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EXHIBIT 10.19
COMMERCIAL LEASE AGREEMENT
CRIN - RICHARDSON I, L.P.
(LANDLORD)
AND
ADVANCE PARADIGM, INC.
(TENANT)
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
Page No.
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1. PREMISES, TERM, AND EXISTING IMPROVEMENTS................................................................1
2. BASE RENT AND ADDITIONAL RENT............................................................................1
3. TAXES....................................................................................................3
4. LANDLORD'S MAINTENANCE...................................................................................3
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS..............................................................4
7. WINDOW TREATMENTS........................................................................................5
8. UTILITIES................................................................................................5
9. INSURANCE................................................................................................6
10. CASUALTY DAMAGE..........................................................................................6
11. LIABILITY, INDEMNIFICATION...............................................................................6
12. USE......................................................................................................7
13. INSPECTION...............................................................................................7
14. ASSIGNMENT AND SUBLETTING................................................................................7
15. CONDEMNATION.............................................................................................9
16. SURRENDER OF PREMISES; HOLDING OVER......................................................................9
17. QUIET ENJOYMENT.........................................................................................10
18. EVENTS OF DEFAULT.......................................................................................10
19. REMEDIES................................................................................................10
20. LANDLORD'S DEFAULT......................................................................................12
21. MORTGAGES...............................................................................................12
22. ENCUMBRANCES............................................................................................12
23. MISCELLANEOUS...........................................................................................12
24. NOTICES.................................................................................................14
25. HAZARDOUS WASTE.........................................................................................14
26. LANDLORD'S LIEN.........................................................................................15
27. NO OFFER................................................................................................15
28. NO WARRANTIES...........................................................................................15
29. EXHIBITS................................................................................................15
30. SPECIAL PROVISIONS......................................................................................16
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LIST OF DEFINED TERMS
Page No.
AAA.................................................................7
Abatement Period....................................................1
Additional Rent.....................................................1
Additional Space..................................................E-1
Affiliate...........................................................9
Base Rent...........................................................1
Building............................................................1
Building Structure..................................................3
Claimant ...........................................................9
Commencement Date...................................................1
Construction Allowance..............................................4
Environmental Law..................................................11
Event of Default....................................................7
Existing Improvements...............................................1
Extension Notice..................................................C-1
Generator..........................................................12
Hazardous Substances...............................................11
HVAC System.........................................................3
including..........................................................10
Initial Improvements...............................................4
Land................................................................1
Landlord............................................................1
Landlord's Mortgagee................................................9
Landlord's Proposal...............................................D-1
Law.................................................................9
Laws................................................................9
Lease...............................................................1
Lease Month.........................................................2
Legal Requirements.................................................12
Loss................................................................5
Mortgage............................................................9
MSDS...............................................................11
Need................................................................3
New Parking Area Construction Costs..............................D-1
New Parking Area.................................................D-1
Offer Notice......................................................E-1
Operating Expenses..................................................1
Parking Area Construction Financing...............................D-1
Permitted Activities...............................................11
Permitted Materials................................................11
Permitted Transfer..................................................6
Permitted Transferee................................................6
Possession Date.....................................................1
Premises............................................................1
Primary Lease.......................................................9
Rent................................................................2
Repair Allowance..................................................F-1
Repair Period.......................................................5
Sign...............................................................12
Sign Requirements..................................................12
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Taking..............................................................7
Tangible Net Worth..................................................6
Taxes...............................................................2
Tenant..............................................................1
Tenant Party.......................................................10
Term................................................................1
Third Party Offer.................................................E-1
Total Construction Costs............................................4
Transfer............................................................6
Vacation Date.......................................................5
Work..............................................................B-1
Working Drawings..................................................B-1
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LEASE AGREEMENT
This Lease Agreement (this "LEASE") is entered into by CRIN-▇▇▇▇▇▇▇▇▇▇ I,
L.P., a Delaware limited partnership ("LANDLORD"), and ADVANCE PARADIGM, INC., a
Delaware corporation ("TENANT").
1. PREMISES, TERM, AND EXISTING IMPROVEMENTS
(a) Landlord leases to Tenant, and Tenant leases from Landlord, the
real property described on Exhibit A (the "PREMISES"), which includes the
approximately 52,000 rentable square foot building (the "BUILDING") located on
the real property described on Exhibit A1 (the "LAND"), subject to the terms and
conditions in this Lease. The calculation of rentable square feet contained
within the Premises shall be subject to measurement and verification by
Landlord's and Tenant's architects according to BOMA Standards, and in the event
of a variation, Landlord and Tenant agree to amend this Lease accordingly.
(b) The Lease term shall be 132 months, beginning on the Commencement
Date (defined below) (the "TERM", which defined term shall include all renewals
and extensions of the Term); however, if the Commencement Date is not the first
day of a calender month, then the Term shall end on the last day of the
132-month period that begins with the first day of the first full calendar month
of the Term. The "POSSESSION DATE" shall mean the date that the current tenant
of the Building has vacated the Premises. Landlord shall provide Tenant
immediate written notice of the Possession Date and amount of prepaid Rent due
in accordance with this section and Section 2(d). The "COMMENCEMENT DATE" shall
be the earlier to occur of (i) the date on which Tenant occupies more than 3,500
square feet on of the Premises and begins conducting business therein, or (ii)
90 days after the Possession Date; provided, however, that if the Possession
Date has not occurred by August 15, 1998, then Landlord shall ▇▇▇▇▇ Base Rent
and additional Rent under Section 2 (b) from the date Tenant would otherwise be
obligated to commence paying Rent hereunder, for a period (the "ABATEMENT
PERIOD") equal to one day for each day after August 15, 1998 that possession of
the Premises is not so tendered to Tenant; provided further, however, that if
the Possession Date has not occurred by September 30, 1998, either Landlord or
Tenant may terminate this Lease by delivering written notice thereof to the
other. If either party terminates this Lease pursuant to this Section 1.(b),
Landlord shall reimburse Tenant for Tenant's out-of-pocket expenses relating to
this Lease.
(c) Tenant may during the Term, at its sole risk and expense, use any
existing fixtures, improvements or equipment in the Premises (the "EXISTING
IMPROVEMENTS"). Unless expressly stated otherwise in this section, Landlord
makes no representation or warranties regarding the Existing Improvements,
including without limitation that the Existing Improvements comply with any Laws
(defined below). Landlord shall not be required to perform any repairs other
than those outlined on Exhibit F attached hereto or maintenance of the Existing
Improvements. By occupying the Premises, Tenant shall have accepted the Premises
in their "As-Is" condition, subject to Exhibit F. Landlord warrants that on the
Possession Date Landlord will own all Existing Improvements constituting
non-trade fixtures then in the Premises.
2. BASE RENT AND ADDITIONAL RENT
(a) Tenant shall pay to Landlord "BASE RENT", in advance, without
demand, deduction or set off, unless otherwise specified herein, equal to the
following amounts for the following months of the term:
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Lease Month Monthly Base Rent
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1 through 12 $36,250.00
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13 through 72 $60,812.50
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73 through 132 $66,879.16
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(b) Tenant shall pay, as Additional Rent, all costs incurred in
owning, managing, operating and maintaining the Premises and the facilities and
services provided for the use of Tenant (collectively, "OPERATING EXPENSES"),
including the following items: (1) Taxes (defined below) and the cost of any tax
consultant employed to assist Landlord in determining the fair tax valuation of
the Premises; (2) the cost of insurance; (3) the cost of management fees and
expenses; (4) the cost of dues actually incurred by Landlord, assessments, and
other charges applicable to the Premises payable to any property or community
owner association under restrictive covenants or deed restrictions to which the
Premises are subject; and (5) alterations, additions, and improvements made by
Landlord to comply with Law (defined below). Additional Rent under this Section
2.(b) shall be payable by Tenant to Landlord in monthly installments equal to
1/12 of Landlord's estimate of the annual Operating Expenses. The initial
monthly payments are based upon Landlord's estimate of the Operating Expenses
for the year in question, and shall be increased or decreased annually to
reflect the projected actual Operating Expenses for that year. Within 90 days
after each calendar year or as soon thereafter as is reasonably practicable,
Landlord shall deliver to Tenant a statement setting forth the actual Operating
Expenses for such year. If Tenant's total payments in respect of Operating
Expenses for any year are less than the Operating Expenses for that year, Tenant
shall pay the difference to Landlord within ten business days after receipt of
Landlord's written request therefor; if such payments are more than such
Operating Expenses, Landlord shall retain such excess and credit it against
Tenant's future annual payments. Operating Expenses shall not include the
following: (A) any costs for interest, amortization, or other payments on loans
to Landlord; (B) federal income taxes imposed on or measured by the income of
Landlord from the operation of the Building; (C) rents under ground leases; (D)
costs incurred in selling, syndicating, financing, mortgaging, or hypothecating
any of Landlord's interests in the Premises; and (E) overhead and profit
increment paid to Affiliates of Landlord or its partners for services (including
insurance) on or to the Building, to the extent that the costs of such services
exceed competitive costs for such services rendered by persons or entities of
similar skill, competence and experience, other than an Affiliate of Landlord or
its partners. There shall be no duplication of costs for reimbursements in
calculating Operating Expenses. The amounts of the initial monthly installments
of Base Rent and Operating Expenses (and the portion thereof attributable to
Taxes) are as follows:
Base Rent (Section 2.(a)).............................. $36,250.00
Operating Expenses, excluding Taxes (Section 2.(b)).... $ 1,511.88
Taxes (Sections 2.(b) and 3.(a))....................... $ 5,416.67
Total initial monthly payment.......................... $43,178.55
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(c) All payments and reimbursements required to be made by Tenant
under this Lease shall constitute "RENT" (herein so called) and shall be payable
without demand, deduction or set off, unless otherwise specified.
(d) As used herein, the term "LEASE MONTH" shall mean each calendar
month during the Term. If the Commencement Date does not occur on the first day
of a calendar month, the Rent for the period from the Commencement Date through
the last day of such calendar month shall be included in the second full Lease
Month, and Tenant shall pay as monthly Rent an amount for such partial month
equal to $43,178.55 multiplied by a fraction whose numerator is the number of
days in the Term which falls within such month and whose denominator is the
number of days in such month. The Rent for the first full Lease Month shall be
prepaid within three (3) business days of receipt of Landlord's written notice
of the Possession Date; thereafter, monthly installments of Rent and additional
rent shall be due on the first day of each calendar month following the
Commencement Date. Any abatement amount accrued under Section 1.(b) not deducted
from the first full Lease Month Rent shall be deducted by Tenant from the second
full Lease Month Rent.
