1
Exhibit 10.14
GREATER DALLAS ASSOCIATION OF REALTORS(R), INC.
COMMERCIAL LEASE AGREEMENT
TABLE OF CONTENTS
ARTICLE PAGE
------- ----
1. Defined Terms................................................ 1
2. Lease and Lease Term......................................... 2
3. Rent and Security Deposit.................................... 2
4. Taxes........................................................ 2
5. Insurance and Indemnity...................................... 2
6. Use of Demised Premises...................................... 3
7. Property Condition: Maintenance, Repairs and Alterations.... 4
8. Damage or Destruction........................................ 4
9. Condemnation................................................. 5
10. Assignment and Subletting.................................... 5
11. Default and Remedies......................................... 5
12. Landlord's Contractual Lien.................................. 6
13. Protection of Lenders........................................ 6
14. Professional Service Fees.................................... 7
15. Environmental Representations and Indemnity.................. 7
16. Miscellaneous................................................ 8
17. Additional Provisions........................................ 8
An Exhibit or Exhibits may be attached to this Lease which shall be made a part
of this Lease for all purposes [check all boxes which apply]:
EXHIBITS TO LEASE
[X] Exhibit A Floor Plan/Site Plan [ ] Exhibit E Guarantee
[X] Exhibit B Legal Description of Property [X] Exhibit F Expense Reimbursement
[X] Exhibit C Renewal Options [ ] Exhibit G Percentage Rental/
[ ] Exhibit D Right of First Refusal for [X] Exhibit H Construction of
Additional Space Improvements
[_] Exhibit I _____________________
ARTICLE ONE: DEFINED TERMS
As used in this Lease, the following terms set forth in this Article One
shall have the respective meanings set forth hereinbelow:
1.01 DATE OF LEASE: , 1993.
------------------------------------------------------
1.02 LANDLORD: ▇▇▇▇▇ ▇▇▇▇▇▇▇ LIMITED PARTNERSHIP, A TEXAS LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
Address of Landlord: ▇▇ ▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Telephone: 214 / ▇▇▇-▇▇▇▇, 817 / 332-2201, OR 817 / 560-1380
--------------------------------------------------------------------------------
1.03 TENANT: DIGITAL TECHNIQUES, INC.
--------------------------------------------------------------------------------
Address of Tenant: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Telephone: 214 / ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Fax: 214 / ▇▇▇-▇▇▇▇
*1.04 PREMISES:
A. Street address (including county): ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
B. Floor or site plan: Being a floor area of approximately 16,700 square
feet and being approximately N/A by N/A feet (measured to the exterior
of outside walls and to the center of the interior walls, and being
more particularly shown in outline on the floor/site plan attached
hereto as Exhibit A. (The aforementioned street address and the floor
or site plan shall collectively be referred to herein as the "Demised
Premises".)
C. Legal description: The legal description of the property on which the
floor/site plan is situated is more particularly described in Exhibit
B attached hereto (the "Property").
1.05 LEASE TERM: THREE (3) years and -0- months beginning on the 1ST day of
SEPTEMBER, 1993, and ending on the 31ST day of AUGUST, 1996.
1.06 BASE RENT: $250,920.00 total Base Rent for the Lease Term payable in
monthly installments of $6,970.00 per month in advance.
1.07 SECURITY DEPOSIT: $2,849.16 (transferred from previous landlord)
1.08 PERMITTED USE: [See Section 6.01] Office, laboratory and manufacturing or
any other legal use consistent with the rules and regulations of the building.
Page 1
--------------------------------------------------------------------------------
2
1.09 PRINCIPAL BROKER: [If none, so state] THE AMEND GROUP
--------------------------------------------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
214 / ▇▇▇-▇▇▇▇ Fax: 214 / ▇▇▇-▇▇▇▇
1.10 COOPERATING BROKER: [If none, so state] NONE
--------------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
1.11 PROFESSIONAL SERVICE FEES: [See Article 14]
A. Payments due to the Principal Broker shall be calculated and paid in
accordance with Paragraph |_| A or |X| B of Selection 14.01. [Check
applicable paragraph]
B. The percentage applicable for leases in Sections 14.01 and 14.02 shall
be FOUR AND ONE-HALF percent (4 1/2%) and the percentage applicable in
Section 14.02 in the event of a sale shall be ZERO percent (-0- %).
1.12 HOLDOVER RENT: [See Section 2.04] $10,000.00 per month in advance.
1.13 DAILY LATE CHARGE: [See Section 3.03] ONE HUNDRED AND NO/100 Dollars
($100.00) per day.
1.14 ACCEPTANCE: [See Section 16.13] The number of days for acceptance of this
offer to lease shall be SEVEN (7) days.
* Actual Square footage to be determined subsequent to the field measurement
and approval of such by Landlord and Tenant.
ARTICLE TWO: LEASE AND LEASE TERM
2.01 LEASE OF DEMISED PREMISES FOR LEASE TERM. Landlord leases the Demised
Premised to Tenant and Tenant leases the Demised Premises from Landlord for the
Lease Term stated in Section 1.05. As used herein, the "Commencement Date" shall
be the date specified in Section 1.05 for the beginning of the Lease Term,
unless advanced or delayed under any provision of this Lease.
2.02 DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant if Landlord
does not deliver possession of the Demised Premises to Tenant on the first date
specified in Section 1.05 above. Landlord's nondelivery of possession of the
Demised Premises to Tenant on that date shall not affect this Lease or the
obligations of Tenant under this Lease. However, the Commencement Date shall be
delayed until possession of the Demised Premises is delivered to Tenant. The
Lease Term shall be extended for a period equal to the delay in delivery of
possession of the Demised Premises to Tenant, plus the number of days necessary
for the Lease Term to expire on the last day of a month. If Landlord does not
deliver possession of the Demised Premises to Tenant within sixty (60) days
after the first date specified in Section 1.05 above, Tenant may elect to cancel
this Lease by giving written notice to landlord within ten (10) days after the
60 day period ends. If Tenant gives such notice, the Lease shall be canceled
effective as of the date of its execution, and no party hereto shall have any
obligations, one tot he other. If Tenant does not give such notice within the
time specified, Tenant shall have no right to cancel the Lease, and the Lease
Term shall commence upon the delivery of possession of the Demised Premises to
Tenant. If delivery of possession of the Demised Premises to Tenant is delayed,
Landlord and Tenant shall, upon such delivery, execute an amendment to this
Lease setting forth the Commencement Date and expiration date of the Lease Term.
2.03 EARLY OCCUPANCY. If Tenant occupies the Demised Premises prior to the
Commencement Date, Tenant's occupancy of the Demised Premises shall be subject
to all of the provisions of this Lease. Unless provided otherwise herein, Tenant
shall pay Base Rent and all other charges specified in this Lease for the period
of occupancy.
2.04 HOLDING OVER. Tenant shall vacate the Demised Premises upon the expiration
of the Lease Term or earlier termination of this Lease. Tenant shall reimburse
Landlord for and indemnify Landlord against all damages incurred by Landlord as
a result of any delay by Tenant in vacating the Demised Premises. If Tenant does
not vacate the Demised Premises upon the expiration of the Lease Term or earlier
termination of the Lease, Tenant's occupancy of the Demised Premises shall be a
"month to month" tenancy, subject to all of the terms of this Lease applicable
to a month to month tenancy, except that the Base Rent per month then in effect
shall be the amount designated in Section 1.12.
ARTICLE THREE: RENT AND SECURITY DEPOSIT
3.01 MANNER OF PAYMENT. All sums payable hereunder by Tenant (the "Rent") shall
be made to the Landlord at tile address designated in Section 1.02 or to such
other party or address as Landlord may designate. Any and all payments made to a
designated third party for the account of the Landlord shall be deemed made to
Landlord when received by said designated third party. All sums payable by
Tenant hereunder, whether or not expressly denominated as rent, shall constitute
rent for the purposes of Section 502(b)(6) of the Bankruptcy Code and for all
other purposes. The Base Rent is the minimum rent for the Demised Premises and
is subject to the terms and conditions contained in this Lease together with the
Exhibits attached hereto, if any.
3.02 TIME OF PAYMENT. Upon execution hereof, Tenant shall pay the installment of
rent for the first month of the Lease Term. On or before the first day of the
second month of the Lease Term and of each month thereafter, the installment of
rent and other sums due hereunder shall be due and payable, in advance, without
off-set, deduction or prior demand. If the Lease Term commences or ends on a day
other than the first or last day of a calendar month, the
Page 2
3
rent for any fractional calendar month following the Commencement Date or
preceding the end of tile Lease Term shall be prorated by days within five (5)
days after the due date.
3.03. LATE CHARGES. Tenant's failure to pay sums due hereunder promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, deed of trust or mortgage encumbering
the Demised Premises. Therefore, if any sum due hereunder is not received within
five (5) days after the due date, Tenant shall pay the Landlord a late charge
equal to the Daily Late Charge for each day after the due date until such
delinquent sum is received. If any check tendered in payment of any sum due from
Tenant hereunder is dishonored for any reason, Tenant shall pay a late charge
for each day after said due date until good funds are received by the Landlord.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of such late payment or such
dishonored check.
3.04. SECURITY DEPOSIT. Upon execution hereof, Tenant shall deposit with
Landlord a cash Security Deposit in the sum stated in Section 1.07. Landlord may
apply all or part of the Security Deposit to any unpaid rent or other charges
due from Tenant or to cure any other defaults of Tenant. If Landlord uses any
part of the Security Deposit, Tenant shall restore the Security Deposit to its
full amount within ten (10) days after Landlord's written demand. Tenant's
failure to restore the full amount of the Security Deposit within the time
specified shall be a default under this Lease. No interest shall be paid on the
Security Deposit. Landlord shall not be required to keep the Security Deposit
separate from its other accounts and no trust relationship is created with
respect to the Security Deposit. Upon any termination of this Lease not
resulting from Tenant's default, and after Tenant has vacated the Demised
Premises in the manner required by this Lease, Landlord shall refund the unused
portion of the Security Deposit to Tenant.
3.05. GOOD FUNDS PAYMENTS. If, for any reason whatsoever, any two or more
payments by check from Tenant to Landlord for Rent are dishonored and returned
unpaid, thereafter, Landlord may, at Landlord's sole option, upon written notice
to Tenant, require that all future payments of Rent for the remaining term of
the Lease shall be made by cash, cashier's check, or money order and that the
delivery of Tenant's personal or corporate check will no longer constitute
payment of Rent as provided in this Lease.
ARTICLE FOUR: TAXES
4.01. PAYMENT BY LANDLORD. Landlord shall pay the real estate taxes on the
Demised Premises during tile Lease Term.
