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EXHIBIT 10.5
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LEASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇ TWO PARTNERSHIP, LTD.
AS LANDLORD,
AND
WESTECH CAPITAL CORP.
AS TENANT
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TABLE OF CONTENTS
ARTICLE I - LEASED PREMISES..............................................................................1
Section 1.01 Leased Premises...............................................................1
Section 1.02 Lease Grant...................................................................1
Section 1.03 Building Core and Shell.......................................................2
ARTICLE II - LEASE TERM..................................................................................2
Section 2.01 Lease Term....................................................................2
Section 2.02 Holding Over..................................................................3
ARTICLE III - RENT.......................................................................................3
Section 3.01 Minimum Rent..................................................................3
Section 3.02 Additional Rent...............................................................3
Section 3.03 Rent Payments.................................................................8
ARTICLE IV - UTILITIES AND SERVICES......................................................................8
Section 4.01 Services to be Provided.......................................................8
Section 4.02 Additional Services..........................................................10
Section 4.03 Tenant's Obligations.........................................................10
Section 4.04 Service Interruptions........................................................10
ARTICLE V - USE AND OCCUPANCY...........................................................................11
Section 5.01 Use and Occupancy............................................................11
Section 5.02 Rules and Regulations........................................................13
Section 5.03 Quiet Enjoyment..............................................................13
ARTICLE VI - REPAIRS, MAINTENANCE AND ALTERATIONS.......................................................13
Section 6.01 Repair and Maintenance by Tenant.............................................13
Section 6.02 Alterations and Additions by Tenant..........................................14
Section 6.03 Mechanics' Liens - Tenant's Obligations......................................15
Section 6.04 Maintenance and Repair by Landlord...........................................15
ARTICLE VII - INSURANCE, FIRE AND CASUALTY..............................................................16
Section 7.01 Tenant's Insurance...........................................................16
Section 7.02 Landlord's Insurance.........................................................16
Section 7.03 Fire or Other Casualty.......................................................17
Section 7.04 Waiver of Subrogation........................................................18
ARTICLE VIII - CONDEMNATION.............................................................................18
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ARTICLE IX - INDEMNIFICATIONS AND WAIVER................................................................19
Section 9.01 Limitations on Liability of Landlord: Waiver.................................19
Section 9.02 Tenant's Indemnification of Landlord; Assumption; Employees'Claims...........20
Section 9.03 Landlord's Indemnification of Tenant.........................................21
Section 9.04 No Implied Waiver............................................................21
Section 9.05 Waiver by Tenant.............................................................21
Section 9.06 Hazardous Materials..........................................................22
ARTICLE X - ASSIGNMENT AND SUBLETTING...................................................................23
Section 10.01 No Assignment or Subletting Without Consent.....................................23
ARTICLE XI - DEFAULT....................................................................................24
Section 11.01 Default......................................................................24
Section 11.02 Landlord's Lien..............................................................27
Section 11.03 Mitigation of Damages........................................................28
ARTICLE XII - MISCELLANEOUS PROVISIONS..................................................................29
Section 12.01 Rights Reserved by Landlord..................................................29
Section 12.02 Taxes on Tenant's Property...................................................31
Section 12.03 Attorneys' Fees and Legal Expenses...........................................32
Section 12.04 Subordination................................................................33
Section 12.05 Estoppel Certificates........................................................33
Section 12.06 Financial Statements.........................................................34
Section 12.07 Notices......................................................................34
Section 12.08 Business Purpose.............................................................34
Section 12.09 Severability.................................................................34
Section 12.10 No Merger....................................................................35
Section 12.11 Force Majeure................................................................35
Section 12.12 Gender.......................................................................35
Section 12.13 Joint and Several Liability..................................................35
Section 12.14 No Representations...........................................................35
Section 12.15 Entire Agreement; Amendments.................................................36
Section 12.16 Section Headings.............................................................36
Section 12.17 Binding Effect...............................................................36
Section 12.18 Counterparts.................................................................36
Section 12.19 Rental Tax...................................................................36
Section 12.20 No Personal Liability of Landlord............................................37
Section 12.21 Authority to Sign Lease......................................................37
Section 12.22 Execution and Approval of Lease..............................................37
ARTICLE XIII - ADDITIONAL AGREEMENTS....................................................................37
ARTICLE XIV - EXHIBITS AND ATTACHMENTS..................................................................38
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BASIC LEASE PROVISIONS
LANDLORD: ▇▇▇▇▇ Two Partnership, Ltd., a Texas limited
partnership
LANDLORD'S ADDRESS: ▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. L. ▇▇▇▇ ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
WITH COPY TO:
▇▇▇▇▇ Two Partnership, Ltd.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
TENANT: Westech Capital Corp., a New York Corporation
TENANT'S ADDRESS: PRIOR TO THE COMMENCEMENT DATE:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. #▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
AFTER THE COMMENCEMENT DATE:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (512)
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Fax No. (512)
----------------
with copy to:
Christian & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone No. (▇▇▇)▇▇▇-▇▇▇▇
Fax No. (▇▇▇)▇▇▇-▇▇▇▇
BUILDING: The land described on Exhibit A attached
hereto, together with all improvements now
or hereafter constructed thereon, including
the office building and related parking
garage locally known or to be known as
Terrace II, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
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LEASED PREMISES: Suite 400 on the fourth (4th) floor of the
Building, which is generally depicted on the floor
plan which is attached hereto as Exhibit B. As
more fully set forth in Section 1.01, the Rentable
Area of the Leased Premises includes not only the
useable floor area of the Leased Premises, but
also, an allocation of a portion of the Common
Area of the Building. For the purposes of this
Lease the Leased Premises shall comprise 24,963
square feet of Rentable Area. Tenant shall also
have the use of ancillary areas common for use of
all Tenants of the Building.
TOTAL BUILDING AREA: 114,635 square feet of Rentable Area.
MINIMUM RENT: Beginning on the Commencement Date, Minimum Rent
under this Lease will be payable during the
applicable months of the Lease Term specified in
the "Lease Months" column hereinbelow, at an
annual rate determined by multiplying the
applicable dollar amounts set out in the "Annual
Rate" column hereinbelow by the number of square
feet of Rentable Area in the Leased Premises. The
Minimum Rent will be payable in monthly
installments in the amounts set out in the
"Monthly Installments" column hereinbelow.
Lease Months Annual Rate Monthly Installments
-------------------------- --------------------- ------------------------
1 - 2 - 0 - - 0 -
-------------------------- --------------------- ------------------------
3 (March 1,2000) - 60 $17.50 $36,404.38$
-------------------------- --------------------- ------------------------
61 - 87 $18.50 $38,488.63$
-------------------------- --------------------- ------------------------
RENT: The Minimum Rent, Additional Rent (hereinafter
defined), and all other amounts payable by Tenant
to Landlord under this Lease.
TENANT'S PERCENTAGE: 21.78%
EFFECTIVE DATE: September 30, 1999.
COMMENCEMENT DATE: As defined in Section 2.01 of the lease which is
projected to be December 15, 1999.
LEASE TERM: Eighty-seven (87) months, commencing on the
Commencement Date and subject to the option to
extend set forth on Exhibit H.
BUILDING STANDARD HOURS: 7:00 A.M. to 7:00 P.M. on each Monday through
Friday (excluding Building Holidays) and 8:00
A.M. to 5:00 P.M. on each Saturday (excluding
Building Holidays).
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BUILDING HOLIDAYS: New Years Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.
LANDLORD'S BROKER: Colliers Oxford Commercial, Inc.
1500 Nations Bank Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
TENANT'S BROKER: ▇. ▇. ▇▇▇▇▇▇▇ Interests
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PARKING: Tenant shall be entitled to no more than one
hundred eleven (111) parking spaces at no
cost to Tenant during the term of this
Lease, of which fifteen (15) are reserved
spaces the location of which is shown on
Exhibit B-1 attached hereto.
PERMITTED USE: General office, including but not limited to,
facilities for brokerage services (including a
trading floor) and associated ancillary uses.
The Basic Lease Provisions set forth hereinabove are hereby incorporated into
and made a part of the Lease Agreement which is attached hereto (the "Lease").
Each reference in the Lease to any of the provisions or definitions set forth in
these Basic Lease Provisions shall mean and refer to the provisions and
definitions hereinabove set forth and shall be used in conjunction with the
provisions of the Lease. In the event of any direct conflict between these Basic
Lease Provision and the Lease, these Basic Lease Provisions shall control;
provided, however, that those provisions in the Lease (including all exhibits
and attachments thereto) which expressly require an adjustment or modification
to any of the matters set forth in these Basic Lease Provisions shall supersede
the adjusted or modified provisions of these Basic Lease Provisions.
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EXECUTED by the undersigned in multiple originals as of the Effective Date set
out hereinabove.
LANDLORD: ▇▇▇▇▇ TWO PARTNERSHIP, LTD.,
a Texas limited partnership
By: ▇▇▇▇▇ TWO MANAGEMENT CORP.,
a Texas corporation, its General Partner
By:
L. ▇▇▇▇ ▇▇▇▇▇▇, President
TENANT:
WESTECH CAPITAL CORP.,
a New York Corporation
By: /s/ ▇▇▇ ▇. VAN ERT
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Name: ▇▇▇ ▇. Van Ert
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Title: President
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LEASE AGREEMENT
This Lease Agreement ("Lease") is entered into as of the Effective Date
specified in the Basic Lease Provisions by and between Landlord and Tenant. The
Basic Lease Provisions attached hereto and the defined terms set out therein are
hereby incorporated herein by reference.
ARTICLE I - LEASED PREMISES
Section 1.01 Leased Premises
(a) The Leased Premises are depicted generally on Exhibit B and are or
will be bounded by the inside surface of the window wall(s) and the
centerline of walls separating the Leased Premises from areas leased
to or held for lease to other tenants or from Common Areas as
described herein. No deduction from usable area will be made for
columns or projections necessary to the Building or for special
stairs, elevators or other vertical penetrations which are for the
specific use of Tenant.
(b) The term "Rentable Area", as used herein with respect to the Leased
Premises, refers to the sum of (i) the usable floor area of the Leased
Premises, estimated to be 23,863 plus (ii) Tenant's share of all
common use: corridors, lobbies, elevator foyers, restrooms, as well as
all mechanical and electrical rooms, janitor's closets and other
similar facilities of the Building (such areas being herein referred
to as "Common Areas"). "Rentable Area" as used herein with respect to
the Building, includes all space occupied or to be occupied by
Tenants, together with the Common Areas. Upon the completion of
construction of improvements to the Leased Premises, useable floor
area of the Leased Premises, but not the Common Area, may be
re-measured at the request of either party. The cost of re-measurement
shall be borne by the party requesting re-measurement. If it is
determined that the useable floor area of the Leased Premises varies
from the estimate set forth above, then the Rentable Area of the
Leased Premises will be appropriately adjusted. If neither party
requests a re-measurement within thirty (30) days after the
Commencement Date, then it will be presumed for all purposes under
this Lease that the information in the Basic Lease Provisions with
respect to the number of square feet of Rentable Area in the Leased
Premises is correct, and such number will be a stipulated number which
will be utilized for all relevant purposes under this Lease.
