Exhibit 10.1
BRIDGEPOINT LEASE AGREEMENT
By and Between
INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
("Landlord")
and
PSW TECHNOLOGIES, INC.
("Tenant")
BRIDGEPOINT LEASE AGREEMENT
This Lease is entered into as of the date of execution set forth below,
between INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA, a Washington
corporation ("Landlord"), whose address for purposes of notice hereunder is ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ and PSW
TECHNOLOGIES, INC., a Delaware corporation ("Tenant"), whose address prior to
the Commencement Date (defined in Section 2.01 hereof) is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and whose address after the
Commencement Date shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Building Three, Suite
______, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇.
W I T N E S S E T H:
ARTICLE 1
1.01 PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, for the rent and subject to the provisions of this Lease, the
following premises: (i) approximately 36,319 rentable square feet ("Three
Bridgepoint Premises") located on floors one, two and three in Three Bridgepoint
Square ("Three Bridgepoint"), as reflected on the floor plans attached as
Exhibit "A" hereto, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, and being all of the rentable square feet contained in
Three Bridgepoint not covered by that certain lease ("Motorola Lease") dated
March 19, 1996, between Landlord and Motorola, Inc. ("Motorola"), and (ii)
approximately 10,000 rentable square feet ("One Bridgepoint Premises") located
in One Bridgepoint Square ("One Bridgepoint"), such One Bridgepoint Premises to
be a portion of the space currently occupied by National Instruments, Inc. in
One Bridgepoint, and to be reflected on the floor plans to be attached as
Exhibit "B" hereto once National Instruments, Inc. vacates such space, and
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
[Three Bridgepoint and One Bridgepoint, together with Two Bridgepoint, Four
Bridgepoint and Five Bridgepoint (collectively the "Bridgepoint Buildings"), the
ground-level open areas and walkways appurtenant to the Bridgepoint Buildings,
any parking areas and garages serving the Bridgepoint Buildings, any other
structure or improvement utilized in the operation or maintenance of the
Bridgepoint Buildings, and the land (the "Land") on which all such improvements
are located, said Land being more particularly described on Exhibit "C" attached
hereto and made a part hereof for all purposes, and any present or future
associated underground or elevated pedestrian tunnels or walkways located on the
Land are hereinafter collectively referred to as the "Project".] Landlord and
Tenant hereby agree that the Three Bridgepoint Premises contain approximately
36,319 square feet of rentable area and that Three Bridgepoint contains
approximately 80,576 square feet of rentable area. All of the remaining rentable
area in Three Bridgepoint is leased to Motorola by virtue of the Motorola Lease.
Landlord and Tenant hereby agree that the One Bridgepoint Premises contain
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approximately 10,000 square feet of rentable area and that One Bridgepoint
contains approximately 84,723 square feet of rentable area. The Three
Bridgepoint Premises and the One Bridgepoint Premises are hereinafter sometimes
collectively referred to as the "Premises".
ARTICLE 2
2.01 TERM. Subject to the other provisions hereof, and any exhibits hereto,
this Lease, as same relates to Three Bridgepoint, shall be for a term of
approximately seven (7) years commencing on the Three Bridgepoint Commencement
Date as defined in Section 2.02, and expiring on December 31, 2003 (the
"Expiration Date"). Subject to the other provisions hereof, and any exhibits
hereto, this Lease, as same relates to One Bridgepoint, shall be for a term of
approximately seventy-one (71) months commencing on the One Bridgepoint
Commencement Date as defined in Section 2.03, and expiring on the Expiration
Date. Such lease term, as it may be modified, is herein called the "Term."
2.02 THREE BRIDGEPOINT COMMENCEMENT DATE. As used herein, "Three
Bridgepoint Commencement Date" means a date which is the earlier of (a) the date
when the Three Bridgepoint Tenant Improvements (as defined in Exhibit "D") are
substantially completed (as hereinafter defined), which the parties anticipate
will be approximately January 31, 1997, (b) the date Tenant occupies all or any
part of the Three Bridgepoint Premises or (c) the date the Three Bridgepoint
Tenant Improvements would have been substantially completed but for (i) the
failure of Tenant to comply with the schedule set forth in Exhibit "D", (ii)
change orders requested by Tenant to the Three Bridgepoint Tenant Improvements
(as hereinafter defined) for the Three Bridgepoint Premises, or (iii) any other
act of the Tenant causing delay in completion of the Three Bridgepoint Tenant
Improvements for the Three Bridgepoint Premises (the "Tenant Delay").
"Substantial completion" shall mean that Landlord has received a temporary or
permanent certificate of occupancy from the City of Austin and that the only
items remaining to be completed are "punch list" items, which Landlord agrees to
complete within thirty (30) days after written notification as set forth in
Exhibit "D". Within five (5) days after the Three Bridgepoint Commencement Date
and at any time thereafter upon the request of Landlord, Tenant shall execute
and deliver to Landlord a declaration (in the form of Exhibit "E-l" hereto)
specifying, among other things, the date upon which the same occurred.
2.03 ONE BRIDGEPOINT COMMENCEMENT DATE. As used herein, "One Bridgepoint
Commencement Date" means a date which is earlier of (a) the date when the One
Bridgepoint Tenant Improvements (as defined in Exhibit "D") are substantially
completed (as hereinafter defined), which the parties anticipate will be
approximately forty-five (45) days after National Instruments, Inc. vacates the
One Bridgepoint Premises (National Instruments is scheduled to vacate the One
Bridgepoint Premises no later than February 28, 1998, as set forth in the Second
Amendment to Lease Agreement dated October 1, 1996, between Landlord and
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National Instruments, Inc.), (b) the date Tenant occupies all or any part of the
One Bridgepoint Premises or (c) the date the One Bridgepoint Tenant Improvements
would have been substantially completed but for the failure of Tenant to comply
with the schedule set forth in Exhibit "D", change orders requested by Tenant to
the One Bridgepoint Tenant Improvements (as hereinafter defined) for the One
Bridgepoint Premises, or any other act of the Tenant causing delay in completion
of the One Bridgepoint Tenant Improvements for the One Bridgepoint Premises (the
"Tenant Delay"). "Substantial completion" shall mean that Landlord has received
a temporary or permanent certificate of occupancy from the City of Austin and
that the only items remaining to be completed are "punch list" items, which
Landlord agrees to complete within thirty (30) days after written notification
as set forth in Exhibit "D". Within five (5) days after the One Bridgepoint
Commencement Date and at any time thereafter upon the request of Landlord,
Tenant shall execute and deliver to Landlord a declaration (in the form of
Exhibit "E-2" hereto) specifying, among other things, the date upon which the
same occurred.
2.04 RENEWAL OPTIONS. Landlord hereby gives and grants to Tenant one (1)
option to renew this Lease for a period of five (5) years on the terms and
conditions set forth in Exhibit "F". The Renewal Term shall commence on the
expiration of the Term.
2.05 RIGHT OF FIRST REFUSAL. Landlord hereby grants Tenant a right of first
refusal with respect to the existing National Instruments Refusal Space in One
Bridgepoint, additional space in One Bridgepoint, and the Motorola Refusal Space
in Three Bridgepoint, as set forth in "Exhibit "G". This right of first refusal
is in effect only during the Primary Term and terminates on the expiration of
the Primary Term.
ARTICLE 3
3.01 BASE RENT. Tenant, in consideration for this Lease, agrees to pay to
Landlord a base rental ("Base Rent") for each square foot of rentable area
agreed by Landlord and Tenant to be within the Premises, for each calendar year
during this Lease as follows:
1997 - $19.75 per rentable square foot
1998 - $19.75 per rentable square foot
1999 - $21.25 per rentable square foot
2000 - $22.25 per rentable square foot
2001 - $22.25 per rentable square foot
2002 - $23.25 per rentable square foot
2003 - $23.25 per rentable square foot
The Base Rent shall be payable in equal monthly installments determined by
dividing the total rent for each respective calendar year by twelve (12), at
Landlord's address herein provided in legal
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tender of the United States of America, without notice, demand, counterclaim,
set-off or abatement, in advance on the first day of each calendar month
throughout the Term, except that the first such monthly installment is due upon
the date of execution of this Lease by Tenant. The Base Rent for the Three
Bridgepoint Premises shall commence on the Three Bridgepoint Commencement Date,
and the Base Rent for the One Bridgepoint Premises shall commence on the One
Bridgepoint Commencement Date. In the event the Three Bridgepoint Commencement
Date or the One Bridgepoint Commencement Date occurs other than on the first day
of the month, the rent for the applicable first month shall be prorated from
such applicable Commencement Date until the end of such month.
3.02 RENTAL ADJUSTMENT. Tenant's pro rata share of all Operating Expenses
(defined in Section 3.03 hereof) for purposes of rental adjustment is agreed to
be forty six and 85/100ths percent (46.85%) for the Three Bridgepoint Premises,
and eleven and 80/100ths percent (11.80%) for the One Bridgepoint Premises
("Tenant's Pro Rata Share"). On or before the applicable Commencement Date and
thereafter on or before the first day of each calendar year of the Term,
Landlord shall provide to Tenant the Estimated Operating Expense (defined in
Section 3.03 hereof) for the upcoming year for both Three Bridgepoint and One
Bridgepoint. In addition to the Base Rent, Tenant shall pay in advance on the
first day of each calendar month in each calendar year following the Base Year
throughout the Term, installments equal to one-twelfth (1/12) of Tenant's Pro
Rata Share of the excess of the Estimated Operating Expense for the current year
over the Actual Operating Expense (defined in Section 3.03 hereof) for the Base
Year (such excess being referred to herein as the "Annual Rental Adjustment")
for both the Three Bridgepoint Premises and the One Bridgepoint Premises, as
applicable. The Base Year is calendar year 1997. Within one hundred twenty (120)
days after the end of each calendar year during the Term, Landlord shall furnish
to Tenant a statement certified by Landlord of the Actual Operating Expense for
the immediately preceding calendar year, which statement shall specify the
various types of Operating Expenses. If Tenant's Pro Rata Share of the Annual
Rental Adjustment paid to Landlord during the previous calendar year exceeds
Tenant's Pro Rata Share of the excess of the Actual Operating Expense for such
year over the Actual Operating Expense for the Base Year, then Landlord shall
refund the difference to Tenant at the time Landlord furnishes the statement of
the Actual Operating Expense. Otherwise, within thirty (30) days after Landlord
furnishes such statement to Tenant, Tenant shall make a lump sum payment to
Landlord equal to the positive difference between (a) Tenant's Pro Rata Share of
the excess of the Actual Operating Expense for the preceding calendar year over
the Actual Operating Expense for the Base Year and (b) the Annual Rental
Adjustment theretofore paid by Tenant. As used in this Lease the term "Rent"
shall refer collectively to the Base Rent and all rental adjustments. If the
Term commences on a day other than the first day of the month or calendar year,
or terminates on a day other than the last day of a month or calendar year, then
Tenant shall be required to pay only a pro rata portion of the installments and
adjustments of Rent due for such month or year.
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3.03 OPERATING EXPENSES. "Operating Expenses" shall mean and include all
amounts, expenses, and costs of whatsoever nature incurred because of or in
connection with the ownership, management, operation, repair, maintenance or
security of the Project, all additional facilities which may be added to the
Project, and Landlord's personal property which may be utilized in connection
therewith. The property management fee that will be included in Operating
Expenses shall be four percent (4%) of gross rent, and shall be paid to FIC
Property Management Services, Inc., an affiliate of Landlord. Operating
Expenses shall not include capital improvements, depreciation, interest and
principal payments on mortgage and other non-operating debts of Landlord, costs
of marketing the Project for lease, and specific costs for special items or
services billed to and paid by specific tenants. Operating Expenses shall,
however, include the amortization of capital improvements which are primarily
for the purpose of reducing Operating Expenses or which are required by
governmental or quasi-governmental authorities. Operating Expenses shall be
determined on an accrual basis in accordance with generally accepted accounting
principles consistently applied. The "Estimated Operating Expense" shall equal
the Landlord's estimate of Operating Expenses for the applicable calendar year.
Landlord's statement of the Estimated Operating Expense shall control for the
year specified in such statement and for each succeeding year during the Term
until Landlord provides a new statement of the Estimated Operating Expense. The
"Actual Operating Expense" shall equal the operating expenses actually incurred
for the applicable calendar year. Notwithstanding any provision contained herein
to the contrary, if less than 95% of the total square feet of rentable area in
Three Bridgepoint or One Bridgepoint, as the case may be, is occupied by tenants
or Landlord is not supplying services to 95% of the total square feet of
rentable area of the applicable Building at any time during any calendar year,
Operating Expenses for such calendar year shall be determined to be an amount
equal to the like expense which would normally be expected to be incurred had
such occupancy been 95% of the Building's total square feet of rentable area and
had Landlord been supplying services to 95% of the Building's total square feet
of rentable area throughout such calendar year.
Upon not less than two (2) days' prior written notice from Tenant to
Landlord, Landlord agrees to provide to Tenant reasonable access to supporting
information for Landlord's computation of Operating Expenses. Access to such
supporting information shall be provided to Tenant on a timely basis during
normal business hours at Landlord's management office in the Building or at such
other location as Landlord regularly maintains such supporting information. At
Tenant's sole cost and expense, except as otherwise provided in Section 3.03, at
Tenant's option, Tenant or any other person or entity retained by Tenant shall
be entitled to audit such supporting information relating to Operating Expenses.
Tenant shall provide Landlord with a copy of the signed audit within five (5)
days after Tenant's receipt thereof. If Tenant's audit of the supporting
information relating to Operating Expenses determines that Landlord's statement
delivered to Tenant pursuant to Section 3.02 hereof with regard to Actual
Operating Expense incurred during the prior year overstates such Operating
Expenses by more than ten percent (10%) of the total Actual Operating Expenses,
unless Landlord disagrees with the results of such audit
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and performs Landlord' own audit which determines that Tenant's audit is
incorrect, Landlord shall reimburse Tenant for all reasonable costs and expenses
reasonably incurred by Tenant in performing such audit.
3.04 ELECTRICITY. Tenant acknowledges and agrees that the Premises will be
separately metered for electricity, and Tenant shall be solely responsible for
the payment of Tenant's electricity bills. Electric charges for common areas
shall be included in Operating Expenses.
3.05 TENANT IMPROVEMENTS. Prior to the applicable Commencement Date,
Landlord shall, on the terms and conditions set forth in Exhibit "D" construct
the improvements desired by Tenant to complete the Premises for Tenant's
occupancy ("Tenant Improvements").
3.06 COMPLETION OF TENANT IMPROVEMENTS. Subject to any Tenant Delay,
Landlord agrees that the Tenant Improvements for Three Bridgepoint should be
completed by January 31, 1997. Landlord acknowledges that Tenant plans to
sublease the space the Tenant currently occupies. To the extent that Tenant's
sublessee incurs any holdover rent, penalties and costs at its current lease
space as a result of it being unable to occupy Tenant's current leased premises
because Tenant is unable to occupy the Three Bridgepoint Premises by January 31,
1997, then, as long as there has been no Tenant Delay, Landlord will pay to
Tenant the amount of Tenant's sublessee's actual holdover rent, penalties and
costs incurred by Tenant, not to exceed $1,000.00 per day for each day the Three
Bridgepoint Premises are not substantially completed after January 31, 1997, not
to exceed $60,000.00.
ARTICLE 4
4.01 USE. Tenant shall use and occupy the Premises only for general office
purposes and software consulting or contracting business, and for no other
purposes. Tenant shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein that will in any way increase the
existing rate of or affect any fire or other insurance upon the Project or any
of its contents, or cause cancellation of any insurance policy covering the
Project or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises that will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Project or injure or annoy them or tend to lower the first class character of
the Bridgepoint Buildings or create unreasonable elevator loads or otherwise
interfere with standard Bridgepoint Buildings operations. Tenant shall not
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer to be committed any waste in or upon the Premises. Tenant shall not use
the Premises or permit anything to be done in or about the Premises that will in
any way conflict with any private restrictive covenant, law, statute, ordinance
or any rule or regulation of
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Landlord or any governmental or quasi-governmental authority now in force or
that may hereafter be enacted or promulgated.
Landlord agrees that as long as this Lease is in existence, or any renewals
thereof, Landlord will not enter into any new leases (other than renewal leases
with existing tenants) with new tenants for Three Bridgepoint that engage in the
computer software consulting or software contracting business without the prior
written approval of Tenant, which approval shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, Landlord has currently entered into
leases with National Instruments, Advance Micro Devices Sales Office as tenants
of One Bridgepoint, and Motorola, Inc. as a tenant in Three Bridgepoint and Four
Bridgepoint, all of whom are involved in computer related businesses.
ARTICLE 5
5.01 LANDLORD'S SERVICES. Provided Tenant is not in default hereunder,
Landlord shall, at Landlord's expense, except as provided to the contrary in
this Lease, furnish to Tenant the following services:
(a) Subject to curtailment as required by governmental laws, rules or
regulations, air conditioning and central heat, in season, at such
temperatures and in such amounts as are deemed by Landlord to be standard
for first class office buildings in Austin, Texas, during normal
Bridgepoint Buildings hours, which are presently scheduled to be 7:00 a.m.
through 6:00 p.m. on weekdays and 8:00 a.m. through 12:00 p.m. on
Saturdays, exclusive of normal business holidays. Normal business holidays
for purposes of this Lease shall include, without limitation, New Year's
Day, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, the Friday following Thanksgiving Day and
Christmas Day. If in the case of any holiday described herein a different
day shall be observed than the respective day described, then the day which
constitutes the day observed by national banks in Austin, Texas, on account
of such holiday shall constitute the holiday under this Lease.
(b) Janitorial services in the Premises and public portions of the
Bridgepoint Buildings for all days except Saturdays, Sundays, and normal
business holidays.
(c) Water at those points of supply provided for drinking, toilet,
and lavatory purposes.
(d) Normal and customary routine maintenance for all public,
structural, and exterior portions of the Project according to Landlord's
standards.
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(e) Electric lighting service for all public portions of the Project
in the manner and to the extent deemed by Landlord to be in keeping with
the standards of a first class office building in Austin, Texas.
(f) Reasonably adequate, non-exclusive automatic passenger elevator
service at all times for access to and egress from the Premises. Freight
elevator service, in common with other tenants, shall be provided during
reasonable business hours as prescribed by Landlord, exclusive of
Saturdays, Sundays, and normal business holidays.