4.02. IMPROVEMENTS BY TENANT. In the event the real estate taxes levied against
the Demised Premises for the real estate tax year in which the Lease Term
commences are increased in the current tax year or subsequent tax years as a
result of any alterations, additions or improvements made by Tenant or by
Landlord at the request of Tenant, Tenant shall pay to Landlord upon demand the
amount of such increase and continue to pay such increase during the term of
this Lease. Landlord shall use reasonable efforts to obtain from the tax
assessor or assessors a written statement of the total amount of such increase.
4.03. JOINT ASSESSMENT. If the real estate taxes are assessed against the
Premises jointly with other property not constituting a part of the Demised
Premises, the real estate taxes for such years shall be equal to the amount
bearing the same proportion to the aggregate assessment that the total square
feet of building area in the Demised Premises bears to the total square feet of
building area included in the joint assessment.
4.04. PERSONAL PROPERTY TAXES. Tenant shall pay all taxes assessed against trade
fixtures, furnishings, equipment, or any other personal property belonging to
Tenant. Tenant shall use reasonable efforts to have its personal property taxed
separately from the Demised Premises, but if any of Tenant's personal property
is taxed with the Demised Premises, Tenant shall pay the taxes for the personal
property within fifteen (15) days after Tenant receives a written statement for
such personal property taxes. In no case, however, shall Tenant be responsible
for taxes levied against another tenant or another land owner.
ARTICLE FIVE: INSURANCE AND INDEMNITY
5.01. CASUALTY INSURANCE. During the Lease Term, Landlord shall maintain
policies of insurance covering loss of or damage to the Demised Premises in such
amount or percentage of replacement value as Landlord deems reasonable in
relation to the age, location, type of construction and physical condition of
the Demised Premises and the availability of such insurance at reasonable rates.
Such policies shall provide protection against all perils included within the
classification of fire and extended coverage and any other perils which Landlord
deems necessary. Landlord may obtain insurance coverage for Tenant's fixtures,
equipment or building improvements installed by Tenant in or on the Demised
Premises. Tenant shall, at Tenant's expense, maintain such primary or additional
insurance on its fixtures, equipment and building improvements as Tenant deems
necessary to protect its interest. Tenant shall not do or permit to be done
anything which invalidates any such insurance policies. Any casualty insurance
which may be carried by Landlord or Tenant shall be for the sole benefit of the
party carrying such insurance and under its sole control.
5.02. INCREASE IN PREMIUMS. Tenant shall not permit any operation or activity to
be conducted or storage or use of any volatile or any other materials on or
about the Demised Premises that would cause suspension or cancellation of any
fire and extended coverage insurance policy carried by Landlord, or increase the
premiums therefor, without the prior written consent of Landlord. If Tenant's
use and occupancy of the Demised Premises causes an increase in the premiums for
any fire and extended coverage insurance policy carried by Landlord as of the
day immediately prior
Page 3
4
to Tenant's possession of the Demised Premises under this Lease, Tenant shall
pay, as additional rental, the amount of such increase to Landlord upon demand
and presentation of written evidence of the increase by Landlord.
5.03. LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a policy
of comprehensive public liability insurance, at Tenant's expense, insuring
Landlord against liability arising out of the ownership, use, occupancy, or
maintenance of the Demised Premises. The initial amount of such insurance shall
be at least $1,000,000 combined single-limit bodily injury and property damage,
for each occurrence, and shall be subject to periodic increases based upon such
economic factors as Landlord shall determine, in Landlord's discretion,
exercised in good faith. However, the amount of such insurance shall not limit
Tenant's liability nor relieve Tenant of any obligation hereunder. The policy
shall contain cross-liability endorsements, if applicable, and shall insure
Tenant's performance of the indemnity provisions of Section 5.04. Such policy
shall contain a provision which prohibits cancellation or modification of the
policy except upon thirty (30) days' prior written notice to Landlord. Tenant
may discharge its obligations under this Section by naming Landlord as an
additional insured under a policy of comprehensive liability insurance
maintained by Tenant and containing the coverage and provisions described in
this Section. Tenant shall deliver a copy of such policy or certificate (or a
renewal thereof) to Landlord prior to the Commencement Date and prior to the
expiration of any such policy during the Lease Term. If Tenant fails to maintain
such policy, Landlord may elect to maintain such insurance at Tenant's expense.
Tenant shall, at Tenant's expense, maintain such other liability insurance as
Tenant deems necessary to protect Tenant.
5.04. INDEMNITY. Landlord shall not be liable to Tenant or to Tenant's
employees, agents, invitees or visitors, or to any other person whomsoever, for
any injury to persons or damage to property on or about the Demised Premises or
any adjacent area owned by Landlord caused by the negligence or misconduct of
Tenant, its employees, subtenants, licensees or concessionaires or any other
person entering the Demised Premises under express or implied invitation of
Tenant, or arising out of the use of the Demised Premises by Tenant and the
conduct of its business therein, or arising out of any breach or default by
Tenant in the performance of its obligations hereunder; and Tenant hereby agrees
to indemnify and hold Landlord harmless from any loss, expense or claims arising
out of such damage or injury. Tenant shall not be liable for any injury or
damage caused by the negligence or misconduct of Landlord, or its employees or
agents, and Landlord agrees to indemnify and hold Tenant harmless from any loss,
expense or damage arising out of such damage or injury.
5.05 COMPARATIVE NEGLIGENCE. Tenant hereby unconditionally and irrevocably
agrees to indemnify, defend and hold Landlord's officers, agents, directors,
subsidiaries, partners, employees, licenses and counsel harmless to the extent
of Tenant's comparative negligence as determined by the court of law, if any,
from and against any and all loss, liability, demand, damage, judgment, suit,
claim, deficiency, interest, fee, charge, cost or expense (including, without
limitation, interest, court costs and penalties, attorney's fees and
disbursements and amounts paid in settlement, or liabilities resulting from any
change in federal, state or local law or regulation or interpretation hereof) of
whatever nature, on a comparative negligence basis, even when caused in part by
Landlord's negligence or the joint or concurring negligence of Landlord and any
other person or entity, which may result or to which Landlord and/or any of
Landlord's officers, agents, directors, employees, subsidiaries, partners,
licensees and counsel may sustain, suffer, incur or become subject to in
connection with or arising in any way whatsoever out of the leasing, operation,
promotion, management, maintenance, repair, use or occupation of the Demised
Premises, or any other activity of whatever nature in connection therewith, or
arising out of or by reason of any investigation, litigation or other
proceedings brought or threatened, arising out of or based upon the leasing,
operation, promotion, management, maintenance, repair, use or occupancy of the
Demised Premises, or any other activity on the Demised Premises, This provision
shall survive the termination of this Lease.
5.06. WAIVER OF SUBROGATION. Each party hereto waives any and every claim which
arises or may arise in its favor against the other party hereto during the term
of this Lease or any renewal or extension thereof for any and all loss of, or
damage to, any of its property located within or upon, or constituting a part
of, the Demised Premises, which loss or damage is covered by valid and
collectible fire and extended coverage insurance policies, to the extent that
such loss or damage is recoverable under such insurance policies. Such mutual
waivers shall be in addition to, and not in limitation or derogation of, any
other waiver or release contained in this Lease with respect to any loss of, or
damage to, property of the parties hereto. Inasmuch as such mutual waivers will
preclude the assignment of any aforesaid claim by way of subrogation or
otherwise to an insurance company (or any other person), each party hereby
agrees immediately to give to each insurance company which has issued to such
party policies of fire and extended coverage insurance, written notice of the
terms of such mutual waivers, and to cause such insurance policies to be
properly endorsed, if necessary, to prevent the invalidation of such insurance
coverages by reason of such waivers.
ARTICLE SIX: USE OF DEMISED PREMISES
6.01. PERMITTED USE. Tenant may use the Demised Premises only for the permitted
use stated in Section 1.08. The parties hereto acknowledge that the current use
of the Demised Premises or the improvements located on the Demised Premises, or
both, may or may not conform to the city zoning ordinance with respect to the
permitted use, height, setback requirements, minimum parking requirements,
coverage of improvements to total area of land and other matters which may have
a significant economic impact upon the intended use of Tenant. Tenant
acknowledges that Tenant has or will independently investigate and verify to
Tenant's satisfaction the extent of any such limitations or nonconforming uses
of the Demised Premises. Tenant further acknowledges that Tenant is not relying
upon any warranties or representations of Landlord or the Brokers who are
participating in the negotiation of this Lease concerning the permitted uses of
the Demised Premises or with respect to any nonconforming uses of the
improvements located on the Demised Premises.
6.02. COMPLIANCE WITH LAW. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Demised Premises, and
shall promptly comply with all governmental orders and directives for the
correction, prevention and abatement of nuisances and other activities in or
upon, or connected
Page 4
5
with the Demised Premises, all at Tenant's sole expense, including any expense
or cost resulting from the compliance with improvements for handicapped or
disabled persons mandated by governmental regulations. Landlord shall be
responsible for the costs associated with compliance of any governmental
regulations with regard to the improvements outlined in Exhibit "D" as well as
any costs associated with the compliance in any common areas. Said costs of
compliance shall not be passed through to Tenant in Operating Expenses or any
other form of monetary recovery.
6.03. CERTIFICATE OF OCCUPANCY. Tenant may, prior to the commencement of the
term of this Lease, apply for a Certificate of Occupancy from the municipality
in which the Demised Premises are located. If Tenant is unable to obtain a
Certificate of Occupancy prior to the Commencement Date, Tenant shall have the
right to terminate this Lease by written notice to Landlord if Landlord or
Tenant is unwilling or unable to cure the defects which prevented the issuance
of the Certificate of Occupancy. Landlord may, but has no obligation to, cure
any such defects preventing the issuance of a Certificate of Occupancy,
including any repairs, installations, or replacements of any items which are not
presently existing on the Demised Premises, or which have not been expressly
agreed upon by Landlord in writing.
6.04. SIGNS. Without the prior written consent of Landlord, Tenant shall not
place or affix any signs or other objects upon or to the Demised Premises,
including but not limited to the roof or exterior walls of the building or other
improvements thereon, or paint or deface said exterior walls. Any signs
installed by Tenant shall conform with applicable laws and deed and other
restrictions.
6.05. UTILITY SERVICES. Tenant shall pay the cost of all utility services,
including but not limited to initial connection charges, all charges for gas,
water, sewerage, storm water disposal, communications and electricity used on
the Demised Premises, and for all electric lights, lamps and tubes.
6.06. LANDLORD'S ACCESS. After giving four (4) hours notice to Tenant, Landlord
and its authorized agents shall have the right, during normal business hours, to
enter the Demised Premises (a) to inspect the general condition and state of
repair thereof, (b) to make repairs required or permitted under this Lease, (e)
to show the Demised Premises or the Property to any prospective tenant and only
within the last ninety (90) days of the Lease or purchaser, or (d) for any other
reasonable purpose. During the final one hundred fifty (150) days of the Lease
Term, Landlord and its authorized agents shall have the right to erect and
maintain on or about the Demised Premises for lease or sale.
