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EXHIBIT 10.1
LEASE AGREEMENT BETWEEN
ENTERPRISE BUSINESS PARK D-2, L.P.,
AS LANDLORD, AND
DAISYTEK, INCORPORATED,
AS TENANT
DATED MAY 3, 2000
ENTERPRISE OFFICE CENTER II
ALLEN, TEXAS
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BASIC LEASE INFORMATION
Lease Date: May 3, 2000
Landlord: ENTERPRISE BUSINESS PARK D-2, L.P., a Delaware limited
partnership
Tenant: DAISYTEK, INCORPORATED, a Delaware corporation
Premises: Suite No. 200 (subject to approval by the applicable governmental
authority), containing 46,122 rentable square feet, in the office
building commonly known as Enterprise Office Center II (the
"BUILDING"), and whose street address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. The Premises are outlined on the plan
attached to the Lease as Exhibit A. The land on which the
Building is located (the "LAND") is described on Exhibit B. The
term "Building" includes the related Land, driveways, parking
facilities, and similar improvements.
Term: Approximately 87 months, commencing on the Commencement Date and
ending at 5:00 p.m. local time on the last day of the 87th full
calendar month following the Commencement Date, subject to
adjustment and earlier termination as provided in the Lease.
Commencement
Date: The earliest of (a) the date on which the Work (as defined in
Exhibit D hereto) in the Premises is Substantially Completed (as
defined in Exhibit D hereto), or (b) the date on which the Work
in the Premises would have been Substantially Completed but for
the occurrence of any Tenant Delay Days (as defined in Exhibit D
hereto).
Basic Rent: Subject to the conditional abatement of Basic Rent, Additional
Rent, and Tenant's Proportionate Share of Taxes contained in
Exhibit J attached hereto, Basic Rent shall be the following
amounts for the following periods of time:
ANNUAL BASIC RENT PER RENTABLE MONTHLY BASIC RENT
LEASE MONTH SQUARE FOOT
------------------------ -------------------------------------- -------------------------
1 - 63 $14.90 $57,268.15
------------------------ -------------------------------------- -------------------------
64 - 87 $17.31 $66,530.99
------------------------ -------------------------------------- -------------------------
As used herein, the term "LEASE MONTH" shall mean each calendar
month during the Term (and if the Commencement Date does not
occur on the first day of a calendar month, the period from the
Commencement Date to the first day of the next calendar month
shall be included in the first Lease Month for purposes of
determining the duration of the Term and the monthly Basic Rent
rate applicable for such partial month).
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Security
Deposit: [Intentionally Deleted].
Rent: Basic Rent, Tenant's Proportionate Share of Taxes, and Electrical
Costs, Tenant's share of Additional Rent, and all other sums that
Tenant may owe to Landlord or otherwise be required to pay to
Landlord under the Lease.
Permitted Use: General office use and telemarketing.
Tenant's Proportionate Share:
50.10%, which is the percentage obtained by dividing (a) the
number of rentable square feet in the Premises as stated above by
(b) the 92,066 rentable square feet in the Building. Landlord and
Tenant stipulate that the number of rentable square feet in the
Premises and in the Building set forth above shall be binding
upon them.
Initial Liability Insurance Amount:
$3,000,000.
Prior to Commencement Date: Following Commencement Date:
-------------------------- ---------------------------
Tenant's
Address: Daisytek, Incorporated Daisytek, Incorporated
500 North Central Expressway ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Telephone: _________________________
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇ Telecopy: __________________________
With a copy to:
--------------
▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Landlord's For all Notices: With a copy to:
Address: --------------- --------------
Enterprise Business Park ▇-▇, ▇.▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇-▇, L.P.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇, Ltd. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: Asset Manager
Attention: ▇▇▇ ▇▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
--------------
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD: ENTERPRISE BUSINESS PARK D-2, L.P., a Delaware
limited partnership
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇ DFW Development, Inc.,
a Delaware corporation, its sole general partner
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
TENANT: DAISYTEK, INCORPORATED, a Delaware corporation
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
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TABLE OF CONTENTS
Page
1. Definitions and Basic Provisions.........................................................................1
2. Lease Grant..............................................................................................1
3. Tender of Possession; Late Delivery; Acceptance of Premises..............................................1
(a) Tender of Possession............................................................................1
(b) Late Delivery...................................................................................1
(c) Acceptance of Premises..........................................................................2
(d) Early Entry by Tenant...........................................................................2
4. Rent.....................................................................................................3
(a) Payment.........................................................................................3
(b) Operating Costs; Taxes; Electrical Costs........................................................3
(c) Tenant Inspection Right.........................................................................5
5. Delinquent Payment; Handling Charges.....................................................................6
6. Security Deposit.........................................................................................6
7. Landlord's Obligations...................................................................................7
(a) Services........................................................................................7
(b) Excess Utility Use..............................................................................7
(c) Restoration of Services; Abatement..............................................................7
8. Improvements; Alterations; Repairs; Maintenance..........................................................8
(a) Improvements; Alterations.......................................................................8
(b) Repairs; Maintenance............................................................................9
(c) Performance of Work.............................................................................9
(d) Mechanic's Liens................................................................................9
9. Use.....................................................................................................10
10. Assignment and Subletting...............................................................................10
(a) Transfers......................................................................................10
(b) Consent Standards..............................................................................10
(c) Request for Consent............................................................................11
(d) Conditions to Consent..........................................................................11
(e) Cancellation...................................................................................11
(f) Additional Compensation........................................................................11
(g) Permitted Transfers............................................................................12
11. Insurance; Waivers; Subrogation; Indemnity..............................................................12
(a) Tenant's Insurance.............................................................................12
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(b) Landlord's Insurance...........................................................................13
(c) No Subrogation.................................................................................13
(d) Indemnity......................................................................................13
12. Subordination; Attornment; Notice to Landlord's Mortgagee...............................................14
(a) Subordination..................................................................................14
(b) Attornment.....................................................................................14
(c) Notice to Landlord's Mortgagee.................................................................14
(d) Landlord's Mortgagee's Protection Provisions...................................................14
Subordination, Non-Disturbance and Attornment Agreement.................................................15
13. Rules and Regulations...................................................................................15
14. Condemnation............................................................................................15
(a) Total Taking...................................................................................15
(b) Partial Taking - Tenant's Rights...............................................................15
(c) Partial Taking - Landlord's Rights.............................................................16
(d) Award..........................................................................................16
15. Fire or Other Casualty..................................................................................16
(a) Repair Estimate................................................................................16
(b) Tenant's Rights................................................................................16
(c) Landlord's Rights..............................................................................16
(d) Repair Obligation..............................................................................16
(e) Abatement of Rent..............................................................................17
16. Personal Property Taxes.................................................................................17
17. Events of Default.......................................................................................17
(a) Payment Default................................................................................17
(b) Abandonment....................................................................................17
(c) Estoppel.......................................................................................17
(d) Other Defaults.................................................................................18
(e) Insolvency.....................................................................................18
18. Remedies................................................................................................18
(a) Termination of Lease...........................................................................18
(b) Termination of Possession......................................................................18
(c) Alteration of Locks............................................................................19
19. Payment by Tenant; Non-Waiver; Cumulative Remedies......................................................19
(a) Payment by Tenant..............................................................................19
(b) No Waiver......................................................................................19
(c) Cumulative Remedies............................................................................19
20. Landlord's Lien.........................................................................................19
21. Surrender of Premises...................................................................................19
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22. Holding Over............................................................................................20
23. Certain Rights Reserved by Landlord.....................................................................20
(a) Building Operations............................................................................20
(b) Security.......................................................................................20
(c) Prospective Purchasers and Lenders.............................................................20
(d) Prospective Tenants............................................................................21
24. Substitution Space......................................................................................21
25. Miscellaneous...........................................................................................21
(a) Landlord Transfer..............................................................................21
(b) Landlord's Liability...........................................................................21
(c) Force Majeure..................................................................................21
(d) Brokerage......................................................................................21
(e) Estoppel Certificates..........................................................................21
(f) Notices........................................................................................21
(g) Separability...................................................................................22
(h) Amendments; Binding Effect.....................................................................22
(i) Quiet Enjoyment................................................................................22
(j) No Merger......................................................................................22
(k) No Offer.......................................................................................22
(l) Entire Agreement...............................................................................22
(m) Waiver of Jury Trial...........................................................................22
(n) Governing Law..................................................................................22
(o) Recording......................................................................................23
(p) Joint and Several Liability....................................................................23
(q) Financial Reports..............................................................................23
(r) Landlord's Fees................................................................................23
(s) Telecommunications.............................................................................23
(t) Confidentiality................................................................................24
(u) Authority......................................................................................24
(v) Hazardous Materials............................................................................24
(w) List of Exhibits...............................................................................24
26. Other Provisions........................................................................................25
(a) ADA............................................................................................25
(b) Environmental Report...........................................................................25
(c) Signage........................................................................................25
(d) Satellite Dish.................................................................................26
(e) Smoking Area...................................................................................27
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LIST OF DEFINED TERMS
Page
Additional Rent...................................................................................................3
Affiliate.........................................................................................................1
Architect.......................................................................................................D-2
Basic Lease Information...........................................................................................1
Basic Rent........................................................................................................i
Building..........................................................................................................i
Building's Structure..............................................................................................1
Building's Systems................................................................................................1
Casualty.........................................................................................................16
Commencement Date.................................................................................................i
Comparable Buildings............................................................................................H-1
Completion Termination Date.......................................................................................2
Construction Allowance..........................................................................................D-5
Construction Drawings...........................................................................................D-1
Consultant.......................................................................................................25
Critical Services.................................................................................................8
Damage Notice....................................................................................................16
Disabilities Acts................................................................................................25
Electrical Costs..................................................................................................5
Essential Landlord Improvements.................................................................................D-1
Estimated Delivery Date...........................................................................................1
Event of Default.................................................................................................18
Force Majeure Delay Days..........................................................................................2
GAAP.............................................................................................................12
Guarantor.......................................................................................................N-1
Hazardous Materials..............................................................................................24
Holidays..........................................................................................................7
HVAC..............................................................................................................7
including.........................................................................................................1
Land..............................................................................................................i
Landlord..........................................................................................................1
Landlord's Contribution..........................................................................................17
Landlord's Mortgagee.............................................................................................14
Law...............................................................................................................1
Laws..............................................................................................................1
Lease.............................................................................................................1
Lease Date........................................................................................................i
Lease Month.......................................................................................................i
Liquidated Damages Date...........................................................................................2
Loss.............................................................................................................13
Mortgage.........................................................................................................14
Offer Notice....................................................................................................I-1
Operating Costs...................................................................................................3
Operating Costs and Tax Statement.................................................................................5
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Parking Lot.....................................................................................................G-1
Permitted Transfer...............................................................................................12
Permitted Transferee.............................................................................................12
Permitted Use....................................................................................................ii
Premises..........................................................................................................i
Prevailing Rental Rate..........................................................................................H-1
Primary Lease....................................................................................................14
Refusal Space...................................................................................................I-1
Rent.............................................................................................................ii
Repair Period....................................................................................................16
Report............................................................................................................25
Satellite Dish...................................................................................................26
Security Deposit..................................................................................................i
Sign Requirements................................................................................................26
Signs............................................................................................................26
Space Plans.....................................................................................................D-2
Space Plans Delivery Deadline...................................................................................D-2
Substantial Completion..........................................................................................D-4
Substantially Completed.........................................................................................D-4
Supplemental Allowance..........................................................................................D-5
Taking...........................................................................................................16
Tangible Net Worth...............................................................................................12
Taxes.............................................................................................................4
Telecommunications Services......................................................................................24
Tenant............................................................................................................1
Tenant Delay Day................................................................................................D-4
Tenant Party......................................................................................................1
Tenant's Proportionate Share.....................................................................................ii
Term..............................................................................................................i
Third Party Offer...............................................................................................I-1
Total Construction Costs........................................................................................D-5
Transfer.........................................................................................................10
Work............................................................................................................D-3
Working Drawings................................................................................................D-3
Working Drawings Delivery Deadline..............................................................................D-2
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LEASE
THIS LEASE AGREEMENT (this "LEASE") is entered into as of May 3, 2000,
between ENTERPRISE BUSINESS PARK D-2, L.P., a Delaware limited partnership
("LANDLORD"), and DAISYTEK, INCORPORATED, a Delaware corporation ("TENANT").