(e) All payments required of Tenant hereunder shall bear interest from
the date due until paid at the maximum lawful rate. Alternatively, after
Landlord has twice delivered to Tenant written notice of its failure to pay Rent
when due, then Landlord may, without delivering to Tenant notice of such
delinquency, charge Tenant a fee equal to 5% of any future delinquency payment
during the 12-month period following such delinquency to reimburse
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Landlord for its cost and inconvenience as a consequence of Tenant's
delinquency. In no event, however, shall the charges permitted under this
Section 2.(e) or elsewhere in this Lease, to the extent they are considered to
be interest under applicable law, exceed the maximum lawful rate of interest.
3. TAXES.
(a) Landlord shall pay all taxes, assessments and governmental charges
whether federal, state, county, or municipal and whether they are imposed by
taxing or management districts or authorities presently existing or hereafter
created (collectively, "TAXES") that accrue against the Premises. If, during the
Term, there is levied, assessed or imposed on Landlord a capital levy or other
tax directly on the Rent or a franchise tax, assessment, levy or charge measured
by or based, in whole or in part, upon Rent, then all such taxes, assessments,
levies or charges, or the part thereof so measured or based, shall be included
within the term "Taxes". "Taxes" shall not include any corporate income tax
levied on Landlord.
(b) Tenant shall (1) before delinquency pay all taxes levied or
assessed against any personal property, fixtures or alterations placed in the
Premises and (2) upon the request of Landlord, deliver to Landlord receipts from
the applicable taxing authority or other evidence acceptable to Landlord to
verify that such taxes have been paid. If any such taxes are levied or assessed
against Landlord or Landlord's property and (A) Landlord pays them or (B) the
assessed value of Landlord's property is increased thereby and Landlord pays the
increased taxes, then Tenant shall pay to Landlord such taxes within 10 business
days after receipt of Landlord's written request therefor; however, Landlord
shall not pay such amounts if Tenant notifies Landlord that it will contest the
validity or amount of such taxes and thereafter diligently proceeds with such
contest in accordance with applicable Law and the non-payment thereof does not
pose a threat of loss or seizure of the Building or interest of Landlord
therein. If Tenant notifies Landlord that it will contest the validity or amount
of taxes, Landlord shall cooperate with Tenant, at Tenant's request, in such
contest. Tenant hereby agrees to reimburse Landlord for any reasonable costs
incurred in contesting the taxes.
4. LANDLORD'S MAINTENANCE.
(a) This Lease is intended to be a net lease; accordingly, Landlord's
maintenance obligations are limited to the repair and replacement of the
Building's roof as provided in Section 4.(b) and maintenance of the foundation
and structural members of the exterior walls; however, subject to Section 4.(b)
Landlord shall not be responsible (1) for any such work until Tenant delivers to
Landlord written notice of the need therefor and Landlord agrees such work is
necessary or (2) for alterations to the Building's Structure required by Law
because of Tenant's use of the Premises (which alterations shall be performed by
Tenant). The Building's Structure does not include skylights, windows, glass or
plate glass, doors, special store fronts or office entries, all of which shall
be maintained by Tenant. Subject to Section 11.(a), Landlord's liability for any
defects, repairs, replacement or maintenance for which Landlord is responsible
hereunder shall be limited to the cost of performing such work.
(b) Landlord shall repair and maintain the Building's roof throughout
the term of this Lease.
Landlord shall complete replacement of the roof during the first half of the
fourth year of the term of this Lease or earlier if, despite repeated repair,
leaks or instability in the roof pose a risk to the safety and security of
Tenant's employees and business invitees and/or personal property or repeated
repairs unduly interfere with Tenant's business operations ("NEED"); provided,
however, that in the event a reputable third party engineer who is mutually
agreed upon by both Landlord and Tenant certifies the Need for roof replacement
prior to the commencement of the first half of the fourth year of the term of
this Lease, then Landlord shall commence replacement of the roof within thirty
(30) days of receipt of such third party engineer's report. Landlord's approval
of the third party engineer shall not be unreasonably withheld, delayed, or
conditioned, and Landlord shall reimburse Tenant for its costs incurred in
connection with the third party engineer. To the extent possible, Landlord shall
repair and replace the roof with minimal interference with Tenant's business
operations.
(c) If (1) Tenant fails to commence any of Tenant's maintenance,
repair and replacement obligations or any other items that are Tenant's
obligation pursuant to Section 5 within fifteen business days after receipt of
written notice by Landlord of the occurrence of damage or the need for repair
and thereafter diligently to pursue the
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completion thereof or (2) notwithstanding such diligence, Tenant fails to
complete such repairs or replacements within 60 days of receipt of notice, then
Landlord shall make the same at Tenant's cost. If any such damage is considered
an emergency, in Landlord's sole determination then Landlord may elect to repair
such damage at Tenant's expense, rather than having Tenant repair such damage.
The cost of all replacement or repair work performed by Landlord under this
Section 4.(c) shall be paid by Tenant to Landlord within 10 business days after
Tenant receives Landlord's invoice.
5. TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS.
(a) Tenant shall maintain all parts of the Premises (except for
maintenance work which Landlord is expressly responsible for under Section
5.(d)) in good condition and promptly make all necessary repairs and
replacements to the Premises. Tenant shall repair and pay for any damage caused
by a Tenant Party (defined below) or caused by Tenant's default hereunder.
(b) Tenant shall maintain the parking areas, sidewalks, driveways,
alleys and grounds located on the Land in a clean and sanitary condition,
consistent with the operation of a first-class office/warehouse building,
including, without limitation, prompt maintenance, repairs and replacements of
(1) the exterior of the Building (including painting), (2) landscaping, (3)
sprinkler systems and sewage lines, four (4) parking areas and any other items
normally associated with the foregoing. Tenant may request Landlord to perform
any or all Tenant's repair, replacement, and maintenance obligations and if
Landlord does so, then Tenant shall reimburse Landlord for the cost thereof
within ten (10) business days after Tenant receives an invoice therefor.
(c) Tenant shall maintain the hot water equipment and the heating, air
condition, and ventilation equipment and system (the "HVAC SYSTEM") in good
repair and condition and in accordance with all Laws and with such equipment
manufacturers' suggested operation/maintenance service program to the extent
Landlord provides Tenant with notice thereof. Such obligation shall include
repair and replacement of all equipment necessary to maintain such equipment and
system in good working order. Within 30 days after the Commencement Date, Tenant
shall enter into regularly scheduled preventive maintenance/service contracts
for such equipment, in a form and substance and with a contractor reasonably
acceptable to Landlord, and deliver copies thereof to Landlord. At least 14 days
before the end of the Term, Tenant shall deliver to Landlord a certificate from
an engineer mutually acceptable to Landlord and Tenant certifying that the hot
water equipment and the HVAC System are then in good repair and working order.
(d) Tenant shall be responsible for all pest control in the Premises.
If requested by Landlord (such request must be in writing and be accompanied by
the recommendation of an independent pest control expert), Tenant shall enter
into a regularly scheduled termite control contract with a contractor reasonably
acceptable to Landlord. At Landlord's election and with advance written notice
to Tenant, Landlord may perform the work required under this Section 5.(d), at
Tenant's expense.
6. ALTERATIONS. (a) Tenant shall not make any alterations, additions or
improvements to the Premises which affect the Building's Structure (defined
below) without the prior written consent of Landlord. Landlord shall not be
required to notify Tenant of whether it consents to any such alteration,
addition or improvements until it (1) has received plans and specifications
thereof which are sufficiently detailed to allow construction of the work
depicted thereon to be performed in a good and workmanlike manner and (2) has
had a reasonable opportunity, not to exceed 10 business days, to review them. If
the alteration, addition or improvement will affect the Building's roof,
foundation and structural elements (the roof, foundation, and structural
elements herein collectively called the "BUILDING STRUCTURE"), HVAC System, or
mechanical, electrical, or plumbing systems, then the plans and specifications
therefor must be prepared by a licensed engineer reasonably acceptable to
Landlord. Landlord's approval of any plans and specifications shall not be a
representation that the plans or the work depicted thereon will comply with Law
or be adequate for any purpose, but shall merely be Landlord's consent to
performance of the work. Upon completion of any alteration, addition, or
improvement, Tenant shall deliver to Landlord accurate, reproducible as-built
plans therefor. Unless Landlord specifies in writing otherwise, all alterations,
additions, improvements, and fixtures shall be Landlord's property when
installed in the Premises, except for furniture and equipment of Tenant which is
not affixed to the Premises so as to become a fixture (i.e., unattached items
and items which are temporarily attached by bolts and screws, but not items
which are built-in or incorporated into the Building or the electrical,
plumbing, or mechanical systems therein). In addition, Tenant may erect shelves,
bins, and trade fixtures provided that such items (A) do not alter
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the basic character of the Premises; (B) do not overload or damage the Premises;
and (C) may be removed without damage to the Premises (normal wear and tear
excepted). All work performed by a Tenant Party in the Premises (including that
relating to the installations, repair, replacement, or removal of any item)
shall be performed in accordance with all Laws and with Landlord's
specifications and requirements, in a good and workmanlike manner, and so as not
to damage or alter the Building's Structure or the Premises, provided, however,
that Tenant may make non-structural alterations, additions or improvements to
the Premises at an estimated cost of up to $25,000 without Landlord's prior
written consent, specifications and requirements.
(b) INITIAL TENANT IMPROVEMENTS. Tenant shall construct the initial
tenant improvements following the Possession Date and during the first 18 months
of the Term (those improvements completed during such period are herein called
the "INITIAL IMPROVEMENTS") in accordance with Exhibit B, at Tenant's expense,
except as provided below.
(1) Tenant shall bear the entire cost of performing the Work
(defined below) relating to the Initial Improvements (including,
without limitation, design of the Initial Improvements and preparation
of the Working Drawings, costs of construction labor and materials,
electrical usage during construction, additional janitorial services,
general tenant signage, related taxes and insurance costs relating
thereto, all of which are herein collectively called the ("TOTAL
CONSTRUCTION COSTS") in excess of the Construction Allowance. Upon the
approval of the Working Drawings for the Initial Improvements and
selection of a contractor, Tenant shall promptly execute a mutually
agreeable work order agreement prepared by Landlord which identifies
such drawings, itemizes the Total Construction Costs and sets forth
the Construction Allowance.