6.07. QUIET POSSESSION. If Tenant pays the rent and complies with all other
terms of this Lease, Tenant may occupy and enjoy the Demised Premises for the
full Lease Term, subject to the provisions of this Lease.
6.08. EXEMPTIONS FROM LIABILITY. Landlord shall not be liable for any damage or
injury to the person, business (or any loss of income therefrom), goods, wares,
merchandise or other property of Tenant, Tenant's employees, invitees, customers
or any other person in or about the Demised Premises, whether such damage or
injury is caused by or results from: (a) fire, steam, electricity, water, gas or
rain; (b) the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause; (c) conditions arising on or about the Demised Premises or
upon other portions of any building of which the Demised Premises is a part, or
from other sources or places; or (d) any act or omission of any other tenant of
any building of which the Demised Premises is a part. Landlord shall not be
liable for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Tenant. The provisions of
this Section 6.08 shall not, however, exempt Landlord from liability for
Landlord's gross negligence or willful misconduct.
ARTICLE SEVEN: PROPERTY CONDITION, MAINTENANCE, REPAIRS AND ALTERATIONS
7.01. PROPERTY CONDITION. Except as disclosed in writing by Landlord to Tenant
contemporaneously with the execution hereof (the "Disclosure Notice"), to the
best of Landlord's knowledge the Demised Premises has no known latent structural
defects, construction defects of a material nature, and to the best of
Landlord's knowledge none of the improvements has been constructed with
materials known to be a potential health hazard to occupants of the Demised
Premises. Tenant acknowledges that neither the Principal Broker nor any
cooperating Broker has made any warranty or representation to Tenant with
respect to the condition of the Demised Premises, and that Tenant is relying
exclusively upon the representations, if any, of Landlord with respect to the
condition of the Demised Premises. Landlord agrees to hold said Brokers harmless
of and from any and all damages, claims, costs and expenses of every kind and
character resulting from or related to Landlord's furnishing to said Brokers any
false, incorrect or inaccurate information with respect to the Demised Premises
of Landlord's concealing any material information with respect to the condition
of the Demised Premises. Other than as expressly set forth in this Lease,
Landlord represents that on the Commencement Date, the plumbing, electrical and
lighting system, exterior doors, any fire protection sprinkler system, heating
system, air conditioning equipment, dock levelers and elevators in the Demised
Premises are in good operating condition.
7.02. ACCEPTANCE OF DEMISED PREMISES. Tenant acknowledges that a full and
complete inspection of the Demised Premises and adjacent common areas has been
made and Landlord has represented a full and adequate disclosure of existence of
any defects which would interfere with Tenant's use of the Demised Premises for
their intended commercial purpose. Tenant specifically acknowledges that as a
result of such inspection and disclosure, Tenant has taken possession of the
Demised Premises and has made its own determination to fully accept same in its
as-is condition.
7.03. OBLIGATION TO REPAIR. Except as otherwise provided herein, Landlord shall
be under no obligation to perform any repair, maintenance or management service
in the Demised Premises or adjacent common areas. Tenant shall be fully
responsible, at its expense, for all repair, maintenance and management services
other than those which are expressly assumed by Landlord.
Page 5
6
A. LANDLORD'S OBLIGATION TO REPAIR.
(1) Subject to the provisions of Article Eight (Damage or Destruction)
and Article Nine (Condemnation) and except for damage caused by any act or
omission of Tenant, Landlord shall keep the foundation, roof and the
structural portions of exterior walls of the improvements of the Demised
Premises in good order, condition and repair. Landlord shall not be
obligated to maintain or repair windows, doors, plate glass or the surfaces
of walls. In addition, Landlord shall not he obligated to make any repairs
under this Section until a reasonable time after receipt of written notice
from Tenant of the need of such repairs. If any repairs are required to be
made by Landlord, Tenant shall, at Tenant's sole cost and expense, promptly
remove Tenant's fixtures, inventory, equipment and other property, to the
extent required to enable Landlord to make such repairs. Landlord's
liability hereunder shall be limited to the cost of such repairs or
corrections.
(2) Landlord and Tenant expressly agree that all repair, maintenance
management and other services to be performed by Landlord or Landlord's
agents exclusively consist of the exercise of professional judgment by such
service providers, and Tenant expressly waives any claims for breach of
warranty arising from the performance of such services.
B. TENANT'S OBLIGATION TO REPAIR. Subject to the provisions of the last
sentence of Section 7.01, the preceding Section 7.03.A, Article Eight (Damage or
Destruction) and Article Nine (Condemnation), Tenant shall, at all times, keep
all other portions of the Demised Premises in good order, condition and repair,
including but not limited to repairs (including all necessary replacements) of
the windows, plate glass, doors, heating system, air conditioning equipment,
electrical and lighting system, fire protection sprinkler system, dock levelers,
elevators interior plumbing and the interior of the building in general. In
addition, Tenant shall, at Tenant's expense, repair any damage to any portion of
the Property, including the roof, foundation, or structural portions of exterior
walls of the Demised Premises, caused by Tenant's acts or omissions. If Tenant
fails to maintain and repair the Property as required by this Section, Landlord
may, on ten (10) days' prior written notice, enter the Demised Premises and
perform such maintenance or repair on behalf of Tenant, except that no notice
shall be required in case of emergency, and Tenant shall reimburse Landlord for
all costs incurred in performing such maintenance or repair immediately upon
demand.
7.04. ALTERATIONS, ADDITIONS AND IMPROVEMENTS. Tenant shall not create any
openings in the roof or exterior walls, or make any alterations, additions or
improvements to the Demised Premises without the prior written consent of
Landlord. Consent for nonstructural alterations, additions or improvements shall
not be unreasonably withheld by Landlord. Tenant shall have the right to erect
or install shelves, bins, machinery, air conditioning or heating equipment and
trade fixtures, provided that Tenant complies with all applicable governmental
laws, ordinances, codes, and regulations. At the expiration or termination of
this Lease, Tenant shall, subject to the restrictions of Section 7.05 below,
have the right to remove such items so installed by it, provided Tenant is not
in default at the time of such removal and provided further that Tenant shall,
at the time of removal of such items, repair in a good and workmanlike manner
any damage caused by installation or removal thereof. Tenant shall pay for all
costs incurred or arising out of alterations, additions or improvements in or to
the Demised Premises and shall not permit a mechanic's or materialman's lien to
be filed against the Demised Premises. Upon request by Landlord, Tenant shall
deliver to Landlord proof of payment reasonably satisfactory to Landlord of all
costs incurred or arising out of any such alterations, additions or
improvements.
7.05. CONDITION UPON TERMINATION. Upon the termination of the Lease, Tenant
shall surrender the Demised Premises to Landlord, broom clean and in the same
condition as received except for ordinary wear and tear which Tenant was not
otherwise obligated to remedy under any provision of the Lease. Tenant shall not
be obligated to repair any damage which Landlord is required to repair under
Article Eight (Damage or Destruction). In addition, Landlord may require Tenant
to remove any alterations, additions or improvements (whether or not made with
Landlord's consent) prior to the termination of the Lease and to restore the
Demised Premises to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord's property and shall be surrendered to Landlord
upon the termination of the Lease. In no event, however, shall Tenant remove any
of the following materials or equipment without Landlord's prior written
consent: any power wiring or power panels; lighting or lighting fixtures; wall
coverings; drapes, blinds or other window coverings; carpets or other floor
coverings; heaters, air conditioners or any other heating or air conditioning
equipment; fencing or security gates; or other similar building operating
equipment and decorations.
ARTICLE EIGHT: DAMAGE OR DESTRUCTION
8.01. NOTICE. If the building or other improvements situated on the Demised
Premises should be damaged or destroyed by fire, tornado or other casualty,
Tenant shall immediately give written notice thereof to Landlord.
8.02. PARTIAL DAMAGE. If the building or other improvements situated on the
Demised Premises are damaged by fire, tornado, or other casualty but not to such
an extent that rebuilding or repairs cannot reasonably be completed within one
hundred twenty (120) days from the date Landlord receives written notification
by Tenant of the happening of the damage, this Lease shall not terminate, but
Landlord shall, at its sole cost and risk, proceed forthwith and use reasonable
diligence to rebuild or repair such building and other improvements on the
Demised Premises (other than leasehold improvements made by Tenant or any
assignee, subtenant or other occupant of the Demised Premises) to substantially
the condition in which they existed prior to such damage; provided, however, if
the casualty occurs during the final eighteen (18) months of the Lease Term,
Landlord shall not be required to rebuild or repair such damage unless Tenant
shall exercise its renewal option (if any is contained herein) within fifteen
(15) days after the date of receipt by Landlord of the notification of the
occurrence of the damage. If Tenant does not elect to exercise its renewal
option or if there is no renewal option contained herein or previously
unexercised at such time, this Lease shall terminate at the option of Landlord
and the Rent shall be abated for the unexpired portion of this Lease, effective
from the date of actual receipt by Landlord of the written notification of the
damage. If the building and
Page 6
7
other improvements are to be rebuilt or repaired and arc untenantable in whole
or in part following such damage, the monthly installments of Rent payable
hereunder during the period in which they are untenantable shall be adjusted
equitably. Should any such damage cause a materially adverse effect to Tenant's
business and needed repairs are not started within thirty (30) days and
completed within seventy-five (75) days after written notice to Landlord. at
Tenant's option, Tenant may terminate this Lease and all rent shall be abated
for the unexpired portion of this Lease.
8.03 SUBSTANTIAL OR TOTAL DESTRUCTION. If the building or other improvements
situated on the Demised Premises are substantially or totally destroyed by fire,
tornado, or other casualty, or so damaged that rebuilding or repairs cannot
reasonably be completed within one hundred twenty (120) days from the date
Landlord receives written notification by Tenant of the happening of the damage,
this Lease shall terminate at the option of either Landlord or Tenant and
monthly installments of Rent shall be abated for the unexpired portion of this
Lease, effective from the date of receipt by Landlord Or Tenant of such written
notification. If this Lease is not terminated, the building and the improvements
shall be rebuilt or repaired and monthly installments of Rent abated to the
extent provided under Section 8.02.