1. DEFINITIONS AND BASIC PROVISIONS. The definitions and basic
provisions set forth in the Basic Lease Information (the "BASIC LEASE
INFORMATION") executed by Landlord and Tenant contemporaneously herewith are
incorporated herein by reference for all purposes. Additionally, the following
terms shall have the following meanings when used in this Lease: "AFFILIATE"
means any person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; "BUILDING'S STRUCTURE" means the Building's exterior walls,
roof, elevator shafts, footings, foundations, structural portions of
load-bearing walls, structural floors and subfloors, and structural columns and
beams; "BUILDING'S SYSTEMS" means the Building's HVAC, life-safety, plumbing,
electrical, and mechanical systems; "INCLUDING" means including, without
limitation; "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 Building as of the date hereof, and
"LAW" shall mean any of the foregoing; and "TENANT PARTY" means any of the
following persons: 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.
2. LEASE GRANT. Subject to the terms of this Lease, Landlord
leases to Tenant, and Tenant leases from Landlord, the Premises.
3. TENDER OF POSSESSION; LATE DELIVERY; ACCEPTANCE OF PREMISES.
(a) TENDER OF POSSESSION. Landlord and Tenant presently
anticipate that possession of the Premises will be tendered to Tenant (with the
Work to be performed by Landlord therein, if any, Substantially Completed) on or
about August 15, 2000 (the "ESTIMATED DELIVERY DATE"). If Landlord is unable to
tender possession of the Premises in such condition to Tenant by the Estimated
Delivery Date, then, subject to Section 3.(b), (1) Landlord shall not be in
default hereunder or be liable for damages therefor, and (2) Tenant shall accept
possession of the Premises when Landlord tenders possession thereof to Tenant in
such condition.
(b) LATE DELIVERY. Notwithstanding the foregoing,
(1) if the Work in the Premises is not
Substantially Completed by the Liquidated Damages Date, Tenant may
offset from its Basic Rent obligations first accruing following the
Commencement Date, liquidated damages equal to the product of $1,882.79
multiplied by the number of days commencing on the Liquidated Damages
Date and ending on the earlier of the 15th day following the Liquidated
Damages Date or the day Landlord tenders possession of the Premises
(with the Work to be performed by Landlord therein Substantially
Completed); provided, if the Work in the Premises is not Substantially
Completed by the 15th day following the
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Liquidated Damages Date, Tenant may offset from its Basic Rent
obligations first accruing following the Commencement Date, liquidated
damages equal to the product of $3,765.58 multiplied by the number of
days commencing on the 15th day following the Liquidated Damages Date
and ending on the earlier of the 30th day following the Liquidated
Damages Date or the day Landlord tenders possession of the Premises
(with the Work to be performed by Landlord therein Substantially
Completed); provided further, if the Work in the Premises is not
Substantially Completed by the 30th day following the Liquidated
Damages Date, Tenant may offset from its Basic Rent obligations first
accruing following the Commencement Date, liquidated damages equal to
the product of $5,648.37 multiplied by the number of days commencing on
the 30th day following the Liquidated Damages Date and ending on the
day Landlord tenders possession of the Premises (with the Work to be
performed by Landlord therein Substantially Completed). Except as
provided in Section 3.(b)(2), the abatement rights afforded to Tenant
under this Section 3.(b)(1) shall be Tenant's sole remedy for
Landlord's failure to timely Substantially Complete the Work; and
(2) If the Work in the Premises is not
Substantially Completed by the Completion Termination Date, Tenant may
terminate this Lease by delivering to Landlord written notice thereof
at any time before the earlier of (A) ten days following the Completion
Termination Date or (B) the date on which the Work in the Premises is
Substantially Completed. Except as provided in Section 3.(b)(1) or as
set forth in the next paragraph, the termination right afforded to
Tenant under this Section 3.(b)(2) shall be Tenant's sole remedy for
Landlord's failure to timely Substantially Complete the Work. Time is
of the essence for the delivery of Tenant's termination notice under
this Section 3; accordingly, if Tenant fails timely to deliver any such
notice, Tenant's right to terminate this Lease under this Section
3.(b)(2) shall expire. As used herein, "COMPLETION TERMINATION DATE"
means December 31, 2000, plus the number of Tenant Delay Days and the
number of Force Majeure Delay Days. As used herein, "LIQUIDATED DAMAGES
DATE" means the Estimated Delivery Date, plus the number of Tenant
Delay Days and the number of Force Majeure Delay Days. As used herein,
"FORCE MAJEURE DELAY DAYS" means any delay in achieving Substantial
Completion with respect to the Work due to the events specified in
Section 25.(c) of this Lease provided such events are not reasonably
(i) foreseeable and (ii) preventable, by Landlord.
If this Lease is terminated by Tenant pursuant to this Section 3.(b)(2),
Landlord shall refund to Tenant the first monthly installment of Basic Rent
delivered to Landlord pursuant to Section 4.(a) and reimburse Tenant for all
reasonable architectural and attorney fees incurred by Tenant in connection with
this Lease and the Working Drawings, up to a maximum of $75,000, within 30 days
after delivery to Landlord of a statement of such costs.
(c) ACCEPTANCE OF PREMISES. By occupying the Premises on
or any time after the Commencement Date, Tenant shall be deemed to have accepted
the Premises in their condition as of the date of such occupancy, subject to the
performance of punch-list items that remain to be performed by Landlord, if any.
Within 30 days following the Commencement Date, Tenant and Landlord shall
jointly execute and deliver a letter substantially in the form of Exhibit E
hereto confirming (1) the Commencement Date and the expiration date of the
initial Term, (2) that Tenant has accepted the Premises, (3) that Landlord has
performed all of its obligations with respect to the Premises (except for
punch-list items specified in such letter), and (4) the aggregate amount of
offset against Basic Rent, in any, to which Tenant is entitled hereunder.
(d) EARLY ENTRY BY TENANT. Tenant may enter the Premises
before the Work in the Premises is Substantially Completed with Landlord's prior
consent (which shall not be unreasonably withheld) to perform work therein,
provided that (1) Landlord is given prior written notice of any such entry, (2)
such
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entry shall be coordinated with Landlord and shall not interfere with Landlord's
work, and (3) Tenant shall deliver to Landlord evidence that the insurance
required under Section 11 of this Lease has been obtained. Any such entry shall
be on the terms of this Lease, but no rent shall accrue in respect of Basic
Rent, Additional Rent, Taxes or Electrical Costs, during the period that Tenant
so enters the Premises. Tenant shall conduct its activities therein so as not to
interfere with Landlord's construction activities, and shall do so at its risk
and expense. If, in Landlord's judgment, Tenant's activities therein interfere
with Landlord's construction activities, Landlord may terminate Tenant's right
to enter the Premises before the Commencement Date.
4. RENT.
(a) PAYMENT. Tenant shall timely pay to Landlord Rent,
without notice, demand, deduction or set off (except as otherwise expressly
provided herein), at Landlord's address provided for in this Lease or as
otherwise specified by Landlord in accordance with the notice provisions hereof
and shall be accompanied by all applicable state and local sales or use taxes.
Basic Rent, adjusted as herein provided, shall be payable monthly in advance.
Subject to the terms hereof contained in Exhibit J hereto, the first monthly
installment of Basic Rent shall be payable contemporaneously with the execution
of this Lease; thereafter, Basic Rent shall be payable on the first day of each
month beginning on the first day of the second full calendar month of the Term.
The monthly Basic Rent for any partial month at the beginning of the Term shall
equal the product of 1/365 of the annual Basic Rent in effect during the partial
month and the number of days in the partial month from and after the
Commencement Date, and shall be due on the Commencement Date.
(b) OPERATING COSTS; TAXES; ELECTRICAL COSTS.
(1) Tenant shall pay to Landlord the amount
("ADDITIONAL RENT") equal to Tenant's Proportionate Share of the annual
Operating Costs (defined below). Landlord may make a good faith
estimate of the Additional Rent to be due by Tenant for each calendar
year or part thereof during the Term. During each calendar year or
partial calendar year of the Term, Tenant shall pay to Landlord, in
advance concurrently with each monthly installment of Basic Rent, an
amount equal to the estimated Additional Rent for such calendar year or
part thereof divided by the number of months therein. On an annual
basis for each calendar year during the Term, Landlord may estimate the
Additional Rent to be due by Tenant and deliver a copy of the estimate
to Tenant. Thereafter, the monthly installments of Additional Rent
payable by Tenant shall be appropriately adjusted in accordance with
the estimations so that, by the end of the calendar year in question,
Tenant shall have paid all of the Additional Rent as estimated by
Landlord for such year. Any amounts paid based on such an estimate
shall be subject to adjustment as herein provided when actual Operating
Costs are available for each calendar year.
(2) The term "OPERATING COSTS" shall mean all
expenses and disbursements (subject to the limitations set forth below)
that Landlord incurs in connection with the ownership, operation, and
maintenance of the Building, determined in accordance with sound
accounting principles consistently applied, including the following
costs: (A) management fees equal to 3% of the Rent (excluding
Electrical Costs and, from Operating Costs only, the cost of
electricity for the common areas [all other Operating Costs shall be
included in the calculation of management fees]) payable to Landlord
under this Lease; (B) all supplies and materials used in the operation,
maintenance, repair, replacement, and security of the Building; (C)
costs for improvements made to the Building which, although capital in
nature, are reasonably expected to reduce the normal
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operating costs (including all utility costs) of the Building
(excluding any improvements arising as a result of the specific use of
the Building by any tenant or occupant of the Building other than the
Tenant), as amortized using a commercially reasonable interest rate
over the time period reasonably estimated by Landlord to recover the
costs thereof taking into consideration the anticipated cost savings,
as determined by Landlord using its good faith, commercially reasonable
judgment, as well as capital improvements made in order to comply with
any Law hereafter promulgated by any governmental authority or any
interpretation hereafter rendered with respect to any existing Law, as
amortized using a commercially reasonable interest rate over the useful
economic life of such improvements as determined by Landlord in its
reasonable discretion; (D) cost of all utilities, including gas,
electricity (but only for the common areas of the Building), water,
sewer, and other services; (E) repairs, replacements, and general
maintenance of the Building; and (F) service or maintenance contracts
with independent contractors for the operation, maintenance, repair,
replacement, or security of the Building (including alarm service,
window cleaning, and elevator maintenance).
Operating Costs shall not include costs for (i) capital
improvements made to the Building, other than capital improvements
described in Section 4.(b)(2)(C) and except for items which are
generally considered maintenance and repair items, such as painting of
common areas, replacement of carpet in elevator lobbies, and the like;
(ii) repair, replacements and general maintenance and any other costs
paid by proceeds of insurance or by Tenant or other third parties;
(iii) interest, amortization or other payments on loans to Landlord;
(iv) depreciation; (v) leasing commissions, advertising and all other
costs and expenses relating to the leasing of the Building; (vi) legal
expenses and third party consultant expenses for services other than
those that benefit the Building tenants generally (e.g., tax disputes);
(vii) renovating or otherwise improving space for occupants of the
Building or vacant space in the Building; (viii) Taxes; and (ix)
federal, state and local income taxes imposed on or measured by the
income of Landlord from the operation of the Building.
(3) Tenant shall also pay its Proportionate
Share of Taxes for each year and partial year falling within the Term.
Tenant shall pay its Proportionate Share of Taxes in the same manner as
provided above for Additional Rent with regard to Operating Costs.