(g) Electric energy that Tenant shall require for normal office
equipment such as typewriters, dictation machines, calculators, other
machines of a similar low electrical consumption, and Building Standard
(defined in Exhibit "D" attached hereto) lighting in the Premises. Without
Landlord's prior written consent, Tenant shall not be entitled to employ
lighting on the Premises that consumes electrical current in excess of
Building Standard lighting nor utilize any office equipment that consumes
more than 0.5 kilowatts per hour at rated capacity or requires a voltage
other than 120 volts single phase.
(h) Bridgepoint Buildings security to encourage compliance with the
Rules and Regulations (defined in Section 15.09 hereof) and to limit after-
hour access to the Building; provided, however, Landlord shall have no
responsibility to prevent, and shall not be liable to Tenant for, and shall
be indemnified by Tenant against, liability or loss to Tenant, its agents,
employees and visitors arising out of losses due to theft, burglary, or
damage or injury to persons or property caused by persons having or gaining
access to the Bridgepoint Buildings or the Premises, whether or not caused
by Landlord's negligence, and Tenant hereby releases Landlord from all
liability relating thereto; provided, however, Tenant shall not indemnify
Landlord from Landlord's gross negligence or wilful misconduct.
(i) Window washing services for the outside portions of the
Bridgepoint Buildings at least one (1) time per calendar year.
5.02 ADDITIONAL SERVICE COST. Tenant shall pay Landlord, upon demand, such
additional amounts as are necessary to recover additional costs incurred by
Landlord in performing or providing janitorial, maintenance, security, or other
services or requirements of Tenant (and in paying additional taxes) as to any
non-Building Standard installations in the Premises. Tenant shall pay Landlord,
upon demand, monthly as billed charges for providing off-hour and nonstandard
air conditioning, heating and electricity. Tenant shall be entitled to after
hours heating, air conditioning and electricity subject to Tenant providing
"reasonable notice" of such requirements. For purposes of this Section 5.02,
"reasonable notice" shall mean two hours advance notice. Notwithstanding the
foregoing, Tenant shall be obligated to pay Landlord any
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and all of Landlord's costs related to providing after hours heating, air
conditioning or electricity, including a factor reasonably determined by
Landlord attributable to the depreciation of Landlord's heating and air
conditioning equipment. Landlord estimates that Landlord's current costs for
such after hours utility services are approximately $25.00 per hour per zone.
For purposes of this Lease, Landlord and Tenant acknowledge and agree that a
"zone" shall constitute one floor in the Building, or in the case the Premises
do not cover an entire floor, the "zone" for such partial floor shall be the
portion of the Premises located on such partial floor. Landlord shall make
reasonable efforts to accommodate Tenant's extra electrical needs; provided,
however, Tenant's excessive use or consumption of heating, air conditioning
and/or electrical services in violation of Section 5.01 hereof, without
Landlord's prior written consent, which consent shall not be unreasonably
withheld, shall constitute a default under this Lease.
5.03 SERVICE INTERRUPTION. To the extent any of the services described
above require electricity, gas, water or other services supplied by public
utilities, Landlord's covenants hereunder shall impose on Landlord only the
obligation to use its good faith efforts to cause the applicable public
utilities to furnish the same. Any failure or defect in the services described
above shall not be construed as an eviction of Tenant nor entitle Tenant to any
reduction, abatement, offset, or refund of Rent or to any damages from Landlord.
Landlord shall not be in breach or default under this Lease, provided Landlord
uses reasonable diligence during normal business hours to restore any such
failure or defect after Landlord receives written notice thereof.
ARTICLE 6
6.01 ALTERATIONS. Tenant shall not make or allow to be made any
alterations, installations, additions or improvements in or to the Premises, or
place safes, vaults or other heavy furniture or equipment within the Premises,
without Landlord's prior written consent. All alterations, installations,
additions or improvements, other than movable furniture and movable trade
fixtures, made by Tenant to the Premises shall remain upon and be surrendered
with the Premises and become the property of Landlord at the expiration or
termination of this Lease or the termination of Tenant's right to possession of
the Premises; provided, however, that Landlord may require Tenant, at Tenant's
cost, to remove any or all of such items that are not Building Standard upon the
expiration or termination of this Lease or the termination of Tenant's right to
possession of the Premises. Tenant, at its sole cost and prior to the expiration
or termination of this Lease, shall remove all of Tenant's property from the
Premises and make, or reimburse Landlord for the cost of, all repairs to the
Premises and/or Project for damage resulting from such removal. All work shall
be completed promptly and in a good and workmanlike manner and shall be
performed in such a manner that no mechanic's, materialman's or other similar
liens shall attach to Tenant's leasehold estate, and in no event shall Tenant
permit, or be authorized to permit, any such liens or other claims to be
asserted against Landlord or Landlord's rights, estate and interests with
respect to the Project or this Lease. For any improvements, additions, or
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alterations estimated to cost in excess of $10,000.00, Landlord may require, at
Tenant's sole cost and expense, a lien and completion bond in an amount equal to
the estimated cost of any improvements, additions or alterations in the
Premises.
6.02 TENANT REPAIRS. By taking possession of the Premises, Tenant shall be
deemed to have accepted the Premises as being in good, sanitary order and
condition. Tenant shall, at Tenant's sole cost and expense, keep the Premises in
good condition, damage thereto from causes beyond the reasonable control of
Tenant and ordinary wear and tear damage excepted. Any injury or damage to the
Premises or Project, or the appurtenances or fixtures thereof, caused by or
resulting from the act, omission or neglect of Tenant or Tenant's employees,
servants, agents, invitees, assignees, or subtenants shall be repaired or
replaced by Tenant, or at Landlord's option by Landlord, at the expense of
Tenant. If Tenant fails to maintain the Premises or fails to repair or replace
any damage to the Premises or Project resulting from the negligence or
intentional act of Tenant, its employees, servants, agents, invitees, assignees
or subtenants, Landlord may, but shall not be obligated to, cause such
maintenance, repair or replacement to be done, as Landlord deems necessary, and
Tenant shall immediately pay to Landlord all costs related thereto plus a charge
for overhead of 15% of such costs.
6.03 LANDLORD REPAIRS. Unless otherwise stipulated herein, Landlord shall
not be required to make any improvements to or repairs of any kind or character
to the Premises during the Term, except such repairs to Building Standard
improvements as may be deemed necessary by Landlord for normal maintenance
operations; provided, however, non-Building Standard leasehold improvements
will, at Tenant's written request, be maintained by Landlord at Tenant's
expense, at a cost or charge equal to the costs incurred in such maintenance
plus an additional charge of 10%. Notwithstanding any provisions of this Lease
to the contrary, all repairs, alterations or additions to the base Bridgepoint
Buildings or its systems (as opposed to those involving only Tenant's leasehold
improvements), and all repairs, alterations or additions to Tenant's non-
Building Standard leasehold improvements which affect the Building's structural
components or major mechanical, electrical or plumbing systems in the Building,
to be made by or for or on behalf of Tenant, shall be made by Landlord or its
contractor only, and, except as otherwise provided in Exhibit "D" attached
hereto, shall be paid for by Tenant in an amount equal to Landlord's costs plus
an additional charge of 10%.
ARTICLE 7
7.01 LANDLORD INSURANCE. Landlord shall insure the Project and shall
maintain liability and other insurance in such amounts as may be required by
Landlord's mortgagee, or in such greater amounts as Landlord, in its sole
discretion, may deem appropriate. The cost of such insurance, including any
deductible paid thereunder by Landlord, shall be an "Operating Expense" as
defined in Section 3.03 hereof. Such insurance shall be for the sole benefit of
Landlord and,
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if required, Landlord's mortgagee. If the annual premiums to be paid by Landlord
exceed the standard rates because of Tenant's operations within or contents of
the Premises or because improvements to the Premises are beyond Building
Standard, Tenant shall promptly pay the excess amount of the premium upon
request by Landlord (and if necessary, Landlord may allocate the insurance costs
of the Bridgepoint Buildings to give effect to this sentence).
7.02 TENANT INSURANCE. Tenant shall, at Tenant's expense, fully insure its
property located in the Premises against fire and other casualty and shall
maintain comprehensive general liability insurance insuring Landlord and Tenant
against any liability arising out of ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto, including contractual liability
insurance (with respect to Section 7.04 hereof), with insurance companies
approved by Landlord and with limits of liability of at least $2,000,000 in each
occurrence for Bodily Injury and Property Damage combined and $2,000,000 general
aggregate for Bodily Injury and Property Damage combined with the endorsement of
comprehensive general liability CG-2504. Tenant shall cause Landlord to be named
as an additional insured under such policies and shall, not less than twenty
(20) days prior to (a) the Three Bridgepoint Commencement Date, and (b) the
expiration of old policies, furnish Landlord with certificates of insurance with
loss payable clauses satisfactory to Landlord. The limit of such insurance shall
not, however, limit the liability of Tenant hereunder. Tenant may carry such
insurance under a blanket policy, provided such insurance has a Landlord's
protective liability endorsement attached thereto. If Tenant fails to procure
and maintain said insurance, Landlord may, but shall not be required to, procure
and maintain same, but at the expense of Tenant. No policy shall be cancelable
or subject to reduction of coverage except after thirty (30) days prior written
notice to Landlord.
7.03 WAIVER OF SUBROGATION. Whenever (a) any loss, cost, damage or expense
resulting from fire, explosion or any other casualty or occurrence is incurred
by either of the parties to this Lease in connection with the Premises or the
Project, and (b) such party is then covered (or is required under this Lease to
be covered) in whole or in part by insurance with respect to such loss, cost,
damage or expense, then the party so insured hereby releases the other party
from any liability it may have on account of such loss, cost, damage or expense
to the extent of any amount recovered by reason of such insurance, and waives
any right of subrogation which might otherwise exist on account thereof,
provided that such release of liability and waiver of the right to subrogation
shall not be operative in any case where the effect thereof is to invalidate
such insurance coverage or increase the cost thereof (provided, that in the case
of increased cost, the other party shall have the right, within thirty (30) days
following written notice, to pay such increased costs, thereupon keeping such
release and waiver in full force and effect). Landlord and Tenant shall use
their respective best efforts to obtain such a release and waiver of subrogation
from their respective insurance carriers and shall obtain any special
endorsements, if required by their insurer, to evidence compliance with the
aforementioned waiver.
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7.04 INDEMNITY. Tenant hereby indemnifies and holds Landlord harmless from
and against any and all claims arising from Tenant's use of the Premises for the
conduct of its business or from any activity, work or other thing done,
permitted or suffered by Tenant on or about the Project and shall further
indemnify and hold harmless Landlord from and against any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed under the terms of this Lease, or arising from any act or
omission of, or due to the negligence of, the Tenant, or any officer, agent,
employee, guest or invitee of Tenant, and from and against all costs, attorney's
fees, expenses and liabilities incurred in or related to any such claim or any
action or proceeding brought thereon. Tenant as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons including death in, upon or about the Premises, from any
cause, including without limitation, Landlord's negligence, but except for such
damage or injury caused solely by Landlord's negligence or by Landlord's gross
negligence or wilful misconduct, and Tenant hereby waives all claims in respect
thereof against Landlord. The liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease shall be limited to the interest of
Landlord in the Building, it being intended that Landlord, its officers,
directors and employees shall not be personally liable for any judgment or
deficiency. Notwithstanding the foregoing, Landlord shall be personally liable
to Tenant for damages that Tenant sustains as the result of the gross negligence
or willful misconduct of Landlord, its employees, agents or representatives.
ARTICLE 8
8.01 CASUALTY. Tenant shall give Landlord written notice of any fire or
other casualty occurring within the Premises on the next business day following
such occurrence or Tenant's knowledge thereof, whichever is later. If the
Premises or Project (provided such damage to the Project would constitute an
interference with Tenant's quiet enjoyment of the Premises), or any portion of
either, shall be damaged by fire or other casualty covered by the insurance
carried by Landlord hereunder and the cost of repairing such damage shall not be
greater than 10% of the then full replacement cost thereof, then, subject to the
following provisions of this Article, Landlord shall repair the Premises and/or
Project. If the Premises or Project shall be damaged (a) by fire or other
casualty not covered by insurance carried by Landlord hereunder, (b) by fire or
other casualty covered by insurance carried by Landlord hereunder and Landlord's
mortgagee requires that such insurance proceeds be used to retire the mortgage
debt, or (c) to an extent greater than 10% of the then full replacement cost of
any Building in which the Premises are located, then Landlord shall have the
option (i) to repair or reconstruct the damaged Premises or Project to
substantially the same condition as immediately prior to such fire or other
casualty, or (ii) to terminate this Lease by so notifying Tenant within ninety
(90) days after the date of such fire or other casualty, such termination to be
effective as of the date of such fire or other casualty. The Rent required to be
paid hereunder shall be abated in proportion to the portion of the Premises, if
any, which is rendered untenantable by fire or other casualty hereunder until
repairs
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of the Premises are completed, or if the Premises are not repaired, until the
Expiration Date hereunder. Other than such rental abatement, no damages,
compensation or claims shall be payable by Landlord for loss of the use of the
whole or any part of the Premises, Tenant's personal property, or any
inconvenience, loss of business, or annoyance arising from any such repair and
reconstruction. If the damage results from the fault or negligence of Tenant,
its agents, employees, licensees or invitees, Tenant shall not be entitled to
any abatement or reduction of any Rent or other sums due hereunder, and such
damage shall be repaired by Tenant, or at Landlord's option by Landlord, at
Tenant's expense. If this Lease is terminated as provided in (c)(ii) above, all
Rent shall be apportioned and paid up to the date of such termination. Landlord
shall not be required to repair or replace any furniture, furnishings, or other
personal property that Tenant may be entitled to remove from the Premises or any
property constructed and installed by or for Tenant pursuant to Section 6.01
hereof or any installations in excess of Building Standard.
8.02 END OF TERM CASUALTY. Notwithstanding anything to the contrary in this
Article, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises or the Project when the damage resulting
from any casualty covered under this Article occurs during the last twelve (12)
months of the Term or any extension thereof.
ARTICLE 9
9.01 CONDEMNATION. If more than 20% of the Premises should be taken for any
public or quasi-public use, by right of eminent domain or otherwise, or should
be sold in lieu of condemnation, then either party hereof shall have the right,
at its option, to terminate this Lease as of the date when physical possession
of the Premises is taken by the condemning authority. If 20% or less of the
Premises is so taken or sold or if this Lease is not terminated upon any taking
or sale of greater than 20% of the Premises, the Rent payable hereunder shall be
abated in proportion to the portion of the Premises which is rendered
untenantable by such condemnation, and Landlord shall, to the extent Landlord
deems feasible and if permitted by Landlord's mortgagee, ground lessor or other
secured party, restore the Premises to substantially its former condition, but
Landlord shall not in any event be required to spend for such work an amount in
excess of the amount received by Landlord as compensation for such taking. If
any part of the Project other than the Premises may be so taken or sold,
Landlord shall have the right at its option to terminate this Lease as of the
date when physical possession of such part of the Project is taken by the
condemning authority. All amounts awarded upon taking of any part or all of the
Project or the Premises shall belong to Landlord and Tenant shall not be
entitled to, and expressly assigns all claims, rights and interests to, any such
compensation to Landlord.
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ARTICLE 10
10.01 ENTRY. Landlord, its agents, employees and representatives, shall
have the right to enter the Premises at any time upon "reasonable notice" to
Tenant under the circumstances (which notice may be oral and not in compliance
with Section 15.08 hereof, but no notice shall be required in the case of
routine maintenance or an emergency) to show the Premises to prospective tenants
or purchasers or for any purpose that Landlord may reasonably deem necessary for
the operation and maintenance of the Project. For purposes of this Section
10.01, "reasonable notice" shall mean two hours advance notice. In addition,
except for routine maintenance or an emergency, Landlord agrees that
representatives of Landlord shall be accompanied by a Tenant staff member.
Tenant hereby waives any claim for damages or for any injury or inconvenience to
or interference with Tenant's business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key with which
to unlock all of the doors in, upon and about the Premises, excluding Tenant's
vaults, safes, desks, filing cabinets and files. Landlord shall have the right
to use any and all means which Landlord may deem proper to open the doors in,
upon and about the Premises in an emergency in order to obtain entry to the
Premises without liability to Tenant, except for any failure to exercise due
care for Tenant's property. Landlord agrees that Tenant and its officers,
directors, and employees shall have 24 hour access to the Premises.
ARTICLE 11
11.01 SUBORDINATION. This Lease is and shall be subject and subordinate
to any and all ground or similar leases affecting the Project, and to all
mortgages, deeds of trust, and security agreements that may now or hereafter
encumber or affect the Project or any interest of Landlord therein and/or the
contents of the Building, and to any advances made on the security thereof and
to any and all increases, renewals, modifications, consolidations, replacements
and extensions of any such leases, mortgages, deeds of trust and/or security
agreements. This clause shall be self-operative and no further instrument of
subordination need be required by any owner or holder of such ground lease,
mortgage, deed of trust or security agreement. Notwithstanding the foregoing,
Landlord represents to Tenant that at the time of the execution of this Lease,
the Project is not subject to a mortgage or deed of trust. Tenant agrees to
execute and return any estoppel certificate, consent or agreement reasonably
requested by any such lessor, mortgagee, trustee or secured party in connection
with this Section within a reasonable period of time, not to exceed fifteen (15)
days after receipt of same. In the event Tenant fails to respond within such
period, Tenant shall be in default under this Lease. Tenant shall furnish any
mortgagee of Landlord secured by a lien on the Project, any lessor to Landlord
under a ground lease of the Project, or any secured party under a security
agreement encumbering the interest of Landlord,
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with written notice of any default or breach by Landlord at least sixty (60)
days prior to the exercise by Tenant of any rights and/or remedies of Tenant
hereunder arising out of such default or breach.
11.02 ATTORNMENT. If any ground or similar such lease, mortgage, deed of
trust or security agreement is enforced by the ground lessor, the mortgagee, the
trustee, or the secured party, Tenant shall, upon request, attorn to the lessor
under such lease or the mortgagee or purchaser at such foreclosure sale, or any
person or party succeeding to the interest of Landlord as a result of such
enforcement, as the case may be, and execute instrument(s) confirming such
attornment; provided however, that if this Lease was approved and accepted in
writing by such lessor, mortgagee, trustee or secured party, Tenant's attornment
shall be conditioned upon the agreement by such successor to Landlord's interest
not to disturb Tenant's possession hereunder during the Term so long as Tenant
performs its obligations under this Lease. In the event of such enforcement and
upon Tenant's attornment as aforesaid, Tenant will automatically become the
tenant of the successor to Landlord's interest without change in the terms or
provisions of this Lease; provided, however, that such successor to Landlord's
interest shall not be bound by (a) any payment of Rent for more than one month
in advance (except prepayments for security deposits, if any), (b) any
amendments or modifications of this Lease made without the prior written consent
of such lessor or mortgagee, or (c) any credits, offsets, defenses or claims
which Tenant may have against Landlord.