Section 1.02 Lease Grant
For the consideration and subject to the terms, provisions and conditions
set out below, Landlord lets and leases to Tenant and Tenant leases from
Landlord the Leased Premises and the right to use all areas commonly held
for use by tenants of the Building and located on the Land described on
Exhibit A.
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Section 1.03 Building Core and Shell
Landlord will provide the improvements which are listed and described on
Exhibit C which is attached hereto and incorporated herein by reference
(the "Building Core and Shell"). If improvements are to be constructed by
Landlord within the Leased Premises, then all of Landlord's agreements with
respect thereto are set forth in a tenant work letter which is attached to
this Lease (the "Tenant Work Letter").
ARTICLE II - LEASE TERM
Section 2.01 Lease Term
(a) Subject to and upon the terms and conditions set forth in the Lease,
or in any exhibit attached hereto, the primary term of this Lease
shall commence on the earlier of (i) the Completion Date or (ii) the
date Tenant occupies all or part of the Leased Premises, (such earlier
date being the "Commencement Date") and shall expire on the last day
of the eighty-seventh (87th) month after the Commencement Date. The
"Lease Term" of this Lease shall be the primary term specified in this
Section 2.01, as renewed or otherwise extended or earlier terminated
pursuant to the terms and provisions set forth herein.
(b) As used herein, "Completion Date" means the date Tenant's leasehold
improvements are Substantially Completed (as defined below). If the
Commencement Date is other than the first day of a calendar month, the
Lease Term will be extended and will be calculated as if the
Commencement Date were the first day of the next full calendar month
and the Rent hereunder will be prorated for the first partial month.
(c) The Leased Premises shall be deemed Substantially Completed when: (i)
Landlord's architect has certified to Tenant the Leased Premises are
complete with all the improvements identified in the Tenant Work
Letter and change orders, if any, completed in accordance with
Tenant's plans and specifications (except for minor "punch list"
items, which must be completed by Landlord within thirty (30) days
after Tenant's submission of such "punch list" to Landlord); and (ii)
Landlord has delivered to Tenant a copy of a Temporary Certificate of
Occupancy for the Leased Premises approving the work and lawfully
permitting Tenant's intended uses (as such term is defined below) of
the Leased Premises. Tenant's agents shall have reasonable access to
the Leased Premises on a rent-free basis to make any installations of
telephone systems, equipment, fixtures and furnishings; provided,
however, if Tenant's agents cause the date of Substantial Completion
to be after March 1, 2000, then for each day of such delay after March
1, 2000, Tenant shall be obligated to pay one day's Minimum Rent to
Landlord for each day of delay.
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(d) By its execution of the Lease, Landlord hereby consents to Tenant's
plans and specifications for initial improvements, copies of which,
initialed and dated by Landlord and Tenant, are in the possession of
both parties (the "Plans").
(e) After the Completion Date, Landlord and Tenant shall promptly, upon
the request of either of them, execute and deliver to each other an
agreement setting forth the Commencement and Expiration Dates.
Section 2.02 Holding Over
Should Tenant hold the Leased Premises after termination of this Lease, by
lapse of time, default, or otherwise, such holding over shall be construed
as a tenancy at sufferance only, and Tenant shall pay in advance, as Rent,
for each day of such holding, a per diem amount equal to 1/30 of one
hundred fifty percent (150%) of the Rent payable for the last month of the
Lease Term. No receipt of money by Landlord from Tenant after termination
of this Lease shall reinstate or extend this Lease, or affect any prior
notice given by Landlord to Tenant, and no extension shall be valid unless
in writing, signed by Landlord and Tenant. The foregoing shall not be
construed as Landlord's consent for any such holding over, and Landlord
reserves the right to proceed against Tenant for any damages caused
thereby.
ARTICLE III - RENT
Section 3.01 Minimum Rent
Tenant shall pay the Minimum Rent to Landlord in monthly installments in
advance on or before the first day of each calendar month during the Lease
Term beginning on the later of (i) sixty (60) days after the date of
Substantial Completion or (ii) March 1, 2000, subject to any Landlord delay
as defined in the Tenant Work Letter.
Section 3.02 Additional Rent
(a) For purposes of this Lease "Operating Expenses" means all of
Landlord's reasonable costs and expenses paid or incurred in owning,
operating, managing and maintaining the Building for a particular
calendar year or portion thereof, including by way of illustration but
not limitation: (i) all taxes, assessments and governmental charges of
any kind and nature whatsoever levied or assessed against the
Building, excluding penalties, interest and attorney's fees assessed
due to non-payment; (ii) any and all assessments levied by the planned
unit development owner's association; (iii) all normal and customary
premiums for any and all insurance maintained in connection with the
ownership, operation, maintenance, and/or management of the Building
(including but not limited to property and liability coverage); (iv)
water, sewer, electrical and other utility charges (but excluding any
of such items paid separately by other Tenants of the Building); (v)
service and other charges incurred in the operation and maintenance of
the
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elevators and the heating, ventilation and air-conditioning system;
(vi) cleaning and other janitorial services; (vii) tools and supplies;
(viii) repair costs to the Building that are not capitalized; (ix)
landscape installation and maintenance costs (other than original
installation); (x) security services; (xi) license, permit and
inspection fees other than that required for Tenant's interior
improvements; (xii) reasonable management fees which are earned
relating exclusively to management functions for the Building; (xiii)
wages and related benefits payable to employees who render services to
or for the benefit of the Building or tenants of the Building; (xiv)
legal and accounting fees; (xv) trash removal; (xvi) garage
maintenance and operating costs; (xvii) the cost of electrical surveys
(xviii) costs associated with building amenities; (xviv) capital
improvements costing less than five thousand dollars ($5,000) and, in
general, all other costs and expenses which would generally be
regarded as operating and maintenance costs and expenses, including
those which would normally be amortized over a period not to exceed
five (5) years employing Generally Accepted Accounting Principals.
Also included in Operating Expenses is the cost of any capital
improvement made to the Building by Landlord after the date of this
Lease that is required under governmental law or regulation not
applicable to the Building at the time the Building was constructed,
amortized employing Generally Accepted Accounting Principals together
with an amount equal to interest at the rate of ten (10) percent per
annum on the unamortized balance.
All references in this Section 3.02(a) to Operating Expenses mean
actual Operating Expenses; provided, however, for any calendar year or
partial calendar year in which the rentable area of the Building is
not one hundred percent (100%) occupied with all tenants in occupancy
and paying full rent, variable Operating Expenses for that period
shall be calculated in a manner, and in the amount, that would have
been incurred had the Building been one hundred percent (100%)
occupied with all tenants in occupancy and paying full rent the result
of which is Tenant not being assessed in excess of Tenant's
Percentage. Notwithstanding anything to the contrary in the preceding
sentence, in no event will Landlord ▇▇▇▇ tenants of the Building, or
collect from tenants of the Building, amounts for reimbursement of
Operating Expenses which exceed, in the aggregate, after all
adjustments to correct and conform any estimated ▇▇▇▇▇▇▇▇ to actual
expenses, the actual amount of Operating Expenses incurred by Landlord
in any calendar year.
If Landlord installs any device, improvement or equipment which will
improve the operating efficiency of any system within the Building
(e.g. solar collectors) or reduce Operating Expenses, or any device or
equipment that is required to be installed by any government or
governmental agency having authority to order that it be installed,
then Landlord may add to the Operating Expenses each year during the
useful life of the installed device, improvement, or equipment (as the
useful life is determined by Landlord) an amount equal to the annual
amortization of the cost of the installed device, improvement, or
equipment, calculated in accordance with
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Generally Accepted Accounting Principals but in no event more than the
actual cost saved as a result of the installation thereof.
(b) Operating Costs shall not include costs for (i) repair, replacements
and general maintenance paid by proceeds of insurance or by Tenant or
other third parties; (ii) interest, amortization or other payments on
loans to Landlord; (iii) leasing commissions; (iv) legal or accounting
expenses for services, other than those that benefit the Building
tenants generally (e.g., tax disputes); (v) renovating or otherwise
improving space for occupants of the Building or vacant space in the
Building other than Common Areas; (vi) the costs incurred by Landlord
to bring the Building, the Land or any equipment maintained therein in
compliance with laws, ordinances, rules, regulations, requirements,
directives, guidelines and orders in effect and applicable to the
Building as of the date of this Lease; (vii) the cost of any services
or materials supplied to other tenants and not to Tenant; (viii) the
cost of any services or materials for which Landlord receives
reimbursement or payment from other sources; (ix) depreciation on the
Building; (x) federal income taxes imposed on or measured by the
income of Landlord from the operation of the Building; (xi) repairs,
alternations, additions, improvements, replacements made to rectify or
correct any defect in the original design, materials or workmanship of
Building or Common Areas other than repairs, alterations, additions,
improvements or replacements made as a result of ordinary wear and
tear; (xii) damage and repairs attributable to fire or other casualty;
(xiii) damage and repairs necessitated by the negligence or willful
misconduct of Landlord, Landlord's employees, contractors or agents;
(xiv) executive salaries or salaries of service personnel to the
extent that such the services of such persons do not relate to the
management, operation, repair or maintenance of the Building; (xv)
Landlord's general overhead expenses not related to the Building;
(xvi) costs including permit, license and inspection fees incurred in
renovating or otherwise improving, decorating or painting or altering
space for tenants or other occupants or of vacant space (excluding
Common Areas) in the Building; (xvii) costs incurred due to a
violation by Landlord or any other tenant of the Building of the terms
and conditions of a lease; and (xviii) cost of any service provided to
Tenant or other occupants of the Building for which Landlord is
reimbursed has received reimbursement from another source.
For the purposes of calculating Tenant's obligation for the payment of
Additional Rent under this Article, if any tenants of the Building are
billed separately for any category of Operating Expense (e.g.,
separately metered utilities) the amount of the separately billed
Operating Expenses will not be included in Operating Expenses. For any
category of Operating Expense for which one or more tenants of the
Building make(s) separate payments, Tenant's Percentage will be
adjusted for that category of Operating Expense by excluding from the
denominator thereof the Rentable Area of all tenants making separate
payments with respect to such category.
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Further, with regards to all operating expenses, Landlord shall, at
its sole cost and expense: (a) competitively bid all services, the
charges for which are passed to Tenant under the definition of
Operating Expenses (so that the result of the same is services or
items provided at comparable prices for like buildings); (b) contest
unreasonable increases in ad valorem taxes, assessments, utilities, or
the like; (c) see that, with respect to all accounting and related
treatment decisions, Generally Accepted Accounting Principles are
used; and (d) cause any company related to Landlord to render such
service at competitive prices comparable to like services for like
buildings.