ARTICLE NINE: CONDEMNATION
If, during the term of this Lease or any extension or renewal thereof, all or a
substantial part of the Demised Premises are taken for any public or
quasi-public use under any governmental law, ordinance or regulation or by right
of eminent domain, or are sold to the condemning authority under threat of
condemnation, this Lease shall terminate and the monthly installments of Rent
shall be abated during the unexpired portion of this Lease, effective from the
date of taking of the Demised Premises by the condemning authority. If less than
a substantial part of the Demised Premises is taken for public or quasi-pubic
use under any governmental law, ordinance or regulation, or by right of eminent
domain, or is sold to the condemning authority under threat of condemnation,
Landlord, at its option, may by written notice terminate this Lease or shall
forthwith at its sole expense restore and reconstruct the buildings and
improvements (other than leasehold improvements made by Tenant or any assignee,
subtenant or other occupant of the demised Premises) situated on the Demised
Premises in order to make the same reasonably tenantable and suitable for the
use for which the Demised Premises is leased as defined in Section 6.01. The
monthly installments of Base Rent payable hereunder during the unexpired portion
of this Lease shall be adjusted equitably. Landlord and Tenant shall each be
entitled to receive and retain such separate awards and portions of lump sum
awards as may be allocated to their respective interests in any condemnation
proceedings. The termination of this Lease shall not affect the rights of the
respective parties to such awards.
ARTICLE TEN: ASSIGNMENT AND SUBLETTING
Tenant shall not, without the prior written consent of Landlord which consent
shall not be unreasonably withheld, assign this Lease or sublet the Demised
Premises or any portion thereof. Any assignment or subletting shall be expressly
subject to all terms and provisions of this Lease, including the provisions of
Section 6.01 pertaining to the use of the Demised Premises. In the event of any
assignment or subletting, Tenant shall remain fully liable for the full
performance of all Tenant's obligations under this Lease. Tenant shall not
assign its rights hereunder or sublet the Demised Premises without first
obtaining a written agreement from the assignee or sublessee whereby the
assignee or sublessee agrees to assume the obligations of Tenant hereunder and
to be bound by the terms of this Lease. No such assignment or subletting shall
constitute a novation. In the event of the occurrence of an event of default
while the Demised Premises is assigned or sublet, Landlord, in addition to any
other remedies provided herein or by law, may at Landlord's option, collect
directly from such assignee or subtenant all rents becoming due under such
assignment or subletting and apply such rent against any sums due to Landlord
hereunder. No direct collection by Landlord from any such assignee or subtenant
shall release Tenant from the performance of its obligations hereunder.
Tenant may assign this Lease or sublet the Lease Premises or any portion
thereof, without Landlord's consent to any corporation which controls, is
controlled by, or is under common control with Tenant, or to any corporation
resulting from a merger or consolidation with Tenant, or to any person or entity
which acquires substantially all the assets of Tenant as a going concern
(collectively, an "Affiliate"), provided that the Affiliate assumes in writing
all of Tenant's obligation under this Lease, provided the original Tenant and
guarantor are not relieved of their obligation.
ARTICLE ELEVEN: DEFAULT AND REMEDIES
11.01. DEFAULT. Each of the following events shall be an event of default under
this Lease:
A. Failure of Tenant to pay any installment of the Rent or other sum payable to
Landlord hereunder on the date that same is due and such failure shall continue
for a period of ten (10) days after written notice from Landlord or its agent.
B. Failure of Tenant to comply with any term, condition or covenant of this
Lease, other than the payment of Base Rent or other sum of money, and such
failure shall not be cured within thirty (30) days after written notice thereof
to Tenant;
C. Tenant or any guarantor of Tenant's obligations hereunder shall generally
fail to pay its debts as they become due or shall admit in writing its inability
to pay its debts, or shall make a general assignment for the benefit of
creditors;
D. Tenant or any guarantor of Tenant's obligations hereunder shall commence any
case, proceeding or other action seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property;
Page 7
8
E. Any case, proceeding or other action against Tenant or any guarantor of
Tenant's obligations hereunder shall be commenced seeking to have an order for
relief entered against it as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and Tenant (i) fails
to obtain a dismissal of such case, proceeding, or other action within sixty
(60) days of its commencement; or (ii) converts the case from one chapter of the
Federal Bankruptcy Code to another chapter; or (iii) is the subject of an order
of relief which is not fully stayed within seven (7) business days after the
entry thereof; and
F. Abandonment by Tenant of any substantial portion of the Demised Premises or
cessation of the use of the Demised Premises for the purpose leased and Tenant
discontinues to pay rent.
11.02. REMEDIES. Upon the occurrence of any of the events of default listed in
Section 11.01, Landlord shall have the option to pursue any one or more of the
following remedies without any prior notice or demand whatsoever:
A. Terminate this Lease, in which event Tenant shall immediately surrender the
Demised Premises to Landlord. If Tenant fails to so surrender the Demised
Premises, Landlord may, without prejudice to any other remedy which it may have
for possession of the Demised Premises or arrearages in Rent, enter upon and
take possession of the Demised Premises and expel or remove Tenant and any other
person who may be occupying the Demised Premises or any part thereof, without
being liable for prosecution or any claim for damages therefor. Tenant shall pay
to Landlord on demand the amount of all loss and damage which Landlord may
suffer by reason of such termination, whether through inability to relet the
Demised Premises on satisfactory terms or otherwise.
B. Enter upon and take possession of the Demised Premises, without terminating
this Lease and without being liable for prosecution or for any claim for damages
therefor, and expel or remove Tenant and any other person who may be occupying
the Demised Premises or any part thereof. Landlord may relet the Demised
Premises and receive the rent therefor. Tenant agrees to pay to Landlord monthly
or on demand from time to time any deficiency that may arise by reason of any
such reletting. In determining the amount of such deficiency, the professional
service fees, attorneys' fees, remodeling expenses and other costs of reletting
shall be subtracted from the amount of rent received under such reletting.
C. Enter upon the Demised Premises, by force if necessary, without terminating
this Lease and without being liable for prosecution or for any claim for damages
therefor, and do whatever Tenant is obligated to do under the terms of this
Lease. Tenant agrees to pay Landlord on demand for expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this Lease,
together with interest thereon at the rate of twelve percent (12%) per annum
from the date expended until paid. Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by negligence of Landlord
or otherwise.
D. In addition to the foregoing remedies, Landlord shall have the right to
change or modify the locks on the Demised Premises in the event Tenant fails to
pay the monthly installment of Rent when due only to produce a meeting between
Landlord and Tenant. Tenant agrees that Landlord shall not be liable for any
damages resulting to the Tenant from the lockout. At such time that Landlord
changes or modified the lock, Landlord shall post a "Notice of Change of Locks"
on the front of the Demised Premises. Such Notice shall state the following:
(1) That Tenant's monthly installment of Rent is delinquent, and therefore,
under authority of Section 11.02D of Tenant's Lease, the Landlord has exercised
its contractual right to change or modify Tenant's door lock;
(2) That the Notice has been posted on the Tenant's front door by a
representative of Landlord and that Tenant should make arrangements to pay the
delinquent installment of Rent when Tenant picks up the key; and
(3) That the failure of the Tenant to comply with the provisions of the Lease
and the Notice and/or tampering with or changing the door lock(s) by Tenant may
subject the Tenant to legal liability.
E. No re-entry or taking possession of the Demised Premises by Landlord shall be
construed as an election to terminate this Lease, unless a written notice of
such intention is given to Tenant. Notwithstanding any such reletting or
re-entry or taking possession, Landlord may, at any time thereafter, elect to
terminate this Lease for a previous uncured default. Pursuit of any of the
foregoing remedies shall not preclude pursuit of any of the other remedies
provided by law, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any monthly installment of Rent due to Landlord
hereunder or of any damages accruing to Landlord by reason of the violation of
any of the terms, provisions and covenants herein contained. Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an event of
default shall not be deemed or construed to constitute a waiver of any other
violation or default. The loss or damage that Landlord may suffer by reason of
termination of this Lease or the deficiency from any reletting as provided for
above shall include the expense of repossession and any repairs or remodeling
undertaken by Landlord following possession. Should Landlord terminate this
Lease at any time for any default, in addition to any other remedy Landlord may
have, Landlord may recover from Tenant all damages Landlord may incur by reason
of such default, including the cost of recovering the Demised Premises and the
cost of the rental then remaining unpaid.
11.03. NOTICE OF DEFAULT. Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Lease to Landlord and to
any ground lessor, mortgagee or beneficiary under any deed of trust encumbering
the Demised Premises whose name and address have been furnished to Tenant in
writing. Landlord shall not be in default under this Lease unless Landlord (or
such ground lessor, mortgagee or beneficiary) fails to cure such nonperformance
within thirty (30) days after receipt of Tenant's notice. However, if such
nonperformance
Page 8
9
reasonably requires more than thirty (30) days to cure, Landlord shall not be in
default if such cure is commenced within such 30-day period and thereafter
diligently pursued to completion.
11.04. LIMITATION OF LANDLORD'S LIABILITY. As used in this Lease, the term
"Landlord" means only the current owner or owners of the fee title to the
Demised Premises or the leasehold estate under a ground lease of the Demised
Premises at the time in question. Each Landlord is obligated to perform the
obligations of Landlord under this Lease only during the time such Landlord owns
such interest or title. Any Landlord who transfers its title or interest is
relieved of all liability with respect to the obligations of Landlord under this
Lease accruing on or after the date of transfer. However, each Landlord shall
deliver to its transferee the Security Deposit held by Landlord if such Security
Deposit has not then been applied under the terms of this Lease.
ARTICLE TWELVE: [Intentionally Deleted]
ARTICLE THIRTEEN: PROTECTION OF LENDERS
13.01. SUBORDINATION. Landlord shall have the right to subordinate this Lease to
any future ground Lease, deed of trust or mortgage encumbering the Demised
Premises, and advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Landlord's right to obtain such a future subordination is subject
to Landlord's providing Tenant with a written Subordination, Nondisturbance and
Attornment Agreement from any such ground lessor, beneficiary or mortgagee
wherein Tenant's right to peaceable possession of the Demised Premises during
the Lease Term shall not be disturbed if Tenant pays the Rent and performs all
of Tenant's obligations under this Lease and is not otherwise in default. If any
ground lessor, beneficiary, or mortgagee elects to have this Lease superior to
the lien of its ground lease, deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed superior to such ground lease,
deed of trust or mortgage whether this Lease is dated prior or subsequent to the
date of said ground lease, deed of trust or mortgage or the date of recording
thereof. Tenant's rights under this Lease, unless specifically modified at the
time this Lease is executed, are subordinated to any existing ground lease, deed
of trust or mortgage encumbering the Demised Premises.
13.02. ATTORNMENT. If Landlord's interest in the Demised Premises is transferred
voluntarily or involuntarily to any ground lessor, beneficiary under a deed of
trust, mortgagee or purchaser at a foreclosure sale, Tenant shall attorn to the
transferee of or successor to Landlord's interest in the Demised Premises and
recognize such transferee or successor as Landlord under this Lease. Tenant
waives the protection of any statute or rule of law which gives or purports to
give Tenant any right to terminate this Lease or surrender possession of the
Demised Premises upon the transfer of Landlord's interest.
