EXHIBIT 10.5
BALCONES NORTH
OFFICE BUILDING
OFFICE LEASE AGREEMENT
LEASE AGREEMENT
BY AND BETWEEN
RGK RENTALS, LTD., AS LESSOR
AND
APPLIED SCIENCE FICTION, INC
AS LESSEE
March 19, 1998
LEASE AGREEMENT
STATE OF TEXAS )
)
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ▇▇▇▇▇▇ )
1. PARTIES. This Lease Agreement (the "Lease") is made and entered into by
and between RGK RENTALS, LTD., a Texas limited partnership (hereinafter
referred to as the "Lessor") and APPLIED SCIENCE FICTION, INC., a Delaware
corporation (hereinafter referred to as "Lessee").
2. LEASED PREMISES. In return for the consideration, covenants and
agreements hereinafter set forth to be paid, observed and/or performed by
Lessee, Lessor hereby demises and lets unto Lessee, and Lessee does hereby lease
from Lessor, that certain real property and improvements including an
approximately 53,984 rentable square foot building (the "Building") together
with the related parking, driveways and landscaped areas, locally known as ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ in ▇▇▇▇▇▇, ▇▇▇▇▇▇ County, Texas, legally described as ▇▇▇ ▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇-▇, ▇▇▇▇ of Austin, recorded at
Volume 80, Page 286 of the Plat Records of ▇▇▇▇▇▇ County, Texas (all of which is
hereinafter collectively referred to as the "Leased Premises") indicated on the
Site Plan attached hereto as Exhibit A.
3. TERM, RENEWAL AND CANCELLATION. The term of this Lease shall commence on
April 1, 1998, ("Commencement Date") and shall end on March 31, 2003 (the
"Term"). Lessee shall have two (2) two-year renewal options at then market
rates. Market rates shall be governed by Exhibit D attached hereto. In the event
Lessee desires to exercise such option to renew this Lease, Lessee shall give
Lessor 180 days prior written notice of such exercise. After the first thirty-
six (36) months of this Lease, Lessee shall have the right to cancel the Lease
by giving Lessor one-hundred and eighty (180) days written notice and by paying
Lessor Two Hundred and Fifty Thousand Dollars ($250,000) plus the then
unamortized portion of the cost of Lessor's Allowance for Improvements (as
defined in paragraph 22 herein) and brokerage fees. Any sublease agreements,
pursuant to paragraph 18 below, shall contain appropriate cancellation
provisions, reflecting Lessee's right to terminate this Lease contained in this
Paragraph 3.
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4. COMMENCEMENT OF LESSEE'S POSSESSION. On March 20, 1998, Lessee has
possession of the Leased Premises subject to all the terms of this Lease, with
the exception of the payment of rent which will commence on April 1, 1998, as
more fully described below.
5. RENTAL PAYMENTS.
(a) Commencing on the Commencement Date and continuing throughout the Term,
Lessee hereby agrees to pay the Base Rental as described in paragraph 6, plus
Forecast Additional Rental and Additional Rental as descfibed in paragraph 7.
The Base Rental and Forecast Additional Rental shall be due and payable in equal
installments on the first day of each calendar month during the Term and any
renewals or extensions thereof, and Lessee hereby agrees to make such payments
monthly in advance to Lessor at Lessor's address as provided herein (or such
other address as may be designated by Lessor from time to time).
(b) If the Term commences or terminates on other than the first day of a
calendar month or terminates on other than the last day of a calendar month,
then the installments of Base Rental and Forecast Additional Rental for such
month or months shall be prorated and the installment or installments so
prorated shall be paid in advance. The payment for such prorated month shall be
calculated by multiplying the monthly installment by a fraction, the numerator
of which shall be the number of days of the Term occurring during said
commencement or termination month, as the case may be, and the denominator of
which shall be the total number of days occurring in said commencement or
termination month. Also, if the Term commences or terminates on other than the
first day of a calendar year, Additional Rent shall be prorated for such
commencement or termination year, as the case may be, by multiplying each by a
fraction, the numerator of which shall be the number of days of the Term during
the commencement or termination year, as the case may be, and the denominator
of which shall be 365.
(c) Lessee shall pay all rent and other sums of money as they shall become
due and payable to Lessor under this Lease at the time and in the manner
provided herein, without demand, set-off or counterclaims. At Lessor's option,
Lessee shall pay (i) five percent (5%) of the monthly rent (including Base
Rental, Forecast Additional Rental and all other sums owed by Lessee to Lessor
under the provisions this Lease), if same are not fully paid within ten (10)
days of the due date as specified herein, or (ii) $25.00 per day from due date
(if not paid within ten (10) days of due date) until all sums due, including
late charges, are paid in full. The parties hereby agree that such charges
represent a fair and reasonable estimate of expenses Lessor
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would incur by reason of Lessee's late payments. Acceptance of such late charge
by Lessor shall neither constitute a waiver of Lessee's default nor, in the
event of Lessee's default, shall it prevent Lessor from exercising any rights or
remedies specified herein or otherwise.
6. BASE RENTAL. (Beginning on April 1, 1998, Lessee shall pay to Lessor a
monthly rental (the "Base Rental") as follows:
April 1, 1998 until September 30, 1998 $20,625.00 per month
October 1, 1998 until December 31, 1998 $35,291.67 per month
January 1, 1999 until March 31, 1999 $49,485.33 per month
April 1, 1999 until March 31, 2000 $58,482.67 per month
April 1, 2000 until March 31, 2002 $62,981.33 per month
April 1, 2002 until March 31, 2003 $71,978.67 per month
7. ADDITIONAL RENTAL.
(a) Beginning on the Commencement Date and continuing thereafter for each
calendar year during the Term, Lessor shall present to Lessee, prior to the
beginning of said period, a statement of Forecast Additional Rental. Lessee
shall pay Forecast Additional Rental in equal monthly installments in advance.
"Forecast Additional Rental" shall mean Lessor's reasonable estimate of
Additional Rental. Lessee shall be liable also for any Additional Rental.
(b) The term "Additional Rental" shall mean Lessor's Actual Operating
Expenses (defined below in paragraph 8) for the Leased Premises incurred during
each calendar year.
(c) By April 1 of each year during the Term, or as soon as possible
thereafter, Lessor shall provide Lessee a statement showing the Actual
Operating Expenses for the twelve-month period then ended, and a statement
prepared by Lessor comparing Forecast Additional Rental with Additional Rental.
In the event that Forecast Additional Rental exceeds Additional Rental for said
calendar year, Lessor shall pay Lessee (in the form of a credit against rentals
next due) an amount equal to such excess. In the event that the Additional
Rental exceeds Forecast Additional Rental for said calendar year, Lessee shall
pay Lessor, within thirty (30) days of receipt of the statement, an amount equal
to such difference. The calculation described in this paragraph 6(c) shall be
made as soon as possible after the termination of the Lease, and all provisions
of this Lease relating to said calculation shall survive the termination of this
Lease.