(c) In addition to the Minimum Rent, Tenant shall pay to Landlord as
Additional Rent for the Leased Premises, in each calendar year, or
partial calendar year, during the Lease Term, an amount equal to
Tenant's Percentage of the Operating Expenses for the calendar year or
portion of the calendar year; provided, however, Tenant shall not be
required to pay Additional Rent during the period of time of abatement
of Minimum Rent as set forth in paragraph 3.01; nor shall Tenant be
required to pay Additional Rent in excess of $8.00 per rentable square
foot for the calendar year 2000.
(d) Landlord shall estimate Tenant's Additional Rent for each subsequent
calendar year, and give written notice thereof to Tenant as soon as
reasonably possible. For each calendar year (or partial calendar year)
Tenant shall pay to Landlord each month, at the same time the Minimum
Rent is due, an amount equal to one-twelfth (1/12) of the estimated
annual Additional Rent due provided that Landlord agrees that in
calendar year 2002 and subsequent calendar years Operating Expenses
which may be controlled by Landlord shall not increase more than six
percent (6%) in any one (1) calendar year. For these purposes,
Operating Expenses over which Landlord has no control shall include,
but not be limited to (i) taxes, assessments and governmental charges
or impositions of any kind or nature whatsoever; (ii) premiums for any
and all property, casualty, worker's compensation and/or other
insurance maintained in connection with the ownership, operation,
maintenance or management of the Building; or (iii) impositions,
charges or fees of whatever kind or nature for water, sewer, gas,
electric or other utilities. For any year during which Additional Rent
is due for less than the entire calendar year, Tenant shall pay to
Landlord each calendar month during such year, one-twelfth of the
estimated Additional Rent that would have been due if Additional Rent
had been due throughout that calendar year.
(e) If Operating Expenses increase during a calendar year, Landlord may
revise the estimated Additional Rent during such year by giving Tenant
written notice to that effect, and thereafter Tenant shall pay to
Landlord, in each of the remaining months of that calendar year, an
additional amount equal to the amount of the increase in the estimated
Additional Rent divided by the number of months remaining in the year.
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(f) Within one hundred twenty (120) days after the end of each calendar
year, or as soon thereafter as figures are reasonably available,
Landlord shall prepare and deliver to Tenant a statement showing
Tenant's actual Additional Rent for that calendar year. Within thirty
(30) days after receipt of each statement, Tenant shall pay to
Landlord, or Landlord shall credit against the next Additional Rent
payment or payments due from Tenant, as the case may be, the
difference between Tenant's actual Additional Rent for the preceding
calendar year and the estimated Additional Rent paid by Tenant during
the year. If Tenant is owed money after the termination of this Lease,
Landlord shall pay such overpayment to Tenant within thirty (30) days.
(g) Tenant will have the right, for a period of two (2) years after the
expiration of any calendar year (but not thereafter) to audit
Landlord's books, at Tenant's cost and expense, to verify the
Operating Expenses for such calendar year. If Tenant does not request
an audit within two (2) years after the expiration of any particular
calendar year, then Tenant will be deemed to have waived any right it
may have to an adjustment to Tenant's Percentage of any Operating
Expenses for such calendar year.
(h) Tenant's right to verify Operating Expenses shall be subject to the
following limitations and conditions: (i) Tenant shall have no right
to verify Operating Expenses if Tenant has committed a monetary Event
of Default or if an event has occurred which, with the giving of
notice, the passage of time, or both, would constitute a monetary
Event of Default on the part of Tenant (ii) Tenant shall have provided
Landlord with timely written notice of its desire to verify Operating
Expenses and specified a date for such verification not less than
fourteen (14) nor more than thirty (30) from the delivery of the
notice to Landlord; (iii) such review or verification shall take place
in Landlord's offices in Austin, Texas; and (iv) Tenant and any third
party auditor, reviewer, attorney or accountant employed by Tenant
shall execute and deliver to Landlord a confidentiality agreement
acceptable to Landlord and which shall include, among other terms, the
agreement of Tenant and such third party not to disclose to any other
person the existence of the review, the results of the review and the
agreement of any third party not to solicit or conduct verifications
or reviews on the part of any other tenant of the Building or the
Project.
(i) In the event Landlord and Tenant are unable to agree on the
appropriate resolution of any dispute relating to Operating Expenses,
the sole and exclusive remedy of Tenant shall be to submit the
appropriate determination of Operating Expenses to binding arbitration
in ▇▇▇▇▇▇ County, Texas in accordance with the rules of the American
Arbitration Association for commercial disputes. In the event Landlord
and Tenant can not agree on a panel of arbiters within ten (10) days
after either party notifies the other of its election to submit the
matter to arbitration, then Landlord and Tenant shall each appoint an
arbitrator and the two arbitrators selected shall appoint the third.
All arbitrators selected or appointed for resolution
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of the dispute shall be unaffiliated with the parties and shall have
at least ten (10) years experience in commercial real estate leasing
in ▇▇▇▇▇▇ County, Texas as either an attorney or a licensed real
estate broker. The arbitration panel shall render a decision within
ninety (90) days of appointment.
(j) If (i) an arbitration panel determines, or (ii) Landlord agrees that
Tenant's audit results in a finding that Tenant was overcharged in an
amount in excess of five percent (5%) of the actual costs incurred by
Landlord for the Operating Expenses, then in such event, Landlord
shall reimburse Tenant for the reasonable costs of the audit, as well
as refund the overpayment plus interest at the rate of ten percent
(10%) per year. Landlord agrees to make such payment within thirty
(30) days.
Section 3.03 Rent Payments
(a) All Rent is payable by Tenant at the times and in the amounts
specified in this Lease in legal tender of the United States of
America to Landlord at Landlord's management office in the Building,
or to any other person or at any other address as Landlord may from
time to time designate by notice to Tenant.
(b) Rent is payable by Tenant without notice, demand, abatement,
deduction, or set-off except as expressly specified in this Lease.
Tenant's obligation to pay Rent is independent of any obligation of
Landlord under this Lease. If any installment of Rent is not paid
within ten (10) days after it is due, Tenant shall pay to Landlord a
late charge in an amount equal to five percent (5%) of the delinquent
installment of Rent when it pays the delinquent installment. In
addition, if Tenant fails to pay any Rent when the same is due (and
which represents amounts not already specified as bearing interest
under other provisions of this Lease) then Tenant shall also pay to
Landlord interest on the unpaid Rent from the due date until the date
paid at the highest rate lawfully permitted to be contracted for,
charged or received pursuant to a written contract under applicable
federal or state law (whichever is higher) or such lower rate as may
be assessed by Landlord (the "Interest Rate").
ARTICLE IV - UTILITIES AND SERVICES
Section 4.01 Services to be Provided
Provided Tenant is not in default hereunder, Landlord shall furnish or
cause to be furnished to the Leased Premises, the utilities and services
described below, subject to the conditions and in accordance with the
standards set forth herein:
(a) Landlord shall provide not less than one (1) automatic elevator
service to the Leased Premises twenty-four (24) hours per day, seven
(7) days per week.
(b) During Building Standard Hours, Landlord agrees to ventilate the
Leased Premises and furnish heat or air conditioning, at such
temperatures and in such amounts as
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is necessary and appropriate for the comfortable occupancy of the
Leased Premises, reasonably consistent with the standards of "Class A"
office buildings in Austin, Texas. Landlord's obligations to provide
heating and air conditioning are subject to any governmental
requirements or standards relating to, among other things, energy
conservation. Upon reasonable request (in both time and manner) from
Tenant, Landlord shall make available at Tenant's expense heat or air
conditioning at times other than Building Standard Hours. The minimum
charge and the hourly rate for the use of after hours heat or air
conditioning shall be determined from time to time by Landlord and
confirmed in writing to Tenant. Until further notice is given by
Landlord to Tenant, the hourly rate for such after hours heart or air
conditioning shall be Eight Dollars ($8.00) per hour for one-half hour
service or Sixteen Dollars ($16.00) per hour for full hour service.
Such charge shall not exceed Landlord's costs to provide such service.
(c) Electric lighting for the Common Areas of the Building.
(d) Toilet facilities and hot and cold water for lavatory purposes (at
temperatures prescribed by applicable law).
(e) Replacement, as necessary, of all lamps and ballasts in the H Building
Standard light fixtures within the Leased Premises and Common Areas.
(f) Window washing of exterior windows not less than once each year.
(g) Professional landscaping services for all landscaped areas from time
to time on the Land.
(h) Display, throughout the Term, on all Building directories of Tenant's
name and suite number. At Tenant's request, Landlord shall provide at
no cost to Tenant not less than twenty percent (20%) of the space on
the Building directory.
(i) Janitorial services at times and comparable and reasonably consistent
in quality to those being provided by other Class A office buildings
in Austin, Texas.
(j) Landlord shall furnish to the Leased Premises at all times, subject to
interruptions beyond Landlord's control and temporary interruptions
necessary or appropriate for Building maintenance or equipment
installation, electricity sufficient to operate normal office lighting
and equipment. Tenant shall not install or operate in the Leased
Premises any electrically operated machinery or equipment which
requires high electricity consumption for operation without the prior
written consent of Landlord. In no event may Tenant's use of
electricity exceed the capacity of the feeders to the Building or the
risers or wiring installation. Electrical consumption in the Leased
Premises, or in any portion of the Leased Premises in which excess
electricity is consumed, may, at Landlord's option, be separately
metered after written notice to Tenant. Tenant shall pay within thirty
(30) days of invoicing
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from Landlord all costs associated with any separate metering required
by Landlord, including but not limited to installation of any separate
metering devices and the costs of all electrical consumption in any
areas which are separately metered. The obligation of Landlord to
provide or cause to be provided electricity is subject to the rules
and regulations of the supplier of electricity and of any municipal or
other governmental authority regulating the business of providing
electricity. Landlord is not liable or responsible to Tenant for any
loss, damage or expense Tenant sustains or incurs if either the
quality or character of the electricity is changed or is no longer
available or no longer suitable for Tenant's requirements. At any time
when Landlord is furnishing electricity to the Leased Premises under
this subsection, Landlord may, at its option, upon not less than
thirty (30) days prior written notice to Tenant, discontinue the
furnishing of electricity. If Landlord gives a notice of
discontinuance, Landlord shall make all reasonably necessary
arrangements with the public utility supplying the electricity to the
Building with respect to connecting electrical service to the Leased
Premises, but Tenant shall contract directly with the public utility
with respect to supplying the electrical service.