(2) Provided no Event of Default exists, Landlord shall
provide to Tenant a construction allowance for the Initial
Improvements the "CONSTRUCTION ALLOWANCE") equal to the lesser of (A)
the Total Construction Costs incurred for the Initial Improvements or
(B) $624,000, of which a minimum of $520,000 of the Construction
Allowance must be utilized to improve the Premises. The Construction
Allowance shall be disbursed in monthly advances based on the cost of
work incurred. Tenant shall submit to Landlord (but not more
frequently than once per month) Construction Allowance requests
accompanied by all invoices from contractors, subcontractors, and
suppliers evidencing the cost of performing the Work for which the
request is being submitted, together with lien waivers from such
parties. Provided that no Event of Default exists, Landlord shall make
advances of the Construction Allowance within 30 days after its
receipt of the advance request accompanied by the appropriate
documentation; however, the final draw of the amount of the applicable
allowance utilized to improve the Premises, which shall be 10% of the
amount of such allowance allocated to improvement, shall not be
disbursed until Landlord has received final lien waivers from all
persons performing work or supplying materials for the Initial
Improvements and certificate of occupancy from the appropriate
governmental authority, if applicable to the Work for the Initial
Improvements or, if applicable, evidence of governmental inspection
and approval of the Work for the Initial Improvements. Any amount of
the Construction Allowance above the minimum which must be utilized to
improve the Premises shall be credited against Tenant's Rent during
the first year of the Term.
7. WINDOW TREATMENTS. Tenant shall not place, install or attach any
decorations, advertising media, blinds, draperies, window treatments, bars, or
security installations to the Premises or the Building which are visible from
the outside of the Building without Landlord's prior written approval which
approval may be withheld in Landlord's sole discretion, provided that Landlord
shall not unreasonably delay notifying Tenant of its decision. Tenant shall not
(a) make any changes to the exterior of the Premises or the Building, (b)
install any exterior lights, decorations, balloons, flags, pennants, banners or
paintings, or (c) erect or install any signs, windows or door lettering, decals,
window or storefront stickers, placards, decorations or advertising media of any
type that is visible from the exterior of the Premises without Landlord's prior
written consent.
8. UTILITIES. Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with any taxes, penalties, surcharges,
maintenance charges, and the like pertaining to the Tenant's use of the
Premises. Landlord shall not be liable for any interruption or failure of
utility service to the Premises. If Tenant fails to pay any such amounts when
due, Landlord
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may, after notifying Tenant in writing of the amounts due, and giving Tenant 10
business days to pay such amount, to do so, in which case, Tenant shall
reimburse Landlord for all amounts paid by Landlord within 10 business days
after Tenant receives Landlord's invoice therefor. Landlord agrees it will not
pay any amounts due in the event Tenant, in good faith, is disputing any charges
from such providers.
9. INSURANCE. Tenant shall maintain (a) workers' compensation insurance
(with a waiver of subrogation endorsement reasonably acceptable to Landlord) and
commercial general liability insurance (with contractual liability endorsement),
including personal injury and property damage in the amount of $1,000,000 per
occurrence combined single limit for personal injuries and death of persons and
property damage occurring in or about the Premises, plus umbrella coverage of at
least $3,000,000 per occurrence, (b) fire and extended coverage insurance
covering (1) the replacement cost of all alterations, additions, partitions and
improvements installed in the Premises, (2) the replacement cost of all of
Tenant's personal property in the Premises, and (3) loss of profits in the event
of an insured peril damaging the Premises, and (c) such other insurance as
Landlord may reasonably require. Such policies, other than worker's
compensation, shall (A) name Landlord, Landlord's Mortgagee, Landlord's agents,
and their respective Affiliates (defined below), as additional insureds (and as
loss payees on the fire and extended coverage insurance), (B) be issued by an
insurance company rated "A-X" or better as established by Best's Rating Guide or
(C) provided that Landlord shall receive 30 days' prior written notice of
cancellation, (D) be delivered to Landlord by Tenant before the Commencement
Date and at least 15 days before each renewal thereof, and (E) provide primary
coverage to Landlord when any policy issued to Landlord is similar or duplicate
in coverage, in which case Landlord's policy shall be excess over Tenant's
policies.
10. CASUALTY DAMAGE.
(a) Tenant immediately shall give written notice to Landlord of any
damage to the Premises. If the Premises are totally destroyed by an insured
peril or so damaged by an insured peril that, in Landlord's estimation ,
rebuilding or repairs cannot be substantially completed within 210 days after
the date of Landlord's actual knowledge of such damage, then Landlord shall
immediately notify Tenant in writing of its intent not to rebuild. Landlord or
(if a Tenant Party did not intentionally cause such damage) Tenant may terminate
this Lease by delivering to the other written notice thereof within 30 days
after Tenant's receipt of Landlord's notice of intent not to rebuild, in which
case, the Rent shall be abated during the unexpired portion of this Lease,
effective upon the date such damage occurred. Time is of the essence with
respect to the delivery of such notices.
(b) Subject to Section 10.(c), if this Lease is not terminated under
Section 10.(a), then Landlord shall restore the Premises to substantially its
previous condition, except that Landlord shall not be required to rebuild,
repair or replace any part of the partitions, fixtures, additions and other
improvements or personal property required to be covered by Tenant's insurance
under Section 9. If the Premises are untenantable, in whole or in part, during
the period beginning on the date such damage occurred and ending on the date of
substantial completion of Landlord's repair or restoration work (the "REPAIR
PERIOD"), then the Rent for such period shall be reduced to such extent as may
be fair and reasonable under the circumstances and the Term shall be extended by
the number of days in the Repair Period.
(c) If the Premises are destroyed or substantially damaged by any
peril not covered by the insurance maintained by Landlord or any Landlord's
Mortgagee (defined below) requires that insurance proceeds be applied to the
indebtedness secured by its Mortgage (defined below) or to the Primary Lease
(defined below) obligations, Landlord may terminate this Lease by delivering
written notice of termination to Tenant within 15 days after such destruction or
damage or such requirement is made known by any such Landlord's Mortgagee, as
applicable, whereupon all rights and obligations hereunder shall cease and
terminate, except for any liabilities of, Landlord and Tenant which accrued
before this Lease is terminated.
11. LIABILITY, INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE
CLAIMS.
(a) Subject to Section 11.(b) Tenant shall defend, indemnify, and hold
harmless Landlord and its agents from and against all claims, demands,
liabilities, causes of action, suits, judgments, and expenses (including
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attorneys' fees) for any injury to or death of any person or persons or the
damage to or theft, destruction, loss, or loss of use of any property or
inconvenience (A "LOSS") (other than a Loss arising from the ordinary or gross
negligence or willful misconduct of Landlord or its agents or employees),
arising from any occurrence on the Premises. Subject to Section 11.(b),
Landlord shall indemnify, defend, and hold harmless Tenant, its successors,
assigns, agents, employees, contractors, partners, directors, officers,
subsidiaries and affiliates from and against all fines, suits, losses, costs,
liabilities, claims, demands, actions and judgments of every kind and character
arising out of the ordinary or gross negligence or willful misconduct of
Landlord or any of its duly authorized agents or employees. These indemnity
provisions shall survive termination or expiration of this Lease.
(b) Landlord and Tenant each waives any claim it might have against
the other for any damage to or theft, destruction, loss, or loss of use of any
property, to the extent the same is insured against under any insurance policy
maintained by it that covers the Premises, Landlord's or Tenant's fixtures,
personal property, leasehold improvements, or business, or is required to be
insured against by the waiving party under the terms hereof, REGARDLESS OF
WHETHER THE NEGLIGENCE OR FAULT OF THE OTHER PARTY CAUSED SUCH LOSS; HOWEVER,
LANDLORD'S WAIVER SHALL NOT APPLY TO ANY DEDUCTIBLE AMOUNTS MAINTAINED BY
LANDLORD UNDER ITS INSURANCE. Each party shall cause its insurance carrier to
endorse all applicable policies waiving the carrier's rights of recovery under
subrogation or otherwise against the other party. The deductible amount shall
not exceed $25,000 without Tenant's prior written consent.
12. USE. Tenant shall continuously occupy and use the Premises only for
general office use and shall comply with all laws, orders, rules, and
regulations relating to the use, condition, and occupancy of the Premises. The
Premises shall not be used for any use which is disreputable or creates
extraordinary fire hazards or results in an increased rate of insurance on the
Building or its contents or the storage of any hazardous materials or
substances. If, because of Tenant's acts, the rate of insurance on the Building
or its contents increases, failing Tenant's cure of such condition within 10
business days of receipt of Landlord's written notice of such condition, then
Tenant shall pay to Landlord the amount of such increase within 10 business days
after receipt of a written notice thereof, and acceptance of such payment shall
not constitute a waiver of any of Landlord's other rights. Tenant shall conduct
its business and control its agents, employees, and invitees in such a manner as
not to create any nuisance or interfere with other tenants or Landlord in its
management of the Building.
13. INSPECTION. Upon reasonable advance written notice, which, excluding
emergencies (in which case no notice is required), shall be one business day,
Landlord and Landlord's agents and representatives may enter the Premises during
business hours to inspect the Premises; to make such repairs as may be required
or permitted under this Lease; to perform any unperformed obligations of Tenant
hereunder; and to show the Premises to prospective purchasers, mortgagees,
ground lessors, and (during the last 12 months of the Term) tenants. During the
last 12 months of the Term, Landlord may erect a sign on the Premises indicating
that the Premises are available. Tenant shall notify Landlord in writing of its
intention to vacate the Premises at least 60 days before Tenant will vacate the
Premises; such notice shall specify the date on which Tenant intends to vacate
the Premises (the "VACATION DATE"). At least 30 days before the Vacation Date,
Tenant shall arrange to meet with Landlord for a joint inspection of the
Premises. After such inspection, Landlord shall prepare a list of items that,
subject to ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ must perform before the Vacation Date. If Tenant
intentionally or in bad faith fails to arrange for such inspection, then
Landlord may conduct such inspection and Landlord's determination of the work
Tenant is required to perform before the Vacation Date shall be conclusive. If
Tenant fails to perform such work before the Vacation Date, then Landlord may
perform such work at Tenant's cost. Tenant shall pay all reasonable costs
incurred by Landlord in performing such work within 10 business days after
receipt of Landlord's written request therefor.
