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EXHIBIT 10.2.2
LEASE AGREEMENT
VENTURE TECHNOLOGY CENTER VII BUILDING
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
THIS LEASE AGREEMENT (the "Lease") is made and entered into on this
the________ day of_______________ , 1997, between THE WOODLANDS COMMERCIAL
PROPERTIES COMPANY, L.P., a Texas limited partnership, ("Lessor"), and TELXON
CORPORATION, a Delaware corporation, ("Lessee").
l. Premises. Lessor hereby leases to Lessee and Lessee hereby takes
from Lessor, 69,671 net rentable square feet of floor space ("Premises"),
together with all appurtenances thereto, in a building known and referred to as
Venture Technology Center VII Building ("Building"), located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇. The Building is located on
Restricted Reserve "A", being that certain 7.754 acre tract of land, out of The
Woodlands Medical Research Park Section 7, according to the map or plat thereof
recorded in Cabinet J, Sheet 69 of the Real Property Records of ▇▇▇▇▇▇▇▇▇▇
County, Texas, as more particularly described in Exhibit "A" attached hereto
("Land"). The Building will contain 69,671 net rentable square feet of floor
space. The Premises are shown on the floor plan attached hereto as Exhibit
"A-1". Lessor reserves the right to change the name of the Building whenever it
desires without any liability or consent of Lessee.
2. Loading Dock and Parking. In addition to the Premises, Lessee and
its invitees are hereby granted the exclusive right to use the loading dock for
the Building. Lessee shall also have the right to park 243 automobiles in the
parking areas provided by Lessor on the Land, and the nonexclusive right to park
25 automobiles in the parking area located on both the Land and lands southeast
of the Land ("Shared Parking Area") shown on the site plan attached as Exhibit
"G" attached hereto. Lessor shall keep in good condition throughout the Term
described below the parking areas for and vehicular access ways to the Premises.
There will be no parking fees charged to Lessee during the Term or any renewal
thereof pursuant to the terms of this Lease. The use of such loading dock and
parking and access areas shall at all times be subject to such reasonable rules
and regulations as Lessor may promulgate.
3. Term. The term of this Lease ("Term") shall commence on that date
("Commencement Date") which is the earlier of (i) June 1, 1998, or (ii) 30 days
after the date of substantial completion of the Premises, including leasehold
improvements within the space as described in the Tenant Improvement Addendum
("Tenant Improvement Addendum") attached hereto as Exhibit "B", so long as
during the 30 day period, the Premises are used only for the purposes of moving
in office furniture and equipment and telephone and cable installation, or (ii)
occupancy of the Premises for the purpose of conducting the business described
in Section 4, and shall expire on the last day of the one hundred and
twenty-first (121st) full calendar month following the Commencement Date,
subject to earlier termination as hereinafter provided. Lessor shall not be
liable or responsible for any claims, damages or liabilities of any nature
whatsoever in connection with or by reason of any delayed occupancy, except that
if the Premises are not substantially complete by October 1, 1998,
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Lessee may terminate the Lease by written notice to Lessor at any time prior to
substantial completion. Within 15 days following Lessee's receipt from Lessor of
a memorandum of this Lease specifying the Commencement Date, the date of
expiration of the Term, and the Base Rent (as described in Section 7 hereof)
Lessee agrees to execute the memorandum.
4. Use. Lessee shall use the entire Premises solely for general office
and engineering design, product development, and incidental uses related
thereto, and for no other use.
5. Acceptance of the Premises. Upon taking possession of all or any
portion of the Premises, Lessee shall be deemed to have accepted the Premises,
to have acknowledged that the same are in the condition called for hereunder and
to have agreed that the obligations of the Lessor imposed by the Tenant
Improvement Addendum have been fully performed. Lessee hereby waives any implied
warranty, except as may be provided for in the Tenant Improvement Addendum, of
Lessor that the Premises are suitable for their intended commercial purpose and
acknowledges and agrees that all of Lessee's obligations hereunder (including
without limitation, the obligation to pay rent) are independent of any such
implied warranty and agrees to perform all such obligations and pay rent
notwithstanding any breach or allegation of breach by Lessor of any such implied
warranty (which implied warranty as aforesaid is hereby waived by Lessee).
6. Security Deposit. INTENTIONALLY DELETED.
7. Base Rent. The Base Rent, which Lessee hereby agrees to pay to
Lessor monthly, in advance, at Lessor's address stated above, shall be the
monthly sum calculated as described in Article 8 of the Tenant Improvement
Addendum, due and payable on the first day of each calendar month during the
Term hereof, without offset or deduction, with a pro rata portion being due and
payable in advance for any partial month occurring at the beginning of the Term.
8. Additional Rent. Lessee agrees to pay all Operating Expenses (as
defined in Section 10 below) for the Premises. Prior to the Commencement Date,
Lessor will provide Lessee a statement showing Lessor's reasonable estimate of
the Operating Expenses for the then current Fiscal Year and the Additional Rent
due. Within 90 days following the completion of each Fiscal Year thereafter,
Lessor will provide to Lessee a statement showing in reasonable detail the
Operating Expenses for the preceding Fiscal Year, the Additional Rent due, and
Lessor's reasonable estimate of Operating Expenses for the then current Fiscal
Year. A listing of the current categories of Operating Expenses ("Operating
Expense Categories") used by Lessor are set out in Exhibit "E" attached hereto.
The Operating Expense Categories may change from time to time in Lessor's
reasonable discretion. Lessee shall, on or before 30 days following receipt of
said statement, pay to Lessor the amount of Additional Rent due as provided
herein, less the amount of Additional Rent paid in advance (if any) during the
preceding Fiscal Year. Any overpayment will be paid to Lessee within 30 days of
the determination of such overpayment. Lessee agrees to pay Additional Rent each
month thereafter, in addition to Base Rent, in an amount necessary to amortize
the estimated Operating Expenses for the then current Fiscal Year over a period
equal to the lesser of (i) the number of months remaining in the Term on a pro
rata basis or (ii) the number of months remaining in the current Fiscal Year.
Notwithstanding that the Term has expired or been terminated, Lessee shall
remain liable for and agrees to pay to Lessor within 30 days following receipt
of an invoice therefor, its pro rata share of Operating Expenses for the Fiscal
Year during which the Term expired or was
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terminated, but only for those months prior to expiration of the Term. The term
"Fiscal Year", as used herein, shall mean Lessor's fiscal year for accounting
purposes which currently is the 12-month period beginning January 1 and ending
December 31. Lessor shall have the right to change the Fiscal Year, from time to
time, and, in such event, Lessor shall notify Lessee in writing of such change.
Lessee shall have the right, at its sole expense and at a reasonable time within
2 years after the date the statement is provided to Lessee, to audit Lessor's
books relevant to the Additional Rent due under this Section. If any audit,
which is not being paid for on a "contingency" basis, determines a discrepancy
of 5% or more in the total (aggregate) Operating Expenses, Lessor shall
reimburse Lessee for the reasonable costs of the audit, not to exceed $2,500.00.
9. Payment of Rentals. Lessee covenants to promptly pay all rentals
when due and payable. Lessor shall have the right to charge a late charge of 10%
of any payment of Base Rent or Additional Rent which is more than 10 days past
due in order to compensate Lessor for the extra administrative expenses
incurred. Lessor shall ▇▇▇▇ Lessee for any applicable late charge.
Notwithstanding anything contained herein to the contrary, the late charge will
be waived the first 2 times during each Fiscal Year the rental is more than 10
days past due provided Lessee pays the late rental within 5 business days after
written notice from Lessor. If Lessor shall pay any monies or incur any expenses
in correction of violations of the covenants herein set forth applicable to
Lessee, the amounts so paid or incurred shall, on notice to Lessee, be
considered additional rent payable by Lessee with the first installment of Base
Rent thereafter to become due and payable, and may be collected or enforced as
by law provided in respect of rentals.
10. Operating Expenses. The term "Operating Expenses" means all of
Lessor's costs, expenses and disbursements (but not acquisition of capital
investment items, except as hereinafter expressly provided or specific costs
billed to specific lessees) to operate and maintain the Land, the Building, and
all improvements on the Land from time to time (to the extent and only to the
extent same are Lessor's obligation to pay or furnish under the other provisions
of this Lease), including, but not limited to, Lessor's costs of providing
utilities, including, but not limited to lighting; ▇▇▇▇▇▇ services and supplies;
refuse removal; landscaping, including irrigation; and general maintenance and
repairs, including, but not limited to, repairs to roof surface and preventive
maintenance, parking area restriping, exterior painting and other activities.