Notwithstanding the above, Landlord shall not be allowed to
discontinue electrical service without providing (and assisting with
causing Tenant to contract with) an additional electrical service. In
this regard, Landlord shall allow Tenant (and the new service
provider) to use all facilities reasonably necessary to install and
provide such electricity.
Section 4.02 Additional Services
Landlord may impose a reasonable charge for heating, ventilating and air
conditioning provided by Landlord at any time other than the Building
Standard Hours or for any use beyond what Landlord agrees to furnish or
because of special electrical, cooling, and ventilating needs created by
Tenant's telephone equipment, computers, and other equipment or uses.
Section 4.03 Tenant's Obligations
Tenant shall reasonably cooperate at all times with Landlord and abide by
all regulations and requirements Landlord may prescribe for the use of all
utilities and services and which Landlord has notified Tenant of in
writing.
Section 4.04 Service Interruptions
(a) Landlord does not warrant that the services provided by Landlord will
be free from any slow-down, interruption, or stoppage by governmental
bodies, regulatory agencies, utility companies, and others supplying
services or caused by the maintenance, repair, replacement, or
improvement of any equipment involved in the furnishing of the
services or caused by changes of services, alterations, strikes,
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lock-outs, labor controversies, fuel shortages, accidents, acts of
God, the elements, or other causes beyond the reasonable control of
Landlord. Landlord shall use due diligence to resume the service upon
any slow-down, interruption, or stoppage.
(b) No slow-down, interruption, or temporary stoppage of the services may
be construed as an eviction, actual or constructive, of Tenant. If all
of the services provided by Landlord are interrupted to such an extent
that the Leased Premises are not usable by Tenant for a period of five
(5) consecutive days, then Tenant, as its exclusive remedy, shall be
entitled to a rental abatement to a fair and equitable extent until
such services are reinstated. Except for such abatement of rent, no
slowdown, interruption or temporary stoppage of the services to be
provided by Landlord hereunder will in any manner or for any purpose
relieve Tenant from its obligations under this Lease. Landlord is not
liable for damage to persons or property, or in default under this
Lease, as a result of any slow-down, interruption, or temporary
stoppage. If the services provided by Landlord are interrupted to such
an extent that the Leased Premises are not usable by Tenant for a
period of thirty (30) consecutive days and reasonable accommodation
(including all costs associated with a move) has not been made by
Landlord for Tenant to continue to operate Tenant's business in an
adjacent building, then Tenant may terminate this Lease and thereafter
be released from all future obligations under this Lease.
ARTICLE V - USE AND OCCUPANCY
Section 5.01 Use and Occupancy
(a) The Leased Premises may be used and occupied by Tenant only for
general business offices, including, but not limited to, facilities
for brokerage services (including a trading floor) and associated
ancillary uses and for no other purpose. Tenant shall use and maintain
the Leased Premises in a clean, careful, safe, and proper manner and
shall comply with all laws, ordinances, orders, rules, regulations and
requirements of any kind imposed by any governmental authority (state,
federal, county and municipal) applicable to or having jurisdiction
over the use, occupancy, operation, and maintenance of the Leased
Premises and the Building, including without limitation, all
applicable environmental laws and the Americans With Disabilities Act
of 1990 (ADA) (those laws, ordinances, orders, rules, decisions, and
regulations hereafter referred to as "Applicable Law" or "Applicable
Laws"). Landlord shall comply with all applicable Laws relating to the
use, condition, access to and occupancy of the Building. Landlord
represents that to the best of its knowledge on the Commencement Date
the Leased Premises (if planned and by Landlord's architect and
constructed by a contractor selected by Landlord) and the Building
shall comply with Title III of the Americans With Disabilities Act and
if the Premises do not so comply, then Landlord shall cause the
Premises and the Building to so comply within a reasonable time
thereafter.
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(b) Tenant may not deface or injure the Leased Premises or the Building or
any part thereof or overload the floors of the Leased Premises. Tenant
may not commit waste or permit waste to be committed or cause or
permit any nuisance on or in the Leased Premises or the Building.
Tenant shall pay Landlord as Rent, after written notice and a
reasonable opportunity to cure, for any damage to the Leased Premises
or to any other part of the Building caused by any negligence or
willful act or any misuse or abuse (whether or not the misuse or abuse
results from negligence or willful acts) by Tenant or Tenant's
employees.
(c) Tenant may not use or allow the Leased Premises to be used for any
purpose prohibited by any Applicable Law applicable to the Building.
Tenant and each of Tenant's employees shall conduct its business and
occupy the Leased Premises so as not to create any material nuisance
or interfere with, annoy, or disturb any other tenants in the Building
or Landlord in its management of the Building (or its occupancy of
portions of the Building).
(d) Tenant shall not erect, place, or allow to be placed any sign, symbol,
advertising matter, stand, booth, or showcase in or upon the
doorsteps, vestibules, halls, corridors, doors, walls, windows, or
pavement of the Building visible outside the Leased Premises (except
for lettering on the door or doors to the Leased Premises as allowed
by the Rules and Regulations attached hereto as Exhibit D) without the
prior consent of Landlord.
(e) Tenant may not use or allow or permit the Leased Premises to be used
in any way or for any purpose that:
(1) is hazardous on account of the possibility of fire or other
casualty, or hazardous substances;
(2) increases the rate of fire or other insurance for the Building or
its contents or in respect of the operation of the Building; or
(3) renders the Building uninsurable at normal rates by responsible
insurance carriers authorized to do business in the State of
Texas or renders void or voidable any insurance on the Building.
If insurance premiums are increased because of Tenant's use of the
Leased Premises, then, in addition to any other remedies Landlord may
have, Tenant shall pay the amount of the increase to Landlord as Rent
within thirty (30) days after written notice of such increase from
Landlord. If Tenant's use of the Leased Premises is modified,
resulting in a reduction of the insurance premiums, Landlord agrees to
then reduce the additional rent accordingly.
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Section 5.02 Rules and Regulations
Tenant and its employees, agents and licensees shall comply with the rules
and regulations (as changed from time to time as hereinafter provided)
attached as Exhibit D (the "Rules and Regulations"). Landlord may at any
time make reasonable changes to the Rules and Regulations or promulgate
other Rules and Regulations as Landlord deems advisable for the safety,
care, cleanliness, or orderliness of the Building. No changes are effective
until a copy of the changes is delivered to Tenant. Tenant is responsible
for the compliance with the Rules and Regulations by Tenant's employees.
Landlord shall use reasonable efforts to enforce compliance by all other
tenants with the Rules and Regulations from time to time in effect, but
Landlord is not responsible to Tenant for failure of any person to comply
with the Rules and Regulations.
Section 5.03 Quiet Enjoyment
If Tenant pays the Rent when due and timely performs all other obligations
of Tenant under this Lease, then Tenant may peaceably and quietly enjoy the
Leased Premises during the Lease Term without any disturbance from Landlord
or from any other person claiming by, through, or under Landlord, subject
to the terms of this Lease and of the deeds of trust, mortgages, ground
leases, ordinances, leases, utility easements, agreements and other matters
to which this Lease may be subordinate.
ARTICLE VI - REPAIRS, MAINTENANCE AND ALTERATIONS
Section 6.01 Repair and Maintenance by Tenant
(a) Tenant shall keep the Leased Premises and all fixtures installed by or
on behalf of Tenant in good and tenantable condition, normal wear and
tear excepted. Tenant shall promptly make all necessary non-structural
repairs and replacements thereto except those caused by fire or other
casualty covered by Landlord's insurance on the Building, or resulting
from Landlord or Landlord's employees or contractors negligence or
willful misconduct, all at Tenant's expense and with the approval of
Landlord. All repairs and replacements must be equal in quality to the
original work, and all contractors and subcontractors performing such
repairs and replacements must comply with the conditions specified in
Section 6.02(a) hereinbelow. Without diminishing this obligation of
Tenant, if Tenant fails to make any repairs and replacements within
thirty (30) days after the occurrence of the damage or injury,
Landlord may at its option after written notice make the repairs and
replacements and Tenant shall pay Landlord on demand as Rent the costs
incurred by Landlord plus an administrative fee equal to ten (10)
percent of the costs.
(b) Tenant shall pay the cost of repairs and replacements due to damage or
injury to the Building or any part thereof caused by any of Tenant's
employees or by any malfunction or misuse of any equipment installed
by or on behalf of Tenant unless improperly installed by Landlord's
contractor. This amount is payable by Tenant to Landlord as Rent
within thirty (30) days after written notice from Landlord. If
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Tenant requests Landlord to perform any maintenance or repairs to the
Leased Premises, over and above the services required to be performed
by Landlord pursuant to Article IV, Tenant shall pay the actual cost
thereof, plus an administrative fee equal to ten (10) percent of the
actual cost thereof, to Landlord as Rent within thirty (30) business
days after demand.
Section 6.02 Alterations and Additions by Tenant
(a) Tenant may not make or permit any alterations, improvements or
additions in or to the Leased Premises or the Building without
Landlord's prior written consent, such consent not to be unreasonably
withheld. All alterations, additions and improvements made to, or
fixtures or other improvements placed in or upon, the Leased Premises,
whether temporary or permanent in character, by either party (except
only Tenant's movable trade fixtures, office furniture and equipment)
are a part of the Building and are the property of Landlord when they
are placed in the Leased Premises. Alterations, improvements and
additions in and to the Leased Premises requested by Tenant must be
made in accordance with plans and specifications approved in advance
in writing by Landlord. All work must be performed at Tenant's expense
either by Landlord or by contractors and subcontractors approved in
advance by Landlord. If the work is not performed by Landlord, then
all work performed by Tenant's contractors and subcontractors is
subject to the following conditions:
(1) Each contractor and subcontractor must deliver evidence
reasonably satisfactory to Landlord that the insurance specified
by Landlord is in force prior to commencing work.
(2) Tenant shall insure that all workers are cooperative with
Building personnel and comply with all Building Rules and
Regulations.
(3) Tenant must deliver to Landlord evidence that Tenant has obtained
all necessary governmental permits and approvals, if any are
required, for the improvements or alterations prior to starting
any work.
(4) All construction must be done in a good and workmanlike manner
and is subject to approval by Landlord during and after
construction, in its reasonable discretion.
(5) Lien releases from each contractor and subcontractor must be
submitted to Landlord within five days after completion of the
work performed by the contractor or subcontractor.
(6) Within thirty (30) days after completion of any improvements or
alterations, Tenant, at its cost, shall deliver to Landlord two
reproducible copies of "as-built" plans and specifications (1/8"
scale) for each floor where alterations or improvements were
made.
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(b) All alterations and improvements must comply with all Applicable
Laws. If Tenant's use of the Leased Premises causes Landlord to
make any alterations or improvements to the Building to comply
with the provisions of ADA or any other Applicable Laws, Tenant
shall reimburse Landlord for the cost of the alterations or
improvements within thirty (30) days after written notice.