"TAXES" shall mean taxes, assessments, and governmental charges or fees
whether federal, state, county or municipal, and whether they be by
taxing districts or authorities presently taxing or by others,
subsequently created or otherwise, and any other taxes and assessments
(including non-governmental assessments for common charges under a
restrictive covenant or other private agreement existing as of the date
hereof that are not treated as part of Operating Costs) now or
hereafter attributable to the Building (or its operation), excluding,
however, penalties and interest thereon and federal, state and local
taxes on income (if the present method of taxation changes so that in
lieu of the whole or any part of any Taxes, there is levied on Landlord
a capital tax directly on the rents received therefrom or a franchise
tax, assessment, or charge based, in whole or in part, upon such rents
for the Building, then all such taxes, assessments, or charges, or the
part thereof so based, shall be deemed to be included within the term
"Taxes" for purposes hereof). Taxes shall include the costs of
consultants retained in an effort to lower taxes and all costs incurred
in disputing any taxes or in seeking to lower the tax valuation of the
Building. For property tax purposes, Tenant waives all rights to
protest or appeal the appraised value of the Premises, as well as the
Building, and all rights to receive notices of reappraisement as set
forth in Sections 41.413 and 42.015 of the Texas Tax Code. Landlord
shall use good-faith reasonable efforts to pursue tax protests and
appeals.
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(4) To the extent Landlord is billed directly by
the utility company furnishing electrical service to the Premises,
Tenant shall also pay to Landlord the cost of all electricity used by
Tenant ("ELECTRICAL COSTS"), which shall be determined by a separate
submeter installed as part of the Work set forth in Exhibit D, and
which shall be maintained and read by Landlord. The submeter shall be
read by Landlord and Tenant shall pay to Landlord the cost of such
electrical service based on rates charged for such service by the
utility company furnishing such service, including all fuel adjustment
charges, demand charges and taxes. Such amount, which shall be based on
the meter reading for the prior month, shall be payable in monthly
installments on the first day of each calendar month during the Term.
To the extent Tenant is billed directly for Electrical Costs by the
utility company furnishing electrical service to the Premises, Tenant
shall promptly pay all electrical Costs to such utility company.
(5) By April 1 of each calendar year, or as soon
thereafter as practicable, Landlord shall furnish to Tenant a statement
of (A) the actual Operating Costs for the previous year, adjusted as
provided in Section 4.(b)(6), (B) the actual Taxes for the previous
year, (C) the amount of Additional Rent and Taxes paid by Tenant during
such previous year, and (D) Tenant's Proportionate Share of the actual
Operating Costs and Taxes for such previous year (the "OPERATING COSTS
AND TAX STATEMENT"). If Tenant's payments of Additional Rent or Taxes
under this Section 4.(b) for the year covered by the Operating Costs
and Tax Statement exceed Tenant's Proportionate Share of such items as
indicated in the Operating Costs and Tax Statement, then Landlord shall
promptly credit Tenant for such excess; likewise, if Tenant's payments
of Additional Rent or Taxes under this Section 4.(b) for such year are
less than Tenant's Proportionate Share of such items as indicated in
the Operating Costs and Tax Statement, then Tenant shall promptly pay
Landlord such deficiency.
(6) With respect to any calendar year, or
portion thereof, following the Commencement Date in which the Building
is not occupied to the extent of 95% of the rentable area of the
Building, then, for such period of time, the Operating Costs shall be
increased to the amount which reasonably would have been incurred had
the Building been occupied to the extent of 95% of the rentable area
thereof. Operating Costs grossed-up under this Section 4.(b)(6) shall
include only those Operating Costs that vary with occupancy of the
Building.
(7) Landlord's reasonable estimate of calendar
year 2000 Operating Costs are $1.90 per rentable square foot in the
Building (grossed up as provided in Section 4.(b)(6) of this Lease).
Landlord's reasonable estimate of calendar year 2000 Taxes are $2.10
per rentable square foot in the Building .
(c) TENANT INSPECTION RIGHT. Provided no Event of Default
then exists, after receiving an annual Operating Costs and Tax Statement and
giving Landlord 30-days' prior written notice thereof, Tenant may inspect or
audit Landlord's records relating to Operating Costs and Taxes for the period of
time covered by such Operating Costs and Tax Statement in accordance with the
following provisions. If Tenant fails to request to inspect or audit Landlord's
calculation of Operating Costs and Taxes on an annual Operating Costs and Tax
Statement within 30 days after the statement has been delivered to Tenant, or if
Tenant fails to conclude its audit or inspection within 90 days after making
such request (which 90-day period shall be extended by one day for each day of
delay caused solely by Landlord's failure to reasonably cooperate with Tenant in
conducting such audit or inspection, then Tenant shall have waived its right to
object to the calculation of Operating Costs and Taxes for the year in
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question and the calculation of Operating Costs and Taxes set forth on such
statement shall be final. Tenant's audit or inspection shall be conducted where
Landlord maintains its books and records, shall not unreasonably interfere with
the conduct of Landlord's business, and shall be conducted only during business
hours reasonably designated by Landlord. To the extent Tenant's audit or
inspection unreasonably interferes with Landlord's business, Tenant shall pay
the cost of such audit or inspection, including $150 per hour of Landlord's or
the building manager's employee time unreasonably devoted to such inspection or
audit to reimburse Landlord for its overhead costs allocable to the inspection
or audit, unless the total Operating Costs and Taxes for the period in question
is determined to be in error by more than 5% in the aggregate, and, as a result
thereof, Tenant paid to Landlord $0.20 per rentable square foot in the Premises
more than the actual Operating Costs and Taxes due for such period, in which
case Landlord shall pay the audit or inspection cost (not to exceed the amount
Tenant was overcharged for the period in question). Tenant may not conduct an
inspection or have an audit performed more than once during any calendar year.
If such inspection or audit reveals that an error was made in the Operating
Costs or Taxes previously charged to Tenant, then Landlord shall refund to
Tenant any overpayment of any such costs, or Tenant shall pay to Landlord any
underpayment of any such costs, as the case may be, within 30 days after
notification thereof. Provided Landlord's accounting for Operating Costs and
Taxes is consistent with the terms of this Lease, Landlord's good faith judgment
regarding the proper interpretation of this Lease and the proper accounting for
Operating Costs and Taxes shall be binding on Tenant in connection with any such
audit or inspection. Tenant shall maintain the results of each such audit or
inspection confidential and shall be permitted to use any third party to perform
such audit or inspection which (1) is reasonably acceptable to Landlord (it
being understood that Landlord shall not be entitled to withhold its consent to
any firm solely on the basis of the fact that such party is compensated on a
contingency fee basis or in any other manner which is dependent upon the results
of such audit or inspection), and (2) agrees with Landlord in writing to
maintain the results of such audit or inspection confidential. Nothing in this
Section 4.(c) shall be construed to limit, suspend or ▇▇▇▇▇ Tenant's obligation
to pay Rent when due, including Additional Rent.
5. DELINQUENT PAYMENT; HANDLING CHARGES. All past due
payments required of Tenant hereunder shall bear interest from the date due
until paid at the lesser of eighteen percent per annum or the maximum lawful
rate of interest; additionally, in the event Tenant fails to pay Rent when due,
Landlord may charge Tenant a fee equal to five percent of the delinquent payment
to reimburse Landlord for its cost and inconvenience incurred as a consequence
of Tenant's delinquency. In no event, however, shall the charges permitted under
this Section 5 or elsewhere in this Lease, to the extent they are considered to
be interest under applicable Law, exceed the maximum lawful rate of interest.
Notwithstanding the foregoing, (a) the late fee referenced above shall not be
charged with respect to the first two occurrences (but not any subsequent
occurrence) during any 12-month period that Tenant fails to make payment when
due, until five days after Landlord delivers written notice of such delinquency
to Tenant, and (b) past due payments (other than payments of Basic Rent,
Additional Rent, Tenant's Proportionate Share of Taxes or Electrical Costs [to
the extent Landlord is billed directly by the utility company electrical service
to the Premises]) shall not bear interest with respect to the first two
occurrences (but not any subsequent occurrence) during any 12-month period that
Tenant fails to make payment when due, until ten days after landlord delivers
written notice of such delinquency to Tenant.
6. SECURITY DEPOSIT. [Intentionally Deleted].
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7. LANDLORD'S OBLIGATIONS.
(a) SERVICES. Landlord shall furnish to Tenant (1) hot
and cold water at those points of supply set forth in the Construction Drawings
and as provided for general use of tenants of the Building; (2) heated and
refrigerated air conditioning ("HVAC") for the Premises with keypad access; (3)
HVAC for the common areas of the Building as appropriate, at such temperatures
and in such amounts as are standard for comparable buildings in the vicinity of
the Building, provided that Landlord shall furnish HVAC to the common areas of
the Building at a temperature of not more than 80(Degree) and not less than
65(Degree) between 8:01 p.m. and 5:59 a.m. on weekdays and between 7:01 p.m. and
7:59 a.m. on Saturdays, and all times on Sundays and Holidays; (4) janitorial
service to the Premises and the Building on weekdays, other than Holidays, as
more particularly described on Exhibit K and such window washing as may from
time to time be reasonably required; (5) elevators for ingress and egress to the
floor on which the Premises are located, in common with other tenants, provided
that Landlord may reasonably limit the number of operating elevators (but not
less than one) during non-business hours and Holidays; and (6) common use of the
Building lobby and other common areas set forth in the Construction Drawings.
Landlord shall maintain the common areas of the Building in reasonably good
order and condition, except for damage caused by a Tenant Party. As used herein,
"HOLIDAYS" means New Year's Day, Good Friday, Easter Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
(b) EXCESS UTILITY USE. Tenant shall not install any
electrical equipment requiring special wiring or requiring voltage in excess of
110 volts or otherwise exceeding Building capacity unless approved in advance by
Landlord or as part of the Working Drawing as described in Exhibit D hereto. The
use of electricity in the Premises shall not exceed the capacity of the existing
feeders and risers to or wiring in the Premises installed pursuant to the
Construction Drawings as described in Exhibit D hereto. Any risers or wiring
required to meet Tenant's excess electrical requirements shall, upon Tenant's
written request, be installed by Landlord, at Tenant's cost, if, in Landlord's
judgment, the same are necessary and shall not cause permanent damage to the
Building or the Premises, cause or create a dangerous or hazardous condition,
entail excessive or unreasonable alterations, repairs, or expenses, or
unreasonably interfere with or disturb other tenants of the Building. If Tenant
uses machines or equipment in the Premises which affect the temperature
otherwise maintained by the air conditioning system or otherwise overload any
utility, Landlord may install supplemental air conditioning units or other
supplemental equipment in the Premises, and the cost thereof, including the cost
of installation, operation, use, and maintenance, shall be paid by Tenant to
Landlord within 30 days after Landlord has delivered to Tenant an invoice
therefor.
(c) RESTORATION OF SERVICES; ABATEMENT. Landlord shall
use reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for more than ten consecutive days
(as extended one day for each Holiday that occurs during such ten-day period)
after Tenant advises Landlord in writing thereof because of the unavailability
of any such service (or five consecutive days [as extended one day for each
Holiday that occurs during such five-day period] because of the unavailability
and the restoration of such services is within the reasonable control of
Landlord) and such unavailability was not caused by a Tenant Party, then Tenant
shall, as its exclusive remedy be entitled to an abatement of Basic Rent for
each consecutive day (after such ten-day period [or after such five-day period
as applicable]) that Tenant is so prevented from using the Premises. Landlord
shall
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exceed its reasonable efforts in restoring any service required of it if Tenant
agrees in writing to reimburse Landlord for its extraordinary costs related to
such restoration.