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8. LESSOR'S ACTUAL OPERATING EXPENSES. Lessor shall pay all of Lessor's
"Actual Operating Expenses," which term shall include solely the following:
(a) Ad valorem taxes for the Leased Premises.
(b) Casualty insurance on the Leased Premises to be carried by Lessor as
described in paragraph 12 below.
9. LESSEE'S OPERATING EXPENSES. Lessee is responsible for paying when due
Lessee's Operating Expenses for the Leased Premises. The term "Lessee's
Operating Expenses" shall mean the aggregate all of operating and maintenance
expenses incurred by Lessor or Lessee in connection with the Leased Premises,
other than Lessor's Actual Operating Expenses, and shall include without
limitation the following:
(a) The cost of all wages, salaries and any ancillary expenses of all
employees actually engaged in operation and maintenance of the Leased Premises,
including taxes, insurance and benefits relating thereto.
(b) The cost of all supplies and material used in operation and
maintenance of the Leased Premises.
(c) The cost of all utilities, including but not limited to electric, gas,
water, heating, lighting, air conditioning and ventilation of the Building.
(d) The cost of all maintenance, service and operating agreements for the
Leased Premises and related equipment, including but not limited to security
service, window cleaning, elevator maintenance and janitorial service.
(e) The gross cost of liability insurance applicable to the Leased Premises
and Lessor's personal property used in connection therewith; excluding however
cost of casualty insurance on the Building included in Lessor's Actual Operating
Expenses.
(f) The cost of all taxes and assessments and governmental charges whether
federal, state, county or municipal, whether they be by taxing district or
authorities presently taxing the Leased Premises or by others, subsequently
created or otherwise, and any other taxes and assessments attributable to the
Leased Premises or its operator and maintenance or its operation,
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excluding only Lessor's federal and state taxes on income, franchise tax and
inheritance tax. Lessee will be responsible for all ad valorem taxes on its
personal property and on the Leased Premises not covered by Lessor's Actual
Operating Expenses as described above. If any such taxes, assessments or charges
are paid by Lessor, Lessee will reimburse Lessor therefor, upon Lessor's demand
accompanied by a supporting statement setting forth Lessor's reasonable
calculation of the amount of such taxes chargeable to the Leased Premises.
(g) The cost of repairs, replacements and maintenance on or of the Leased
Premises (excluding repairs to the structure, foundation and the exterior walls
of the Building or replacement of the roof membrane). Lessee's obligation to
maintain, repair and make replacements to the Leased Premises shall cover, but
not be limited to, pest control (including termites), roof repairs, trash
removal and the maintenance, repair and replacement of all window glass, HVAC,
electrical, plumbing, fire and security and other mechanical systems.
(h) The cost of expenditures, capital or otherwise, made for the specific
purpose of installing equipment, devices or materials intended to reduce
operating expenses of the Building if required by law or regulation of a
governmental authority.
(i) The cost of landscaping and any other costs necessary to maintain the
Leased Premises in a first class condition.
10. SECURITY DEPOSIT. Upon the execution of this Lease, Lessee shall pay
Lessor a security deposit in the amount of Three Hundred Thousand Dollars
($300,000) as security for Lessee's full performance of all the provisions of
this Lease. If Lessee fails to pay rent or otherwise defaults with respect to
any provision of this Lease, Lessor may use, apply or retain all or any portion
of the security deposit for the payment of Base Rent, Additional Rent, or any
other charge in default, or for the payment of any other sum to which Lessor
may become obligated by reason of Lessee's default, or to compensate Lessor for
any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies
all or any portion of the security deposit, Lessee must within five days after
written demand, deposit cash with Lessor in any amount sufficient to restore the
security deposit to the original amount and Lessee's failure to do so is a
material breach of this Lease. The security deposit shall be placed in an
interest bearing account or other instruments chosen by Lessee in Lessor's name
at a bank chosen by Lessee. If Lessee performs all of Lessee's obligations
hereunder, the security deposit, or as much thereof as has not been applied by
Lessor shall be returned to Lessee with accrued interest. At the end of the
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twenty-fourth month of this lease, so long as Lessee has paid all Base Rental
and Additional Rental amounts on or before the due date each month, Lessor will
refund $75,000 of Lessee's security deposit. At the end of the thirty-sixth
month of this lease, so long as Lessee has paid all Base Rental and Additional
Rental amounts on before the due date each month, Lessor will refund $50,000 of
Lessee's security deposit plus one-half of the accrued interest on Lessee's
security deposit. At the end of the forty-eighth month of this lease, so long as
Lessee has paid all Base Rental and Additional Rental amounts on or before the
due date each month, Lessor will refund $50,000 of Lessee's security deposit
plus one-half of the accrued interest over the last twelve months. Lessee will
request in writing any refunds of its security deposit. Lessee's security
deposit shall never drop below $150,000.
11. LESSEE'S DUTIES.
(a) Use of Leased Premises. The Leased Premises are to be used and occupied
by the Lessee solely for the purpose of general office, engineering labs and
computer rooms and for no other purpose without the prior written consent of
Lessor, which consent shall not be unreasonably withheld. Lessee agrees not to
commit or suffer to be committed on the Leased Premises any nuisance or other
act or thing against public policy or which violates any law or governmental
regulation or which is disreputable or which may disturb the quiet enjoyment of
any sublease of the Building. Lessee will not use, occupy, or permit the use or
occupancy of the Leased Premises for any unlawful, disreputable, immoral, or
hazardous purpose, or maintain or permit the maintenance of any public or
private nuisance, or keep any substance or carry on or permit any operation
which might emit offensive odors into other portions of the Building or permit
anything to be done which would increase the fire insurance rate of the Building
or contents or which could lead to the cancellation of the fire insurance
coverage.
(b) Condition of the Leased Premises. Lessee shall not damage the Leased
Premises and will maintain the Leased Premises in a clean, attractive condition
and in good repair, ordinary wear and tear excepted. Upon termination of this
Lease, Lessee will surrender and deliver up the Leased Premises in good order
and repair and in the same condition as upon the Commencement Date of this
Lease, ordinary wear and tear excepted.
(c) Compliance with Laws. Lessee will comply with all applicable federal,
state, municipal and other laws, ordinances, rules, and regulations applicable
to the Leased Premises and to the business conducted therein by Lessee,
including without limitation the American's
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with Disabilities Act (collectively, "Applicable Laws"). Within fourteen (14)
days of receipt, Lessee shall forward to Lessor copies of any notices received
from any governmental authority regarding noncompliance with any Applicable
Laws. Lessor represents and warrants to Lessee, that to the best of Lessor's
knowledge, that at the commencement of the Lease, the Leased Premises are in
compliance with all applicable laws.