Operating Expenses shall also include a reasonable amortization charge on
account of any capital expenditure incurred to effect a reduction of Operating
Expenses and a reasonable charge for amortization of all capital items Lessor
installs (a) to reduce Operating Expenses; however, Lessor shall perform a cost
justification showing that the anticipated reduction in Operating Expenses is
greater than the amortization amount (inclusive of finance charges) related to
such installation, or (b) to promote safety, or (c) which Lessor is required to
install on or for the benefit of the Building by any governmental law, code or
regulation passed or enacted on or after the Commencement Date, or (d) which is
a replacement (as opposed to additions or new improvements) of items located in
the common areas adjacent to the Building, the parking area and other facilities
used in connection with the Building, or involving the exterior of the Building,
including, but not limited to, the roof and structural elements. With respect to
(b), (c) and (d), the amortization shall be based on the useful life of such
capital expenditure, together with interest thereon, at the Prime Rate, adjusted
daily on the unamortized balance thereof. "Prime Rate" as used herein shall mean
the varying per annum rate of interest then most recently established and
announced by BankBoston, N.A., at its head office in Boston, Massachusetts, as
its "Base Rate" of interest with each such change in such per annum rate to
become effective on the effective date of each such
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change. Additionally, Operating Expenses shall include all ad valorem taxes or
assessments, and Annual Assessments of The Woodlands Community Association, Inc.
and The Woodlands Commercial Owners Association, whichever is applicable, which
accrue against the Building or the Land during the Term, together with all
insurance premiums which Lessor is required to pay or deems necessary to pay
with respect to the Building or the Land, including, but not limited to,
casualty insurance and liability insurance, and a management fee ("Management
Fee") of 4% of Lessee's annual Base Rent (no Additional Rent shall be included).
Further, Operating Expenses shall include 50% of Lessor's costs to operate and
maintain the Shared Parking Area. Estimated Operating Expenses for Fiscal Year
1998 for the different Operating Expense Categories are set forth on Exhibit "F"
attached hereto. The figures are estimated only and are subject to change based
on the actual Operating Expenses.
Notwithstanding anything contained herein to the contrary, Operating
Expenses shall not include those items set forth on Exhibit "D".
11. Utilities. Lessor shall make available to the Building gas,
electricity, water and sewer facilities. Lessee agrees to assume all costs and
expenses for water and sewer, gas, electricity, telephone, and any other service
needed for its use at the Premises, including any license or deposit required to
establish or maintain such services, and the costs of installation, hook-up and
metering (which will be part of Project Costs described in the Tenant
Improvement Addendum). Lessee shall promptly pay for all utility services
furnished to the Premises during the term of this Lease. Lessor shall under no
circumstances be liable to Lessee in damage or otherwise for any interruption in
service of water, electricity, heating, air conditioning or other utilities or
services caused by governmental regulation, emergencies, Acts of God, by the
making of any necessary repairs or improvements, or by any cause beyond Lessor's
reasonable control. Lessor shall endeavor in good faith to give at least 24
hours notice to Lessee when any necessary interruption in service will be made
by Lessor and will use reasonable efforts to minimize such interruption in
service.
12. Peaceful Enjoyment. Lessee shall and may peacefully have, hold and
enjoy the Premises for the Term, subject to the terms and conditions of this
Lease, provided that Lessee pays the rentals and other sums herein recited and
performs all of its covenants and agreements herein contained. It is understood
and agreed that this covenant and any and all other covenants of Lessor
contained in this Lease shall be binding upon Lessor and its successors and
assigns, but only with respect to breaches occurring during its and their
respective ownership of Lessor's interest hereunder.
13. Alterations, Additions and Improvements. Lessee shall not make or
allow to be made any alterations or physical additions in or to the Premises
without first obtaining the written consent of Lessor. Lessor will approve or
disapprove Lessee's request for the right to make alterations or physical
additions to the Premises within 5 days after Lessee's written request. Lessor
shall not be liable as a result of any such consent for completeness, design
sufficiency, or compliance with any law, ordinance, order, rule, or regulation
and Lessee shall indemnify, defend and hold Lessor harmless from all claims,
demands, damages, causes of action or litigation, arising out of or resulting
from such consent. Any and all alterations, additions or improvements shall be
made at Lessee's sole expense, except as may be otherwise provided in the Tenant
Improvement Addendum. All such alterations, additions or improvements shall,
upon completion, become the property of Lessor, and shall be surrendered to
Lessor upon the termination of this Lease by lapse of time or otherwise, unless
at the
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time Lessor approves Lessee's request to Lessor to make an alteration and/or
physical addition to the Building or Premises, Lessor advises Lessee that such
alteration or physical addition must be removed at the end of the Term, such
removal, if approved, being subject to repair by Lessee of all damage to the
Premises incurred in removing the alteration or physical addition. The preceding
sentence shall not apply to removable equipment or furniture owned by Lessee and
which can be removed without damage to the Building or the Premises, provided
there is no default by Lessee in any of the terms and conditions of the Lease.
14. Exterior Repairs. Lessor will keep in good order and repair the
exterior of the Building, including any doors, windows, roof, all entrances and
driveways, landscaping, sidewalks, ponds/lakes, parking lot, or glass, in
repair, provided Lessee shall give Lessor written notice of the necessity for
such repairs ("Exterior Repairs"). All Exterior Repairs are included in
Operating Expenses. Lessor shall be under no liability for costs of repair,
maintenance, alteration or any other action with reference to any plumbing,
electrical or other mechanical installation within or serving the Premises or
any part thereof, except for the service lines leading to the Premises. Lessor
shall maintain the Building and the Land consistent with similar properties in
the greater Houston area. Lessor agrees that Lessee will receive the benefit of
all applicable warranties received by Lessor on the improvements and mechanical
systems and will assist in enforcement of the warranties for the benefit of
Lessee.
15. Operation by Lessee. Lessee agrees to (a) keep the inside of all
glass in the doors and windows of the Premises clean; (b) replace promptly, at
its expense, any cracked or broken window glass inside the Premises with glass
of like kind and quality; (c) maintain the Premises in a clean, orderly and
sanitary condition and free of insects, rodents, vermin and other pests; (d)
keep any garbage, trash, rubbish or refuse in rat-proof containers within the
interior of the Premises until removed from the area; (e) keep all mechanical
apparatus free of vibration, noise or pollution which may be transmitted beyond
the Premises; (f) comply with all laws, ordinances, rules and regulations of the
Fire Underwriters Rating Bureau now or hereafter in affect within the Premises;
and (g) conduct its business in all respects in a dignified manner in accordance
with industry standards of business operation.
In addition, Lessee shall not (a) place or maintain any merchandise or
other articles on the exterior of the Premises or Building without the written
consent of Lessor; (b) permit undue accumulation of garbage, trash, rubbish or
other refuse within or without the Premises; (c) cause or permit objectionable
odors to emanate or be dispelled from the Premises; (d) cause or permit the
parking of vehicles so as to interfere with the use of any driveway, walk,
parking area, dock or other common facility in the area; (e) occupy, use or
permit the use or occupancy of any portion of the Premises for any business or
purpose which is immoral, disreputable or in violation of any legal direction of
any public officer; or (f) occupy, use or permit the use or occupancy of any
portion of the Premises for any business or purpose which, in the opinion of
Lessor, reasonably formed, constitutes a public or private nuisance.
Lessee agrees to discharge all waste materials from the Premises in
compliance with the rules and regulations as set forth in The Woodlands Metro
Center Municipal Utility District Policy Manual - Industrial Waste Discharges -
Permits and Charges - No. R&S-50, issued July 12, 1979, with an effective date
of July 12, 1979, a copy of which is attached hereto as Exhibit "H", as it may
be
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amended from time to time. Lessee shall haul away for disposal at its own
expense, any waste material not meeting the standards for discharge set forth in
the above-referenced manual.
As of the Commencement Date, Lessee shall comply, at Lessee's cost and
expense, with all private restrictions, as may be imposed as set forth in
Section 38, encumbering the Land and all present and future laws, ordinances,
orders, rules, regulations and requirements of all federal, state, and municipal
governments, including all municipal and road utility districts and municipal
utility districts, and all departments, commissions, boards and officers
thereof, and any other body exercising similar functions, which now or hereafter
may be applicable to Lessee's occupancy of the Premises, the improvements in the
Premises, or to the use or manner of use of the Premises or the improvements,
including but not limited to, all environmental laws and the Americans With
Disabilities Act, except as set forth below. In the event of a violation of any
environmental law by Lessee and cleanup of contamination is required, in
addition to all other remedies of Lessor under this Lease or at law or in
equity, Lessee shall conduct only a Risk Reduction Standard 1 cleanup as
described in the 30 Texas Administrative Code Section 335.554 so that there is a
total and complete removal of all contaminates from the Premises, except for any
condition that may have occurred prior to Lessee taking occupancy, and no deed
recordation notice is recorded in the Real Property Records of ▇▇▇▇▇▇▇▇▇▇
County, Texas, against the Land. Lessee agrees that no such cleanup shall be
subject to any other type of risk reduction standard. By execution of the Lease,
Lessee acknowledges receipt of a copy of the Environmental Report dated March 5,
1997, prepared by Ground Water Services, Inc.