13.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any reasonable
instruments or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so. If Tenant fails to do so
within ten (10) days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
13.04. ESTOPPEL CERTIFICATES.
A. Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; and (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why). Tenant shall deliver such statement to Landlord within ten (10) days after
Landlord's request. Any such statement by Tenant may be furnished by Landlord to
any prospective purchaser or lender of the Demised Premises. Such purchaser or
lender may rely conclusively upon such statement as true and correct.
B. If Tenant does not deliver such statement to Landlord within such 10 day
period, Landlord, and any prospective purchaser or lender, may conclusively
presume and rely upon the following facts: (i) that the terms and provisions of
this Lease have not been changed except as otherwise represented by Landlord;
(ii) that this Lease has not been canceled or terminated except as otherwise
represented by Landlord; (iii) that not more than one monthly installment of
Base Rent or other charges have been paid in advance; and (iv) that Landlord is
not in default under the Lease. In such event, Tenant shall be estopped from
denying the truth of such facts.
13.05. TENANT'S FINANCIAL CONDITION. Within ten (10) days after written request
from Landlord, but not more than twice per calendar year, Tenant shall deliver
to Landlord such financial statements as are reasonably required by Landlord to
verify the net worth of Tenant, or any assignee, subtenant, or guarantor of
Tenant. In addition, Tenant shall deliver to any lender designated by Landlord
any financial statements required by such lender to facilitate the financing or
refinancing of the Demised Premises. Tenant represents and warrants to Landlord
that each such financial statement is a true, complete, and accurate statement
as of the date of such statement. All financial statements shall be confidential
and shall be used only for the purposes set forth herein.
ARTICLE FOURTEEN: PROFESSIONAL SERVICE FEES
14.01. AMOUNT AND MANNER OF PAYMENT OF SERVICE FEES. Fees due to the Principal
Broker shall be calculated and paid in accordance with Article 1.11 as follows:
A. Landlord agrees to pay to the Principal Broker a fee for negotiating this
Lease equal to the percentage stated in Section 1.11B of each monthly Rent
payment at the time such payment is due.
Page 9
10
B. Landlord agrees to pay to the Principal Broker a fee for negotiating this
Lease equal to the percentage stated in Section 1.11B of the total Rent to
become due to Landlord during the term of this Lease. Said fees shall be payable
to the Principal Broker on the date of the execution of this Lease.
14.02. PAYMENTS ON RENEWAL, EXPANSION OR PURCHASE. If during the term of this
Lease (as the same may be renewed or extended) or within ten (10) years from the
date hereof, whichever shall be the greater period of time, Tenant, its
successors or assigns, shall (a) exercise any right or option to renew or extend
the term of this Lease (whether contained in this Lease or in any amendment,
supplement or other agreement pertaining hereto) or enter into a new lease or
rental agreement with Landlord covering the Demised Premises, or (b) enter into
any lease, extension, renewal, expansion or other rental agreement with Landlord
demising to Tenant any premises located on or constituting all or part of any
tract or parcel of real property adjoining, adjacent to or contiguous to the
Demised Premises and owned by Landlord on the date of this Lease, Landlord shall
pay to the Principal Broker an additional fee covering the full period of such
renewal, extension, lease, expansion or other rental agreement which shall be
due on the date of exercise, in the case of the exercise of an option, or the
execution, in the case of a lease or other agreement. Such fees shall be
computed under Section 14.01A or 14.01B above (whichever has been made
applicable under Section 1.11A), as if a new lease had been made for such period
of time. In the event Tenant, its successors or assigns, purchases the Demised
Premises at any time, pursuant to a purchase option contained in this Lease (or
any lease, extension, renewal, expansion or other rental agreement upon which an
additional fee would be due under the above provisions) or, in the absence of
any purchase option or exercise thereof, purchases the Demised Premises within
ten (10) years from the date hereof, Landlord shall pay to the Principal Broker
a sales fee in cash equal to the percentage stated in Section 1.11B of the
purchase price, payable at closing. Upon closing of the sale, all lease fees
shall terminate if the lease fees are payable monthly.
14.03. LANDLORD'S LIABILITY. If this Lease is negotiated by Principal Broker in
cooperation with another Broker, Landlord shall be liable for payment of all
Professional Service Fees to Principal Broker only, whereupon Landlord shall be
protected from any claims from the Cooperating Broker.
14.04. [Intentionally Deleted]
14.05. SALE. In the event of a sale of the Demised Premises or the assignment of
this Lease by Landlord, Landlord shall obtain from the purchaser or assignee an
Assumption Agreement in recordable form whereby such purchaser or assignee
agrees to pay the Principal Broker all professional service fees payable under
this Lease and shall deliver a fully executed counterpart thereof to Principal
Broker on the date of closing of the sale of the Demised Premises or assignment
of this Lease. Landlord shall be released from personal liability for subsequent
payments only upon the delivery of such counterpart of said Assumption
Agreement. Landlord shall not transfer, convey, or sell the Demised Premises or
assign this Lease without first obtaining from the purchaser or assignee such
Assumption Agreement. The form of such Assumption Agreement shall be furnished
to the Principal Broker at the time Landlord enters into any contract for the
sale of the Demised Premises or assignment of this Lease.
14.06. TERMINATION. The termination of this Lease by the mutual agreement of
Landlord and Tenant, Tenant not being in default hereunder, shall not affect the
right of the Principal Broker to continue to receive the monthly Professional
Services Fees agreed to be paid by Landlord under Section 14.01A above, just as
if Tenant had continued to occupy the Demised Premises and had paid the monthly
installments of Base Rent during the remaining term of this Lease. Termination
of this Lease under Article Eight or Article Nine shall not terminate the right
to such monthly Professional Service Fees.
14.07. LIEN. The Principal Broker is hereby granted a lien against the Demised
Premises to secure payment of all Professional Services Fees (including not only
the Professional Service Fees originally payable hereunder but also any
additional Professional Service Fees which may hereafter become payable by
reason of renewals, new leases, rental agreements, sales or otherwise). This
lien is subject to the rights of Tenant under this Lease, but prior and superior
to any liens hereafter created against the Demised Premises, excepting only
liens in favor of institutional lenders and similar regulated financial
institutions securing indebtedness incurred for the purposes of acquiring the
Demised Premises or constructing, repairing, rebuilding or remodeling buildings
and other improvements thereon, to all of which liens the lien hereby created
shall be subordinate and inferior.
ARTICLE FIFTEEN: ENVIRONMENTAL REPRESENTATIONS AND INDEMNITY
15.01. TENANT'S COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant, at Tenant's expense,
shall comply with all laws, rules, orders, ordinances, directions, regulations
and requirements of federal, state, county and municipal authorities pertaining
to Tenant's use of the Property and with the recorded covenants, conditions and
restrictions, regardless of when they become effective, including, without
limitation, all applicable federal, state and local laws, regulations or
ordinances pertaining to air and water quality, Hazardous Material (as defined
hereinafter), waste disposal, air emissions and other environmental matters, all
zoning and other land use matters, and with any direction of any public officer
or officers, pursuant to law, which shall impose any duty upon Landlord or
Tenant with respect to the use or occupation of the Property.
15.02. TENANT'S INDEMNIFICATION. Tenant shall not cause or permit any hazardous
material to be brought upon, kept or used in or about the Property by Tenant,
its agents, employees, contractors or invitees without the prior written consent
of Landlord. If Tenant breaches the obligations stated in the preceding Section
or sentence, or if the presence of Hazardous Material on the Property caused or
permitted by Tenant results in contamination of the Property or any other
property, or if contamination of the Property or any other property by Hazardous
Material otherwise occurs for which Tenant is legally liable to Landlord for
damage resulting therefrom, then Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities or losses (including, without limitation, diminution in value
of the Property, damages for the loss or
Page 10
11
restriction on use of rentable or unusable space or of any amenity or
appurtenance of the Property, damages arising from any adverse impact on
marketing of building space or land area, and sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or after
the Lease term as a result of such contamination. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any clean-up, remedial work,
removal or restoration work required by any federal, state or local government
agency or political subdivision because of Hazardous Material present in the
soil or ground water on or under the Property. Without limiting the foregoing,
if the presence of any Hazardous Material on the Property or any other property
caused or permitted by Tenant results in any contamination of the Property,
Tenant shall promptly take all actions at its sole expense as are necessary to
return the Property to the condition existing prior to the introduction of any
such Hazardous Material to the Property, provided that Landlord's approval of
such actions shall first be obtained. The foregoing indemnity shall survive the
expiration or earlier termination of this Lease.
15.03. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents and
warrants to the best of Landlord's actual knowledge that any handling,
transportation, storage, treatment or usage of Hazardous Material that has
occurred on the Property to date has been in compliance with all applicable
federal, state, and local laws, regulations and ordinances. Landlord further
represents and warrants that no leak, spill, release, discharge, emission or
disposal of Hazardous Material has occurred on the Property to date and that the
soil or groundwater on or under the Property is free of Hazardous Material as of
the date that the term of this Lease commences unless expressly disclosed by
Landlord to Tenant in writing.
15.04. LANDLORD'S INDEMNIFICATION. Landlord hereby indemnifies, defends and
holds Tenant harmless from any claims, judgments, damages, penalties, fines,
costs, liabilities, (including sums paid in settlements of claims) or loss,
including, without limitation, attorneys' fees, consultant fees, and expert
fees, which arise during or after the term of this Lease from or in connection
with the presence or suspected presence of Hazardous Material in the soil or
groundwater on or under the Property, unless the Hazardous Material is released
by Tenant or is present solely as a result of the negligence or willful conduct
of Tenant, its officers, employees or agents. Without limiting the generality of
the foregoing, the indemnification provided by this Article 15.04 shall
specifically cover costs incurred in connection with any investigation of site
conditions or any clean-up, remedial work, removal or restoration work required
by any federal, state or local governmental agency or political subdivision
because of the presence or suspected presence of Hazardous Material in the soil
or groundwater on or under the Property, unless the Hazardous Material is
released by Tenant or is present solely as a result of the negligence or willful
conduct of Tenant, its officers, employees, or agents.
15.05. DEFINITIONS. For purposes of this Article 15, the term "Hazardous
Material" shall mean any pollutant, toxic substance, hazardous waste, hazardous
material, hazardous substance, or oil as defined in or pursuant to the Resource
Conservation and Recovery Act, as amended, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, the Federal Clean Water
Act, as amended, or any other federal, state or local environmental law,
regulation, ordinance, rule, or bylaw, whether existing as of the date hereof,
previously enforced or subsequently enacted.
15.06. SURVIVAL. The indemnities contained in this Article 15 shall survive the
expiration or earlier termination of this Lease.