(d) Liens. Lessee shall allow no liens to be filed against the Leased
Premises, or any part thereof, and shall promptly cause the release any liens
that are filed against the Leased Premises, or any part thereof
(e) Alterations, Addition and Improvements. Lessee covenants and agrees not
to permit the Leased Premises to be used for any purpose other than that stated
in paragraph 10(a) hereof, or make or allow to be made any alterations or
physical additions in or to the Leased Premises, or place on the Leased Premises
any signs visible from outside the Leased Premises, or place any safes or vaults
(whether movable or not) upon or in the Leased Premises, without first obtaining
the written consent of Lessor. All plans and drawings pertaining to buildout or
remodeling of the Building exterior, corridors or core, shall first be submitted
to Lessor for review and reasonable determination of Lessor's approval or
disapproval. Remodeling and buildout of the general office and lab areas are
excluded from Lessor review. Within 7 days of any and all remodeling, Lessee
will provide Lessor an electronic file and blue line drawing of changes to the
as-built of the Building. Any and all such alterations, physical additions, or
improvements made to the Leased Premises shall at once become the property of
Lessor and shall be surrendered to Lessor upon the termination of this Lease,
whether by lapse of time or otherwise; however, this clause shall not apply to
movable equipment or furniture owned by Lessee, provided no damage is caused to
the Leased Premises by the removal thereof If not in default at the termination
of this Lease, Lessee may remove all such fixtures, equipment, decoration,
furniture or other such items installed by Lessee. Any damage occasioned and
caused by the installation or removal of such fixtures and equipment shall be
repaired at Lessee's expense. Upon written request by Lessor, Lessee shall
remove all such furniture and equipment and repair the damage caused by the
removal of same. In the event Lessee does not remove such fixtures, equipment
and other installed items, Lessor shall have the right to remove the same and to
repair any damage caused by such removal, and Lessee shall be obligated to pay
the cost of such removal and repair.
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(f) Rules and Regulations. Lessee shall comply with the Rules and
Regulations of the Building provided in Exhibit B attached hereto and made a
part hereof. Lessor reserves the right from time to time, after consultation
with Lessee and upon written notice to Lessee, to make such changes, additions
or amendments to the Rules and Regulations as it may deem necessary or
advisable. Lessor shall have no liability to Lessee for any failure of any
sublessees or lessees of the Building to comply with such Rules and Regulations.
(g) Operation. Lessee shall not place, install, or operate on the Leased
Premises or in any part of the Building any engine, refrigerating, heating or
air conditioning apparatus, stove, or machinery, or conduct mechanical
operations, or place or use in or about the Leased Premises any inflammable,
explosive, hazardous, or odorous solvents or materials without the prior written
consent of Lessor. No portion of the Leased Premises shall at any time be used
for cooking, residential quarters; provided, however, that Lessee may place
refrigerators and microwave ovens in the Building.
(h) Repair and Maintenance. Lessee shall, at its own cost, repair/replace
any damage or injury done to the Leased Premises or any part thereof caused by
Lessee or Lessee's agents, contractors, employees, invitees, or visitors. If
Lessee fails promptly to make such repairs/replacements to the Leased Premises,
Lessor may make such repairs/replacement, and Lessee shall repay the cost of
such repairs/replacement plus ten percent (10%) thereof to Lessor on demand.
(i) Telephone System.
(i) As part of this Lease, Lessor hereby leases to Lessee, the
existing telephone system "as is where is", including without limitation all
cabling, telephone switch, telephone instruments, voice mail system, network
cabling in the Building (collectively called the "Telephone System") as more
particularly described on Exhibit C attached hereto for all purposes. Lessee
may, at its own cost, add upgrades to the Telephone System at any time during
the Term. Any such upgrades shall become the property of Lessor and shall
remain with the Telephone System after departure of Lessee from the Leased
Premises.
(ii) Lessee shall maintain and pay for telephone service provided by a
third party approved by Lessor. Any existing unexpired service agreements at the
commencement or
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termination of this Lease shall be paid in full by Lessee or shall be paid by
Lessor and reimbursed to Lessor by Lessee.
(iii) Lessee must not sell, mortgage or part with possession or
control, or attempt to sell, mortgage or part with possession or control of the
Telephone System, except as provided in paragraph 18 hereof.
(iv) Lessee may not pledge, encumber, create a security interest in,
or permit any lien to become effective on all or any portion of the Telephone
System. On the occurrence of any of these events, Lessee will be in default.
Lessee must promptly notify Lessor of any such liens, charges, or other
encumbrances of which Lessee has knowledge. Lessee must promptly pay or satisfy
any obligation from which any such lien or encumbrance arises. Lessee must
deliver to Lessor appropriate satisfactions, waivers, or evidence of payment of
any such lien or encumbrance.
(v) On the expiration of the Term, or on any earlier termination of
this Lease, Lessee must return the Telephone System to Lessor in good repair,
condition and working order, normal wear and tear excepted. In addition, Lessee
will provide Lessor a complete and updated inventory of the Telephone System.
(j) Signage. Lessee shall be allowed exterior signage on the Building
subject to Lessor and City of Austin design approval.
(k) Lessor Access. Lessor shall have the right to enter upon and inspect
the Leased Premises following reasonable notice to Lessee in accordance with
paragraph 21(b).
12. QUIET ENJOYMENT. So long as Lessee is not in default under the terms
and provisions of this Lease, Lessee shall peaceably hold and enjoy the Leased
Premises during the said term.
13. INSURANCE; INDEMNITY.
(a) Lessee's Insurance. Lessee shall, at Lessee's expense, obtain and keep
in force during the term of this Lease:
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(i) Comprehensive general liability insurance with broad form general
liability endorsement, in an amount of not less than $1,000,000 per occurrence
of bodily injury and property damage combined, or in a greater amount as
reasonably determined by Lessor, and shall insure Lessee with Lessor as an
additional insured against liability arising out of the use, occupancy or
maintenance of the Leased Premises. Compliance with the above requirement
shall not, however, limit the liability of Lessee hereunder.
(ii) Worker's compensation coverage as required by law, together with
employer's liability coverage, with a limit of not less than $500,000.
(iii) Fire and extended coverage insurance, with vandalism and
malicious mischief, in an amount sufficient to cover not less than 100% of the
full replacement cost, as the same may exist from time to time, of all Lessee's
personal property, fixtures, equipment, and tenant improvements.
(b) Insurance Policies. Lessee shall deliver to Lessor copies of liability
insurance policies required under (a) above, or certificates evidencing the
existence and amounts of such insurance, within seven (7) days after the
Commencement Date. No such policy shall be cancelable or subject to reduction of
coverage or other modification except after thirty (30) days prior written
notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals thereof.