Lessee also agrees to comply with the Rules and Regulations of the
Building, a copy of which is attached as Exhibit "C". Lessor may amend said
Rules and Regulations, from time to time, if reasonably necessary for the
safety, care, or cleanliness of the Building, provided that no amendment shall
alter any covenant or provision contained in this Lease. Lessee agrees to comply
with any amendment which is made to said rules and Regulations in compliance
with the terms of this subsection.
16. Interior Repairs and Maintenance. Lessee will, at Lessee's cost and
expense, keep the interior of the Premises, together with all electrical,
plumbing and other mechanical installations therein, all heating and air
conditioning equipment ("AC Equipment"), and all interior windows or doors
serving the Premises, in good order and repair, and will make all replacements
thereto as its expense. Lessee will surrender the Premises at the expiration or
earlier termination of this Lease, in as good condition as of the Commencement
Date, excepting depreciation caused by ordinary wear and tear or fire or
casualty, in which case, Section 23 shall apply. Notwithstanding anything
contained herein to the contrary, if Lessee has replaced the AC Equipment and/or
any building standard capital equipment ("Replaced Equipment") during the Term,
provided there is no monetary default by Lessee and Lessee has maintained the
Replaced Equipment as provided herein, Lessor shall reimburse Lessee for
Lessor's pro rata share of the cost of the Replaced Equipment calculated as
follows: Reasonable cost of the Replaced Equipment ("Cost") Minus an amount
equal to Cost divided by the useful life (in months) of the Replaced Equipment
Times the number of months from installation of the Replaced Equipment until
termination of the Lease. Lessee will not overload the electrical wiring serving
the Premises or within the Premises, and will install at its expense, but only
after obtaining Lessor's written approval, any additional electrical service
which may be required in connection with Lessee's use or occupancy.
Notwithstanding anything herein to the contrary, Lessor,
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and not Lessee, shall be liable for any and all interior repairs which may
result from any structural failure of the Building, unless caused by the
negligence or willful act or omission of Lessee, its agents, employees or
invitees. Lessee will repair promptly, at its expense, any damage to the
Premises caused by bringing into the Premises any property for Lessee's use, or
by the installation or removal of such property, regardless of fault or by whom
such damage was caused, unless caused by Lessor, its agents, employees or
contracts. Upon execution of this Lease, Lessee, at its own cost and expense,
shall enter into a regularly scheduled preventative maintenance/service contract
with Lessor, or a maintenance contractor approved by Lessor, which approval
shall not be unreasonably withheld or delayed, for servicing all hot water,
heating, and air-conditioning systems and equipment within the Premises. If
Lessee fails to make such repairs and/or to perform the maintenance and repairs
to the Premises which are Lessee's obligation under this Lease, within 10 days
after written notice from Lessor, Lessor may make same, and Lessee agrees to
pay, as additional rent, the cost thereof, plus 10% overhead, to Lessor promptly
upon Lessor's demand therefor. Lessor warrants and represents that as of the
Commencement Date all mechanical, plumbing, and electrical systems will be in
good order and repair.
17. Roof and Walls. Lessor or its designee shall have the exclusive
right to install, maintain, use, repair and replace within the Premises, pipes,
ducts, conduits, wires and all other mechanical equipment serving other parts of
the Building, the same to be in locations within the Premises as will not
materially interfere with Lessee's use thereof. Lessee shall have no right to
penetrate or erect improvements on the roof without the prior written consent of
Lessor. Lessee shall be liable in damages to Lessor for any breach of this
provision, including damages for loss of any and all warranties. Lessor agrees
that so long as Lessee is occupying the entire Premises and is not in monetary
default in any of the terms and conditions of the Lease, Lessor will not provide
a license to use the roof to any other person or entity.
18. Signs and Advertising. Lessee will not place or suffer to be placed
or maintained on or displaced to the exterior of the Premises, any sign,
advertising matter or other thing of any kind, and will not place or maintain
any decoration, lettering or advertising matter on the glass of any window or
door of the Premises without first obtaining the written approval of Lessor.
Lessee will maintain any approved sign, decoration, lettering, advertising
matter or other thing in good condition and repair at all times. Lessee may
install a sign panel on the monument sign for the Building, which monument sign
will also include the street address of the Building. Lessee shall pay for all
costs related to its sign panel and the installation of the panel. So long as
Lessee is the only lessee in the Building, no other name shall appear on the
sign panel.
19. Entry by Lessor. Lessee shall permit Lessor or Lessor's agents,
representatives, or employees to enter upon the Premises at reasonable times,
and upon having given Lessee reasonable advance notice, (a) to inspect the
Premises, to determine whether Lessee is in compliance with the terms of this
Lease; (b) to show the Premises to prospective purchasers, lessees, mortgagees,
beneficiaries under trust deeds, or insurers (but as to prospective lessees only
within the last 9 months of the Term), and (c) to make repairs, improvements,
additions and alterations thereto, as Lessor is permitted to make according to
the terms of the Lease. Entry by Lessor shall be subject to Lessee's reasonable
security procedures. Any inspections of the Premises pursuant to this subsection
shall be at Lessor's cost and expense; provided, however, in the event it is
determined by Lessor as a result of such inspection, that an environmental study
should be conducted on the Premises and said
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environmental study determines that Lessee has not complied with all then
existing environmental laws, Lessee shall reimburse Lessor for the cost of the
study within 15 days after receipt of an invoice setting forth the cost, and
Lessee shall promptly take all action necessary, at Lessee's sole expense, to
remedy any noncompliance by Lessee discovered by such study in accordance with
Section 15 above.
20. Liens. In the event that any mechanic's, materialmen's, or other
lien shall at any time be filed against the Premises, the Building or the Land
purporting to be for work, labor, services or materials performed for or
furnished to Lessee or anyone holding the Premises through or under Lessee, or
arising out of any alleged act or omission of Lessee, Lessee shall forthwith
cause the same to be properly bonded or released. If Lessee shall fail to cause
such lien to be bonded or released within 30 days after being notified of the
filing thereof, then, in addition to any other right or remedy of Lessor, Lessor
may, but shall not be obligated to, discharge the same by posting a bond or
paying the amount claimed to be due, and the amount so paid by Lessor, and all
costs and expenses incurred by Lessor in procuring the discharge of such lien,
including reasonable attorney's fees, shall be due and payable by Lessee to
Lessor as additional rent on the first day of the next succeeding month.
Lessor shall not be liable for any labor or materials furnished to Lessee upon
credit, and that no mechanics', materialmen's or other liens for any such labor
or materials shall attach to or affect the estate or interest of Lessor in and
to the Land or Building.
21. Subordination. Lessee agrees that this Lease is and shall be
subordinate to any mortgage or deed of trust which may now or hereafter encumber
the Building or the Land, and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided, however, that the holder of any
such mortgage or deed of trust shall agree that Lessee shall not be disturbed in
its possession of the Premises or its rights hereunder terminated or amended by
the mortgagee, any purchaser at or in lieu of foreclosure or other party so long
as Lessee is not in default under this Lease. In confirmation of such
subordination, Lessee shall at Lessor's request execute promptly any appropriate
certificate or instrument that Lessor may reasonably request. Lessor agrees to
deliver to Lessee a commercially reasonable nondisturbance and attornment
agreement within 45 days after a mortgage or deed of trust is placed on the
Building or the Land. In the event of the enforcement by the trustee or the
beneficiary under a mortgage or deed of trust of the remedies provided for by
law or by such mortgage or deed of trust, Lessee will, upon request of any
person or party succeeding to the interest of Lessor as a result of such
enforcement, automatically become the lessee of such successor in interest
without change in the terms or other provisions of this Lease; provided,
however, that such successor in interest shall not be bound by (i) any payment
of Base Rent or Additional Rent for more than one month in advance except
prepayments in the nature of security for the performance by Lessee of its
obligations under this Lease; (ii) any amendment or modifications under this
Lease made without the written consent of such trustee, beneficiary, or
successor in interest; (iii) any default by the prior owner or landlord in the
observance or performance of any of its covenants or obligations hereunder any
right of offset which Lessee may have had against the prior owner or landlord.