(d) If at any time following the Commencement Date
Landlord fails to deliver electrical service, elevator service, HVAC service,
sewer service or water service to the Premises (the "CRITICAL SERVICES") for
three consecutive business days after Tenant advises Landlord in writing that
the Critical Services are not being provided to the Premises, the unavailability
of such Critical Services prevents Tenant from conducting its business in the
Premises in a manner reasonably comparable to that conducted immediately before
such unavailability, and Landlord has not commenced to cure such cessation of
Critical Services or has failed to prosecute such cure with reasonable
diligence, Tenant shall be entitled to restore such service in a commercially
reasonable manner. Provided that such repairs are completed in a good and
workmanlike manner, Landlord shall reimburse Tenant for its actual,
out-of-pocket costs therefor within 30 days after delivery to Landlord of a
reasonably detailed invoice and, if requested by Landlord, receipts, bills paid
affidavits, and appropriate releases of liens, failing which default interest
shall accrue thereon from the date due until the date paid at the maximum lawful
rate. If the unavailability of such Critical Services is caused by a Taking
(defined below) or a Casualty (defined below), then the provisions of this
Section shall not be applicable thereto; rather, the provisions of Sections 14
and 15 (as the case may be) shall apply.
8. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
(a) IMPROVEMENTS; ALTERATIONS. Improvements to the
Premises shall be installed at Tenant's expense only in accordance with plans
and specifications which have been previously submitted to and approved in
writing by Landlord, which approval shall be governed by standards in the
following sentence. No alterations or physical additions in or to the Premises
may be made without Landlord's prior written consent, which shall not be
unreasonably withheld or delayed; however, Landlord may withhold its consent to
any alteration or addition that would adversely affect (in the reasonable
discretion of Landlord) (1) the Building's Structure or the Building's Systems
(including the Building's restrooms or mechanical rooms), (2) the exterior
appearance of the Building, or (3) the appearance of the Building's common areas
or elevator lobby areas. Tenant shall not paint or install lighting or
decorations, signs, window or door lettering, or advertising media of any type
on or about the Premises without the prior written consent of Landlord, which
shall not be unreasonably withheld or delayed; however, Landlord may withhold
its consent to any such painting or installation which would affect the
appearance of the exterior of the Building or of any common areas of the
Building. Notwithstanding the foregoing, and subject to Section 21, Tenant shall
not be required to obtain Landlord's consent for repainting, recarpeting, or
other non-structural alterations, tenant improvements, or non-permanent
temporary additions to the Premises which are cosmetic in nature totaling less
than $20,000 in any single instance or series of related alternations performed
during the Term of this Lease (provided that Tenant shall not perform any
improvements, alterations or additions to the Premises in stages as a means to
subvert this provision), in each case provided that (A) Tenant delivers to
Landlord written notice thereof, a list of contractors and subcontractors to
perform the work (and certificates of insurance for each such party) and any
plans and specifications therefor prior to commencing any such alterations,
additions, or improvements (for informational purposes only so long as no
consent is required by Landlord as required by this Lease), (B) the installation
thereof does not involve any core drilling or the reconfiguration or relocation
of any exterior or interior load bearing walls of the Building, and (C) such
alterations, additions and improvements will not affect (i) the Building's
Structure or the Building's Systems, including the distribution of the HVAC
under Section 7.(a), (ii) the provision of services to other Building tenants,
or (iii) the appearance of the Building's common areas or the exterior of the
Building. All alterations,
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additions, and improvements shall be constructed, maintained, and used by
Tenant, at its risk and expense, in accordance with all Laws; Landlord's consent
to or approval of any alterations, additions or improvements (or the plans
therefor) shall not constitute a representation or warranty by Landlord, nor
Landlord's acceptance, that the same comply with sound architectural and/or
engineering practices or with all applicable Laws, and Tenant shall be solely
responsible for ensuring all such compliance.
(b) REPAIRS; MAINTENANCE. Tenant shall maintain the
Premises in a clean, safe, and operable condition, and shall not permit or allow
to remain any waste or damage to any portion of the Premises. Tenant shall
repair or replace, subject to Landlord's direction and supervision, any damage
to the Building caused by a Tenant Party. If Tenant fails to make such repairs
or replacements within 15 days after Landlord delivers written notice of the
occurrence of such damage (except in the case of an emergency, in which case no
notice is required), then Landlord may make the same at Tenant's cost. If any
such damage occurs outside of the Premises, then Landlord may elect to repair
such damage at Tenant's expense, rather than having Tenant repair such damage.
The cost of all repair or replacement work performed by Landlord under this
Section 8 shall be paid by Tenant to Landlord within 30 days after Landlord has
invoiced Tenant therefor.
(c) PERFORMANCE OF WORK. All work described in this
Section 8 shall be performed only by Landlord or by contractors and
subcontractors approved in writing by Landlord; provided, all work described in
this Section 8 for which Landlord's consent is not required may be performed by
any contractor or subcontractor on Landlord's approved list without obtaining
Landlord's prior written approval, which list shall be provided upon Tenant's
written request therefor. Tenant shall cause all contractors and subcontractors
to procure and maintain insurance coverage naming Landlord as an additional
insured against such risks, in such amounts, and with such companies as Landlord
may reasonably require. All such work shall be performed in accordance with all
Laws and in a good and workmanlike manner so as not to damage the Building
(including the Premises, the Building's Structure and the Building's Systems).
All such work which may affect the Building's Structure or the Building's
Systems must be approved by the Building's engineer of record, at Tenant's
expense and, at Landlord's election, must be performed by Landlord's usual
contractor for such work. In consideration for Landlord's expenses in reviewing
such plans and specifications and providing construction supervision services,
Tenant shall reimburse Landlord for Landlord's reasonable, out-of-pocket costs
payable to third parties and reasonably incurred by Landlord in reviewing such
plans and specifications and providing such construction supervision services,
and pay to Landlord a construction supervision fee equal to $150 per hour of
Landlord employee time devoted to reviewing such plans and specifications and
providing such construction supervision services; provided, no reimbursement
shall be made nor shall a construction supervision fee shall be charged for the
first $20,000 of cosmetic work as described in Section 8.(a) or for the initial
tenant improvements described in Exhibit D attached hereto.
(d) MECHANIC'S LIENS. Tenant shall not permit any
mechanic's liens to be filed against the Premises or the Building for any work
performed, materials furnished, or obligation incurred by or at the request of
Tenant. If such a lien is filed, then Tenant shall, within ten days after
Landlord has delivered notice of the filing thereof to Tenant (or such earlier
time period as may be necessary to prevent the forfeiture of the Building or any
interest of Landlord therein or the imposition of a civil or criminal fine with
respect thereto), either (1) pay the amount of the lien and cause the lien to be
released of record, or (2) diligently contest such lien and deliver to Landlord
a bond or other security reasonably satisfactory to Landlord. If Tenant fails to
timely take either such action, then Landlord may pay the lien claim, and any
amounts so paid, including expenses and interest, shall be paid by Tenant to
Landlord within ten days after Landlord has invoiced Tenant therefor. All
materialmen, contractors, artisans, mechanics, laborers
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and any other persons now or hereafter contracting with Tenant or any contractor
or subcontractor of Tenant for the furnishing of any labor, services, materials,
supplies or equipment with respect to any portion of the Premises, at any time
from the date hereof until the end of the Term, are hereby charged with notice
that they look exclusively to Tenant to obtain payment for same. Nothing herein
shall be deemed a consent by Landlord to any liens being placed upon the
Building or Landlord's interest therein due to any work performed by or for
Tenant.
9. USE. Tenant shall continuously occupy and use the Premises
only for the Permitted Use and shall comply with all Laws relating to the use,
condition, access to, and occupancy of the Premises. The Premises shall not be
used for any use which is disreputable, creates extraordinary fire hazards, or
results in an increased rate of insurance on the Building or its contents, or
for the storage of any Hazardous Materials (other than typical office supplies
[e.g., photocopier toner] and then only in compliance with all Laws). If,
because of a Tenant Party's acts, the rate of insurance on the Building or its
contents increases, Tenant shall pay to Landlord the amount of such increase on
demand, and acceptance of such payment shall not waive any of Landlord's other
rights. If Tenant fails to cease or remediate such acts or pay to Landlord the
amount of such increase within five days after Landlord's request that Tenant do
so, then such acts shall be an Event of Default Tenant shall conduct its
business and control each other Tenant Party so as not to create any nuisance or
unreasonably interfere with other tenants or Landlord in its management of the
Building.
10. ASSIGNMENT AND SUBLETTING.
(a) TRANSFERS. Except as provided in Section 10.(g),
Tenant shall not, without the 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 (unless Tenant is
the surviving entity thereof, in which event, any such merger consolidation or
reorganization shall not be deemed a "Transfer" hereunder), (3) if Tenant is an
entity other than a corporation whose stock is publicly traded, permit the
transfer of an ownership interest in Tenant so as to result in a change in the
current control of Tenant; provided, this clause (3) shall not apply to Tenant
if the stock of Tenant or Tenant's parent corporation is publicly traded (or
whose parent corporation stock), (4) sublet any portion of the Premises, (5)
grant any license, 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 Section 10.(a)(1) through 10.(a)(6) being a
"TRANSFER").
(b) CONSENT STANDARDS. Landlord shall not unreasonably
withhold its consent to any assignment or subletting or other Transfer of the
Premises, provided that the proposed transferee (1) has a net worth equal to or
greater than the net worth of Tenant as of the Commencement Date; provided, this
clause (1) shall not apply to any subletting, (2) has a good reputation in the
business community, (3) will use the Premises for the Permitted Use and, as to
any proposed assignment, will not use the Premises in any manner that would
conflict with any exclusive use agreement or other similar agreement entered
into by Landlord with any other tenant of the Building; provided, upon Tenant's
written request therefor pursuant to a prospective Transfer, Landlord shall
provide to Tenant a description of all of the exclusive use and similar
agreements then existing between Landlord and the other tenants of the Building,
(4) is not a governmental entity, or subdivision or agency thereof, (5) is not
another occupant of the Building, and (6) is not a person or entity with whom
Landlord is negotiating to lease space in the Building; otherwise, Landlord may
withhold its consent in its sole discretion; provided, upon
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Tenant's written request therefor pursuant to a prospective Transfer, Landlord
shall provide to Tenant a list of all persons and entities with whom Landlord is
negotiating to lease space in the Building.
(c) REQUEST FOR CONSENT. If Tenant requests Landlord's
consent to a Transfer, then, at least 15 business days prior to the effective
date of the proposed Transfer, Tenant shall provide Landlord with a written
description of all 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; with respect to
any proposed assignment, banking, financial, and other credit information; and
general references sufficient to enable Landlord to determine the proposed
transferee's character and, with respect to any proposed assignment,
creditworthiness in accordance with the requirements contained herein.
Concurrently with Tenant's notice of any request for consent to a Transfer,
Tenant shall pay to Landlord a fee of $1,000 to defray Landlord's expenses in
reviewing such request, and Tenant shall also reimburse Landlord immediately
upon request for its reasonable attorneys' fees incurred in connection with
considering any request for consent to a Transfer.
(d) CONDITIONS TO CONSENT. If Landlord consents to a
proposed Transfer, then the proposed transferee shall deliver to Landlord a
written agreement whereby it expressly assumes 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 for the period of the Transfer. No Transfer shall
release Tenant from its obligations 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 Rent. Tenant authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so following the
occurrence of an Event of Default hereunder. Tenant shall pay for the cost of
any demising walls or other improvements necessitated by a proposed subletting
or assignment.
(e) CANCELLATION. Landlord may, within 30 days after
submission of Tenant's written request for Landlord's consent to an assignment
or subletting, cancel this Lease and release Tenant from all liability arising
after the date of such cancellation as to the portion of the Premises proposed
to be sublet or assigned as of the date the proposed Transfer is to be
effective. If 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. Notwithstanding the foregoing, if
Landlord provides written notification to Tenant of its election to cancel this
Lease as to any portion of the Premises as provided above, Tenant may rescind
its request for Landlord's consent to Tenant's proposed assignment or subletting
of all or any portion of the Premises by notifying Landlord in writing within
three business days following Landlord's written cancellation notice, in which
event this Lease shall continue in full force and effect as if Tenant had not
submitted such request for Landlord's consent to Tenant's proposed assignment or
subletting.