Neither Landlord's approval of Tenant's plans and specifications
for the alterations or improvements nor Landlord's acceptance of
Tenant's as-built plans is a confirmation or agreement by
Landlord that the improvements and alterations comply with
Applicable Laws.
(c) Within thirty (30) days after Tenant installs any telephone or
data cables, whether or not in connection with an alteration or
addition to the Leased Premises, Tenant, at its cost, shall
deliver to Landlord two reproducible copies of "as-built" plans
and specifications (1/8" scale) showing the location of the
telephone and data cables.
Section 6.03 Mechanics' Liens - Tenant's Obligations
Tenant may not cause or permit any mechanic's or materialman's lien to
be placed upon Landlord's interest in the Building or the Leased
Premises or any part thereof or against Landlord's interest under this
Lease by any architect, contractor, subcontractor, laborer, or
materialman performing any labor or furnishing any materials to Tenant
for any improvement, alteration, or repair of or to the Leased
Premises, the Building, or any part thereof. If any lien is filed on
Landlord's interest in the Building or Tenant's interest in the Leased
Premises, Tenant shall cause the same to be discharged of record
within thirty (30) days after filing, or post a bond reasonably
satisfactory to Landlord pending such discharge. If Tenant does not
discharge the lien within the thirty (30) day period or post the bond,
then, in addition to any other right or remedy of Landlord, Landlord
may, but is not obligated to, discharge the lien by paying the amount
claimed to be due or by procuring the discharge of the lien by deposit
in court or bonding. Any amount paid by Landlord relating to any lien
not caused by Landlord, and all reasonable legal and other expenses of
Landlord, including reasonable attorneys' fees, in defending any
action or in procuring the discharge of any lien, with interest
thereon at the Interest Rate from date of payment by Landlord until
paid by Tenant, is payable by Tenant to Landlord on demand as Rent.
Section 6.04 Maintenance and Repair by Landlord
(a) Landlord shall maintain the Building in a clean, and operable
condition, and shall not permit or allow to remain any waste or
damage to any portion of the Building. Landlord shall keep or
cause to be kept (i) the roof, exterior walls, foundations,
exterior canopies, gutters and water spouts, truck loading
facilities and structural components of the Building, utility
services extending to the service connections within the Leased
Premises and those improvements located on the exterior of the
Leased Premises, (ii) the Common Areas and (iii) all other
improvements in a neat,
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clean and orderly condition (including repair and replacement),
reasonable wear and tear excepted, and shall promptly repair any
damage to such improvements.
(b) Landlord shall pay the cost of repairs and replacements due to
damage or injury to the Leased Premises or Tenant's personal
property located therein resulting from the negligence or willful
misconduct of Landlord, or Landlord's employees, agents or
contractors. Any amounts due Tenant pursuant to this paragraph
6.04(b) shall be payable within thirty (30) days after written
notice from Tenant to Landlord.
ARTICLE VII - INSURANCE, FIRE AND CASUALTY
Section 7.01 Tenant's Insurance
(a) Tenant shall, at its expense, maintain at all times a policy or
policies of insurance insuring Tenant against all liability for
injury to or death of a person or persons and for damage to or
destruction of property occasioned by or arising out of or in
connection with the use or occupancy of the Leased Premises or by
the condition of the Leased Premises (including Tenant's
contractual liability to indemnify and defend Landlord) with a
combined single limit of $1,000,000 for bodily injury and
property damages, or with increased limits as may be required
from time to time by Landlord by giving notice to Tenant.
Tenant's policies must be written by an insurance company or
companies satisfactory to Landlord and licensed to do business in
the State of Texas with Landlord and Landlord's manager named as
additional insureds without restriction. If Tenant has an
umbrella or excess policy, Tenant shall name Landlord and
Landlord's manager as additional insureds without restriction on
all layers of umbrella or excess policies. Tenant shall obtain a
written obligation on the part of each insurance company to
notify Landlord at least fifteen (15) days prior to cancellation
of the insurance.
(b) Tenant shall deliver copies of its insurance policies or duly
executed certificates of insurance to Landlord prior to occupying
any part of the Leased Premises. Tenant shall deliver
satisfactory evidence of renewals of the insurance policies to
Landlord at least fifteen (15) days prior to the expiration of
the respective policies. If Tenant fails to comply with these
insurance requirements, Landlord may obtain the insurance and
Tenant shall pay to Landlord on demand as additional Rent the
premium cost thereof plus interest at the Interest Rate from the
date of payment by Landlord until paid by Tenant.
(c) Tenant shall use its best efforts to insure that all contractors,
subcontractors, moving companies and others performing work of
any type for Tenant in the Building shall comply with the
insurance requirements set out on Exhibit E attached hereto and
incorporated herein by reference, as such requirements may be
revised from time to time by Landlord.
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Section 7.02 Landlord's Insurance
Landlord shall, at all times during the Lease Term, maintain a policy
of insurance insuring the Building against loss or damage by fire,
explosion or other hazards and contingencies in amounts determined by
Landlord. Tenant agrees that all personal property upon the Leased
Premises shall be at the risk of Tenant only that the Landlord shall
not be liable for any damage thereto or theft thereof. Tenant will not
permit anything to be done which will in any way increase the rate of
fire and casualty insurance on the Building or contents. If by reason
of any act or conduct of business of Tenant there shall be any
increase in the rate of insurance on the Building or contents created
by Tenant's acts or conduct of business, such act or conduct shall
constitute an event of default under this Lease and Tenant agrees to
pay Landlord the amount of such increase on demand.
Section 7.03 Fire or Other Casualty
(a) If the Leased Premises or any part thereof are damaged by fire or
other casualty, Tenant shall give prompt notice thereof to
Landlord. If the Building is so damaged by fire or other casualty
that, in Landlord's reasonable opinion and discretion,
substantial alteration or reconstruction of the Building is
required or desirable (whether or not the Leased Premises are
damaged) or if any mortgagee under a mortgage or deed of trust
covering the Building requires that the insurance proceeds
payable as a result of the fire or other casualty be used to
retire the mortgage debt, Landlord may, at its sole option,
terminate this Lease by giving Tenant notice of termination
within sixty (60) days after the date of the damage. If Landlord
terminates this Lease under this Section, the Rent shall ▇▇▇▇▇ as
of the date of the damage.
(b) If Landlord does not elect to terminate this Lease, Landlord
shall, within seventy-five (75) days after Landlord's receipt of
insurance proceeds relating to the damage, commence to repair and
restore the Building (except that Landlord is not responsible for
delays outside its control) to substantially the same condition
in which it was immediately prior to the casualty. Landlord is
not required to rebuild, repair, or replace any part of Tenant's
furniture or furnishings or fixtures and equipment removable by
Tenant under the provisions of this Lease. Landlord is not liable
for any inconvenience or annoyance to Tenant or any Tenant's
employees or injury to the business of Tenant resulting in any
way from casualty damage or the repairs; provided, during the
time and to the extent the Leased Premises are unfit for
occupancy, Landlord shall either furnish Tenant with comparable
office space at prevailing market rates or a fair diminution of
Rent, the choice of which is at Landlord's sole discretion.
(c) If the damages are caused by the negligence or willful misconduct
of Tenant or Tenant's employees, Rent does not ▇▇▇▇▇. Any
insurance carried by Landlord or Tenant against loss or damage to
the Building or to the Leased Premises is for the sole benefit of
the party carrying the insurance and under its sole control.
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Section 7.04 Waiver of Subrogation
Each party waives all claims that arise or may arise in its favor
against the other party, or anyone claiming through or under them, by
way of subrogation or otherwise, during the Lease Term or any
extension or renewal thereof, for all losses of, or damage to, any of
its property (whether or not the loss or damage is caused by the fault
or negligence of the other party or anyone for whom the other party is
responsible), which loss or damage is covered by valid and collectible
fire and extended coverage insurance policies, to the extent that the
loss or damage is recovered under the insurance policies. These
waivers are in addition to, and not in limitation of, any other waiver
or release in this Lease with respect to any loss or damage to
property of the parties. Since these mutual waivers preclude the
assignment of any claim by way of subrogation (or otherwise) to an
insurance company (or any other person), each party shall immediately
give each insurance company issuing to it policies of fire and
extended coverage insurance written notice of the terms of these
mutual waivers, and have the insurance policies properly endorsed, if
necessary, to prevent the invalidation of the insurance coverages by
reason of these waivers.
ARTICLE VIII - CONDEMNATION
(a) If all or substantially all of the Building is taken for any
public or quasi-public use under any governmental law, ordinance
or regulation or by right of eminent domain or is sold to the
condemning authority in lieu of condemnation, then this Lease
will terminate as of the date when physical possession of the
portion of the Building is taken by the condemning authority. If
less than all or substantially all of the Building is taken or
sold, Landlord (whether or not the Leased Premises are affected)
may terminate this Lease by giving notice to Tenant within sixty
(60) days after the right of election accrues, in which event
this Lease will terminate as of the date when physical possession
of the portion of the Building is taken by the condemning
authority.
(b) If this Lease is not terminated upon any taking or sale of less
than all or substantially all of the Building:
(1) The Rent will be reduced by an amount representing that part
of the Rent properly allocable to the portion of the Leased
Premises taken or sold, if any; and
(2) Landlord shall, at Landlord's sole expense, restore the
Building to substantially its former condition to the extent
reasonably deemed feasible by Landlord, but:
(A) Landlord's restoration obligation does not exceed the
scope of the work done by Landlord in originally
constructing the Building and installing Tenant finish
improvements in the Leased Premises; and
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(B) Landlord is not required to spend for the work an
amount in excess of the amount received by Landlord as
compensation or damages (over and above amounts going
to the mortgagee of the property taken) for the part of
the Building so taken.
(c) Landlord is entitled to receive all of the compensation awarded
upon a taking of any part or all of the Building, including any
award for the value of the unexpired Lease Term. Tenant is not
entitled to and expressly waives all claim to any compensation;
provided, Tenant is entitled to make a claim against the
condemning authority and to receive any award from the condemning
authority for moving costs and damages to Tenant's personal
property, fixtures, loss of business and business interruption.