14. ASSIGNMENT AND SUBLETTING. (a) Tenant shall not, without prior written
consent of Landlord, (1) assign, transfer, or encumber this Lease or any estate
or interest herein, whether directly or by operation of law, (2) permit any
other entity to become Tenant hereunder by merger, consolidation, or other
reorganization, except as provided in Section 14.(c), (3) if Tenant is an entity
other than a corporation whose stock is publicly traded, permit the transfer of
the ownership interest in Tenant, (4) sublet any portion of the Premises, (5)
grant any licence, concession, or other right of occupancy of any portion of the
Premises, or (6) permit the use of the Premises by any parties other than Tenant
(any of the events listed in Sections 14.(a)(1) through 14.(a)(6) being a
"Transfer"). Provided that (A) the proposed assignment or sublease is for the
entire Premises, Landlord shall not unreasonably withhold, delay or condition
its consent to any assignment or subletting of the Premises to a party which may
reasonably be expected to
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fulfill the obligations of Tenant hereunder, and (B) will use the Premises for
the purposes herein stated. Without limiting the foregoing, Landlord may
withhold its consent to any such assignment or subletting of the Premises to (i)
any governmental agency, (ii) any party which will use Hazardous Substances in
the Premises, or (iii) any party to whom Landlord's Mortgagee objects. If Tenant
requests Landlord's consent to a Transfer, then Tenant shall provide Landlord
with a written description of all relevant terms and conditions of the proposed
Transfer, copies of the proposed documentation, and the following information
about the proposed transferee: name and address, reasonably satisfactory
information about its business and business history; its proposed use of the
Premises; banking, financial, and other credit information; and general
references sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. Tenant shall reimburse Landlord for its
reasonable attorney's fees and other expenses incurred in connection with
considering any request for its consent to a Transfer. Landlord shall, within 10
business days of receipt of such information from Tenant, approve such Transfer
or notify Tenant in writing of Landlord's reason for not approving such proposed
Transfer. Landlord will use commercially reasonable efforts to obtain the
consent of Landlords' Mortgagee to any proposed assignee or subtenant of which
Landlord approves. If Landlord fails to so notify Tenant within such period,
then the proposed Transfer shall be deemed approved. If Landlord consents to a
proposed Transfer, then the proposed transferee shall deliver to Landlord a
written agreement whereby it expressly assumes the Tenant's obligations
hereunder (however, any transferee of less than all of the space in the Premises
shall be liable only for obligations under this Lease, that are properly
allocable to the space subject to the Transfer, and only to the extent of the
Rent it has agreed to pay Tenant therefor). No transfer shall release Tenant
from performing the obligations of the "Tenant" under this Lease, but rather
Tenant and its transferee shall be jointly and severally liable therefor.
Landlord's consent to any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. If an Event of Default occurs while the Premises or any
part thereof are subject to a Transfer, then Landlord, in addition to its other
remedies, may collect directly from such transferee all rents becoming due to
Tenant and apply such rents against Tenant's Rent obligations. Tenant authorizes
its transferees to make payments of Rent directly to Landlord upon receipt of
notice from Landlord to do so.
(b) Tenant hereby assigns, transfers and conveys all consideration
(less reasonable costs and expenses actually incurred by Tenant directly
relating to such Transfer) received by Tenant under any Transfer, which are in
excess of the rents payable by Tenant under this Lease, and Tenant shall hold
such amounts in trust for Landlord and pay them to Landlord within 10 business
days after receipt.
(c) Notwithstanding the foregoing, Tenant may Transfer all or part of
its interest in this Lease or all or part of the Premises to the following types
of entities (a "PERMITTED TRANSFEREE") without the written consent of Landlord
(a "PERMITTED TRANSFER").
(1) a subsidiary or an Affiliate of Tenant;
(2) any corporation in which or with which Tenant, or its
corporation successors or assigns, is merged or consolidated, in
accordance with applicable statutory provisions governing merger and
consolidation of corporations, so long as (A) Tenant's obligations
hereunder are assumed by the corporation surviving such merger or
created by such consolidation; and (B) the Tangible Net Worth of
surviving or created corporation is not less than the Tangible Net
Worth of Tenant as of the date hereof; or
(3) any corporation acquiring all or substantially all of
Tenant's assets, if such corporation's Tangible Net Worth after such
acquisition is not less than the Tangible Net Worth of Tenant as of
the date hereof.
Tenant shall promptly notify Landlord of any such Permitted Transfer. As a
condition precedent to any Permitted Transfer, the proposed Permitted Transferee
must deliver to Landlord a written agreement whereby it expressly assumes the
Tenant's obligations hereunder. As used herein, "TANGIBLE NET WORTH" shall mean
the excess of total assets over total liabilities (in each case, determined in
accordance with GAAP) excluding from the determination of total assets all
assets which would be classified as intangible assets under GAAP, including,
without limitation, goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises. Any subsequent Transfer by a Permitted Transferee
shall be subject to the provisions of this Section 14. Notwithstanding any
assignment or subletting, Tenant shall at all times
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remain fully responsible and liable for the payment of Rent and for compliance
with all of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has been obtained for any such assignments or sublettings).
(d) With respect to any written request by Tenant to Landlord for
Landlord's consent to a Transfer (other than a Permitted Transfer), if such
Transfer is for more than fifty percent (50%) of the Premises or for more than
five years, Landlord may, within 10 business days after submission of such
request, cancel this Lease (or, as to a subletting or assignment, cancel as to
the portion of the Premises proposed to be sublet or assigned) as of the date of
the proposed Transfer was to be effective. If, pursuant to the exercise of this
right, Landlord cancels this Lease as to any portion of the Premises, then this
Lease shall cease for such portion of the Premises and Tenant shall pay to
Landlord all Rent accrued through the cancellation date relating to the portion
of the Premises covered by the proposed Transfer. Thereafter, Landlord may lease
such portion of the Premises to the prospective transferee (or to any other
person) without liability to Tenant.
(e) If Tenant believes Landlord has unreasonably withheld its consent,
then, as Tenant's exclusive remedy therefor, Tenant may notify Landlord in
writing of such dispute, whereupon the following shall occur. Within 10 business
days of Landlord's receipt of such notice, Landlord and Tenant shall jointly
appoint a person to resolve such dispute, who shall have at least 3-years'
experience in commercial real estate matters. If Landlord and Tenant are unable
to agree on such person within such ten-day period, then either party may ask
the Dallas office of the American Arbitration Association ("AAA") to select such
person. The AAA's selection of the arbitrator shall be binding on Landlord and
Tenant. The parties shall bear equally any appointment fee charged by AAA. The
arbitration shall be conducted in accordance with the expedited version of the
AAA Commercial Arbitration Rules and shall take place in Dallas, Texas. The
determination of the arbitrator shall be final and binding on Landlord and
Tenant. The non-prevailing party shall pay the fees of the arbitrator. Each
party shall bear its own expenses.
15. CONDEMNATION. If 50% or more of the Land or Premises is taken for any
public or quasi-public use by right of eminent domain or private purchase in
lieu thereof (a "TAKING"), and the Taking prevents or materially interferes with
the use of the remainder of the Premises for the purpose for which they were
leased to Tenant, either party may terminate this Lease by delivering to the
other written notice thereof within 30 days after the Taking, in which case Rent
shall be abated during the unexpired portion of the Term, effective on the date
of such Taking. If (a) less than 50% of the Land or Premises are subject to a
Taking or (b) 50% or more of the Land or Premises are subject to a Taking, but
the Taking does not prevent or materially interfere with the use of the
remainder of the Premises for the purpose for which they were leased to Tenant,
then neither party may terminate this Lease, but the Rent payable during the
unexpired portion of the Term shall be reduced to such extent as may be fair and
reasonable under the circumstances. If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the Land, the Building, and
other improvements taken, and Tenant may separately pursue a contemporaneous
claim against the condemner for the value of Tenant's personal property which
Tenant is entitled to remove under this Lease, moving costs, loss of business,
and other claims it may have.
16. SURRENDER OF PREMISES; HOLDING OVER.
(a) No act by Landlord shall be an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid
unless it is in writing and signed by Landlord. At the end of the Term or the
termination of Tenant's right to possess the Premises, Tenant shall (1) deliver
to Landlord the Premises with all improvements located thereon in good repair
and condition, reasonable wear and tear (subject however to Tenant's maintenance
obligations) excepted, and with the HVAC System and hot water equipment, light
and light fixtures (including ballasts), and overhead doors and related
equipment in good working order, (2) deliver to Landlord all keys to the
Premises, and (3) remove all signage placed on the Premises by or at Tenant's
request. All fixtures, alterations, additions, and improvements shall be
Landlord's property and shall remain on the Premises except as provided in the
next two sentences. Tenant may remove all unattached trade fixtures, furniture,
and personal property placed in the Premises by Tenant (but Tenant shall not
remove any such item which was paid for, in whole or in part, by Landlord).
Additionally, Tenant shall remove such alterations, additions, improvements,
fixtures, equipment, wiring, furniture, and other property not previously
approved by Landlord, as Landlord may request, provided such request is made
within one month after the end of the Term; however, Tenant shall not be
required to remove any addition or improvements to the Premises unless Landlord
has specifically required in writing at the time of approval in accordance with
Section
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6 or Exhibit B that the improvement or addition in question must be
removed. All items not so removed shall, at the option of Landlord, be deemed
abandoned by Tenant and may be appropriated, sold, stored, destroyed, or
otherwise disposed of by Landlord without notice to Tenant and without any
obligation to account for such items and Tenant shall pay for the costs incurred
by Landlord in connection therewith. All work required of Tenant under this
Section 16 shall be coordinated with Landlord and be done in a good and
workmanlike manner, in accordance with all Laws, and so as not to damage the
Building. Tenant shall, at its expense, repair all damage caused by any work
performed by Tenant under this Section 16.(a).
(b) If Tenant fails to vacate the Premises at the end of the Term,
then Tenant shall be a Tenant at will and Tenant shall pay, in addition to the
other Rent due hereunder, a daily base rental equal to 150% of the daily Base
Rent payable during the last month of the Term, even if Landlord consents to
such holdover, unless Landlord agrees otherwise in writing. Additionally, Tenant
shall defend, indemnify, and hold harmless Landlord from any damage, liability
and expense (including attorneys' fees and expenses) incurred because of such
holding over. No payments of money by Tenant to Landlord after the Term shall
reinstate, continue or extend the Term, and no extension of the Term shall be
valid unless it is in writing and signed by Landlord and Tenant.