(c) No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of insurance specified in this Paragraph 13
are adequate to cover Lessee's property or obligations under this Lease.
(d) Hazard Insurance. During the Lease term, Lessor shall maintain policies
of insurance covering loss of or damage to the Leased Premises in an amount
equal to 100% of the replacement value of the Building. Such policies shall
provide protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, special extended perils
(all risk), and Inflation Guard endorsement, and any other perils (except flood
and earthquake, unless required by any lender holding a security interest in the
Leased Premises) which Lessor deems necessary.
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(e) INDEMNITY. LESSEE SHALL INDEMNIFY AND HOLD HARMLESS LESSOR AND
LESSOR'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, GUESTS, INVITEES, AND LENDERS
FROM AND AGAINST ALL LOSSES, CLAIMS, COSTS, DAMAGE, LIABILITY OR EXPENSES,
INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEYS' FEES, ARISING OUT OF ANY AND
ALL INJURIES TO OR DEATH OF ANY PERSON OR DAMAGE TO ANY PROPERTY ARISING OUT OF
ANY OCCURRENCE ON OR IN THE PREMISES, INCLUDING THAT CAUSED BY THE NEGLIGENCE OF
LESSOR, BUT NOT TO THE EXTENT CAUSED BY THE INTENTIONAL ACT OR GROSS NEGLIGENCE
OF LESSOR, OR ARISING FROM ANY BREACH OR DEFAULT IN THE PERFORMANCE OF ANY OF
LESSEE'S OBLIGATIONS UNDER THIS LEASE, OR ARISING FROM ANY ACT OR OMISSION OF
LESSEE OR LESSEE'S DIRECTORS, OFFICERS, CONTRACTORS, CUSTOMERS, INVITEES,
EMPLOYEES. IF ANY ACTION OR PROCEEDING IS BROUGHT AGAINST LESSOR BY REASON OF
ANY SUCH MATTER, LESSEE UPON NOTICE FROM LESSOR SHALL DEFEND THE SAME AT
LESSEE'S EXPENSE BY COUNSEL REASONABLY SATISFACTORY TO LESSOR AND LESSOR SHALL
COOPERATE WITH LESSEE IN SUCH DEFENSE. LESSOR NEED NOT HAVE FIRST PAID ANY SUCH
CLAIM IN ORDER TO BE SO INDEMNIFIED. LESSEE, AS A MATERIAL PART OF THE
CONSIDERATION TO LESSOR, HEREBY ASSUMES ALL RISK OF DAMAGE TO PROPERTY OF LESSEE
OR INJURY TO PERSONS, IN, UPON OR ABOUT THE LEASED PREMISES ARISING FROM ANY
CAUSE AND LESSEE HEREBY WAIVES ALL CLAIMS IN RESPECT THEREOF AGAINST LESSOR,
EXCEPT TO THE EXTENT CAUSED BY THE INTENTIONAL ACT OR GROSS NEGLIGENCE OF
LESSOR.
(f) Exemption of Lessor from Liability. Lessee hereby agrees that except to
the extent caused by the intentional act or gross negligence of Lessor, Lessor
shall not be liable to Lessee's business or any loss of income therefrom or for
loss of or damage to the goods, wares, merchandise or other property of Lessee,
Lessee's employees, invitees, customers, or any other person in or about the
Leased Premises, nor shall Lessor be liable for injury to the person of Lessee,
Lessee's employees, agents or contractors, regardless of whether such damage or
injury is caused by or results from theft, fire, steam, electricity, gas, water
or rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air-conditioning or lighting fixtures,
or from any other cause, including the negligence of Lessor, regardless of
whether said damage or injury results from conditions arising upon the Leased
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Premises, or of the equipment, fixtures or appurtenances applicable thereto, and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible. Lessor shall not be liable for any damages
arising from any act or neglect of any other tenant, occupant or user of the
Leased Premises, nor from the failure of Lessor to enforce the provisions of any
lease of any other sublessee of the Leased Premises.
(g) Waiver of Subrogation. Anything in this Lease to the contrary
notwithstanding, as and to the extent permitted by applicable insurance
policies, Lessor and Lessee each hereby waive any and all rights of recovery,
claim, action, or cause of action, against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Leased Premises, or any
improvements thereto, or the Building, or any improvements thereto, or any
personal property of such party therein, by reason of fire, the elements, or any
other cause to the extent but only to the extent the foregoing are insured
against under the terms of standard fire and extended coverage insurance
policies, regardless of cause or origin, including negligence of the other party
hereto, its agents, officers, or employees, and covenants that no insurer shall
hold any right of subrogation against such other party.
(h) Fire or Other Casualty. The parties hereto mutually agree that if any
time during the Term the Leased Premises or any portion of the Building are
partially (more than 20% of replacement cost) or totally destroyed by fire or
other casualty covered by the fire and extended coverage insurance, the Lessor
may, at its option, upon written notice to Lessee, delivered within sixty (60)
days after such occurrence, elect either (i) to promptly repair and restore the
Leased Premises and the Building, as soon as it is reasonably practicable, to
substantially the same conditions in which the Leased Premises and the Building
were before such damage, or (ii) to terminate the Lease with such termination
to be effective on the date of such fire or other casualty; provided, however in
the event Lessee has occupied and conducted business on the Leased Premises
during the interim between the fire or other casualty and the delivery of the
written notice, the termination will be effective on the date Lessee last
occupied and conducted business on the Leased Premises.
In the event the Leased Premises are completely destroyed or so damaged by
fire or other casualty covered by the fire and extended coverage insurance to be
carried by Lessor under the terms hereof that it cannot reasonably be used by
Lessee for the purposes herein provided and this Lease is not terminated as
above provided, then there shall be a total
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abatement of rent until the Leased Premises are made usable. In the event the
Leased Premises are substantially destroyed or damaged by fire or other hazard
so that the Leased Premises can be only partially used by Lessee for the
purposes herein provided, then there shall be a partial abatement in the rent
corresponding to the time and extent to which the Leased Premises cannot be used
by Lessee.
If the Leased Premises shall be damaged by fire or other casualty
resulting from the fault or negligence of Lessee, or the agents employees,
licensees, or invitees of Lessee, then, to the extent not covered by insurance,
such damage shall be repaired by and at the expense of Lessee, under the
direction and supervision of Lessor, and rent shall continue without abatement.
(i) Condemnation and Loss or Damage. If the Leased Premises or any part
thereof shall be taken or condemned for any public purpose to such an extent as
to render the remainder of the Leased Premises, in the opinion of Lessor and
Lessee, not reasonably suitable for Lessee's occupancy, this Lease shall, at the
option of either party, forthwith cease and terminate. All proceeds from any
taking or condemnation of the Leased Premises shall belong to and be paid to
Lessor. In addition, Lessor shall not be liable or responsible to Lessee for any
loss or damage to any property or persons occasioned by theft, fire, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order,
requisition or order of governmental body or authority, force majeure or any
other cause beyond the control of Lessor, or for any damage or inconvenience
which may arise through repair or alteration of any part of the Building, or
failure to make repairs, except to the extent caused by the intentional act or
gross negligence of Lessor.