(f) ADDITIONAL COMPENSATION. While no Event of Default
exists, Tenant shall pay to Landlord, immediately upon receipt thereof, fifty
percent (50%) of the excess of (1) all compensation received by Tenant in
consideration for a Transfer less the costs reasonably incurred by Tenant with
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unaffiliated third parties in connection with such Transfer (i.e., brokerage
commissions, tenant finish work, and the like) over (2) the Rent allocable to
the portion of the Premises covered thereby. While any Event of Default exists,
Tenant shall pay to Landlord, immediately upon receipt thereof, one hundred
percent (100%) of the excess of (A) all compensation received by Tenant for a
Transfer over (B) the Rent allocable to the portion of the Premises covered
thereby.
(g) PERMITTED TRANSFERS. Notwithstanding Section 10.(a),
Tenant may Transfer all or part of its interest in this Lease or all or part of
the Premises (a "PERMITTED TRANSFER") to the following types of entities (a
"PERMITTED TRANSFEREE") without the written consent of Landlord:
(1) an Affiliate of Tenant;
(2) any corporation, limited partnership,
limited liability partnership, limited liability company or other
business entity in which or with which Tenant, or its corporate
successors or assigns, is merged or consolidated, in accordance with
applicable statutory provisions governing merger and consolidation of
business entities, so long as (A) Tenant's obligations hereunder are
expressly assumed in writing by the entity surviving such merger or
created by such consolidation; and (B) the Tangible Net Worth of the
surviving or created entity is not less than the Tangible Net Worth of
Tenant as of the Commencement Date; or
(3) any corporation, limited partnership,
limited liability partnership, limited liability company or other
business entity acquiring all or substantially all of Tenant's assets
if such entity's Tangible Net Worth after such acquisition is not less
than the Tangible Net Worth of Tenant as of the Commencement Date.
Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant
shall remain liable for the performance of all of the obligations of Tenant
hereunder (except as set forth in Section 10.(g)(2) above). Additionally, the
Permitted Transferee shall comply with all of the terms and conditions of this
Lease, including the Permitted Use, and the use of the Premises by the Permitted
Transferee may not violate any other agreements affecting the Premises, the
Building, Landlord or other tenants of the Building; provided, upon Tenant's
written request therefor in connection with a Permitted Transfer, Landlord shall
provide to Tenant a description of all agreements affecting the Premises, the
Building, Landlord or other tenants of the Building which restrict such
Permitted Transferee's use of the Premises. At least 30 days after the effective
date of any Permitted Transfer, Tenant agrees to furnish Landlord with copies of
the instrument effecting any of the foregoing Transfers and documentation
establishing Tenant's satisfaction of the requirements set forth above
applicable to any such Transfer. The occurrence of a Permitted Transfer shall
not waive Landlord's rights as to any subsequent Transfers. "TANGIBLE NET WORTH"
means the excess of total assets over total liabilities, in each case as
determined in accordance with generally accepted accounting principles
consistently applied ("GAAP"), excluding, however, from the determination of
total assets all assets which would be classified as intangible assets under
GAAP including goodwill, licenses, patents, trademarks, trade names, copyrights,
and franchises. Any subsequent Transfer by a Permitted Transferee shall be
subject to the terms of this Section 10.
11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.
(a) TENANT'S INSURANCE. Tenant shall maintain throughout
the Term the following insurance policies: (1) commercial general liability
insurance in amounts of $3,000,000 per occurrence or, following the expiration
of the initial Term, such other amounts as Landlord may from time to time
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reasonably require (and, if the use and occupancy of the Premises include any
activity or matter that is or may be excluded from coverage under a commercial
general liability policy [e.g., the sale, service or consumption of alcoholic
beverages], Tenant shall obtain such endorsements to the commercial general
liability policy or otherwise obtain insurance to insure all liability arising
from such activity or matter [including liquor liability, if applicable] in such
amounts as Landlord may reasonably require), insuring Tenant, Landlord,
Landlord's agents and their respective Affiliates against all liability for
injury to or death of a person or persons or damage to property arising from the
use and occupancy of the Premises, (2) insurance covering the full value of
Tenant's property and improvements, and other property (including property of
others) in the Premises, (3) contractual liability insurance sufficient to cover
Tenant's indemnity obligations hereunder (but only if such contractual liability
insurance is not already included in Tenant's commercial general liability
insurance policy), (4) worker's compensation insurance, and (5) business
interruption insurance. Tenant's insurance shall provide primary coverage to
Landlord when any policy issued to Landlord provides duplicate or similar
coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. Tenant shall furnish to Landlord certificates of such insurance
and such other evidence satisfactory to Landlord of the maintenance of all
insurance coverages required hereunder, and Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord at least 30
days before cancellation or a material change of any such insurance policies.
All such insurance policies shall be in form, and issued by companies,
reasonably satisfactory to Landlord.
(b) LANDLORD'S INSURANCE. Throughout the Term of this
Lease, Landlord shall maintain, as a minimum, the following insurance policies:
(1) fire and extended risk insurance for the Building's replacement value and
(2) commercial general liability insurance in an amount of not less than
$3,000,000. The cost of all reasonable and customary insurance carried by
Landlord with respect to the Building shall be included in Operating Costs. The
foregoing insurance policies and any other insurance carried by Landlord shall
be for the sole benefit of Landlord and under Landlord's sole control, and
Tenant shall have no right or claim to any proceeds thereof or any other rights
thereunder.
(c) NO SUBROGATION. Landlord and Tenant each waives any
claim it might have against the other for any injury to or death of any person
or persons or damage to or theft, destruction, loss, or loss of use of any
property (a "LOSS"), to the extent the same is insured against under any
insurance policy that covers the Building, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or is required
to be insured against under the terms hereof, REGARDLESS OF WHETHER THE
NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS. 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.
(d) INDEMNITY. Subject to Section 11.(c), Tenant shall
defend, indemnify, and hold harmless Landlord and its representatives and agents
from and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including attorneys' fees) arising from any
Loss arising from any occurrence on the Premises, EVEN THOUGH CAUSED OR ALLEGED
TO BE CAUSED BY THE NEGLIGENCE OR FAULT OF LANDLORD OR ITS AGENTS (OTHER THAN A
LOSS ARISING FROM THE SOLE OR GROSS NEGLIGENCE OF LANDLORD OR ITS AGENTS), AND
EVEN THOUGH ANY SUCH CLAIM, CAUSE OF ACTION, OR SUIT IS BASED UPON OR ALLEGED TO
BE BASED UPON THE STRICT LIABILITY OF LANDLORD OR ITS AGENTS. THIS INDEMNITY IS
INTENDED TO INDEMNIFY LANDLORD AND ITS AGENTS AGAINST THE CONSEQUENCES OF THEIR
OWN NEGLIGENCE OR FAULT AS PROVIDED ABOVE WHEN LANDLORD OR ITS AGENTS ARE
JOINTLY, COMPARATIVELY, CONTRIBUTIVELY, OR CONCURRENTLY NEGLIGENT WITH TENANT.
Subject to Section 11.(c), Landlord shall defend, indemnify, and hold harmless
Tenant and its representative and agents from and against all claims, demands,
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liabilities, causes of action, suits, judgments, damages and expenses (including
attorneys' fees) arising from any Loss arising from any occurrence in the
Building's common areas, EVEN THOUGH CAUSED OR ALLEGED TO BE CAUSED BY THE
NEGLIGENCE OR FAULT OF TENANT OR ITS AGENTS (OTHER THAN A LOSS ARISING FROM THE
SOLE OR GROSS NEGLIGENCE OF TENANT OR ITS AGENTS), AND EVEN THOUGH ANY SUCH
CLAIM, CAUSE OF ACTION, OR SUIT IS BASED UPON OR ALLEGED TO BE BASED UPON THE
STRICT LIABILITY OF TENANT OR ITS AGENTS. THIS INDEMNITY IS INTENDED TO
INDEMNIFY TENANT AND ITS AGENTS AGAINST THE CONSEQUENCES OF THEIR OWN NEGLIGENCE
OR FAULT AS PROVIDED ABOVE WHEN TENANT OR ITS AGENTS ARE JOINTLY, COMPARATIVELY,
CONTRIBUTIVELY, OR CONCURRENTLY NEGLIGENT WITH LANDLORD. The indemnities set
forth in this Section 11.(d) shall survive termination or expiration of this
Lease and shall not terminate or be waived, diminished or affected in any manner
by any abatement or apportionment of Rent under any provision of this Lease. If
any proceeding is filed for which indemnity is required hereunder, the
indemnifying party agrees, upon request therefor, to defend the indemnified
party in such proceeding at its sole cost utilizing counsel satisfactory to the
indemnified party.
12. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.
(a) SUBORDINATION. This Lease shall be subordinate to any
deed of trust, mortgage, or other security instrument (each, a "MORTGAGE"), or
any ground lease, master lease, or primary lease (each, a "PRIMARY LEASE"), that
now or hereafter covers all or any part of the Premises (the mortgagee under any
such Mortgage, beneficiary under any such deed of trust, or the lessor under any
such Primary Lease is referred to herein as a "LANDLORD'S MORTGAGEE"). Any
Landlord's Mortgagee may elect, at any time, unilaterally, to make this Lease
superior to its Mortgage, Primary Lease, or other interest in the Premises by so
notifying Tenant in writing. The provisions of this Section shall be
self-operative and no further instrument of subordination shall be required;
however, in confirmation of such subordination, Tenant shall execute and return
to Landlord (or such other party designated by Landlord) within ten days after
written request therefor such documentation, in recordable form if required, as
a Landlord's Mortgagee may reasonably request to evidence the subordination of
this Lease to such Landlord's Mortgagee's Mortgage or Primary Lease (including a
subordination, non-disturbance and attornment agreement) or, if the Landlord's
Mortgagee so elects, the subordination of such Landlord's Mortgagee's Mortgage
or Primary Lease to this Lease.
(b) ATTORNMENT. 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 shall execute such agreements
confirming such attornment as such party may reasonably request.
(c) NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek
to enforce any remedy it may have for any default on the part of Landlord
without first giving written notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any Landlord's Mortgagee whose
address has been given to Tenant, and affording such Landlord's Mortgagee a
reasonable opportunity to perform Landlord's obligations hereunder.
Notwithstanding the foregoing, nothing in this Section 12.(c) shall be construed
to limit Tenant's rights to enforce any remedies it may have (other than
termination of this Lease) that are expressly set forth elsewhere in this Lease.
(d) LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS. If
Landlord's Mortgagee shall succeed to the interest of Landlord under this Lease,
Landlord's Mortgagee shall not be: (1) liable for any act or omission of any
prior lessor (including Landlord); (2) bound by any rent or additional rent or
advance rent which Tenant might have paid for more than the current month to any
prior lessor (including
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Landlord), and all such rent shall remain due and owing, notwithstanding such
advance payment; (3) bound by any security or advance rental deposit made by
Tenant which is not delivered or paid over to Landlord's Mortgagee and with
respect to which Tenant shall look solely to Landlord for refund or
reimbursement; (4) bound by any termination, amendment or modification of this
Lease made without Landlord's Mortgagee's consent and written approval, except
for those terminations, amendments and modifications permitted to be made by
Landlord without Landlord's Mortgagee's consent pursuant to the terms of the
loan documents between Landlord and Landlord's Mortgagee; (5) subject to the
defenses which Tenant might have against any prior lessor (including Landlord);
and (6) subject to the offsets which Tenant might have against any prior lessor
(including Landlord) except for those offset rights which (A) are expressly
provided in this Lease, (B) relate to periods of time following the acquisition
of the Building by Landlord's Mortgagee, and (C) Tenant has provided written
notice to Landlord's Mortgagee and provided Landlord's Mortgagee a reasonable
opportunity to cure the event giving rise to such offset event. Landlord's
Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise after it ceases to own an interest in the
Building. Nothing in this Lease shall be construed to require Landlord's
Mortgagee to see to the application of the proceeds of any loan, and Tenant's
agreements set forth herein shall not be impaired on account of any modification
of the documents evidencing and securing any loan.