17. QUIET ENJOYMENT. Provided Tenant has substantially performed its
obligations under this Lease, Tenant shall peaceably and quietly hold and enjoy
the Premises for the Term, without hindrance from Landlord or any party claiming
by, through, or under Landlord, but not otherwise.
18. EVENTS OF DEFAULT. Each of the following events shall constitute an
"EVENT OF DEFAULT" under this Lease:
(a) Tenant's failure to pay Rent within ten (10) business days after
Landlord has delivered written notice to Tenant that the same is due; however,
an Event of Default shall occur hereunder without any obligation of Landlord to
give any notice if Landlord has given Tenant written notice under this Section
18.(a) more than twice during the twelve (12) month interval preceding such
failure by Tenant;
(b) The filing of a petition by or against Tenant or any guarantor of
Tenant's obligations hereunder (1) in any bankruptcy or other insolvency
proceeding; (2) seeking in any relief under any debtor relief Law; (3) for the
appointment of a liquidator, receiver, trustee, custodian, or similar official
for all or substantially all of Tenant's property or for Tenant's interest in
this Lease; or (4) for reorganization or modification of Tenant's capital
structure (however, if any such petition is filed against Tenant, then the
filing of such petition shall not constitute an Event of Default, unless it is
not dismissed within 45 days after the filing thereof).
(c) Tenant fails to discharge any lien placed upon the Premises in
violation of Section 22 within ten (10) days after Tenant receives written
notice that any such lien or encumbrance is filed against the Premises.
(d) Tenant fails to comply with any term, provision or covenant of
this Lease (other than those listed in this Section 18), and such failure
continues for 30 days after written notice thereof to Tenant.
19. REMEDIES.
(a) Upon any Event of Default, Landlord may, in addition to all other
rights and remedies afforded Landlord hereunder or by Law, take any of the
following actions:
(1) Terminate this Lease by giving Tenant written notice
thereof, in which event, Tenant shall pay to Landlord the sum of (A)
all Rent accrued hereunder through the date of termination, (B) all
amounts due under Section 19.(b), and (C) an amount equal to (i) the
total Rent that Tenant would have been required to pay for the
remainder of the Term discounted to present value at a per annum rate
equal to the rate of interest set forth for 26-week U.S. governmental
bills sold at a discount from face value in units of $10,000 to
$1,000,000 as published on the date this Lease is terminated by The
Wall Street Journal, Southwest Edition, in its listing of "Money
Rates" under the heading "Treasury Bills" (or, if no such rate is
published, the
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"Discount Rate" as published on such date under the "Money Rate"
listing), minus (ii) the then present fair rental value of the
Premises for such period, similarly discounted; or
(2) Terminate Tenant's right to possess the Premises without
terminating this Lease by giving written notice thereof to Tenant, in
which event Tenant shall pay to Landlord (A) all Rent and other
amounts accrued hereunder to the date of termination of possession,
(B) all amounts due from time to time under Section 19.(b), and (C)
all Rent and other sums required hereunder to be paid by Tenant during
the remainder of the Term, diminished by any net sums thereafter
received by Landlord through reletting the Premises during such
period. Landlord shall use reasonable efforts to relet the Premises on
such terms and conditions as Landlord, in its sole discretion, may
determine (including a term different than the Term, rental
concessions, alterations to, and improvement of, the Premises);
Landlord shall use commercially reasonable efforts to relet the
Premises. Landlord shall not be liable for, nor shall Tenant's
obligations hereunder be diminished because of, Landlord's failure to
relet the Premises or to collect Rent due for a reletting. Tenant
shall not be entitled to the excess of any consideration obtained by
reletting over the Rent due hereunder. Reentry by Landlord in the
Premises shall not affect Tenant's obligations hereunder for the
unexpired Term; rather, Landlord may, from time to time, bring action
against Tenant to collect amounts due by Tenant, without the necessity
of Landlord's waiting until the Term ends. Unless Landlord delivers
written notice to Tenant expressly stating that it has elected to
terminate this Lease, all actions taken by Landlord to exclude or
dispossess Tenant of the Premises shall be deemed to be taken under
this Section 19.(a)(2). If Landlord elects to proceed under this
Section 19.(a)(2), it may at any time elect to terminate this Lease
under Section 19.(a)(1).
Additionally, Landlord may perform Tenant's unperformed obligations hereunder
and, without notice, Landlord may alter locks or other security devices at the
Premises to deprive Tenant of access thereto, and Landlord shall not be required
to provide a new key or right of access to Tenant; provided, however, that
Landlord shall provide Tenant written notice and a reasonable opportunity to
remove all of its temporary and/or unattached trade fixtures, furniture, and
personal property placed on the Premises by Tenant (but Tenant shall not remove
any such item which was paid for, in whole or in part, by Landlord) in
accordance with Section 16.(a).
(b) Tenant shall pay to Landlord all costs incurred by Landlord
(including court costs and reasonable attorneys' fees and expenses) in (1)
obtaining possession of the Premises, (2) removing and storing Tenant's or any
other occupant's property, (3) repairing, restoring, altering, remodeling, or
otherwise putting the Premises into condition acceptable to a new tenant, (4) if
Tenant is dispossessed of the Premises and this Lease is not terminated,
reletting all or any part of the Premises (including brokerage commissions, cost
of tenant finish work, and other costs incidental to such reletting), (5)
performing Tenant's obligations which Tenant failed to perform, and (6)
enforcing, or advising Landlord of, its rights, remedies, and recourses.
Landlord's acceptance of Rent following an Event of Default shall not waive
Landlord's rights regarding such Event of Default. Landlord's receipt of Rent
with knowledge of any default by Tenant hereunder shall not be a waiver of such
default, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless set forth in writing and signed by Landlord. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such term
or violation of any other term. If Landlord repossesses the Premises pursuant to
the authority herein granted, then Landlord shall have the right to (A) keep in
place or (B) remove and store, at Tenant's expense, all of the furniture,
fixtures, equipment and other property in the Premises, including that which is
owned by or leased to Tenant at all times before any repossession thereof by any
lessor thereof or third party having a lien thereon. Landlord may relinquish
possession of all or any portion of such furniture, fixtures, equipment and
other property to any person (a "CLAIMANT") who presents to Landlord a copy of
any instrument represented by Claimant to have been executed by Tenant (or any
predecessor of Tenant) granting Claimant the right under various circumstances
to take possession of such furniture, fixtures, equipment or other property,
without the necessity on the part of Landlord to inquire into the authenticity
or legality of the instrument, but with reasonable advance written notice to
Tenant. Landlord may, at its option and without prejudice to or waiver of any
rights it may have, (i) escort Tenant to the Premises to retrieve any personal
belongings of Tenant and/or its employees or (ii) obtain a list from Tenant of
the personal property of Tenant and/or its employees and make such property
available to Tenant and/or Tenant's employees; however, Tenant first shall pay
in cash all costs and estimated expenses to be incurred, if any, in connection
with the removal of such property and making it available. The rights of
Landlord herein stated are in addition to any
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and all other rights that Landlord has or may hereafter have at law or in
equity, unless otherwise expressly waived in this Lease.
20. LANDLORD'S DEFAULT. If Landlord fails to perform any of its
obligations hereunder within 30 days after written notice from Tenant specifying
such failure, Tenant's exclusive remedy shall be an action for damages. Unless
Landlord fails to so cure such default after such notice, Tenant shall not have
any remedy or cause of action by reason thereof. Liability of Landlord to Tenant
for any default by Landlord, shall be limited to actual, direct, but not
consequential, damages therefor and shall be recoverable only from the interest
of Landlord in the Building and the Land, and neither Landlord nor Landlord's
owners shall have any personal liability therefor.
21. MORTGAGES.
(a) Upon receipt of a non-disturbance, attornment and subordination
agreement, this Lease shall be subordinate to any deed of trust, mortgage or
other security instrument (a "MORTGAGE"), and any ground lease, master lease, or
primary lease (a "PRIMARY LEASE") that now or hereafter covers any portion of
the Premises (the mortgagee under any Mortgage or the lessor under any Primary
Lease is referred to herein as "LANDLORD'S MORTGAGEE"), and to increases,
renewals, modifications, consolidations, replacements, and extensions thereof.
However, any Landlord's Mortgagee may elect to subordinate its Mortgage or
Primary Lease (as the case may be) to this Lease by delivering written notice
thereof to Tenant. Landlord shall use reasonable efforts to obtain a
non-disturbance, attornment and subordination agreement from the current
Landlord's Mortgagee, substantially in the form of Exhibit G attached hereto,
within 10 business days from the date hereof.
(b) Tenant shall attorn to any party succeeding to Landlord's interest
in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure,
power of sale, termination of lease, or otherwise, upon such party's request,
and Tenant's receipt of documentation confirming such party's interest in the
Premises and shall execute such agreements confirming such attornment as such
party may reasonably request. Tenant's obligation to attorn to any future
Landlord's Mortgagee under this Section 21 shall be conditioned upon such future
Landlord's Mortgagee's execution and delivery of a non-disturbance, attornment
and subordination agreement substantially in the form of the non-disturbance,
attornment and subordination agreement executed in connection with the execution
of this Lease attached hereto as Exhibit G. Tenant shall execute and deliver any
such non-disturbance, attornment and subordination agreement within ten (10)
days after Landlord's request therefor.
22. ENCUMBRANCES. Tenant has no authority, express or implied, to create
or place any lien or encumbrance of any kind or nature whatsoever upon, or in
any manner to bind Landlord's property or the interest of Landlord or Tenant in
the Premises or to deduct from the Rent for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs. Tenant shall pay or cause to be paid all sums
due for any labor performed or materials furnished in connection with any work
performed on the Premises by or at the request of Tenant. Tenant shall give
Landlord immediate written notice of the placing of any lien or encumbrance
against the Premises.