Lessor will require the trustee or beneficiary under a mortgage or deed of trust
to give Lessee written notice of Lessor's default in the mortgage or deed of
trust. Upon request by any successor in interest, Lessee shall execute and
deliver an instrument or instruments confirming the attornment herein provided
for.
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As of the date of the Lease, the Land is not encumbered by a mortgage
or deed of trust and the Premises if not subject to a ground or underlying
lease.
Within 20 days after Lessor's written request, Lessee agrees to execute
an estoppel certificate or other agreement certifying to Lessor and/or any
mortgagee of the Building such facts and agreeing to such reasonable notice
provisions as such mortgagee may request in connection with Lessor's financing,
subject, however, to the non-disturbance rights of Lessee above-described. If
Lessee fails or refuses to give a certificate hereunder within the time period
herein specified, then the information contained in such certificate as
submitted by Lessor shall be deemed correct for all purposes, and all notice
provisions and other matters in the certificate shall be deemed agreed to, but
Lessor shall have the right to treat such failure or refusal as a default by
Lessee.
This Lease and all rights of Lessee hereunder are further subject and
subordinate to the extent that the same relate to the Premises to all ground or
underlying leases covering the Land/or any part thereof which may now or
hereinafter affect the Land or the Building, and any renewals or modifications
thereof; provided, however that the holder of any ground lease or underlying
leases covering the Land or the Building shall agree that Lessee shall not be
disturbed in its possession of the Premises or its rights hereunder terminated
or amended by such holder as long as Lessee is not in default under this Lease.
22. Condemnation. If the whole or any part of the Premises shall be
taken under the power of eminent domain, this Lease shall terminate as to the
part so taken on the date Lessee is required to yield possession thereof to the
condemning authority. Lessor shall, with reasonable diligence, make such repairs
and alterations as may be necessary in order to restore the part not taken to a
useful condition, and the Base Rent shall be reduced proportionately to the
portion of the Premises so taken. If the amount of the Premises so taken
substantially impairs the usefulness of the Premises for the purposes set forth
in Section 4, either party may terminate this Lease within 30 days after Lessor
gives Lessee notice that it will be dispossessed, effective as of the date when
Lessee is required to yield possession, at which time all Lessor's and Lessee's
rights and obligations under the Lease, including Lessee's obligation to pay
rent shall terminate. All compensation awarded for any taking shall belong to
and be the property of Lessor.
23. Fire and Casualty. In the event of a fire or other casualty in the
Premises, Lessee shall immediately give notice thereof to Lessor. If the
Premises, through no fault or neglect of Lessee, its agents, employees,
invitees, licensees or visitors, shall be destroyed by fire or other casualty so
as to render the Premises untenantable, the rental herein shall be reduced
proportionally as of the date of such casualty to the portion of the Premises
rendered untenantable until such time as the Premises are made tenantable by
Lessor. If from such cause the same shall be so damaged that Lessor shall decide
not to rebuild, then all rent and other sums owed hereunder up to the time of
such destruction or casualty shall be paid by Lessee, and thenceforth this Lease
shall cease and come to an end. If (i) the repairs or restoration will take more
than 275 days after Lessee has given Lessor notice of the loss or damage, in
Lessor's opinion reasonably formed or (ii) if Lessor has not given Lessee notice
of its decision to repair and restore the Premises within 75 days of the date
Lessee has given Lessor notice of the loss or damage, then Lessee may terminate
the Lease.
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24. Casualty Insurance. Lessor shall, at all times during the Term,
maintain a policy or policies of insurance with the premiums thereon fully paid
in advance, issued by and binding upon some solvent insurance company, licensed
to do business in the State of Texas, insuring Lessor's interest in the Building
against loss or damage by fire and other hazards within the coverage of a Texas
standard form of fire and extended coverage policy, for the full replacement
value thereof, with payments for losses thereunder payable solely to Lessor or
its designee. A Certificate showing the insurance will be delivered to Lessee
within 45 days after the Commencement Date.
25. Liability Insurance. Lessee shall maintain, at its expense, at all
times during the Term, a policy or policies of commercial general liability
insurance, with the premiums thereon fully paid in advance, issued by (i) an
insurance company or companies rated "A-" or higher under the most current
edition of A.M. Best's Key Rating Guide, (ii) a Lloyds of London underwriter, or
(iii) an insurance company agreed to by Lessor. All insurers must be licensed to
do business in the State of Texas. The insurance shall afford protection of not
less than $1,000,000 combined single limit bodily injury and property damage per
occurrence. The policy or policies shall name Lessor as an additional insured.
As to any injury or damage occurring in or on the Premises, Lessee's insurance
shall be primary. Lessee's policy shall contain an agreement by the insurer that
such policy, or policies may not be canceled or materially modified without 30
days' prior notice to Lessor. Lessee shall provide Lessor a copy of the required
policy or policies, or a certificate evidencing the required coverage, before
beginning any work in the Premises or taking occupancy of same. Additionally,
Lessee shall provide Lessor evidence of the renewal of each policy prior to
expiration of the policy.
26. RELEASE OF CLAIMS; WAIVER OF SUBROGATION. ANYTHING IN THIS LEASE TO
THE CONTRARY NOTWITHSTANDING, LESSOR AND LESSEE EACH WAIVE ANY AND ALL RIGHT OF
RECOVERY, CLAIM, ACTION OR CAUSE OF ACTION AGAINST THE OTHER AND ITS PARTNERS
(IF ANY), AND THE AGENTS, OFFICERS, AND EMPLOYEES OF THE OTHER PARTY OR ITS
PARTNERS, FOR ANY LOSS OR DAMAGE:
(i) TO THE PREMISES, THE BUILDING, OR ANY IMPROVEMENTS
THERETO, OR ANY PERSONAL PROPERTY OF SUCH PARTY
THEREIN, BY REASON OF FIRE, THE ELEMENTS OR ANY
OTHER CAUSE WHICH COULD HAVE BEEN INSURED AGAINST
UNDER A TEXAS STANDARD FORM OF FIRE AND EXTENDED
COVERAGE INSURANCE POLICY, OR
(ii) ARISING OUT OF ANY BUSINESS INTERRUPTION,
INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, BY
REASON OF FIRE, THE ELEMENTS OR ANY OTHER CAUSE,
REGARDLESS OF CAUSE OR ORIGIN, INCLUDING THE SOLE OR CONCURRENT NEGLIGENCE OF
THE OTHER PARTY OR ITS PARTNERS, OR THE AGENTS, OFFICERS, OR EMPLOYEES OF THE
OTHER PARTY OR ITS PARTNERS. LESSOR AND LESSEE COVENANT THAT NO INSURER SHALL
HOLD ANY RIGHT OF SUBROGATION AGAINST THE OTHER PARTY FOR LOSSES WHICH MUST BE
INSURED AGAINST BY THE TERMS OF THIS LEASE. THIS SECTION SHALL SURVIVE THE
TERMINATION OF THIS LEASE.
27. RELEASE AND INDEMNIFICATION BY LESSEE. SUBJECT TO SECTION 26 ABOVE,
LESSEE RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR AND ITS
PARTNERS, AND THE AGENTS, OFFICERS AND EMPLOYEES OF LESSOR OR ITS PARTNERS,
HARMLESS FROM AND AGAINST ALL CLAIMS OR CAUSES OF ACTION FOR DAMAGE OR INJURY OR
DEATH TO PERSONS OR PROPERTY OCCURRING ON OR IN THE PREMISES, INCLUDING, BUT NOT
LIMITED TO, ANY CLAIMS OR CAUSES OF ACTION CAUSED BY OR RESULTING FROM (i) THE
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SOLE OR CONCURRENT NEGLIGENCE, BUT NOT THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LESSOR OR ITS PARTNERS, OR THE AGENTS, OFFICERS, OR EMPLOYEES OF
LESSOR OR ITS PARTNERS, OR (ii) STRICT LIABILITY OR PRODUCT LIABILITY. LIKEWISE,
SUBJECT TO SECTION 26 ABOVE, LESSOR RELEASES AND AGREES TO DEFEND, INDEMNIFY AND
HOLD LESSEE AND ITS PARTNERS, AND THE AGENTS, OFFICERS AND EMPLOYEES OF LESSEE
OR ITS PARTNERS, HARMLESS FROM AND AGAINST ALL CLAIMS OR CAUSES OF ACTION FOR
DAMAGE OR INJURY OR DEATH TO PERSONS OR PROPERTY OCCURRING ON OR IN THE LAND,
OTHER THAN THE PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS OR CAUSES OF
ACTION CAUSED BY OR RESULTING FROM (i) THE SOLE OR CONCURRENT NEGLIGENCE, BUT
NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSEE OR ITS PARTNERS, OR THE
AGENTS, OFFICERS, OR EMPLOYEES OF LESSEE OR ITS PARTNERS, OR (ii) STRICT
LIABILITY OR PRODUCT LIABILITY. THIS SECTION SHALL SURVIVE THE TERMINATION OF
THIS LEASE.
