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EXHIBIT 10.24
OFFICE LEASE AGREEMENT
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This Lease Agreement (this "Lease") is made this 7 day of November, 1998,
between B.O.III, LTD., (hereinafter called "Landlord"), and IXC COMMUNICATIONS
SERVICES, INC., a (hereinafter called ("Tenant"). Ibis Lease consists of this
paragraph, the Basic Lease Provisions, the Supplemental Lease Provisions and
each exhibit, rider, schedule and addendum attached to the Basic Lease
Provisions and Supplemental Lease Provisions. Each capitalized term used, but
not defined, in the Supplemental Lease Provisions shall have the meaning
assigned to such term in the Basic Lease Provisions.
BASIC LEASE PROVISIONS
1 . Building:
a. Name: Barton Oaks III
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
b. Agreed Rentable Area: 121,432 square feet.
2. Premises:
a. Suite #: 200
Floors: Second Floor.
b. Agreed Rentable Area: 24,134 square feet. The number of rentable
square feet in the Premises is determined
by multiplying the number of usable square
feet in the Premises (calculated in
accordance with the BOMA Standard
[hereinafter defined] by 1. 15). The term
"BOMA Standard" shall mean the American
National Standard method of measuring floor
area in office buildings of the Building
Owners and Managers Association (ANSI 265.1
- 1996).
3. a. Basic Rent (See Article 2, Supplemental Lease Provisions):
Basic Basic
Rent Rate Annual Monthly
Period Square Foot Rent Rent
------ ----------- ---- ----
1/15/99- 1/31/2002 $17.50 per square foot $422,345.00 $35,195.42
b. Each "Lease Year" shall be a twelve (12) month period commencing
with the Commencement Date or any anniversary date of the
Commencement Date and ending on but not including the next
occurring anniversary date of the Commencement Date; provided,
however, the last Lease Year shall mean the period of time from
and including the anniversary date of the Commencement Date that
immediately precedes the Expiration Date to and including the
Expiration Date. Each "Lease Month" shall be a period of time
commencing on the same numeric day as the Commencement Date and
ending on (but not including) the day in the next calendar month
that is the same numeric date as the Commencement Date.
4. Tenant's Pro Rata Share Percentage: 19.87% (the Agreed Rentable Area of
the Premises divided by the Agreed Rentable Area of the Building,
expressed in a percentage).
5. Term: Three (3) years (see Article 1, Supplemental Lease
Provisions).
6. Commencement Date: January 15, 1999 (see Article 1, Supplemental Lease
Provisions).
7. Expiration Date: January 31, 2002 (see Article 1, Supplemental Lease
Provisions).
8. Security Deposit: $102,569.50 (see Article 3, Supplemental Lease
Provisions).
9. Tenant's Broker: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ (such broker is represented by
▇▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ .
10. Permitted Use: General Office Purposes Only (see Article 4,
Supplemental Lease Provisions).
11. All payments shall be sent to Landlord in care of Hill Partners
Management Co., Inc. ("Property Manager") at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or such other place as Landlord may designate
from time to time. All payments shall be in the form of check until
otherwise designated by Landlord, provided that payment by check shall
not be deemed made if the check is not duly honored with good funds.
12. Parking: SEE SECTION 15.17 and Exhibit F, if any, attached to
the Supplemental Lease Provisions.
13. Addresses for notices due under this Lease (see Article 14, Supplemental
Lease Provisions):
LANDLORD: Tenant:
B.O. III, LTD. IXC COMMUNICATIONS SERVICES, INC.
By: Office/Industrial, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o Hill Partners Management Vice President
Company, Inc. 1122 S. Capital of TX Hwy
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Atten:
Atten: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Telephone: 512/▇▇▇-▇▇▇▇
Telephone: 512/▇▇▇-▇▇▇▇ Fax: 512/▇▇▇-▇▇▇▇
Fax: 512/▇▇▇-▇▇▇▇
Landlord and Tenant are initialing these Basic Lease Provisions in the
appropriate space provided below as an acknowledgment that they are a part of
this Lease.
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TABLE OF CONTENTS
FOR
SUPPLEMENTAL LEASE PROVISIONS
Description:
ARTICLE I TERM AND POSSESSION............................................1
ARTICLE 2 RENT...........................................................2
ARTICLE 3 SECURITY DEPOSIT...............................................5
ARTICLE 4 OCCUPANCY AND USE..............................................5
ARTICLE 5 UTILITIES AND SERVICES.........................................7
ARTICLE 6 MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS.............9
ARTICLE 7 INSURANCE, FIRE AND CASUALTY..................................10
ARTICLE 8 CONDEMNATION..................................................13
ARTICLE 9 LIENS.........................................................13
ARTICLE 10 TAXES ON TENANT'S PROPERTY....................................13
ARTICLE 11 SUBLETTING AND ASSIGNING......................................14
ARTICLE 12 TRANSFERS BY LANDLORD, SUBORDINATION AND TENANT'S
ESTOPPEL CERTIFICATE..........................................16
ARTICLE 13 DEFAULT.......................................................16
ARTICLE 14 NOTICES.......................................................19
ARTICLE 15 MISCELLANEOUS PROVISIONS......................................19
LIST OF EXHIBITS AND RIDERS
TO
SUPPLEMENTAL LEASE PROVISIONS
Exhibit A Floor Plan
Exhibit B Land Legal Description
Exhibit C Intentionally Omitted
Exhibit D Work Letter
Exhibit E Acceptance of Premises Memorandum
Exhibit F Parking Agreement
Rider 1 Right to Audit
Rider 2 Right to Sublease or Assign to Affiliate and Additional
Subleasing Rights
Rider 3 Cap on Certain Operating Expenses
Rider H- I Tenant's Study, Testing and Inspection Rights
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SUPPLEMENTAL LEASE PROVISIONS
ARTICLE I
TERM AND POSSESSION
SECTION 1.1 LEASE OF PREMISES, COMMENCEMENT AND EXPIRATION.
1.101 Lease of Premises. In consideration of the mutual covenants herein,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
subject to all the terms and conditions of this Lease, the portion of
the Building (as described in Item 1 of the Basic Lease Provisions)
described as the Premises in Item 2 of the Basic Lease Provisions and
that is more particularly described by the crosshatched area on Exhibit
A attached hereto (hereinafter called the "Premises"). The Building, the
land (the "Land") on which the Building is situated (which Land is more
particularly described on Exhibit B attached hereto), the parking
garage, if any, located on the Land and serving the Building (the
"Garage") and all other improvements located on and appurtenances to the
Building, the Garage and the Land are referred to collectively herein as
the "Property".
1.102 Agreed Rentable Area. The agreed rentable area of the Premises is hereby
stipulated to be the "Agreed Rentable Area" of the Premises set forth in
Item 2b of the Basic Lease Provisions. The agreed rentable area of the
Building is hereby stipulated to be the "Agreed Rentable Area" of the
Building set forth in Item lb of the Basic Lease Provisions.
1.103 Initial Term and Commencement. The initial term of this Lease shall be
the period of time specified in Item 5 of the Basic Lease Provisions.
The initial term shall commence on the Commencement Date (herein so
called) set forth in Item 6 of the Basic Lease Provisions (as such
Commencement Date may be adjusted pursuant to Section 3 of the Work
Letter attached hereto as Exhibit D) and, unless sooner terminated
pursuant to the terms of this Lease, the initial term of this Lease
shall expire, without notice to Tenant, on the Expiration Date (herein
so called) set forth in Item 7 of the Basic Lease Provisions (as such
Expiration Date may be adjusted pursuant to Section 3 of the Work
Letter).
SECTION 1.2 INSPECTION AND DELIVERY OF PREMISES, CONSTRUCTION OF LEASE SPACE
IMPROVEMENTS AND POSSESSION.
1.201 Delivery. Tenant hereby accepts delivery of the Premises. Tenant
acknowledges that Tenant has inspected the Premises and the Common Areas
(as hereinafter defined) and, except for punch list items and latent
defects discovered and reported to Landlord by Tenant within 180 days
from the Commencement Date, hereby (a) accepts the Common Areas in "as
is" condition for all purposes and (a) subject to Landlord's completion
of its obligations under the Work Letter, Tenant hereby accepts the
Premises (including the suitability of the Premises for the Permitted
Use) for all purposes.
1.202 Completion. Landlord will perform or cause to be performed the work
and/or construction of Tenant's Improvements (as defined in the Work
Letter) in accordance with the terms of the Work Letter and will use
reasonable efforts to Substantially Complete (as defined in the Work
Letter) Tenant's Improvements by the Commencement Date. If Tenant's
Improvements are not Substantially Complete by the Commencement Date set
forth in Item 6 of the Basic Lease Provisions for any reason whatsoever,
Tenant's sole remedy shall be an adjustment of the Commencement Date and
the Expiration Date to the extent permitted under Section 3 of the Work
Letter.
1.203 Acceptance of Premises Memorandum. Upon Substantial Completion (as
defined in the Work Letter) of Tenant's Improvements, Landlord and
Tenant shall execute the Acceptance of Premises Memorandum (herein so
called) attached hereto as Exhibit E. If Tenant occupies the Premises
without executing an Acceptance of Premises Memorandum, Tenant shall be
deemed to have accepted the Premises for all purposes and Substantial
Completion shall be deemed to have occurred on the earlier to occur of
(i) actual occupancy or (ii) the Commencement Date set forth in Item 6
of the Basic Lease Provisions.
SECTION 1.3 REDELIVERY OF THE PREMISES.
1.301 Obligation to Redeliver. Upon the expiration or earlier termination of
this Lease or upon the exercise by Landlord of its right to re-enter the
Premises without terminating this Lease, Tenant shall immediately
deliver to Landlord the Premises free of offensive odors and in a safe,
clean, neat, sanitary and operational condition, ordinary wear and tear
excepted, together with all keys and parking and access cards. Tenant
shall, by the Expiration Date or, if this Lease is earlier terminated,
within seven (7) days after the termination, at the sole expense of
Tenant, remove from the Premises (unless Landlord is asserting its lien
rights therein) any equipment, machinery, trade fixtures and personalty
installed or placed in the Premises by or on behalf of Tenant. All
removals and work described above shall be accomplished in a good and
workmanlike manner and shall be conducted so as not to damage the
Premises or the Building or the plumbing, electrical lines or other
utilities serving the Building. Tenant shall, at its expense, promptly
repair any damage caused by any such removal or work. If Tenant fails to
deliver the Premises in the condition aforesaid, then Landlord may
restore the Premises to such a condition at Tenant's expense. All
property required to be removed pursuant to this Section not removed
within time period required hereunder shall thereupon be conclusively
presumed to have been abandoned by Tenant and Landlord may, at its
option, take over possession of such property and either (a) declare the
same to be the property of Landlord by written notice to Tenant at the
address provided herein or (b) at the sole cost and expense of Tenant,
remove and store and/or dispose of the same or any part thereof in any
manner that Landlord shall choose without incurring liability to Tenant
or any other person.
1.302 Failure to Deliver. Notwithstanding any provision or inference to the
contrary herein contained, in the event that Tenant fails to deliver to
Landlord (and surrender possession of) all of the Premises upon the
expiration or earlier termination of this Lease (or the applicable
portion of the Premises if this Lease expires or terminates as to only a
portion of the Premises) on the date of expiration or earlier
termination, then Landlord may, without judicial process and without
notice of any kind, immediately enter upon and take absolute possession
of the Premises or applicable portion thereof, expel or remove Tenant
and any other person or entity who may be occupying the Premises or
applicable portion thereof, change the locks to the Premises or
applicable portion
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thereof (in which event, Tenant shall have no right to any key for the
new locks), limit elevator access to the Premises or APPLICABLE portion
thereof, and take any other actions as are necessary for Landlord to
take absolute possession of the Premises or applicable portion thereof
The foregoing rights are without prejudice and in addition to, and shall
not in any way limit Landlord's rights under, Section 1.4 below.
SECTION 1.4 HOLDING OVER. In the event Tenant or any party under Tenant claiming
rights to this Lease, retains possession of the Premises after the
expiration or earlier termination of this Lease, such possession shall
constitute and be construed as a tenancy at will only, subject, however,
to all of the terms, provisions, covenants and agreements on the part of
Tenant hereunder; such parties shall be subject to immediate eviction
and removal and Tenant or any such party shall pay Landlord as rent for
the period of such holdover an amount equal to one and one-half (I -
1/2) times the Basic Annual Rent and Additional Rent (as hereinafter
defined) in effect immediately preceding expiration or termination, as
applicable, prorated on a daily basis. Tenant shall also pay any and all
damages sustained by Landlord as a result of such holdover provided
Landlord has notified Tenant, 30 days prior, of the potential damages
that Landlord will incur. The rent during such holdover period shall be
payable to Landlord from time to time on demand; provided, however, if
no demand is made during a particular month, holdover rent accruing
during such month shall be paid in accordance with the provisions of
Article 2. Tenant will vacate the Premises and deliver same to Landlord
within 15 days of Tenant's receipt of notice from Landlord to so vacate.
No holding over by Tenant, whether with or without consent of Landlord,
shall operate to extend the term of this Lease; no payments of money by
Tenant to Landlord after the expiration or earlier termination of this
Lease shall reinstate, continue or extend the term of this Lease; and no
extension of this Lease after the expiration or earlier termination
thereof shall be valid unless and until the same shall be reduced to
writing and signed by both Landlord and, Tenant.
ARTICLE 2
RENT
SECTION 2.1 BASIC RENT. Tenant shall pay as annual rent for the Premises the
applicable Basic Annual Rent shown in Item 3 of the Basic Lease
Provisions. The Basic Annual Rent shall be payable in monthly
installments equal to the applicable Basic Monthly Rent shown in Item 3
of the Basic Lease Provisions in advance, without demand, offset or
deduction except as provided in this Lease, which monthly installments
shall commence on the Commencement Date and shall continue on the first
(I st) day of each calendar month thereafter. If the Commencement Date
occurs on a day other than the first day of a calendar month or the
Expiration Date occurs on a day other than the last day of a calendar
month, the Basic Monthly Rent for such partial month shall be prorated.
SECTION 2.2 ADDITIONAL RENT.
2.201 Definitions. For purposes of this Lease, the following definitions shall
apply:
(a) "Additional Rent", for a particular calendar year, shall equal the
sum of all (i) Operating Expenses (as hereinafter defined) for the
applicable calendar year multiplied by Tenant's Pro Rata Share
Percentage (as set forth in Item 4-.a 4 of the Basic Lease
Provisions) plus (ii) Real Estate Taxes (as hereinafter defined) for
the applicable calendar year multiplied by Tenant's Pro Rata Share
Percentage plus (iii) Additional Pass Through Costs (as hereinafter
defined) for the applicable calendar year multiplied by Tenant's Pro
Rata Share Percentage.
(b) "Operating Expenses" shall mean all of the costs and expenses
Landlord incurs, pays or becomes obligated to pay in connection with
operating, maintaining, insuring and managing the Property for a
particular calendar year or portion thereof as determined by
Landlord in accordance with generally accepted accounting
principles, including, but not limited to, the following: (i)
insurance premiums ("Insurance Premiums"); (ii) water, sewer,
electrical and other utility charges ("Utility Expenses"); (iii)
service, testing and other charges incurred in the operation and
maintenance of the elevators and the plumbing, fire sprinkler,
security, heating, ventilation and air conditioning system; (iv)
cleaning and other janitorial services inclusive of window
cleaning); (v) tools and supplies costs; (vi) repair costs; (vii)
costs of landscaping, including landscape maintenance and sprinkler
maintenance costs and rental and supply costs in connection
therewith; (viii) security and alarm services; (ix) license, permit
and inspection fees; (x) management fees; (xi) wages and related
benefits payable to employees, including taxes and insurance
relating thereto; (xii) accounting services; (xiii) legal services,
unless incurred in connection with tenant defaults or lease
negotiations; (xiv) trash removal; (xv) garage and parking
maintenance, repair, repaving and operating costs; and (xvi) the
charges assessed against the Property pursuant to any contractual
covenants or recorded declaration of covenants or the covenants,
conditions and restrictions of any other similar instrument
affecting the Property. Notwithstanding the foregoing, Operating
Expenses shall not include:
(1) Real Estate Taxes;
(2) Additional Pass Through Costs;
(3) Repairs or other work occasioned by fire, windstorm or other
casualty or condemnation;
(4) Leasing commissions, attorneys' fees, costs and disbursements
and other expenses incurred in connection with negotiations or
disputes with tenants, other occupants, or prospective tenants
or other occupants or legal fees incurred in connection with
this Lease or the operation of the Property that are not for the
benefit of all tenants in the Building;
(5) Costs incurred in renovating or otherwise improving or
decorating, painting, or redecorating space for tenants or other
occupants or vacant space;
(6) Depreciation and amortization;
(7) Costs of a capital nature, including, but not limited to,
capital improvements, capital replacements, capital repairs,
capital equipment and capital tools, all in connection with
generally accepted accounting principles consistently applied.
In the event the Building is not in compliance at the time this
Lease is executed with any Federal, State or local regulations
or building codes, the expense to bring the Building into
compliance with be considered capital and not an Operating
Expense;
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(8) Costs (including penalties, fines and legal expenses) incurred
due to violation by Landlord of the terms and conditions of
this Lease or any other lease in the Building or any other
rental arrangement covering space in the Building or the Garage
or any portion thereof other than costs Landlord would be
permitted to include in Operating Expenses absent such
violation;
(9) Fees or other compensation paid to subsidiaries or affiliates
of Landlord for services on or to the Property, to the extent
that the costs of such services exceed competitive costs of
such services were they not so rendered by a subsidiary of
affiliate;
(10) Interest on debt or amortization payments on any mortgage(s)
COVERING THE PROPERTY OR ANY PART thereof, rental concessions,
and rental under ground or underlying lease(s);
(11) Landlord's general partnership or corporate overhead and
general administrative expenses for services not specifically
performed for the Building; or wages, salaries, or other
compensation of any kind or nature paid to any executive
employees above the grade of building manager;
(12) Any compensation paid to clerks, attendants, or other persons
in commercial concessions operated by Landlord;
(13) Rentals and other related expenses incurred in leasing air
conditioning systems, elevators, or other equipment ordinarily
considered to be of a capital nature, except equipment which is
used in providing janitorial services and which is not fixed to
the Building;
(14) All items and services for which Tenant reimburses Landlord or
pays third persons other than through Operating Expense
reimbursements, or for or with respect to which Landlord
provides selectively to one or more tenants of the Building
other than Tenant, without reimbursement;
(15) Advertising and promotional expenditures;
(16) Any costs, fines, penalties, legal fees or costs of litigation
incurred due to violations by Landlord, its employees, agents,
contractors or assigns, of any governmental rule or authority,
other than costs Landlord would be permitted to include in
Operating Expenses absent such violation;
(17) Costs for sculpture, paintings or other objects of art;
(18) Repairs or replacements of the roof, foundation, structure,
exterior walls, equipment or components of the Building caused
by deficient design, selection of materials or construction or
grossly negligent conduct of Landlord;
(19) Interest or penalties due to late payments of taxes, utility
bills and other costs;
(20) Federal and state taxes on income; death, estate or inheritance
taxes; franchise taxes and any taxes imposed or measured on or
by the income of Landlord from the operation of the Building;
(21) Any expense in excess of Landlord's actual operating costs
(consequently, Landlord may not pass on to the Tenant any cost
which Landlord did not actually incur);
(22) Janitor and cleaning costs related to construction;
(23) Costs of security provided for particular tenants which is not
available to Tenant;
(24) Overtime HVAC charges paid by other tenants;
(25) Management fees paid to an affiliate of Landlord in excess of
three percent (3%) of the gross rentals of the Building plus
escalations in any calendar year or, if higher, what is
considered market rate for first class office buildings in
Austin, Texas; and
(26) Costs attributable to repairs and replacements for which the
Landlord is reimbursed pursuant to any warranty.