11.03 QUIET ENJOYMENT. Tenant, on paying the Rent and keeping and
performing the conditions and covenants herein contained, shall and may
peaceably and quietly enjoy the Premises for the Term, subject to the aforesaid
underlying leases, mortgages, deeds of trust and security agreements, all
applicable laws and other governmental and legal requirements, applicable
insurance requirements and regulations, and the provisions of this Lease. It is
understood and agreed that this covenant and any and all other covenants of
Landlord contained in this Lease shall be binding upon Landlord and its
successors only with respect to breaches occurring during its and their
respective ownership of the Landlord's interest hereunder.
ARTICLE 12
12.01 ASSIGNMENT AND SUBLETTING. Tenant shall not, voluntarily, by
operation of law, or otherwise, assign, transfer, mortgage, pledge, or encumber
this Lease or sublease the Premises or any part thereof, or suffer any person
other than Tenant, its employees, agents, servants and invitees to occupy or use
the Premises or any portion thereof, without the express prior written consent
of Landlord. Any attempt to do any of the foregoing without such written consent
shall be null and void and of no effect, and shall further constitute a material
default under this Lease. If Tenant so requests Landlord's consent, said request
shall be in writing specifying the identity of the proposed transferee, the
duration of said desired sublease or assignment, the
15
date same is to occur, the exact location of the space affected thereby and the
proposed rentals on a square foot basis chargeable thereunder, and shall be
submitted to Landlord at least thirty (30) days in advance of the date on which
Tenant desires to make such assignment or sublease or allow such occupancy or
use. Upon such request Landlord may (a) grant such consent subject to Landlord's
approval of the assignee, transferee, subtenant, or mortgagee, or (b) deny such
consent. If Landlord does not give such consent in writing within fifteen (15)
days of the date such consent is requested, then Landlord's consent shall be
deemed to have been denied. In no event may Tenant assign this Lease or sublease
the Premises or any portion thereof to any party whose operations in the Project
would not be in keeping with, or would detract from, the operations of other
tenants in the Project.
Landlord's consent shall not be unreasonably withheld to any proposed
assignment or subletting by Tenant; provided, however, Landlord shall not be
required to give its consent to a sublease or assignment that would result in a
breach by Landlord of any of its lease obligations to other tenants of the
Project. In no event may Tenant assign this Lease or sublease the Premises or
any portion thereof to any party whose operations in the Project would not be in
keeping with, or would detract from, the operations of other tenants in the
Project.
In any situation in which Landlord consents to an assignment or sublease
hereunder, Tenant shall promptly deliver to Landlord a fully executed copy of
the final sublease agreement or assignment instrument and all ancillary
agreements relating thereto. No assignment shall be effective unless the
assignee has agreed within the assignment instrument to assume the obligations
of Tenant hereunder and to be personally bound by all of the covenants, terms
and conditions hereof on the part of Tenant to be performed or observed
hereunder.
Notwithstanding the foregoing, Tenant shall have the right to assign or
sublease the Premises or any part thereof to any subsidiary or affiliate of
Tenant without Landlord's consent; provided, however, in the event of any such
assignment or sublease, Tenant must give Landlord written notice within thirty
(30) day of any such assignment or sublease of the name of the subsidiary or
affiliate to which all or a portion of the Premises has been assigned or
subleased, and the portion of the Premises so assigned or subleased.
12.02 CONTINUED LIABILITY. Tenant shall, despite any permitted assignment
or sublease, remain directly and primarily liable for the performance of all of
the covenants, duties, and obligations of Tenant hereunder, and Landlord shall
be permitted to enforce the provisions of this Lease against Tenant or any
assignee or sublessee (including a subsidiary or affiliate assignee or
sublessee) without demand upon or proceeding in any way against any other
person.
12.03 CONSENT. Consent by Landlord to a particular assignment or sublease
shall not be deemed a consent to any other or subsequent transaction. If this
Lease is assigned or if the
16
Premises are subleased without the permission of Landlord, then Landlord may
nevertheless collect Rent from the assignee or sublessee and apply the net
amount collected to the Rent payable hereunder, but no such transaction or
collection of Rent or application thereof by Landlord shall be deemed a waiver
of any provision hereof or a release of Tenant from the performance of the
obligations of the Tenant hereunder.
12.04 PROCEEDS. All cash or other proceeds of any assignment, sale or
sublease of Tenant's interest in this Lease, whether consented to by Landlord or
not, shall be paid to Landlord notwithstanding the fact that such proceeds
exceed the Rent called for hereunder, and Tenant hereby assigns all rights it
might have or ever acquire in any such proceeds to Landlord.
ARTICLE 13
13.01 DEFAULT. Each of the following shall constitute a "Default" by
Tenant:
(a) The failure of Tenant to pay the Rent or any part thereof when
due and the continuation of such failure for five (5) days after Tenant is
notified thereof; provided, however, that if Tenant fails to make any
payment required by this Lease when due two (2) or more times in any Lease
Year, then notwithstanding that such defaults have been cured by Tenant,
any further similar failure shall be deemed a Default without notice or
opportunity to cure;
(b) Tenant shall become insolvent or unable to pay its debts as they
become due, or Tenant notifies Landlord that it anticipates either
condition;
(c) Tenant defaults in the terms of its working capital credit
facility at Texas Commerce Bank-Austin (the "TCB Credit Facility"), or any
other credit facility which represents more than one-half of Tenant's bank
indebtedness. Tenant agrees to give Landlord written notice of any actual
or asserted default in any such credit facility, or any event which, with
the passage of time, will constitute a default in any such credit facility.
(d) Tenant takes any action to, or notifies Landlord that Tenant
intends to, file a petition under any section or chapter of the United
States Bankruptcy Code, as amended from time to time, or under any similar
law or statute of the United States or any state thereof; or a petition
shall be filed against Tenant under any such statute or Tenant notifies
Landlord that it knows such a petition will be filed; or the appointment of
a receiver or trustee to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this
17
Lease; unless the application of this subsection 13.01(c) shall contravene
any applicable law;
(e) Tenant shall fail to fulfill or perform, in whole or in part, any
of its covenants or obligations under this Lease (other than the payment of
Rent), including, but not limited to, the specific covenants set forth in
Section 14.03 of this Lease, and such failure or nonperformance shall
continue for a period of twenty (20) days after written notice thereof has
been given by Landlord to Tenant;
(f) Any material representation or warranty by Tenant in this Lease
or in any certificate, statement or other document furnished pursuant to or
under this Lease, including, without limitation, financial statements,
proves to be or becomes incorrect in any material respect; or
(h) There is a default under the Lease Guaranty, a copy of which is
attached hereto as Exhibit "J".
13.02 RIGHTS UPON DEFAULT. If a Default by Tenant occurs and Tenant fails
to cure such Default within any applicable cure period set forth in Section
13.01, then Landlord, with or without any further notice or demand, may exercise
any and all rights and remedies available to Landlord under this Lease, at law
or in equity, including without limitation, termination of this Lease and
termination of Tenant's right to possession without terminating the Lease. If
Tenant is in Default for nonpayment of Rent and if Tenant fails to pay same in
full within five (5) days after Landlord hand delivers to the Premises written
notice of Landlord's intent to exercise its lockout rights, then Landlord shall
be entitled to change or modify door locks on all entry doors of the Premises
and Tenant shall not be entitled to a key to re-enter the Premises until all
delinquent Rent is paid in full; provided, however, Landlord shall immediately
thereafter post a notice on an entry door to the Premises, stating that Landlord
has exercised such lockout rights. The preceding sentence shall supersede any
conflicting provisions of Section 93.002 of the Texas Property Code or any
successor statute. In the event of a Default by Tenant and Tenant fails to cure
such Default within any applicable cure period set forth in Section 13.01,
Landlord may, without additional notice and without court proceedings, re-enter
and repossess the Premises and remove all persons and property therefrom, and
Tenant hereby agrees to surrender possession of the Premises, waives any claim
arising by reason thereof or by reason of issuance of any distress warrant or
writ of sequestration, and agrees to hold Landlord harmless from any such
claims. If Landlord elects to terminate this Lease, it may treat the default as
an entire breach of this Lease and Tenant shall immediately become liable to
Landlord for damages equal to the total of (a) the cost of recovering,
reletting, including, without limitation, the cost of leasing commissions
attributable to the unexpired portion of the Term of this Lease, and remodeling
the Premises, (b) all unpaid Rent and other amounts earned or due through such
18
termination, including interest thereon at the rate specified in Section
13.04 hereof, plus (c) the present value (discounted at the rate of 8% per
annum) of the balance of the Rent for the remainder of the Term less the
present value (discounted at the same rate) of the fair market rental value
of the Premises for said period and (d) any other sum of money and damages
owed by Tenant to Landlord. If Landlord elects to terminate Tenant's right to
possession of the Premises without terminating this Lease, Landlord may (but
shall not be obligated to) rent the Premises or any part thereof for the
account of Tenant to any person or persons for such rent and for such terms
and conditions as Landlord deems appropriate, and Tenant shall be liable to
Landlord for the amount, if any, by which the Rent for the unexpired balance
of the Term exceeds the net amount, if any, received by Landlord from such
reletting, being the gross amount so received by Landlord less the costs of
repossession, reletting, remodeling, and other expenses incurred by Landlord.
Such sum or sums shall be paid by Tenant in monthly installments on the first
day of each month of the Term. In such event, Landlord agrees to use
reasonable business judgment in its attempts to re-lease the Premises.
However, Landlord shall not be liable for failure to relet the Premises or to
collect the rent due under such reletting, and in no event shall Tenant be
entitled to more than 50% of any excess rents received by Landlord. All
rights and remedies of Landlord shall be cumulative and not exclusive.
13.03 COSTS. If a Default by Tenant occurs, then Tenant shall reimburse
Landlord on demand for all costs reasonably incurred by Landlord in connection
therewith including, but not limited to, reasonable attorney's fees, court
costs, and related costs, plus interest thereon from the date such costs are
paid by Landlord until Tenant reimburses Landlord, at the rate specified in
Section 13.04 hereof.
13.04 INTEREST. All late payments of Rent, costs or other amounts due from
Tenant under this Lease shall bear interest from the date due until paid at the
rate of 18% per annum; provided, however, in no event shall the rate of interest
hereunder exceed the maximum non-usurious rate of interest (the "Maximum Rate")
permitted by the applicable laws of the State of Texas or the United States of
America, whichever shall permit the higher non-usurious rate, and as to which
Tenant could not successfully assert a claim or defense of usury, and to the
extent that the Maximum Rate is determined by reference to the laws of the State
of Texas, the Maximum Rate shall be the indicated rate ceiling (as defined and
described in Texas Revised Civil Statutes, Article 5069-1.04, as amended) at the
applicable time in effect.
13.05 LANDLORD'S LIEN. Landlord reserves (and is hereby granted) a first
and superior lien and security interest (which shall be in addition to and not
in lieu of the statutory landlord's lien) on all fixtures, equipment, and
tangible personal property (excluding however, intangibles and Tenants
computers) now or hereafter placed by Tenant in or on the Premises to secure all
sums due by Tenant hereunder, which lien and security interest may be enforced
by Landlord in any manner provided by law, including, without limitation, under
and in accordance
19
with the Texas Uniform Commercial Code. The provisions of this Section shall
constitute a security agreement under the Texas Uniform Commercial Code and, at
Landlord's request, Tenant shall execute and file, where appropriate, all
documents required to perfect the security interest herein granted in accordance
with the Texas Uniform Commercial Code. Landlord may at its election at any time
file a copy of this Lease as a financing statement. Unless otherwise provided by
law and for the purpose of exercising any right pursuant to this Section,
Landlord and Tenant agree that reasonable notice shall be met if such notice is
given by five days' written notice, certified mail, return receipt requested, to
Landlord or Tenant at the address specified herein. Notwithstanding anything in
this Lease to the contrary, the lien granted to Landlord herein and the
statutory landlord's lien granted to Landlord pursuant to the Texas Property
Code shall be subject and subordinate to any and all purchase money security
interests in and to any fixtures, equipment and personal property of Tenant.
Alternatively, at Tenant's option, Tenant shall have the right to deliver to
Landlord a security deposit in the amount of one month's rent due under this
Lease. In the event Tenant delivers to Landlord such security deposit, Landlord
agrees to waive all of Landlord's rights to a landlord's lien as set forth in
this Section 13.05.
13.06 NON-WAIVER. The failure of Landlord or Tenant to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease shall not prevent a subsequent act or omission that
would have originally constituted a violation of this Lease from having all the
force and effect of an original violation. The receipt by Landlord of Rent with
or without knowledge of the breach of any provision of this Lease shall not be
deemed a waiver of such breach, shall not reinstate this Lease or Tenant's right
of possession if either or both have been terminated, and shall not otherwise
affect any notice, election, action, or suit by Landlord. No provision of this
Lease shall be deemed to have been waived unless such waiver is in writing
signed by the waiving party. No act or thing done by Landlord during the Term
shall be deemed an acceptance of a surrender of the Premises and no agreement to
accept such surrender shall be valid, unless express and in writing signed by
Landlord.
ARTICLE 14
14.01 FINANCIAL STATEMENTS. Within sixty (60) days after the end of each
fiscal year of Tenant, or as may be requested from time to time by Landlord,
Tenant shall deliver to Landlord current financial statements, including,
without limitation, balance sheets, profit and loss statements, reconciliations
of capital and surplus, changes in financial condition, schedules of sources and
applications of funds, and operating statements with respect to the business of
Tenant, all of which shall, at the request of Landlord, be certified by an
independent certified public accountant.
14.02 CORPORATE RESOLUTIONS. If Tenant is a corporation, Tenant shall,
simultaneously with the execution and delivery of this Lease, deliver a fully
executed Certificate
20
of the Secretary with attached Resolutions of the Corporate Board substantially
in the form attached hereto as Exhibit "H".
14.03 TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS: To induce
Landlord to enter into the Lease with the Tenant, Tenant represents, warrants
and agrees that:
(a) Tenant's Financial Condition. As of the date hereof, and after
giving effect to this Lease and the contingent obligations evidenced
hereby, Tenant is, and will be, solvent, and has and will have assets
which, fairly valued, exceed its obligations, liabilities and debts, and
has and will have property and assets in the State of Texas sufficient to
satisfy and repay its obligations and liabilities.
(b) Tenant's Current Debt. Tenant is free of debt other than trade
payables and Tenant's contemplated $5,000,000.00 credit facility with Texas
Commerce Bank (the "TCB Credit Facility").
(c) Financial Covenants. In the event Tenant has not obtained the TCB
Credit Facility, Tenant agrees to comply with the following financial
covenants:
(i) Tenant shall maintain a ratio of total debt divided by
EBITDA (earnings before interest, taxes, depreciation and
amortization) of 2.00x or less (1.75x or less effective after March
31, 1997) tested quarterly; and
(ii) Tenant will not have total indebtedness which exceeds ten
percent (10%) of shareholders' equity;
(iii) Tenant will not have liens against any of its assets,
except with respect to the Lease and in connection with other allowed
indebtedness; and
(iv) Tenant's borrowings will not exceed 85% of Tenant's adjusted
accounts receivable.
Tenant agrees to give Landlord written notice of any breach of any of the
foregoing financial covenants, or any event which, with the passage of
time, will constitute a default in any such financial covenants.
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(d) Negative Covenants. Tenant hereby agrees that as long as this
Lease is in effect, Tenant will not:
(i) dispose of or transfer any of its assets, other than in the
ordinary course of business, to or for the benefit of Tenant's
Affiliated Parties (as that term is defined herein), or
(ii) except as otherwise specifically provided herein, declare or
make any dividend or distribution, other than in the ordinary course
of business, or take any other action that would reduce the
shareholders equity of Tenant below $10,000,000.00, or
(iii) enter into any transaction with or for the direct or
indirect benefit of any of Tenant's Affiliated Parties, except for (a)
an arms length transaction in the ordinary course of business, or (b)
so long as Tenant is treated for federal income tax purposes as an S
Corporation, distributions to Tenant's shareholders of an amount equal
to the shareholder's federal, state and local income taxes
attributable to the Tenant's income for federal income tax purposes,
or
(iv) allow any of Tenant's Affiliated Parties, to exercise any
rights or powers over Tenant, or as a shareholder of Tenant, or in any
other capacity, whether directly or indirectly, which would approve,
consent to or require Tenant take any of the actions set forth in
subsections (i), (ii) or (iii) of this Section 14.03c.
For purposes of this Section 14.03, the term "Tenant's Affiliated Parties"
shall mean the shareholders and directors of Tenant, any subsidiary or
affiliate of Tenant, the shareholders and directors of Guarantor, and any
subsidiary or affiliate of Guarantor.
ARTICLE 15
15.01 AMENDMENT. Any agreement hereafter made between Landlord and Tenant
shall be ineffective to modify, release, or otherwise affect this Lease, in
whole or in part, unless such agreement is in writing and signed by the parry to
be bound thereby.
15.02 SEVERABILITY. If any term or provision of this Lease shall, to any
extent, be held invalid or unenforceable by a final judgment of a court of
competent jurisdiction, the remainder of this Lease shall not be affected
thereby.
22
15.03 ESTOPPEL LETTERS. Tenant shall promptly upon request from Landlord
execute and acknowledge a certificate containing such information as may be
reasonably requested for the benefit of Landlord, any prospective purchaser or
any current or prospective mortgagee of all or any portion of the Project.
15.04 LANDLORD'S LIABILITY AND AUTHORITY. The liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease shall be
limited to the interest of Landlord in the Project, it being intended that
Landlord, its officers, directors and employees shall not be personally liable
for any judgment or deficiency. Whenever in this Lease there is imposed upon
Landlord the obligation to use its best efforts, reasonable efforts, diligence
or act in good faith, Landlord shall be required to do so only to the extent the
same is economically feasible and otherwise will not impose upon Landlord
extreme financial or other burdens.