14. DEFAULT BY LESSEE. The occurrence of any one or more of the following
events shall constitute a default and breach of the Lease by Lessee.
(a) The vacating or abandonment of the Leased Premises by Lessee. Such
vacating or abandonment shall be deemed to have occurred upon the absence of the
Lessee from the Leased Premises for ten (10) consecutive days while Lessee is in
default in the payment of any sum to be paid by Lessee hereunder, during the
term of the Lease or any renewals or extensions thereof.
(b) The failure by Lessee to make any payment of Monthly Rental, Additional
Rental or Forecast Additional Rental or any other payment required to be made by
Lessee hereunder as
/s/ /s/
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Lessor Lessee
13
and when due, provided such failure shall continue for a period of ten (10)
business days after written notice thereof by Lessor to Lessee.
(c) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Lessee, other than described in Paragraph 13(a) and (b) above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof by Lessor to Lessee; provided, however, that if the nature of Lessee's
default is such that more than thirty (30) days are reasonably required for its
cure, then Lessee shall not be deemed to be in default if Lessee commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion.
(d) The making by Lessee, or any guarantor of Lessee's obligations under
this Lease, of any general assignment or general arrangement for the benefit of
creditors; or the filing by or against Lessee, or any guarantor of Lessee's
obligations under this Lease, of a petition to have Lessee, or any guarantor of
Lessee's obligations under this Lease, adjudged a bankrupt, or a petition for
reorganization or arrangement under any laws relating to bankruptcy (unless, in
the case of a petition filed against Lessee, or any guarantor of Lessee's
obligations under this Lease, the same is dismissed within thirty (30) days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Lessee's assets located at the Leased Premises or of interests in this
Lease, where possession is not restored to Lessee within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Leased Premises or of Lessee's interest in this
Lease, where such seizure is not discharged in thirty (30) days.
15. REMEDIES IN DEFAULT BY LESSEE. Except as otherwise required herein, in
the event of any such default or breach by Lessee, from time to time, in its
sole discretion, and without notice and without limiting Lessor in the exercise
of any other right or remedy which Lessor may be entitled to exercise at law or
in equity, Lessor may elect to:
(a) Terminate this Lease, after ten (10) business days written notice to
Lessee, and forthwith repossess the Leased Premises and be entitled to recover
as damages a sum of money equal to the total of (1) the cost of recovering the
Leased Premises; (2) all unpaid Base Rental, Additional Rental and Forecast
Additional Rental earned at the time of termination, plus interest thereon at
the maximum lawful rate; (3) an amount equal to the difference between (i) the
total rental (Base Rental, Additional Rental and Forecast Additional Rental
computed as stated in this
/s/ /s/
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Lessor Lessee
14
Lease) for the remaining portion of the Term; and (ii) the then present value
of the fair rental value of the Leased Premises for such period (the parties
hereto agreeing that the fair rental value of the Leased Premises shall be the
sum of all rentals to be paid during such period discounted at the rate of ten
percent (10%) per annum); (4) the cost of repairs or of alteration of the Leased
Premises that are the Lessee's responsibility under this Lease; (5) that portion
of any leasing commission paid by Lessor applicable to the unexpired term of
Lease; and (6) any other sum of money and damages owed by Lessee to Lessor.
(b) Terminate, after five (5) days written notice to Lessee, Lessee's right
of possession (but not the Lease) and repossess the Leased Premises by forcible
entry or otherwise, without demand or notice of any kind to Lessee and without
terminating this Lease, in which event Lessor may, but shall be under no
obligation to do so, re-let the same for the account of Lessee for such rent and
upon such terms as shall be satisfactory to Lessor. For the purpose of such re-
letting, Lessor is authorized to make any repairs, changes, alterations, or
additions in or to Leased Premises that may be desirable, necessary or
convenient, and, if the same are re-let and a sufficient sum shall not be
realized from such re-letting after paying the unpaid Rental, Additional Rental
or Forecast Additional Rental due hereunder earned but unpaid at the time of re-
letting, plus interest thereon at a maximum lawful rate, the cost of recovering
possession, and all of the costs and expenses of such repairs, changes,
alterations, and additions and the expenses of such re-letting and of the
collection of the rent accruing therefrom to satisfy all rent provided for in
this Lease to be paid, the Lessee shall satisfy and pay any such deficiency upon
demand therefor from time to time. If Lessor is unable to re-let the Lease
Premises, then Lessee shall pay to Lessor as damages a sum equal to the amount
of all rentals specified in this Lease for the term thereof. Lessee agrees that
Lessor may file suit to recover any sums falling due under the terms of this
paragraph from time to time, and that no delivery or recovery of any portion due
Lessor hereunder shall be any defense to any subsequent action brought for any
amount not previously reduced to judgment in favor of Lessor, nor shall such re-
letting be construed as an election on the part of the Lessor to terminate this
Lease unless a written notice of such intention be given to Lessee by Lessor.
Notwithstanding any such re-letting without termination, Lessor may at any time
thereafter elect to terminate this lease for any previous breach.
(c) In the event of abandonment as defined in paragraph 14(a) above, of the
Leased Premises by Lessee, Lessor may enter the premises to make inspections, to
show prospective tenants and to remove and store any property of Lessee in the
Leased Premises, without
/s/ /s/
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Lessor Lessee
15
terminating this Lease or limiting any other remedy of Lessor under this Lease.
In addition to any other rights of Lessor, Lessor may dispose of the stored
property if Lessee does not claim such property within sixty (60) days after the
property is stored. Lessor shall deliver by certified mail to Lessee at Lessee's
last known address a notice stating that Lessor may dispose of Lessee's property
if Lessee does not claim the property within sixty (60) days after the date the
property is stored. Lessee's rights in and to such stored property and Lessor's
obligations as herein set forth with regard to such stored property are subject
to and subordinated to the landlord's lien in and to all personal property of
Lessee on the Leased Premises as set forth in paragraph 15(g). Notwithstanding
anything herein to the contrary, upon an abandonment of the Leased Premises by
Lessee, Lessor shall be under no obligation to re-enter the Leased Premises,
store any property or take any other action. In any such event, Lessor may
continue this Lease and recover the full amount of the rent to be paid hereunder
as it comes due.
(d) Pursuit of any remedy by Lessor, whether hereunder or otherwise, shall
never be deemed an election of remedies. Lessee further agrees that failure by
Lessor to use diligence in enforcing its rights against Lessee, or in requiring
performance by Lessee of any of its obligations hereunder or in preserving the
liability of Lessee hereunder, shall not impair, reduce or in any manner affect
Lessor's rights or remedies hereunder, or Lessee's liability or obligations
hereunder.