(c) "Real Estate Taxes" shall mean (i) all real estate taxes and other
taxes or assessments which are levied with respect to the Property
or any portion thereof for each calendar year, (ii) any tax,
surcharge or assessment which shall be levied as a supplement to or
in lieu of real estate taxes, (iii) the reasonable expenses of a
consultant, if any, or of contesting the validity or amount of such
real estate or other taxes and (iv) any rental, excise, sales,
transaction, privilege or other tax or levy, however denominated,
imposed upon or measured by the rental received hereunder or on
Landlord's business of leasing the Premises, excepting only
Landlord's net income taxes.
(d) "Additional Pass Through Costs" shall mean the following costs and
expenses incurred by Landlord from and after the Commencement Date:
(i) subject to the limitations of clause (ii), the cost of any
improvement made to the Property by Landlord that is required under
any governmental law or regulation which was not promulgated, or
which was promulgated but was not applicable to the Building, at the
time the Building was constructed, amortized on a straight line
basis over the useful life of such improvements, together with an
amount equal to interest at the rate of ten percent (10%) per annum
(the "Amortization Rate") on the unamortized balance thereof; (ii)
the cost of any improvement made to the Common Areas of the Property
that is required under interpretations or regulations issued after
the Commencement Date under, or amendments made after the
Commencement Date to, the provisions of Tex. Rev. Civ. Stat. ▇▇▇.
art. 9102 and the provisions of the Americans With Disabilities Act
of 1990, 42 U.S.C. Sections 12101-12213 (collectively, the
"Disability Acts"), amortized on a straight line basis over the
useful life of such improvements, together with an amount equal to
interest at the Amortization Rate on the unamortized balance
thereof-, (iii) the cost of any labor-saving or energy-saving device
or other equipment installed in the Building (provided Landlord
reasonably anticipates that the installation thereof will reduce
Operating Expenses), amortized on a straight line basis over the
useful life of such improvements, together with an amount equal to
interest at the Amortization Rate on the unamortized balance thereof
to the extent such device actually reduces operating expenses; and
(iv) all other expenses which would generally be regarded as
operating, maintenance and management costs and expenses which would
normally be amortized over a period not to exceed five (5) years.
2.202 Gross-Up. After the initial term of this lease, Operating Expenses,
which vary with levels of occupancy, shall be grossed up to include all
additional costs and expenses of owning, operating, maintaining and
managing the Building which Landlord determines that it would have
incurred, paid or been obligated to pay during such year if the Building
had been ninety-five (95 %) occupied.
2.203 Payment Obligation. In addition to the Basic Rent specified in this
Lease, Tenant shall pay to Landlord the Additional Rent, in each
calendar year or partial calendar year during the term of this Lease,
payable in monthly installments as hereinafter provided and subject to
Rider 3. On or prior to the Commencement Date and at least thirty (30)
days prior to each calendar year thereafter
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(or as soon thereafter as is reasonably possible), Landlord shall give
Tenant written notice of Tenant's estimated Additional Rent for the
applicable calendar year and the amount of the monthly installment due
for each month during such year. Tenant acknowledges that Tenant's
estimated Additional Rent for calendar year 1999 is $8.00 per square
foot of Agreed Rentable Area of the Premises, and Tenant! s monthly
installment due for each month during calendar year 1999 is $16,089.33.
Tenant shall pay to Landlord on the Commencement Date and on the first
day of each month thereafter the amount of the applicable monthly
installment, without demand, offset or deduction except as provided in
this Lease, provided, however, ifthe applicable installment covers a
partial month, then such installment shall be prorated on a daily basis.
Within ninety (90) days after the end of (i) each calendar year and (ii)
the Expiration Date or as soon thereafter as is reasonably possible,
Landlord shall prepare and deliver to Tenant a statement showing
Tenant's actual Additional Rent for the applicable calendar year,
provided that with respect to the calendar year in which the Expiration
Date occurs, (iii) that calendar year shall be deemed to have commenced
on January I of that year and ended on the Expiration Date (the "Final
Calendar Year") and (iv) Landlord shall have the right to estimate the
actual Operating Expenses allocable to the Final Calendar Year but which
are not determinable within such ninety day period. If Tenant's total
monthly payments of Additional Rent for the applicable year are less
than Tenant's actual Additional Rent then Tenant shall pay to Landlord
the amount of such underpayment. If Tenant's total monthly payments of
Additional Rent for the applicable year are more than Tenant's actual
Additional Rent, then Landlord shall credit against the next Additional
Rent payment or payments due from Tenant the amount of such overpayment,
provided, however, with respect to the Final Calendar Year, Landlord
shall pay to Tenant within thirty (30) days following the Expiration
Date or earlier termination date the amount of such excess payments,
less any amounts then owed to Landlord. Unless Tenant takes written
exception to any item within thirty (30) days after the furnishing of an
annual statement, such statement shall be considered as final and
accepted by Tenant. Any amount due Landlord as shown on any such
statement shall be paid by Tenant within thirty (30) days after it is
famished to Tenant.
2.204 Billing Disputes. If there exists any dispute as to (i) the amount of
Additional Rent, (ii) whether a particular expense is properly included
in Additional Rent or (iii) Landlord's calculation of Additional Rent
(each an "Additional Rent Dispute"), the events, errors, acts or
omissions giving rise to such Additional Rent Dispute shall not
constitute a breach or default by Landlord under this Lease and even if
a judgment resolving the Additional Rent Dispute is entered against
Landlord, this Lease shall remain in full force and effect.
Notwithstanding the existence of an Additional Rent Dispute, Tenant
shall pay timely the amount of Additional Rent which is in dispute and
will continue to make all subsequent payments of Additional Rent as and
when required under this Lease, provided that the payment of such
disputed amount and other amounts shall be without prejudice to Tenant's
s position. If an Additional Rent is resolved in favor of Tenant,
Landlord shall forthwith pay to Tenant the amount of Tenant! s
overpayment of Additional Rent, together with interest from the time of
such overpayment at the annual rate of ten percent (10%).
2.205 Revisions in Estimated Additional Rent. If Real Estate Taxes, Insurance
Premiums, Utility Expenses or Additional Pass Through Costs increase
once during a calendar year or if the number of square feet of rentable
area in the Premises increases, Landlord may revise the estimated
Additional Rent during such year by giving Tenant written notice to that
effect and thereafter Tenant shall pay to Landlord, in each of the
remaining months of such year, an additional amount equal to the amount
of such increase in the estimated Additional Rent divided by the number
of months remaining in such year.
2.206 Real Estate Tax Protest. Section 41.413 of the Texas Property Tax Code
may give Tenant the right to protest before the appropriate appraisal
review board a determination of the appraised value of the Property if
Landlord does not so protest and requires Landlord to deliver to Tenant
a notice of any determination of the appraised value of the Property.
Tenant acknowledges that the Property is a multi-tenant facility, that
any filing of a protest of appraised value by Tenant will give the
appraisal district discretion to increase or decrease the appraised
value, that an increase in the appraised value will affect Landlord and
the other tenants of the Property, and that an increase in the appraised
value may increase the taxes not only for the year in question but for
future years, potentially beyond expiration of the Lease Term.
Accordingly, to the extent permitted by applicable law, Tenant hereby
waives the provisions of Section 41.413 of the Texas Property Tax Code
(or any successor thereto). In the alternative, if Section 41.413 of the
Texas Property Tax Code may not be waived, Tenant agrees not to protest
any valuation unless Tenant notifies Landlord in writing of Tenant's
intent so to protest and Landlord fails to protest the valuation within
fifteen (15) days after Landlord receives Tenant's written notice. If
Tenant files a protest without giving the written notice required by the
preceding sentence, such filing shall be an event of default under this
Lease without the necessity of any notice from Landlord, regardless of
the provisions of Section 13.102 of this Lease. Furthermore, if Tenant
exercises the right of protest granted by Section 41.413 of the Texas
Property Tax Code, Tenant shall be solely responsible for, and shall
pay, all costs of such protest. If as a result of any protest filed by
Tenant, the appraised value of the Property is increased by the
appraisal board, Tenant shall be solely responsible for, and shall pay
upon demand by Landlord, all taxes (not only Tenant's Pro Rata Share
Percentage of Real Estate Taxes) assessed against the Property in excess
of the taxes which would have been payable in the absence of the
protest. Tenant shall continue to pay such excess taxes until the
determination of appraised value of the Property is changed by the
appraisal review board, regardless of whether the increased taxes are
incurred during the term of the Lease or thereafter. Landlord agrees,
upon request by Tenant, to provide to Tenant a copy of the determination
of appraised value for any year. The payment obligations of Tenant under
this Section 2.206 shall survive the expiration or other termination of
this Lease.
SECTION 2.3 RENT DEFINED AND NO OFFSETS. Basic Annual Rent, Additional Rent and
all other sums (whether or not expressly designated as rent) required to
be paid to Landlord by Tenant under this Lease (including, without
limitation, any sums payable to Landlord under any addendum, exhibit,
rider or schedule attached hereto) shall constitute rent and are
sometimes collectively referred to as "Rent". Each payment of Rent shall
be paid by Tenant when due, without prior demand therefor and without
deduction or setoff except as provided in this Lease.
SECTION 2.4 LATE CHARGES. If more than two installments in a 12 month period of
Basic Annual Rent or Additional Rent or any other payment of Rent under
this Lease shall not be paid within ten (10) days after due, a "Late
Charge" of five cents ($.05) per dollar so overdue may be charged by
Landlord to defray Landlord's administrative expense incident to the
handling of such overdue payments. Each Late Charge shall be payable on
demand.
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ARTICLE 3
SECURITY DEPOSIT
Tenant will pay Landlord on the date this Lease is executed by Tenant
the Security Deposit set forth in Item 8 of the Basic Lease Provisions
as security for the performance of the terms hereof by Tenant. Tenant
shall not be entitled to interest thereon and Landlord may commingle
such Security Deposit with any other funds of Landlord. The Security
Deposit shall not be considered an advance payment of rental or a
measure of Landlord's damages in case of default by Tenant. If Tenant
defaults with respect to any provision of this Lease and fails to cure
such default within the applicable time period following notice from
Landlord, Landlord may, but shall not be required to, from time to time,
without prejudice to any other remedy, use, apply or retain all or any
part of this Security Deposit for the payment of any Rent or any other
sum in default or for the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default, including, without limitation,
costs and attorneys' fees incurred by Landlord to recover possession of
the Premises. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit
shall be returned to Tenant within thirty (30) days after the Expiration
Date or earlier termination date. Tenant agrees that it will not assign
or encumber or attempt to assign or encumber the monies deposited herein
as the Security Deposit and that Landlord and its successors and assigns
shall not be bound by any such actual or attempted assignment or
encumbrance. Regardless of any assignment of this Lease by Tenant,
Landlord may return the Security Deposit to the original Tenant, in the
absence of evidence satisfactory to Landlord of an assignment of the
right to receive the Security Deposit or any part of the balance
thereof.
ARTICLE 4
OCCUPANCY AND USE
SECTION 4.1 USE OF PREMISES.
4.101 General. The Premises shall, subject to the remaining provisions of this
Section, be used solely for the Permitted Use (herein so called)
specified in Item 10 of the Basic Lease Provisions. Without in any way
limiting the foregoing, Tenant will not use, occupy or permit the use or
occupancy of the Premises for any purpose which is forbidden by or in
violation of any law, ordinance or governmental or municipal regulation,
order, or certificate of occupancy, or which may be dangerous to life,
limb or property; or permit the maintenance of any public or private
nuisance; or do or permit any other thing which may disturb the quiet
enjoyment of any other tenant of the Property; or keep any substance or
carry on or permit any operation which might emit offensive odors or
conditions from the Premises; or commit or suffer or permit any waste in
or upon the Premises; or use any apparatus which might make undue noise
or set up vibrations in the Building; or permit anything to be done
which would increase the fire and extended coverage insurance rate on
the Building or Building contents and, if there is any increase in such
rate by reason of acts of Tenant, then Tenant agrees to pay such
increase upon demand therefor by LANDLORD. Payment by Tenant of any such
rate increase shall not be a waiver of Tenant's duty to comply herewith.
Tenant shall keep the Premises neat and clean at all times. Tenant shall
comply with, and promptly correct any violation of, each and every
governmental law, rule or regulation relating to the Premises; provided,
however that Landlord shall deliver the Premises to Tenant in compliance
with all governmental laws, rules and regulations, subject to 1.2 of the
Work Letter.
4.102 Hazardous and Toxic Materials.
(a) For purposes of this Lease, hazardous or toxic materials shall mean
asbestos containing materials ("ACM") and all other materials,
substances, wastes and chemicals classified as hazardous or toxic
substances, materials, wastes or chemicals under then-current
applicable governmental laws, rules or regulations or that are
subject to any right-to-know laws or requirements.
(b) Tenant shall not knowingly incorporate into, or use or otherwise
place or dispose of any hazardous or toxic materials at or on the
Premises or the Property except for use and storage of cleaning and
office supplies used in the ordinary course of Tenant's business and
then only if (i) such materials are in small quantities, properly
labeled and contained, (ii) such materials are handled and disposed
of in accordance with the highest accepted industry standards for
safety, storage, use and disposal, (iii) notice of and a copy of the
current material safety data sheet is provided to Landlord for each
such hazardous or toxic material and (iv) such materials are used,
transported, stored, handled and disposed of in accordance with all
applicable governmental laws, rules and regulations. Landlord shall
have the right on reasonable notice to Tenant to periodically
inspect, take samples for testing and otherwise investigate the
Premises for the presence of hazardous or toxic materials. Landlord,
has not, and shall not, knowingly dispose of any hazardous or toxic
materials on the Property and shall otherwise deal with all
hazardous or toxic materials at the Property in a manner that will
not materially and adversely affect Tenant's access, use or
occupancy of the Premises. If Landlord or Tenant ever has knowledge
of the presence of hazardous or toxic materials on the Property that
affect the Premises, the party having knowledge shall notify the
other party thereof in writing promptly after obtaining such
knowledge.
(c) Prior to commencement of any tenant finish work to be performed by
Landlord, Tenant shall have the right to make such studies and
investigations and conduct such tests and surveys of the Premises
from an environmental standpoint as permitted under Rider H-1
attached hereto. If Tenant requests that Landlord commence
construction of Tenant's Improvements prior to exercising such
right, Tenant shall be deemed to have waived the termination right
set forth in Rider H-1.
(d) If Tenant or its employees, agents or contractors shall ever violate
the provisions of paragraph (b) of this subsection 4.102 or
otherwise contaminate the Premises or the Property with hazardous or
toxic materials, then Tenant shall clean-up, remove and dispose of
the material causing the violation, in compliance with all
applicable governmental standards, laws, rules and regulations and
then prevalent industry practice and standards and shall repair any
damage to the Premises or Building within such period of time as may
be reasonable under the circumstances after written notice by
Landlord. Tenant shall notify Landlord of its method, time and
procedure for any clean-up or removal and Landlord
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shall have the right to require reasonable changes in such method,
time of procedure or to require the same to be done after normal
business hours. Tenant's obligations under this subsection 4.102(d)
shall survive the termination of this Lease. Tenant represents to
Landlord that, except as has been disclosed to Landlord, Tenant has
never been cited for or convicted of any hazardous or toxic
materials violations under applicable laws, rules or regulations.
4.103 Disability Acts. Landlord, at Landlord's expense, shall be obligated to
see that all Common Areas comply with the Disability Act requirements
that are in effect on the Commencement Date. From and after the
Commencement Date, Tenant shall be obligated to see that the Premises
comply with all existing requirements of and regulations issued under
the Disability Acts for each of the following: (i) alterations or
improvements to any portion of the Premises performed by or on behalf of
Tenant after the Commencement Date; (ii) obligations or complaints
arising under or out of Title I of the Americans With Disabilities Act
or Tenant's employer-employee obligations; and (iii) obligations or
complaints arising under or out of the conduct or operations of Tenant's
business (if the Premises is used for other than office purposes),
including any obligations or requirements for barrier removal to
customers or invitees as a commercial facility or as a public
accommodation (as defined in the Disability Acts); and (iv) any change
in the nature of Tenant's business, or its employees, or financial net
worth, or Tenant's business operations that triggers an obligation under
the Disability Acts).Subject to Section 1.2 of the Work Letter, Landlord
shall deliver the Premises to Tenant in compliance with the Disability
Act requirements in effect on the Commencement Date.
SECTION 4.2 COMPLIANCE WITH LAWS.
4.201 Tenant's Compliance Obligation.
(a) Tenant shall comply with all laws, statutes, ordinances, orders,
permits and regulations affecting (i) Tenant's use and occupancy of
the Premises, (ii) any improvements constructed within the Building
by or on behalf of Tenant and (iii) any equipment installed within
the Building by Tenant or installed by a party other than Landlord
on behalf of Tenant, provided, however, Tenant's compliance
obligations with respect to the Disability Acts shall be governed by
Section 4.103 above and the applicable provisions of the Work
Letter.
(b) If any law, statute, ordinance, order, permit or regulation with
which Tenant is required to comply pursuant to this Lease is
violated and Tenant is notified or otherwise has actual knowledge of
such violation, Tenant shall take such corrective action as is
necessary to cause compliance.
4.202 Landlord's Compliance Obligation.
(a) Landlord shall comply with all laws, statutes, ordinances, orders
and regulations (i) relating to the Property (exclusive, however, of
those with which Tenant is obligated to comply by reason of
subsection 4.103) and (ii) non-compliance with which would adversely
affect Tenant's use or occupancy of the Premises or Tenant's rights
under this Lease, provided, however, Landlord's compliance
obligations with the Disability Acts shall be as provided in Section
4.103 above and Section 4.202 (b) below.
(b) From and after the Commencement Date, Landlord shall be responsible
for compliance with the Disability Acts in the Common Areas;
provided that Landlord shall not be obligated to Tenant to make any
alterations to the Common Areas to effect such compliance.
SECTION 4.3 RULES AND REGULATIONS. Tenant will comply with such rules and
regulations (the "Rules and Regulations") generally applying uniformly
to tenants in the Building as may be reasonably adopted from time to
time by Landlord for the management, safety, care and cleanliness of,
and the preservation of good order and protection of property in, the
Premises and the Building and at the Property. All such Rules and
Regulations are hereby made a part hereof. The Rules and Regulations in
effect on the date hereof are on file with the Property Manager. All
changes and amendments to the Rules and Regulations sent by Landlord to
Tenant in writing and conforming to the foregoing standards shall be
carried out and observed by Tenant. Landlord hereby reserves all
reasonable rights necessary to implement and enforce the Rules and
Regulations and each and every provision of this Lease.
SECTION 4.4 ACCESS. Without being deemed guilty of an eviction of Tenant and
without abatement of Rent, Landlord and its authorized agents shall have
the right to enter the Premises, upon reasonable notice, to inspect the
Premises, to show the Premises to prospective lenders, purchasers and
during the last three (3) months of the Term to prospective tenants and
to fulfill Landlord's obligations or exercise its rights (including
without limitation Landlord's RESERVED RIGHT [AS HEREINAFTER DEFINED))
UNDER THIS LEASE; PROVIDED that Landlord shall enter the Premises for
showing the Premises to third parties only during the normal business
hours of the Tenant, unless otherwise agreed by Tenant, and provided
further THAT LANDLORD SHALL NOT UNREASONABLY INTERFERE with Tenant's use
of the Premises in connection with any such entry. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key
with which to unlock the doors to and within the Premises, excluding
Tenant's vaults, files and safes. Landlord shall have the right to use
any and all means which Landlord may deem proper to enter the Premises
in an emergency without liability therefor other than for Landlord's
gross negligence or willful misconduct.
SECTION 4.5 QUIET POSSESSION. Provided Tenant timely pays Rent and observes and
performs all of the covenants, conditions and provisions on Tenant's
part to be observed and performed hereunder, Tenant shall have the quiet
possession of the Premises for the entire term hereof, subject to all of
the provisions of this Lease and all laws and restrictive covenants to
which the Property is subject.