23. MISCELLANEOUS.
(a) Words of any gender used in this Lease shall include any other
gender, and words in the singular shall include the plural, unless the context
otherwise requires. The captions inserted in this Lease are for convenience only
and in no way affect the interpretation of this Lease. The following terms shall
have the following meanings: "LAWS" means all federal, state, and local laws,
rules, and regulations; all court orders, governmental directives, and
governmental orders; and all restrictive covenants affecting the Property (of
which Landlord has notified Tenant in writing), "LAW" means any of the
foregoing; "AFFILIATE" means any person or entity which, directly or indirectly,
controls, is controlled by, or is under common control with the party in
question; "TENANT PARTY" shall include Tenant, any assignees claiming by,
through, or under Tenant, any subtenants claiming by, through, or under Tenant,
and any of their respective agents, contractors, employees, and invitees; and
"INCLUDING" means "including, without limitation."
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(b) Landlord may transfer and assign, in whole or in part, its rights
and obligations in the Premises, in which case Landlord shall have no further
liability hereunder for all obligations expressly assumed in writing by
transferee or assignee. Each party represents and warrants that it has full
power and authority to enter into this Lease.
(c) Whenever a period of time is herein prescribed for action to be
taken by either party, such party 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.
(d) Tenant shall, from time to time, within 10 business days after
receipt of written request of Landlord, or as soon thereafter as is practicable
in the event such document is unavailable due in whole or in part to the action
or inaction of a non-related third party, deliver to Landlord, or Landlord's
designee, a certificate of occupancy for the Premises, financial statements for
itself and any guarantor of its obligations hereunder, evidence reasonably
satisfactory to Landlord that Tenant has performed its obligations under this
Lease, and an estoppel certificate stating that this Lease is in full effect,
the date to which Rent has been paid, the unexpired Term and such other factual
matters pertaining to this Lease as may be requested by Landlord. Consolidated
quarterly financial statements shall satisfy the requirement of this Section
23.(d). Tenant's obligation to furnish the above-described items in a timely
fashion is a material inducement for Landlord's execution of this Lease. If
Tenant fails to execute any such estoppel certificate within such 10
business-day period, Landlord may do so as attorney-in-fact for Tenant.
(e) This Lease, together with its Exhibits, constitutes the entire
agreement of the Landlord and Tenant with respect to the subject matter of this
Lease, and contains all of the covenants and agreements of Landlord and Tenant
with respect thereto. Landlord and Tenant each acknowledge that no
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations not expressly set forth in this Lease are of no
effect. This Lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.
(f) All obligations of the parties hereunder not fully performed by
the end of the Term shall survive, including, without limitation, all payment
obligations with respect to Taxes and insurance and all obligations concerning
the condition and repair of the Premises. Subject to Section 16, upon the end of
the Term and before Tenant vacates the Premises, Tenant shall pay to Landlord
any amount reasonably estimated by Landlord as necessary to put the Premises in
good condition and repair, reasonable wear and tear excluded. Tenant shall also,
prior to vacating the Premises, pay to Landlord the amount, as estimated by
Landlord, of Tenant's obligation hereunder for Operating Expenses for that
portion of the year in which the Term ends. All such amounts shall be used and
held by Landlord for payment of such obligations of Tenant hereunder, with
Tenant being liable for any additional costs therefor upon demand by Landlord or
with any excess to be returned to Tenant after all such obligations have been
determined and satisfied as the case may be.
(g) If any provision of this Lease is illegal, invalid or
unenforceable, then the remainder of this Lease shall not be affected thereby,
and in lieu of each such provision, there shall be added, as a part of this
Lease, a provision as similar in terms to such illegal, invalid or unenforceable
clause or provision as may be possible and be legal, valid and enforceable.
(h) All references in this Lease to "the date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this Lease.
(i) Landlord and Tenant each warrant to the other that it has not
dealt with any broker or agent in connection with this Lease other than The
Staubach Company. Landlord shall pay any amounts due to The Staubach Company as
a real estate brokerage commission as agreed upon by a separate document. Tenant
and Landlord shall each indemnify the other against all costs, attorneys' fees,
and other liabilities for commissions or other compensation claimed by any
broker or agent claiming the same by, through, or under the indemnifying party.
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(j) Subject to Section 24.(c) requiring duplicate notice to Tenant, if
and when included within the term "Tenant," as used in this instrument, there is
more than one person, firm or corporation, all shall jointly arrange among
themselves for their joint execution of a notice specifying an individual at a
specific address within the continental United States for the receipt of notices
and payments to Tenant. All parties included within the terms "Landlord" and
"Tenant," respectively, shall be bound by notices given in accordance with the
provisions of Section 24 to the same effect as if each had received such notice.
(k) The terms and conditions of this Lease are confidential and Tenant
shall not disclose the terms of this Lease to any third party except as may be
required by Law as necessary or to enforce its rights hereunder or in the course
of discussions or negotiations preceding a potential corporate transaction.
(l) Subject to Section 2.(b) of this Lease, Tenant shall pay interest
on all past-due Rent from the date due until paid at the maximum lawful rate. In
no event, however, shall the charges permitted under this Section 23.(l) or
elsewhere in this Lease, to the extent they are considered to be interest under
applicable Law, exceed the maximum lawful rate of interest.
24. NOTICES. Each provision of this instrument or of any applicable Laws
and other requirements with reference to the sending, mailing or delivering of
notice or the making of any payment hereunder shall be deemed to be complied
with when and if the following steps are taken:
(a) All Rent shall be payable to Landlord at the address for Landlord
set forth below or at such other address as Landlord may specify from time to
time by written notice delivered in accordance herewith. Tenant's obligation to
pay Rent shall not be deemed satisfied until such Rent has been actually
received by Landlord.
(b) All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address set forth below, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith.
(c) Unless otherwise provided herein, any written notice or document
required or permitted to be delivered hereunder shall be deemed to be delivered
upon the earlier to occur of (1) actual of delivery (in the case of a
hand-delivered or overnight mail or courier notice), (2) five days following
deposit in the United States Mail, postage prepaid, Certified Mail, or (3)
receipt by facsimile transmission confirmed by telephone conversation (recorded
message is insufficient), in each case, addressed to the parties hereto at the
respective addresses set out below, or at such other address as they have
theretofore specified by written notice delivered in accordance herewith;
provided, however, that a duplicate notice shall be delivered for Tenant to: Sr.
Vice President and General Counsel, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Phone: 972/▇▇▇-▇▇▇▇, Fax: 972/▇▇▇-▇▇▇▇. If Landlord has
attempted to deliver notice to Tenant at Tenant's address reflected on
Landlord's books but such notice was returned or acceptance thereof was refused,
then Landlord may post such notice in or on the Premises, which notice shall be
deemed delivered to Tenant upon the posting thereof.
25. HAZARDOUS WASTE. The term "HAZARDOUS SUBSTANCES," as used in this
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the removal of which is required or the use of which is
restricted, prohibited or penalized by any "ENVIRONMENTAL LAW," which term shall
mean any Law relating to health, pollution or protection of the environment.
Tenant shall not be responsible for the cleanup of any Hazardous Substances that
existed on the Property prior to the date hereof. Tenant hereby agrees that (a)
no activity will be conducted on the Premises that will produce any Hazardous
Substances, except for such activities that are part of the ordinary course of
Tenant's business activities (the "PERMITTED ACTIVITIES") provided such
Permitted Activities are conducted in accordance with all Environmental Laws and
have been approved in advance in writing by Landlord; (b) the Premises will not
be used in any manner for the storage of any Hazardous Substances except for any
temporary storage of such materials that are used in the ordinary course of
Tenant's business (the "PERMITTED MATERIALS") provided such Permitted Materials
are properly stored in a manner and location satisfying all Environmental Laws
and approved in advance in writing by Landlord; (c) no portion of the Premises
will be used as a landfill or a dump; (d) Tenant will not install any
underground tanks of any type; (e) Tenant will not allow any surface or
subsurface conditions to exist or come into existence that constitute, or with
the passage of time may constitute a public or private nuisance; and (f)
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Tenant will not permit any Hazardous Substances to be brought onto the Premises,
except for the Permitted Materials, and if so brought or found located thereon,
the same shall be immediately removed by Tenant, with proper disposal, and all
required cleanup procedures shall be diligently undertaken pursuant to all
Environmental Laws. If at any time during or after the Term, the Premises are
found to be so contaminated or subject to such conditions, Tenant shall defend,
indemnify and hold Landlord harmless from all claims, demands, actions,
liabilities, costs, expenses, damages and obligations of any nature arising from
or as a result of the use of the Premises by Tenant. Tenant will maintain on the
Premises a list of all materials stored at the Premises for which a material
safety data sheet (an "MSDS") was issued by the producers or manufacturers
thereof, together with copies of the MSDS's for such materials and shall deliver
such lists and MSDS copies to Landlord upon Landlord's request therefor. Tenant
shall remove all Permitted Materials from the Premises in a manner acceptable to
Landlord before Tenant's right to possess the Premises ends. Unless expressly
identified on an addendum to this Lease, as of the date hereof there are no
"Permitted Activities" or "Permitted Materials" for purposes of the foregoing
provision and none shall exist unless and until approved in writing by the
Landlord. Provided Landlord has delivered to Tenant at least ten (10) business
days prior written notice thereof (except in an emergency, in which case no
prior notice will be required), Landlord may enter the Premises and conduct
environmental inspections and tests therein as it may require from time to time,
provided that Landlord shall use reasonable efforts to minimize the interference
with Tenant's business. Such inspections and tests shall be conducted at
Landlord's expense, unless they reveal the presence of Hazardous Substances
(other than Permitted Materials) or that Tenant has not complied with the
requirements set forth in this Section 25, in which case Tenant shall reimburse
Landlord for the cost thereof within ten business days after receipt of
Landlord's written request therefor.
26. LANDLORD'S LIEN. Landlord hereby waives any and all lien or other
security interest, statutory or otherwise, it may have in all goods inventory,
equipment, fixtures, furniture, improvements, chattel paper, accounts, and
general intangibles, and other personal property of Tenant now or hereafter
situated on or relating to Tenant's use of the Premises, other than any liens
Landlord may obtain to secure a judgment obtained against Tenant.
27. NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer to enter into this Lease. Tenant shall have no rights
under this Lease or in or to the Premises, unless and until Landlord has
executed a copy of this Lease and delivered it to Tenant.