28. Holding Over. In the event of holding over by Lessee after the
expiration or termination of the Term or any extension thereof as mutually
agreed or as provided under Section 3, and without the written consent of
Lessor, Lessee shall be a Tenant at will and shall pay rent equal to one hundred
thirty-five percent (135%) on a per diem basis the amount of all Base Rent, and
Additional Rent payable during the last month of the Term. Further, in the event
Lessee holds over for more than 90 days without Lessor approval, Lessee shall
indemnify Lessor against all claims for damages by any other lessee to whom
Lessor may have leased all or any part of the Premises. Lessor may terminate the
tenancy by giving written notice to Lessee. No holding over by Lessee, either
with or without the consent and acquiescence of Lessor, shall operate to extend
the Lease for a longer period than 1 day, except as otherwise set forth herein.
Any holding over with the consent of Lessor in writing shall there after
constitute this Lease a lease from day to day.
29. Default by Lessee. If (a) Lessee fails to timely pay any sum to be
paid by Lessee under this Lease after 5 days written notice from Lessor; (b)
Lessee fails to perform any of its other duties or obligations under this Lease
and such default continues for 20 business days after Lessor delivers written
notice to Lessee or deposits written notice in the U. S. Mail addressed to
Lessee's address above; (c) any of the following actions occur and Lessee fails
to vigorously contest and cause same to be removed, dismissed, or vacated within
30 days from the date of entry or filing: (i) Lessee's interest under this Lease
is levied on under execution or other legal process, or (ii) any petition is
filed by or against Lessee to declare Lessee a bankrupt or to delay, reduce or
modify Lessee's debts or obligations, or (iii) any petition under the Bankruptcy
Code is filed or other action taken to reorganize or modify Lessee's capital
structure, or (iv) Lessee is declared insolvent according to law, or (v) any
general assignment of Lessee's property is made for the benefit of creditors, or
(vi) a receiver or trustee is appointed for Lessee or its property; (d) if
Lessee is a corporation, Lessee ceases to exist as a corporation in good
standing in the State of Texas; or (e) if Lessee is a partnership or other
entity, Lessee is dissolved or otherwise liquidated, then Lessor may treat the
occurrence of any one or more of the foregoing events as a breach of this Lease.
Upon the occurrence of any of the foregoing events, at Lessor's option, Lessor
shall have any one or more of the following described remedies, in addition to
all other rights and remedies provided at law or in equity:
A. Lessor may terminate this Lease and forthwith repossess the
Premises and recover damages in a sum of money equal to the total of (i) the
cost of recovering the Premises, including the cost of the removal and storage
of any of Lessee's possessions left within the Premises, (ii) the unpaid Base
Rent and Additional Rent earned at the time of termination, plus interest
thereon at the lesser of (A) thirteen percent (13%) per annum, or (B) the then
maximum interest rate permitted to be
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charged by applicable law ("Interest") from the due date until paid, (iii) the
balance of the Base Rent and Additional Rent for the remainder of the Term,
discounted to its present value at the rate of 8% per annum, less the fair
market rental value (allowing a reasonable period for reletting) of the Premises
for said period (provided said sum shall not be less than zero), and (iv) any
other sum of money and damages owed by Lessee to Lessor in accordance with the
terms of the Lease.
B. Without terminating this Lease, Lessor may terminate
Lessee's right of possession and repossess the Premises by forcible detainer
suit or otherwise, in accordance with Texas law. If Lessor pursues this remedy,
Lessor may relet the Premises for Lessee's account, for such rent and upon such
terms and conditions as Lessor deems satisfactory. For the purpose of such
reletting, Lessor is authorized to make any reasonable repairs in or to the
Premises as it deems necessary to prepare the Premises to relet at Lessee's
expense. If Lessor fails to relet the Premises, then Lessee shall pay to Lessor
as damages a sum equal to the amount of the Base Rent and Additional Rent
provided for in this Lease for such period or periods. If Lessor relets the
Premises and fails to realize a sufficient sum from such reletting after
deducting (a) the due and unpaid Base Rent and Additional Rent, (b) the accrued
Interest thereon, (c) the cost of recovering possession, (d) the costs and
expenses of all reasonable repairs, and (e) the expense of such reletting and
the collection of the rent accruing therefrom, then Lessee shall pay to Lessor
any such deficiency upon demand from time to time. Lessor may file one or more
suits to recover any sums falling due under this Section from time to time. Any
reletting shall not be an election by Lessor to terminate this Lease unless
Lessor gives a written notice of such intention to Lessee. Notwithstanding any
such reletting without termination, Lessor may at any time thereafter elect to
terminate this Lease for such previous default.
▇. ▇▇▇▇▇▇ may change the locks on the Premises. The Lessor
will not have to give the Lessee a new key unless the Lessee cures the
default(s); the new key will be provided only during Lessor's regular business
hours.
30. Waiver. Failure of Lessor to declare any default immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such default, but Lessor shall have the right to declare any such
default at any time and take such action as might be lawful or authorized
hereunder, either in law or at equity.
31. Lien for Rent. INTENTIONALLY DELETED.
32. Assignment by Lessor. Lessor shall have the right to sell, transfer
or assign, in whole or in part, all of its rights and obligations hereunder and
in the Building and the Land. In such event and upon the assumption by such
transferee of Lessor's obligations hereunder, no further liability or obligation
shall thereafter accrue against Lessor hereunder.
33. Assignment by Lessee. Lessee shall not assign this Lease or any
interest therein, nor sublet the Premises or any part thereof or any right or
privilege appurtenant thereto, nor permit any other person, firm or entity to
occupy or use the Premises or any portion thereof without first obtaining the
written consent of Lessor. Lessor agrees to give Lessee the approval or
disapproval within 15 days after Lessee's written request. Lessor shall have the
right, at its option, to terminate this Lease as to any portion of the Premises
covered by a proposed assignment or sublease, or to approve any such assignment
or sublease only upon the condition that (a) 50% of all rentals paid by
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the assignee or sublessee (if other than an Affiliate as described below) in
excess of the rentals due from Lessee hereunder, shall be paid directly to
Lessor after deducting all reasonable out-of-pocket expenses incurred by Lessee
as a result of the assignment or sublease, and (b) the proposed assignee or
sublessee agrees to use the Premises only for the uses permitted by Lessee under
this Lease, and to comply with all of the other terms and conditions of this
Lease. Otherwise, Lessor's consent to any proposed sublease or assignment shall
not be unreasonably withheld. Consent by Lessor to one assignment, subletting,
occupation or use by another person shall not be deemed to be a consent to any
subsequent assignment, subletting, occupation or use by the same or another
person. Consent to an assignment or sublease shall not release Lessee from
liability for the continued performance of the terms and provisions to be kept
and performed by Lessee hereunder, unless Lessor specifically and in writing
releases Lessee from said liability. In addition, an amendment or modification
of the Lease after the assignment or sublease during the Term shall not release
Lessee from liability for the continued performance of the terms and provisions
to be performed by Lessee hereunder. Any assignment or subletting by operation
of law or otherwise, (including without limitation, a transfer of controlling
interest in Lessee to any other person, firm or entity, except to an Affiliate
as described below) without the prior written consent of Lessor, shall be void
and shall, at the option of Lessor, terminate this Lease. Notwithstanding
anything contained herein to the contrary, provided Lessee is not in default
hereunder and all Base Rent and Additional Rent due and owing as of the date of
such assignment have been paid in full, Lessee shall have the right at any time
and from time to time, as many times as may be convenient, a) to sublease the
Premises to a licensed franchisee of Lessee, b) to sublet or assign all or part
of the Premises to (i) a partially or wholly owned corporation subsidiary of
Lessee, to its parent company, or an Affiliate of Lessee, as described below,
(ii) any corporation which acquires all or substantially all of the assets or
operations of Lessee, or (iii) any corporation into which or with which Lessee
has merged or consolidated, other than an Affiliate, so long as the surviving
entity has a net worth not less than Lessee's prior to the merger, consolidation
or acquisition; provided, (a) Lessee gives prior written notice of the
assignment or transfer to Lessor and presents evidence to Lessor of the
assignees ability to perform Lessee's financial obligations hereunder, (b) the
assignee assumes in writing the duties and obligations of Lessee hereunder, and
(c) Lessee remains directly and primarily liable for the performance of all the
covenants, duties and obligations of Lessee hereunder (including, without
limitation, the obligation to pay all rent and other sums herein provided to be
paid), and Lessor shall be permitted to enforce the provisions of this
instrument against the undersigned Lessee and/or any assignee without demand
upon or proceeding in any way against any other person. As used in this Lease,
the term "Affiliate" shall mean and refer to any person or entity controlling,
controlled by, or under common control with another such person or entity.