SECTION 4.6 PERMITS. Landlord shall obtain the certificate of occupancy required
for occupancy of the Premises following construction of Tenant's
Improvements. Tenant shall pay for the cost of any such certificate of
occupancy, provided that Tenant shall be entitled to have such cost
funded from the Finish Allowance, if any, PROVIDED FOR IN THE WORK
Letter. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business in the Premises or any
part thereof, Tenant, at its expense, shall procure and thereafter
maintain such license or permit.
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ARTICLE 5
UTILITIES AND SERVICES
SECTION 5.1 SERVICES TO BE PROVIDED.
Landlord agrees to furnish or cause to be famished to the Premises, the
utilities and services described in subsections 5. 101 through 5.106
below, subject to all other provisions of this Lease.
5.101 Elevator Service. Except for holidays generally recognized by businesses
and emergencies, Landlord shall provide automatic elevator facilities on
generally accepted business days from 7:00 a.m. to 6:00 p.m. and on
Saturdays from 8:00 a.m. to 1:00 p.m. and have at least one (1) elevator
available for use at all other times.
5.102 Heat and Air Conditioning. On generally accepted business days from 7:00
a.m. to 6:00 p.m. and on Saturdays (other than holidays generally
recognized by businesses) from 8:00 a.m. to 1:00 p.m., Landlord shall
ventilate the Premises and furnish heat or air conditioning, at such
temperatures and in such amounts as is customary in buildings of
comparable size, quality and in the general vicinity of the Building,
with such adjustments as Landlord reasonably deems necessary for the
comfortable occupancy of the Premises, subject to events of force
majeure and any governmental requirements, ordinances, rules,
regulations, guidelines or standards relating to, among other things,
energy conservation. Upon request, Landlord shall make available, at
Tenant's expense, after hours heat or air conditioning. The charge and
the hourly rate for the use of after hours heat or air conditioning
shall be $25.00 per hour per floor.
5.103 Electricity.
(a) Landlord shall furnish to the Premises electric current in such
capacity as is required by the office lighting and receptacles
included in Tenant's Improvements, provided, however, Tenant shall
be solely responsible for the costs of electrical consumption
(without duplication) by equipment which requires a voltage GREATER
THAN 208 VOLTS SINGLE PHASE (SUCH consumption is herein referred to
as "Excess Consumption" and the costs of Excess Consumption are
herein referred to as "Excess Consumption Costs").
(b) Landlord may, from time to time, engage a reputable consultant to
conduct a survey of electrical usage within the Premises or install
one or more submeters to measure electrical usage within the
Premises or a particular floor of the Premises. If the survey or
submeters reflect Excess Consumption for a 60 day period, then (i)
Tenant shall be responsible for the costs of any such surveys and
submeters, (ii) Landlord shall have the right to install permanent
submeters to measure the electrical consumption within the Premises
(which permanent submeters shall constitute a part of Tenant's
Submeters, as hereinafter defined), (iii) Tenant shall pay for the
cost of acquiring, maintaining, repairing and reading such
submeters, and (iv) Tenant shall pay the Excess Consumption Costs.
(c) Tenant shall not (i) use electric current in excess of the capacity
of the feeders or lines to the Building as of the Commencement Date
or the risers or wiring installation of the Building or the Premises
as of the Commencement Date, or (ii) install any electrical plugs,
connections or outlets which supply a voltage greater than 208 volts
single phase without first notifying Landlord and arranging for the
installation of a permanent submeter (which shall be deemed to be
part of Tenant's Submeters), at Tenant's expense, to measure the
electrical power consumed by the equipment and/or machinery hooked
or plugged into such plugs, connections or outlets. All submeters
installed by Landlord or Tenant to measure electrical usage by
certain pieces of equipment located within the Premises together
with any submeters installed by Landlord pursuant to paragraph (b)
of this subsection are herein collectively referred to as "Tenant's
Submeters". Landlord will maintain and repair Tenant's Submeters, at
Tenant's cost.
(d) Upon the installation of Tenant's Submeters, if any, Landlord will,
at Tenant's cost, on or about the first day of each month during the
Term of this Lease, read Tenant's Submeters and record such readings
for purposes of determining Metered Electrical Expenses (hereinafter
defined). The cost of electricity consumed within each separately
metered portion of the Premises and by each separately metered piece
of equipment within the Premises ("Metered Electrical Expenses")
shall be equal to the sum of (i) the kilowatts of electricity
consumed within the separately metered portions of the Premises (as
measured by the applicable Tenant's Submeters) during the applicable
month (or other applicable period) and (ii) the kilowatts of
electricity consumed by each separately metered equipment within the
Premises (as measured by the applicable Tenant's Submeters),
multiplied by (iii) the cost per kilowatt of electricity charged to
Landlord by the public utility for electricity consumed within the
Building during the applicable month (or other applicable period).
Landlord may, from time to time, invoice Tenant for Metered
Electrical Expenses (as well as any Excess Consumption Costs
determined by a reputable consultant) and Tenant shall, within ten
(10) days after receiving an invoice therefor, pay Landlord the
amount of the Metered Electrical Expenses (and/or, as applicable,
any Excess Consumption Costs determined by a reputable consultant)
covered by such invoice. Each such invoice submitted by Landlord to
Tenant shall include (i) the period of consumption covered by such
invoice, (ii) the beginning and ending readings for each of Tenant's
Submeters for such period, (iii) Landlord's calculations of the
Metered Electrical Expenses covered by such invoice, and (iv) if
applicable, the independent electrical consultant's calculations of
Excess Consumption and the Excess Consumption Costs.
5.104 Water. Landlord shall furnish water for drinking, cleaning and lavatory
purposes only.
5.105 Janitorial Services. Landlord shall provide janitorial services to the
Premises, comparable to THAT PROVIDED IN OTHER OFFICE buildings of
similar size, quality and in the general vicinity of the Building and
generally in the MANNER SUITABLE FOR "CLASS A" office space, provided
the Premises are used exclusively as offices and further provided Tenant
complies with SUBSECTION 6.201 below.
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5.106 Common Areas. Landlord shall perform routine maintenance in the Common
Areas (hereinafter defined).
5.107 Bulbs and Ballasts. Landlord shall provide Building standard bulbs and
ballasts as necessary in the Premises. Landlord shall also provide
non-building standard bulbs and ballasts provided Tenant shall pay the
cost thereof All amounts due under this subsection for such non-building
standard bulbs shall be paid to Landlord within thirty (30) days after
receipt of an invoice therefor.
SECTION 5.2 ADDITIONAL SERVICES. Landlord may impose a reasonable charge for
any utilities and services, including without limitation, air
conditioning, electrical current and water, provided by Landlord by
reason of any use of the services at any time other than the hours set
forth in subsection 5.102 above or beyond the levels or quantities that
Landlord agrees herein to famish or because of special electrical,
cooling or ventilating needs created by Tenant's hybrid telephone
equipment, computers or other equipment. In no event will Landlord be
required to provide any additional services if Tenant is in breach of
its obligation to pay any Rent hereunder as and when due and payable.
SECTION 5.3 TENANT'S OBLIGATION. Tenant agrees to cooperate fully at all times
with Landlord and to abide by all regulations and requirements which
Landlord reasonably prescribes for the use of the above utilities and
services.
SECTION 5.4 SERVICE INTERRUPTION.
5.401 SERVICE INTERRUPTIONIWAIVER OF LANDLORD LIABILITY. LANDLORD SHALL NOT BE
LIABLE FOR AND, EXCEPT AS PROVIDED IN SUBSECTION 5.402 BELOW, TENANT
SHALL NOT BE ENTITLED TO ANY ABATEMENT OR REDUCTION OF RENT BY REASON OF
LANDLORD'S FAILURE TO MAINTAIN TEMPERATURE OR ELECTRICAL CONSTANCY
LEVELS OR TO FURNISH ANY OF THE FOREGOING SERVICES when such failure is
caused by accident, breakage, repairs, strikes, lockouts or other labor
disturbance or labor dispute of any character, governmental regulation,
moratorium or other governmental action, inability to obtain
electricity, water or fuel, or by any cause beyond Landlord's reasonable
control (collectively, "Uncontrollable Events"), NOR SHALL ANY SUCH
UNCONTROLLABLE EVENT OR RESULTS OR EFFECTS THEREOF BE CONSTRUED AS AN
EVICTION (CONSTRUCTIVE OF ACTUAL) OF TENANT OR AS A BREACH OF THE
IMPLIED WARRANTY OF SUITABILITY, OR RELIEVE TENANT FROM THE OBLIGATION
TO PERFORM ANY COVENANT OR AGREEMENT HEREIN AND IN NO EVENT SHALL
LANDLORD BE LIABLE FOR DAMAGE TO PERSONS OR PROPERTY (INCLUDING, WITHOUT
LIMITATION, BUSINESS INTERRUPTION) OR BE IN DEFAULT HEREUNDER, AS A
RESULT OF ANY SUCH UNCONTROLLABLE EVENT OR RESULTS OR EFFECTS THEREOF.
5.402 Limited Right to Abatement of Rent. If any portion of the Premises
becomes unfit for occupancy because Landlord fails to deliver any
service as required under Section 5. 101 through 5.104 above (each an
"Essential Service") for any period (other than a reconstruction period
conducted pursuant to Section 7.1 or Article 8 below) exceeding fifteen
(15) consecutive days after written notice by Tenant to Landlord and
provided such failure is not caused by Tenant, Tenant's Contractors or
any of their respective agents or employees, Tenant shall be entitled to
a fair partial abatement of Basic Annual Rent and Additional Rent for
any such portion of the Premises from the occurrence until such portion
is again fit for occupancy.
5.403 Exclusive Remedy. Tenant's sole and exclusive remedy for a failure by
Landlord to provide any Essential Service to the Premises shall be
Tenant's remedy set forth in subsection 5.402.
SECTION 5.5 MODIFICATIONS. Notwithstanding anything herein to the contrary,
Landlord reserves the right from time to time to make reasonable
modifications to the above standards for utilities and services,
provided that such modifications do not materially decrease the level of
utilities and services available to Tenant, and provided further that
such modifications apply equally or no more favorably to other tenants
in the Building.
SECTION 5.6 TELECOMMUNICATION EQUIPMENT. In the event that Tenant wishes at any
time to utilize the services of a telephone or telecommunications
provider whose equipment is not then servicing the Building, no such
provider shall be permitted to install its lines or other equipment
within the Building without first securing the prior written approval of
the Landlord, which approval shall include, without limitation, approval
of the plans and specifications for the installation of the lines and/or
other equipment within the Building. Landlord's approval shall not be
deemed any kind of warranty or representation by Landlord, including,
without limitation, any warranty or representation as to the
suitability, competence, or financial strength of the provider. Without
limitation of the foregoing standard, unless all of the following
conditions are satisfied to Landlord's satisfaction, it shall be
reasonable for Landlord to refuse to give its approval: (i) Landlord
shall incur no expense whatsoever with respect to any aspect of the
provider's provision of its services, including without limitation, the
costs of installation, materials and services; (ii) prior to
commencement of any work in or about the Building by the provider, the
provider shall supply Landlord with such written indemnities, insurance,
financial statements, and such other items as LANDLORD DETERMINES to be
reasonably necessary to protect its financial interests and the
interests of the Building relating to the proposed activities of the
provider; (iii) the provider agrees to abide by such rules and
regulations, building and other codes, job site rules and such other
requirements as are determined by Landlord to be reasonably necessary to
protect the interests of the Building, the tenants in the Building and
Landlord, in the same or similar manner as Landlord has the right to
protect itself AND THE BUILDING WITH RESPECT to proposed alterations as
described in Section 6.303 of this Lease; (iv) Landlord determines that
there is sufficient space in the Building for the placement of all of
the provider's equipment and materials; (v) the provider agrees to abide
by Landlord requirements, if any, that provider use existing Building
conduits and pipes or use BUILDING CONTRACTORS (OR OTHER CONTRACTORS
reasonably approved by Landlord); (vi) Landlord receives from the
provider such compensation as is determined by Landlord to compensate it
for space used in the Building for the storage and maintenance of the
PROVIDER'S EQUIPMENT FOR THE FAIR MARKET value of a provider's access to
the Building, and the costs which may reasonably be expected to be
incurred by Landlord; (vii) the provider agrees to deliver to Landlord
detailed "as built" plans immediately after the installation of the
provider's equipment is complete; and (viii) all of the foregoing
matters are documented in a written license agreement between Landlord
and the provider, the form and content of which are reasonably
satisfactory to Landlord.
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ARTICLE 6
MAINTENANCE, REPAIRS, ALTERATIONS AND IMPROVEMENTS
SECTION 6.1 LANDLORD'S OBLIGATION TO MAINTAIN AND REPAIR. Landlord shall
(subject to Section 7. 1, Section 7.4, Article 8 below and Landlord's
rights under Section 2.2 above and except for ordinary wear and tear),
maintain the foundation, exterior walls and roof and load bearing
elements of the Building. Except for load bearing elements of the
Building located within the Premises, Landlord shall not be required to
maintain or repair any portion of the Premises.
SECTION 6.2 TENANT'S OBLIGATION TO MAINTAIN AND REPAIR.
6.201 Tenant's Obligation.
(a) Subject to Sections 5.107, 6.1, 7.1 and 7.4 and Article 8 of this
Lease, Tenant shall, at Tenant's sole cost and expense, (i) maintain
and keep the interior of the Premises (including, but not limited
to, all fixtures, walls, ceilings, floors, doors, windows [except
replacement of exterior plate glass], appliances and equipment which
are a part of the Premises) in good repair and condition, (ii)
repair or replace any damage or injury done to the Building or any
other part of the Property caused by Tenant, Tenant's agents,
employees, licensees, invitees or visitors or resulting from a
breach of its obligations under this Section 6.2 and (iii) indemnify
and hold Landlord harmless from, and reimburse Landlord for and with
respect to, any and all costs, expenses (including reasonable
attomeys'fees), claims and causes of action arising from or incurred
by and/or asserted in connection with such maintenance, repairs,
replacements, damage or injury. All repairs and replacements
performed by or on behalf of Tenant shall be performed in a good and
workmanlike manner and in accordance with the standards applicable
to alterations or improvements performed by Tenant. Tenant shall
continue to pay Rent, without abatement, during any period that
repairs or replacements are performed or required to be performed by
Tenant under this Section 6.2.
(b) Subject to Sections 7.1 and 7.4 and Article 8 of this Lease, Tenant
shall maintain and repair all supplemental HVAC units, data and
phone cabling, and any and all other installations and equipment
installed in the Premises, above the acoustical ceiling tiles of the
Premises or elsewhere in the Building (such equipment and
installations collectively referred to as the "Tenant Service
Equipment") installed by or on behalf of Tenant and which service
only the Premises. Tenant shall notify Landlord prior to performing
any repair, maintenance or replacement of the Tenant Service
Equipment and the same shall be performed in accordance with the
standards and conditions applicable to maintenance, repairs and
replacements performed by Tenant pursuant to subpart (a) of this
Section 6.20 1. Except for damage caused by Landlord, Landlord shall
have no liability for any repair, maintenance or replacement cost
incurred in connection with the Tenant Service Equipment. All Tenant
Service Equipment other than the LAN room HVAC supplement, shall
become property of the Landlord if paid by Landlord or from the
Tenant Improvement Allowance at the expiration or earlier
termination of the Lease; provided that, if requested by Landlord at
the time of installation of such Tenant Service Equipment, Tenant
shall remove the Tenant Service Equipment on or before the
Expiration Date or, if this Lease is terminated earlier, within
seven (7) days after such termination. All removals shall be
accomplished in accordance with the standards for removals under
Section 1.301 hereof. Tenant shall indemnify and hold Landlord
harmless from, and reimburse Landlord for and with respect to, any
and all costs, expenses (including reasonable attorneys' fees),
claims and causes of action arising from or incurred by and/or
asserted in connection with the (i) maintenance, repair, replacement
of the Tenant Service Equipment and (ii) any damage or injury
arising out of or resulting from or in connection with the Tenant
Service Equipment.
6.202 Rights of Landlord. Landlord shall have the same rights with respect to
repairs performed by Tenant as Landlord has with respect to improvements
and alterations performed by Tenant under subsection 6.303 below. In the
event Tenant fails, in the reasonable judgment of Landlord, to maintain
the Premises in good order, condition and repair, or otherwise satisfy
its repair and replacement obligations under subsection 6.201 above
within ten (10) days following written notice to Tenant of reasonably
necessary repairs, Landlord shall have the right to perform such
maintenance, repairs and replacements at Tenant's expense. Tenant shall
pay to Landlord within ten (10) days after demand any such cost or
expense incurred by Landlord, together with interest thereon at the rate
specified in Section 15. 10 below from the date of demand until paid.
SECTION 6.3 IMPROVEMENTS AND ALTERATIONS.
6.301 Landlord's Construction Obligation. Landlord's sole construction
obligation under this Lease is as set forth in the Work Letter.
6.302 Alteration of Building. LANDLORD HEREBY RESERVES THE RIGHT AND AT ALL
TIMES SHALL HAVE THE RIGHT TO REPAIR, CHANGE, REDECORATE, ALTER,
IMPROVE, MODIFY, RENOVATE, ENCLOSE OR MAKE ADDITIONS TO ANY PART OF THE
PROPERTY (INCLUDING, WITHOUT LIMITATION, STRUCTURAL ELEMENTS AND LOAD
BEARING ELEMENTS WITHIN THE PREMISES) AND TO ENCLOSE AND/OR CHANGE THE
ARRANGEMENT AND/OR LOCATION OF DRIVEWAYS OR PARKING AREAS OR LANDSCAPING
OR OTHER COMMON AREAS OF THE PROPERTY, ALL WITHOUT BEING HELD GUILTY OF
AN ACTUAL OR CONSTRUCTIVE EVICTION OF TENANT OR BREACH OFTHE IMPLIED
WARRANTY OF SUITABILITY AND WITHOUT AN ABATEMENT OF RENT (THE "RESERVED
RIGHT"). WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING,
LANDLORD'S RESERVED RIGHT SHALL INCLUDE, BUT NOT BE LIMITED TO THE RIGHT
TO DO ANY OF THE FOLLOWING: (i) erect and construct scaffolding, pipe,
conduit and other structures on and within and outside of the Premises
where reasonably required by the nature of the changes, alterations,
improvements, modifications, renovations and/or additions being
performed, (ii) perform within and outside of the Premises all work and
other activities associated with such changes, alterations,
improvements, modifications, renovations and/or additions being
performed, (iii) repair, change, renovate, remodel, alter, improve,
modify or make additions to the arrangement, appearance, location and/or
size of entrances or passageways, doors and doorways, corridors,
elevators, elevator lobbies, stairs, toilets or other Common Areas or
Service Areas, (iv) temporarily close any Common Area and/or temporarily
suspend Building services and facilities in connection with any repairs,
changes, alterations, modifications, renovations or additions to any
part of the Building, (v) repair, change, alter or improve plumbing,
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pipes and conduits located in the Building, including without
limitation, those located within the Premises, the Common Areas, the
Service Corridors or the Service Areas (hereinafter defined) of the
Building and (vi) repair, change, modify, alter, improve, renovate or
make additions to the Building central heating, ventilation, air
conditioning, electrical, mechanical or plumbing systems. When
exercising the Reserved Right, Landlord will interfere with Tenant's use
and occupancy of the Premises as little as is reasonably practicable.
Notwithstanding the foregoing, Landlord shall not make any material
alterations to the Building or the Common Areas during the initial Term
of this Lease unless such alterations are (i) required by applicable
law, (ii) performed in connection with Landlord's obligations hereunder
or in connection with any repair of the Building, or (iv) are necessary
for the protection of the Property.
