental for the Renewal
Term shall be the "Renewal Rental Rate". The Renewal Rental Rate is
hereby defined to mean the then prevailing rents (including, without
limitation, those similar to the Basic Annual Rent and Additional Rent)
payable by renewal tenants having a credit standing substantially
similar to that of Tenant, for properties of equivalent quality, size,
utility and location as the Premises, including any additions thereto,
located within the area described below and leased for a renewal term
approximately equal to the Renewal Term. The Renewal Rental Rate will
take into consideration the tenant inducements offered in the renewal
transactions considered by Landlord in determining the Renewal Rental
Rate.
2. If Tenant desires to renew this Lease, Tenant must notify Landlord in
writing of its intention to renew on or before the date which is at
least nine (9) months but no more than twelve (12) months prior to the
Expiration Date. Landlord shall, within the next sixty (60) days,
notify Tenant in writing of Landlord's determination of the Renewal
Rental Rate and Tenant shall, within the next twenty (20) days
following receipt of Landlord's determination of the Renewal Rental
Rate, notify Landlord in writing of Tenant's acceptance or rejection of
Landlord's determination of the Renewal Rental Rate. If Tenant timely
notifies Landlord of Tenant's acceptance of Landlord's determination of
the Renewal Rental Rate, this Lease shall be extended as provided
herein and Landlord and Tenant shall enter into an amendment to this
Lease to reflect the extension of the term and changes in Rent in
accordance with this Rider. If (x) Tenant timely notifies Landlord in
writing of Tenant's rejection of Landlord's determination of the
Renewal Rental Rate or (y) Tenant does not notify Landlord in writing
of Tenant's acceptance or rejection of Landlord's determination of the
Renewal Rental Rate within such twenty (20) day period, this Lease
shall end on the Expiration Date and Landlord shall have no further
obligations or liability hereunder.
3. The market area with respect to which the Renewal Rental Rate will be
determined is LBJ Freeway to the south, Preston Road to the east,
Midway Road to the west and Frankford to the north.