(e) Exercise by Lessor of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Leased Premises by Lessee, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Lessor and Lessee. No removal or other exercise of dominion by Lessor over the
property of Lessee or others on the Leased Premises shall be deemed unauthorized
or constitute a conversion, Lessee hereby consenting, after any event of
default, to the aforesaid exercise of dominion over Lessee's property within the
Leased Premises. All claims for damages, except to the property of Lessee or
others on the Leased Premises, by reason of such re-entry and/or repossession
are hereby waived, as are all claims for damages by reason of any distress
warrant, forcible entry and detainer proceedings, sequestration proceedings or
other legal process. Lessee agrees that any re-entry by Lessor may be pursuant
to judgment contained in forcible entry and detainer proceedings or other legal
proceedings or without the necessity for any legal proceedings if such re-entry
may be accomplished without force, as Lessor may elect, and Lessor shall not be
liable in trespass or otherwise.
/s/ /s/
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Lessor Lessee
16
(f) If Lessee should fail to make any payment or cure any default hereunder
within the time herein permitted, Lessor, without being under any obligation to
do so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account of Lessee (and enter the Leased
Premises for such purpose), and thereupon Lessee shall be obligated to, and
hereby agrees, to pay Lessor, upon demand, all reasonable costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Lessor in
taking such remedial action.
(g) In the event that Lessor shall have taken possession of the Leased
Premises pursuant to the authority herein granted, then Lessor shall have the
right to keep in place and use all of the furniture, fixtures, equipment, and
other personal property at the Leased Premises, including that which is owned by
or leased to Lessee, at all times prior to any foreclosure thereon by Lessor or
repossession thereof by any Lessor thereof or third party having a lien thereon.
Lessor shall also have the right to remove from the Leased Premises (without
notice to Lessee and without the necessity of obtaining a distress warrant, writ
of sequestration or other legal process) all or any portion of such furniture,
fixtures, equipment and other property located thereon and place same in storage
at any place within ▇▇▇▇▇▇ County; and in such event, Lessee shall be liable to
Lessor for costs incurred by Lessor in connection with such removal and storage.
Lessor shall also have the right to relinquish possession of all or any portion
of such furniture, fixtures, equipment and other property to any person
("Claimant") claiming to be entitled to possession thereof who presents to
Lessor a copy of any instrument represented to Lessor by Claimant to have been
executed by Lessee granting Claimant the right under the circumstances to take
possession of such furniture, fixtures, equipment or other property, without the
necessity on the part of Lessor to inquire into the authenticity of said
instrument and without the necessity of Lessor making any investigation or
inquiry as to the validity of the factual or legal basis upon which Claimant
purports to act.
16. HOLDING OVER. In the event of holding over by Lessee after expiration
or termination of this Lease without the written consent of Lessor, Lessee shall
pay monthly as liquidated damages a sum equal to one and one-half (1 1/2) times
the amount of the monthly Base Rental, Forecast Additional Rental and Additional
Rental paid, or to be paid, by Lessee to Lessor for the last month of the Term
for the entire holdover period. No holding over by Lessee after the Term of the
lease shall operate to extend the Lease. In the event of any unauthorized
holding over, Lessee shall indemnify Lessor against all claims for damages by
any other Lessee to whom
/s/ /s/
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Lessor Lessee
17
Lessor may have leased all or any part of the Leased Premises covered hereby
effective upon the termination of this Lease. Any holding over with the consent
of Lessor in writing shall thereafter constitute this Lease a lease from month
to month.
17. NON-WAIVER. Failure of Lessor to declare any default immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such default, but Lessor shall have the right to declare any such
default at any time and take such action as might be lawful or authorized
hereunder, either at law or in equity.
18. DEFAULT BY LESSOR. Except as may otherwise be provided herein, Lessor
shall not be in default unless Lessor fails to perform obligations required of
Lessor within a reasonable time, but in no event later than thirty (30) days
after written notice by Lessee to Lessor and to the holder of any first mortgage
or deed of trust covering the Leased Premises whose name and address shall have
been furnished previously to Lessee in writing, specifying wherein Lessor has
failed to perform such obligations; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are required for
performance, then Lessor shall not be in default if Lessor commences performance
within such thirty (30) day period and thereafter diligently prosecutes the
same to completion. Except as may otherwise be provided herein, Lessee shall
not have the right to terminate this Lease, it being agreed that Lessee's
remedies shall be limited to actual damages, without any award for incidental
or consequential damages.
19. ASSIGNMENT AND SUBLETTING.
(a) Lessee may assign the Leased Premises or any part thereof or sublease,
mortgage, pledge, or hypothecate its leasehold interest only with the prior
express written permission of Lessor. Such permission shall not be unreasonably
withheld or delayed. Any attempt to do any of the foregoing without the prior
express written permission of Lessor, shall be void and of no effect. Lessee
must furnish to Lessor the name and terms of any proposed assignment or sublease
of each proposed assignee or sublessee.
(b) Any assignment or sublease of the leasehold, whether or not consent is
required under the terms of this Lease, and consent to any assignment or
sublease by Lessor, shall not operate to release Lessee of any obligation
hereunder and Lessee shall remain liable for the performance of all of the
covenants, duties, and obligations hereunder including without limitation
/s/ /s/
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Lessor Lessee
18
the obligation to pay all rent and other sums herein provided to be paid, and
Lessor shall be entitled to enforce the provisions of this instrument against
the Lessee and/or against any assignee or sublessee, or either of them, at the
election of Lessor.
(c) Lessee shall give Lessor written notice of the consummation of any
assignment or sublease consented to by Lessor, shall furnish to Lessor copies of
all assignments, transfers, subleases, and other documents executed in
connection with such assignment or sublease, and shall notify Lessor in writing
of the date the assignee or sublessee takes possession of the Leased Premises or
a portion thereof.
(d) Lessee shall require of any sublessee a security deposit equal to at
least one month's rent with Lessor to be held pursuant to the terms of paragraph
9 above.