"Control" as used herein shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
controlled person or entity; ownership, directly or indirectly, of more than
fifty percent (50%) of the voting securities of, or possession of the right to
vote, in the ordinary direction of its affairs, more than fifty percent (50%) of
the voting interest in, any person or entity shall be presumed to constitute
such control.
Notwithstanding anything contained herein to the contrary, if Lessor
approves an assignment of the Lease or sublease of all or any portion of the
Premises, the approval shall be conditional upon Lessee paying to Lessor a fee
in the amount of $300.00 to cover Lessor's administrative, legal, and other
costs and expenses incurred in processing each of Lessee's approved requests.
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34. Transfer of Control. If Lessee is a corporation, and if at any time
during the term of this Lease, corporate shares of Lessee shall be transferred
by sale, assignment, bequest, inheritance, operation of law or other disposition
so as to result in a change in the present control of said corporation by the
person or persons now owning a majority of said corporate shares, Lessee shall
be in default of this Lease and Lessor may reasonably exercise its rights in
respect of default hereunder. Notwithstanding anything contained herein to the
contrary, this provision shall not apply to a transfer to an Affiliate as
described in Section 33 above.
35. Notices. Any notice required or permitted to be given pursuant to
the terms of this Lease shall be sent by certified or registered U.S. mail to
Lessor at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: Property
Management, with a copy to Crescent Real Estate Equities Limited Partnership,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: Legal Department,
and to Lessee at Telxon Corporation, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The place to which such notices shall be sent
may be changed by either party giving notice of such change to the other party
in the manner hereinabove provided. A notice shall be deemed given and received
on the 3rd business day following deposit in the U.S. Mail as provided above.
36. Severability. If any of the provisions of this Lease shall
contravene or be invalid under the laws of the particular state, county, or
jurisdiction where applied, such contravention or invalidity shall not
invalidate the Lease or any other portions thereof and the remainder of this
Lease or the application thereof to other persons or circumstances shall not be
affected thereby.
37. Corporate Authority. If Lessee signs as a corporation, each of the
persons executing this Lease on behalf of Lessee represents and warrants that
Lessee is a duly organized and existing corporation, that Lessee has and is
qualified to do business in Texas, that the corporation has full right and
authority to enter into this Lease, and that all persons signing on behalf of
the corporation were authorized to do so by appropriate corporate actions.
38. Title. This Lease is subject to all matters of record in the Real
Property Records of ▇▇▇▇▇▇▇▇▇▇ County, Texas. By execution of this Lease, Lessee
consents to all plats and replats of the Land, if any, in compliance with all
applicable laws and the recording in the Real Property Records of ▇▇▇▇▇▇▇▇▇▇
County, Texas, of an instrument annexing the Land into the Declaration of
Covenants and Restrictions of The Woodlands Commercial Owners' Association
("Restrictions").
Lessee consents to the annexation of the Land into the Restrictions and agrees
that is leasehold interest shall be subject and subordinate to the Restrictions.
39. Not an Offer. The submission of this Lease to Lessee shall not be
construed as an offer, nor shall Lessee have any rights with respect thereto
unless Lessor executes a copy of this Lease and delivers the same to Lessee.
40. Exhibits, Riders and Addenda. This Lease also includes and
incorporates herein for all purposes all attached Exhibits, Riders, and Addenda,
if any.
41. Joint and Several Tenancy. If more than one entity executes this
Lease as Lessee, their obligations hereunder are joint and several, and any act
or notice of or to, or refund to, or the
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signature of, any one or more of them, in relation to the renewal or termination
of this Lease, or under or with respect to any of the terms hereof shall be
fully binding on each and all of the entities executing this Lease as a Lessee.
42. Binding Effect. This Lease shall be binding upon and inure to the
benefit of the heirs, successors or assigns of Lessor and Lessee, subject to the
limitation on subleasing and assignment herein contained.
43. Entire Agreement. This Lease shall constitute the sole and only
agreement of Lessor and Lessee with regard to the Lease of the Premises, and
shall supercede any prior or contemporaneous oral or written agreements. This
Lease may not be altered, changed or amended, except by an instrument in
writing, signed by both parties hereto.
44. Pronouns. Pronouns which refer to either Lessor or Lessee shall be
construed to mean the appropriate number and gender intended.
45. Force Majeure. If either party shall be delayed or prevented from
the performance of any act required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials, restrictive
governmental laws or regulations or other cause without fault and beyond the
control of the party obligated (Lessee's financial inability, such as inability
to obtain financing or lack of capital, excepted), performance of such act shall
be excused for the period of the delay, and the period for the performance of
any such act shall be extended by a period equal to the period of such delay;
provided, however, nothing in this Section shall excuse Lessee from the prompt
payment of any rental or other charge required of Lessee hereunder, except as
may be expressly provided elsewhere in this Lease.
46. General. Time is of the essence of this Lease. All rights and
remedies of Lessor and Lessee under this Lease shall be cumulative and none
shall exclude any other rights or remedies allowed by law. This Lease shall be
declared to be a Texas lease, and all of the terms hereof shall be construed
according to the laws of the State of Texas. Said Lease shall be performable
only in ▇▇▇▇▇▇▇▇▇▇ County, Texas, and venue for any action hereunder shall lie
exclusively in ▇▇▇▇▇▇▇▇▇▇ County, Texas or in the Southern District of Texas,
Houston Division, as appropriate.
47. Reasonableness. Wherever in the Lease Lessor's or Lessee's consent
or approval is required to any action, such consent or approval shall not be
unreasonably withheld, delayed or conditioned.
48. Conflict. In the event of a conflict between the Lease and the
Rules and Regulations attached as Exhibit "C", or the Exclusions from Operating
Expenses attached hereto as Exhibit "D", the Lease and all other Exhibits and
Riders thereto will control. In the event of a conflict between the Lease and
any other Exhibit or Rider, the Exhibit, or Rider, as applicable, will control.
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IN TESTIMONY WHEREOF, the parties hereto have executed this Lease in
multiple counterparts, each of which shall constitute an original but
collectively shall constitute only one document, such execution to be effective
on the date first above written.
LESSOR
Date: January 16, 1998 THE WOODLANDS COMMERCIAL PROPERTIES COMPANY,
L.P., A Texas Limited Partnership
By: The Woodlands Operating Company, L.P.,
A Texas Limited Partnership, Its
Authorized Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & COO
Federal Employer Tax Identification
No. ▇▇-▇▇▇▇▇▇▇
------------------------
Originator dpp
------------------------
Legal
------------------------
Financial
------------------------
LESSEE
Date: December 8, 1997 TELXON CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V-P Financial Planning
Federal Employer Tax Identification
No. ▇▇-▇▇▇▇▇▇▇
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RIDER NO. 1
to Lease Agreement dated , 1997,
by and between
THE WOODLANDS COMMERCIAL PROPERTIES COMPANY, INC., as Lessor, and
TELXON CORPORATION, as Lessee,
covering Venture Technology Center VII Building,
The Woodlands, ▇▇▇▇▇▇▇▇▇▇ County, Texas
1. RENEWAL OPTION
As long as Lessee is not in default in the performance of its covenants under
this Lease, Lessee is hereby granted the option to renew the Term of this Lease
as to the Premises or a portion thereof (provided no portion shall be less than
50,000 rentable square feet of floor space as of the date of exercise of the
renewal option) for periods of additional years each as described below (each of
which is a "Renewal Term"), to commence at the expiration of the initial term of
this Lease, or applicable Renewal Term. Lessee shall exercise each option to
renew by delivering written notice of such election to Lessor at least nine (9)
months prior to the expiration of the Term of this Lease. The renewal of this
Lease shall be upon the same terms and conditions of this Lease, except (a) the
Base Rent during the Renewal Term shall be the prevailing market Base Rent rate
(as defined below) at the time each Renewal Term commences, (b) Lessee shall
have no option to renew this Lease beyond the Renewal Terms set out herein, (c)
Lessee shall not have the right to assign its renewal rights to any sublessee of
the Premises or assignee of the Lease, except to an Affiliate as described in
Section 33 of the Lease and, at Lessor's discretion, and (d) the "Term" as
defined in the Lease, shall include any Renewal Term that has been duly
exercised by Lessee. The number of Renewal Terms and period of additional years
each shall be determined by the number of rentable square feet of floor space
covered by the renewal. If the floor space covered by the requested renewal is
between 50,000 and 69,670 rentable square feet, Lessee shall have the option to
renew the Term of the Lease for two (2) periods of five (5) additional years
each. If the floor space covered by the requested renewal is equal to or more
than 69,670 rentable square feet of floor space, Lessee shall have the option to
renew the Term of the Lease for two (2) periods of five (5) additional years
each or one (1) period of ten (10) years.