28. NO WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT, TENANT ACKNOWLEDGES THAT (1) IT HAS INSPECTED AND ACCEPTS THE
PREMISES IN AN "AS IS, WHERE IS" CONDITION, (2) THE BUILDINGS AND IMPROVEMENTS
COMPRISING THE SAME ARE SUITABLE FOR THE PURPOSE FOR WHICH THE PREMISES ARE
LEASED AND LANDLORD HAS MADE NO WARRANTY, REPRESENTATION, COVENANT, OR AGREEMENT
WITH RESPECT TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
PREMISES, (3) SUBJECT TO SECTION 1 (C), THE PREMISES ARE IN GOOD AND
SATISFACTORY CONDITION, (4) NO REPRESENTATIONS AS TO THE REPAIR OF THE PREMISES,
NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE PREMISES HAVE BEEN MADE BY
LANDLORD (UNLESS AND EXCEPT AS MAY BE SET FORTH IN EXHIBIT B ATTACHED TO THIS
LEASE, IF ONE SHALL BE ATTACHED, OR AS IS OTHERWISE EXPRESSLY SET FORTH IN THIS
LEASE), AND (5) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED, IMPLIED
OR STATUTORY, THAT EXTEND BEYOND THE DESCRIPTION OF THE PREMISES.
29. EXHIBITS. The following exhibits hereto are incorporated herein by
this reference:
Exhibit A Outline of Premises
Exhibit A1 Legal Description of Land
Exhibit B Tenant Work
Exhibit C Extension Options
Exhibit D Parking
Exhibit D -1 New Parking Area
Exhibit E Tenant Preferential Right to Lease
Exhibit F Repair Allowance
Exhibit F - 1 List of Repair Items
Exhibit G Non-disturbance, subordination and attornment agreement
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30. SPECIAL PROVISIONS
(a) ROOF. Tenant shall have the right of access to and upon the roof
of the Building for Tenant uses approved by Landlord, which approval shall not
be unreasonably withheld, delayed or conditioned. Any installations or
improvements made in or upon the roof of the Building shall be made only in
accordance with plans and specifications which have been previously approved by
Landlord and shall be removed by Tenant prior to the end of the Term (and Tenant
shall repair all damage caused thereby if requested by Landlord). All
improvements shall be constructed, maintained and used by Tenant, at its risk
and expense in accordance with all Laws; Landlord's approvals of the plans and
specifications therefor shall not be a representation by Landlord that such
improvements comply with any Law.
(b) SIGNAGE. Subject to Landlord's prior approval (which shall not be
unreasonably withheld, delayed or conditioned) of the location, design, size,
color, material composition, and plans and specifications therefor, Tenant may,
at its sole risk and expense, construct a monument and/or Building sign (the
"SIGN") on the grounds or the Building. If Landlord grants its approval, Tenant
shall erect the Sign in accordance with the approved plans and specifications,
in a good and workmanlike manner, in accordance with all Laws, regulations,
restrictions (governmental or otherwise), and architectural guidelines in effect
for the area in which the Building is located and has received all requisite
approvals thereunder (the "SIGN REQUIREMENTS"), and in a manner so as not to
unreasonably interfere with the use of the Building grounds or the Building
while such construction is taking place; thereafter, Tenant shall maintain the
Sign in a good, clean, and safe condition in accordance with the Sign
Requirements. After Tenant's right to possess the Premises has been terminated,
Landlord may require that Tenant remove the Sign by delivering to Tenant written
notice thereof within 30 days after the end of the Term. If Landlord so requests
(but only with a Building sign), Tenant shall remove the Sign, repair all damage
caused thereby, and return that portion of the Building on which the Sign was
located to their condition before the installation of the Sign within 30 days
after after receipt of Landlord's written request therefor. If Tenant fails to
timely do so, Landlord may, without compensation to Tenant, at Tenant's expense,
remove the Sign, perform the related restoration and repair work and dispose of
the Sign in any manner Landlord deems appropriate. Tenant shall defend,
indemnify, and hold harmless Landlord from all losses, claims, costs and
liabilities arising in connection with or relating to the construction,
installation, maintenance and use during the Term of the Lease, or removal of
the Sign, INCLUDING THOSE ARISING FROM LANDLORD'S NEGLIGENCE. The rights granted
to Tenant under this Section 30.(b) may not be assigned to any party, except as
to a Permitted Transferee.
(c) GENERATOR. Tenant may install, operate, and maintain generators
reasonably necessary for Tenant's business operations in the Premises for
emergency back-up purposes (the "GENERATOR", which defined term shall also refer
to all related equipment) at a location on the Building grounds acceptable to
Landlord, provided that the installation, maintenance, use, and operation
thereof complies with all Laws and architectural guidelines in effect for the
area in which the Building is located as they may be amended from time to time
(the "LEGAL REQUIREMENTS"), and Tenant receives all approvals, consents, and
permits required under the Legal Requirements before the installation,
maintenance, use, and operation thereof. Before beginning the installation of
the Generator, Tenant shall deliver to Landlord final plans and specifications
therefor prepared by an engineer reasonably approved by Landlord and setting
forth in detail the design, location, size, and method of installation
(including, without limitation, separation walls and ventilation system) for
Landlord's review and approval, together with evidence reasonably satisfactory
to Landlord that all Legal Requirements have been satisfied. Landlord's approval
of any such plans and specifications shall not constitute a representation or
warranty by Landlord that such plans and specifications comply with the Legal
Requirements; such compliance shall be the sole responsibility of Tenant. The
Generator shall be installed and screened in a manner acceptable to Landlord,
and no underground storage tanks may be installed or used in connection
therewith. Additionally, the generator model, size and weight shall be subject
in all respects to Landlord's prior written approval, not to be unreasonably
withheld, delayed or conditioned. Upon approval of the plans and specifications
therefor and the size and location thereof, Tenant may install the Generator
provided that such work is performed in a good and workmanlike manner, in
accordance with all Legal Requirements and the plans and specifications therefor
and in a manner so as not to damage the Building; thereafter, Tenant shall use,
maintain, and operate the Generator in a good, clean, and safe condition and in
accordance with all Legal Requirements. Tenant shall repair all damage caused by
the installation, use, maintenance, operation, or removal of the Generator and,
upon its removal, restore the portion of the Building or grounds where it was
located to its condition immediately before the installation thereof. If Tenant
fails
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to do so within 30 days after receipt Landlord's written request, Landlord may
perform such work and Tenant shall pay to Landlord all reasonable costs incurred
in connection therewith within 30 days after receipt of Landlord's written
request therefor or Landlord may deem the Generator abandoned by Tenant and, at
Landlord's sole risk and expense, use such Generator without compensation to
Tenant. Tenant shall properly fuel and immediately remove from the area
surrounding the Generator any spills or other leaks of fluid from the Generator.
Additionally, Tenant shall ensure that the Generator is properly exhausted at
all times so no odors emanate therefrom. The Generator shall be installed, used,
maintained, operated, and removed at Tenant's risk and expense and Tenant shall
maintain insurance in respect thereof reasonably satisfactory to Landlord,
listing Landlord as an additional insured. IT IS THE INTENTION OF THE PARTIES
THAT TENANT BEAR ALL RISKS RELATING TO THE INSTALLATION, REMOVAL AND TENANT'S
USE, MAINTENANCE, AND OPERATION DURING THE TERM, AND REMOVAL OF THE GENERATOR;
THEREFORE, TENANT SHALL DEFEND, INDEMNIFY, AND HOLD HARMLESS LANDLORD, ITS
AGENTS, AND THEIR RESPECTIVE AFFILIATES FROM ALL LOSSES, CLAIMS, COSTS, AND
LIABILITIES ARISING IN CONNECTION WITH OR RELATING TO THE INSTALLATION, REMOVAL
AND TENANT'S USE, MAINTENANCE, AND OPERATION DURING THE TERM OF THE GENERATOR,
INCLUDING, WITHOUT LIMITATION, THAT ARISING FROM LANDLORD'S NEGLIGENCE (OTHER
THAN ITS SOLE OR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).
Executed by Tenant on July 14, 1998.
TENANT: ADVANCE PARADIGM, INC., a Delaware corporation
By:
---------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President,
Chief Operating Officer
Address: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
By:
---------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & Chief Executive Officer
Address: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Executed by Landlord on July 14, 1998.
LANDLORD: CRIN-▇▇▇▇▇▇▇▇▇▇ I, L.P., a ______ limited partnership
By: CRIN-▇▇▇▇▇▇▇▇ I, L.L.C., as general partner
By: InvestCrow I, L.L.C., its Managing Member
By:
---------------------------------------------------------
Name: P. ▇▇▇▇▇▇▇▇ Draces
Title: Chairman of the Executive Committee
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Associates Ltd.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A-1
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EXHIBIT A
Outline of Premises
[Description of Premises and Land]
A-2
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EXHIBIT B
TENANT WORK
1. Except as provided in Section 1.(c) of the Lease, Tenant hereby
accepts the Premises in their "AS-IS" condition, and Landlord shall have no
obligation to perform any work therein (including, without limitation,
demolition of any improvements existing therein or construction of any tenant
finish-work or other improvements therein), and, except as provided in Section
6.(b) of the Lease shall not be obligated to reimburse Tenant or provide an
allowance for any costs related to the demolition or construction of
improvements therein. Before Tenant may occupy the Premises to conduct its
business therein, Tenant shall, at its expense, obtain and deliver to Landlord a
certificate of occupancy or equivalent form from the appropriate governmental
authority for the Premises.