20. SUBORDINATION. This Lease and Lessee's rights hereunder are and will
remain subordinate to any ground lease, mortgage, deed of trust or any other
hypothecation for security now or hereafter placed upon the Leased Premises, and
to all increases, renewals, modifications, consolidations, replacements, and
extension thereof (collectively referred to as the "Mortgage"). If the holder of
a Mortgage becomes the owner of the Leased Premises by reason of foreclosure or
acceptance of a deed in lieu of foreclosure, at such holder's election Lessee
will be bound to such holder or its successor-in-interest under all terms and
conditions of this Lease, and Lessee will be deemed to have attorned to and
recognized such holder or successor as Lessor's successor-in-interest for the
remainder of the Lease term or any extension thereof. In such event, the holder
of such Mortgage will agree that, so long as Lessee is not then in default
hereunder, such holder will recognize this Lease and will not disturb Lessee in
its possession of the Leased Premises for any reason other than one which would
entitle the Lessor to terminate this Lease under its terms. The foregoing is
self-operative and no further instrument of subordination and/or attornment will
be necessary unless required by Lessor or the holder of a Mortgage, in which
case Lessee will, within ten (10) days after written request, execute and
deliver without charge any documents reasonably required by Lessor or such
holder in order to confirm the subordination and attornment set forth above.
Should the holder of a Mortgage request that this Lease and Lessee's rights
hereunder be made superior, rather than subordinate, to the Mortgage, then
Lessee will, within ten (10) days after written request, execute and deliver
without charge such agreement as may be reasonably required by such holder in
order to effectuate and evidence such superiority of the Lease to the Mortgage.
/s/ /s/
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Lessor Lessee
19
21. MISCELLANEOUS.
(a) Attorney's Fees. In case it should be necessary or proper for Lessor or
Lessee to bring any action under this Lease, then the prevailing party in any
such action shall be entitled to reasonable attorneys' fees, expenses and court
costs from the non-prevailing party.
(b) Lessor's Entry/Inspections. With 4 hours notice, Lessor's agents and
representatives shall have the right to enter the Leased Premises at any
reasonable time during business hours (or at any time in case of emergency) (i)
to inspect the Premises, (ii) to make such repairs as may be required or
permitted pursuant to this Lease, and/or (iii) during the last 180 day period
prior to expiration of this Lease or following notice from Lessee of Lessee's
intent to cancel this Lease pursuant to paragraph 3 above, for showing the
Leased Premises to any prospective tenant. In addition, Lessor shall have the
right to erect a suitable sign on the Leased Premises stating the Leased
Premises are available for lease. Lessee will provide Lessor with all keys
necessary to enter the Leased Premises in case of an emergency.
(c) No Partnership or Agency. Lessor does not in any way or for any purpose
become a partner of Lessee in the conduct of its business or otherwise, or a
joint venturer with Lessee. Lessee shall not be deemed an agent of Lessor for
any purpose.
(d) Accord and Satisfaction. No payment by Lessee or receipt by Lessor of a
lesser amount than the monthly consideration or other payments herein stipulated
shall be deemed to be other than an account of the earliest stipulated monthly
consideration or other payments then due, or shall any check or writing
accompanying any check or payment as monthly consideration or other payment
provided for herein be deemed an accord or satisfaction; and Lessor may accept
such check or payment without prejudice to Lessor's right to recover the
balance of such monthly consideration or other payments or to pursue other
remedies provided in this Lease or by law.
(e) Acceptance of Leased Premises and Building by Lessee. In consideration
of the Allowance granted by Lessor to Lessee under paragraph 22 hereof, the
taking of possession of the Leased Premises by Lessee shall be conclusive
evidence as against Lessee (1) that Lessee accepts the Leased Premises in "AS
IS" condition and as suitable for the purpose for which same is leased; (2) that
it accepts the Building and the land and each and every part and appurtenance
thereof as being in a good and satisfactory condition; and (3) that Lessee
waives any defects in the Leased Premises and its appurtenances. Lessor shall
not be liable, except in the
/s/ /s/
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Lessor Lessee
20
event of negligence if and to the extent such liability is indemnified by
insurance, and in the event of the intentional act or gross negligence
notwithstanding whether such claim is indemnified by insurance, to Lessee or any
of its agents, employees, and servants for any injury or damage to person or
property due to the condition or design of or any defect in the Building or its
mechanical systems and equipment which may exist or occur. Lessor shall be
liable for simple negligence only to the extent Lessor is indemnified by
insurance.
In addition to a visual inspection of the Leased Premises, Lessor warrants
and conveys to Lessee that the Leased Premises are in good working order at
lease commencement including but not limited to: the roof membrane, HVAC,
Telephone System and security system.
(f) Laws Governing. The laws of the State of Texas shall govern the
interpretation and validity of, and other matters pertaining to, this lease.
(g) Notice. Any notice which may or shall be given under the terms of this
Lease shall, unless otherwise provided herein, be in writing and shall be either
delivered by hand or sent by United States Registered or Certified Mail, postage
prepaid, to the address below. Such addresses may be changed from time to time
by either party by giving written notice as provided above. Notice shall be
deemed given when delivered (if delivered by Hand) or when postmarked (if sent
by mail).
LESSOR: RGK RENTALS, LTD.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
LESSEE: APPLIED SCIENCE FICTION, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
LESSEE: FACILITIES SERVICES, INC.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ /s/
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Lessor Lessee
21
(h) Severability. If any clause or provision of this Lease is illegal,
invalid, or unenforceable, under present or future laws effective during the
term hereof, then it is the intention of the parties hereto that the remainder
of this lease shall not be affected thereby, and it is also the intention of
both parties that in lieu of each clause or provision that is illegal, invalid,
or unenforceable, there be added as a party of this Lease a clause or provision
as similar to in terms to such illegal, invalid, or unenforceable clause or
provision as is enforceable.
(i) Entire Agreement and Binding Effect. This Lease Agreement, including
exhibits A, B, C and D all of which are hereby incorporated herein by reference,
constitute the entire agreement between Lessor and Lessee; no prior written or
prior contemporaneous oral promises or representations shall be binding.
Paragraph captions herein are for convenience only, and neither limit nor
amplify the provisions of this Lease. The provisions of this Lease shall be
binding upon and insure to the benefit of the heirs, executors, administrator,
successors, and assigns of the parties, but this provision shall in no way alter
the restriction herein in connection with assignment and subletting by Lessee.
(j) Assignment by Lessor. Lessor shall have the right to transfer and
assign, in whole or in part, all of its rights and obligations hereunder and in
the Building and the Leased Premises referred to herein.
(k) Alterations. This Lease may not be altered, changed, or amended, except
by an instrument in writing signed by both parties herein.
(l) Gender. When required for clarity, the masculine gender shall also
include the feminine and neuter.
22. REFURBISHMENT ALLOWANCE. Lessor grants to Lessee a refurbishment
allowance of $269,920.00 (the "Allowance") to be used by Lessee for improvements
to and renovation of the Leased Premises (the "Improvements"). Upon submission
of invoices and releases by Lessee, Lessor shall promptly reimburse Lessee for
actual costs incurred in construction of the Improvements. Lessee is solely
responsible for the cost of any Improvements in excess of the Allowance.
/s/ /s/
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Lessor Lessee
22
23. Brokerage. Lessor agrees to pay to KAM Properties, Inc. and the ▇▇▇ ▇▇▇
Company of Austin, Texas, for services performed in procurring and negotiating
this agreement, as set out in the Commission Agreement executed February 20,
1998.