15.05 HOLDOVER. If Tenant shall remain in possession of the Premises after
the Expiration Date or earlier termination of this Lease, then Tenant shall be
deemed a tenant-at-will whose tenancy is terminable at any time. In such event,
Tenant shall pay Rent at one hundred twenty five percent (125%) of the daily
rental rate prevailing on the date of such termination or expiration, but
otherwise shall be subject to all of the obligations of Tenant under this Lease.
Additionally, Tenant shall pay to Landlord all damages sustained by Landlord on
account of such holding over by Tenant.
15.06 SURRENDER. Upon the expiration or earlier termination of the Term,
Tenant shall peaceably quit and surrender the Premises in good order and
condition, excepting ordinary wear and tear, but subject to Sections 6.01 and
6.02 hereof. All obligations of Tenant for the period of time prior to the
expiration or earlier termination of the Term shall survive such expiration or
termination.
15.07 PARTIES AND SUCCESSORS. Subject to the limitations and conditions
set forth elsewhere herein, this Lease shall bind and inure to the benefit of
the respective heirs, legal representatives, successors, and permitted assigns
and/or sublessee of the parties hereto. The term "Landlord", as used in this
Lease, so far as the performance of any covenants or obligations on the part of
Landlord under this Lease are concerned, shall mean only the owner of the
Project at the time in question, so that in the event of any transfer of title
to the Project, the party by whom any such transfer is made shall be relieved of
all liability and obligations of the Landlord arising under this Lease from and
after the date of such transfer. Landlord shall have the right to transfer,
sell, assign, mortgage or encumber, in whole or in part, all of its rights and
obligations hereunder and in the Building, the Land, the Project and other
property of Landlord referred to herein.
23
15.08 NOTICE. Except as otherwise provided herein, any statement, notice,
or other communication that Landlord or Tenant may desire or be required to give
to the other shall be deemed sufficiently given or rendered if hand delivered,
or if sent by registered or certified mail, return receipt requested, addressed
at the address(es) first hereinabove given or at such other addresses(es) as the
other party shall designate from time to time by prior written notice, and such
notice shall be effective when the same is received or mailed as herein
provided.
15.09 RULES AND REGULATIONS. Tenant, its servants, employees, agents,
visitors, invitees, and licensees, shall observe faithfully and comply strictly
with the Rules and Regulations set forth in Exhibit "I" hereto, and shall abide
by and conform to such further Rules and Regulations as Landlord may from time
to time reasonably make, amend or adopt, after Tenant receives a copy thereof.
15.10 CAPTIONS. The captions in this Lease are inserted only as a matter
of convenience and for reference and they in no way define, limit, or describe
the scope of this Lease or the intent of any provision hereof.
15.11 NUMBER AND GENDER. All genders used in this Lease shall include the
other genders, the singular shall include the plural, and the plural shall
include the singular, whenever and as often as may be appropriate.
15.12 GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Texas.
15.13 INABILITY TO PERFORM. Notwithstanding Section 15.18 hereof, whenever
a period of time is herein prescribed for the taking of any action by Landlord,
Landlord shall not be liable or responsible for, and there shall be excluded
from the computation of such period of time, any delays due to strikes, riots,
acts of God, shortages of labor or materials, war, governmental laws,
regulations or restrictions, or any other cause whatsoever beyond the control of
Landlord, and such nonperformance or delay in performance by Landlord shall not
constitute a breach or default by Landlord under this Lease nor give rise to any
claim against Landlord for damages or constitute a total or partial eviction,
constructive or otherwise.
15.14 USE OF NAME. Tenant shall not, except to designate Tenant's business
address (and then only in a conventional manner and without emphasis or
display), use the name or ▇▇▇▇ "One Bridgepoint Office Square" for any purpose
whatsoever.
15.15 BROKER. Tenant represents and warrants that Tenant has dealt with,
and only with ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, with CB Commercial, as
broker(s) in connection with this Lease and that, insofar as Tenant knows, no
other broker(s) negotiated this Lease or are
24
entitled to any commission in connection herewith. Tenant shall indemnify and
hold harmless Landlord from and against all claims (and costs of defending
against and investigating such claims) of any other broker(s) or similar parties
claiming under Tenant in connection with this Lease.
15.16 MEMORANDUM OF LEASE. Without the prior written consent of Landlord
(which may be granted or withheld in Landlord's sole discretion), Tenant shall
not record this Lease or any memorandum or other instrument with respect to this
Lease.
15.17 ENTIRE AGREEMENT. This Lease, including all Exhibits attached hereto
(which Exhibits are hereby incorporated herein and shall constitute a portion
hereof), contains the entire agreement between Landlord and Tenant with respect
to the subject matter hereof. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives have made any representations,
warranties, or promises with respect to the Project, the Premises, Landlord's
services, or any other matter or thing except as herein expressly set forth, and
no rights, easements, or licenses are acquired by Tenant by implication or
otherwise except as expressly set forth in this Lease. The taking of possession
of the Premises by Tenant shall be conclusive evidence, as against Tenant, that
Tenant accepts the Premises and the Project, and that same were in good and
satisfactory condition at the time such possession was so taken. Further, the
terms and provisions of this Lease shall not be construed against or in favor of
a party hereto merely because such party is the "Landlord" or the "Tenant"
hereunder or such party or its counsel is the draftsman of this Lease.
15.18 TIME OF ESSENCE. Time is of the essence of this Lease and each and
all of its provisions in which performance is a factor.
15.19 PARKING. Landlord agrees to provide to Tenant, in common with other
tenants in the Bridgepoint Buildings, the privilege to use one (1) unreserved
parking space per 279 rentable square feet contained in the Premises. Such
parking spaces shall be located in the either of the two parking garages located
on ▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, that serve One
Bridgepoint, Two Bridgepoint, Three Bridgepoint and Four Bridgepoint. In
addition, Tenant shall have a right of first refusal to lease sixty (60)
additional parking spaces at a cost of $50.00 per space per month. Tenant shall
comply with all traffic, security, safety and other rules and regulations
promulgated from time to time by Landlord. Tenant shall indemnify and hold
harmless Landlord from and against all claims, losses, liabilities, damages,
costs and expenses (including, but not limited to, attorneys' fees and court
costs) arising or alleged to arise out of Tenant's use of any such parking
spaces, whether or not caused or alleged to be caused by Landlord's negligence.
In the event any parking spaces are or become unavailable at any time or from
time to time throughout the Term, whether due to casualty or any other cause,
this Lease shall continue in full force and effect.
25
15.20 TENANT TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the Term upon all of Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Premises; except such
property which has been paid for by Landlord and is the standard of the
Building. Tenant shall have the right to timely contest any tax assessment.
15.21 ATTORNEY'S FEES. In the event Tenant defaults in the performance of
any of the terms, agreements or conditions contained in this Lease and Landlord
places the enforcement of this Lease, or any part thereof, or the collection of
any rent due or to become due hereunder, or recovery of the possession of the
Premises, in the hands of any attorney who files suit upon the same, the Tenant
shall pay the Landlord's reasonable attorney's fees.
15.22 LANDLORD ALTERATIONS OR MODIFICATIONS. Notwithstanding anything
herein to the contrary, Landlord expressly reserves the right in its sole
discretion to temporarily or permanently change the location of, close, block or
otherwise alter any entrances, corridors, skywalks, tunnels, doorways, or
walkways leading to or providing access to the Bridgepoint Buildings or any part
thereof or otherwise restrict the use of same provided such acts do not
unreasonably impair Tenant's access to the Premises. Landlord shall not incur
any liability whatsoever to Tenant as a consequence thereof and such acts shall
not be deemed to be a breach of any of Landlord's obligations hereunder.
Landlord agrees to exercise good faith in notifying Tenant within a reasonable
time in advance of any alterations, modification or other acts of Landlord under
this Section.
15.23 NAME CHANGE. Landlord and Tenant covenant and agree that Landlord
hereby reserves and shall have the right at any time and from time to time to
change the name of the Bridgepoint Buildings as Landlord may deem advisable, and
Landlord shall not incur any liability whatsoever to Tenant as a consequence
thereof.
15.24 SIGNS. Tenant acknowledges that the name of the Bridgepoint
Buildings shall always be as currently designated, or such other name determined
by Landlord. The Bridgepoint Buildings shall have exterior signs indicating such
respective names. However, Landlord and Tenant shall mutually agree to an
exterior sign on a monument on Three Bridgepoint identifying Tenant to be the
occupant of Three Bridgepoint. Tenant shall not, without Landlord's prior
written consent, which shall not be unreasonably withheld or delayed, place any
exterior sign on the Premises or the Project. The design and location of all
exterior signs shall be approved in writing by Landlord, must comply with the
all applicable sign ordinances of the City of Austin, or any other governmental
authority having jurisdiction over signs, and must comply with all restrictions
of the Hidden Valley Subdivision - Commercial Association. Prior to the Three
Bridgepoint Commencement Date, Tenant shall submit to landlord working drawings
of any and all proposed exterior signs. No exterior sign shall be installed
unless and until Landlord's written
26
approval of such exterior sign and its location has been obtained by Tenant.
Tenant, at Tenant's sole cost and expense, shall maintain all such signs
installed by Tenant in good condition and in proper operating order at all
times. Tenant, at Tenant's sole cost and expense, shall repair or cause to be
repaired all damage done to any party of the Bridgepoint Buildings or the
Premises in connection with the installation, repair or removal of any signs.
Landlord shall have the right to temporarily remove any sign or signs in order
to make any repairs or alterations deemed reasonable and necessary by Landlord.
15.25 COMPLIANCE WITH LAWS. Landlord and Tenant agree to comply with all
applicable laws, ordinances, rules and regulations of any governmental authority
having jurisdiction over the Project, including, but not limited to, the
Americans With Disabilities Act.
15.26 LEASE GUARANTY. The obligations of the Tenant under this Lease are
guaranteed by Tenant's parent company, PENCOM SYSTEMS, INC., pursuant to the
terms of the Lease Guaranty attached hereto as Exhibit "J" attached hereto and
made a part hereof for all purposes.
27
EXECUTED as of this 31st day of October, 1996.
LANDLORD:
INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
Assistant Secretary
TENANT:
PSW TECHNOLOGIES, INC.
By: /s/[Illegible]
--------------------------------
Printed Name:
Title:
EXHIBITS:
EXHIBIT A: THREE BRIDGEPOINT FLOOR-PLANS
EXHIBIT B: ONE BRIDGEPOINT FLOOR-PLANS
EXHIBIT C: LEGAL DESCRIPTION
EXHIBIT D: TENANT IMPROVEMENTS
EXHIBIT E-1: THREE BRIDGEPOINT COMMENCEMENT DATE DECLARATION
EXHIBIT E-2: ONE BRIDGEPOINT COMMENCEMENT DATE DECLARATION
EXHIBIT F RENEWAL OPTION
EXHIBIT G: RIGHT OF FIRST REFUSAL
EXHIBIT H: CERTIFICATE OF THE SECRETARY OF TENANT
EXHIBIT I: RULES AND REGULATIONS
EXHIBIT J: LEASE GUARANTY
EXHIBIT K: CERTIFICATE OF SECRETARY OF GUARANTOR
27
EXHIBIT A
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
THREE BRIDGEPOINT FLOOR-PLANS
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
A-1
EXHIBIT B
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
ONE BRIDGEPOINT FLOOR-PLANS
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
B-1
EXHIBIT C
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
LEGAL DESCRIPTION
ONE BRIDGEPOINT, TWO BRIDGEPOINT, THREE BRIDGEPOINT AND FOUR BRIDGEPOINT: Lot
One (1), HIDDEN VALLEY, PHASE B, a subdivision in ▇▇▇▇▇▇ County, Texas,
according to the map or plat thereof, recorded in Volume 85, Page(s) 44D and 45A
of the Plat Records of ▇▇▇▇▇▇ County, Texas.
FIVE BRIDGEPOINT: Lot Two (2), HIDDEN VALLEY, PHASE B, a subdivision in ▇▇▇▇▇▇
County, Texas, according to the map or plat thereof, recorded in Volume 84,
Page(s) 117D of the Plat Records of ▇▇▇▇▇▇ County, Texas.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
C-1
EXHIBIT D
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
CONSTRUCTION OF BUILDING SHELL, TENANT IMPROVEMENTS
TENANT IMPROVEMENT ALLOWANCE AND ADDITIONAL
TENANT IMPROVEMENT ALLOWANCE
A. Three Bridgepoint Premises
1. Building Shell. Landlord shall, at its sole cost and expense,
construct the Building Shell for Three Bridgepoint. The Three Bridgepoint
Building Shell is specifically described in the Three Bridgepoint Shell Plans.
The Three Bridgepoint Building Shell includes the foundation, structural walls,
exterior facade, exterior glass, roof, mechanical equipment and systems,
electrical systems, plumbing systems, atrium, elevator shafts, cabs and lobbies,
rest rooms, corridors required by code for building access, and certain Three
Bridgepoint Building Shell finishes as set forth below. The Three Bridgepoint
Building Shell and Three Bridgepoint Building Shell finishes shall include the
following:
Floor: Exposed structural concrete slab.
Walls: The interior of exterior walls and partitions
separating tenant spaces from public spaces shall be
taped and floated, but not finished on the Tenant side.
Exposed concrete shear walls will exist where they
occur.
Columns: Columns containing building electrical and plumbing
risers shall have gypsum board furring enclosures, with
taped and floated finish. All other columns shall be
left exposed.
Ceiling: A 1" white 24" x 48" suspended grid installed
throughout the Three Bridgepoint Building.
Lighting: Lighting only in public areas, no lighting in Tenant
spaces.
Exit Corridors: Code required exit corridors.
Riser Sleeves: Sleeves will be provided at most interior columns for
use by Tenant for electrical/plumbing risers, or other
uses as necessary (refer to Three Bridgepoint Building
Shell Plans and Specifications for locations).
D-1
Mechanical: VAV boxes sized to handle normal Tenant loads will be
positioned throughout the Three Bridgepoint Building
Shell. Diffusers will be provided at Three Bridgepoint
Building Shell Perimeter within the Tenant space.
Plumbing use Risers: There will be some water and wastewater risers
installed for tenant throughout the Three Bridgepoint
Building Shell (refer to Shell Plans for locations).
Doors: Doors and door hardware for doors that are visible from
public spaces shall be provided in accordance with the
specifications contained in the Three Bridgepoint Shell
Plans.
Electrical: Circuits will be provide throughout the Three
Bridgepoint Building Shell sized to handle normal
occupant loads with j-boxes. Two electrical rooms will
be provided on each floor.
Communications: One communications closet will be installed on each
floor for telephone service.
Emergency System: The base building emergency system will be provided.
Tenant will be responsible for code compliant life
safety system in Tenant Improvements.
Sprinklers: A code compliant sprinkler system will be installed in
the Three Bridgepoint Building Shell. Modifications to
the base system shall be by Tenant as part of Tenant
Improvements and shall be required to meet all codes.
Structural: The Three Bridgepoint Building Shell is designed for a
nominal live load of 50 psf along the Three Bridgepoint
Building Shell perimeter and a nominal live load of 80
psf in the Three Bridgepoint Building Shell interior.
Elevators: Two passenger and one service elevator will be provided
and finished.
2. Three Bridgepoint Tenant Improvements. Prior to the Three Bridgepoint
Commencement Date, Landlord shall, at its sole cost and expense (except as
limited below), construct the improvements desired by Tenant to complete the
Three Bridgepoint Premises for Tenant's occupancy ("Three Bridgepoint Tenant
Improvements"). The cost of the Three Bridgepoint Tenant Improvements shall be
advanced by Landlord for the benefit of Tenant, to be repaid by Tenant in the
form of Base Rent, but only to the extent that the aggregate cost of
D-2
furnishing the Three Bridgepoint Tenant Improvements does not exceed $20.00 per
rentable square foot contained in Three Bridgepoint Premises (the "Three
Bridgepoint Tenant Improvement Allowance"). The Three Bridgepoint Tenant
Improvement Allowance shall include architectural, engineering and design work
in preparation of the Three Bridgepoint Tenant Improvement plans. Landlord shall
keep accurate books and records related to all costs, expenses or fees related
to the construction of the Three Bridgepoint Tenant Improvements.
3. Additional Tenant Improvement Allowance. As set forth in Section A2
above, the Three Bridgepoint Tenant Improvement Allowance is $20.00 per rentable
square foot for the Three Bridgepoint Premises. All costs incurred in the design
or construction of the Three Bridgepoint Tenant Improvements in excess of such
amounts shall be paid by Tenant. Notwithstanding the foregoing, in the event
Tenant requests additional allowances for moving expenses or additional Three
Bridgepoint Tenant Improvements in excess of the Three Bridgepoint Tenant
Improvement Allowance, Landlord will provide a reasonable increase in the Three
Bridgepoint Tenant Improvement Allowance, not to exceed an additional $10.00 per
rentable square foot in the Three Bridgepoint Premises ("Three Bridgepoint
Additional Tenant Improvement Allowance"); provided, however, the Three
Bridgepoint Additional Tenant Improvement Allowance, plus interest thereon at
the rate of ten percent (10%), shall be added to the Base Rent and amortized
over the Term of the Lease. If Tenant desires to request the Three Bridgepoint
Additional Tenant Improvement Allowance, Tenant shall give Landlord written
notice thereof. Once the total cost of the Three Bridgepoint Additional Tenant
Improvement Allowance is determined, Landlord shall calculate the revised Base
Rent and give Tenant written notice thereof. Upon completion of the Three
Bridgepoint Tenant Improvements and the issuance of a certificate of occupancy
for same by the City of Austin, Landlord shall provide to Tenant an accounting
of all costs, expenses and fees related to the construction of the Three
Bridgepoint Tenant Improvements. In the event the total cost of the Three
Bridgepoint Tenant Improvements exceeds the Three Bridgepoint Tenant Improvement
Allowance and the Three Bridgepoint Additional Tenant Improvement Allowance,
Tenant shall pay to Landlord the excess within thirty (30) days from the date
such accounting is delivered to Tenant. Tenant, at its expense, shall have the
right to examine all of the books and records of Landlord, Landlord's contractor
or the Architect in order to verify the total cost of the Three Bridgepoint
Tenant Improvements.