2. Before commencing any Work, Tenant shall provide to Landlord for its
approval final working drawings or partial drawings sufficient to begin Work,
prepared by an architect that has been approved by Landlord (which approval
shall not unreasonably be withheld, delayed, or conditioned), of all
improvements that Tenant proposes to install in the Premises; such working
drawings shall include the partition layout, ceiling plan, electrical outlets
and switches, telephone outlets, drawings for any modifications to the
mechanical and plumbing systems of the Building, and detailed plans and
specifications for the construction of the improvements called for under this
Exhibit in accordance with all Laws. Further, if any of Tenant's proposed
construction work will affect the Building's Structure, the Building's HVAC,
electrical, mechanical, or plumbing systems, then the working drawings
pertaining thereto shall be prepared by a licensed engineer selected by Tenant
and reasonably acceptable to Landlord, whom Tenant shall at its cost engage for
such purpose. Landlord's approval of such working drawings shall not be
unreasonably withheld, delayed, or conditioned and shall be given in writing
within 5 days of receipt by Landlord or such drawings shall be deemed approved
by Landlord. The Working Drawings shall (a) comply with all Laws, (b) be
sufficiently detailed to allow construction of the improvements in a good and
workmanlike manner, and (c) the improvements depicted thereon conform to the
rules and regulations promulgated from time to time by the Landlord for the
construction of tenant improvements (a copy of which has been delivered to
Tenant). As used herein, "WORKING DRAWINGS shall mean the final working drawings
approved by Landlord, as amended from time to time by any approved changes
thereto, and "WORK" shall mean all improvements to be constructed in accordance
with and as indicated on the Working Drawings. Approval by Landlord of the
Working Drawings shall not be a representation or warranty of Landlord that such
drawings are adequate for any use, purpose, or condition, or that such drawings
comply with any applicable law or code, but shall merely be the consent of
Landlord to the performance of the Work. Landlord shall, at Tenant's request,
sign the Working Drawings to evidence its review and approval thereof. All
changes in the Work must receive the prior written approval of Landlord, and in
the event of any such approved change Tenant shall, upon completion of the Work,
furnish Landlord with an accurate, reproducible "as-built" plan (e.g., sepia) of
the improvements as constructed, which plan shall be incorporated into this
Lease by this reference for all purposes.
3. All Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld, delayed, or conditioned. Tenant shall have the right to competitive
bid all the work to reputable contractors. Landlord or an affiliate shall
perform construction management services in connection with the Work. Tenant
shall pay such entity a construction management fee of $5,000. All contractors
and subcontractors shall be required to procure and maintain insurance against
such risks, in such amounts, and with such companies as Landlord may reasonably
require and Certificates of such insurance, with paid receipts thereof, must be
received by Landlord before the Work is commenced. The Work shall be performed
in a good and workmanlike manner that is free of defects and is in strict
conformance with the Working Drawings. At Landlord's request, Tenant shall
deliver suitable evidence of timely and complete payment of all contractors
performing any part of the Work, together with lien waivers relating to such
work.
4. Landlord or its affiliate shall have the right to supervise all Work
and coordinate the relationship between the Work, the Building, and the
Building's systems.
B-1
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5. To the extent not inconsistent with this Exhibit, Section 6 of this
Lease shall govern the performance of all Work and the Landlord's and Tenant's
respective rights and obligations regarding the improvements installed pursuant
thereto.
6. After Landlord tenders possession of the Premises to Tenant, Tenant
may enter the Premises to perform the Work, provided that (a) Landlord is given
prior written notice of any such entry, (b) such entry shall be coordinated with
Landlord, and (c) Tenant shall deliver to Landlord evidence that the insurance
required under this Lease has been obtained. Any such entry shall be on the
terms of this Lease, but no Rent shall accrue in respect of Base Rent or
Operating Expenses during the period before the Commencement Date that Tenant so
enters the Premises.
B-2
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EXHIBIT C
EXTENSION OPTIONS
Provided no Event of Default exists and Tenant is occupying the entire
Premises at the time election, Tenant may renew this Lease for two additional
periods of five years each on the same terms provided in the Lease (except as
set forth below). If Tenant wishes to renew the Lease, Tenant shall deliver to
Landlord written notice thereof (an "EXTENSION NOTICE") no later than 9 months
before the expiration of the Term. Landlord shall then have a period of thirty
days after receipt of the Extension Notice to provide Tenant with the Fair
Market Rental Rate (defined below) for the extended Term. Tenant shall notify
Landlord in writing whether Tenant elects to extend the Term at the Fair Market
Rental Rate within 60 days after receipt of Landlord's notice. As used herein,
the term Fair Market Rental Rate shall mean the rate (including tenant
improvements, inducements and allowances) then being charged to new tenants in
comparable buildings (within a one mile radius of the Building), at the
commencement of such extended Term, for space of comparable quality, size, and
utility. If Tenant elects to extend the Term, on or before the Commencement Date
of extended Term in question, Landlord and Tenant shall execute an amendment to
this Lease extending the Term on the same terms provided in this Lease, except
as follows:
(1) The Basic Rental payable for each month during each such
extended Term shall be the Fair Market Rental Rate for the extended
Term;
(2) Tenant shall have no further options for additional
parking;
(3) Tenant shall have no further renewal options or
expansion options (except as otherwise provided herein) unless
expressly granted by Landlord in writing; and
(4) Landlord shall lease to Tenant the Premises in their
then-current condition, and Landlord shall provide to Tenant all
allowances and other tenant inducements available in the market for
comparable office buildings within a 1-mile radius of the Building.
Tenant's right under this Exhibit shall terminate if (A) this Lease of
Tenant's right to possession of the Premises is terminated, (B) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises, except
to a Permitted Transferee , or (C) Tenant fails to timely exercise its option
under this Exhibit, time being of the essence with respect to Tenant's exercise
thereof. Tenant may not assign its right under this Exhibit to any assignee or
subtenant other than to a Permitted Transferee of the entire Premises.
X-1
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EXHIBIT D
PARKING
Landlord shall provide Tenant 295 parking spaces as of the Lease
Commencement Date.
Landlord shall construct additional surface parking pursuant to the
plan attached hereto on the portion of the Land depicted on Exhibit D-1 (the
"NEW PARKING AREA"). Within 30 days from the date hereof, Landlord shall submit
a proposal to Tenant for Landlord's construction of the New Parking Area
("LANDLORD'S PROPOSAL") which proposal shall be subject to compliance with all
Laws and Landlord's agreement as to the size, location, design, color and
material composition therefor, the date by which the New Parking Area would be
complete, and estimates of all hard and soft costs incurred in connection with
the design and construction of the New Parking Area (the "NEW PARKING AREA
CONSTRUCTION COSTS"). However, in no event shall the New Parking Area
Construction Costs exceed $150,000 unless Landlord, in its sole discretion,
determines otherwise. Within 15 days from delivery of Landlord's Proposal,
Landlord and Tenant shall execute an agreement confirming whether Tenant accepts
Landlord's Proposal. If Tenant accepts Landlord's Proposal, Tenant shall
increase the annual per-rentable-square-foot Base Rent for the remainder of the
Term after the completion of the New Parking Area by an amount equal to the
amortization of the New Parking Area Construction Costs over the remaining Term
at an interest rate of ten percent (10%). If Tenant rejects Landlord's Proposal,
Tenant may at Tenant's sole cost and expense and with Landlord's consent,
construct the New Parking Area and Landlord shall have no further obligation to
construct the New Parking Area. Any such work to be performed by Tenant to
construct the New Parking Area which Landlord consents to shall be performed in
accordance with the terms of Exhibit B to the extent applicable and in a good
and workmanlike manner free of any liens.
Landlord's obligation to construct the New Parking Area shall be
subject to (a) all applicable Laws, (b) Landlord obtaining financing acceptable
to the Landlord in its sole discretion in all respects for the construction of
the New Parking Area (the "PARKING AREA CONSTRUCTION FINANCING") and (c) the
occurrence of no Event of Default. Landlord shall use reasonably diligent
efforts to obtain such financing. Accordingly, if any Law would prohibit the
Construction of the New Parking Area, or if Landlord cannot obtain Parking Area
Construction Financing on commercially reasonable terms acceptable to Landlord
in its sole discretion, or an Event of Default has occurred, Landlord shall have
no obligation to construct the New Parking Area.
D-1
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EXHIBIT E
TENANT'S PREFERENTIAL RIGHT TO LEASE
1. Provided no Event of Default exists, Landlord shall first offer to
lease to Tenant or a Permitted Transferee any new space constructed on the Land
which adds leasable square footage to the Building (the "ADDITIONAL SPACE")
before leasing such space to any third party. Such offer shall be in writing and
specify the lease terms for the Additional Space, including the Rent to be paid
for the Additional Space, the term therefor, and the date on which the
Additional Space shall be included in the Premises (the "OFFER NOTICE"). Tenant
or a Permitted Transferee shall notify Landlord in writing whether Tenant or a
Permitted Transferee elects to lease all of the Additional Space on the terms
set forth in the Offer Notice, within 10 business days after receipt by Tenant
or a Permitted Transferee of the Offer Notice. If Tenant or a Permitted
Transferee timely elects to lease all the Additional Space, then Landlord and
Tenant or a Permitted Transferee shall execute an amendment to this Lease,
effective as of the date the Additional Space is to be included in the Premises,
on the terms set forth in the Offer Notice and, to the extent not inconsistent
with the Offer Notice terms, the terms of this Lease; however, Tenant or a
Permitted Transferee shall accept all the Additional Space in an "AS-IS"
condition and Landlord shall not provide to Tenant or a Permitted Transferee any
allowances (e.g., moving allowance, construction allowance, and the like) or
other tenant inducements except as specifically provided in the Offer Notice.
Notwithstanding the foregoing, if prior to Landlord's delivery to Tenant or
Permitted Transferee of the Offer Notice, Landlord has received an offer to
lease all or part of the Additional Space from a third party (a "THIRD PARTY
OFFER"), Tenant or Permitted Transferee must exercise its rights hereunder. If
Tenant or Permitted Transferee fails or is unable to timely exercise its right
hereunder, then such right shall lapse, time being of the essence with respect
to the exercise thereof, and Landlord may lease all or a portion of the
Additional Space to the same third party on the terms and conditions of the
Third Party Offer provided such third party shall pay its proportionate share of
any common area and Operating Expenses. If Landlord does not lease the
Additional Space to such third party, then the preferential right to lease given
by this Exhibit shall remain in full force and effect for Tenant and Permitted
Transferees. In no event shall Landlord be required to construct Additional
Space.
2. Tenant's rights under this Exhibit shall terminate if this Lease or
Tenant's right to possession of the Premises is terminated.
E-1
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EXHIBIT F-1
F-1-1
29
EXHIBIT F
REPAIR ALLOWANCE
Landlord shall within 180 days of the Commencement Date cause certain repairs
described on Exhibit F-1 attached hereto, to be made to the Building. In no
event shall Landlord pay more than $50,000 (the "REPAIR ALLOWANCE") to repair
such items. In the event the Repair Allowance is not adequate to repair the
entire list of repairs, Landlord shall notify Tenant, promptly following the
Possession Date, of the cost estimate of each item and Tenant shall thereafter
notify Landlord in writing of the priority of the items to be repaired; except
for items 18 through 23 on Exhibit F-1 which Landlord shall commence to repair
immediately after the Possession Date.
F-1