(e) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT. Landlord shall use reasonable efforts to obtain a subordination,
non-disturbance and attornment agreement from the current Landlord's Mortgagee,
and Landlord shall use reasonable efforts to obtain a subordination,
non-disturbance and attornment agreement from any future Landlord's Mortgagee,
in the form of Exhibit O hereto or another form reasonably acceptable to Tenant
and such Landlord's Mortgagee or other institutional lenders, within 30 days
from the date hereof; however, Landlord's failure to obtain such agreement shall
not constitute a default by Landlord hereunder or prohibit the mortgaging of the
Building. The subordination of Tenant's rights hereunder to any Landlord's
Mortgagee under Section 12.(a) shall be conditioned upon such Landlord's
Mortgagee's execution and delivery of a subordination, non-disturbance and
attornment agreement in the form of Exhibit O hereto or another form reasonably
acceptable to Tenant and such Landlord's Mortgagee or other institutional
lenders.
13. RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
shall (a) require that all tenants in the Building are subject to such rules and
regulations and (b) enforce such rules and regulations in a non-discriminatory
manner. Landlord may, from time to time, change such rules and regulations for
the safety, care, or cleanliness of the Building and related facilities,
provided that such changes are applicable to all tenants of the Building, will
not unreasonably interfere with Tenant's use of the Premises and are enforced by
Landlord in a non-discriminatory manner. Tenant shall be responsible for the
compliance with such rules and regulations by each Tenant Party.
14. CONDEMNATION.
(a) TOTAL TAKING. If the entire Building or Premises are
taken by right of eminent domain or conveyed in lieu thereof (a "TAKING"), this
Lease shall terminate as of the date of the Taking.
(b) PARTIAL TAKING - TENANT'S RIGHTS. If any part of the
Building becomes subject to a Taking and such Taking will prevent Tenant from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Taking for a period of more than 120
days, then Tenant may terminate this Lease as of the date of such Taking by
giving written
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notice to Landlord within 30 days after the Taking, and Rent shall be
apportioned as of the date of such Taking. If Tenant does not terminate this
Lease, then Rent shall be abated on a reasonable basis as to that portion of the
Premises rendered untenantable by the Taking.
(c) PARTIAL TAKING - LANDLORD'S RIGHTS. If any material
portion, but less than all, of the Building becomes subject to a Taking, or if
Landlord is required to pay any of the proceeds arising from a Taking to a
Landlord's Mortgagee, then Landlord may terminate this Lease by delivering
written notice thereof to Tenant within 30 days after such Taking, and Rent
shall be apportioned as of the date of such Taking. If Landlord does not so
terminate this Lease, then this Lease will continue, but if any portion of the
Premises has been taken, Rent shall ▇▇▇▇▇ as provided in the last sentence of
Section 14.(b).
(d) AWARD. If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the Land, the Building, and
other improvements taken; however, Tenant may separately pursue a claim (to the
extent it will not reduce Landlord's award) against the condemnor 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.
15. FIRE OR OTHER CASUALTY.
(a) REPAIR ESTIMATE. If the Premises or the Building are
damaged by fire or other casualty (a "CASUALTY"), Landlord shall, within 60 days
after such Casualty, deliver to Tenant a good faith estimate (the "DAMAGE
NOTICE") of the time needed to repair the damage caused by such Casualty.
(b) TENANT'S RIGHTS. If a material portion of the
Premises or the Building is damaged by Casualty such that Tenant is prevented
from conducting its business in the Premises in a manner reasonably comparable
to that conducted immediately before such Casualty and Landlord estimates that
the damage caused thereby cannot be repaired within 180 days after the Casualty
(the "REPAIR PERIOD"), then Tenant may terminate this Lease by delivering
written notice to Landlord of its election to terminate within 30 days after the
Damage Notice has been delivered to Tenant.
(c) LANDLORD'S RIGHTS. If a Casualty damages the Premises
or a material portion of the Building and (1) Landlord estimates that the damage
to the Premises cannot be repaired within the Repair Period, (2) the damage to
the Premises exceeds 50% of the replacement cost thereof (excluding foundations
and footings), as estimated by Landlord, and such damage occurs during the last
two years of the Term, (3) regardless of the extent of damage to the Premises,
Landlord makes a good faith determination that restoring the Building would be
uneconomical, or (4) Landlord is required to pay any insurance proceeds arising
out of the Casualty to a Landlord's Mortgagee, then Landlord may terminate this
Lease by giving written notice of its election to terminate within 30 days after
the Damage Notice has been delivered to Tenant.
(d) REPAIR OBLIGATION. If neither party elects to
terminate this Lease following a Casualty, then Landlord shall, within a
reasonable time after such Casualty, begin to repair the Premises and shall
proceed with reasonable diligence to restore the Premises to substantially the
same condition as they existed immediately before such Casualty; however,
Landlord shall only be required to reconstruct the Premises to the extent of any
improvements existing therein on the date of the damage that were installed by
Landlord as part of the Work (if any) pursuant to Exhibit D ("LANDLORD'S
CONTRIBUTION"), and Landlord's obligation to repair or restore the Premises
(including the Essential Landlord Improvements [as defined in Exhibit D]) shall
be limited to the extent of the insurance proceeds actually
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received by Landlord for the Casualty in question. Tenant shall be responsible
for repairing or replacing its furniture, equipment, fixtures, alterations and
other improvements which Landlord is not obligated to restore, and shall use the
proceeds of its insurance for such purpose. If Landlord does not complete the
restoration of the Premises within 60 days after the time period estimated by
Landlord to repair the damage caused by such Casualty as specified in the Damage
Notice, as the same may be extended by Force Majeure Delay Days or delays caused
by a Tenant Party, Tenant may terminate this Lease by delivering written notice
to Landlord and Landlord's Mortgagee within ten days following the expiration of
such 60-day period (as the same may be extended as set forth above) and prior to
the date upon which Landlord Substantially Completes such restoration. Such
termination shall be effective as of the date specified in Tenant's termination
notice as if such date were the date fixed for the expiration of the Term. If
Tenant fails to timely give such termination notice, Tenant shall be deemed to
have waived its right to terminate this Lease, time being of the essence with
respect thereto.
(e) ABATEMENT OF RENT. If the Premises are damaged by
Casualty, Rent for the portion of the Premises rendered untenantable by the
damage shall be abated on a reasonable basis from the date of damage until the
completion of Landlord's repairs (or until the date of termination of this Lease
by Landlord or Tenant as provided above, as the case may be), unless a Tenant
Party caused such damage, in which case, Tenant shall continue to pay Rent
without abatement.
16. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture, or fixtures placed by
Tenant in the Premises. If any taxes for which Tenant is liable are levied or
assessed against Landlord or Landlord's property and Landlord elects to pay the
same, or if the assessed value of Landlord's property is increased by inclusion
of such personal property, furniture or fixtures and Landlord elects to pay the
taxes based on such increase, then Tenant shall pay to Landlord, within 30 days
following written request, the part of such taxes for which Tenant is primarily
liable hereunder; however, Landlord shall not pay such amount if Tenant notifies
Landlord that it will contest the validity or amount of such taxes before
Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with Law and if the non-payment thereof does not pose a
threat of loss or seizure of the Building or interest of Landlord therein or
impose any fee or penalty against Landlord.
17. EVENTS OF DEFAULT. Each of the following occurrences shall be
an "EVENT OF DEFAULT":
(a) PAYMENT DEFAULT. Tenant's failure to pay Rent within
five 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 Tenant fails to pay Rent when due
and, during the 12 month interval preceding such failure, Landlord has given
Tenant written notice of failure to pay Rent on two or more occasions;
(b) ABANDONMENT. Without prior written notice to
Landlord, Tenant (1) abandons or vacates the Premises or any substantial portion
thereof or (2) fails to continuously operate its business in the Premises;
(c) ESTOPPEL. Tenant fails to provide any estoppel
certificate after Landlord's written request therefor pursuant to Section 25.(e)
and such failure shall continue for five days after Landlord's second written
notice thereof to Tenant;
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(d) OTHER DEFAULTS. Tenant's failure to perform, comply
with, or observe any other agreement or obligation of Tenant under this Lease
and the continuance of such failure for a period of more than 30 days after
Landlord has delivered to Tenant written notice thereof; and
(e) INSOLVENCY. The filing of a petition by or against
Tenant (the term "TENANT" shall include, for the purpose of this Section 17.(e),
any guarantor of Tenant's obligations hereunder) (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any state or federal debtor
relief law; (3) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this Lease;
or (4) for the reorganization or modification of Tenant's capital structure;
however, if such a petition is filed against Tenant, then such filing shall not
be an Event of Default unless Tenant fails to have the proceedings initiated by
such petition dismissed within 90 days after the filing thereof.
18. REMEDIES. Upon any Event of Default, Landlord may, in addition
to all other rights and remedies afforded Landlord hereunder or by law or
equity, take any one or more of the following actions:
(a) TERMINATION OF LEASE. Terminate this Lease by giving
Tenant written notice thereof, in which event Tenant shall pay to Landlord the
sum of (1) all Rent accrued hereunder through the date of termination, (2) all
amounts due under Section 19.(a), and (3) an amount equal to (A) 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 "Prime Rate" as
published on the date this Lease is terminated by The Wall Street Journal,
Southwest Edition, in its listing of "Money Rates" minus one percent, minus (B)
the then present fair rental value of the Premises for such period, similarly
discounted;
(b) TERMINATION OF POSSESSION. 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 (1) all Rent and
other amounts accrued hereunder to the date of termination of possession, (2)
all amounts due from time to time under Section 19.(a), and (3) all Rent and
other net 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, after deducting all costs incurred by
Landlord in reletting the Premises. If Landlord elects to proceed under this
Section 18.(b), Landlord may remove all of Tenant's property from the Premises
and store the same in a public warehouse or elsewhere at the cost of, and for
the account of, Tenant, without becoming liable for any loss or damage which may
be occasioned thereby. Landlord shall use reasonable efforts to relet the
Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building. 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
such 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 an action against Tenant to
collect amounts due by Tenant, without the necessity of Landlord's waiting until
the expiration of the Term. Unless Landlord delivers written notice to Tenant
expressly stating that it has elected to terminate this Lease, all actions taken
by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to
be taken under this Section 18.(b). If Landlord elects to proceed under this
Section 18.(b), it may at any time elect to terminate this Lease under Section
18.(a); or
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(c) ALTERATION OF LOCKS. Additionally, with or without
notice, and to the extent permitted by Law, 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.
19. PAYMENT BY TENANT; NON-WAIVER; CUMULATIVE REMEDIES.
(a) PAYMENT BY TENANT. Upon any Event of Default, 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 arising out of the Event of
Default. To the full extent permitted by law, Landlord and Tenant agree the
federal and state courts of the state in which the Premises are located shall
have exclusive jurisdiction over any matter relating to or arising from this
Lease and the parties' rights and obligations under this Lease.
(b) NO WAIVER. Landlord's acceptance of Rent following an
Event of Default shall not waive Landlord's rights regarding such Event of
Default. 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. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
(c) CUMULATIVE REMEDIES. Any and all remedies set forth
in this Lease: (1) shall be in addition to any and all other remedies Landlord
may have at law or in equity, (2) shall be cumulative, and (3) may be pursued
successively or concurrently as Landlord may elect. The exercise of any remedy
by Landlord shall not be deemed an election of remedies or preclude Landlord
from exercising any other remedies in the future.
20. LANDLORD'S LIEN. [Intentionally Deleted].
21. SURRENDER OF PREMISES. No act by Landlord shall be deemed 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 expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises with all improvements located therein in good repair
and condition, free of Hazardous Materials placed on the Premises during the
Term, broom-clean, reasonable wear and tear (and condemnation and Casualty
damage not caused by Tenant, as to which Sections 14 and 15 shall control)
excepted, and shall deliver to Landlord all keys to the Premises. Provided that
Tenant has performed all of its obligations hereunder, Tenant may remove all
unattached trade fixtures, furniture, and personal property placed in the
Premises or elsewhere in the Building by Tenant. Additionally, at Landlord's
option, Tenant shall remove such alterations, additions, improvements, trade
fixtures, personal property, equipment, wiring, cabling, and furniture as
Landlord may request; however, Tenant shall not be required to remove any
addition or improvement to the Premises if Landlord has specifically agreed in
writing that the improvement or addition in question need not be removed. Tenant
shall repair all damage caused by
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such removal and restore the Premises, reasonable wear and tear excepted, to the
condition that existed as of the Commencement Date of this Lease. All items not
so removed shall, at Landlord's option, be deemed to have been 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. Notwithstanding the foregoing, Landlord hereby acknowledges that
Landlord will not require the removal of the Work (as described in Exhibit D
hereto) at the expiration of the Term. The provisions of this Section 21 shall
survive the end of the Term.