It is understood and agreed that the term "prevailing market Base Rent rate", as
used herein, shall mean, as of any date, the then prevailing annual rental rate
being charged for space in comparable buildings (including the Building) in the
area in The Woodlands development designated as The Woodlands Research Forest
comparable to the space in the Building for which such determination is being
made after taking into consideration the following (to the extent that same are
applicable under the circumstances in question): (a) the location, quality and
age of the building; (b) use, location and size; (c) extent of leasehold
improvements in the Premises (other than those in Tenant's then-existing
Premises) or to be provided, and/or any allowance for same; (d) abatements
(including, with respect to base rental, operating expenses and real estate
taxes, and parking charges); (e) lease takeover/assumptions; (f)
relocation/relocation allowance; (g) refurbishment allowance; (h) club
memberships; (i) distinction between "gross" and "net" lease; (j) base year or
dollar amount for escalation purposes (operating expenses, real estate taxes and
management fee); (k) any other adjustments (including by way of indexes) to base
rental; (l) credit standing of the Tenant; (m) term or length of lease; (n) the
time the particular rental rate under consideration was agreed upon and became
or is to become effective; (o) programming/spaces, planning/interior
architecture and engineering allowances; and (p) any other
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concession or inducement and/or relevant term or condition in making such fair
market value rental rate determination.
By not later than nine (9) months prior to the expiration of the Lease Term
Lessee shall give written notice to Lessor of its desire to exercise this option
and request the rental rate. Within fifteen (15) days thereafter Lessor shall
notify Lessee of the rental rate (in no event higher than the prevailing market
Base Rental Rate specified above). If Lessee elects to exercise its option but
concludes that the rental rate proposed by Lessor is higher than the prevailing
market Base Rental Rate, and Lessor and Lessee are not able to agree upon a
mutually acceptable rate within the following thirty (30) days, Lessee shall
have the option, but not the obligation (i) of revoking the exercise of its
option, or (ii) of accepting Lessor's determination of the prevailing market
Base Rental Rate, or (iii) of electing to submit the issue to binding appraisal,
in which event Lessee and Lessor will agree upon a Market Professional who shall
estimate the prevailing market Base Rental Rate. The arbitration process must be
initiated no later than six (6) months prior to expiration of the Term or
Lessee's renewal rights shall terminate and be of no further force or effect.
The cost of the Market Professional shall be shared equally by the parties and
his or her decision shall be binding upon the parties. The term "Market
Professional", as used herein, shall mean an individual with a minimum of five
(5) years experience in commercial and office leasing and/or valuation in the
Greater Houston Area who is either a designated Member of the Appraisal
Institute ("MAI") or a Texas licensed real estate broker.
2. SATELLITE DISH
Notwithstanding anything contained herein to the contrary, subject to Community
Review Committee of The Woodlands' approval of plans and specifications for the
satellite dish and antennae and the location and screening thereof, Lessor shall
allow Lessee to install and maintain a satellite dish and other equipment
("Equipment") on a portion of the roof of the Building ("Roof Space") on the
terms hereof:
(a) Lessee may run cables ("Cables") between the Roof Space and
the Premises provided that all cabling shall be installed so
as to comply with all local building codes and Lessor's
reasonable instructions.
(b) The Equipment shall remain the property of Lessee or its
contractor. Lessee shall at its cost remove such Equipment and
if requested by Lessor, the Cables, at the expiration of the
Term of the Lease and restore the Roof Space to its original
condition as of the Commencement Date of the Lease, ordinary
wear and tear excepted.
(c) Lessee and/or its contractor shall bear all expenses in
connection with the installation, use and maintenance of such
Equipment and Cables and removal of the Cables and the
Equipment. LESSEE SHALL INDEMNIFY AND HOLD LESSOR HARMLESS
FROM AND AGAINST ANY AND ALL LIABILITY, DAMAGES, COSTS AND
EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES INCURRED BY
LESSOR, OF ANY AND EVERY KIND OR CHARACTER, INCLUDING WITHOUT
LIMITATION, BODILY INJURY TO OR DEATH OF ANY PERSON OR
PROPERTY DAMAGE, FIXED OR CONTINGENT, ARISING OUT OF LESSEE'S
INSTALLATION, USE, MISUSE, MAINTENANCE OR
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OPERATION OF THE ROOF SPACE, THE EQUIPMENT AND CABLES AND
REMOVAL OF SAME.
(d) Lessee and/or its contractor shall maintain in force at all
times during the term of the Lease comprehensive liability
insurance in an amount satisfactory to Lessor, with an insurer
satisfactory to Lessor, protecting Lessor against any
liability, damages, cost or expenses, in connection with the
installation, use, maintenance and operation of the Equipment
and Cables and shall supply certificates of such insurance
upon request.
(e) Lessee and its contractors shall comply with all applicable
laws, regulations and building codes in connection with the
installation, use, misuse, maintenance and operation of the
Equipment and Cables.
(f) Lessor agrees to permit Lessee reasonable access to the Roof
Space so as to facilitate the installation, use, maintenance
and operation of the Equipment and Cables, and for the removal
of the Cables and Equipment.
(g) Notwithstanding anything contained herein to the contrary, it
is understood and agreed by Lessee that this license is
granted to Lessee by Lessor on the condition that Lessee
agrees, at Lessee's expense, to remove the Equipment on a
temporary basis within 5 business days after written notice
("Lessor Notice") from Lessor that Lessor needs access to the
area on the roof where the Equipment has been installed in
order to make roof repairs. Lessor agrees to provide a
location on the Land or in the vicinity of the Land where the
Equipment may be stored and will advise Lessee of this
location in its notice. Lessor will make the repairs as soon
as practicable and will notify Lessee when the Equipment may
be relocated back to the roof. If Lessor does not remove the
Equipment within the 5 business days after Lessor's Notice,
Lessor shall have the right to remove the Equipment and Lessee
shall pay to Lessor all of Lessor's actual costs and expenses
to remove, and reinstall, after the roof repairs are
completed, the Equipment, plus 10% overhead. Said sums shall
constitute Additional Rent under the Lease due with the next
payment of Base Rent under the Lease. If Lessor exercises its
rights hereunder, Lessor shall not be deemed to be guilty of
any manner of conversion or trespass with respect to the
Equipment and Lessor shall not be liable for any business
interruption or inconvenience caused to Lessee because of its
inability to use the Equipment while the roof repairs are
being made. Nothing herein contained shall be deemed to affect
or limit the right of Lessor to enforce this provision by
appropriate judicial proceedings.
(h) This agreement to install Equipment is personal to the Lessee.
It is nonassignable and any attempt to assign this license
will terminate the privileges herein granted.
3. OPTION AND FIRST RIGHT TO PURCHASE - OPTION I
(1) During the period ("Option I Period") commencing on the date
of substantial completion of the
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Premises as certified by the Project Architect and ending two (2) years
thereafter, Lessee shall have the option ("Option I") to purchase that
approximately 6.6 acre parcel of land ("Option Tract I") shown on Annex "1" to
be used for general office and engineering design and incidental uses related
thereto purposes only . If Lessee shall fail to enter into an ▇▇▇▇▇▇▇ money
contract on Lessor's then standard form (to close within ninety (90) days
thereafter) covering the Option Tract I within the Option I Period, subject to
subparagraph (2) below, Lessor shall be at liberty to make such sale to a third
party. It is understood and agreed that during the Option I Period, the purchase
price shall be the Estimated Fair Market Value (determined as described in
Paragraph 5 below) of the Option Tract I at the time of exercise of the Option
I. Lessee shall have the right to extend the Option I for one (1) additional
year by delivery to Lessor of written notice of its election to extend the
Option I, accompanied by an extension fee of $144,000.00 at least ninety (90)
days prior to expiration of the Option I. Any extension fee paid by Lessee shall
be applied to the purchase price of the Option Tract I if the sale and purchase
on the terms hereof closes; otherwise the extension fee shall be retained by
Lessor.