6.303 Alterations, Additions, Improvements and Installations by Tenant. Tenant
shall not, without the prior written consent of Landlord, make any
changes, modifications, alterations, additions or improvements (other
than Tenant's Improvements under the Work Letter) to, or install any
equipment or machinery (other than office equipment and unattached
personal property) on, the Premises (all such changes, modifications,
alterations, additions, improvements (other than Tenant's Improvements
under the Work Letter) and installations approved by Landlord are herein
collectively referred to as "Installations") if any such Installations
would (i) affect any structural or load bearing portions of the
Building, (ii) result i n a material increase of electrical usage above
the normal type and amount of electrical current to be provided by
Landlord, (iii) result in an increase in Tenant's usage of heating or
air conditioning, (iv) impact mechanical, electrical or plumbing systems
in the Premises or the Building, (v) affect areas of the Premises which
can be viewed from Common Areas, (vi) require greater or more difficult
cleaning work (e.g., kitchens, reproduction rooms and interior glass
partitions), (vii) adversely affect Landlord's ability to deliver
Building services to other tenants of the Building or (viii) violate any
provision in Article 4 above or Rider HI attached hereto. As to
Installations not covered by the preceding sentence, Tenant will not
perform same without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. All Installations
shall be at Tenant's sole cost and expense. Without in any way limiting
Landlord's consent rights, Landlord shall not be required to give its
consent until (a) Landlord approves the contractor or person making such
Installations and approves such contractor's insurance coverage to be
provided in connection with the work, (b) Landlord approves final and
complete plans and specifications for the work and (c) the appropriate
governmental agency, if any, has approved the plans and specifications
for such work. All work performed by Tenant or its contractor relating
to the Installations shall conform to applicable governmental laws,
rules and regulations, including, without limitation, the Disability
Acts. Upon completion of the Installations, Tenant shall deliver to
Landlord "as built" plans. Each payment shall be made to Landlord within
ten (10) days after receipt of an invoice from Landlord. All
Installations that constitute improvements constructed within the
Premises shall be surrendered with the Premises at the expiration or
earlier termination of this Lease, unless Landlord requests that same be
removed pursuant to Section 1. 3 above. Tenant shall indemnify and hold
Landlord harmless from and reimburse Landlord for and with respect to,
any and all costs, expenses (including reasonable attorneys' fees),
demands, claims, causes of action and liens, arising from or in
connection with any Installations performed by or on behalf of Tenant,
EVEN IF THE SAME IS CAUSED BY THE NEGLIGENCE OR OTHER TORTIOUS CONDUCT
OF LANDLORD OR LANDLORD IS STRICTLY LIABLE FOR SUCH COSTS, EXPENSES OR
CLAIMS. All Installations performed by or on behalf of Tenant will be
performed diligently and in a first-class workmanlike manner and in
compliance with all applicable laws, ordinances, regulations and rules
of any public authority having jurisdiction over the BUILDING AND/OR
TENANT'S AND LANDLORD'S insurance carriers. Landlord will have the
right, but not the obligation, to inspect periodically the work on the
Premises and may require changes in the method or quality of the work.
6.304 Approvals. Any approval by Landlord (or Landlord's architect and/or
engineers) of any of Tenant's contractors or Tenant's drawings, plans or
specifications which are prepared in connection with any construction of
improvements (including without limitation, Tenant's Improvements) in
the Premises shall not in any way be construed as or constitute a
representation or warranty of Landlord as to the abilities of the
contractor or the adequacy or sufficiency of such drawings, plans or
specifications or the improvements to which they relate, for any use,
purpose or condition.
ARTICLE 7
INSURANCE, FIRE AND CASUALTY
SECTION 7.1 TOTAL OR PARTIAL DESTRUCTION OF THE BUILDING OR THE PREMISES. In the
event that the Building should be totally destroyed by fire or other
casualty or in the event the Building (or any portion thereof) should be
so damaged that rebuilding or repairs cannot be completed, in Landlord's
reasonable opinion, within one hundred eighty (180) days after
commencement of repairs to the Building, Landlord may, at its option,
terminate this Lease, in which event Basic Annual Rent and Additional
Rent shall be abated during the unexpired portion of this Lease
effective with the date of such damage. Landlord shall exercise the
termination right pursuant to the preceding sentence, if at all, by
delivering written notice of termination to Tenant within sixty (60)
days after the casualty. In the event that the Premises should be so
damaged by fire or other casualty that rebuilding or repairs cannot be
completed, in Landlord's reasonable opinion, within one hundred eighty
(180) days after the commencement of repairs to the Premises, Landlord
shall notify Tenant within 60 days after the casualty, and Tenant may,
at its option terminate this Lease, in which event Basic Annual Rent and
Additional RENT SHALL BE ABATED DURING THE UNEXPIRED portion of this
Lease, effective the date of such damage. Tenant shall exercise the
TERMINATION RIGHT PURSUANT TO the preceding sentence, if at all, by
delivering written notice of termination to Landlord within ten (10)
days after being advised by Landlord that the repairs cannot be
completed within such one hundred eighty (180) day period. In the event
the Building or the Premises should be damaged by fire or other casualty
and, in Landlord's reasonable opinion, the rebuilding or repairs can be
completed within one hundred. eighty (180) days after the commencement
of repairs to the Building or Premises, as applicable, or if the damage
should be more serious but neither Landlord nor Tenant elect to
terminate this Lease pursuant to this Section, in either such event
Landlord shall, within sixty (60) days after the date of such damage,
commence (and thereafter pursue with reasonable diligence) repairing the
Building and the Premises (including Tenant's Improvements), but only to
the extent of insurance proceeds actually received by Landlord for such
repairs, to substantially the same condition which existed immediately
prior to the happening of the casualty. In no event shall Landlord be
required to rebuild, repair or replace any part of the furniture,
equipment, fixtures, inventory, supplies or any other personalty or any
other improvements (except Tenant's Improvements to the extent set forth
in the preceding sentence), which may have been placed by Tenant within
the Building or at the Premises. If more than fifty percent (50%) of the
Premises is rendered untenantable by fire or other CASUALTY, ALL RENT
SHALL be abated until repairs to the Premises are completed; provided,
however, if less than fifty percent (50%) of the Premises is rendered
untenantable
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by fire or other casualty, the Refit required to be paid hereunder shall
be abated in proportion to the portion of the Premises, if any, which is
rendered untenantable by fire or other casualty hereunder until repairs
of the Premises are completed, or if the Premises are not repaired,
until the Expiration Date hereunder; provided, that if such casualty was
caused by Tenant, its agents, employees, licensees or invitees, Basic
Annual Rent and Additional Rent shall be abated only to the extent
Landlord is compensated for such Basic Annual Rent and Additional Rent
by loss of rents insurance, if any. Notwithstanding Landlord's
restoration obligation, in the event any mortgagee under a deed of
trust, security agreement or mortgage on the Building should require
that the insurance proceeds be used to retire or reduce the mortgage
debt or if the insurance company issuing Landlord's fire and casualty
insurance policy fails or refuses to pay Landlord the proceeds under
such policy, Landlord shall have no obligation to rebuild and this Lease
shall terminate upon notice by Landlord to Tenant which notice must be
delivered, if at all, within 10 days after Landlord is notified by its
mortgagee, and if the Lease is so terminated, all Basic Annual Rent and
Additional Rent shall be abated during the unexpired portion of this
Lease effective from the date of such damage. Any insurance which may be
carried by Landlord or Tenant against loss or damage to the Building or
to the Premises shall be for the sole benefit of the party carrying such
insurance and under its sole control.
SECTION 7.2 TENANTS INSURANCE.
7.201 Types of Coverage. Tenant covenants and agrees that from and after the
date of delivery of the Premises from Landlord to Tenant, Tenant will
carry and maintain, at its sole cost and expense, the insurance set
forth in paragraphs (a), (b) and (c) of this subsection.
(a) Commercial General Liability Insurance. Commercial General Liability
Insurance covering the Premises and Tenant's use thereof against
claims for personal or bodily injury or death or property damage
occurring upon, in or about the Premises (including contractual
indemnity and liability coverage), such insurance to insure both
Tenant and, as additional named insureds, Landlord and the Property
Manager, and to afford protection to the limit of not less than $
1,000,000.00, combined single limit, in respect to injury or death
to any number of PERSONS AND ALL PROPERTY DAMAGE ARISING out of any
one (1) occurrence, with a deductible acceptable to Landlord. IF THE
AGREED RENTABLE AREA OF THE Premises is more than 30,000 square
feet, then, in addition to and not in lieu of the above stated
coverage, Tenant shall carry umbrella or so called excess coverage
in an amount not less than $1,000,000.00 over Tenant's base coverage
amount. All insurance coverage required under this subparagraph (a)
shall extend to any liability of Tenant arising out of the
indemnities provided for in this Lease. Additionally, each policy
evidencing the insurance required under this subparagraph shall
expressly insure Tenant; in addition, each such policy shall
expressly provide that Landlord and Property Manager are named as
additional insureds, IT BEING THE INTENT THAT SUCH POLICIES AFFORD
INSURANCE COVERAGE TO LANDLORD AND THE PROPERTY MANAGER AGAINST
CLAIMS FOR PERSONAL OR BODILY INJURY OR DEATH OR PROPERTY DAMAGE
OCCURRING UPON, IN OR ABOUT THE PREMISES AS THE RESULT OF THE
NEGLIGENCE OF LANDLORD OR THE PROPERTY MANAGER, whether or not
required by the other provisions of this Lease.
(b) Fire and Extended Coverage Insurance. Property insurance on an
all-risk extended coverage basis (including coverage against fire,
wind, tornado, vandalism, malicious mischief, water damage and
sprinkler leakage) covering all fixtures, equipment and personalty
located in the Premises and endorsed to provide one hundred percent
(100%) replacement cost coverage. Such policy will be written in the
names of Tenant, Landlord and any other parties reasonably
designated by Landlord from time to time, as their respective
interests may appear. The property insurance may, with the consent
of the Landlord, provide for a reasonable deductible.
(c) Workers Compensation and Employer's Liability Insurance. To the
extent required by applicable law, Worker's compensation insurance
insuring against and satisfying Tenant's obligations and liabilities
under the worker's compensation laws of the State of Texas, together
with employer's liability insurance in an amount not less than $
1,000,000.00. The insurance required by this part (c) shall include
provisions waiving all subrogation rights against Landlord.
7.202 Other Requirements of Insurance. All such insurance will be issued and
underwritten by companies reasonably acceptable to Landlord and will
contain endorsements that (a) such insurance may not lapse with respect
to Landlord or Property Manager or be canceled or amended with respect
to Landlord or Property Manager without the insurance company giving
Landlord and Property Manager at least thirty (30) days prior written
notice of such cancellation or amendment, (b) Tenant will be solely
responsible for payment of premiums, (c) in the event of payment of any
loss covered by such policy, Landlord or Landlord's designees will be
paid first by the insurance company for Landlord's loss and (d) Tenant's
insurance is primary in the event of overlapping coverage which may be
carried by Landlord.
7.203 Proof of Insurance. Tenant shall deliver to Landlord within ten (10)
days prior to the COMMENCEMENT OF CONSTRUCTION of Tenants Improvements,
duplicate originals of all policies of insurance required by this
Section 7.2 or duly executed originals of the evidence of such insurance
(on ▇▇▇▇▇ Form 27 or a similar form) evidencing in-force coverage,
stating that Landlord is an additional insured thereunder and agreeing
to give Landlord at least thirty (30) days written notice prior to
termination, cancellation or modification adversely affecting Landlord.
Further, Tenant shall deliver to Landlord renewals thereof at least ten
(10) days prior to the expiration of the respective policy terms.
SECTION 7.3 LANDLORD'S INSURANCE.
7.301 Types of Coverage. Landlord covenants and agrees that throughout the
Term of this Lease, Landlord will carry and maintain, at its sole cost
and expense, the insurance set forth in paragraphs (a) and (b) of this
subsection.
(a) Commercial General Liability Insurance. Commercial General Liability
Insurance covering the Building and all Common Areas, but excluding
the Premises, insuring against claims for personal or BODILY INJURY
OR DEATH OR PROPERTY damage occurring upon, in or about the Building
or Common Areas to afford protection to the limit of not less than
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$2,000,000.00 combined single limit in respect to injury or death to
any number of persons and property damage arising out of any one (1)
occurrence. This insurance coverage shall extend to any liability of
Landlord arising out of the indemnities provided for in this Lease.
(b) Fire and Extended Coverage Insurance. Landlord shall at all times
during the term hereof maintain in effect a policy or policies of
all risk extended coverage insurance covering the Building
(excluding property required to be insured by Tenant) endorsed to
provide full replacement cost coverage and providing protection
against perils included within the standard Texas form of fire and
extended coverage insurance policy, together with insurance against
sprinkler damage, vandalism, malicious mischief and such other risks
as Landlord may from time to time determine and with any such
deductibles as Landlord may from time to time determine.
7.302 Self Insurance. Any insurance provided for in subsection 7.301 above may
be effected by a policy or policies of blanket insurance covering
additional items or locations or assureds, provided that the
requirements of this Section 7.3 are otherwise satisfied. Tenant shall
have no rights in any policy or policies maintained by Landlord,
SECTION 7.4 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives any
rights it may have against the other (including, but not limited to, a
direct action for damages) on account of any loss or damage occasioned
to Landlord or Tenant, as the case may be (EVEN IF (i) SUCH LOSS OR
DAMAGE IS CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT,
ACTS OR OMISSIONS OF THE RELEASED PARTY OR THE RELEASED PARTY'S
DIRECTORS, EMPLOYEES, AGENTS OR INVITEES, OR (ii) THE RELEASED PARTY IS
STRICTLY LIABLE FOR SUCH LOSS OR DAMAGE), TO THEIR RESPECTIVE PROPERTY,
THE PREMISES, ITS CONTENTS OR TO ANY OTHER PORTION OF THE BUILDING OR
THE PROPERTY ARISING FROM ANY RISK (WITHOUT REGARD TO THE AMOUNT OF
COVERAGE OR THE AMOUNT OF DEDUCTIBLE) COVERED BY THE ALL RISK FULL
REPLACEMENT COST PROPERTY INSURANCE REQUIRED TO BE CARRIED BY TENANT AND
LANDLORD, RESPECTIVELY, UNDER SUBSECTIONS 7.201 (b) AND 7.301 (b) ABOVE.
The foregoing waiver shall be effective even if either or both parties
fail to carry the insurance required by sections 7.201(b) and 7.301(b)
above. If a party waiving rights under this Section is carrying an all
risk full replacement cost insurance policy in the promulgated form used
in the State of Texas and an amendment to such promulgated form is
passed, such amendment shall be deemed not a part of such promulgated
form until it applies to the policy being carried by the waiving party.
Without in any way limiting the foregoing waivers and to the extent
permitted by applicable law, the parties hereto each, on behalf of their
respective insurance companies insuring the property of either Landlord
or Tenant against any such loss, waive any right of subrogation that
Landlord or Tenant or their respective insurers may have against the
other party or their respective officers, directors, employees, agents
or invitees and all rights of their respective insurance companies based
upon an assignment from its insured. Each party to this Lease agrees
immediately to give to each such insurance company written notification
of the terms of the MUTUAL WAIVERS CONTAINED IN THIS Section and to have
said insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waivers. The
foregoing waiver shall be effective whether or not the parties maintain
the required insurance.
SECTION 7.5 INDEMNITY.
7.501 Tenant's Indemnity. Subject to the limitation and exclusions set forth
below in this subsection, Tenant will indemnify and hold harmless
Landlord, Property Manager, their respective officers, directors, and
employees and any other parties for whom Landlord and/or Property
Manager are responsible (each a "Landlord Indemnified Party") from, and
shall reimburse each Landlord Indemnified Party for and with respect to,
any and all costs, expenses (including, without limitation, reasonable
attorneys' fees), claims, demands, actions, proceedings, judgments,
hearings, damages, losses and liabilities brought or asserted by or
payable to any third party, on account of personal injury, death,
property damage or any other form of injury or damage (each a "Claim"
and collectively, the "Claims") arising out of or relating to (A) an
incident or event which occurred within or on the Premises, (B) any
breach of this Lease by Tenant and which resulted in a Claim, EVEN IF
THE CLAIM IS THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS
OF ANY LANDLORD INDEMNIFIED PARTY OR THE LANDLORD INDEMNIFIED PARTY IS
STRICTLY LIABLE FOR SUCH CLAIM. The indemnification and reimbursement
obligations of Tenant under this subsection (i) shall be limited to the
greater of the amount of Commercial General Liability Insurance required
to be carried by such party under this Lease or $5,000,000 and (ii)
shall not apply to a Claim (a) waived by Landlord under Section 7.4
above or any other provision of this Lease, (b) related to hazardous or
toxic materials and caused by an act or omission that does not
constitute a breach by Tenant of the provisions of subsection 4.102
above, (c) arising out of the gross negligence or intentional misconduct
of the Landlord Indemnified Party or (d) resulting from host liquor
liability. If a third party files a lawsuit or brings any other legal
action asserting a Claim against a Landlord Indemnified Party and that
is covered by Tenant's indemnity, then Tenant, upon notice from the
Landlord Indemnified Party, shall resist and defend such Claim through
counsel reasonably satisfactory to the Landlord Indemnified Party.
Tenant's obligations under this subsection shall survive the termination
of this Lease.
7.502 Landlord's Indemnity. Subject to the limitation and exclusions set forth
below in this subsection, Landlord will indemnify and hold harmless
Tenant and its officers, directors, and employees and any other parties
for whom Tenant is responsible (each a "Tenant Indemnified Party") from,
and shall reimburse each Tenant Indemnified Party for and with respect
to, any and all Claims (as defined in subsection 7.501 preceding)
arising out of or relating to (a) an incident or event which occurred
within or on the Common Areas, or (b) any breach of this Lease by
Landlord and which resulted in a Claim, EVEN IF THE CLAIM IS THE RESULT
OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF ANY TENANT
INDEMNIFIED PARTY OR THE TENANT INDEMNIFIED PARTY IS STRICTLY LIABLE FOR
SUCH CLAIM. The indemnification and reimbursement obligations of
Landlord under this subsection (i) shall be limited to the greater of
the amount of Commercial General Liability Insurance required to be
carried by such party under this Lease or $5,000,000 and (ii) shall not
apply to a Claim (a) waived by Tenant under Section 7.4 above or any
other provision of this Lease, (b) related to hazardous or toxic
materials and caused by an act or omission that does not constitute a
breach by Landlord of the provisions of subsection 4.102
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above; (c) arising out of the gross negligence or intentional misconduct
of the Tenant Indemnified Party or (d) resulting from host liquor
liability. If a third party files a lawsuit or brings any other legal
action asserting a Claim against a Tenant Indemnified Party and that is
covered by Landlord's indemnity, then Landlord, upon notice from the
Tenant Indemnified Party, shall resist and defend such Claim through
counsel reasonably satisfactory to the Tenant Indemnified Party.
Landlord's obligations under this subsection shall survive the
termination of this Lease.
ARTICLE 8
CONDEMNATION
SECTION 8.1 CONDEMNATION RESULTING IN CONTINUED USE NOT FEASIBLE. If the
Property or any portion thereof that, in Landlord's reasonable opinion,
is necessary to the continued efficient and/or economically feasible use
of the Property shall be taken or condemned in whole or in part for
public purposes, or sold to a condemning authority in lieu of taking,
then the term of this Lease shall, at the option of Landlord, forthwith
cease and terminate.
SECTION 8.2 TOTAL CONDEMNATION OF PREMISES. In the event that any portion of the
Property is taken or condemned or sold in lieu thereof and such taking
or condemnation prevents Tenant from conducting its business in the
Premises in a manner reasonably comparable to that conducted immediately
before such taking or condemnation (including a significant reduction in
the parking spaces available) or Tenant will be unable to use a
substantial portion of the Premises for a period of one hundred eighty
(180) consecutive days by reason of a temporary taking, either Landlord
or Tenant may terminate this Lease by delivering written notice thereof
to Landlord within ten (10) business days after the taking, condemnation
or sale in lieu thereof.