4. Building Standard. For purposes of this Lease, "Building Standard"
shall mean those improvements and other items as approved by Landlord as
standard for build out purposes on initial space and for expansion and
additional space in the Building. The improvements set forth as Building
Standard are part of the Three Bridgepoint Tenant Improvements and shall be
charged against the Three Bridgepoint Tenant Improvement Allowance. The
following shall apply unless otherwise specified in this Lease:
a. Ceiling System: 2' X 4" suspended lay-in acoustical ceiling.
Ceiling tile is regular edged and is cut to resemble 1' X 1'.
D-3
b. HVAC System: A multi-zoned heating, ventilating, and air
conditioning system is provided with perimeter slot diffusers, light
fixture mounted supply troffers and ceiling mounted supply and return air
grilles. Main duct runs and mixing boxes are provided on each floor for
spin-in connections to supply points. Each zone is individually controlled
by a wall mounted thermostat. Landlord's central plant will provide heat
and conditioned air to each floor in quantities necessary to support
typical office use occupancy during ordinary business hours as set forth in
this Lease.
c. Window Wall: Window blinds in Landlord selected color will be
provided at each exterior window. Interior window blinds will be provided
to Tenant if they are determined by Landlord to be appropriate for the
project.
d. Public Restroom: Complete men's and women's restroom facilities
are provided on each floor. All restrooms meet current handicap
requirements.
e. Interior Partition: One (1) linear foot of latex flat painted
partition with rubber base per twelve (12) square feet of rentable area.
Measurement will be through door openings.
f. Demising Partitions: One-half (1/2) the total length of demising
partitions separating tenants on multi-tenant floors will be added to
interior partition footage.
g. Interior Doors: One (1) solid core wood veneer door with hollow
metal frame and latchset will be provided per three hundred (300) square
feet of rentable area.
h. Entry Doors: Front and rear entry doors will be provided with a
building standard lockset and closer. Two (2) keys will be supplied with
each lockset.
i. Light Fixtures: One (1) 2' X 4' parabolic lay-in fluorescent
light fixture will be provided for each ninety (90) square feet of rentable
area. Light fixtures are capable of receiving saddle type air troffer for
supply air or adjustable slots for return air.
j. Light Switches: One (1) single pole wall switch for lighting
control will be provided for each three hundred twenty five (325) square
feet of rentable area.
k. Duplex Outlets: One (1) 120 volt house circuited duplex wall
outlet will be provided for each one hundred twenty five (125) square feet
of rentable area.
l. Telephone Outlets: One (1) wall mounted telephone pull string
will be provided for each two hundred twenty (220) square feet of rentable
area.
m. Flooring: Building standard flooring will be 32 ounce carpet
glued directly to the concrete slab.
D-4
Standard line VCT can be installed in lieu of carpet at no additional cost.
In order to ensure that the Landlord is able to maintain and monitor the
quality of the building construction, the design intent of the systems,
including warranties, guarantees, etc. and to further protect the unit prices
established for the Building Standard items, it shall be understood that all
Work will be performed by Landlord's contractor unless otherwise provided
herein. The cost of the Work shall include a charge of 5% of the total expenses
and costs otherwise chargeable for the Work, for Landlord's overhead (exclusive
of and in addition to the general contractor's overhead and profit), whether the
Work is performed by Landlord's contractor or others. It shall be understood
that all mechanical, structural, electrical, plumbing and fire sprinkler
engineering required to develop Tenant's improvements through modifications to
Building Standard requested by Tenant and approved by Landlord to accommodate
Tenant's layout will be done by the Landlord's engineers at Tenant's expense.
5. Three Bridgepoint Drawings. Landlord shall provide, in consultation
with Tenant, architectural construction drawings for the Three Bridgepoint
Tenant Improvements (hereinafter called "Three Bridgepoint Drawings"), the cost
of which will be applied against the Three Bridgepoint Tenant Improvement
Allowance. The Three Bridgepoint Drawings shall include partition and door
location drawings, telephone and electric drawings and reflect ceiling drawings,
and include any specifications required by Tenant including, but not limited to,
paint colors, finish details, and non-standard construction work to be performed
within the Three Bridgepoint Premises by Landlord's contractors. Tenant has
delivered to Landlord the completed Drawings for Three Bridgepoint. Landlord
will have mechanical (sprinkler, air conditioning, heating, electric and
plumbing) drawings prepared by Landlord's mechanical engineer or contractor
covering, and limited to, the mechanical elements of the work as shown on the
Three Bridgepoint Drawings as the work relates specifically to Building Standard
installations as set forth in Section A4 above. The cost of the Three
Bridgepoint Drawings relating to the Three Bridgepoint Tenant Improvements shall
be paid by Tenant and shall be part of the Three Bridgepoint Tenant Improvements
Allowance.
6. Turn-Key Project. Landlord and Tenant acknowledge and agree that the
design and construction of the Three Bridgepoint Tenant Improvements shall be a
"turn-key" project, which means that the total cost of the design and
construction of the Three Bridgepoint Tenant Improvements shall be a fixed cost,
approved by Landlord, Tenant and Landlord's contractor, Constructors, Inc.
("Constructors") and shall be subject to a fixed price contract between Landlord
and Constructors, except for change orders either requested by Tenant or as a
result of inadequacies in the Three Bridgepoint Drawings. Once the Three
Bridgepoint Drawings have been completed, Landlord will obtain a bid from
Constructors for the construction of the Three Bridgepoint Tenant Improvements
and Landlord will provide Tenant with a copy of the Constructors bid. If Tenant
is not satisfied with the Constructors bid, Tenant shall have the right to
delete various options set forth in the Three Bridgepoint Drawings to reduce the
total cost of the Three Bridgepoint Tenant Improvements. Once Landlord, Tenant
and Constructors have agreed on the final Three Bridgepoint Drawings and the
final cost of the Three Bridgepoint Tenant
D-5
Improvements, Landlord will enter into a fixed price construction contract (the
"Three Bridgepoint TI Construction Contract") with Constructors for the
construction of the Three Bridgepoint Tenant Improvements. The total cost of the
Three Bridgepoint Tenant Improvements (the "Total Three Bridgepoint TI Cost")
shall be (i) the amount reflected in the Three Bridgepoint TI Construction
Contract, which amount shall have been approved by Tenant (the "Three
Bridgepoint Construction Cost") and (ii) the total cost incurred in connection
the preparation of the Three Bridgepoint Drawings, including all design and
architectural fees and costs (the "Three Bridgepoint Drawings Cost"). Total
Three Bridgepoint TI Cost shall not include the cost of any change orders either
requested by Tenant after the execution of the Three Bridgepoint TI
Construction Contract or caused by any inadequacies in the Three Bridgepoint
Drawings. The Total Three Bridgepoint TI Cost shall be allocated between the
Three Bridgepoint Tenant Improvement Allowance as set forth in Section A2 above,
the Three Bridgepoint Additional Tenant Improvement Allowance as set forth in
Section A3 above, and any amounts in excess the Three Bridgepoint Additional
Tenant Improvement Allowance as set forth in Section A3 above. Any change orders
requested by Tenant after the execution of the Three Bridgepoint TI Construction
Contract shall be at the sole cost and expense of Tenant and shall not be
included in either the Three Bridgepoint Tenant Improvement Allowance or the
Three Bridgepoint Additional Tenant Improvement Allowance.
7. Schedule. In order for the Three Bridgepoint Premises to be completed
by the Three Bridgepoint Commencement Date, Landlord and Tenant acknowledge and
agree that it is imperative that the parties adhere to the following schedule:
October 31, 1996 - Three Bridgepoint Drawings, including mechanical,
electrical and plumbing plans and specifications, all
in a form and content suitable for construction
bidding, must be completed and delivered to
Constructors for bidding. The Three Bridgepoint
Drawings should include approximately ten optional
items, one or more of which could be deleted if the
Three Bridgepoint Construction Cost bid exceeds an
amount acceptable to Tenant.
November 4, 1996 - Constructors will provide the Three Bridgepoint
Construction Cost bid to Tenant based on the Three
Bridgepoint Drawings.
November 6, 1996 - By midnight on November 6, 1996, Tenant must approve a
final Three Bridgepoint Construction Cost, based on the
Three Bridgepoint Construction Cost bid submitted by
Constructors, as adjusted, negotiated and finally
approved, based on the Three Bridgepoint Drawings, less
any optional items deleted in order to obtain an
acceptable Three Bridgepoint Construction Cost.
November 7, 1996 - Landlord and Constructors execute the Three Bridgepoint
Construction Contract which contains the final approved
Three Bridgepoint Construction Cost which has been
approved by Tenant.
D-6
If the Three Bridgepoint Construction Cost is not finally approved by midnight
on November 6, 1996, the Three Bridgepoint Commencement Date as set forth in
Section 2.02 of the Lease shall be automatically extended for the number of days
between November 6, 1996 and the day the Tenant approves the Three Bridgepoint
Construction Cost. The Three Bridgepoint Commencement Date shall also be
extended by the number of days necessary to accomplish any change orders either
requested by Tenant or as a result of any inadequacies in the Three Bridgepoint
Drawings.
8. Punch List. Tenant shall have the right to designate to Landlord those
items of incomplete or erroneous construction of the Three Bridgepoint Tenant
Improvements in a written "punch list" to be submitted by Tenant to Landlord
within ten (10) days after the Landlord tenders possession of the Three
Bridgepoint Premises to Tenant. Landlord shall use diligent effort to complete
or correct any incomplete or erroneous construction items not less than thirty
(30) days after the delivery of the "punch list" to Landlord.
9. Extra Work. Except as set forth above, Landlord has no other agreement
with Tenant and has no other obligation to do any other work with respect to the
Three Bridgepoint Premises. Any other work in the Three Bridgepoint Premises
that may be permitted by Landlord pursuant to the terms and conditions of this
Lease shall be done at Tenant's sole cost and expense and in accordance with
said terms and conditions. If Landlord agrees to perform, at Tenant's request
and upon submission by Tenant (at Tenant's sole cost and expense) of all
necessary drawings, plans and specifications (the "Extra Work Drawings"), any
other work in addition to the Work (the "Extra Work"), such Extra Work will be
done at Tenant's sole cost and expense. Landlord shall submit to Tenant written
estimates of the cost of Extra Work. Such estimate shall include a charge of 15%
of the total expenses and costs otherwise chargeable for the Extra Work, for
Landlord's overhead (exclusive of and in addition to the general contractor's
overhead and profit), whether the Extra Work is to be performed by Landlord or
others. If Tenant shall fail to approve said estimates within seven (7) days
from the receipt thereof, the same shall be deemed disapproved in all respects
by Tenant and Landlord shall not be authorized to proceed thereon. Upon
Landlord's approval of the Extra Work Drawings, Tenant agrees to pay 50% of the
cost of the Extra Work to Landlord and the balance of the cost upon being billed
therefor by Landlord at any time and from time to time thereafter. Landlord
shall not be liable for any damages, nor shall the applicable Commencement Date
be delayed, nor any Rent abated, as a result of the construction or performance
of any Extra Work or any delay in such construction or performance.
10. Tenant's Right of Entry Prior to Occupancy. Landlord, at Landlord's
discretion, may permit Tenant and Tenant's agents to enter the Three Bridgepoint
Premises prior to the Three Bridgepoint Commencement Date in order that Tenant
may do such other work as may be required by Tenant to make the Three
Bridgepoint Premises ready for Tenant's use and occupancy thereof. If Landlord
permits such entry prior to commencement of the Term, then such permission is
conditioned upon Tenant and Tenant's agents, contractors, workmen, mechanics,
suppliers and invitees, working in harmony and not interfering with Landlord and
Landlord's agents in doing Landlord's work in the Three Bridgepoint Premises or
for other tenants and occupants of the
D-7
Three Bridgepoint Building. If at any time such entry shall cause or threaten to
cause such disharmony or interference, Landlord shall have the right to withdraw
such permission upon twenty-four (24) hours written notice to Tenant. Tenant
agrees that any such entry into and occupation of the Three Bridgepoint Premises
shall be deemed to be under all of the terms, covenants, conditions and
provisions of this Lease except as to the covenant to pay Rent, and further
agrees Landlord shall not be liable in any way for any injury, loss or damage
that may occur to any of Tenant's work and installations made in the Three
Bridgepoint Premises or to properties placed therein prior to the Three
Bridgepoint Commencement Date, the same being at Tenant's sole risk.
11. Default. Tenant agrees that in the event Tenant shall have:
(a) failed, by the time set forth in Section A7, to furnish to
Landlord any and all necessary information to prepare the Three Bridgepoint
Drawings, or
(b) failed to approve the mechanical drawings and/or cost estimate
and make the payment as described in Section A7 hereof within the time
specified therein, or
(c) ordered or requested materials, finishes or installations other
than Building Standard, or
(d) caused changes to be made in the Three Bridgepoint Drawings after
they have been prepared by Landlord or in the mechanical drawings and/or
specifications thereof or work or improvements required thereby
(notwithstanding Landlord's approval of such changes), or
(e) failed to perform timely any work to be performed by Tenant, or
any person, firm or corporation employed by Tenant, or
(f) directly, or indirectly through any person, firm or corporation
employed by Tenant, unreasonably interfered with or delayed the work of
Landlord's contractor, or
(g) caused any delay in Landlord's completion of the Three
Bridgepoint Premises through any fault or negligence of Tenant or its
agents,
thereby delaying Tenant's occupancy of the Three Bridgepoint Premises, Tenant
shall commence payment of Rent on the Three Bridgepoint Commencement Date
specified in Section 2.02 of this Lease.
D-8
B. One Bridgepoint Premises
1. One Bridgepoint Building Shell. Tenant acknowledge and agrees that the
One Bridgepoint Building was constructed prior to Landlord acquiring the
Project. The One Bridgepoint Building Shell will not be modified by Landlord,
and Tenant accepts same "AS IS".
2. One Bridgepoint Tenant Improvements. Prior to the One Bridgepoint
Commencement Date, Landlord shall, at its sole cost and expense (except as
limited below), construct the improvements desired by Tenant to complete the One
Bridgepoint Premises for Tenant's occupancy ("One Bridgepoint Tenant
Improvements"). The cost of the One Bridgepoint Tenant Improvements shall be
advanced by Landlord for the benefit of Tenant, to be repaid by Tenant in the
form of Base Rent, but only to the extent that the aggregate cost of furnishing
the One Bridgepoint Tenant Improvements does not exceed $7.50 per rentable
square foot contained in One Bridgepoint Premises (the "One Bridgepoint Tenant
Improvement Allowance"). The One Bridgepoint Tenant Improvement Allowance shall
include architectural, engineering and design work in preparation of the One
Bridgepoint Tenant Improvement plans. Landlord shall keep accurate books and
records related to all costs, expenses or fees related to the construction of
the One Bridgepoint Tenant Improvements.
3. Additional Tenant Improvement Allowance. As set forth in Section B2
above, the One Bridgepoint Tenant Improvement Allowance is $7.50 per rentable
square foot for the One Bridgepoint Premises. All costs incurred in the design
or construction of the One Bridgepoint Tenant Improvements in excess of such
amounts shall be paid by Tenant. Notwithstanding the foregoing, in the event
Tenant requests additional allowances for moving expenses or additional One
Bridgepoint Tenant Improvements in excess of the One Bridgepoint Tenant
Improvement Allowance, Landlord will provide a reasonable increase in the One
Bridgepoint Tenant Improvement Allowance, not to exceed an additional $3.00 per
rentable square foot in the One Bridgepoint Premises ("One Bridgepoint
Additional Tenant Improvement Allowance"); provided, however, the One
Bridgepoint Additional Tenant Improvement Allowance, plus interest thereon at
the rate of ten percent (10%), shall be added to the Base Rent and amortized
over the Term of the Lease. If Tenant desires to request the One Bridgepoint
Additional Tenant Improvement Allowance, Tenant shall give Landlord written
notice thereof. Once the total cost of the One Bridgepoint Additional Tenant
Improvement Allowance is determined, Landlord shall calculate the revised Base
Rent and give Tenant written notice thereof. Upon completion of the One
Bridgepoint Tenant Improvements and the issuance of a certificate of occupancy
for same by the City of Austin, Landlord shall provide to Tenant an accounting
of all costs, expenses and fees related to the construction of the One
Bridgepoint Tenant Improvements. In the event the total cost of the One
Bridgepoint Tenant Improvements exceeds the One Bridgepoint Tenant Improvement
Allowance and the One Bridgepoint Additional Tenant Improvement Allowance,
Tenant shall pay to Landlord the excess within thirty (30) days from the date
such accounting is delivered to Tenant. Tenant, at its expense, shall have the
right to examine all of the books and records of Landlord, Landlord's contractor
or the Architect in order to verify the total cost of the One Bridgepoint Tenant
Improvements.
D-9
4. One Bridgepoint Drawings. Landlord shall provide, in consultation with
Tenant, architectural construction drawings for the One Bridgepoint Tenant
Improvements (hereinafter called "One Bridgepoint Drawings"), the cost of which
will be applied against the One Bridgepoint Tenant Improvement Allowance. The
One Bridgepoint Drawings shall include partition and door location drawings,
telephone and electric drawings and reflect ceiling drawings, and include any
specifications required by Tenant including, but not limited to, paint colors,
finish details, Building Standard and any non-standard construction work to be
performed within the One Bridgepoint Premises by Landlord's contractors. Tenant
covenants and agrees to deliver to Landlord all information necessary to cause
the One Bridgepoint Drawings to be completed by December 15, 1997. The cost of
the One Bridgepoint Drawings shall be paid by Tenant shall be paid by Tenant and
shall be part of the One Bridgepoint Tenant Improvements Allocance.