(2) If the Option I is not extended, during the period commencing on
the first day following the expiration of the Option I Period, provided the
Option I is not extended, and ending one (1) year thereafter, Lessee shall have
a first right to purchase the Option Tract I on the following terms and
conditions. If Lessor shall receive a letter of intent to purchase the Option
Tract I which terms Lessor is willing to accept, Lessor shall give Lessee
written notice that it has received an offer it is willing to accept. Lessee
shall have the right for fifteen (15) working days after receipt of notice of
such third party letter of intent, which is acceptable to Lessor, to execute
Lessor's then standard form ▇▇▇▇▇▇▇ money contract to be provided by Lessor,
covering such Option Tract I. Lessee's first right to purchase shall be
paramount to any rights of the third party in question. If Lessee shall fail to
execute the ▇▇▇▇▇▇▇ money contract for the Option Tract I within the time herein
specified, Lessor shall be at liberty to make such sale to the third party. It
is understood that in the event Lessee exercises its first right to purchase,
the purchase price of Option Tract I shall be the Estimated Fair Market Value
(determined as described in paragraph (5) below).
Further, notwithstanding anything contained herein to the contrary, it
is understood and agreed that the rights set forth (1) and (2) above are
conditioned upon Lessee being in full compliance with all the terms and
conditions of the Lease at the time Lessee gives notice to Lessor of its
election to exercise its rights in (1) and (2) above. Any monetary default
beyond any applicable cure period shall, at Lessor's option, terminate Lessee's
rights hereunder. The right set forth above are not assignable by lessee to any
sublessee of the Premises or assignee of the Lease, except to an Affiliate as
described in Section 33 of the Lease.
4. OPTION AND FIRST RIGHT TO PURCHASE - OPTION II
(1) During the period ("Option II Period") commencing on the date of
substantial completion of the Premises and ending two (2) years thereafter,
Lessee shall have the option ("Option II") to purchase that approximately 17.7
acre parcel of land ("Option Tract II") shown on Annex "2" to be used for office
and light manufacturing/assembly purposes only. If Lessee shall fail to enter
into an ▇▇▇▇▇▇▇ money contract on Lessor's then standard form (to close within
ninety (90) days thereafter) covering the Option Tract II within the Option II
Period, subject to subparagraph (2) below, Lessor shall be at liberty to make
such sale to a third party. It is understood and agreed that during the Option
II Period, the purchase price of the Option Tract II shall be
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the Estimated Fair Market Value (determined as described in paragraph (5) below)
of the Option Tract II at the time of exercise of the Option II. Lessee shall
have the right to extend the Option II for one (1) additional year by delivery
to Lessor of written notice of election to extend the Option II, accompanied by
an extension fee of $260,000.00 at least ninety (90) days prior to expiration of
Option II. Any extension fee paid by Lessee shall be applied to the purchase
price of the Option Tract II of the sale and purchase, on the terms hereof,
closes; otherwise the extension fee shall be retained by Lessor.
(2) During the period commencing on the first day following the
expiration of the Option II Period and ending either (i) three (3) years
thereafter, if the Option II is not extended, or (ii) two (2) years thereafter
if Lessee extends the Option II, Lessee shall have a first right to purchase the
Option Tract II on the following terms and conditions. If Lessor shall receive a
letter of intent to purchase the Option Tract II ,which terms Lessor is willing
to accept, Lessor shall give Lessee written notice that it has received an offer
it is willing to accept. Lessee shall have the right for fifteen(15) business
days after receipt of notice of such third party letter of intent, which is
acceptable to Lessor, to execute Lessor's then standard form ▇▇▇▇▇▇▇ money
contract to be provided by Lessor, covering such Option Tract II. Lessee's first
right to purchase shall be paramount to any rights of the third party in
question. If Lessee shall fail to execute a ▇▇▇▇▇▇▇ money contract for the
Option Tract II within the time herein specified, Lessor shall be at liberty to
make such sale to the third party. It is understood that in the event Lessee
exercises its first right to purchase, the purchase price of Option Tract II
shall be the Estimated Fair Market Value (determined as described in paragraph
(5) below).
Further, notwithstanding anything contained herein to the contrary, it
is understood and agreed that the rights set forth (1) and (2) above are
conditioned upon Lessee being in full compliance with all the terms and
conditions of the Lease at the time Lessee gives notice to Lessor of its
election to exercise its rights in (1) and (2) above. Any monetary default
beyond any applicable cure period shall, at Lessor's option, terminate Lessee's
rights hereunder. The right set forth above are not assignable by lessee to any
sublessee of the Premises or assignee of the Lease, except to an Affiliate as
defined in Section 33 of the Lease.
5. ESTIMATED FAIR MARKET VALUE
"Estimated Fair Market Value" as used in paragraph 3. and 4. above
shall mean the value of the land to a person or entity with a real property
interest adjoining the land the subject of the option and determined as follows.
Lessor and Lessee may, by written agreement, agree upon the estimated fair
market value of the land provided that if Lessor and Lessee are unwilling or
unable to make such an estimate within thirty (30) days after Lessee exercises
an option provided for in 3. and/or 4. above, then Lessor and Lessee, within
fifteen (15) days after the expiration of such thirty (30) day period, shall
each select an appraiser. If either Lessor or Lessee fails to select an
appraiser within said period, the appraiser selected (by the party that did not
fail to select an appraiser) shall select a second appraiser and the Estimated
Fair Market Value shall be the average of the two (2) appraisals. If both Lessor
and Lessee do each select an appraiser, the two (2) appraisers shall within
thirty (30) days thereafter submit their written appraisals to Lessor and Lessee
and if the two (2) appraisers agree on a value of the land within five percent
(5%), such average of the two (2) values shall be the Estimated Fair Market
Value. If the two (2) appraisers cannot agree, then they will choose a third
appraiser by mutual agreement. When three (3) appraisers are utilized, the
Estimated Fair Market Value of the land shall be determined by: first, if the
highest appraisal exceeds the middle appraisal by more than five percent (5%)
and/or if the lowest appraisal is less than the middle appraisal by more than
five
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percent (5%), then the appraisal that exceeds or is less than the middle
appraisal by the greater percentage shall be disregarded; then disregarding the
appropriate appraisal, if any, in the manner set forth above, the remaining
appraisals will be averaged.
Each appraiser shall be an MAI appraiser with a least ten (10) years
experience appraising commercial properties in the ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇
Counties, Texas.
The cost of the appraiser chosen by Lessor and Lessee shall each be
paid by Lessor and Lessee. In the event a third appraiser is selected, the cost
for such third appraiser shall be divided equally between Lessor and Lessee.
6. TAXES
Lessor shall use reasonable efforts to notify Lessee annually in
writing of a proposed or contemplated increase (of more than 15%, which
percentage shall not include the increase due to expiration of any applicable
tax abatement programs) in total taxes and assessments payable on the Land and
the Building. Lessor agrees to meet with Lessee, upon Lessee's request, to
discuss and consider the need to contest any such increase in such taxes and
assessments. Lessor and Lessee shall both make a good faith effort to cooperate
with each other in evaluating whether the taxes and assessments should be
contested.
7. EARLY ENTRY
Notwithstanding anything contained herein to the contrary, Lessee may
enter into the Premises prior to the Commencement Date, at its sole risk, for
the purpose of moving in office furniture and equipment and installing telephone
cabling. Lessee's activities must not unreasonably interfere with the work being
performed by Lessor's contractors and subcontractors. Prior to entering onto the
Premises Lessee shall provide evidence of the insurance required by the terms of
the Lease. Lessee acknowledges that Lessor shall have no responsibility for the
security of the furniture and equipment located to the Premises prior to the
Commencement Date and Lessee agrees to indemnify and save Lessor harmless
against claims, demands and liabilities for personal injuries or property damage
that may be caused by or arise out of, or are attributed to, directly or
indirectly, Lessee's entry onto the Premises prior to the Commencement Date.
8. BASE RENT ABATEMENT
So long as Lessee is not in default in the performance of its covenants under
this Lease, the payment of Base Rent (in the amount and as defined in Section 7
of the Lease) shall be abated up to an amount equal to $95,312.50 ("Incentive").
No Base Rent shall be payable for the first month of the Term. The balance of
the Incentive (difference between $95,312.50 and the monthly Base Rent amount
payable during the first 5 years of the Lease Term) may be applied by Lessee,
with 30 days prior written notice to Lessor, to the Base Rent of any month
within 24 months from the Lease Commencement Date. The Incentive is provided to
Lessee
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as an incentive for entering into the Lease. Nothing contained herein shall
abate, amend, or delay the obligation of Lessee to pay Additional Rent at the
times and in the amounts provided for in the Lease.
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