ARTICLE IX - INDEMNIFICATIONS AND WAIVER
SECTION 9.01 LIMITATIONS ON LIABILITY OF LANDLORD: WAIVER
(a) LANDLORD IS NOT LIABLE TO ANY TENANT, AND TENANT WAIVES ANY
LIABILITY OF LANDLORD, FOR:
(1) ANY INJURY OR DAMAGE TO PERSON OR PROPERTY DUE TO THE
CONDITION OR DESIGN OF, OR ANY DEFECT IN, THE BUILDING THAT
EXISTS NOW OR OCCURS IN THE FUTURE, EXCEPT FOR LANDLORD'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT;
(2) ANY INJURY OR DAMAGE TO PERSON OR PROPERTY DUE TO THE
BUILDING OR RELATED IMPROVEMENTS OR APPURTENANCES BEING OUT
OF REPAIR, OR DEFECTS IN OR FAILURE OF PIPES OR WIRING, OR
BACKING UP OF DRAINS, OR THE BURSTING OR LEAKING OF PIPES,
FAUCETS AND PLUMBING MIXTURES, OR GAS, WATER, STEAM,
ELECTRICITY, OR OIL LEAKING, ESCAPING, OR FLOWING INTO THE
LEASED PREMISES, UNLESS CAUSED BY LANDLORD'S WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE;
(3) ANY LOSS OR DAMAGE CAUSED BY THE ACTS OR OMISSIONS OF OTHER
TENANTS IN THE BUILDING OR OF ANY OTHER PERSONS, EXCEPTING
ONLY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF DULY
AUTHORIZED EMPLOYEES AND AGENTS OF LANDLORD; OR
(4) ANY LOSS OR DAMAGE TO PROPERTY OR PERSON OCCASIONED BY
THEFT, FIRE, ACT OF GOD, PUBLIC ENEMY, INJUNCTION, RIOT,
INSURRECTION, WAR, COURT ORDER, REQUISITION, ORDER OF
GOVERNMENTAL AUTHORITY, AND ANY OTHER CAUSE BEYOND THE
CONTROL OF LANDLORD.
(b) NOTWITHSTANDING THE FOREGOING OR ANYTHING ELSE TO THE CONTRARY
CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD TO TENANT FOR
ANY DEFAULT OR INDEMNITY BY LANDLORD UNDER THIS LEASE IS LIMITED
TO THE INTEREST OF LANDLORD IN THE BUILDING. NEITHER LANDLORD NOR
ANY PARTNER, EMPLOYEE, AGENT, DIRECTOR, OR OFFICER OF LANDLORD
HAS ANY PERSONAL LIABILITY FOR ANY AMOUNTS PAYABLE OR OBLIGATIONS
PERFORMABLE BY LANDLORD UNDER THIS LEASE.
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SECTION 9.02 TENANT'S INDEMNIFICATION OF LANDLORD; ASSUMPTION; EMPLOYEES'
CLAIMS
(a) TENANT SHALL INDEMNIFY, DEFEND, AND HOLD LANDLORD HARMLESS FROM:
(1) ALL FINES, SUITS, LOSSES, COSTS, LIABILITIES, CLAIMS,
DEMANDS, ACTIONS, AND JUDGMENTS OF EVERY KIND AND CHARACTER
BY REASON OF ANY BREACH BY TENANT UNDER THIS LEASE; AND
(2) ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES, LOSSES, COSTS,
LIABILITIES, EXPENSES, AND JUDGMENTS SUFFERED BY, RECOVERED
FROM, OR ASSERTED AGAINST LANDLORD DUE TO INJURY OR DAMAGE
TO PERSON OR PROPERTY TO THE EXTENT THAT THE DAMAGE OR
INJURY IS CAUSED, EITHER PROXIMATELY OR REMOTELY, WHOLLY OR
IN PART, BY AN ACT, OMISSION, NEGLIGENCE, OR MISCONDUCT OF
TENANT OR TENANT'S EMPLOYEES, OR WHEN THE INJURY OR DAMAGE
IS THE RESULT, PROXIMATE OR REMOTE, OF THE VIOLATION BY
TENANT OR ANY TENANT'S EMPLOYEES OF ANY APPLICABLE LAW, OR
WHEN THE INJURY OR DAMAGE IN ANY OTHER WAY ARISES OUT OF THE
OCCUPANCY OR USE BY TENANT OR ANY TENANT'S EMPLOYEES OF THE
LEASED PREMISES OR THE BUILDING.
(b) TENANT IS NOT REQUIRED TO INDEMNIFY, DEFEND, OR HOLD LANDLORD
HARMLESS FROM ANY CLAIM, DEMAND, FINE, SUIT, LOSS, LIABILITY,
ACTION OR JUDGMENT ARISING SOLELY FROM LANDLORD'S NEGLIGENCE OR
WILLFUL MISCONDUCT.
(c) IF LANDLORD IS MADE A PARTY TO ANY LITIGATION COMMENCED BY OR
AGAINST TENANT OR TENANT'S EMPLOYEES OR RELATING TO THIS LEASE OR
TO THE LEASED PREMISES, THEN TENANT SHALL PAY ALL COSTS AND
EXPENSES, INCLUDING ATTORNEYS FEES AND COURT COSTS, INCURRED BY
OR IMPOSED UPON LANDLORD BY VIRTUE OF THE LITIGATION. THE AMOUNT
OF ALL COSTS AND EXPENSES, INCLUDING ATTORNEY'S FEES AND COURT
COSTS, IS A DEMAND OBLIGATION PAYABLE BY TENANT TO LANDLORD AS
ADDITIONAL RENT BEARING INTEREST AT THE INTEREST RATE FROM THE
DATE OF PAYMENT BY LANDLORD UNTIL PAID BY TENANT.
(d) TENANT, ASSUMES ALL RISKS OF INJURY OR DAMAGE TO PERSON OR
PROPERTY, EITHER PROXIMATE OR REMOTE, BY REASON OF THE CONDITION
OR DESIGN OF, OR ANY DEFECTS IN, THE LEASED PREMISES.
(e) EXCEPT AS OTHERWISE PROVIDED HEREIN, ALL PERSONAL PROPERTY IN THE
LEASED PREMISES IS AT THE SOLE RISK OF TENANT.
(f) THE PROVISIONS OF THIS SECTION 9.02 SURVIVE THE EXPIRATION OR
EARLIER TERMINATION OF THIS LEASE.
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Section 9.03 Landlord's Indemnification of Tenant
(a) Landlord shall indemnify, defend and hold Tenant harmless from:
(1) all fines, suits, losses, costs, liabilities, claims,
demands, actions, and judgments of every kind and character
by reason of any breach by Landlord under this Lease; and
(2) all claims, demands, actions, damages, losses, costs,
liabilities, expenses, and judgments suffered by, recovered
from, or asserted against Tenant due to injury or damage to
person or property to the extent that the damage or injury
is caused, either proximately or remotely, wholly or in
part, by an act, omission, negligence, or misconduct of
Landlord or Landlord's employees, or when the injury or
damage is the result, proximate or remote, of the violation
by Landlord or any Landlord's employees of any Applicable
Law, or when the injury or damage in any other way arises
out of the ownership or control Landlord may have over the
leased Premises or the Building.
(b) Landlord is not required to indemnify, defend or hold Tenant
harmless from any claim, demand, fine, suit, loss, liability,
action or judgment arising solely from Tenant's negligence or
willful misconduct.
(c) The provisions of this Section 9.03 survive the expiration or
earlier termination of this Lease.
Section 9.04 No Implied Waiver
The failure of Landlord to insist at any time upon the strict
performance of any of the terms of this Lease or to exercise any
option, right, power or remedy contained in this Lease is not a waiver
of the right or remedy for the future. The waiver of any breach of
this Lease or violation of the Rules and Regulations attached hereto
does not prevent a subsequent act, which would have originally
constituted a breach or violation, from having all the force and
effect of an original breach or violation. No express waiver affects
any terms other than the ones specified in the waiver and those only
for the time and in the manner specifically stated. Acceptance by
Landlord of any Rent after the breach of any of the terms of this
Lease or violation of any Rule or Regulation is not a waiver of the
breach or violation or the right to collect applicable late charges
and interest, and no waiver by Landlord of any of the terms of this
Lease is effective unless expressed in writing and signed by Landlord.
Section 9.05 Waiver by Tenant
Tenant waives and surrenders for itself and all persons or entities
claiming by, through, and under it, including creditors of all kinds:
(A) any right and privilege which it or any
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of them has under any present or future constitution, statute, or rule
of law to redeem the Leased Premises or to have a continuance of this
Lease for the Lease Term after termination of Tenant's right of
occupancy by order or judgment of any court or by any legal process or
writ, or under the terms of this Lease, (B) the benefits of any
present or future constitution, statute, or rule of law that exempts
property from liability for debt or for distress for Rent, (C) any
provision of law relating to notice or delay in levy of execution in
case of eviction of a Tenant for nonpayment of Rent, and (D) any
rights, privileges, and liens set out under Sections 91.004 and 93.003
of the Texas Property Code (as amended), and Tenant exempts Landlord
from any liability or duty thereunder.
Section 9.06 Hazardous Materials
(a) Tenant has no liability or responsibility with respect to
Hazardous Substances, if any, which were placed or located within
the Leased Premises or the Building prior to the Effective Date,
but Tenant may not:
(1) cause or permit the escape, disposal, or release in the
Leased Premises or the Building of any biologically active,
chemically active, or hazardous substances or materials
(hereafter referred to as "Hazardous Substances"); or
(2) bring or permit or allow any Tenant's employee to bring, any
Hazardous Substances into the Leased Premises or the
Building.
The term Hazardous Substances includes, but is not limited to,
those described in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. Section 6901 et seq., the Texas Water Code,
the Texas Solid Waste Disposal Act, and other applicable state or
local environmental laws and the regulations adopted under those
acts.
(b) If any lender or governmental agency requires testing to
ascertain whether or not a release of Hazardous Substances has
occurred in or on the Leased Premises or the Building based on
probable cause that a release occurred and was caused by any
Tenant or Tenant's employees, then Tenant shall reimburse the
reasonable costs of the testing to Landlord as Rent within thirty
(30) days from the date of written notice from Landlord.
(c) Tenant shall execute affidavits, representations, and the like
from time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence of Hazardous
Substances in the Leased Premises and the Building.
(d) Tenant shall indemnify Landlord in the manner elsewhere provided
in this Lease from any release of Hazardous Substances in or on
the Leased Premises or the Building caused or permitted by any
Tenant or Tenant's employees.
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(e) Landlord may not cause or permit the escape, disposal, or release
in the Building of any Hazardous Substances or bring, or
knowingly permit any tenant to bring, any Hazardous Substances
into the Building.
(f) The provisions of this Section 9.06 survive the expiration or
earlier termination of this Lease.
ARTICLE X - ASSIGNMENT AND SUBLETTING
10.01 Assignment or Subletting Without Consent.
(a) Tenant may, subject to the below conditions, sublet or assign all
or a portion of the Leased Premises so long as Tenant first
offers back the Leased Premises to Landlord (in accordance with
subparagraph d below).