SECTION 8.3 CONDEMNATION WITHOUT TERMINATION. If a taking or condemnation or
sale in lieu of the taking of all or less than all of the Property does
not give Landlord or Tenant the right to terminate, or gives either
LANDLORD or Tenant the right to terminate this Lease pursuant to Section
8.1 or 8.2 above and neither Landlord NOR TENANT ELECT TO exercise such
termination right, then this Lease shall continue in full force and
effect, provided that, if the taking, condemnation or sale includes any
portion of the Premises, the Basic Annual Rent and Additional Rent shall
be redetermined on the basis of the remaining square feet of Agreed
Rentable Area of the Premises or if the taking or condemnation includes
other portions of the Building or Land, the Basic Annual Rent and
Additional Rent shall be adjusted on such equitable basis as is
reasonable under the circumstances. Landlord, at Landlord's sole option
and expense, shall restore and reconstruct the Building to substantially
its former condition to the extent that the same may be reasonably
feasible, but such work shall not be required to exceed the scope of the
work done by Landlord in originally constructing the Building, nor shall
Landlord in any event be required to spend for such work an amount in
excess of the amount received by Landlord as compensation or damages
(over and above amounts going to the mortgagee of the property taken)
for the part of the Building or the Premises so taken.
SECTION 8.4 CONDEMNATION PROCEEDS. Landlord shall receive the entire award
(which shall include sales proceeds) payable as a result of a
condemnation, taking or sale in lieu thereof. Tenant hereby expressly
assigns to Landlord any and all right title and interest of Tenant now
or hereafter arising in and to any such award. Tenant shall, however,
have the right to recover from such authority through a separate award
which does not reduce Landlord's award, any compensation as may be
awarded to Tenant on account of moving and relocation expenses and,
depreciation to and removal of Tenant's physical property and the loss
of Tenant's use of the Premises.
ARTICLE 9
LIENS
Tenant shall keep the Premises and the Property free from all liens
arising out of any work performed, materials furnished or obligations
incurred by or for Tenant AND TENANT SHALL INDEMNIFY AND HOLD HARMLESS
LANDLORD FROM AND AGAINST, AND REIMBURSE LANDLORD FOR AND WITH RESPECT
TO, ANY AND ALL CLAIMS, CAUSES OF ACTION, DAMAGES, EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES), ARISING FROM OR IN CONNECTION WITH ANY SUCH
LIENS. In the event that Tenant shall not, within thirty (30) days
following notification to Tenant of the imposition of any such lien,
cause the same to be released of record by payment or the posting of a
bond in amount, form and substance acceptable to Landlord, Landlord
shall have, in addition to all other remedies provided herein and by
law, the right but not the obligation, to cause the same to be released
by such means as it shall deem proper, including payment of or defense
against the claim giving rise to such lien. All amounts paid or incurred
by Landlord in connection therewith shall be paid by Tenant to Landlord
on demand and shall bear interest from the date of demand until paid at
the rate set forth in Section 15. 10 below. Nothing in this Lease shall
be deemed or construed in any way as constituting the consent or request
of Landlord, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialman for the performance of
any labor or the furnishing of any materials for any specific
IMPROVEMENT, ALTERATION OR REPAIR of or to the Building or the Premises
or any part thereof, nor as giving Tenant any right, power or authority
to CONTRACT FOR OR permit the rendering of any services or the
furnishing of any materials that would give rise to the filing of any
mechanic's or other liens against the interest of Landlord in the
Property or the Premises.
ARTICLE 10
TAXES ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, prior to their becoming
delinquent, any and all taxes and assessments levied against, and any
increases in Real Estate Taxes as a result of, any personal property or
trade or other fixtures placed by Tenant in or about the Premises and
any improvements (other than Tenant's Improvements) constructed in the
Premises by or on behalf of Tenant. In the event Landlord pays any such
additional taxes or increases, Tenant will, within ten (10) days after
demand, reimburse Landlord for the amount thereof.
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ARTICLE I I
SUBLETTING AND ASSIGNING
SECTION 11.1 SUBLEASE AND ASSIGNMENT. Except as provided below and as provided
in Rider 2 to the Lease, Tenant shall not assign this Lease, or allow it
to be assigned, in whole or in part, by operation of law or otherwise
(it being agreed that for purposes of this Lease, assignment shall
include, without limitation, the transfer of a majority interest of
stock, PARTNERSHIP or other forms of ownership interests, merger or
dissolution) or mortgage or pledge the same, or sublet the Premises or
any part thereof or permit the Premises to be occupied by any firm,
person, partnership or corporation or any combination thereof, other
than Tenant, without the prior written consent of Landlord. In no event
shall any assignment or sublease ever release Tenant from any obligation
or liability hereunder. Without limiting Landlord's consent rights and
as a condition to obtaining Landlord's consent, (i) each assignee must
assume all obligations under this Lease and (ii) each sublessee must
confirm that its sublease is subject and subordinate to this Lease. In
addition, each assignee and sublessee shall agree to cause the Premises
to comply at all times with all requirements of the Disability Acts (as
amended), including, but not limited to, obligations arising out of or
associated with such assignee's or subtenant's use of or activities or
business operations conducted within the Premises to the extent Tenant
would be required to so comply under this Lease. No assignee or
sublessee of the Premises or any portion thereof may assign or sublet
the Premises or any portion thereof. Consent by Landlord to one or more
assignments or sublettings shall not operate as a waiver of Landlord's
rights as to any subsequent assignments and/or sublettings. Tenant shall
deliver to Landlord a copy of each assignment or sublease entered into
by Tenant promptly after the execution thereof, whether or not
Landlord's consent is required in connection therewith. Any assignment
made by Tenant shall be in RECORDABLE FORM AND SHALL CONTAIN A covenant
of assumption by the assignee running to Landlord. All reasonable legal
fees and expenses INCURRED BY LANDLORD IN CONNECTION with any assignment
or sublease proposed by Tenant will be the responsibility of Tenant and
will be paid by Tenant within five (5) days of receipt of an invoice
from Landlord. In addition, Tenant will pay to Landlord an
administrative overhead fee of $500.00 in consideration for Landlord's
review of any requested assignment or sublease.
SECTION 11.2 LANDLORD'S RIGHTS.
11.201 Landlord's Termination and Consent Rights.
(a) If, at any time during the term of this Lease, Tenant determines
that it desires to sublease more than fifty percent (50%) of the
then existing Premises (other than to an Affiliate (as defined in
Rider 2 to the Lease)) for a term equal to or greater than
seventy-five percent (75%) of the remaining Term if one (1) or more
years remains in the term of this Lease or for the remaining Term if
less than one (1) year remains in the term of this Lease, Tenant
may, prior to commencing any marketing efforts to locate a suitable
subtenant, deliver notice to Landlord, specifying the portion of the
Premises that Tenant desires to sublease (the "Proposed Sublease
Space"), and the proposed effective date of such sublease ("Tenant's
Preliminary Transfer Notice"). Landlord shall have a period of
fifteen (15) business days following receipt of Tenant's Preliminary
Transfer Notice (the "Exercise Period") in which to notify Tenant
that it will terminate this Lease with respect to the Proposed
Sublease Space pursuant to subsection 11. 20 1 (c) below or that it
will not terminate this Lease with respect to the Proposed Sublease
Space. If Landlord fails to notify Tenant of its election within the
Exercise Period, Landlord shall be deemed to have elected not to
terminate with Lease with respect to the Proposed Sublease Space,
and Tenant shall be free to commence its marketing efforts in
respect of the Proposed Sublease Space; provided that if Tenant has
not executed a sublease agreement covering the Proposed Sublease
Space within the one hundred fifty (150) day period following the
expiration of the Exercise Period, Landlord's election not to
terminate this Lease shall expire and Landlord shall be entitled,
within twenty (20) business days following delivery of a second
Preliminary Transfer Notice to exercise its recapture rights as
provided above. The above procedure shall continue in the event that
Tenant does not execute a sublease agreement covering the Proposed
Sublease Space within any one hundred fifty (150) day period
following the expiration of any Exercise Period, Landlord's election
not to terminate this Lease shall expire and Landlord shall be
entitled, within twenty (20) business days following delivery of
another Preliminary Transfer Notice to exercise its recapture rights
as provided above. The above PROCEDURE SHALL CONTINUE in the event
that Tenant does not execute a sublease agreement covering the
Proposed Sublease Space within any one hundred fifty (150) day
period following the expiration of any Exercise Period.
(b) If Tenant desires to sublease any portion of the Premises to any
party other than as provided in Rider 2 or assign this Lease to any
party other than an Affiliate, Tenant shall submit to Landlord (a)
in writing the name of the proposed subtenant or assignee, the
nature of the proposed subtenant's or assignee's business and, in
the event of a sublease, the portion of the Premises which Tenant
desires to sublease (if the proposed sublease space is less than all
of the Premises, such portion is herein referred to as the "Proposed
Sublease Space"), (b) a current balance sheet and income statement
for such proposed subtenant or assignee, (c) a copy of the proposed
form of sublease or assignment, and (d) such other information as
Landlord may reasonably request (collectively, the "Required
Information").
(c) Landlord shall, within fifteen (15) days after Landlord's receipt of
the Required Information deliver to Tenant a written notice (each
such notice, a "Landlord Response") in which Landlord either (i)
TERMINATES THIS LEASE, if Tenant desires to sublease all of the
Premises or assign this Lease, unless Landlord has waived such right
pursuant to subsection 11.20 1 (a) above, (ii) terminates this Lease
only as to the Proposed Sublease Space, if the Proposed Sublease
Space is less than the entire Premises, unless Landlord has waived
such right pursuant to subsection 11.201(a) above, (iii) consents to
the proposed sublease or assignment, or (iv) withholds its consent
to the proposed sublease or assignment, which consent shall not be
unreasonably withheld so long as Landlord does not elect to
terminate this Lease under subparts (i) or (ii) above and so long as
Landlord has received all Required Information. Notwithstanding the
foregoing, Landlord shall not have the right to terminate this Lease
with respect to any Proposed Sublease Space if the Agreed Rentable
Area of such space, together with the Agreed Rentable Area of all
other portions of the Premises then subject to a sublease, is less
than fifty percent (50%) of the Agreed Rentable Area of the
Premises. Landlord shall be deemed to have reasonably withheld its
consent to any sublease or assignment if the refusal is based on (i)
Landlord's determination (in its commercially reasonable discretion)
that such subtenant or assignee is not of the character or quality
of a tenant to whom Landlord would GENERALLY LEASE SPACE OF THE
BUILDING, (II) THE fact that such sublease or assignment is not in
form and of substance reasonably satisfactory to Landlord, (iii)
such sublease or
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assignment conflicts in any material manner with this Lease,
including, but not limited to, the Permitted Use under Item 10 of
the Basic Lease Provisions or Section 4.1 of the Supplemental Lease
Provisions, (iv) the proposed subtenant or assignee is a
governmental entity or a medical office, (v) the proposed
subtenant's or assignee's primary business is prohibited by any
non-compete clause then affecting the Building, (vi) the proposed
subtenant or assignee is a tenant of the Building or Landlord is
negotiating with the proposed subtenant or assignee to become a
tenant of the Building, (vii) the character of the business to be
conducted within the Premises by the proposed subtenant or assignee
is likely to substantially increase the expenses or costs or
providing Building services, or the burden on parking, existing
janitorial services or elevators in the Building, (viii) the
sublease or assignment would cause Landlord to breach any recorded
covenants or contractual obligations to which the Property or
Landlord is subject or (ix) such sublessee or assignee has a net
worth reasonably unsatisfactory to Landlord at the time Tenant
submits the Required Information.
(d) If Landlord does not timely exercise its termination right with
respect to the proposed sublease or assignment within the required
fifteen (15) days period, then Landlord shall be deemed to have
waived its right, if any, to terminate this Lease with respect to
the applicable assignment or sublease, but Landlord shall have the
right to consent or withhold its consent to the applicable proposed
assignment or sublease, by delivering written notice thereof to
Tenant WITHIN SUCH FIFTEEN (15) DAY PERIOD. If Landlord does not
exercise its right to consent or withhold its consent in respect of
a proposed assignment or sublease within the required fifteen (15)
day period, then Landlord shall be deemed to have consented to the
proposed assignment or sublease.
11.202 Effect of Termination. If Landlord timely exercises its option to
terminate this Lease as to the entire Premises as provided in subsection
11.201, then this Lease shall terminate on a date specified by Landlord
in the Landlord Response (the "Specified Termination Date"), which
Specified Termination Date shall not be sooner than 30 days after the
date of Landlord's Response, nor later than 90 days after the date of
Landlord's Response, and the Basic Rent and Additional Rent shall be
paid and apportioned to the Specified Termination Date. If Landlord
timely exercises its option to terminate this Lease as to only the
Proposed Sublease Space, then (i) this Lease shall end and expire with
respect to the Proposed Sublease Space on the applicable Specified
Termination Date, (ii) from and after the applicable Specified
Termination Date, the Basic Rent shall be reduced by the amount of Basic
Rent that was being paid in respect of the Proposed Sublease Space as of
the applicable Specified Termination Date, (iii) Tenant's Pro Rata Share
Percentage shall be recalculated based on the square feet of rentable
area included in the Premises (exclusive of such Proposed Sublease
Space), (iv) Tenant's estimated payments of Additional Rent shall be
recalculated on the basis of the revised Tenant's Pro Rata Share
Percentage, and (v) if the Proposed Sublease Space adjoins another
portion of the Premises, Tenant shall, at Tenant's sole cost and
expense, construct and finish such demising walls as are necessary to
physically separate the Premises from the Proposed Sublease Space, and
(vi) if the Proposed Sublease Space is part of a floor which is fully
included in the Premises, then Landlord shall have the right, at Tenant!
s sole cost and expense, (a) to construct and finish in accordance with
Building standards or to cause Tenant to construct and finish in
accordance with Building standards such demising walls as are necessary
(x) to construct a public corridor so as to convert the floor to a
multi-tenant floor and (y) to convert the restrooms on such floor
(including access thereto) to restrooms, which will serve the entire
floor, as opposed to only the Premises, and (b) to make such revisions,
if any, are necessary, to properly light, heat, cool and ventilate the
public corridor and public restrooms. The alterations performed by
Tenant pursuant to this paragraph shall be deemed Installations and
therefore subject to the provisions of subsection 6.303.
SECTION 11.3 LANDLORD'S RIGHTS RELATING TO ASSIGNEE OR SUBTENANT. To the extent
the rentals or income derived from any sublease or assignment exceed the
rentals due hereunder, one-half ('/2) of such excess rentals, after
deducting Tenant's costs of entering into the sublease or assignment,
(the "Excess Sublease Rentals") shall be the property of and paid over
to Landlord in consideration for Landlord's consent to the applicable
assignment or sublease. Landlord may at its option collect directly from
such assignee or sublessee all rents becoming due to Tenant under such
assignment or sublease Tenant hereby authorizes and directs any such
assignee or sublessee to make such payments of rent direct to Landlord
upon receipt of notice from Landlord and Tenant agrees that any such
payments made by an assignee or sublessee to Landlord shall, to the
extent of the payments so made, be a full and complete release and
discharge of rent owed to Tenant by such assignee or sublessee. No
direct collection by Landlord from any such assignee or sublessee shall
be construed to constitute a novation or a release of Tenant or any
guarantor of Tenant from the further performance of its obligations
hereunder. Receipt by Landlord of rent from any assignee, sublessee or
occupant of the Premises or any part thereof shall not be deemed a
waiver of the above covenant in this Lease against assignment and
subletting or a release of Tenant under this Lease. IN THE EVENT THAT,
FOLLOWING AN ASSIGNMENT or subletting, this Lease or Tenant's right to
possession of the Premises is TERMINATED BY LANDLORD FOR ANY REASON,
INCLUDING WITHOUT limitation in connection with default by or bankruptcy
of Tenant (which, for the purposes of this Section 11.2, shall include
all persons or entities claiming by or through Tenant), Landlord may, at
its SOLE OPTION, CONSIDER THIS LEASE TO BE THEREAFTER a direct lease to
the assignee or subtenant of Tenant upon the terms and conditions
contained in this Lease, in which event all rentals payable under such
lease to which Landlord would otherwise be entitled after the
termination of this Lease or Tenant's right to possession of the
Premises shall be deemed the property of Landlord.
SECTION 11.4 ASSIGNMENT AND BANKRUPTCY.
11.401 Assignments after Bankruptcy. If, pursuant to applicable bankruptcy law
(as hereinafter defined in Section 13.104), Tenant (or its successor in
interest hereunder) is permitted to assign this Lease in disregard of
the restrictions contained in this Article I I (or if this Lease shall
be assumed by a trustee for such person), the trustee or assignee shall
cure any default under this Lease and shall provide adequate assurance
of future performance by the trustee or assignee, including (i) THE
SOURCE OF PAYMENT of Basic Annual Rent and performance of other
obligations under this Lease (for which ADEQUATE ASSURANCE SHALL MEAN
THE DEPOSIT of cash security with Landlord in an amount equal to the sum
of one (1) YEAR'S BASIC ANNUAL RENT, ADDITIONAL RENT AND OTHER RENT THEN
RESERVED HEREUNDER FOR THE CALENDAR YEAR PRECEDING the year in which
such ASSIGNMENT IS INTENDED TO BECOME EFFECTIVE, which deposit shall be
held by Landlord, without interest, for the balance of THE TERM AS
SECURITY FOR THE FULL AND FAITHFUL performance of all of the obligations
under this Lease on the part of Tenant yet to be PERFORMED AND THAT ANY
SUCH ASSIGNEE of this Lease shall have a net worth exclusive of good
will, computed in accordance with the generally accepted accounting
principles, equal to at least ten (10) times the aggregate of the Basic
Annual Rent RESERVED HEREUNDER); AND (II) THAT THE USE OF the Premises
shall be in accordance with the requirements of Article 4 hereof and,
FURTHER, SHALL IN NO WAY DIMINISH THE REPUTATION of the Building as a
first-class office building or impose any additional BURDEN UPON THE
Building or increase the
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services to be provided by Lan - lord. If all defaults are not cured and
such adequate ssurance is not provided within sixty (60) days after
there has been an order for relief under applicable bankruptcy law, then
this Lease shall be deemed rejected, Tenant or any other person in
possession shall immediately vacate the Premises, and Landlord shall be
entitled to retain any Basic Annual Rent, Additional Rent and any other
Rent, together with any security deposit previously received from the
Tenant, and shall have no further liability to Tenant or any person
claiming through Tenant or any trustee.
11.402 Bankruptcy of Assignee. If Tenant assigns this Lease to any party and
such party or its successors or representatives causes termination or
rejection of this Lease pursuant to applicable bankruptcy law, then,
notwithstanding any such termination or rejection, Tenant (i) shall
remain fully liable for the performance of all covenants, agreements,
terms, provisions and conditions contained in this Lease, as though the
assignment never occurred and (ii) shall, without in any way limiting
the foregoing, in writing ratify the terms of this Lease, as same
existed immediately prior to the termination or rejection.
ARTICLE 12
TRANSFERS BY LANDLORD, SUBORDINATION AND
TENANT'S ESTOPPEL CERTIFICATE
SECTION 12.1 SALE OF THE PROPERTY. In the event of any transfer of title to the
Building, the transferor shall automatically be relieved and freed of
all obligations of Landlord under this Lease accruing after such
transfer, provided that if a Security Deposit has been made by Tenant,
Landlord shall not be released from liability with respect thereto
unless Landlord transfers the Security Deposit to the transferee and the
transferee assumes in writing the obligations of the Landlord with
respect to the Security Deposit.