22. HOLDING OVER. If Tenant fails to vacate the Premises at the
end of the Term, then Tenant shall be a tenant at sufferance and (a) Tenant
shall pay, in addition to the other Rent, Basic Rent equal to the greater of (1)
150% of the Basic Rent payable during the last month of the Term, or (2) 125% of
the prevailing rental rate in the Building for similar space, and (b) Tenant
shall otherwise continue to be subject to all of Tenant's obligations under this
Lease. If Tenant fails to surrender the Premises within 30 days following the
termination or expiration of this Lease, then Landlord shall be entitled to all
rights and remedies provided herein or at law (none of which shall be deemed
limited or waived by the provisions of this Section 22), and, in such instance,
in addition to any other liabilities to Landlord accruing therefrom, Tenant
shall protect, defend, indemnify and hold Landlord harmless from all loss, costs
(including reasonable attorneys' fees) and liability resulting from such
failure, including any claims made by any succeeding tenant founded upon such
failure to surrender, and any lost profits to Landlord resulting therefrom.
23. CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the
exercise of such rights does not unreasonably interfere with Tenant's occupancy
of the Premises, Landlord shall have the following rights:
(a) BUILDING OPERATIONS. To decorate and to make
inspections, repairs, alterations, additions, changes, or improvements, whether
structural or otherwise, in and about the Building, or any part thereof; to
enter upon the Premises during normal business hours and in a manner which does
not unreasonably interfere with Tenant's operations (after giving Tenant
reasonable prior notice thereof, which may be oral notice, except in cases of
real or apparent emergency, in which case no notice shall be required) and,
during the continuance of any such work, to temporarily close doors, entryways,
public space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities; to change the name of the Building; and to
change the arrangement and location of entrances or passageways, doors, and
doorways, corridors, elevators, stairs, restrooms, or other public parts of the
Building;
(b) SECURITY. To take such reasonable measures as
Landlord deems advisable for the security of the Building and its occupants;
evacuating the Building for cause, suspected cause, or for drill purposes;
temporarily denying access to the Building; and closing the Building after
normal business hours and on Sundays and Holidays, subject, however, to Tenant's
right to enter the Building twenty-four hours a day, seven days a week under
such reasonable regulations as Landlord may prescribe from time to time;
(c) PROSPECTIVE PURCHASERS AND LENDERS. To enter the
Premises at all reasonable hours (upon prior notice, which may be oral notice,
and during normal business hours and in a manner which does not unreasonably
interfere with Tenant's operations) to show the Premises to prospective
purchasers or lenders; and
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(d) PROSPECTIVE TENANTS. At any time during the last 12
months of the Term or at any time following the occurrence of an Event of
Default, to enter the Premises at all reasonable hours to show the Premises to
prospective tenants.
24. SUBSTITUTION SPACE. [Intentionally Deleted].
25. MISCELLANEOUS.
(a) LANDLORD TRANSFER. Landlord may transfer any portion
of the Building and any of its rights under this Lease. If Landlord assigns its
rights under this Lease, then Landlord shall thereby be released from any
further obligations hereunder arising after the date of transfer, provided that
the assignee assumes Landlord's obligations hereunder in writing.
(b) LANDLORD'S LIABILITY. The liability of Landlord (and
its partners, shareholders or members) to Tenant (or any person or entity
claiming by, through or under Tenant) for any default by Landlord under the
terms of this Lease or any matter relating to or arising out of the occupancy or
use of the Premises and/or other areas of the Building shall be limited to
Tenant's actual direct, but not consequential, damages therefor and shall be
recoverable only from the interest of Landlord in the Building, and Landlord
(and its partners, shareholders or members) shall not be personally liable for
any deficiency. Additionally, Tenant hereby waives its statutory lien under
Section 91.004 of the Texas Property Code.
(c) FORCE MAJEURE. Other than for Tenant's obligations
under this Lease that can be performed by the payment of money (e.g., payment of
Rent and maintenance of insurance), whenever a period of time is herein
prescribed for action to be taken by either party hereto, such party shall not
be liable or responsible for, and there shall be excluded from the computation
of any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, extreme weather, war, governmental laws,
regulations, or restrictions, or any other causes of any kind whatsoever which
are beyond the control of such party.
(d) BROKERAGE. Neither Landlord nor Tenant has dealt with
any broker or agent in connection with the negotiation or execution of this
Lease, other than ▇▇▇▇▇▇▇▇ ▇▇▇▇ Dallas/Fort Worth, Ltd. and ▇▇▇▇▇▇▇ & Wakefield
of Texas, Inc., whose commissions shall be paid by Landlord pursuant to separate
written agreements. Tenant and Landlord shall each indemnify the other against
all costs, expenses, attorneys' fees, liens and other liability for commissions
or other compensation claimed by any other broker or agent claiming the same by,
through, or under the indemnifying party.
(e) ESTOPPEL CERTIFICATES. From time to time, Tenant
shall furnish to any party designated by Landlord, within 15 days after Landlord
has made a request therefor, a certificate signed by Tenant confirming and
containing such factual certifications and representations as to this Lease as
Landlord may reasonably request. Unless otherwise required by Landlord's
Mortgagee or a prospective purchaser or mortgagee of the Building, the initial
form of estoppel certificate to be signed by Tenant is attached hereto as
Exhibit F.
(f) NOTICES. All notices and other communications given
pursuant to this Lease shall be in writing and shall be (1) mailed by first
class, United States Mail, postage prepaid, certified, with return receipt
requested, and addressed to the parties hereto at the address specified in the
Basic Lease Information, (2) hand delivered to the intended address, (3) sent by
a nationally recognized overnight
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courier service, or (4) sent by facsimile transmission during normal business
hours followed by a confirmatory letter sent in another manner permitted
hereunder. All notices shall be effective upon delivery to the address of the
addressee. The parties hereto may change their addresses by giving notice
thereof to the other in conformity with this provision.
(g) SEPARABILITY. If any clause or provision of this
Lease is illegal, invalid, or unenforceable under present or future laws, then
the remainder of this Lease shall not be affected thereby and in lieu of such
clause or provision, there shall be added as a part of this Lease a clause or
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) AMENDMENTS; BINDING EFFECT. This Lease may not be
amended except by instrument in writing signed by Landlord and Tenant. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord, and no custom or practice which
may evolve between the parties in the administration of the terms hereof shall
waive or diminish the right of Landlord to insist upon the performance by Tenant
in strict accordance with the terms hereof. The terms and conditions contained
in this Lease shall inure to the benefit of and be binding upon the parties
hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is
for the sole benefit of Landlord and Tenant, and, other than Landlord's
Mortgagee, no third party shall be deemed a third party beneficiary hereof.
(i) QUIET ENJOYMENT. Provided Tenant has performed all of
its obligations hereunder, 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, subject to the terms and
conditions of this Lease.
(j) NO MERGER. There shall be no merger of the leasehold
estate hereby created with the fee estate in the Premises or any part thereof if
the same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
(k) NO OFFER. The submission of this Lease to Tenant
shall not be construed as an offer, and Tenant shall not have any rights under
this Lease unless Landlord executes a copy of this Lease and delivers it to
Tenant.
(l) ENTIRE AGREEMENT. This Lease constitutes the entire
agreement between Landlord and Tenant regarding the subject matter hereof and
supersedes all oral statements and prior writings relating thereto. Except for
those set forth in this Lease, no representations, warranties, or agreements
have been made by Landlord or Tenant to the other with respect to this Lease or
the obligations of Landlord or Tenant in connection therewith. The normal rule
of construction that any ambiguities be resolved against the drafting party
shall not apply to the interpretation of this Lease or any exhibits or
amendments hereto.
(m) WAIVER OF JURY TRIAL. To the maximum extent permitted
by law, Landlord and Tenant each waive right to trial by jury in any litigation
arising out of or with respect to this Lease.
(n) GOVERNING LAW. This Lease shall be governed by and
construed in accordance with the laws of the state in which the Premises are
located.
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(o) RECORDING. Tenant shall not record this Lease or any
memorandum of this Lease without the prior written consent of Landlord, which
consent may be withheld or denied in the sole and absolute discretion of
Landlord. Tenant grants to Landlord a power of attorney to execute and record a
release releasing any such recorded instrument of record that was recorded
without the prior written consent of Landlord.
(p) JOINT AND SEVERAL LIABILITY. If Tenant is comprised
of more than one party, each such party shall be jointly and severally liable
for Tenant's obligations under this Lease. All unperformed obligations of Tenant
at the end of the Term shall survive.
(q) FINANCIAL REPORTS. Within 15 days after Landlord's
request, Tenant will furnish Tenant's most recent audited financial statements
(including any notes to them) to Landlord, or, if no such audited statements
have been prepared, such other financial statements (and notes to them) as may
have been prepared by an independent certified public accountant or, failing
those, Tenant's internally prepared financial statements. If Tenant or Tenant's
parent corporation is a publicly traded corporation, Tenant may satisfy its
obligations hereunder by providing to Landlord Tenant's or its parent
corporation's most recent annual and quarterly reports. Tenant will discuss its
financial statements with Landlord and, following the occurrence of an Event of
Default hereunder, will give Landlord access to Tenant's books and records in
order to enable Landlord to verify the financial statements. Landlord will not
disclose any aspect of Tenant's financial statements that Tenant designates to
Landlord as confidential except (1) to Landlord's Mortgagee or prospective
mortgagees or purchasers of the Building, (2) in litigation between Landlord and
Tenant, and (3) if required by court order. Tenant shall not be required to
deliver the financial statements required under this Section 25.(q) more than
once in any 12-month period unless requested by Landlord's Mortgagee or a
prospective buyer or lender of the Building or an Event of Default occurs.
(r) LANDLORD'S FEES. Whenever Tenant requests Landlord to
take any action not required of it hereunder or give any consent required or
permitted under this Lease, Tenant will reimburse Landlord for Landlord's
reasonable, out-of-pocket costs payable to third parties and reasonably incurred
by Landlord in reviewing the proposed action or consent, including reasonable
attorneys', engineers' or architects' fees, within 30 days after Landlord's
delivery to Tenant of a statement of such costs. Tenant will be obligated to
make such reimbursement without regard to whether Landlord consents to any such
proposed action.
(s) TELECOMMUNICATIONS. Tenant and its telecommunications
companies, including local exchange telecommunications companies and alternative
access vendor services companies, shall have no right of access to and within
the Building, for the installation and operation of telecommunications systems,
including voice, video, data, Internet, and any other services provided over
wire, fiber optic, microwave, wireless, and any other transmission systems
("TELECOMMUNICATIONS SERVICES"), for part or all of Tenant's telecommunications
within the Building and from the Building to any other location without
Landlord's prior written consent; provided, such telecommunications companies
shall have a right of access to and within the Building for the installation of
telecommunication systems and services pursuant to the Working Drawings
described in Exhibit D hereto. All providers of Telecommunications Services
shall be required to comply with the rules and regulations of the Building,
applicable Laws and Landlord's policies and practices for the Building. Except
for providing conduits and related components thereto as set forth in the
Construction Drawings, Tenant acknowledges that Landlord shall not be required
to provide or arrange for any
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Telecommunications Services and that Landlord shall have no liability to any
Tenant Party in connection with the installation, operation or maintenance of
Telecommunications Services or any equipment or facilities relating thereto.