(b) In the event Landlord elects not to terminate the Lease as to the
portion of the Leased Premises Tenant desires to sublease or
assign, the same shall be allowed if: (i) Tenant reconfirms in
writing it is still liable in all respects under the Lease; (ii)
Landlord reasonably approves the written sublease or assignment
document; and (iii) such proposed subtenant or assignee does not
violate (1) any exclusive rights to operate certain types of
business in the building, and (2) the use of such proposed
subtenant or assignee does not violate any material provision of
the Lease, including, but not limited to, rules and regulations.
(c) In the event the Minimum Rent paid by any assignee or subtenant
exceeds the Minimum Rent due from Tenant, Landlord shall be
entitled to receive one-half (1/2) of such excess less one-half
reasonable costs (including tenant build-out and brokerage
commission) in addition to the Minimum Rent.
(d) Upon receipt of written notice from Tenant of its intent to
sublet or assign Landlord may exercise an option to terminate the
lease as to that portion of the Leased Premised Tenant desires to
sublet or assign. In the event Landlord elects to exercise this
right to terminate the Lease, Tenant shall surrender possession
of the Lease Premises to Landlord on the later of (i) the
proposed date of possession by the assignee or subtenant or (ii)
ninety (90) days after the date of Landlord's notice of
termination to Tenant.
(e) Landlord may not elect to exercise its option to terminate
granted herein if the proposed subtenant or assignee is an
affiliate or subsidiary of Tenant and the same shall be allowed
hereunder.
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ARTICLE XI - DEFAULT
Section 11.01 Default
(a) Each of the following shall constitute an "Event of Default" by
Tenant:
(1) The Tenant abandons all or any part of the Leased Premises
and fails to pay one or more installments of Minimum Rent or
Additional Rent due hereunder; or, if Tenant is a
corporation or partnership, Tenant dissolves or liquidates;
or
(2) The filing of a petition to declare Tenant bankrupt or to
delay, reduce or modify Tenant's debts or obligations, or
for the appointment of a receiver or trustee of Tenant or
its property or for the winding up or liquidation of its
affairs; or if Tenant makes an assignment of the benefits of
Tenant's creditors or admits in writing Tenant's inability
to pay the debts due; or, if Tenant dissolves or liquidates;
and in either case does not pay any Rent due hereunder; or,
(3) The failure of Tenant to pay when due any subsequent
installment of Minimum Rent, or Additional Rent, or any
other money payments due hereunder, or any part thereof, and
such failure shall continue for a period of ten (10) days
after Landlord has delivered to Tenant written notice of
such failure provided, however, if Tenant fails to pay
installments of Rent, Additional Rent, or any other money
payments due hereunder on a timely basis: (i) on two or more
occasions during any calendar year; or (ii) in two or more
consecutive calendar months, then Landlord will thereafter
have no obligation to deliver any notice of default to
Tenant under the terms hereof and an "Event of Default" will
be deemed to have occurred immediately upon the failure of
Tenant to pay when due any installment of Rent, Additional
Rent, or any other money payments due hereunder, without any
grace period and without necessity of Landlord delivering
any notice of default to Tenant); or
(4) The failure of Tenant to fulfill or perform in whole or in
part, any material agreement or provision of this Lease
which is an obligation upon Tenant, other than the payment
of Rent, Additional Rent or any other money amounts due
hereunder, and such failure or nonperformance shall continue
for a period of thirty (30) days after written notice
thereof has been given by Landlord to Tenant; or
(b) Upon the occurrence of any Event of Default, Landlord shall have
the option to do any one or more of the following without any
notice or demand, in addition to and in limitation of any other
remedy permitted by law or by this lease:
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(1) Landlord may terminate this Lease and forthwith repossess the
Leased Premises and be entitled to recover forthwith as damages a
sum of money equal to the total of: (i) the cost of recovering
the Leased Premises (including attorneys' fees and costs of
suit); (ii) the unpaid Rent earned at the time of termination,
plus interest thereon at Interest Rate; (iii) the entire amount
of the total Rent payable during the remainder of the Lease Term;
and (iv) any other sum of money and damages owed by Tenant to
Landlord.
(2) Landlord may terminate Tenant's right of possession (but not this
Lease) and may repossess the Leased Premises by forcible entry or
detainer suit or otherwise, without demand or notice of any kind
to Tenant and without terminating this Lease, in which event
Landlord may (but shall be under no obligation to do so) relet
the Leased Premises for the account of Tenant for such rent and
upon such terms as shall be satisfactory to Landlord, in
Landlord's sole and absolute discretion. For the purpose of such
reletting, Landlord is authorized to make any repairs, changes,
alterations, or additions in or to Leased Premises which Landlord
may consider to be necessary, in Landlord's reasonable judgment.
If Landlord shall fail or refuse to relet the Leased Premises,
then Tenant shall pay to Landlord as damages a sum equal to the
amount of the Rent and all other sums due hereunder, plus the
cost of recovering possession of the Leased Premises, plus
interest on all of the foregoing at the Interest Rate. If the
Leased Premises are relet and a sufficient sum is not realized
from such reletting (after paying the reasonable cost of
recovering possession of the Leased Premises, plus all of the
costs and expenses of repairs, changes, alterations, and
additions to the Leased Premises, plus all expenses of reletting
the Leased Premises, plus interest on all of the forgoing at the
Interest Rate) to satisfy the Rent provided for in this Lease to
be paid, plus all other sums owed by Tenant to Landlord, plus
interest on all of the foregoing at the Interest Rate, then
Tenant shall satisfy and pay any such deficiency to Landlord upon
demand therefor from time to time, and Tenant agrees that
Landlord may file suit to recover any sums falling due under the
terms of this paragraph from time to time, and that no delivery
or recovery of any portion due Landlord hereunder shall be any
defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Landlord, nor shall
such reletting be construed as an election on the part of
Landlord to terminate this Lease unless a written notice of such
intention be given to Tenant by Landlord. Notwithstanding any
such reletting without termination, Landlord may at any time
thereafter elect to terminate this Lease for such previous
breach.
(3) Landlord may make such payments and/or take such actions
(including, without limitation, entering upon or within the
Leased Premises, by force if necessary) and do whatever Tenant is
obligated to do under the terms of
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this Lease, and Tenant covenants and agrees to reimburse Landlord
on demand for any expenses which Landlord may incur in effecting
compliance with Tenant's obligations under this Lease, together
with interest thereon at the Interest Rate from the date paid by
Landlord.
(4) At any time after an Event of Default by Tenant has occurred
hereunder, Landlord shall have the right to change or modify door
locks on entry doors to the Leased Premises, and such right to
modify or change locks shall continue so long as Tenant is in
default hereunder. Landlord shall not be obligated to furnish
Tenant with a new key or to allow Tenant to enter the Leased
Premises, until and unless Tenant has cured any default
hereunder. Landlord may take such action as is required to cure
any breach or default by Tenant hereunder and ▇▇▇▇ Tenant for any
expenses incurred by Landlord in curing such breach, and Tenant
shall be obligated to pay such ▇▇▇▇ immediately upon its receipt
by Tenant.
(5) Landlord shall have the right to cause a receiver to be appointed
in any action against Tenant to take possession of the Leased
Premises and/or to collect the rents or profits derived
therefrom. The appointment of such receiver shall not constitute
an election on the part of Landlord to terminate this Lease
unless notice of such intention is given to Tenant.
(6) After terminating this Lease or Tenant's right to possession of
the Leased Premises, Landlord may, without notice to Tenant or
any other party, remove any and all personal property located in
the Leased Premises and either dispose of or store such personal
property at Tenant's expense.
(7) In addition to the other remedies provided in this Lease,
Landlord shall be entitled, to the extent permitted by applicable
law, to injunctive relief in case of the violation or attempted
or threatened violation, of any of the provisions of this Lease,
or to a decree compelling performance of any other provisions of
this lease, or to any other remedy allowed at law or in equity.
Notwithstanding any other remedy or provision set forth in this Lease: (i)
if Landlord has made rent concessions of any type or character, or waived
any rent, and Tenant defaults at any time during the term of this Lease,
the rent concessions, including any waived rent, shall be canceled and the
amount of the rent concessions shall be due and payable immediately as if
no rent concessions or waiver of any rent had ever been granted; (ii) this
Lease may be terminated by Landlord only by written notice of such
termination to Tenant given in accordance with the notice provisions of
this Lease, and no other act or omission of Landlord shall be construed as
a termination of this Lease; (iii) all rights and remedies of Landlord
herein or existing at law or in equity are cumulative and the exercise of
one or more rights or remedies shall not be taken to exclude or waive the
right to the exercise of any other; (iv) Tenant agrees that acceptance of
full or partial payments by Landlord
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after notice of termination or forfeiture will not constitute a waiver of
the default, termination, or forfeiture unless Landlord agrees to a waiver
in writing, nor affect any legal proceedings taken or to be taken by
Landlord except to reduce Tenant's obligation to Landlord by the amount of
such payment; and (v) waiver by Landlord of any defaults or breaches by
Tenant of any provisions of this Lease shall not bar Landlord thereafter
from requiring prompt performance by Tenant of the obligations of this
Lease, nor shall Landlord be barred thereafter from immediate exercise of
any of Landlord's rights or remedies in case of continuing or subsequent
default or violation by Tenant.
Section 11.02 Landlord's Lien
(a) Tenant hereby grants to Landlord a security interest to secure payment
of all rent and other sums of money coming due hereunder from Tenant,
and to secure payment of any damages or loss which Landlord may suffer
by reason of the breach by Tenant of any covenant, agreement, or
condition contained herein, upon all equipment, fixtures, furniture,
improvements and other personal property of Tenant presently or which
may hereafter be situated on the Leased Premises, and all proceeds
therefrom. Such property shall not be removed from the Leased Premises
at any time without the consent of the Landlord until all arrearages
in rent as well as any other sums of money then due to Landlord
hereunder shall first have been paid and discharged, and all the
covenants, agreements, and conditions hereof have been fulfilled and
performed by Tenant. In addition to any other remedies provided
herein, in the event of default, Landlord may enter the Leased
Premises and take possession of any and all equipment, fixtures,
furniture, improvements and other personal property of Tenant situated
upon the Leased Premises without liability for trespass or conversion.
Landlord may sell the same at a public or private sale, with or
without having such property at the sale, after giving Tenant
reasonable notice as to the time and place of the sale. At such sale,
Landlord or its assigns may purchase the Property unless such purchase
is otherwise prohibited by law. Unless otherwise provided by law, the
requirement of reasonable notice shall be met if such notice is given
to Tenant at the address hereafter prescribed at least fifteen (15)
days prior to the time of the sale. The proceeds of any such
disposition, less all expenses connected with the taking of possession
and sale of the property, including a reasonable attorney's fee, shall
be applied as a credit against the indebtedness secured by the
security interest granted in this paragraph. Any surplus shall be paid
to Tenant and Tenant shall pay any deficiencies upon demand. Upon
request by Landlord, Tenant will execute and deliver to Landlord a
financing statement in a form sufficient to perfect the security
interest of the Landlord in the aforementioned property and the
proceeds thereof under the provision of the uniform commercial code in
force in the State of Texas. The statutory lien for rent is not
waived; the security interest herein granted is in addition and
supplementary thereto.