SECTION 12.2 SUBORDINATION, ATTORNMENT AND NOTICE. This Lease is subject and
subordinate to (i) any lease wherein Landlord is the tenant and to the
liens of any and all mortgages and deeds of trust, regardless of whether
such lease, mortgage or deed of trust now exists or may hereafter be
created with regard to all or any part of the Property, (ii) any and all
advances (including interest thereon) to be made under any such lease,
mortgage or deed of trust and (iii) all modifications, consolidations,
renewals, replacements and extensions of any such lease, mortgage or
deed of trust; provided that the foregoing subordination in respect of
any mortgage or deed of trust placed on the Property after the date
hereof shall not become effective until and unless the holder of such
mortgage or deed of trust delivers to Tenant a commercially reasonable
non-disturbance agreement (which may include Tenant's agreement to
attorn as set forth below) permitting Tenant, if Tenant is not then in
default under, or in breach of any provision of, this Lease, to remain
in occupancy of the Premises in the event of a foreclosure of any such
mortgage or deed of trust. Tenant also agrees that any lessor, mortgagee
or trustee may elect (which election shall be revocable) to have this
Lease superior to any lease or lien of its mortgage or deed of trust
and, in the event of such election and upon notification by such lessor,
mortgagee or trustee to Tenant to that effect, this Lease shall be
deemed superior to the said lease, mortgage or deed of trust, whether
this Lease is dated prior to or subsequent to the date of said lease,
mortgage or deed of trust. Tenant shall, in the event of the sale or
assignment of Landlord's interest in the Premises (except in a
sale-leaseback financing transaction), or in the event of the
termination of any lease in a sale-leaseback financing transaction
wherein Landlord is the lessee, attorn to and recognize such purchaser,
assignee or mortgagee as Landlord under this Lease, provided that any
purchaser or assignee assumes the obligations of Landlord under this
Lease in writing, or any mortgagee provides Tenant with a nondisturbance
agreement. Tenant shall, in the event of any proceedings brought for the
foreclosure of, or in the event of the exercise of the power of sale
under, any mortgage or deed of trust covering the Premises, attorn to
and recognize purchaser at such sale, assignee or mortgagee, as the case
may be, as Landlord under this Lease, PROVIDED THAT TENANT HAS received
a nondisturbance agreement. 'Me above subordination and attornment
clauses shall be self-operative and no further instruments of
subordination or attornment need be required by any mortgagee, trustee,
lessor, purchaser or assignee. In confirmation thereof, Tenant agrees
that, upon the request of Landlord, or any such lessor, mortgagee,
trustee, purchaser or assignee, Tenant shall execute and deliver
whatever instruments may be reasonably required for such purposes and to
carry out the intent of this Section 12.2.
SECTION 12.3 TENANT'S ESTOPPEL CERTIFICATE. Tenant shall, upon the reasonable
request of Landlord or any mortgagee of Landlord, without additional
consideration, deliver an estoppel certificate, consisting of reasonable
statements required by Landlord, any mortgagee or purchaser of any
interest in the Property, which statements may include but shall not be
limited to the following: this Lease is in full force and effect with
rent paid through a specified date; this Lease has not been modified or
amended; Landlord is not in default and Landlord has fully performed all
of Landlord's obligations hereunder; and such other statements as may
reasonably be required by the requesting party. If Tenant is unable to
make any of the statements contained in the estoppel certificate because
the same is untrue, Tenant shall with specificity state the reason why
such statement is untrue. Tenant shall, if requested by Landlord or any
such mortgagee, deliver to Landlord a fully executed instrument in form
reasonably satisfactory to Landlord evidencing the agreement of Tenant
to the mortgage or other hypothecation by Landlord of the interest of
Landlord hereunder.
ARTICLE 13
DEFAULT
SECTION 13.1 DEFAULTS BY TENANT. The occurrence of any of the events described
in subsections 13. 101 through 13.108 shall constitute a default by
Tenant under this Lease.
13.101 Failure to Pay Rent. With respect to the first two payments of Rent not
made by Tenant WHEN DUE IN ANY TWELVE (12) MONTH period, the failure by
Tenant to make either such payment to Landlord within three (3) business
days after Tenant receives written notice specifying that the payment
was not made when due. With respect to any other payment of Rent, the
failure by Tenant to make such payment of Rent to Landlord when due, no
notice of any such failure being required.
13.102 Failure to Perform. Except for a failure covered by subsection 13. 101
above or 13.103 below, any failure by Tenant to observe and perform any
provision of this Lease to be observed or performed by Tenant where such
failure continues for thirty (30) days after written notice to Tenant,
provided that if such failure cannot be cured within said fifteen (15)
day period, Tenant shall not
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be in default hereunder so long as Tenant commences curative action
within such fifteen (15) day period, diligently and continuously pursues
the curative action and fully and completely cures the failure within
sixty (60) days after such written notice to Tenant.
13.103 Continual Failure to Perform. The third failure by Tenant in any twelve
(12) month period to perform and observe a particular provision of this
Lease to be observed or performed by Tenant (other than the failure to
pay Rent, which in all instances will be covered by subsection 13. 101
above), no notice being required for any such third failure.
13.104 Bankruptcy, Insolvency, Etc. Tenant or any guarantor of Tenant's
obligations hereunder (hereinafter called "Guarantor", whether one (1)
or more), (i) declared insolvent according to any law, (ii) makes a
transfer in fraud of creditors according to any applicable law, (iii)
assigns or conveys all or a substantial portion of its property for the
benefit of creditors, or (iv) Tenant or Guarantor files a petition for
relief under the Federal Bankruptcy Code or any other present or future
federal or state insolvency, bankruptcy or similar law (collectively,
"applicable bankruptcy law"); a receiver or trustee is appointed for
Tenant or Guarantor or its property; the interest of Tenant or Guarantor
under this Lease is levied on under execution or under other legal
process; any involuntary petition is filed against Tenant or Guarantor
under applicable bankruptcy law; or any action is taken in bankruptcy to
reorganize or modify Tenant's or Guarantor's capital structure if either
Tenant or Guarantor be a corporation or other entity (provided that no
such levy, execution, legal process or petition filed against Tenant or
Guarantor shall constitute a breach of this Lease if Tenant or Guarantor
shall vigorously contest the same by appropriate proceedings and shall
remove or vacate the same within ninety (90) days from the date of its
creation, service or filing).
13.105 Intentionally Omitted.
13.106 Intentionally Omitted.
13.107 Loss of Right to do Business. If Tenant is a corporation or limited
partnership, Tenant fails to maintain its right to do business in the
State of Texas or fails to pay any applicable annual franchise taxes as
and when same become finally due and payable, and Tenant fails to cure
within thirty (30) days following notice of such failure.
13.108 Dissolution or Liquidation. If Tenant is a corporation or partnership,
Tenant dissolves or liquidates or otherwise fails to maintain its
corporate or partnership structure, as applicable, and Tenant fails to
cure within thirty (30) days following notice of such failure.
With respect to the defaults described in subsections 13.103 through
13.108, Landlord shall not be obligated to give Tenant notices of
default and Tenant shall have no right to cure such defaults.
SECTION 13.2 REMEDIES OF LANDLORD.
13.201 Termination. of the Lease. Upon the occurrence of a default by Tenant
hereunder, Landlord may, without judicial process, terminate this Lease
by giving written notice thereof to Tenant (whereupon all obligations
and liabilities of Landlord hereunder shall terminate) and, without
further notice and without liability, repossess the Premises. Landlord
shall be entitled to recover all loss and damage Landlord may suffer by
reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise, including without
limitation, the following (without duplication of any element of
damages):
(a) accrued Rent to the date of termination and Late Charges, plus
interest thereon at the rate established under Section 15. 10 below
from the date due through the date paid or date of any judgment or
award by any court of competent jurisdiction, the unamortized cost
of Tenant's Improvements, brokers' fees and commissions, attorneys'
fees, moving allowances and any other costs incurred by Landlord in
connection with making or executing this Lease, the cost of
recovering the Premises and the reasonable costs of reletting the
Premises (including, without limitation, advertising costs,
brokerage fees, leasing commissions, reasonable attorneys' fees and
refurbishing costs and other costs in readying the Premises for a
new tenant);
(b) the present value of the Rent (discounted at a rate of interest
equal to eight percent [8%] per annum [the "Discount Rate"]) that
would have accrued under this Lease for the balance of the Lease
term but for such termination, reduced by the reasonable fair market
rental value of the Premises for such balance of the Lease term
(determined from the present value of the actual base rents,
discounted at the Discount Rate, received and to be received from
Landlord's reletting of the Premises or, if the Premises are not
relet, the base rents, discounted at the Discount Rate, that with
reasonable efforts could be collected by Landlord by reletting the
Premises, calculated in accordance with subsection 13.206);
(c) plus any other costs or amounts reasonably necessary to compensate
Landlord for its damages.
13.202 Repossession and Re-Entry. Upon the occurrence of a default by Tenant
hereunder, LANDLORD MAY, WITHOUT JUDICIAL PROCESS, immediately terminate
Tenant's right of possession of the Premises (whereupon all OBLIGATIONS
AND LIABILITY OF LANDLORD hereunder shall terminate), but not terminate
this Lease, and, without notice, demand or liability, enter upon the
Premises or any part thereof, take absolute possession of the same,
expel or remove Tenant and any OTHER PERSON OR ENTITY WHO MAY BE
OCCUPYING the Premises and change the locks. If Landlord terminates
Tenant's possession of THE PREMISES UNDER THIS SUBSECTION 13.202, (i)
Landlord shall have no obligation whatsoever to tender to Tenant a key
for new LOCKS INSTALLED IN THE PREMISES, (ii) Tenant shall have no
further right to possession of the Premises and (iii) Landlord will HAVE
THE RIGHT TO RELET THE PREMISES or any PART THEREOF on such TERMS AS
LANDLORD DEEMS advisable, taking into account the FACTORS DESCRIBED IN
SUBSECTION 13.206. Any rent received by Landlord from reletting the
Premises or a part thereof shall be applied first, to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord (in
such order as Landlord shall designate), second, to the payment of any
cost of such reletting, including, without limitation, refurbishing
costs, reasonable attorneys' fees, advertising costs, brokerage fees and
leasing commissions and third, to the payment of Rent due and unpaid
hereunder (in such order as Landlord shall designate), and Tenant shall
satisfy and pay to Landlord any deficiency upon demand therefor from
time to time. Landlord shall not be responsible or liable for any
failure to relet the Premises or any PART THEREOF OR FOR ANY FAILURE to
collect
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any rent due upon any such reletting No such re-entry or taking of
possession of the Premises by Landlord shall be construed as an election
on Landlord's part to terminate this Lease unless a written notice of
such termination is given to Tenant pursuant to subsection 13.201 above.
If Landlord relets the Premises, either before or after the termination
of this Lease, all such rentals received from such lease shall be and
remain the exclusive property of Landlord and Tenant shall not be, at
any time, entitled to recover any such rental. Any rents received shall
be credited against amounts owed by Tenant. Landlord may at any time
after a reletting elect to terminate this Lease.
13.203 Cure of Default. Upon the occurrence of a default hereunder by Tenant,
Landlord may, without judicial process and without having any liability
therefor, enter upon the Premises and do whatever Tenant is obligated to
do under the terms of this Lease and Tenant agrees to reimburse Landlord
on demand for any expenses which Landlord may incur in effecting
compliance with Tenant's obligations under this Lease, and Tenant
further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action, WHETHER CAUSED BY THE NEGLIGENCE
OF LANDLORD OR OTHERWISE, UNLESS CAUSED BY LANDLORD'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
13.204 Continuing Obligations. No repossession of or re-entering upon the
Premises or any part thereof pursuant to subsection 13.202 or 13.203
above or otherwise and no reletting of the Premises or any part thereof
pursuant to subsection 13.202 above shall relieve Tenant or any
Guarantor of its liabilities and obligations hereunder, all of which
shall survive such repossession or re-entering. In the event of any such
repossession of or re-entering upon the Premises or any part thereof by
reason of the occurrence of a default, Tenant will continue to pay to
Landlord Rent required to be paid by Tenant.
13.205 Cumulative Remedies. No right or remedy herein conferred upon or
reserved to Landlord is intended to be exclusive of any other right or
remedy set forth herein or otherwise available to Landlord at law or in
equity and each and every right and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now or
hereafter existing at law or in equity or by statute. In addition to the
other remedies provided in this Lease and without limiting the preceding
sentence, Landlord shall be entitled, to the extent permitted by
applicable law, to injunctive relief in case of the violation, or
attempted or threatened violation, of ANY of the covenants, agreements,
conditions or provisions of this Lease, or to a decree compelling
performance of any of the covenants, agreements, conditions or
provisions of this Lease, or to any other remedy allowed to Landlord at
law or in equity.
13.206 Mitigation of Damages. For purposes of determining any recovery of rent
or damages by Landlord that depends upon what Landlord could collect by
using reasonable efforts to relet the Premises, whether the
determination is required under subsections 13.201 or 13.202 or
otherwise, it is understood and agreed that:
(a) Landlord may reasonably elect to lease other comparable, available
space in the Building, if any, before reletting the Premises.
(b) Landlord may reasonably decline to incur out-of-pocket costs to
relet the Premises, other than customary leasing commissions and
legal fees for the negotiation of a lease with a new tenant.
(c) Landlord may reasonably decline to relet the Premises at rental
rates below then prevailing market rental rates, because of the
negative impact lower rental rates would have on the value of the
Building and because of the uncertainty of actually receiving from
Tenant the greater damages that Landlord would suffer from and after
reletting at the lower rates.
(d) Before reletting the Premises to a prospective tenant, Landlord may
reasonably require the prospective tenant to demonstrate the same
financial wherewithal that Landlord would require as a condition to
leasing other space in the Building to the prospective tenant.
(e) Identifying a prospective tenant to relet the Premises, negotiating
a new lease with such tenant and making the Premises ready for such
tenant will take time, depending upon market conditions when the
Premises first become available for reletting, and during such time
Landlord cannot reasonably be expected to collect any revenue from
reletting.
(f) Listing the Premises with a broker in a manner consistent with parts
(a) through (e) above constitutes reasonable efforts on the part of
Landlord to relet the Premises.
SECTION 13.3 DEFAULTS BY LANDLORD. Landlord shall be in default under this Lease
if Landlord fails to perform any of its obligations hereunder and said
failure continues for a period of fifteen (15) days after Tenant
delivers written notice thereof to Landlord (to each of the addresses
required by this Section) and each mortgagee who has a lien against any
portion of the Property and whose name and address has been provided to
Tenant, provided that if such FAILURE CANNOT REASONABLY BE CURED WITHIN
said fifteen (15) day period, Landlord shall not be in default hereunder
if the curative action is commenced within said fifteen (15) day period
and is thereafter diligently pursued until cured. In no event shall (i)
Tenant claim a constructive or actual eviction or that the Premises have
become unsuitable hereunder or (ii) a constructive or actual eviction or
breach of the implied warranty of suitability be deemed to have occurred
under this Lease, prior to the expiration of THE NOTICE AND CURE PERIODS
PROVIDED under this Section 13.3. Any notice of a failure to perform by
Landlord shall be sent to Landlord at the addresses and to the attention
of the parties set forth in the Basic Lease Provisions. Any notice of a
failure to perform by Landlord not sent to Landlord at all addresses
and/or to the attention of all parties required under this Section and
to each mortgagee who is entitled to notice or not sent in compliance
with Article 14 below shall be of no force or effect.
SECTION 13.4 LANDLORD'S LIABILITY.
13.401 Tenant's Rights in Respect of Landlord Default. Tenant is granted no
contractual right of termination by this Lease, except to the extent and
only to the extent set forth in Sections 7.1 and 8.2 above and Rider H-
I attached hereto If Landlord is in default, Tenant's exclusive remedy
shall bean action for damages. If Tenant shall recover a money judgment
against Landlord, such
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judgment shall be satisfied only out of the right, title and interest of
Landlord in the Property as the same may then be encumbered and Landlord
shall not be liable for any deficiency. If Landlord is found to be in
default hereunder by reason of its failure to give a consent that it is
required to give hereunder, Tenant's sole remedy will be an action for
specific performance or injunction. The foregoing sentence shall in no
event be construed as mandatorily requiring Landlord to give consents
under this Lease. In no event shall Landlord be liable to Tenant for
consequential or special damages by reason of a failure to perform (or a
default) by Landlord hereunder or otherwise. In no event shall Tenant
have the right to levy execution against any property of Landlord other
than its interest in the Property as hereinbefore expressly provided.
13.402 Certain Limitations on Landlord's Liability. UNLESS COVERED BY
SUBSECTION 7.502 ABOVE OR CAUSED BY LANDLORD'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT AND WITHOUT LIMITING THE PROVISIONS OF SECTION 7.4,
LANDLORD SHALL NOT BE LIABLE TO TENANT FOR ANY CLAIMS, ACTIONS, DEMANDS,
COSTS, EXPENSES, DAMAGE OR LIABILITY OF ANY KIND (i) arising out of the
use, occupancy or enjoyment of the Premises by Tenant or any person
therein or holding under Tenant or by or through the acts or omissions
of any of their respective employees, officers, agents, invitees or
contractors, (ii) caused by or arising out of fire, explosion, falling
sheetrock, gas, electricity, water, rain, snow or dampness, or leaks in
any part of the Premises, (iii) caused by or arising out of damage to
the roof, pipes, appliances or plumbing works or any damage to or
malfunction of heating, ventilation or air conditioning equipment, or
(iv) caused by tenants or any persons either in the Premises or
elsewhere in the Building (other than Common Areas) or by occupants of
property adjacent to the Building or Common Areas or by the public or by
the construction of any private, public or quasi-public work. In no
event shall Landlord be liable to Tenant for any loss of or damage to
property of Tenant or of others located in the Premises, the Building or
any other part of the Property by reason of theft or burglary.
SECTION 13.5 WAIVER OF TEXAS DECEPTIVE TRADE PRACTICES ACT
TENANT HEREBY WAIVES ALL ITS RIGHTS UNDER THE TEXAS DECEPTIVE TRADE PRACTICES
- CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ. OF THE TEXAS BUSINESS AND
COMMERCE CODE (THE "DTPA"), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH AN AT-▇▇▇▇▇▇ OF TENANT'S OWN SELECTION,
TENANT VOLUNTARILY CONSENTS TO THIS WAIVER.
SECTION 13.6 LANDLORD'S LIEN. Intentionally Omitted.
ARTICLE 14
NOTICES
Any notice or communication required or permitted in this Lease shall be
given in writing, sent by (a) personal delivery, with proof of delivery,
(b) expedited delivery service, with proof of delivery, (c) United
States mail, postage prepaid, registered or certified mail, return
receipt requested or (d) prepaid telegram (provided that such telegram
is confirmed by expedited delivery service or by mail in the manner
previously described), addressed as provided in Item 13 of the Basic
Lease Provisions and Section 13.3 above or to such other address or to
the attention of such other person as shall be designated from time to
time in writing by the applicable party and sent in accordance herewith.
Notice also may be given by telex or fax, provided each such
transmission is confirmed (and such confirmation is supported by
documented evidence) as received and further provided a telex or fax
number, as the case may be, is set forth in Item 13 of the Basic Lease
Provisions. Any such notice or communication shall be deemed to have
been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at
the address and in the manner provided herein, or in the case of
telegram or telex or fax, upon receipt.
ARTICLE 15
MISCELLANEOUS PROVISIONS
SECTION 15.1 BUILDING NAME AND ADDRESS. Tenant shall not, without the written
consent of Landlord, use the name of the Building for any purpose other
than as the address of the business to be conducted by Tenant in the
Premises and in no event shall Tenant acquire any rights in or to such
names. Landlord shall have the right at any time to change the name,
number or designation by which the Building is known, upon reasonable
notice to Tenant.