5. Turn-Key Project. Landlord and Tenant acknowledge and agree that the
design and construction of the One Bridgepoint Tenant Improvements shall be a
"turn-key" project, which means that the total cost of the design and
construction of the One Bridgepoint Tenant Improvements shall be a fixed cost,
approved by Landlord, Tenant and Landlord's contractor ("Contractor"), and shall
be subject to a fixed price contract between Landlord and Contractor, except for
change orders either requested by Tenant or as a result of inadequacies in the
One Bridgepoint Drawings. Once the One Bridgepoint Drawings have been completed,
Landlord will obtain a bid from Contractor for the construction of the One
Bridgepoint Tenant Improvements and Landlord will provide Tenant with a copy of
the Contractor's bid. If Tenant is not satisfied with the Contractor's bid,
Tenant shall have the right to delete various options set forth in the One
Bridgepoint Drawings to reduce the total cost of the One Bridgepoint Tenant
Improvements. Once Landlord, Tenant and Contractor have agreed on the final One
Bridgepoint Drawings and the final cost of the One Bridgepoint Tenant
Improvements, Landlord will enter into a fixed price construction contract (the
"One Bridgepoint TI Construction Contract") with Contractor for the construction
of the One Bridgepoint Tenant Improvements. The total cost of the One
Bridgepoint Tenant Improvements (the "Total One Bridgepoint TI Cost") shall be
(i) the amount reflected in the One Bridgepoint TI Construction Contract, which
amount shall have been approved by Tenant (the "One Bridgepoint Construction
Cost") and (ii) the total cost incurred in connection the preparation of the One
Bridgepoint Drawings, including all design and architectural fees and costs (the
"One Bridgepoint Drawings Cost"). Total One Bridgepoint TI Cost shall not
include the cost of any change orders either requested by Tenant after the
execution of the One Bridgepoint TI Construction Contract or caused by any
inadequacies in the One Bridgepoint Drawings. The Total One Bridgepoint TI Cost
shall be allocated between the One Bridgepoint Tenant Improvement Allowance as
set forth in Section B2 above, the One Bridgepoint Additional Tenant Improvement
Allowance as set forth in Section B3 above, and any amounts in excess the One
Bridgepoint Additional Tenant Improvement Allowance as set forth in Section B3
above. Any change orders requested by Tenant after the execution of the One
Bridgepoint TI Construction Contract shall be at the sole cost and expense of
Tenant and shall not be included in either the One Bridgepoint Tenant
Improvement Allowance or the One Bridgepoint Additional Tenant Improvement
Allowance.
D-10
6. Schedule. In order for the One Bridgepoint Premises to be completed
by the One Bridgepoint Commencement Date, Landlord and Tenant acknowledge and
agree that it is imperative that the parties adhere to the following schedule:
December 15, 1997 - One Bridgepoint Drawings, including mechanical,
electrical and plumbing plans and specifications, all
in a form and content suitable for construction
bidding, must be completed and delivered to Contractor
for bidding. The One Bridgepoint Drawings should
include approximately ten optional items, one or more
of which could be deleted if the One Bridgepoint
Construction Cost bid exceeds an amount acceptable to
Tenant.
January 2, 1998 - Contractor will provide the One Bridgepoint
Construction Cost bid to Tenant based on the One
Bridgepoint Drawings.
January 10, 1998 - Tenant must approve a final One Bridgepoint
Construction Cost, based on the One Bridgepoint
Construction Cost bid submitted by Contractor, as
adjusted, negotiated and finally approved, based on the
One Bridgepoint Drawings, less any optional items
deleted in order to obtain an acceptable One
Bridgepoint Construction Cost.
January 11, 1998 - Landlord and Contractor execute the One Bridgepoint
Construction Contract which contains the final approved
One Bridgepoint Construction Cost which has been
approved by Tenant. Construction will commence within
three (3) business days after National Instruments
vacates the One Bridgepoint Premises.
If the One Bridgepoint Construction Cost is not finally approved by the date
National Instruments vacates the One Bridgepoint Premises, the One Bridgepoint
Commencement Date as set forth in Section 2.02 of the Lease shall be
automatically extended for the number of days between the date National
Instruments vacates the One Bridgepoint Premises and the day the Tenant approves
the One Bridgepoint Construction Cost.
7. Punch List. Tenant shall have the right to designate to Landlord
those items of incomplete or erroneous construction of the One Bridgepoint
Tenant Improvements in a written "punch list" to be submitted by Tenant to
Landlord within ten (10) days after the Landlord tenders possession of the One
Bridgepoint Premises to Tenant. Landlord shall use diligent effort to complete
or correct any incomplete or erroneous construction items not less than thirty
(30) days after the delivery of the "punch list" to Landlord.
D-11
8. Extra Work. Except as set forth above, Landlord has no other agreement
with Tenant and has no other obligation to do any other work with respect to the
One Bridgepoint Premises. Any other work in the One Bridgepoint Premises that
may be permitted by Landlord pursuant to the terms and conditions of this Lease
shall be done at Tenant's sole cost and expense and in accordance with said
terms and conditions. If Landlord agrees to perform, at Tenant's request and
upon submission by Tenant (at Tenant's sole cost and expense) of all necessary
drawings, plans and specifications (the "Extra Work Drawings"), any other work
in addition to the Work (the "Extra Work"), such Extra Work will be done at
Tenant's sole cost and expense. Landlord shall submit to Tenant written
estimates of the cost of Extra Work. Such estimate shall include a charge of 15%
of the total expenses and costs otherwise chargeable for the Extra Work, for
Landlord's overhead (exclusive of and in addition to the general contractor's
overhead and profit), whether the Extra Work is to be performed by Landlord or
others. If Tenant shall fail to approve said estimates within seven (7) days
from the receipt thereof, the same shall be deemed disapproved in all respects
by Tenant and Landlord shall not be authorized to proceed thereon. Upon
Landlord's approval of the Extra Work Drawings, Tenant agrees to pay 50% of the
cost of the Extra Work to Landlord and the balance of the cost upon being billed
therefor by Landlord at any time and from time to time thereafter. Landlord
shall not be liable for any damages, nor shall the applicable Commencement Date
be delayed, nor any Rent abated, as a result of the construction or performance
of any Extra Work or any delay in such construction or performance.
9. Tenant's Right of Entry Prior to Occupancy. Landlord, at Landlord's
discretion, may permit Tenant and Tenant's agents to enter the One Bridgepoint
Premises prior to the One Bridgepoint Commencement Date in order that Tenant may
do such other work as may be required by Tenant to make the One Bridgepoint
Premises ready for Tenant's use and occupancy thereof. If Landlord permits such
entry prior to commencement of the Term, then such permission is conditioned
upon Tenant and Tenant's agents, contractors, workmen, mechanics, suppliers and
invitees, working in harmony and not interfering with Landlord and Landlord's
agents in doing Landlord's work in the One Bridgepoint Premises or for other
tenants and occupants of the One Bridgepoint Building. If at any time such entry
shall cause or threaten to cause such disharmony or interference, Landlord shall
have the right to withdraw such permission upon twenty-four (24) hours written
notice to Tenant. Tenant agrees that any such entry into and occupation of the
One Bridgepoint Premises shall be deemed to be under all of the terms,
covenants, conditions and provisions of this Lease except as to the covenant to
pay Rent, and further agrees Landlord shall not be liable in any way for any
injury, loss or damage that may occur to any of Tenant's work and installations
made in the One Bridgepoint Premises or to properties placed therein prior to
the One Bridgepoint Commencement Date, the same being at Tenant's sole risk.
10. Default. Tenant agrees that in the event Tenant shall have:
(a) failed, by the time set forth in Section B6, to furnish to
Landlord any and all necessary information to prepare the One Bridgepoint
Drawings, or
D-12
(b) failed to approve the mechanical drawings and/or cost estimate
and make the payment as described in Section B6 hereof within the time
specified therein, or
(c) ordered or requested materials, finishes or installations other
than Building Standard, or
(d) caused changes to be made in the One Bridgepoint Drawings after
they have been prepared by Landlord or in the mechanical drawings and/or
specifications thereof or work or improvements required thereby
(notwithstanding Landlord's approval of such changes), or
(e) failed to perform timely any work to be performed by Tenant, or
any person, firm or corporation employed by Tenant, or
(f) directly, or indirectly through any person, firm or corporation
employed by Tenant, unreasonably interfered with or delayed the work of
Landlord's contractor, or
(g) caused any delay in Landlord's completion of the One Bridgepoint
Premises through any fault or negligence of Tenant or its agents,
thereby delaying Tenant's occupancy of the One Bridgepoint Premises, Tenant
shall commence payment of Rent on the One Bridgepoint Commencement Date
specified in Section 2.02 of this Lease.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
D-13
EXHIBIT E-1
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
COMMENCEMENT DATE DECLARATION
THREE BRIDGEPOINT PREMISES
This declaration is executed with respect to that certain Lease Agreement
(the "Lease") dated _______________, 19___ by and between Investors Life
Insurance Company of North America, a Washington corporation ("Landlord"), and
PSW Technologies, Inc., a __________ corporation ("Tenant"), covering
approximately 37,751 rentable square feet ("Three Bridgepoint Premises") located
on floors one, two and three in Three Bridgepoint Square ("Three Bridgepoint"),
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇. Capitalized terms used but not defined herein shall have the meanings
given to them in the Lease.
By their respective execution below, Landlord and Tenant each hereby
stipulates and agrees that:
(1) The Three Bridgepoint Commencement Date (as defined in Section 2.02 of
the Lease) occurred on _________, 19___ and the Expiration Date is
December 31, 2003.
(2) The Premises contain 37,751 rentable square feet.
(3) Tenant's Pro Rata Share for purposes of calculating rental adjustments
based on payment of Operating Expenses is ____________%.
(4) Base Rent is ______________ per year payable in equal monthly
installments of ____________ starting on _____________, with the
following adjustments, if any.
(5) All construction work per the Drawings is complete with the exceptions
outlined in the attached "punch list". Landlord agrees to remedy the
items on the punch list within ______ (______)days of the date hereof.
This declaration may be relied upon by any person having or acquiring an
interest in the Lease or the Building, without notice to or consent of Landlord
or Tenant.
E-1-1
EXECUTED on this ____________ day of _____________, 19___.
LANDLORD:
INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA
By: _________________________________
Printed Name: _______________________
Title: ______________________________
TENANT:
PSW TECHNOLOGIES, INC.
By: _________________________________
Printed Name: _______________________
Title: ______________________________
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
E-1-2
EXHIBIT E-2
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
COMMENCEMENT DATE DECLARATION
ONE BRIDGEPOINT PREMISES
This declaration is executed with respect to that certain Lease Agreement
(the "Lease") dated ________________, 19___ by and between Investors Life
Insurance Company of North America, a Washington corporation ("Landlord"), and
PSW Technologies, Inc., a __________ corporation ("Tenant"), covering
approximately 10,000 rentable square feet ("One Bridgepoint Premises") located
on floors ________ in One Bridgepoint Square ("One Bridgepoint"), located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Lease.
By their respective execution below, Landlord and Tenant each hereby
stipulates and agrees that:
(1) The One Bridgepoint Commencement Date (as defined in Section 2.02 of
the Lease) occurred on ________, 19___ and the Expiration Date is
December 31, 2003.
(2) The Premises contain 10,000 rentable square feet.
(3) Tenant's Pro Rata Share for purposes of calculating rental adjustments
based on payment of Operating Expenses is ____________%.
(4) Base Rent is ________________ per year payable in equal monthly
installments of ____________ starting on ____________, with the
following adjustments, if any.
(5) All construction work per the Drawings is complete with the exceptions
outlined in the attached "punch list". Landlord agrees to remedy the
items on the punch list within _______ (____) days of the date hereof.
This declaration may be relied upon by any person having or acquiring an
interest in the Lease or the Building, without notice to or consent of Landlord
or Tenant.
E-2-1
EXECUTED on this ____________ day of _____________, 19___.
LANDLORD:
INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA
By: _________________________________
Printed Name: _______________________
Title: ______________________________
TENANT:
PSW TECHNOLOGIES, INC.
By: _________________________________
Printed Name: _______________________
Title: ______________________________
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
E-2-2
EXHIBIT F
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
RENEWAL OPTION
Provided that a Default by Tenant has not occurred and is continuing,
Tenant shall have the right to renew and extend this Lease with respect to all
of the Premises for one (1) renewal term of five (5) years commencing upon the
expiration of the initial Term by giving Landlord written notice thereof at
least one (1) year prior to the expiration of the initial Term. In the event of
such renewal, the "Term" shall include such renewal term and such renewal shall
be upon the same provisions as for the initial Term except that:
1. Tenant shall pay during the renewal term Base Rent to Landlord in
monthly installments in an amount equal to ninety-five percent (95%) the then
prevailing market rate for comparable space in first-class office buildings in
comparable locations in Austin, Texas as of the commencement of the renewal term
(the "Market Rate") as designated by Landlord within thirty (30) days after
Landlord receives Tenant's renewal notice; provided, however, the Base Rent for
the first two years of the renewal term shall be $23.25 per rentable square
foot. In addition, during such renewal term, Tenant shall pay all other Rent and
other amounts due under this Lease, including without limitation all rental
adjustments pursuant to Article 3 of this Lease, provided that any expense caps
or similar limitations shall not be renewed or carried forward unless the Market
Rate contemplates that such limitations be continued during the renewal term. If
Tenant not does agree with Landlord's designation of Market Rate for purposes of
computing Base Rent or other Rent for the renewal term, then Tenant may either
(i) withdraw its election to renew, or (ii) request arbitration of such Market
Rate in accordance with the following procedure. Landlord and Tenant each shall
select one qualified (MAI) appraiser and inform the other as to its selection
within five (5) business days after the date Tenant receives Landlord's
designation of Market Rate (the "Designation Date"). Those two appraisers shall
select a third qualified (MAI) appraiser within five (5) business days after the
Designation Date. In order to be "qualified," each of said appraisers shall have
at least three (3) years of experience appraising leasehold interests under
commercial leases in downtown Austin, Texas. Landlord and Tenant shall each bear
the cost of its appraiser and one-half (1/2) of the cost of the third appraiser.
Said three appraisers shall determine the Market Rate in accordance with the
parameters set forth herein by mutual agreement within thirty (30) business days
after the Designation Date. If all of said appraisers fail to agree on the
Market Rate within thirty (30) business days after the Designation Date, but two
of said appraisers can so agree, then the Market Rate as determined by such two
appraisers shall be controlling. If none of said appraisers can agree on the
Market Rate within such time period, then
F-1
an average shall be taken of the two closest determinations thereof and such
average shall be controlling (except that if the median of the three rates
provided by the appraisers is also the average of the three, it shall be
controlling). Tenant shall have fifteen (15) days to accept or reject in writing
the Market Rate as determined by said arbitration procedure. If such Market Rate
is not agreed to by Tenant as determined by said arbitration procedure on or
before the end of said fifteen (15) day period, then Tenant shall pay all of
Landlord's costs associated with obtaining the aforementioned appraisals and the
exercise of the applicable option to renew and all rights of Landlord and Tenant
under this option to renew shall immediately terminate and all terms and
conditions of this option to renew shall be of no further force and effect.
Except as noted above in case of a failure to agree on Market Rate, Tenant may
not revoke its election to renew after such election has been made.
2. Landlord shall not be obligated to make any alterations or
improvements to the Premises.
3. Tenant shall have no further right to renew this Lease.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
F-2
EXHIBIT G
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA, AS LANDLORD,
AND PSW TECHNOLOGIES, INC., AS TENANT
RIGHT OF FIRST REFUSAL
1. National Instruments Refusal Space. Landlord hereby grants to Tenant a
right of first refusal exercisable as hereinafter set forth, covering
approximately 10,000 rental square feet of area in One Bridgepoint, same being
the remaining space in One Bridgepoint occupied by National Instruments, Inc.
more particularly described on Exhibit "B" (the "National Instruments Refusal
Space"). Tenant acknowledges that National Instruments has the existing right
under its lease to renew its existing lease for the National Instruments Refusal
Space. In the event National Instruments exercises its renewal option, this
right of first refusal on the National Instruments Refusal Space shall terminate
and be of no further force and effect. In the event National Instruments does
not exercise its option to renew its lease on the National Instruments Refusal
Space, then Tenant's right of first refusal shall be as follows:
(a) Prior to leasing any portion of the National Instruments Refusal Space
to any third party, Landlord shall notify the Tenant in writing of the
availability of the National Instruments Refusal Space and the date
upon which the Refusal Space is expected to be made available to
Tenant (the "Notice"). Tenant may exercise the right of first refusal
and include the National Instruments Refusal Space under this Lease,
upon the terms and conditions of this Lease, including the Base Rent,
by delivering to Landlord written notice of Tenant's election on or
before the fifth (5th) calendar day after the date of Tenant's receipt
of the Notice.
(b) In the event Landlord does not receive notice of Tenant's election to
lease the National Instruments Refusal Space described in the Notice
within the period provided herein, then Landlord shall be free to
lease such space to one or more third parties.
(c) All National Instruments Refusal Space leased pursuant to the Right of
First Refusal shall be for a term which is coterminous with the
initial Term and any renewal or extension thereof.
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(d) The term Premises, as used in this Lease, shall include all expansions
thereof that may occur from time to time pursuant to this right of
first refusal.
(e) In the event Tenant exercises the right of first refusal pursuant to
the terms hereof, Landlord shall do the work necessary to furnish and
install within the National Instruments Refusal Space, in accordance
with drawings to be prepared by Tenant and approved in writing by
Landlord, the Building Standard tenant improvements and other
additional tenant improvements provided for in the drawings. The cost
of the work shall be advanced by Landlord for the benefit of Tenant,
to be repaid by Tenant in the form of Base Rent, but only to the
extent that the aggregate cost of furnishing the Building Standard
improvements and such additional improvements provided for in the
drawings does not exceed $7.50 per rentable square foot leased, less
an amount, rounded up or down to the nearest cent, equal to (X) $7.50
per rentable square foot leased, times (Y) seventy-one (71) minus the
number of months remaining in the Term (excluding all renewals, unless
such renewals have been unrevocably exercised by Tenant).
(f) Upon the exercise of the refusal option pursuant to the terms hereof,
Landlord and Tenant shall execute, at the request of either, an
instrument delineating and describing the National Instruments Refusal
Space added thereby.
2. One Bridgepoint Refusal Space. Landlord hereby grants to Tenant a
right of first refusal exercisable as hereinafter set forth, covering the
remainder of One Bridgepoint that is contiguous to the One Bridgepoint Premises
(the "One Bridgepoint Refusal Space"). All rights of Tenant to lease the One
Bridgepoint Refusal Space pursuant to the right of first refusal shall be
applicable to the entire One Bridgepoint Refusal Space or to any portion thereof
which may become available from time to time. The right of first refusal shall
be as follows:
(a) Prior to leasing any portion of the One Bridgepoint Refusal Space to
any third party (except for renewals of existing leases held by
tenants occupying the Refusal Space under leases effective as of the
Commencement Date), Landlord shall notify the Tenant in writing of the
availability of such portion of the One Bridgepoint Refusal Space and
the date upon which such portion of the One Bridgepoint Refusal Space
is expected to be made available to Tenant (the "Notice"). Tenant may
exercise the right of first refusal and include such portion of the
One Bridgepoint Refusal Space
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under this Lease, upon the terms and conditions of this Lease,
including, but not limited to, the Base Rent, by delivering to
Landlord written notice of Tenant's election on or before the fifth
(5th) calendar day after the date of Tenant's receipt of the Notice.