15.07. BROKER'S ENVIRONMENTAL DISCLOSURE. Tenant and Landlord further
acknowledge that the Brokers involved in the negotiation of this transaction
have no expertise with respect to any such Hazardous Materials, although said
Brokers will disclose any actual knowledge possessed by them. Tenant and
Landlord shall look solely to experts and professionals, if any, selected by
Tenant or Landlord to advise Tenant or Landlord with respect to the condition of
the Property and shall not hold the Brokers responsible for any Hazardous
Material condition or problem relating to the Property. Both the Landlord and
Tenant hereby agree to indemnify, defend, and hold the Brokers participating in
this transaction harmless of and from any and all liability, claim, debt,
damage, cost, or expense, including reasonable attorneys' fees, related to or
arising out of or in any way connected to Hazardous Materials and/or toxic
wastes and/or any other undesirable substances affecting the Property.
ARTICLE SIXTEEN: MISCELLANEOUS
16.01. FORCES MAJEURE. In the event performance by Landlord or Tenant of any
term, condition or covenant in this Lease is delayed or prevented by any Act of
God, strike, lockout, shortage of material or labor, restriction by any
governmental authority, civil riot, flood, or any other cause not within the
control of the affected party the period for performance of such term, condition
or covenant shall be extended for a period equal to the period the affected
party is so delayed or hindered.
16.02. INTERPRETATION. The captions of the Articles or Sections of this Lease
are to assist the parties in reading this Lease and are not a part of the terms
or provisions of this Lease. Whenever required by the context of this Lease, the
singular shall include the plural and the plural shall include the singular. For
convenience, each party hereto is referred to in the neuter gender, but the
masculine, feminine and neuter genders shall each include the other. In any
provision relating to the conduct, acts or omissions of Tenant, the term
"Tenant" shall include Tenant's agents, employees, contractors, invitees,
successors or others using the Demised Premises with Tenant's expressed or
implied permission.
16,03. WAIVERS. All waivers must be in writing and signed by the waiving party.
Landlord's failure to enforce any provisions of this Lease or its acceptance of
late installments of Rent shall not be a waiver and shall not estop Landlord
from enforcing that provision or any other provision of this Lease in the
future. No statement on a payment check from Tenant or in a letter accompanying
a payment check shall be binding on Landlord. Landlord
Page 11
12
may, with or without notice to Tenant, negotiate, cash, or endorse such check
without being bound to the conditions of such statement.
16.04. SEVERABILITY. A determination by a court of competent jurisdiction that
any provision of this Lease or any part thereof is invalid or unenforceable
shall not cancel or invalidate the remainder of such provision or this Lease,
which shall remain in full force and effect.
16.05. JOINT AND SEVERAL LIABILITY. All parties signing this Lease as Tenant
shall be jointly and severally liable for all obligations of Tenant.
16.06. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This Lease is the only
agreement between the parties pertaining to the lease of the Demised Premises
and no other agreements are effective. All amendments to this Lease shall be in
writing and signed by all parties. Any other attempted amendment shall be void.
16.07. NOTICES. All notices required or permitted under this Lease shall be in
writing and shall be personally delivered or shall be deemed to be delivered,
whether actually received or not, when deposited in the United States mail,
postage pre-paid, registered or certified mail, return receipt requested,
addressed as stated herein. Notices to Tenant shall be delivered to the address
specified in Section 1.03 above, except that, upon Tenant's taking possession of
the Demised Premises, the Demised Premises shall be Tenant's address for notice
purposes. Notices to any other party hereto shall be delivered to the address
specified in Article One as the address for such party. Any party hereto may
change its notice address upon written notice to the other parties.
16.08. ATTORNEYS' FEES. If on account of any breach or default by any party
hereto in its obligations to any other party hereto (including but not limited
to the Principal Broker), it shall become necessary for the nondefaulting party
to employ an attorney to enforce or defend any of its rights or remedies
hereunder, the defaulting party agrees to pay the nondefaulting party its
reasonable attorneys' fees, whether or not suit is instituted in connection
therewith.
16.09. VENUE. All obligations hereunder, including but not limited to the
payment of fees to the Principal Broker, shall be performable and payable in the
county in which the Property is located.
16.10. GOVERNING LAW. The laws of the State of Texas shall govern this Lease.
16.11. SURVIVAL. All obligations of any party hereto not fulfilled at the
expiration or the earlier termination of this Lease shall survive such
expiration or earlier termination as continuing obligations of such party.
16.12. BINDING EFFECT. This Lease shall inure to the benefit of and be binding
upon each of the parties hereto and their respective heirs, representatives,
successors and assigns; provided, however, Landlord shall have no obligation to
Tenant's successors or assigns unless the rights or interests of such successors
or assigns are acquired in accordance with the terms of this Lease.
16.13. EXECUTION AS OFFER. The execution of this Lease by the first party to do
so constitutes an offer to lease the Demised Premises. Unless within the number
of days stated in Section 1.14 above after the date of its execution by the
first party to do so, this Lease is signed by the other party and a fully
executed copy is delivered to the first party, such offer shall be automatically
withdrawn and terminated.
ARTICLE SEVENTEEN: ADDITIONAL PROVISIONS
Additional provisions may be set forth in the blank space below. and/or an
Exhibit or Exhibits may be attached hereto which shall be a part of this Lease
for all purposes.
EFFECTIVE as of the date stated in Section 1.01 above.
Page 12
13
BROKERS: LANDLORD:
The Amend Group ▇▇▇▇▇ ▇▇▇▇▇▇▇ Limited Partnership
-------------------------------------- ---------------------------------
Principal Broker, Member of
the Greater Dallas Association of
REALTORS(R), Inc.
By: By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------- ---------------------------------
Name: Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ----------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Title: President of ▇▇▇▇▇
------------------------------ Corporation, General Partner
------------------------------
Suite 1300, LB 7 Date of Execution by Landlord:
-------------------------------------- -----------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------
Telephone: 214/▇▇▇-▇▇▇▇
----------------------------
License No.:
--------------------------
Fax: 214/▇▇▇-▇▇▇▇ TENANT:
None Digital Techniques, Inc.
-------------------------------------- ----------------------------------
Cooperating Broker
By: By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- -------------------------------
Name: Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- -----------------------------
Address: Title: President
------------------------------ ----------------------------
Date of Execution
by Tenant:
July 7, 1993
----------------------
--------------------------------------
Telephone:
-----------------------------
License No.:
---------------------------
********************************************************************************
[For voluntary use only by members of the Greater Dallas Association
of REALTORS(R), Inc.]
Page 13
14
LEASE AMENDMENT NUMBER ONE
APRIL 21, 1995
The provisions of Commercial Lease Agreement dated July 7, 1993, by and between
the undersigned parties is hereby amended as follows:
1. Paragraph 1.04, effective April 1, 1995, add: "and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇, being floor area of approximately 11,400 square feet."
2. Renewal Option number one is hereby exercised, extending the lease to
August 31, 1999.
3. Paragraph 1.06: Effective July 1, 1995, base rent is changed to $12,500.00
per month.
All other terms and conditions remain unchanged.
DIGITAL TECHNIQUES, INC. ▇▇▇▇▇ ▇▇▇▇▇▇▇ LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President of ▇▇▇▇▇ Corporation,
----------------------------- Its General Partner
Title: President
---------------------------
Page 14
15
LEASE AMENDMENT NUMBER TWO
The provisions of Commercial Lease Agreement dated July 7, 1993, and Lease
Amendment Number One dated April 21, 1995, by and between the undersigned
parties are hereby amended as follows:
1. Renewal Option number two is hereby exercised, extending the lease to
August 31, 2004.
2. Paragraph 1.06: Effective September 1, 1999 base rent is changed to
$17,500.00 per month; effective September 1, 2000 base rent is changed to
$17,750.00 per month; effective September 1, 2001 base rent is changed to
$18,000.00 per month; effective September 1, 2002 base rent is changed to
$18,250.00 per month; effective September 1, 2003 base rent is changed to
$18,500.00 per month;
3. Paragraph 1.12: Holdover Rent: $25,000.00 per month in advance.
4. Add Paragraph 7.03 - C., as follows:
LANDLORD'S ADDITIONAL OBLIGATION:
Notwithstanding the obligations cited above, Landlord will pay 50% of the
cost of replacement of any major component (condenser, compressor, etc.) of
HVAC units.
5. Tenant is hereby granted an additional three-year option period beginning
September 1, 2004, which must be exercised in writing by June 1, 2004. Rent
during this option will be increased annually in proportion to the increase
in the CPI (Dallas, Texas) in the prior calendar year.
6. Attached Addendum A replaces the original Exhibit F attached to the Lease.
All other terms and conditions of the Lease remain unchanged.
The effective date of this Amendment is the latest of the dates listed below as
the dates executed by the parties hereto.
DIGITAL TECHNIQUES, INC. ▇▇▇▇▇ ▇▇▇▇▇▇▇ LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ President of ▇▇▇▇▇ Corporation,
------------------------------ Its General Partner
Title: President
Date: December 10, 1998
Page 15
16
Exhibit A
[Plot plan showing the leased building]
Page 16
17
NORTH TEXAS COMMERCIAL ASSOCIATION OF REALTORS
ADDENDUM A TO LEASE
EXPENSE REIMBURSEMENT
Demised Premises and Address: 402 and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ -
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
[Check all boxes which apply. Boxes not checked do not apply to this Lease.]
1. Expense Reimbursement. Tenant shall pay the Landlord as additional Rent a
portion of the following expenses (collectively called "Reimbursement") which
are incurred by or assessed against the Demised Premises [check all boxes which
apply]:
|X| Ad Valorem Taxes;
|X| Insurance Premiums;
|X| Common Area Maintenance (CAM) Expenses;
|_| Operating Expenses;
|_| Roof and Structural Maintenance Expenses;
2. Expense Reimbursement Limitations. The amount of Tenant's Reimbursement shall
be determined be one of the following methods as described in Section 4 below
[check all boxes which apply]:
|X| Base Year/Expense Stop Adjustment;
|_| Pro Rata Adjustment;
|_| Fixed Amount Adjustment;
|_| Net Lease Provisions.
3. Expense Reimbursement Payments. Tenant agrees to pay any end-of-year lump sum
Reimbursement within thirty (30) days after receiving an invoice from Landlord.
Any time during the Lease Term (or any renewals or extensions) Landlord may
direct Tenant to pay monthly an estimated portion of the projected future
Reimbursement amount. Any such payment directed by Landlord shall be due and
payable monthly on the same day that the Base Rent is due. Any Reimbursement
relating to partial calendar years shall be prorated accordingly. Tenant's Pro
Rata Share of such Reimbursements shall be based on the square footage of
useable area contained in the Demised Premises in proportion to the square
footage of useable building area of the Property. Tenant may audit or examine
those items of expense in Landlord's records which relate to Tenant's
obligations under this Lease. Landlord shall promptly refund to Tenant any
overpayment which is established by an audit or examination. If the audit or
examination reveals an error of more than five percent (5%) over the figures
billed to Tenant, Landlord shall pay the reasonable cost of the audit or
examination.