SECTION 15.2 SIGNAGE. Except as provided below, Tenant shall not inscribe,
paint, affix or display any signs, advertisements or notices on or in
the Building, except for such tenant identification information as
Landlord permits to be included or shown on the directory in the main
lobby and adjacent to the access door or doors to the Premises. Landlord
agrees that Tenant may, at Tenant's expense, maintain a sign over its
reception desk (or at such other location visible from the elevator
lobby of the Building) bearing Tenant's name (subject to Landlord's
reasonable approval of the size, DESIGN, FORM, CONTENT AND LOCATION of
such sign) on each floor of the Building on which any part of the Leased
Premises are located. Tenant shall be solely responsible for all costs
of designing, installing and repairing such signage, diligently
construct such building signage to completion in a good and workmanlike
manner and maintain such signage in an attractive condition, and comply
with all governmental codes and regulations. Landlord shall, at
Landlord's expense, maintain a Building directory, and shall furnish
Tenant with space on the directory identifying Tenant.
SECTION 15.3 NO WAIVER. No waiver by Landlord or by Tenant of any provision of
this Lease shall be deemed to be a waiver by either party of any other
provision of this Lease. No waiver by Landlord of any breach by Tenant
shall be deemed a waiver of any subsequent breach by Tenant of the same
or any other provision. No waiver by Tenant of any breach by Landlord
shall be deemed a waiver of any subsequent breach by Landlord of the
same or any other provision. The failure of Landlord or Tenant to insist
at any time upon the strict performance of any covenant or agreement or
to exercise any option, right, power or remedy contained in this Lease
shall not be construed as a waiver or a relinquishment THEREOF FOR THE
FUTURE. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary
the obtaining of Landlord's consent to or approval of any subsequent act
of Tenant. Tenant s consent to or approval of any act by Landlord
requiring Tenant's consent or approval shall not be deemed to render
unnecessary the obtaining of Tenant's consent
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to or approval of any subsequent act of Landlord. No act or thing done
by Landlord or Landlord's agents during the term of this Lease shall be
deemed an acceptance of a surrender of the Premises, unless done in
writing signed by Landlord. The delivery of the keys to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises. The acceptance of any Rent by Landlord
following a breach of this Lease by Tenant shall not constitute a waiver
by Landlord of such breach or any other breach. The payment of Rent by
Tenant following a breach of this Lease by Landlord shall not constitute
a waiver by Tenant of any such breach or any other breach. No waiver by
Landlord or Tenant of any provision of this Lease shall be deemed to
have been made unless such waiver is expressly stated in writing signed
by the waiving party. No payment by Tenant or receipt by Landlord of a
lesser amount than the monthly installment of Rent due under this Lease
shall be deemed to be other than on account of the earliest Rent due
hereunder, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as Rent be deemed an accord and
satisfaction and Landlord may accept such check or payment without
'prejudice to Landlord's right to recover the balance of such rent or
pursue any other remedy which may be available to Landlord.
SECTION 15.4 APPLICABLE LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Texas.
SECTION 15.5 COMMON AREAS. "Common Areas" will mean all areas, spaces,
facilities and equipment (whether or not located within the Building)
made available by Landlord for the common and joint use of Landlord,
Tenant and others designated by Landlord using or occupying space in the
Building, including but not limited to, tunnels, walkways, sidewalks and
driveways necessary for access to the Building, Building lobbies,
landscaped areas, public corridors, public rest rooms, Building stairs,
elevators open to the public, service elevators (provided that such
service elevators shall be available only for TENANTS OF the Building
and others designated by Landlord), drinking fountains and any such
other areas and facilities, if any, as are designated by Landlord from
time to time as Common Areas. "Service Corridors" shall mean all loading
docks, loading areas and all corridors that are not open to the public
but which are available for use by Tenant and others designated by
Landlord. "Service Areas" will refer to areas, spaces, facilities and
equipment serving the Building (whether or not located within the
Building) but to which Tenant and other occupants of the Building will
not have access, including, but not limited to, mechanical, telephone,
electrical and similar rooms and air and water refrigeration equipment.
Tenant is hereby granted a nonexclusive right to use the Common Areas
and Service Corridors during the term of this Lease for their intended
purposes, in common with others designated by Landlord, subject to the
terms and conditions of this Lease, including, without limitation, the
Rules and Regulations. The Building, Common Areas, Service Corridors and
Service Areas will be at all times under the exclusive control,
management and operation of the Landlord. Tenant agrees and acknowledges
that the Premises (whether consisting of less than one floor or
consisting of one or more full floors within the Building) do not
include, and Landlord hereby expressly reserves for its sole and
exclusive use, any and all mechanical, electrical, telephone and similar
rooms, janitor closets, elevator, pipe and other vertical shafts and
ducts, flues, stairwells, any area above the acoustical ceiling and any
other areas not specifically shown on Exhibit A as being part of the
Premises.
SECTION 15.6 SUCCESSORS AND ASSIGNS. Subject to Article I I hereof, all of the
covenants, conditions and provisions of this Lease shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
SECTION 15.7 BROKERS. Tenant warrants that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in Item 9 of the Basic Lease Provisions
and that it knows of no other real estate brokers or agents who are or
might be entitled to a commission in connection with this Lease. Tenant
agrees to indemnify and hold harmless Landlord from and against any
liability or claim, whether meritorious or not, arising in respect to
brokers and/or agents not so named. Landlord has agreed to pay the fees
of the broker (but only the broker) named in Item 9 of the Basic Lease
Provisions to the extent that Landlord has agreed to do so pursuant to a
written agreement with such broker.
SECTION 15.8 SEVERABILITY. If any provision of this Lease or the application
thereof to any person or circumstances shall be invalid or unenforceable
to any extent, the application of such provisions to other persons or
circumstances and the remainder of this Lease shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
SECTION 15.9 EXAMINATION OF LEASE. Submission by Landlord of this instrument to
Tenant for examination or signature does not constitute a reservation of
or option for lease. This Lease will be effective as a lease or
otherwise only upon execution by and delivery to both Landlord and
Tenant.
SECTION 15.10 INTEREST ON TENANT'S OBLIGATIONS. Any amount due from Tenant to
Landlord which is not paid within thirty (30) days after the date due
shall bear interest at the lower of (i) ten percent (10%) per annum or
(ii) the highest rate from time to time allowed by applicable law, from
the date such payment is due until paid, but the payment of such
interest shall not excuse or cure the default.
SECTION 15.11 TIME. Time is of the essence in this Lease and in each and all of
the provisions hereof. Whenever a period of days is specified in this
Lease, such period shall refer to calendar days unless otherwise
expressly stated in this Lease.
SECTION 15.12 DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as singular. If
more than one person is named as Tenant, the obligations of such persons
are joint and several. The headings and titles to the articles, sections
and subsections of this Lease are not a part of this Lease and shall
have no effect upon the construction or interpretation of any part of
this Lease.
SECTION 15.13 AUTHORITY OF TENANT. Tenant and each person signing this Lease on
behalf of Tenant represents to Landlord as follows: Tenant, if a
corporation, is duly incorporated and legally existing under the laws of
the state of its incorporation and is duly qualified to do business in
the State of Texas. Tenant, if a partnership or joint venture, is duly
organized under the Texas Uniform Partnership Act. Tenant, if a limited
partnership, is duly organized under the applicable limited partnership
act of the State of Texas or, if organized under the laws of a state
other than Texas, is qualified under said Texas limited partnership act.
Tenant has all requisite power and all governmental certificates of
authority, licenses, permits,
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qualifications and other documentation to lease the Premises and to
carry on its business as now conducted and as contemplated to be
conducted. Each person signing on behalf of Tenant is authorized to do
so. The foregoing representations in this Section 15.13 shall also apply
to any corporation, partnership, joint venture or limited partnership
which is a general partner or joint venturer of Tenant.
SECTION 15.14 FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, the party taking the action
shall not be liable or responsible for, and there shall be excluded from
the computation for any such period of time, any delays due to strikes,
riots, acts of God, shortages of labor or materials, war, governmental
laws, regulations or restrictions or any other causes of any kind
whatsoever which are beyond the reasonable control of such party;
provided, however, in no event shall the foregoing apply to the
financial obligations of either Landlord or Tenant to the other under
this Lease, including Tenant's obligation to pay Basic Annual Rent,
Additional Rent or any other amount payable to Landlord hereunder.
SECTION 15.15 RECORDING. This Lease shall not be recorded. However, Landlord
shall have the right to record a short form or memorandum hereof, at
Landlord's expense, at any time during the term hereof and, if
requested, Tenant agrees (without charge to Landlord) to join in the
execution thereof.
SECTION 15.16 NO REPRESENTATIONS. Landlord and Landlord's agents have made no
warranties, representations or promises (express or implied) with
respect to the Premises, the Building or any other part of the Property
(including, without limitation, the condition, use or suitability of the
Premises, the Building or the Property), except as herein expressly set
forth and no rights, easements or licenses are acquired by Tenant by
implication or otherwise except as expressly set forth in the provisions
of this Lease.
SECTION 15.17 PARKING. If the Property includes a Garage, there shall be an
Exhibit F. If there is no Garage included in the Property, then the
remaining provisions of this Section shall be applicable with respect to
parking. The parking areas shall be designated for automobile parking on
a non-exclusive basis for all Property tenants (including Tenant) and
their respective employees, customers, invitees and visitors. Parking
and delivery areas for all vehicles shall be in accordance with parking
regulations established from time to time by Landlord, with which Tenant
agrees to conform. Tenant shall only permit parking by its employees,
customers and agents of automobiles in appropriate designated parking
areas.
SECTION 15.18 ATTORNEYS' FEES. In the event of any legal action or proceeding
brought by either party against the other arising out of this Lease, the
prevailing party shall be entitled to recover reasonable attorneys' fees
and costs incurred in such action (including, without limitation, all
costs of appeal) and such amount shall be included in any judgment
rendered in such proceeding.
SECTION 15.19 NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
light, air or view by any structure which may be erected on the Property
or lands adjacent to the Property shall in no way affect this Lease or
impose any liability on Landlord (even if Landlord is the adjacent land
owner).
SECTION 15.20 SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold
harmless agreement contained herein shall survive the expiration or
termination of this Lease.
SECTION 15.21 ENTIRE AGREEMENT. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this
Lease and no prior agreement, understanding or representation pertaining
to any such matter shall be effective for any purpose. No provision of
this Lease may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors in interest.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Lease, as of the date first written in this Lease.
LANDLORD:
B.0. 111, LTD.
By: Office/Industrial, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
TENANT:
IXC COMMUNICATIONS SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: VP
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EXHIBIT A
FLOOR PLAN FOR THE PREMISES
A-1
25
EXHIBIT B
LAND LEGAL DESCRIPTION
BUILDING: Barton Oaks III
LEGAL DESCRIPTION: ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Condominium, a
condominium project in ▇▇▇▇▇▇ County, Texas, according to
the second Amended and Restated Declaration of Condominium
for Barton Oaks Plaza Condominium and amendments thereto,
recorded in Volume 12236, Page 567 of the Real Property
Records of ▇▇▇▇▇▇ County, Texas, together with an
undivided interest in and to the common elements
appurtenant thereto.
ADDRESS: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
B-1
26
EXHIBIT C
INTENTIONALLY OMITTED
C-1
27
EXHIBIT D
WORK LETTER
PLANS TO BE AGREED UPON/FINISH ALLOWANCE
This Exhibit is attached to and apart of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B. 0. 111, LTD.,
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:
I . Plans.
1.1 Space Plan. On or before November 7 , 1998 , Landlord's designated space
planner, at Tenant's expense, shall prepare and deliver to Tenant a space plan
for the Premises showing, regardless of the quantities of such items, the
location of all partitions and doors and the lay-out of the Premises. Tenant
will at all times cooperate with Landlord's space planner, furnishing all
reasonable information and material concerning Tenant's organization, staffing,
growth expectations, physical facility needs (including, without limitation,
needs arising by reason of the Disability Acts), equipment, inventory, etc.,
necessary for the space planner to efficiently and expeditiously arrive at an
acceptable lay-out of the Premises. Tenant will approve or disapprove in writing
the space plan within five (5) business days after receipt from Landlord and if
disapproved, Tenant shall provide Landlord and Landlord's space planner with
specific reasons for disapproval. If Tenant fails to approve or disapprove the
space plan on or before the end of such five (5) business day period, Tenant
shall be deemed to have approved the last submitted space plan. The foregoing
process shall be repeated until Tenant has approved (which shall include deemed
approval) the space plan (such space plan, when approved by Landlord and Tenant,
is herein referred to as the "Space Plan").
1.2 Compliance With Disability Acts. Tenant shall promptly provide Landlord and
Landlord's space planner and/or architect as applicable, with all information
needed to cause the construction of Tenant's Improvements to be completed such
that Tenant, the Premises and Tenant's Improvements (as constructed) will be in
compliance with the Disability Acts. TENANT SHALL BE RESPONSIBLE FOR AND SHALL
INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL CLAIMS,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION REASONABLE ATTORNEYS'
FEES AND EXPENSES) INCURRED BY OR ASSERTED AGAINST LANDLORD BY REASON OF OR IN
CONNECTION WITH ANY VIOLATION OF THE DISABILITY ACTS ARISING FROM OR OUT OF (x)
information or design and space plans furnished to Landlord by Tenant (or the
lack of complete and accurate information so furnished) concerning Tenant's
Improvements, (y) Tenant's employer-employee obligations, or (z) after the
Commencement Date, violations by Tenant and/or Tenant's Improvements or the
Premises not being in compliance with the Disability Acts as the result of
changes in regulations or law or interpretations thereof not in effect on the
Commencement Date. The foregoing indemnity shall not include any claims,
liabilities or expenses (including reasonable attorneys' fees and expenses)
arising out of the negligence or gross negligence of Landlord or Landlord's
employees, agents or contractors. Without limiting the foregoing, if Landlord
constructs Tenant's Improvements based on any special requirements or
improvements required by Tenant, or upon information furnished by Tenant that
later proves to be inaccurate or incomplete resulting in any violation of the
Disability Acts, Tenant shall be solely liable to correct such violations and to
bring the improvements into compliance with the Disability Acts as promptly as
is practicable.
1.3 Construction Plans. On or before fifteen (15) days after approval of the
Space Plan, the Design and Color Scheme and the Above Standard Product
Specification List by Landlord and Tenant, Landlord's space planner and
engineer, at Tenant's expense, will prepare construction plans (such
construction plans, when approved, and all changes and amendments thereto agreed
to by Landlord and Tenant in writing, are herein called the "Construction
Plans") for all of Tenant's improvements requested pursuant to the Space Plan,
the Design and Color Scheme and the Above Standard Product Specification List
(all improvements required by the Construction Plans are herein called "Tenant's
Improvements"), including complete detail and finish drawings for partitions,
doors, reflected ceiling, telephone outlets, electrical switches and outlets and
Building standard heating, ventilation and air conditioning equipment and
controls. Within ten (10) business days after construction plans are delivered
to Tenant, Tenant shall approve (which approval shall not be unreasonably
withheld) or disapprove same in writing and if disapproved, Tenant shall provide
Landlord and Landlord's space planner and engineer specific reasons for
disapproval. The foregoing process shall continue until the construction plans
are approved by Tenant; provided that if Tenant fails to respond in any ten (10)
business day period, Tenant shall be deemed to have approved the last submitted
construction plans.
1.4 Changes to Approve Plans. If any re-drawing or re-drafting of either the
Space Plan or the Construction Plans is necessitated by Tenant's requested
changes (all of which shall be subject to approval by Landlord and, if
applicable, the Texas Department of Licensing & Regulation and any other
governmental agency or authority to which the plans and specifications are
required to be submitted), the expense of any such re-drawing or re-drafting
required in connection therewith and the expense of any work and improvements
necessitated by such re-drawing or re-drafting will be charged to Tenant.
1.5 Coordination of Planners and Designers. If Tenant shall arrange for interior
design services, whether with Landlord's space planner or any other planner or
designer, it shall be Tenant's responsibility to cause necessary coordination of
its agents' efforts with Landlord's agents to ensure that no delays are caused
to either the planning or construction of the Tenant's Improvements.
1.6 Building Shell. Landlord shall perform the following Building shell work at
Landlord's sole cost and expense:
(a) Building standard VAV system, rigid duct work, perimeter slot diffusers
(excluding internal zone flex duct and supply grills).
(b) Building standard window treatments.
(c) Building standard ceiling grid installed with 2 x 4 ceiling tile
stacked on the floor and 2 x 4 parabolic light fixtures at a ratio of 1
per 90 useable square feet stacked on the floor.
(d) Sprinkler heads installed at 1 per 225 useable square feet.
(e) All Building common areas installed.
▇-▇
▇▇
▇. Construction and Costs of Tenant's Improvements.
2.1 Construction Obligatio and Finish Allowance.
(a) Landlord agrees to construct Tenant's Improvements, at Tenant's cost
and expense; provided, however, Landlord shall provide Tenant with an
allowance of $15.00 per rentable square foot in the Premises (the
"Finish Allowance"), which allowance shall be disbursed by Landlord,
from time to time, for payment of (in the following priority) (i) the
contract sum required to be paid to the general contractor engaged to
construct Tenant's Improvements, which contract sum shall include
without limitation, the costs of any and all payment and performance
bonds required by Landlord in connection with the construction of
Tenant's Improvements and any other costs incurred by such general
contractor to comply with the construction requirements applicable to
the Building (THE "CONTRACT SUM"), (II) THE FEES of the preparer of the
Construction Plans, (iii) payment of the Construction Management Fee
(hereinafter defined), and (iv) such other costs related to the
leasehold improvements (such as equipment, appliances and furnishings)
as Tenant shall specify. Upon completion of Tenant's Improvements and
in consideration of Landlord administering the construction of Tenant's
Improvements, Tenant agrees to pay Landlord a fee equal to four percent
(4%) of the Contract Sum to construct Tenant's Improvements (the
"Construction Management Fee") (the foregoing costs are collectively
referred to as the "Permitted Costs").
(b) Title to any equipment, appliances, furnishings or personalty installed
in the Premises and purchased with any portion of the Finish Allowance
shall pass to Landlord upon payment of the invoice cost thereof and
Tenant shall not remove any such equipment, appliances, furnishings or
personalty from the Premises without Landlord's express, prior written
consent or unless requested by Landlord in connection with the
expiration or earlier termination of the Lease.
2.2 Excess Costs. If the sum of the Permitted Costs exceeds the Finish
Allowance, then Tenant shall pay all such excess costs ("Excess Costs"),
provided, however, Landlord will, prior to the commencement of construction of
Tenant's Improvements, advise Tenant of the Excess Costs, if any, and the
Contract Sum. Tenant shall have five (5) business days from and after the
receipt of such advice within which to approve or disapprove the Contract Sum
and Excess Costs. If Tenant fails to approve same by the expiration of the
second such business day, then Tenant shall be deemed to have approved the
Proposed Contract Sum and Excess Costs. If Tenant disapproves the Contract Sum
and Excess Costs within such five (5) business day period, then Tenant shall
either reduce the scope of Tenant's Improvements such that there shall be no
Excess Costs or, at Tenant's option, Landlord shall obtain two (2) additional
bids, provided that each day beyond such five (5) business day period and until
the rebid is accepted by Tenant shall constitute a Tenant Delay hereunder.
Subject to the last sentence of this subsection, the foregoing process shall
continue until a Contract Sum and resulting Excess Costs, if any, are accepted
or deemed accepted by Tenant. Landlord and Tenant must approve (or be deemed to
have approved) the Contract Sum for the construction of Tenant's Improvements in
writing prior to the commencement of construction. If Tenant fails to accept a
Contract Sum by December 15, 1998, Tenant will be in Tenant delays. If Landlord
does not complete the premises within sixty (60) days after the later to occur
of (i) the date Tenant approves the contract sum and (ii) the date a building
permit for the construction of the Tenant's Improvement is issued. Landlord
shall incur a $ 1,000.00 per day penalty for each day delay.