(b) In the event Landlord does not receive notice of Tenant's election to
lease such portion of the One Bridgepoint Refusal Space described in
the Notice within the period provided herein, then Landlord shall be
free to lease such space to one or more third parties.
(c) All One Bridgepoint Refusal Space leased pursuant to the right of
first refusal shall be for a term which is coterminous with the
initial Term and any renewal or extension thereof.
(d) The term Premises, as used in this Lease, shall include all expansions
thereof that may occur from time to time pursuant to this right of
first refusal.
(e) In the event Tenant exercises the right of first refusal pursuant to
the terms hereof, Landlord shall do the work necessary to furnish and
install within the One Bridgepoint Refusal Space, in accordance with
drawings to be prepared by Tenant and approved in writing by Landlord,
the Building Standard tenant improvements and other additional tenant
improvements provided for in the drawings. The cost of the work shall
be advanced by Landlord for the benefit of Tenant, to be repaid by
Tenant in the form of Base Rent, but only to the extent that the
aggregate cost of furnishing the Building Standard improvements and
such additional improvements provided for in the drawings does not
exceed $7.50 per rentable square foot leased, less an amount, rounded
up or down to the nearest cent, equal to (X) $7.50 per rentable square
foot leased, times (Y) seventy-one (71) minus the number of months
remaining in the Term (excluding all renewals, unless such renewals
have been unrevocably exercised by Tenant).
(f) Upon the exercise of the refusal option pursuant to the terms hereof,
Landlord and Tenant shall execute, at the request of either, an
instrument delineating and describing the One Bridgepoint Refusal
Space added thereby.
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(g) Landlord will endeavor to consolidate space in One Bridgepoint and
provide contiguous space whenever possible.
3. Three Bridgepoint Refusal Space. Landlord hereby grants to Tenant a
right of first refusal exercisable as hereinafter set forth, covering
approximately the remaining space in Three Bridgepoint to be occupied by
Motorola, Inc. more particularly described on Exhibit A (the "Motorola Refusal
Space"). Tenant acknowledges that Motorola, Inc. has the existing right under
its lease to renew its existing lease for the Motorola Refusal Space. In the
event Motorola exercises its renewal option, this right of first refusal on the
Motorola Refusal Space shall terminate and be of no further force and effect. In
the event Motorola does not exercise its option to renew its lease on the
Motorola Refusal Space, then Tenant's right of first refusal shall be as
follows:
(a) Prior to leasing any portion of the Motorola Refusal Space to any
third party, Landlord shall notify the Tenant in writing of the
availability of the Motorola Refusal Space and the date upon which the
Refusal Space is expected to be made available to Tenant (the
"Notice"). Tenant may exercise the right of first refusal and include
the Motorola Refusal Space under this Lease, upon the terms and
conditions of this Lease, including the Base Rent, by delivering to
Landlord written notice of Tenant's election on or before the fifth
(5th) calendar day after the date of Tenant's receipt of the Notice.
(b) In the event Landlord does not receive notice of Tenant's election to
lease the Motorola Refusal Space described in the Notice within the
period provided herein, then Landlord shall be free to lease such
space to one or more third parties.
(c) All Motorola Refusal Space leased pursuant to the Right of First
Refusal shall be for a term which is coterminous with the initial Term
and any renewal or extension thereof.
(d) The term Premises, as used in this Lease, shall include all expansions
thereof that may occur from time to time pursuant to this right of
first refusal.
(e) In the event Tenant exercises the right of first refusal pursuant to
the terms hereof, Landlord shall do the work necessary to furnish and
install within the Motorola Refusal Space, in accordance with drawings
to be prepared by Tenant and approved in writing by Landlord, the
Building Standard
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tenant improvements and other additional tenant improvements provided
for in the drawings. The cost of the work shall be advanced by
Landlord for the benefit of Tenant, to be repaid by Tenant in the form
of Base Rent, but only to the extent that the aggregate cost of
furnishing the Building Standard improvements and such additional
improvements provided for in the drawings does not exceed $7.50 per
rentable square foot leased, less an amount, rounded up or down to the
nearest cent, equal to (X) $7.50 per rentable square foot leased,
times (Y) seventy-one (71) minus the number of months remaining in the
Term (excluding all renewals, unless such renewals have been
unrevocably exercised by Tenant).
(f) Upon the exercise of the refusal option pursuant to the terms hereof,
Landlord and Tenant shall execute, at the request of either, an
instrument delineating and describing the Motorola Refusal Space added
thereby.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
G-5
EXHIBIT H
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
CERTIFICATE OF THE SECRETARY OF TENANT
The undersigned, Secretary of PSW Technologies, Inc., a ____________
corporation (the "Corporation"), hereby certifies that attached is a true and
correct copy of the resolutions duly adopted by unanimous consent dated _______,
19___, of all directors of the Board of Directors of the Corporation and that
the same have not been amended, altered or rescinded and are now in full force
and effect; that the Corporation is duly organized and existing under the laws
of the State of ________; that all franchise and other taxes, if any, required
to maintain the corporate existence of the Corporation have been paid when due
and that no such taxes are delinquent; that no proceedings are pending for the
forfeiture of the Certificate of Incorporation of the Corporation or for its
dissolution, voluntary or involuntary; that the Corporation is duly qualified to
do business in the State of Texas and is in good standing in such state; that
there is no provision of the Articles of Incorporation or Bylaws of the
Corporation limiting the powers of the Board of Directors to pass or consent to
the resolutions set out in the instrument attached hereto and that said
resolutions are in conformity with the provisions of said Articles of
Incorporation and Bylaws; and that the Secretary is the keeper of the records
and minutes of the proceedings of the Board of Directors of the Corporation.
This is to further certify that the persons named below are the duly
elected and qualified officers of the Corporation, holding the respective
offices set forth opposite their names, that they continue to hold these offices
at the present time, and that the respective signatures set opposite their names
are the genuine, original signatures of each respectively:
Name Title Signature
____________________ President ______________________________
____________________ Vice President ______________________________
____________________ Secretary ______________________________
____________________ Treasurer ______________________________
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IN WITNESS WHEREOF I have hereunto affixed my name as Secretary and have
caused the corporate seal of the Corporation to be hereto affixed this ______
day of _______________, 19___.
______________________________
Secretary
The undersigned, __________________________, President of the Corporation,
hereby certifies that __________________________ is the duly elected and
qualified Secretary of the Corporation, that the signature above is his (her)
genuine signature, that attached is a true and correct copy of the resolutions
duly adopted by the Board of Directors of the Corporation, which are now in full
force and effect; and that the foregoing certificate is true and correct.
______________________________
President
RESOLUTIONS OF CORPORATE BOARD
RESOLVED: That PSW Technologies, Inc. (this "Corporation") enter into the Lease
Agreement (the "Lease") dated _______________, 19___, with Investors Life
Insurance Company of North America, a Washington corporation ("Landlord"),
covering premises located on the ____ floor of One Bridgepoint Office Square
(the "Building").
FURTHER RESOLVED: That the Lease shall be in form and substance satisfactory to
Landlord and in form and substance approved by the officer of this Corporation
executing the same, his approval of each such instrument to be conclusively
evidenced by his execution thereof.
FURTHER RESOLVED: That the President or any Vice President of this Corporation
be and each hereby is severally authorized and directed for and on behalf, and
as the act and deed of this Corporation to execute and deliver to Landlord the
Lease and any addenda, amendments and supplements thereto, and to take such
other action in the consummation of the transaction herein
H-2
contemplated as the officer acting shall deem to be necessary or desirable,
without the necessity of attestation by the secretary or any other officer of
this Corporation and with or without the seal of this Corporation; any and all
acts heretofore taken by the President or any Vice President of this Corporation
to such end are hereby expressly ratified and confirmed as the acts and deeds of
this Corporation.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
H-3
EXHIBIT I
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
RULES AND REGULATIONS
The following standards shall be observed by Tenant for the mutual safety,
cleanliness and convenience of all occupants of the Building. These rules are
subject to change from time to time, as specified in the Lease.
1. Tenant shall not use the Premises or the Building to sell any items or
services at retail price or cost without the prior written consent of Landlord.
Stenography, typewriting, blueprinting, duplicating services of any kind, food
and beverage services, and similar businesses, shall not be conducted from or
within the Premises or Building for the service or accommodation of occupants of
the Building without the prior written consent of Landlord.
2. Sidewalks, halls, passageways, fire exits, roof access, and stairwells
shall not be obstructed or used by Tenant for a purpose other than ingress and
egress to and from the Premises and Building.
3. Flammable, explosive or other hazardous liquids and materials shall not be
brought on the Premises or into the Building without the prior written consent
of Landlord. All holiday decorations shall be made of flame retardant materials
and are limited to the interior of the Building.
4. All contractors and technicians performing work for Tenant within the
Building shall be referred to Landlord for approval before performing such work.
All work, including, but not limited to, installation of telephone and telegraph
equipment, electrical and electronic devices and attachments, and all
installations affecting floors, walls, windows, doors, ceilings or any other
physical feature of the Building, shall not commence prior to written approval
by Landlord.
5. Tenant shall not conduct any auction on the Premises nor store goods, wares
or merchandise on the Premises, except for Tenant's own personal use.
6. Movement into or out of the Building of freight, furniture, office
equipment or other material for dispatch or receipt by Tenant which requires
movement through public corridors or lobbies or entrances to the Building shall
be limited to the use of service elevators only and shall be done at hours and
in a manner approved by Landlord for such purposes from time to time.
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Only licensed, commercial movers shall be used for the purpose of moving
freight, furniture or office equipment to and from the Premises and Building.
All hand trucks shall be equipped with rubber tires and rubber side guards.
7. Requests by Tenant for building services, maintenance or repair shall be
made in writing to the office of the Landlord or its management agent, if any.
8. Tenant shall not change locks or install additional locks on doors without
prior written consent of Landlord. Tenant shall not make or cause to be made
duplicates of keys procured from Landlord without the prior approval of
Landlord. All keys to the Premises shall be surrendered to Landlord upon
termination of tenancy.
9. Tenant shall give prompt notice to the office of the Landlord or its
management agent, if any, of any damage to or defects in plumbing, electrical
fixtures or heating and cooling equipment. Liquids, or other materials or
substances which will cause injury to the plumbing, shall not be put into the
lavatories, water closets or other plumbing fixtures, by Tenant, its agents,
employees or invitees.
10. Tenant shall not place, install or operate on the Premises, or in any part
of the Building or Project, any stoves or cooking equipment without the prior
written approval of Landlord.
11. Large files, safes, electronic data processing equipment and other heavy
equipment shall not be moved into the Building or installed in the Premises
without the prior written approval of Landlord.
12. Tenant shall not lay floor covering within the Premises without the prior
written approval of Landlord. The use of cement or other similar adhesive
materials not easily removed with water is expressly prohibited.
13. Tenant agrees to cooperate and assist Landlord in the prevention of
canvassing, soliciting and peddling within the Building.
14. Nails, screws or picture hangers shall not be driven into the walls or wood
finish of any room without the prior written consent of Landlord. Animals or
birds shall not be kept in or about the Premises or the Building.
15. All plants within the Tenant Suite should be maintained by professional
plant management companies. Any infestation as a result of the plants is the
responsibility of the Tenant.
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16. No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by Tenant on, about or from any part of the Premises or the
Building without prior written consent of the Landlord.
17. Landlord reserves the right to exclude from the Building, between the hours
of 6:00 p.m. and 7:00 a.m. on weekdays and at all hours on Saturday, Sunday and
legal holidays, all persons who are not known to the Building watchman, if any,
and who do not present a pass to the Building signed by Tenant. Each Tenant
shall be responsible for all persons for whom he supplies a pass or key to the
Building or Premises.
18. No smoking is allowed inside the Building. Smoking is restricted to the
exterior West end of the Building. Tenant shall be responsible for each
employee.
19. Tenant will use all caution when driving and parking in the garage.
Landlord is NOT responsible for any lost, stolen, or damage done to persons or
property of Tenant and/or its employees as result of parking on the Project.
Parking around the Building is limited to handicapped and 30-minute visitor
parking only. There is no parking on the streets. Violating vehicles will be
towed at owner's expense.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
I-3
EXHIBIT J
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
LEASE GUARANTY
THIS GUARANTY entered into on October __________, 1996, by PENCOM SYSTEMS,
INC. (hereinafter referred to as the "Guarantor") in favor of INVESTORS LIFE
INSURANCE COMPANY OF NORTH AMERICA (hereinafter referred to as the "Landlord"):
WHEREAS, Landlord proposes to lease to PSW TECHNOLOGIES, INC. (hereinafter
referred to as the "Tenant") premises known as Three Bridgepoint, Austin, Texas
(hereinafter referred to as the "Premises") to be evidenced by a Bridgepoint
Lease Agreement (hereinafter referred to as the "Lease"); and,
WHEREAS, Guarantor will directly benefit from Landlord's leasing the
Premises to Tenant; and,
WHEREAS, Landlord is not willing to lease the Premises to Tenant unless the
Guarantor unconditionally guarantees payment of all rent and unconditionally
guarantees the performance of all other obligations of Tenant contained in the
Lease:
NOW THEREFORE, as a necessary inducement to Landlord to lease the Premise
to Tenant and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the Guarantor hereby
agrees, represents and warrants as follows:
1. Guaranty Obligation. The Guarantor hereby irrevocably and unconditionally
guarantees to the Landlord and its successors and assigns, the due and punctual
payment of financial obligations and performance of all other obligations of the
Tenant imposed in the Lease now or hereafter arising hereunder.
2. The Guaranteed Obligations. As used herein, the term "Guaranteed
Obligations" shall mean:
(a) All rent, reasonable attorney's fees, deposits, liabilities for costs
and expenses and other obligations and liabilities of the Tenant to the Landlord
at any time arising, whether by termination of the Lease, lapse of time or
otherwise, under the Lease; and,
J-1
(b) Any and all other liabilities, obligations and duties of every kind or
character, that are now or at any time or times hereafter may be or become owing
from the Tenant to the Landlord, howsoever evidenced, whether due or to become
due, whether by lapse of time or otherwise, termination of the Lease or
otherwise, together with any and all renewals, amendments, and extensions of any
thereof; and,
(c) All costs, expenses and fees, including without limitation, court
costs and attorney's fees, arising in connection with the collection of any and
all amounts, obligations and liabilities of the Tenant to the Landlord whether
collection or performance is sought by suit, through bankruptcy proceedings or
through any other judicial proceeding or by any other formal or informal
procedures, as well as any other costs incurred by the Landlord in enforcing or
protecting any of the Landlord's rights, remedies or recourses hereunder.
3. No Limitation. It is understood that the enumeration of specific types of
obligations herein is made for purposes of illustration only and shall not be
constructed as a limitation upon the obligations included in the definition of
Guaranteed Obligations and which are guaranteed hereby.
4. Nature of Guaranty. It is specifically agreed that:
(a) This Guaranty is a continuing, unconditional irrevocable guaranty of
payment and not a guaranty of collection;
(b) This Guaranty may not be revoked by Guarantor and shall continue to be
effective with respect to the Guaranteed Obligations arising or created
after any attempted revocation by Guarantor and shall be binding upon the
Guarantor and the respective legal representatives, executors,
administrators and successors of the Guarantor; and
(c) If the Guarantor becomes liable for any Guaranteed Obligations owing
by the Tenant to the Landlord, by endorsement or otherwise than under this
Guaranty, such liability shall not be in any manner impaired or reduced
hereby but shall have all and the same force and effect it would have had
if this Guaranty had not existed.
5. Exoneration of Landlord. Guarantor specifically agrees that Guarantor
shall not have any recourse or action against Landlord by reason of any action
the Landlord may take or omit to take with respect to the Guaranteed
Obligations, or this Guaranty, including but not limited to the collection of
any sums mentioned therein, or in connection with any security or other guaranty
now or hereafter existing therefor.
6. Waiver of Notices and Acceptance. The Guarantor specifically waives notice
of (i) acceptance of this guaranty by the Landlord, (ii) any extension,
modification or renewal of the Lease or the Guaranteed Obligations, (iii) any
indulgences allowed by Landlord with
J-2
respect to the Lease or the Guaranteed Obligations, this Guaranty or any part or
parts thereof or any nonpayment, nonperformance, breach or default thereon, (iv)
eviction; (v) any other grace, demand, protest, presentment and notice of
demand, (vi) the amount or nature of the Guaranteed Obligations outstanding at
any time, and (vii) generally all other notices of every kind in connection with
the provisions of this Guaranty and any other documents or agreements evidencing
or relating to the Guaranteed Obligations.
7. Payments. All payments made upon or performance of the Guaranteed
Obligations at any time shall be deemed to have been paid or performed by the
Tenant unless express written notice is given to the Landlord at the time of
payment or performance by the Guarantor that such payment is paid by said
Guarantor.
8. Payment By Guarantor. In each event whenever any of the Guaranteed
Obligations shall become due and remain unpaid or any other Guaranteed
Obligations become performable and remain unperformed, the Guarantor shall, upon
demand, pay the amount due thereon to the Landlord or perform such unperformed
Guaranteed Obligations, without notice having been given to Guarantor previous
to such demand of the acceptance by the Landlord of this Guaranty or of the
creating or incurring of such obligation, and without presentment, protest,
notice of protest, notice of non-payment, or any other notice whatsoever.
9. Place of Payment. All amounts becoming payable by Guarantor to the Landlord
under this Guaranty shall be payable at the Landlord's principal place of
business in the City of ▇▇▇▇▇▇, ▇▇▇▇▇▇ County, Texas.
10. Application of Security, Proceeds. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or property
or the proceeds of any security or property now existing or hereafter obtained
by the Landlord as security for the Guaranteed Obligations, or any part thereof,
and agrees that the Landlord shall have no duty insofar as the Guarantor is
concerned to apply upon any of the Guaranteed Obligations any monies, payments
or other property at any time received by or paid to or in the possession of the
Landlord, except as the Landlord shall determine in its sole discretion.