4. Definitions.
A. Ad Valorem Taxes. All general real estate taxes, general and special
assessments, parking surcharges, rent taxes, and other similar governmental
charges levied against the Property for each calendar year.
B. Insurance Premiums. All Landlord's insurance premiums attributable to
the Property, including but not limited to insurance for fire, casualty, general
liability, property damage, medical expenses, and extended coverage, and loss of
rents coverage for six months' Rent.
C. Common Area Maintenance Charges. Common area maintenance expenses
("CAM") means all costs of maintenance, inspection and repairs of the common
areas of the Property, including but not limited to those costs for security,
lighting, painting, cleaning, decorations and fixtures, utilities, ice and snow
removal, trash disposal, project signs, minor roof defects, pest control,
project promotional expenses, property owners' association dues, wages and
salary costs of maintenance personnel, and other expenses benefiting all the
Property which may be incurred by Landlord, in its discretion, including sales
taxes and a reasonable service charge for the administration thereof. The
"common area" is defined as that part of the Property intended for the
collective use of all tenants including, but not limited to, the parking areas,
driveways, loading areas, landscaping, gutters and downspouts, plumbing,
electrical systems, roof, exterior walls, sidewalks, malls, promenades (enclosed
or otherwise), meeting rooms, doors, windows, corridors and public rest rooms.
CAM does not include depreciation on Landlord's original investment, cost of
tenant improvements, real estate brokers' fees, Landlord's management office and
overhead expenses or interest or depreciation on capital investments.
Page 17
18
EXHIBIT "B"
FIELD NOTE DESCRIPTION
BEING all of ▇▇▇▇▇▇▇ TECH CENTER ADDITION, an Addition to the City of ▇▇▇▇▇,
▇▇▇▇▇▇ County, Texas, according to the Replat thereof recorded in Volume F, Page
273 of the Map Records of Collin County, Texas, and being the same 4.251 acre
tract of land situated in the City of ▇▇▇▇▇, ▇▇▇▇▇▇ County, Texas, out of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Survey, Abstract Number- 708, and being a portion of a tract of
land conveyed to ▇▇▇▇▇▇▇ Tech Center Associates, LTD., by deed recorded in
Volume 1780 Page 105 of the Deed Records of Collin County, Texas, said 4.251
acre tract of land being more particularly, described as follows:
BEGINNING at a 1/2 inch iron rod found in the northerly right-of-way line of
▇▇▇▇▇▇▇ Road (a 110 foot R.O.W.) for the southeast corner of said ▇▇▇▇▇▇▇ Tech
Center tract, said iron rod being in a curve to the left, the radius point of
said curve being situated South 14 degrees 42 minutes 39 seconds West a distance
of 786.42 feet from said iron rod;
THENCE with the northerly right-of-way line of ▇▇▇▇▇▇▇ Road the following:
Westerly with said curve to the left through a central angle of 00
degrees 40 minutes 55 seconds an arc distance of 9.36 feet to a 1/2
inch iron rod found for corner;
S 14 degrees, 01 minutes 44 seconds West, a distance of 5.00' feet to a
cut X found in concrete for corner in a curve to the left, the radius
point of said curve being situated South 14 degrees 01 minutes 44
seconds West, a distance of 781.42' feet from said cut X;
Southwesterly with said curve to the left through a central angle of 29
degrees 59 minutes 39 seconds an arc distance of 409.07' feet to a 1/2'
inch iron rod found for corner;
THENCE departing the northerly right-of-way line of ▇▇▇▇▇▇▇ Road North 14
degrees 01 minutes 44 seconds East, a distance of 534.65' feet to a 1/2" inch
iron rod found for corner in the northerly line of said ▇▇▇▇▇▇▇ Tech Center
Tract;
THENCE with the northerly line of said tract South 75 degrees 58 minutes 16
seconds East, a distance of 400.00' feet to a 3/8" inch iron rod found for the
northeast corner of the ▇▇▇▇▇▇▇ Tech Center Tract:
THENCE with the easterly line of said tract South 14 degrees 01 minutes 44
seconds West, a distance of 425.06' feet to the POINT OF: BEGINNING and
CONTAINING 4.251 acres of land more or less.
Page 18
19
EXHIBIT "E"
RENEWAL OPTIONS
Provided that no event of default exists under any term or provision
contained in this Lease and provided that Tenant has continuously occupied the
Premises for the Permitted Use during the Lease Term, Tenant shall have the
right and option (the "Renewal Option"), subject to the terms and conditions set
forth below, to renew this Lease, by written notice delivered to Landlord no
later than thirteen (13) months prior to the expiration of the initial Lease
Term or of the then-existing Renewal Term, for two (2) additional terms (the
"Renewal Terms") of thirty-six (36) months each under the same terms, conditions
and covenants contained in the Lease, except that (a) no cash allowances, if
any, applicable to the initial Lease Term shall apply to the Renewal Term; (b)
the Base Rental for each 60-month Renewal Term shall be separately determined
and shall be equal to the market rate for comparable office space located in the
5-mile radius geographic area surrounding the Premises as of the end of the
initial Lease Term or as of the end of the first 60-month Renewal Term (as
applicable), (e) Tenant shall have no option to renew this Lease beyond the
expiration of the second Renewal Term, and (d) all, leasehold improvements
within the Premises shall be provided in their then existing condition (on an
"as is" basis) at the time each applicable Renewal Term commences. A
refurbishment allowance shall be provided to Tenant only if, and to the extent
that, market conditions at the time of such Renewal Term indicate such a
refurbishment allowance is appropriate. Failure by Tenant to notify Landlord in
writing of Tenant's election to exercise the Renewal Option herein granted
within the time limits set forth for such exercise shall constitute a waiver of
such Renewal Option. In the event Tenant elects to exercise the Renewal Option
as set forth above, Landlord shall, within thirty (30) days thereafter, notify
Tenant in writing of the proposed rental for the Renewal Term (the "Proposed
Renewal Rental"). Tenant shall within fifteen (15) days following delivery of
the Proposed Renewal Rental by Landlord notify Landlord in writing of the
acceptance or rejection of the Proposed Renewal Rental. If Tenant accepts
Landlord's proposal, then the Proposed Renewal Rental shall be the rental rate.
in effect during the applicable Renewal Term. Failure of Tenant to, respond in
writing during die aforementioned fifteen (15) day period shall be deemed a
rejection by, Tenant of the Proposed Renewal Rental, Should Tenant reject
Landlord's Proposed Renewal Rental during such fifteen (15) day period, or be
deemed to have rejected such Proposed Renewal Rental then Landlord and Tenant
shall negotiate during the thirty (30) days period commencing upon Tenant's
rejection (or deemed rejection) of Landlord's Proposed Renewal Rental to
determine the rental for the Renewal Term. In the event Landlord and Tenant are
unable to agree upon a rental for the applicable Renewal Term during said thirty
(30) day period, then, after the expiration of the 30-day negotiation period,
the following procedure shall be implemented to determine fair market rent:
(a) Within five (5) business days following the expiration of such 30-day
negotiation period, Landlord shall select, and notify Tenant of its
selection of a recognized independent "MAI" designated real estate
appraiser knowledgeable and having at least five (5) years experience
in the current office building market of the Dallas area (the
"Landlord's Market Appraiser"). Within ten (10) days following
Landlord's selection of Landlord's Market Appraiser, Landlord shall
cause such Appraiser to analyze the then-existing market conditions
and prepare and deliver to Landlord and Tenant such Appraiser's
determination of the fair market rent for the Premises for the
applicable Renewal Term. In addition to such Appraiser's determination
of fair market rent being contained in notice to Tenant, Landlord
shall further cause such notice to specifically state that if Tenant
fails to respond to such notice within five (5) days following
Tenant's receipt of such notice from Landlord's Market Appraiser, then
such failure to respond by Tenant shall be deemed to be Tenant's
acceptance of such determination of fair market rent. If (i) Tenant
accepts in writing such determination of fair market rent presented by
Landlord's Market Appraiser or (ii) if Tenant shall not have notified
Landlord of its objection to such determination in writing, within
five (5) days following Tenant's receipt of a written notice of such
determination by Landlord's Market Appraiser, then such determination
by Landlord's Market Appraiser of the fair market rent for the
Premises for the applicable Renewal Term shall irrevocably become the
fair market rent for such period of the Lease. Notwithstanding, such
determination by Landlord's Market Appraiser becoming the fair market
rent for such period of the Lease, Tenant shall nevertheless be
entitled to revoke its exercise of the Renewal Option, as hereinafter
provided in Paragraph (b)(iii).
(b) If Tenant notifies Landlord, within five (5) days following its
receipt of Landlord's Market Appraiser's determination of the fair
market rent that it objects to such determination as not accurately
reflecting such fair market rent ("Tenant's Notice of Objection to
Landlord's Market Appraiser's Determination"), then the following
procedure shall be implemented to determine fair market rent:
(i) Within five (5) days following Tenant's mailing or delivering to
Landlord the Tenant's Notice of Objection to Landlord's Market
Appraiser's Determination, Tenant shall select, and notify
Landlord of its selection of a recognized independent "MAI"
designated real estate appraiser knowledgeable and having at,
leave five (5) years experience in the current office building
market of the Dallas area (the "Tenant's Market Appraiser").
Within ten (10) days following Tenant's selection of Tenant's
Market Appraiser, Tenant shall cause such Appraiser to analyze
the then-existing market conditions, and prepare and deliver to
Landlord and Tenant such Appraiser's determination of the fair
market rent for the Premises for the applicable Renewal Term, In
addition to such Appraiser's determination of fair market rent
being contained in such notice to Landlord, Tenant shall further
cause such notice to specifically state that if Landlord fails to
respond to such notice within five (5) days following Landlord's
receipt of such notice from Tenant's Market Appraiser, then such
failure to respond by Landlord shall be deemed to be Landlord's
acceptance of such determination of fair market rent. If Landlord
accepts in
Page 19
20
writing such determination of fair market rent presented by
Tenant's Market Appraiser, or if Landlord shall not have notified
Tenant of its objection to such determination, in writing, both
within five (5) days following Landlord's receipt of such
determination by Tenant's Market Appraiser, then such
determination by Tenant's Market Appraiser of the fail market
rent for the Premises for the applicable Renewal Term shall
irrevocably become the fair market rent for such period of the
Lease.