Tenant, at its cost and for its own account, shall be solely responsible for
obtaining all Telecommunications Services. However, nothing in this Section
25.(s) shall prohibit Tenant's employees from accessing areas solely within the
Premises that do not contain any equipment serving other tenants of the Building
or the Building's Systems.
(t) CONFIDENTIALITY. Tenant acknowledges that the terms
and conditions of this Lease are to remain confidential for Landlord's benefit,
and may not be disclosed by Tenant to anyone, by any manner or means, directly
or indirectly, without Landlord's prior written consent, except to the extent
otherwise required by applicable law. The consent by Landlord to any disclosures
shall not be deemed to be a waiver on the part of Landlord of any prohibition
against any future disclosure.
(u) AUTHORITY. Tenant (if a corporation, partnership or
other business entity) hereby represents and warrants to Landlord that Tenant is
a duly formed and existing entity qualified to do business in the state in which
the Premises are located, that Tenant has full right and authority to execute
and deliver this Lease, and that each person signing on behalf of Tenant is
authorized to do so. Landlord hereby represents and warrants to Tenant that
Landlord is a duly formed and existing entity qualified to do business in the
state in which the Premises are located, that Landlord has full right and
authority to execute and deliver this Lease, and that each person signing on
behalf of Landlord is authorized to do so.
(v) HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS"
means any substance, material, or waste which is now or hereafter classified or
considered to be hazardous, toxic, or dangerous under any Law relating to
pollution or the protection or regulation of human health, natural resources or
the environment, or poses or threatens to pose a hazard to the health or safety
of persons on the Premises or in the Building. Tenant shall not use, generate,
store, or dispose of, or permit the use, generation, storage or disposal of
Hazardous Materials on or about the Premises or the Building except in a manner
and quantity necessary for the ordinary performance of Tenant's business, and
then in compliance with all Laws. If Tenant breaches its obligations under this
Section 25.(v), Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to clean
up or remediate any contamination resulting from Tenant's use, generation,
storage or disposal of Hazardous Materials. Tenant shall defend, indemnify, and
hold harmless Landlord and its representatives and agents from and against any
and all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including reasonable attorneys' fees and cost of clean up
and remediation) arising from Tenant's failure to comply with the provisions of
this Section 25.(v). This indemnity provision shall survive termination or
expiration of this Lease.
(w) LIST OF EXHIBITS. All exhibits and attachments
attached hereto are incorporated herein by this reference.
Exhibit A - Outline of Premises
Exhibit B - Description of the Land
Exhibit C - Building Rules and Regulations
Exhibit D - Tenant Finish-Work: Allowance
Exhibit E - Form of Confirmation of Commencement Date Letter
Exhibit F - Form of Tenant Estoppel Certificate
Exhibit G - Parking
Exhibit H - Renewal Option
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Exhibit I - Right of First Refusal
Exhibit J - Rent Abatement Provisions
Exhibit K - Janitorial Services
Exhibit L - Tenant's Signage
Exhibit M - Designated Smoking Area
Exhibit N - Guaranty
Exhibit O - Form of Subordination, Non-Disturbance and Attornment Agreement
26. OTHER PROVISIONS.
(a) ADA. Notwithstanding anything in this Lease to the
contrary, as between Landlord and Tenant, (1) Tenant shall bear the risk of
complying with Title III of the Americans With Disabilities Act of 1990, any
state laws governing handicapped access or architectural barriers, including the
Texas Elimination of Architectural Barriers Act, and all rules, regulations, and
guidelines promulgated under such laws, as amended from time to time (the
"DISABILITIES ACTS") in the Premises, and (2) Landlord shall bear the risk of
complying with the Disabilities Acts in the common areas of the Building, other
than compliance that is necessitated by the use of the Premises for other than
the Permitted Use (which risk and responsibility shall be borne by Tenant).
(b) ENVIRONMENTAL REPORT. Landlord has provided to Tenant
a copy of an Environmental Site Assessment Update (HBC Report No. 94007086A)
("REPORT") with respect to the Land, dated February 24, 2000, prepared by HBC
Engineering, Inc. ("CONSULTANT"). Tenant agrees not to release the Report, or a
copy of it, or any part of it, or disclose any of the information contained in
the Report to any third party (other than Tenant's counsel) without the express
prior written consent of Landlord. Such consent shall not be unreasonably
withheld as long as the proposed party to whom the report is given executes a
letter agreement containing covenants similar to this Section 26.(b). Landlord
represents to Tenant that, except as otherwise disclosed in the Report, to the
best of Landlord's actual knowledge (without duty of inquiry), Landlord has not
received written notice from any governmental entity or any other party of any
Hazardous Materials on, in, under or adjacent to the Land or the Building in
violation of any environmental law. Tenant releases Landlord for any
inaccuracies, omissions, or errors contained in the Report. Tenant agrees that
Landlord has no duty to provide it with the Report, to correct any inaccuracies,
errors, or omission in the Report, to supplement the Report with any additional
information, or to provide Tenant with any information concerning the
environmental conditions of the Land. Tenant agrees that Landlord considers the
Report to be confidential proprietary information and Tenant agrees to maintain
the confidentiality and security of the Report information in accordance with
the highest standards of confidentiality and security associated with the
protection of "trade secrets." Landlord hereby expressly disclaims
responsibility for the investigation of the Land by Tenant and further disclaims
any responsibility for the contents of the Report. Tenant's obligations pursuant
to this Section 26.(b) shall survive the expiration or termination of this
Lease.
(c) SIGNAGE. Subject to Landlord's prior approval of the
location, design, size, color, material composition, and plans and
specifications therefor, Tenant may, at its sole risk and expense, construct a
building fascia sign on the Building and a monument sign on the Building grounds
(collectively, the "SIGNS"). Landlord hereby consents to the sign described on
Exhibit L hereto. If Landlord grants its approval, Tenant shall erect each 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
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so as not to unreasonably interfere with the use of the Building grounds while
such construction is taking place; thereafter, Tenant shall maintain each Sign
in a good, clean, and safe condition in accordance with the Sign Requirements.
After the end of the Term or after Tenant's right to possess the Premises has
been terminated, Landlord (1) may require that Tenant remove any Signs by
delivering to Tenant written notice thereof within 30 days after the end of the
Term or (2) may use any Sign, in which case such Sign shall become the property
of Landlord without compensation to Tenant. If Landlord so requests, Tenant
shall remove the Sign, repair all damage caused thereby, and restore the
Building and, if applicable, the grounds on which such Sign was located to their
condition before the installation of the Sign within ten days after Landlord's
request therefor. If Tenant fails to timely do so, Landlord may, without
compensation to Tenant, (A) use such Sign or (B) at Tenant's expense, remove
such Sign, perform the related restoration and repair work and dispose of such
Sign in any manner Landlord deems appropriate. NOTWITHSTANDING LANDLORD'S
INDEMNITY CONTAINED IN SECTION 11.(D), IT IS THE INTENTION OF THE PARTIES THAT
TENANT BEAR ALL RISKS RELATING TO THE INSTALLATION, USE, MAINTENANCE, OPERATION,
AND REMOVAL OF THE SIGNS; 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, MAINTENANCE, USE, OPERATION, AND REMOVAL OF THE SIGNS, INCLUDING,
WITHOUT LIMITATION, THAT ARISING FROM LANDLORD'S NEGLIGENCE (OTHER THAN ITS SOLE
OR GROSS negligence). The rights granted to Tenant under this Section 26.(c) are
personal to Daisytek, Incorporated, may not be assigned to any party, and may be
revoked by Landlord if Tenant ceases to occupy at least 40,000 rentable square
feet in the Building.
(d) SATELLITE DISH. Provided that Tenant complies with
the terms of this Section 26.(d), 26.(e), Tenant may, at its risk and expense,
install a satellite dish, microwave antennae and other equipment and related
wiring (collectively, the "SATELLITE DISH") on the roof of the Building at a
location approved by Landlord. Except as set forth in the Working Drawings
described in Exhibit D hereto, before installing the Satellite Dish, Tenant
shall submit to Landlord for its approval (which approval shall not be
unreasonably withheld or delayed) plans and specifications which (1) specify in
detail the design, location, size, and frequency of the Satellite Dish and (2)
are sufficiently detailed to allow for the installation of the Satellite Dish in
a good and workmanlike manner and in accordance with all Laws. If Landlord
approves of such plans, Tenant shall install (in a good and workmanlike manner),
maintain and use the Satellite Dish in accordance with all Laws and shall obtain
all permits required for the installation and operation thereof; copies of all
such permits must be submitted to Landlord before Tenant begins to install the
Satellite Dish. Tenant shall thereafter maintain all permits necessary for the
maintenance and operation of the Satellite Dish while it is on the Building and
operate and maintain the Satellite Dish in such a manner so as not to
unreasonably interfere with any other satellite, antennae, or other transmission
facility on the Building's roof or in the Building. Landlord may require that
Tenant screen the Satellite Dish with a parapet wall or other screening device
reasonably acceptable to Landlord provided it does not make the Satellite Dish
inoperable. Tenant shall maintain the Satellite Dish and the screening therefor
in good repair and condition. Tenant may only use the Satellite Dish in
connection with Tenant's business. Tenant shall not allow any third party to use
such equipment, whether by sublease, license, occupancy agreement or otherwise.
Tenant shall, at its risk and expense, remove the Satellite Dish, within 15 days
after the occurrence of any of the following events: (A) the termination of
Tenant's right to possess the Premises; (B) the termination of the Lease; (C)
the expiration of the Term; or (D) Tenant's vacating the Premises. If Tenant
fails to do so, Landlord may remove the Satellite Dish and store or dispose of
it in any manner Landlord deems appropriate without liability to Tenant; Tenant
shall reimburse Landlord for all costs incurred by Landlord in connection
therewith within ten days after Landlord's request therefor. Tenant shall repair
any damage to the Building caused by or relating to the Satellite Dish,
including that which is caused by its installation, maintenance, use, or
removal.
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NOTWITHSTANDING LANDLORD'S INDEMNITY CONTAINED IN SECTION 11.(D), IT IS THE
INTENTION OF THE PARTIES THAT TENANT BEAR ALL RISKS RELATING TO THE
INSTALLATION, USE, MAINTENANCE, OPERATION, AND REMOVAL OF THE SATELLITE DISH;
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,
MAINTENANCE, USE, OPERATION, AND REMOVAL OF THE SATELLITE DISH, INCLUDING,
WITHOUT LIMITATION, THAT ARISING FROM LANDLORD'S NEGLIGENCE (OTHER THAN ITS SOLE
OR GROSS NEGLIGENCE). All work relating to the Satellite Dish shall, at Tenant's
expense, be coordinated with Landlord's roofing contractor so as not to affect
any warranty for the Building's roof.
(e) SMOKING AREA. Tenant shall not permit its employees,
invitees or guests to smoke in the lobbies, passages, corridors, elevators,
vending rooms, rest rooms, stairways or any other area shared in common with
other tenants in the Building. Nor shall Tenant permit its employees, invitees,
or guests to loiter at the building entrances for the purposes of smoking.
Tenant's employees, invitees and guests shall be permitted to smoke only in the
designated smoking area, which is depicted on Exhibit M hereto.
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LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE, AND EXCEPT AS EXPRESSLY
SET FORTH HEREIN, TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT
UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS
OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,
TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, DEMAND, SETOFF OR
DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS
HEREUNDER, WHETHER EXPRESS OR IMPLIED. NOTHING IN THIS PARAGRAPH SHALL BE
CONSTRUED TO DIMINISH THE OBLIGATIONS OF LANDLORD THAT ARE EXPRESSLY SET FORTH
ELSEWHERE IN THIS LEASE OR ANY ATTACHMENT HERETO.
Dated as of the date first above written.
LANDLORD: ENTERPRISE BUSINESS PARK D-2, L.P.,
a Delaware limited partnership
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇ DFW Development, Inc.,
a Delaware corporation, its sole
general partner
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
TENANT: DAISYTEK, INCORPORATED, a Delaware
corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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