EXECUTED this 20th day of March, 1998
LESSOR: RKG RENTALS, LTD.
By: KMS Ventures, Inc., Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
LESSEE: APPLIED SCIENCE FICTION, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President and C.E.O.
/s/ /s/
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Lessor Lessee
23
EXHIBIT A
LEASED PREMISES
BALCONES NORTH
OFFICE BUILDING
[FLOOR PLAN APPEARS HERE]
/s/ /s/
------------------ ---------------------
Lessor Lessee
A-1
EXHIBIT B
RULES AND REGULATIONS
1. No signs of any kind or nature, symbol, or identifying ▇▇▇▇ shall be put
on the Building, elevators, staircases, entrances, parking areas or upon the
doors or walls, whether plate glass or otherwise of the Leased Premises nor
within the Leased Premises so as to be visible from the public areas or exterior
of the Building, without prior written approval of Lessor. All signs or
lettering shall conform in all respects to the sign and/or lettering criteria
established by Lessor.
2. Lessee shall not make or permit any loud or improper noises in the
building or otherwise interfere in any way with other Lessees.
3. Lessor will not be responsible for any lost or stolen personal property
or equipment from the Leased Premises or public areas, regardless of whether
such loss occurs when the area is locked against entry or not.
4. Lessee, or the employees, agents, servants, visitors, or licensees of
Lessee shall not, at any time or place, leave or discard rubbish, paper,
articles, or objects of any kind whatsoever outside the doors of the Leased
Premises or in the corridors or passageways of the Building. No animals or
vehicles of any description shall be brought into or kept in or about the
building.
5. None of the entries, passages, doors, hallways, or stairways in the
building shall be blocked or obstructed.
6. Lessor shall have the right to determine and prescribe the weight and
proper position of any unusually heavy equipment, including computers, safes,
large files, etc., that are to be placed in the building, and only those which
in the exclusive judgment of the Lessor will not do damage to the floors,
structure, and/or elevators may be moved into the Building. Any damage caused by
installing, moving, or removing such aforementioned articles in the Building
shall be paid by Lessee.
7. All Christmas and other decorations must be constructed of flame
retardant materials.
8. All doors leading from public corridors to the Leased Premises are to be
kept closed when not in use.
9. Canvassing, soliciting, or peddling in the Building is prohibited and
Lessee shall cooperate to prevent the same.
10. Lessee shall give immediate notice to Lessor in case of accidents in
the Leased Premises or in the Building or of defects therein or in any fixtures
or equipment, or of any known emergency in the Building.
/s/ /s/
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Lessor Lessee
1
EXHIBIT C
TELEPHONE SYSTEM
A complete inventory of the Telephone System will be delivered to Lessee at
Lessee's possession of the Leased Premises
/s/ /s/
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Lessor Lessee
1
EXHIBIT D
FAIR MARKET RENTAL RATE
If Lessee elects to renew this Lease, Base Rental and Forecasted Additional
Rental for each renewal term shall be an amount equal to one hundred percent
(100%) of the Fair Market Rental Rate of the Leased Premises in relation to
market conditions at the time of the extension. The Fair Market Rental Rate of
the Leased Premises shall be determined as follows:
After timely receipt by Lessor of Lessee's notice of exercise of option to
renew the Lease, Lessor and Lessee shall have a period of thirty (30) days in
which to agree on the Fair Market Rental Rate as the Base Rental for the Leased
Premises. If Lessor and Lessee agree on the Fair Market Rental Rate for the
Leased Premises, then they shall immediately execute a new lease.
In the event that Lessor and Lessee are unable to agree as to the Fair
Market Rental Rate of the Leased Premises under a renewal of the Lease within
thirty (30) days after such notice of intent to renew was given by Lessee,
Lessor and Lessee shall each promptly appoint an appraiser, and the two
appraisers so appointed shall select a third, or if they cannot agree upon a
third appraiser, either party may petition a court of competent jurisdiction for
the appointment of a third appraiser; provided, however, that each appraiser
must be an "MAI" appraiser with at least five (5) years experience in appraising
real property in ▇▇▇▇▇▇ County, Texas. Each party shall be responsible for the
compensation, if any, of the third appraiser. Such appraisers shall each make a
separate appraisal of the Fair Market Rental Rate of the Leased Premises under a
renewal of the Lease and shall deliver copies of their appraisals to Lessor and
Lessee, and the average of the three appraisals shall be the figure designated
as the Fair Market Rental Rate for the purposes of this renewal option. Lessor
and Lessee shall, separately and collectively and in good faith, take any
necessary steps to insure that all three appraisals are completed within thirty
(30) days after the appointment of the first appraiser to be appointed. If
Lessee wishes to renew the Lease at the Fair Market Rental Rate determined by
such appraisal, Lessee shall, within ten (10) days after the last appraisal has
been delivered to it, give notice in writing to Lessor of Lessee's agreement to
renew the Lease at a rental rate equal to the average of the three appraisals,
which rental rate shall be specified in such notice. Failure by Lessee to timely
give such notice of agreement shall terminate the right of Lessee to renew the
Lease.
/s/ /s/
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Lessor Lessee
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11. Lessee shall not use the Leased Premises or permit the Leased Premises
to be used for photographic multilith, or multigraph reproductions, except in
connection with its own business without Lessor consent and Lessor will not
unreasonably withhold consent.
12. Any damages (excepting normal wear and tear) caused to carpet in the
Leased Premises shall be repaired or replaced at the expense of Lessee.
13. Lessee, or the employees, agents, servants, visitors, or licensees of
Lessee, shall abide by the Rules and Regulations established from time to time
for the parking area.
14. Lessee shall not allow to pass into any sewer, drain, or toilet serving
the Leased Premises or located in the Building any oil, grease, or any other
deleterious effluent or substance which may cause an obstruction in or damage to
such sewer, drain, or toilet.
15. All areas within the Building are designated as "no smoking areas".
16. Lessor reserves the right, after consultation with Lessee, to rescind
any of these Rules and Regulations of the Building, and to make such other and
further Rules and Regulations of the Building as in its judgment shall from time
to time be needful for the safety, protection, care and cleanliness of the
Building, the Leased Premises, and the operation thereof, the preservation of
good order therein, and the protection and comfort of the other Lessees in the
Building and their agents, employees, and invitees. Changes in these Rules and
Regulations, when made and written notice thereof is given to Lessee, shall be
binding upon Lessee in like manner as if originally herein prescribed. Provided,
however, such changes shall not operate so as to change the provisions of the
lease agreement between lessor and lessee and as long as changes do not effect
normal operations of business that are in place at the time on a day-to-day
basis.
/s/ /s/
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Lessor Lessee
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