2.3 Liens Arising from Excess Costs. Tenant agrees to keep the Premises free
from any liens arising out of nonpayment of Excess Costs. In the event that any
such lien is filed and Tenant, within thirty (30) days following such filing
fails to cause same to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to cause the same to be released by
such means as it in its sole discretion deems proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by Landlord in
connection therewith shall constitute Rent under the Lease and a demand
obligation of Tenant to Landlord and such obligation shall bear interest at the
rate provided for in Section 15. 10 of the Supplemental Lease Provisions from
the date of payment by Landlord until the date paid by Tenant.
2.4 Construction Deposi . Tenant shall remit to Landlord an amount (the
"Prepayment") equal to fifty percent (50%) of the projected Excess Costs, if
any, within five (5) working days after commencement of construction by
Landlord. On or prior to the Commencement Date, Tenant shall deliver to Landlord
the actual Excess Costs, minus the Prepayment previously paid. FAILURE BY TENANT
TO TIMELY TENDER to Landlord the full Prepayment shall permit Landlord to stop
all work until the Prepayment is received. All sums due Landlord under this
Section 2.4 shall be considered Rent under the terms of the Lease and nonpayment
shall constitute a DEFAULT UNDER THE LEASE AND entitle Landlord to any and all
remedies specified in the Lease.
3. Delays. Delays in the completion of construction of Tenant's Improvements or
in obtaining a certificate of occupancy, if required by the applicable
governmental authority, caused by Tenant, Tenant's Contractors (hereinafter
defined) or any person, firm or corporation employed by Tenant or Tenant's
Contractors shall constitute "Tenant Delays". In the event THAT TENANT'S
IMPROVEMENTS ARE not Substantially Complete by the Commencement Date referenced
in Item 6 of the Basic Lease Provisions, then the Commencement Date referenced
in Item 6 shall be amended to be the Adjusted Substantial Completion Date
(hereinafter defined) and the Expiration Date referenced in Item 7 of the Basic
Lease Provisions shall be adjusted forward by the same number of days as is the
Commencement Date, so that the term of the Lease will be the term set forth in
Item 5 of the Basic Lease Provisions. The Adjusted Substantial Completion Date
shall be the date Tenant's Improvements are Substantially Complete, adjusted
backward, however, by one day for each day of Tenant Delays, if any. The
foregoing adjustments in the Commencement Date and the Expiration Date shall be
Tenant's sole and exclusive remedy in the event Tenant's Improvements are not
Substantially Complete by the initial Commencement Date set FORTH IN ITEM 6 OF
the Basic Lease Provisions.
4. Substantial Completio and Punch List. The terms "Substantial Completion" and
"SUBSTANTIALLY COMPLETE," AS APPLICABLE, SHALL mean ten (10) days after the date
when Tenant's Improvements are sufficiently completed in accordance with the
Construction Plans and a certificate of occupancy has been issued for the
Premises so that Tenant can reasonably use the Premises for the Permitted Use
(as described in Item 10 of the Basic Lease Provisions). When Landlord considers
Tenant's Improvements to be SUBSTANTIALLY COMPLETE,
D-2
29
Landlord will notify Tenant and within two (2) business days thereafter,
Landlord's representative and Tenant's representative shall conduct a
walk-through of the Premises and identify any necessary touch-up work, repairs
and minor completion items as are necessary FOR FINAL COMPLETION ofTenant's
Improvements. Neither Landlord's representative nor Tenant's representative
shall unreasonably withhold his agreement on punch list items. Landlord will use
reasonable efforts to cause the contractor to complete all punch list items
within thirty (30) days after agreement thereon.
5. Tenant's Contractors. If Tenant should desire to enter the Premises or
authorize its agent to do so prior to the Commencement Date of the Lease, to
perform approved work not requested of the Landlord, Landlord shall permit such
entry if
(a) Tenant shall use only such contractors which Landlord shall approve in
its reasonable discretion and Landlord shall have approved the plans to
be utilized by Tenant, which approval will not be unreasonably
withheld; and
(b) Tenant, its contractors, workmen, mechanics, engineers, space planners
or such others as may enter the Premises (collectively, "Tenant's
Contractors"), work in harmony with and do not in any way disturb or
interfere with Landlord's space planners, architects, engineers,
contractors, workmen, mechanics or other agents or independent
contractors in the performance of their work (collectively, "Landlord's
Contractors"), it being understood and agreed that if entry of Tenant
or Tenant's Contractors would cause, has caused or is causing a
material disturbance to Landlord or Landlord's Contractors, then
Landlord may, with notice, refuse admittance to Tenant or Tenant's
Contractors causing such disturbance; and
(c) Tenant (notwithstanding the first sentence of subsection 7.201 of the
Supplemental Lease Provisions), Tenant's Contractors and other agents
shall provide Landlord sufficient evidence that each is covered under
such Worker's Compensation, public liability and property damage
insurance as Landlord may reasonably request for its protection.
Landlord shall not be liable for any injury, loss or damage to any of Tenant's
installations or decorations made prior to the Commencement Date and not
installed by Landlord. Tenant shall indemnify and hold harmless Landlord and
Landlord's Contractors from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Premises by or on behalf of Tenant (but excluding work
performed by Landlord or Landlord's Contractors). Landlord is not responsible
for the function and maintenance of Tenant's Improvements which are different
than Landlord's standard improvements at the Property or improvements,
equipment, cabinets or fixtures not installed by Landlord. Such entry by Tenant
and Tenant's Contractors pursuant to this Section 5 shall be deemed to be under
all of the terms, covenants, provisions and conditions of the Lease except the
covenant to pay Rent,
6. Construction Representatives. Landlord's and Tenant's representatives for
coordination of construction and approval of change orders will be as follows,
provided that either party may change its representative upon written notice to
the other:
LANDLORD'S REPRESENTATIVE:
NAME: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
ADDRESS: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
PHONE: ▇▇▇.▇▇▇.▇▇▇▇
TENANTS REPRESENTATIVE:
NAME: ADDRESS:__________________________
__________________________
PHONE:__________________________________
__________________________________
D-3
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EXHIBIT E
ACCEPTANCE OF PREMISES MEMORANDUM
THIS Acceptance of Premises Memorandum is being executed pursuant to that
certain Lease Agreement (the "Lease") between B. 0. 111, LTD., ("Landlord"), and
IXC COMMUNICATIONS SERVICES, INC., ("Tenant"), pursuant to which Landlord leased
to Tenant and Tenant leased from Landlord certain space in the office building
located at 901 S. Mopac Expressway Building III in Austin, Texas (the
"Building"). Landlord and Tenant hereby agree that:
1. Except for the Punch List Items (as shown on the attached Punch List),
Landlord has fully completed the construction work required under the terms
of the Lease and the Work Letter attached thereto.
2. The Premises are tenantable, Landlord has no further obligation for
construction (except with respect to Punch List Items) and Tenant
acknowledges that the Building, the Premises and Tenant's Improvements are
satisfactory in all respects, except for the Punch List Items and are
suitable for the Permitted Use.
3. The Commencement Date of the Lease is ______________. If the date set forth
in Item 6 of the Basic Lease Provisions is different than the date set
forth in the preceding sentence, then Item 6 of the Basic Lease Provisions
is hereby amended to be the Commencement Date set forth in the preceding
sentence.
4. The Expiration Date of the Lease is ________________ If the date set forth
in Item 7 of the Basic Lease Provisions is different than the date set
forth in the preceding sentence, then Item 7 of the Basic Lease Provisions
is hereby amended to be the Expiration Date set forth in the preceding
sentence.
5. Tenant acknowledges receipt of the current Rules and Regulations for the
Building.
6. Tenant represents to Landlord that Tenant has obtained a Certificate of
Occupancy covering the Premises.
7. Tenant's telephone number at the Premises is ____________________. Tenant's
facsimile number at the Premises is ______________.
8. All capitalized terms not defined herein shall have the meaning assigned to
them in the Lease.
AGREED and EXECUTED this ____________day of ___________________, ________.
LANDLORD:
B.O. III, LTD.
By: Office/Industrial, Inc.,
General Partner
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT:
IXC COMMUNICATIONS SERVICES, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
Address: _______________________________
________________________________________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
GARAGE PARKING AGREEMENT
RESERVED AND NON-RESERVED PARKING SPACES
This Exhibit is attached to and apart of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B. 0. 111, LTD.,
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:
1. PARKING Spaces. So long as the Lease remains in effect, Tenant or
persons designated by Tenant shall have the right (but not the
obligation) to rent in the Garage on (i) a reserved basis up to five (5)
parking spaces in the Garage during the term of this Lease and (ii) an
unreserved and non-exclusive basis up to 84 parking spaces in the Garage
during the term of this Lease.
2. Parking RENTAL. On the execution date of the Lease, the monthly rate for
each unreserved parking space is $0.00 plus applicable sales tax and the
monthly rate for each reserved parking space is $0.00 plus applicable
sales tax. Landlord shall provide Tenant at least thirty (30) days
notice of any change in the parking rates at the Garage and the giving
of such notice shall be deemed an amendment to this Agreement and Tenant
shall thereafter pay the adjusted rent. All payments of rent for parking
spaces shallbe made (i) at the same time as Basic Monthly Rent is due
under the Lease and (ii) to Landlord or to such persons (for example but
without limitation, the manager of the Garage) as Landlord may direct
from time to time.
3. LOST ▇▇▇▇▇▇ CARDS. There will be a replacement charge payable by Tenant
equal to the amount posted from time to time by Landlord for loss of any
magnetic parking card or parking sticker issued by Landlord.
4. VALIDATION. Tenant may validate visitor parking, by such method or
methods as Landlord or the Garage operator may approve, at the
validation rate from time to time generally applicable to visitor
parking. Landlord expressly reserves the right to redesignate parking
areas and to modify the parking structure for other uses or to any
extent.
5. PARKING STICKERS AND CARDS. Parking stickers or any other device or form
of identification supplied by Landlord shall remain the property of
Landlord and shall not be transferable.
6. DAMAGE TO OR CONDEMNATION OF GARAGE. If Landlord fails or is unable to
provide any parking space to Tenant in the Garage because of damage or
condemnation, such failure or inability shall never be deemed to be a
default by Landlord as to permit Tenant to terminate the Lease, either
in whole or in part, but Tenant's obligation to pay rent for any such
parking space which is not provided by Landlord shall be abated for so
long as Tenant does not have the use of such parking space and such
abatement shall constitute full settlement of all claims that Tenant
might otherwise have against Landlord by reason of such failure or
inability to provide Tenant with such parking space.
7. RULES AND REGULATIONS. A condition of any parking shall be compliance by
the ▇▇▇▇▇▇ with Garage rules and regulations, including any sticker or
other identification system established by Landlord. Garage managers or
attendants are not authorized to make or allow any exceptions to these
Rules and Regulations. The following rules and regulations are in effect
until notice is given to Tenant of any change. Landlord reserves the
right to modify and/or adopt such other reasonable and generally
applicable rules and regulations for the Garage as it deems necessary
for the operation of the Garage.
(a) Cars must be parked entirely within the stall lines painted on the
floor.
(b) All directional signs and arrows must be observed,
(c) The speed limit shall be five (5) miles per hour.
(d) Parking is prohibited in areas not striped for parking, aisles,
areas where "no parking" signs are posted, in cross hatched areas
and in such other areas as may be designated by Landlord or
Landlord's agent(s) including, but not limited to, areas designated
as "Visitor Parking" or reserved spaces not rented under this
Agreement.
(e) Every ▇▇▇▇▇▇ is required to park and lock his own car. All
responsibility for damage to cars or persons or loss of personal
possessions is assumed by the ▇▇▇▇▇▇.
(f) Spaces which are designated for small, intermediate or full-sized
cars shall be so used. No intermediate or full-size cars shall be
parked in parking spaces limited to compact cars.
8. DEFAULT. Failure to promptly pay the rent required hereunder shall
constitute a default under the Lease and Landlord, may, at
its option and in addition to all other remedies provided for in the
Lease, terminate Tenant's rights to use the Garage. Landlord may refuse
to permit any person who violates the rules to park in the Garage and
any violation of the rules shall subject the car to removal at the car
owner's expense. No such refusal or removal shall create any liability
on Landlord or be deemed to interfere with Tenant's right to quiet
possession of the Premises.
F-1
32
RIDER 1
RIGHT TO AUDIT
This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998 executed by and between B. 0. 111, LTD.
("Landlord") and IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). ANY CAPITALIZED
TERM USED BUT NOT DEFINED herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:
Tenant shall have the right to perform an annual audit at Tenant's
expense on Landlord's books and records to the extent necessary to verify
Landlord's calculation of actual Additional Rent for the prior calendar year,
provided the auditor's report reflecting the results of such audit shall be
promptly delivered to Landlord. Any such audit shall be conducted, if at all,
(i) within sixty (60) days after the receipt of the annual statement of actual
Additional Rent from Landlord, (ii) during Landlord's normal business hours,
(iii) at the place where Landlord maintains its records (or such other place as
Landlord shall deliver the appropriate records) and (iv) only after Landlord has
received ten (10) days prior written notice. If the audit report reflects that
estimated Additional Rent was overcharged or undercharged in the audited
calendar year and provided Landlord does not successfully dispute such audit,
Tenant shall within thirty (30) days following receipt of thereof report pay to
Landlord the amount of any underpayment or, if applicable, Landlord shall allow
Tenant a credit against the next accruing installments of Additional Rent in the
amount of any overpayment or if the Term has expired, or is about to expire,
Landlord shall pay such overpayment to Tenant within thirty (30) days after the
audit. Landlord shall reimburse Tenant for one-half (1/2) the reasonable cost of
any audit which results in a five percent (5 %) or greater reduction of Tenant's
pro rata share of Operating Expenses.
Rider 1
33
RIDER 2
RIGHT TO SUBLEASE OR ASSIGN TO AFFILIATE
AND ADDITIONAL SUBLEASING RIGHTS
This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998. executed by and between B.O. III, LTD ("Landlord")
and IXC COMMUNICATIONS SERVICES, INC ("Tenant"). Any capitalized term used but
not defined herein shall have the meaning assigned to it in the provisions
designated in the Lease as the Supplemental Lease Provisions. Landlord and
Tenant mutually agree as follows:
Notwithstanding the restrictions against assignment and subleasing
contained in Sections 11. 1 and 11.2 of the Supplemental Lease Provisions,
Tenant may, without the prior written consent of Landlord, but only after giving
Landlord at least thirty (30) days prior written notice (Which notice shall
include the identity of the Affiliate (hereinafter defined) and the relationship
of the Affiliate to Tenant), sublet the Premises or any put thereto or any part
thereof to an Affiliate or assign this Lease to an Affiliate or permit occupancy
of any portion of the Premises by an Affiliate. If Tenant is a partnership, the
term "Affiliate" shall mean (i) any entity which, directly or indirectly,
controls or is controlled by or is under common control with the general partner
of Tenant (ii) any entity not less than fifty percent (50%) of whose outstanding
stock shall, at the firm be owned directly or indirectly by Tenant's general
partner or (iii) any partnership or joint venture in which Tenant or the general
partner of Tenant is a general partner or joint venturer (with joint and several
liability for all of the partnership's or venture's obligations). If Tenant is a
corporation, limited liability company or individual, the term "Affiliate" shall
mean (i) any entity which, directly or indirectly, controls or is controlled by
or is under common control with Tenant or (ii) any corporation or limited
liability company not less than fifty percent (50%) of whose outstanding stock
or interests shall, at the time, be owned directly or indirectly by Tenant or
Tenant's parent corporation or limited liability company. For purposes of this
Rider, "control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such entity,
whether through the ownership of voting securities or by contract or otherwise
and ownership of the liabilities, losses, profits and tax benefits for such
entity.
In addition, Tenant shall have the right to assign or otherwise transfer
this Lease Agreement to any parent subsidiary or affiliate of itself or any
corporation into which it may be merged or consolidated or which purchases all
or substantially all of its assets; provided, however, that any such assignment
or transfer shall be subject to Landlord's rights under THIS Lease Agreement and
any assignee or transferee shall commit to perform Tenant's obligations to
Landlord under THIS Lease Agreement Further, notwithstanding the restrictions
against subleasing contained in Sections 11. 1 and 11.2 of the Supplemental
Lease Provisions, Tenant may, without the prior written consent of Landlord,
permit the occupancy by or sublease up to forty-five percent (45%) of the Agreed
Rentable Area of office space within the Premises to an entity related to
Tenant; provided that the portion of the Premises subject to such occupancy or
sublease shall not be separately demised from the remaining Premises. It is the
intent of the Landlord and Tenant that the right described in the foregoing
sentence is to be used by Tenant in connection with permitting the occupancy of
or subleasing a particular office or offices within the Premises to a third
party, but not to permit the related entity to occupy separate space which is
directly accessible without entering the Premises. In the event Tenant grants
any occupancy rights or executes any sublease pursuant to the provisions of THIS
paragraph, then notwithstanding anything to the contrary in Article I I of the
Lease, Landlord shall not be entitled to cancel the Lem with respect to such
space and Landlord shall not be entitled to any compensation in connection
therewith.
Rider 2
34
RIDER 3
CAP ON CERTAIN OPERATING EXPENSES
This Rider is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998, executed by and between B.0. 111, LTD.
("Landlord"), and, IXC COMMUNICATIONS SERVICES, INC. ("Tenant"). Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
provisions designated in the Lease as the Supplemental Lease Provisions.
Landlord and Tenant mutually agree as follows:
For the purpose of determining Additional Rent, Operating Expenses
(exclusive of the Non-Capped Operating Expenses, as hereinafter defined) for any
calendar year shall not be increased over the amount of Operating Expenses
(exclusive of Non-Capped Operating Expenses) during the calendar year in which
the term of this Lease commences by more than EIGHT percent (8%) per year on a
cumulative basis, compounded annually. For example, if Operating Expenses
(exclusive of Non-Capped Operating Expenses) during the calendar year in which
the term of this Lease commences were $ 100,000, the cap on Operating Expenses
(exclusive of Non-Capped Operating Expenses) for the fourth full calendar year
would be $ , 136,048.89 ($ 100,000 times 1.08 times 1.08 times 1.08 times 1.28).
It is understood and agreed that there shall be no cap on Non-Capped Operating
Expenses, which are hereby defined to mean all Utility Expenses and Insurance
Premiums.
Rider 3
35
RIDER H-1
TENANT'S STUDY, TESTING AND INSPECTION RIGHTS
This Exhibit is attached to and a part of that certain Lease Agreement
dated as of December 7, 1998 executed by and between B.0. 111, LTD. ("Landlord")
and IXC COMMUNICATIONS SERVICES- INC. ("Tenant"). Any capitalized term used but
not defined herein shall have the meaning assigned to it in the provisions
designated in the Lease as the Supplemental Lease Provisions. Landlord and
Tenant mutually agree as follows:
Prior to commencement of any tenant finish work to be performed by
Landlord, Tenant shall have the right to make such studies and investigations
and conduct such tests and surveys of the Premises from an environmental
standpoint as Tenant deems necessary or appropriate, subject to the condition
that all such studies and investigations shall be completed prior to the
commencement of any tenant finish work to be performed by Landlord. TENANT SHALL
INDEMNIFY AND HOLD HARMLESS LANDLORD FROM, AND REIMBURSE LANDLORD FOR AND WITH
RESPECT TO, ANY AND ALL LOSS, DAMAGES, AND CLAIMS RESULTING FROM OR RELATING TO
TENANT'S STUDIES, TESTS AND INVESTIGATIONS. If such study, test, investigation
or survey evidences hazardous or toxic materials which affect the Premises,
Tenant shall have the right to terminate this Lease provided such right shall be
exercised, if at all, prior to the commencement of any tenant finish work to be
performed by Landlord and, in any event, within five (5) days after Tenant
receives the evidence of hazardous or toxic materials. If Tenant does not
exercise such right prior to commencement of any such tenant finish work and
within such five (5) day period, Tenant's right to terminate this Lease shall be
null and void and of no further force or effect.