(ii) If Landlord notifies Tenant, within five (5) days following its
receipt of Tenant's Market Appraiser's determination of the fair
market rent, that it objects to such determination as not
accurately reflecting such fair market rental rate ("Landlord's
Notice of Objection to Tenant's Market Appraiser's
Determination"), then Landlord and Tenant shall within five (5)
days thereafter, direct both Landlord's Market Appraiser and
Tenant's Market Appraiser to select within five (5) days
thereafter, and notify Landlord and Tenant of their selection of,
a third independent "MAI" designated real estate appraiser
knowledgeable and having at least five (5) years experience in
the current office building market of the Dallas area (the "Third
Market Appraiser"), Within ten (10) days following such selection
of the Third Market Appraiser, such Appraiser shall analyze the
then-existing market conditions, prepare and deliver to Landlord,
Tenant, Landlord's Market Appraiser, and Tenant's Market
Appraiser such Third Market Appraiser's determination of the fair
market rent for the Premises for the applicable Renewal Term. If
the Third Market Appraiser's determination of fair market rent is
a number between (x) the rental rate determined by Landlord's
Market Appraiser, augmented five percent (5%) both higher and
lower from such rental rate, and (y) the rental rate determined
by Tenant's Market Appraiser, augmented five percent (5%) both
higher and lower form such rental rate, then such Third Market
Appraiser's determination of fair market rent shall be the agreed
upon determination of fair market rent. However, if the Third
Market Appraiser's determination of fair market rent is a number
not between (x) and (y) from the previous sentence, then the
final, irrevocable determination of fair market rent, which shall
be binding upon both Landlord and Tenant, will be calculated by
adding together the two closest appraisals of the three
determinations from the three Appraisers, and dividing such sum
by two. Both Landlord and Tenant acknowledge that the
determination of fair market rent which is derived from such
procedure shall be irrevocably binding upon both Landlord and
Tenant. Within thirty (30) days after Tenant receives notice of
the final and binding determination of fair market rent in
accordance with the Exhibit- "E", Tenant shall deliver written
notice to Landlord indicating whether or not Tenant elects to
extend the Primary or Renewal Term, as the case may be, or
whether Tenant elects to revoke Tenant's prior exercise of the
Renewal Term election. If Tenant fails to deliver such notice
within the 30-day period then such, failure shall be deemed to be
Tenant's revocation of the election to exercise the applicable
Renewal Term.
(c) Notwithstanding, any provisions elsewhere in this Lease allocating the
payment of expenses, Landlord agrees to pay the expenses associated
with the services of Landlord's Market Appraiser Tenant agrees to pay
the expenses associated with the services of Tenant's Market
Appraiser, and both Landlord and Tenant agree to jointly and equally
pay the expenses associated with the services of the Third Market
Appraiser.
Upon exercise of the Renewal Option by Tenant and subject to the conditions
set forth hereinabove, the Lease shall be extended for the period of such
applicable Renewal Term without the necessity of the execution of any further
instrument or document, although if requested by either party, Landlord and
Tenant shall enter into a written agreement modifying and supplementing the
Lease in accordance with the provisions hereof. Any termination of the Lease
during the Lease Term shall terminate all renewal rights hereunder. In the event
of the dissolution or bankruptcy of Tenant, the renewal right contained herein
shall no longer be effective.
Page 20
21
GREATER DALLAS ASSOCIATION OF REALTORS(R), INC.
EXHIBIT F
EXPENSE REIMBURSEMENT
PROPERTY ADDRESS OR DESCRIPTION: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇, ▇▇▇▇▇
---------------------------------------------
DATE OF LEASE:
------------------------------------------------
1. Expense Reimbursement
Tenant shall pay the Landlord, as additional rental hereunder, a portion of
the following expenses, as defined hereafter, incurred, levied or assessed for
or against the Demised Premises: [Check those that are to apply. Boxes not
checked do not apply.]
|_| Ad Valorem Taxes
|_| Insurance Premiums
|_| Common Area Maintenance Charges (CAM)
|_| Operating Expenses
(herein collectively called `Reimbursement")
2. Expense Reimbursement Limitations
The amount of Tenant's Reimbursement obligation shall be determined by one
of the following methods: [Check only the one applicable box.]
|X| Base Year/Expense Stop Adjustment
|_| Pro Rata Adjustment
|_| Fixed Amount Adjustment
The calculation for each of said methods is set forth under Section 4 below.
3. Expense Reimbursement Payments
Tenant agrees to pay the applicable Reimbursement within thirty (30) days
after receiving an invoice therefor from Landlord. If at any time during the
Lease Term or any renewals or extensions Landlord has reason to believe that at
some time within the immediately succeeding 12-month period Tenant will owe
Landlord a payment pursuant to this provision, Landlord may direct Tenant to pay
monthly an estimated portion of the projected future amount. Tenant agrees that
any such payment directed by Landlord shall be due and payable monthly on the
same day that the Base Rent is due. Any Reimbursement relating to partial
calendar years shall be prorated accordingly.
4. Definitions
A. Ad Valorem Taxes: All general real estate taxes, general and special
assessments, parking surcharges, rent taxes, and other similar governmental
charges levied against the Property for each calendar year.
B. Insurance Premiums: All insurance premiums attributable to the Property,
including, but not limited to, premiums for fire, casualty, and extended
coverage, liability coverage, and loss of rents coverage.
C. Common Area Maintenance Charges: All costs of the ownership, operation,
and maintenance of the common area, including, but not limited to, those costs
for security, lighting, painting, cleaning, leasing, inspecting, and repairing
which may be incurred by Landlord, in its discretion, including a reasonable
allowance for Landlord's overhead and management. The term "common area" is
defined as that pan of the Property intended for the common use of all tenants,
including, but not limited to, the parking areas, landscaping, loading areas,
sidewalks, malls, promenades (enclosed or otherwise), public rest rooms, meeting
rooms, corridors, and curbs. Common area maintenance shall not include
depreciation on Landlord's original investment, cost of tenant improvements,
real estate brokers' fees, and interest or depreciation on capital investments.
D. Operating Expenses: All costs of management, operation, and maintenance
of the Property, including, but not limited to, wages, salaries, janitorial
services, maintenance, repairs, and cost of utilities. Operating expenses shall
not include depreciation on Landlord's original investment. cost of tenant
improvements, real estate brokers' fees, and interest or depreciation on capital
investments.
E. Base Year/Expense Stop Adjustment: If the Landlord's ad valorem taxes,
insurance premiums, common area maintenance charges and/or operating expenses
for the Property for any calendar year during the term hereof or during any
extension of this lease increase over (1) such amounts paid by Landlord for the
Base Year 1993, or (2) $___N/A___ per square foot per year [choose one], Tenant
agrees to pay its share of such increase based on the square footage contained
in the Demised Premises in proportion to the square footage of leasable area of
the Property.
F. Pro Rata Adjustment: Tenant shall pay to Landlord its pro rata share of
the total amount of Landlord's insurance premiums, ad valorem taxes, common area
maintenance charges, and/or operating expenses for any calendar year during the
term hereof and during any extension of this lease. Tenant's pro rata share of
such amount
Page 21
22
shall be based on the square footage contained in the Demised Premises in
proportion to the square footage of the leasable area of the Property.
G. Fixed Amount Adjustment: Tenant shall pay as additional rent the
following monthly amounts as Tenant's Reimbursement to Landlord for the ad
valorem taxes, insurance premiums, common area maintenance charges, and/or
operating expenses assessed or levied against the Property:
Ad Valorem Taxes $ per month
--------------------------
Insurance Premiums $ per month
--------------------------
Common Area Maintenance Charges $ per month
--------------------------
Operating Expenses $ per month
--------------------------
INITIALS: LANDLORD: /s/ Illegible INITIALS: TENANT: /s/ Illegible
------------------ -------------------
Page 22
23
GREATER DALLAS ASSOCIATION OF REALTORS(R), INC.
EXHIBIT H
CONSTRUCTION OF IMPROVEMENTS
PROPERTY ADDRESS OR DESCRIPTION: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇, ▇▇▇▇▇
-------------------------------------------
DATE OF LEASE:
------------------------------------------------
1. Construction of Improvements:
A. Landlord agrees to construct (or complete) a building and other
improvements upon the Demised Premises in accordance with detailed Plans and
Specifications to be prepared forthwith by Landlord and delivered to Tenant.
Upon approval by Tenant, two or more sets of said Plans and Specifications shall
be signed by both parties, with one signed set retained by Tenant. Changes to
said Plans and Specifications thereafter shall be made only by written addenda
signed by both parties. If parties cannot agree on detailed Plans and
specifications by July 30, 1993, either party may cancel this Lease by giving
the other party written notice.
B. Upon approval of said Plans and Specifications, Landlord shall forthwith
begin construction and pursue same to completion with reasonable diligence in a
good and workmanlike manner.
2. Completion Date:
A. It is estimated by Landlord that the building and other improvements
shall be completed by 60 days after approval per Paragraph 1A.
B. Landlord shall notify Tenant in writing when construction has been
completed. Tenant shall thereupon inspect the building and other improvements,
and if same have in fact been completed in accordance with the Plans and
Specifications, the Lease Term shall begin upon the date of completion with Base
Rent due and payable as provided in Article Three of the Lease.
C. If the building and other improvements have not in fact been completed
in accordance with the Plans and Specifications, written notification of the
items deemed incomplete shall be given by Tenant to Landlord immediately
following inspection. Landlord shall forthwith proceed to finish the incomplete
items, and the lease term shall begin upon the date that such items are in fact
complete.
D. Completion, as used herein, shall mean substantial completion.
Substantial completion shall mean at such time as the Landlord obtains a
Certificate of Occupancy issued by the local municipal authorities whose
jurisdiction includes the Demised Premises, and is the stage when the
construction is sufficiently Complete in accordance with the Plans and
Specifications that the Tenant can occupy or utilize the Demised Premises for
its intended use, except for minor "punch list" items remaining to be completed.
3. Letter of Acceptance: Tenant agrees to execute and deliver to Landlord,
with a copy to the Principal Broker, a Letter of Acceptance, addressed to
Landlord and signed by Tenant (or its authorized representative) acknowledging
that construction has been completed in accordance with the Plans and
Specifications and acknowledging the Commencement Date of the Lease Term.
4. Taking of Possession: The taking of possession of the Demised Premises
by Tenant shall be deemed conclusively to be acknowledgment by Tenant that
construction has been completed in accordance with Plans and Specifications
(except for latent defects) and that the Lease Term has begun as of the date of
completion.
5. Failure to Complete: In the event that the building and other
improvements have not been completed in accordance with the Plans and
Specifications by * , 19____, or by such date as extended by application of
Section 16.01, Tenant shall have the right and option to terminate this Lease by
giving written notice of Tenant's intention to terminate as of a certain date
not less than fifteen (15) days prior to said certain date. If the building and
other improvements have not been completed by said certain date, the lease
shall, at the option of Tenant, terminate with no further liability of one party
to the other.
6. Lease commencement date is Paragraph 1.05 will be adjusted to the date
of completion.
* 90 days after approval per Paragraph 1A.
INITIALS: LANDLORD: /s/ Illegible INITIALS: TENANT: /s/ Illegible
----------------- ---------------
Page 23