11. Effect of Bankruptcy. This Guaranty shall continue to be effective or
reinstated, as the case may be, if at any time any payment to the Landlord of
all or part of the Guaranteed Obligations are rescinded or must otherwise be
restored or refunded by the Landlord pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief proceeding involving the
Tenant. In the event that the Landlord must rescind or restore any payment
received by the Landlord in satisfaction of any of the Guaranteed Obligations as
set forth herein, any prior release or discharge under the terms of this
Guaranty given to any Guarantor by the Landlord shall be without effect, and
this Guaranty shall remain in full force and effect.
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12. No Duty to Pursue Others. The Guarantor agrees:
(a) that it shall not be necessary or required that the Landlord (and the
Guarantor hereby waives any rights which it may have to so require
Landlord), in order to enforce any obligations under this Guaranty, must
first (i) make demand for payment upon the Tenant or any other person
liable on the Guaranteed Obligations or present same for payment thereto or
make protest or give notice thereto of the nonperformance or non-payment
thereof; (ii) proceed to obtain or assert a claim for personal judgment or
otherwise institute suit or exhaust its remedies against Tenant, others
liable on the Guaranteed Obligations or any other person, (iii) assert or
institute claim or suit against the assets or estate of the Tenant, or
others liable on the Guaranteed Obligations, (iv) enforce its rights
against any security which shall ever have been given to secure the
Guaranteed Obligations, (v) join Tenant or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, or
(vi) resort to any other means of obtaining payment of the Guaranteed
Obligations; and,
(b) that Landlord shall not be required to mitigate damages or take any
other action to reduce, collect or enforce the Guaranteed Obligations.
13. Discharge of Obligations. Guarantor agrees that the fact that at any time
or from time to time the Guaranteed Obligations may be increased, reduced or
fully discharged shall not release, discharge or reduce the obligations of the
Guarantor with respect to any obligations thereafter incurred in connection with
the Guaranteed Obligations. It is the intention of the Landlord and Guarantor
that Guarantor's obligations hereunder shall not be discharged except by
Guarantor's performance of such obligations and then only to the extent of such
performance, unless otherwise expressly agreed in writing by Landlord or as
might otherwise be provided in this Guaranty.
14. Rights of Landlord. The Guarantor agrees that the rights of the Landlord
and any of the obligations and liabilities of the Guarantor created hereunder
shall not in any manner whatsoever be reduced, discharged, diminished, impaired
or affected by any or more of the events, circumstances or occurrences described
in paragraphs a through e inclusive.
(a) Extensions, Modifications and Adjustments. Any renewal, extension,
modification, alteration or any indulgence, delay, adjustment, forbearance
or compromise that might be granted or given by Landlord to the Tenant or
the Guarantor with respect to the Guaranteed Obligations (including but not
limited to any maturity(ies) thereof) or any part or parts hereof, or any
other agreement, contract or instrument between Tenant and Landlord or any
other person or party, pertaining to the Guaranteed Obligations; or,
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(b) Release of Obligors. Any full or partial release of the Tenant or any
other person or entity now or hereafter liable, whether primarily or
secondarily, jointly and/or severally, to pay, perform or guarantee payment
of the Guaranteed Obligations or any part thereof, it being acknowledged
and agreed by Guarantor that Guarantor may be required to pay the
Guaranteed Obligations in full without the support or assistance of any
other party, and Guarantor has not been induced to enter into this Guaranty
on the basis of a belief, understanding or agreement that other parties
will at all times be liable to perform the Guaranteed Obligations, or that
Landlord will look to other parties to perform the Guaranteed Obligations;
or
(c) Other Security. The taking or accepting of any other security,
collateral or guaranty or other assurance of payment, for all or any part
of the Guaranteed Obligations; or
(d) Invalidity of the Guaranteed Obligations. The invalidity, illegality
or unenforceability of all or any part of the Guaranteed Obligations, or
any document or agreement executed in connection therewith, for any reason
whatsoever, including without limitation, the fact(s) that,
(i) the act of creating or guaranteeing the Guaranteed Obligations or
any part thereof, is ultra ▇▇▇▇▇,
(ii) the officers, agents, attorneys-in-fact or other representatives
creating or guaranteeing the Guaranteed Obligations or any part
thereof, acted without any or in excess of their authority,
(iii) the Lease or any document, instrument or agreement pertaining to
the Guaranteed Obligations have been forged or otherwise are irregular
or not genuine or authentic,
(iv) any other facts which for any other reason would render the
Guaranteed Obligations unenforceable or uncollectible against the
Tenant; or
(e) Condition of Tenant or Guarantor. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution
or lack of power of Tenant or any other party at any time liable for the
payment of all or part of the Guaranteed Obligations; or any dissolution of
Tenant or Guarantor; or any sale, lease or transfer of any or all of the
assets of Tenant or Guarantor; or any reorganization or reincorporation of
Tenant or Guarantor (even though rendering the Guaranteed Obligations or
any part or parts thereof void or uncollectible as against the Tenant).
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15. Guarantor's Rights of Contribution and Subrogation. It is expressly agreed
and acknowledged that Guarantor has not and does not hereby waive or release
(expressly or impliedly) any rights of subrogation, reimbursement, or
contribution which it may have after payment in full of the Guaranteed
Obligations against others who are liable for or have also guaranteed the
Guaranteed Obligations or any part thereof, or as against any collateral or
property or security held by any person or party in order to secure the
Guaranteed Obligations or any part thereof; provided, however, that Guarantor's
rights of subrogation and reimbursement are and shall be subordinate to the
rights and claims of the Landlord and all of the Guaranteed Obligations shall be
paid in full before Guarantor shall receive payment or performance of any sums
due Guarantor under the provisions hereof.
16. Guarantor's Representations, Warranties and Covenants: To induce
Landlord to enter into the Lease with the Tenant, the Guarantor represents,
warrants and agrees that:
(a) Benefit. Guarantor has received, or will receive, direct or indirect
benefit from the Landlord entering into the Lease with Tenant and the making of
this Guaranty. Specifically, but not by way of limitation, Guarantor represents
that Tenant has previously been a division of Guarantor, that Guarantor and
Tenant continue to share key employees, that Guarantor and Tenant have similar
business interests and business relationships, and that Tenant's ability to
enter into the Lease affords Tenant the opportunity for continued growth and
success which will provide substantial economic and practical benefits to
Guarantor.
(b) No Representation by Creditor. Neither Landlord nor any other party has
made any representation, warranty or statement to the Guarantor in order to
induce the Guarantor to execute this Guaranty.
(c) Guarantor's Financial Condition. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligations evidenced hereby,
Guarantor is, and will be, solvent, and has and will have assets which, fairly
valued, exceed its obligations, liabilities and debts, and has and will have
property and assets in the State of Texas sufficient to satisfy and repay its
obligations and liabilities.
(d) Guarantor's Dealings with Tenant. Guarantor has disclosed to Landlord
that all of the shareholders and some of the directors of Guarantor are also
shareholders and directors of Tenant. Guarantor hereby agrees that as long as
this Guaranty Agreement is in effect, neither Guarantor nor any of Guarantor's
Affiliated Parties, as that term is defined herein, shall exercise any of the
rights or powers as a shareholder of Tenant or in any other capacity, whether
directly or indirectly, to approve, consent to or require Tenant:
(i) to dispose of or transfer any of its assets, other than in the
ordinary course of business, to or for the benefit of Guarantor
or Guarantor's Affiliated Parties, or
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(ii) except as otherwise specifically provided herein, to declare or
make any dividend or distribution, other than in the ordinary
course of business, or to enter into any transaction with or for
the direct or indirect benefit of Guarantor or any of Guarantor's
Affiliated Parties, or any person controlled by or under common
control with Guarantor, or any of Guarantor's Affiliated Parties,
except for (a) an arms length transaction in the ordinary course
of business, or (b) so long as Tenant is treated for federal
income tax purposes as an S Corporation, distributions to
Tenant's shareholders of an amount equal to the shareholder's
federal, state and local income taxes attributable to the
Tenant's income for federal income tax purposes.
For purposes of this Section 16, the term "Guarantor's Affiliated Parties"
shall mean the shareholders and directors of Guarantor, any subsidiary or
affiliate of Tenant, and any subsidiary or affiliate of Guarantor. Guarantor
acknowledges and agrees that a default by Guarantor under this Guaranty shall
constitute a default under the Lease.
The representations, warranties, and agreements of Guarantor set forth in
this Section 16 shall not survive the termination of this Guaranty.
Notwithstanding anything to the contrary contained in this Guaranty Agreement,
the liability and obligations of the Guarantor to perform and observe the
obligations contained in this Guaranty Agreement are strictly the obligations of
the Guarantor. Under no circumstances whatsoever shall any past, present or
future partner, officer, director or shareholder of Guarantor be personally
liable for any money judgment or any other action brought by Landlord against
Guarantor to enforce the provisions of this Guaranty Agreement, it being
expressly and understood that Landlord agrees to look solely to the Guaranty for
enforcement of Guarantor's liabilities and obligations under this Guaranty
Agreement.
17. Transfer or Assignment by Landlord. This Guaranty is intended for and shall
inure to the benefit of the Landlord, its successors or assigns, and each and
every other person who shall from time to time be or become the owner of the
property that is the subject of the Lease.
18. Transfer or Assignment by Guarantor. It is hereby agreed that Guarantor may
not, without the express prior written consent of Landlord acknowledged by an
officer thereof, transfer or assign any of its rights, powers, duties or
obligations thereunder.
19. Waiver. No failure to exercise, and no delay in exercising, on the part of
Landlord, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any other right. The rights of Landlord hereunder
shall be in addition to all other rights provided by law. No modification or
waiver of any provision of this Guaranty, nor consent to departure therefrom,
shall be effective unless in writing and no such consent or waiver shall extend
beyond the particular case and purpose involved. No notice or demand given in
any
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case shall constitute a waiver of the right to take other action in the same,
similar or other instances without such notice or demand.
20. Release of Guaranty. Notwithstanding anything contained in this Guaranty to
the contrary, and provided further that a Default by Tenant has not occurred and
is continuing, it is specifically agreed that this Guaranty will be canceled,
shall become null and void, and returned to Guarantor upon the happening of
EITHER of the following events:
(a) Event No. 1 (includes all of the following items):
(1) Tenant's audited balance sheet, or as filed with the United
States Securities and Exchange Commission, reflects shareholders'
equity of not less than $10,000,000.00;
(2) Tenant's common stock is approved for listing on the NASDAQ
National Market System, New York Stock Exchange or American Stock
Exchange;
(3) at the time that Tenant's common stock is approved for listing as
set forth in 20(a)(2) above, Tenant is free of debt other than
trade payables and Tenant's contemplated $5,000,000.00 credit
facility with Texas Commerce Bank (the "TCB Credit Facility");
and
(4) Tenant is not in default under the TCB Credit Facility, and no
event has occurred which, with the passage of time, will
constitute a default under the TCB Credit Facility, or, in the
event Tenant has not obtained the TCB Credit Facility, Tenant is
in compliance with the following financial covenants:
(i) Tenant is maintaining a ratio of total debt divided by
EBITDA (earnings before interest, taxes, depreciation and
amortization) of 2.00x or less (1.75x or less effective
after March 31, 1997) tested quarterly; and
(ii) Tenant does not have total indebtedness which exceeds ten
percent (10%) of shareholders' equity;
(iii) Tenant does not have liens against any of its assets,
except with respect to the Lease and in connection with
other allowed indebtedness; and
(iv) Tenant's borrowings do not exceed 85% of Tenant's adjusted
accounts receivable.
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(b) Event No. 2 (includes all of the following items):
(1) Tenant audited balance sheet reflects shareholders' equity of not
less than $10,000,000.00, net of any anticipated distributions
that would reduce shareholders' equity below $10,000,000.00;
(2) Tenant is free of debt other than trade payables and the TCB
Credit Facility; and
(3) Tenant is not in default under the TCB Credit Facility, and no
event has occurred which, with the passage of time, will
constitute a default under the TCB Credit Facility, or, in the
event Tenant has not obtained the TCB Credit Facility, Tenant is
in compliance with the following financial covenants:
(i) Tenant is maintaining a ratio of total debt divided by
EBITDA (earnings before interest, taxes, depreciation and
amortization) of 2.00x or less (1.75x or less effective
after March 31, 1997) tested quarterly; and
(ii) Tenant does not have total indebtedness which exceeds ten
percent (10%) of shareholders' equity;
(iii) Tenant does not have liens against any of its assets,
except with respect to the Lease and in connection with
other allowed indebtedness; and
(iv) Tenant's borrowings do not exceed 85% of Tenant's adjusted
accounts receivable.
21. Notices. It is agreed that:
(a) Any notice or demand to the Guarantor hereunder or in connection
herewith may be given and shall conclusively be deemed and considered to have
been given and received upon the third day after the deposit thereof, in
writing, in the United States mail, duly stamped and addressed to the Guarantor
at the address of the Guarantor as shown below (whether actually received or
not), but actual notice, however given or received, shall always be effective.
The last preceding sentence shall not be construed in anyway to affect or impair
any waiver of notice or demand herein provided or to require giving of notice or
demand to or upon the Guarantor in any situation or for any reason.
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Guarantor: Pencom Systems, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Landlord: Investors Life Insurance Company of North America
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any notice which Guarantor may or shall give to the Landlord shall be
personally delivered or mailed by prepaid certified or registered mail, return
receipt requested, delivery restricted to addressee only at the address of the
Landlord as shown above.
(c) In the event that Landlord or Guarantor changes its mailing address,
notice shall be given to the other party in the manner described in (a) and (b)
of paragraph 26.
22. Invalid Provisions. If any provision of this Guaranty is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Guaranty, such provision shall be fully severable and this
Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall, to the extent permitted by law,
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision.
23. Governing Law, Jurisdiction. The substantive laws of the State of Texas
shall govern the validity, construction, enforcement and interpretation of this
Guaranty. For purposes of this Guaranty and the resolution of disputes
hereunder, Guarantor hereby irrevocably submits and consents to, and waives any
objection to, the non-exclusive jurisdiction of the state and federal courts
located in ▇▇▇▇▇▇ County, Texas.
24. Numerical and Personal References. As used herein and when required by the
context, each number (singular and plural) shall include all numbers, and each
gender shall include all genders, and unless the context otherwise requires the
word "person" or "party" shall include "person, corporation, firm, partnership,
joint venture or association."
25. Headings. Section headings are for convenience of reference only and shall
in no way affect the interpretation of this Guaranty.
26. Rights and Remedies. The exercise by Landlord of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.
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PENCOM SYSTEMS, INC.
By: _________________________________
Printed Name: _______________________
Title: ______________________________
DATE: October _____, 1996.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
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EXHIBIT K
TO LEASE BETWEEN INVESTORS LIFE INSURANCE COMPANY
OF NORTH AMERICA AS LANDLORD
AND PSW TECHNOLOGIES, INC., AS TENANT
CERTIFICATE OF THE SECRETARY OF GUARANTOR
The undersigned, Secretary of Pencom Systems, Inc., a _____________
corporation (the "Corporation"), hereby certifies that attached is a true and
correct copy of the resolutions duly adopted by unanimous consent dated _______,
19___, of all directors of the Board of Directors of the Corporation and that
the same have not been amended, altered or rescinded and are now in full force
and effect; that the Corporation is duly organized and existing under the laws
of the State of ________; that all franchise and other taxes, if any, required
to maintain the corporate existence of the Corporation have been paid when due
and that no such taxes are delinquent; that no proceedings are pending for the
forfeiture of the Certificate of Incorporation of the Corporation or for its
dissolution, voluntary or involuntary; that the Corporation is duly qualified to
do business in the State of Texas and is in good standing in such state; that
there is no provision of the Articles of Incorporation or Bylaws of the
Corporation limiting the powers of the Board of Directors to pass or consent to
the resolutions set out in the instrument attached hereto and that said
resolutions are in conformity with the provisions of said Articles of
Incorporation and Bylaws; and that the Secretary is the keeper of the records
and minutes of the proceedings of the Board of Directors of the Corporation.
This is to further certify that the persons named below are the duly
elected and qualified officers of the Corporation, holding the respective
offices set forth opposite their names, that they continue to hold these offices
at the present time, and that the respective signatures set opposite their names
are the genuine, original signatures of each respectively:
Name Title Signature
____________________ President ______________________________
____________________ Vice President ______________________________
____________________ Secretary ______________________________
____________________ Treasurer ______________________________
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IN WITNESS WHEREOF I have hereunto affixed my name as Secretary and have
caused the corporate seal of the Corporation to be hereto affixed this ______
day of ______________, 19___.
______________________________
Secretary
The undersigned, ________________________, President of the Corporation,
hereby certifies that _________________________ is the duly elected and
qualified Secretary of the Corporation, that the signature above is his (her)
genuine signature, that attached is a true and correct copy of the resolutions
duly adopted by the Board of Directors of the Corporation, which are now in full
force and effect; and that the foregoing certificate is true and correct.
______________________________
President
RESOLUTIONS OF CORPORATE BOARD
RESOLVED: That PSW Technologies, Inc. ("PSW"), an affiliate of Pencom Systems,
Inc. (this "Corporation") is entering into a Lease Agreement (the "Lease") dated
October __, 1996, with Investors Life Insurance Company of North America, a
Washington corporation ("Landlord"), covering premises located in Three
Bridgepoint Office Square (the "Building").
FURTHER RESOLVED: That one of the Landlord's requirements of the Lease is for
the Corporation to guarantee PSW's obligations as the Tenant under the Lease.
FURTHER RESOLVED: That the execution of the Lease by PSW will benefit, directly
or indirectly, the Corporation, and therefore, the Corporation has agreed to
guarantee PSW's obligations as the Tenant under the Lease.
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FURTHER RESOLVED: The Lease Guaranty shall be in form and substance satisfactory
to Landlord and in form and substance approved by the officer of this
Corporation executing the same, his approval of each such instrument to be
conclusively evidenced by his execution thereof.
FURTHER RESOLVED: That the President or any Vice President of this Corporation
be and each hereby is severally authorized and directed for and on behalf, and
as the act and deed of this Corporation to execute and deliver to Landlord the
Lease Guaranty and to take such other action in the consummation of the
transaction herein contemplated as the officer acting shall deem to be necessary
or desirable, without the necessity of attestation by the secretary or any other
officer of this Corporation and with or without the seal of this Corporation;
any and all acts heretofore taken by the President or any Vice President of this
Corporation to such end are hereby expressly ratified and confirmed as the acts
and deeds of this Corporation.
INITIALED FOR IDENTIFICATION BY LANDLORD [Illegible] AND TENANT [Illegible]
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