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(b) Landlord agrees to reasonably subordinate its Landlord's lien to any
lender or similar entity which provides purchase money financing or a
financing lease facility for furnishings and equipment located in the
Leased Premises.
Section 11.03 Mitigation of Damages
(a) Both Landlord and Tenant shall each use commercially reasonable
efforts to mitigate any damages resulting from a default of the other
party under this Lease.
(b) Landlord and Tenant agree to the following criteria in connection with
Landlord's obligation to mitigate damages after a default by Tenant
under this Lease:
(1) Landlord will have no obligation to solicit or entertain
negotiations with any other prospective tenants of the Leased
Premises until and unless Landlord obtains full and complete
possession of the Leased Premises, including without limitation,
the final and unappealable legal right to relet the Leased
Premises free of any claim of Tenant.
(2) Landlord will not be obligated to offer the Leased Premises to a
prospective tenant when other premises suitable for that
prospective tenant's use are (or soon will be) available in the
Building or in any other building which is located in the
vicinity of the Building and which is owned by Landlord or by any
affiliate of Landlord. For all purposes under this Lease,
affiliates of Landlord shall mean and include: (i) any person or
entity owning or holding (directly or indirectly) any interest in
Landlord; and (ii) any entity in which Landlord or any person or
entity owning or holding any interest (directly or indirectly) in
Landlord, owns or holds any interest (directly or indirectly).
(3) Landlord will not have any obligation to lease the Leased
Premises for any rental less than the current rate then
prevailing for similar space in the Building (or if no similar
space is available in the Building, the current fair market
rental then prevailing for similar space in comparable buildings
in the same market area as the Building) nor shall Landlord be
obligated to enter into a new lease under any terms or conditions
that are unacceptable to Landlord under Landlord's then current
leasing policies for comparable space in the Building.
(4) Landlord will not be obligated to enter into any lease with any
prospective tenant whose presence or operations in the Building
would: (i) disrupt the tenant mix or balance of the Building;
(ii) violate any restriction, covenant or requirement contained
in the lease of another tenant in the Building; (iii) adversely
affect the reputation of the Building; or (iv) be incompatible
with the operation of the Building as a first class office
building.
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(5) Landlord will not be obligated to enter into a lease with any
prospective tenant which does not have, in Landlord's sole
judgment and opinion, sufficient financial resources and
operating experience to operate the Leased Premises in a first
class manner and meet its financial obligations.
(6) Landlord will not be required to expend any amount of money to
alter, remodel or otherwise make the Leased Premises suitable for
use by any prospective tenant.
(7) Landlord will have no obligation to advertise or expend any sums
of money to market the Leased Premises.
If Landlord makes the Leased Premises available for reletting under
the criteria set forth hereinabove, Landlord will be deemed to have
fully satisfied Landlord's obligation to mitigate damages under this
Lease and under any law or judicial ruling in effect on the date of
this Lease or at the time of Tenant's default, and Tenant hereby
waives and releases, to the fullest extent legally permissible, any
right to assert in any action by Landlord to enforce the terms of this
Lease, any defense, counterclaim, or rights of set-off or recoupment
respecting the mitigation of damages by Landlord (or alleged failure
by Landlord to adequately mitigate its damages), unless and to the
extent Landlord maliciously or in bad faith fails to act in accordance
with the requirements of this Section 11.03.
(c) Tenant's right to seek mitigation as a result of a default by Landlord
under this Section 11.03 shall be conditioned on Tenant taking all
actions reasonably required, under the circumstances, to minimize any
loss or damage to Tenant's property or business, or to any of Tenant's
officers, employees, agents, invitees, or other third parties that may
be caused by any such default of Landlord.
ARTICLE XII - MISCELLANEOUS PROVISIONS
Section 12.01 Rights Reserved by Landlord
Landlord reserves the following rights, which may be exercised by
Landlord at any time and from time to time with notice and without
liability to Tenant or Tenant's employees for damage or injury to
property, persons, or business. The rights reserved by Landlord
hereunder are as follows:
(a) To change the Building's name.
(b) To install, affix, and maintain any signs on the exterior and
interior of the Building.
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(c) To designate and approve, prior to installation, all types of
window shades, blinds, drapes, awnings, window ventilators, and
similar equipment, and to control all internal lighting that is
visible from the exterior of the Building.
(d) To designate, restrict, and control all sources within the
Building where Tenant may obtain ice, drinking water, towels,
toilet supplies, catering, food and beverages, and like or other
services on the Leased Premises and, in general, the exclusive
right to designate, limit, restrict and control any business and
any service in or to the Building and its tenants.
(e) To enter upon the Leased Premises at reasonable hours to clean
and with reasonable notice (except in the case of an emergency)
to inspect, or make repairs or alterations to the Leased Premises
(but without any obligation to do so, except as expressly
specified in this Lease), to make repairs or alterations to any
part of the Building or the Building systems (including adjacent
premises), to show the Leased Premises to prospective lenders,
purchasers, and, during the last six (6) months of the Lease
Term, to show the Leased Premises to prospective tenants at
reasonable hours and, if the Leased Premises are vacant, to
prepare them for re-occupancy.
(f) To retain at all times, and to use in appropriate instances, keys
to all doors within and into the Leased Premises. No locks may be
changed or added without the prior written consent of Landlord.
(g) To decorate and make repairs, alterations, additions, changes, or
improvements, whether structural or otherwise, in and about the
Building and for those purposes to enter upon the Leased Premises
and, during the continuance of the work, temporarily close doors,
entryways, public space, and corridors in the Building, to
interrupt or temporarily suspend Building services and
facilities, and to change the arrangement and location of
entrances or passageways, doors and doorways, corridors,
elevators, stairs, toilets, or other public parts of the
Building, all without abatement or set-off of Rent or affecting
any of Tenant's obligations under this Lease, so long as the
Leased Premises are reasonably accessible and useable. Landlord
will use its best efforts to conduct such activities in the
Leased Premises during non-business hours.
(h) To have and retain a paramount title to the Leased Premises and
the Building free and clear of any act of Tenant purporting to
burden or encumber the Leased Premises or the Building.
(i) To grant to anyone the exclusive right to conduct any business or
render any service in or to the Building, provided the exclusive
right does not operate to exclude Tenant from the uses expressly
permitted in this Lease.
(j) To approve the weight, size, and location of safes, heavy
equipment, file cabinets, book shelves, and other heavy items in
and about the Leased Premises and the
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Building and to reasonably require all those items and all
furniture to be moved into and out of the Building and the Leased
Premises only at times and in a manner specified by Landlord.
Movements of Tenant's property into or out of the Building and
within the Building are entirely at the risk and responsibility
of Tenant.
(k) To have access for Landlord and other tenants in the Building to
any mail chutes or other depositories located on the Leased
Premises according to the rules of the United States Postal
Service.
(l) To take reasonable measures as Landlord deems advisable for the
security of the Building and its occupants including, without
limitations the search of all persons entering or leaving the
Building, the evacuation of the Building for cause, suspected
cause, or for drill purposes, the temporary denial of access to
the Building, and the closing of the Building after Building
Standard Hours, subject to Tenant's right to admittance when the
Building is closed after Building Standard Hours under reasonable
regulations Landlord may prescribe from time to time.
(m) To transfer, assign or convey, in whole or in part, the Building
and Landlord's rights under this Lease. If Landlord transfers,
assigns, or conveys its rights under this Lease, Landlord is
released from any obligations which arise under this Lease after
the date of such transfer, conveyance or assignment and Tenant
shall look solely to the successor in interest of Landlord for
performance of the obligations of "Landlord" thereafter under
this Lease.
(n) Landlord agrees no action shall be taken pursuant to this Section
12.01 which will (i) detract from any signage of Tenant or (ii)
materially limits the access or usage of Tenant and Tenant's
employees or agents to the Building.
Section 12.02 Taxes on Tenant's Property
Tenant shall pay, and indemnify, defend, and hold Landlord harmless
against, all taxes levied or assessed against personal property,
furniture, fixtures, or other improvements placed by or for Tenant in
the Leased Premises. If any taxes for which Tenant is liable are
levied or assessed against Landlord or Landlord's property and if
Landlord is required to pay the taxes or if the assessed value of
Landlord's property is increased by inclusion of personal property,
furniture, fixtures, or other improvements placed by or for Tenant in
the Leased Premises and Landlord elects to pay the increased taxes,
Tenant shall pay to Landlord on demand as additional Rent that part of
the taxes for which Tenant is liable under this Section.
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Section 12.03 Attorneys' Fees and Legal Expenses
If either party files litigation concerning the interpretation or
enforcement of this Lease, the prevailing party is entitled to recover
from the losing party the prevailing party's reasonable attorneys'
fees, court costs, and expenses, both at the trial level and at the
appellate level.
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Section 12.04 Subordination
(a) This Lease and all rights of Tenant under this Lease are subject
and subordinate to:
(1) any mortgage or deed of trust secured by a lien against the
Building;
(2) all increases, renewals, modifications, consolidations,
replacements, and extensions of any mortgage or deed of
trust; and
(3) all leases, restrictions, easements, and encumbrances
recorded in the Real Property Records of ▇▇▇▇▇▇ County,
Texas, to the extent they validly affect the Building.
Tenant shall, upon demand at any time or times, execute,
acknowledge, and deliver to Landlord, or to Landlord's mortgagee,
any instruments that may be requested by Landlord or any
mortgagee of Landlord's to more effectively effect or evidence
this subordination to any mortgage or deed of trust.
(b) If any mortgage or deed of trust against the Building is
foreclosed, Tenant shall, upon request by the purchaser at the
foreclosure sale:
(1) attorn to the purchaser and recognize the purchaser as
"Landlord" under this Lease; and
(2) execute, acknowledge, and deliver to the purchaser a
statement in appropriate form acknowledging the attornment.
(c) Tenant waives the provisions of any statute or rule of law, now
or hereafter in effect, that may give or purport to give Tenant
any right or election to terminate or otherwise adversely affect
this Lease and the obligations of Tenant under this Lease if any
foreclosure sale occurs. This Lease is not affected in any way
whatsoever by any foreclosure sale unless the holder(s) of the
indebtedness or other obligations secured by the mortgages or
deeds of trust declare otherwise.
(d) As a condition to Tenant's agreement to these provisions,
Landlord shall provide within ten (10) days of the Effective
Date, a non-disturbance agreement, the form of which is attached
hereto as Exhibit I from Landlord's mortgagees.
Section 12.05 Estoppel Certificates
Tenant shall, from time to time within ten (10) days after receipt of
a request for same, execute, acknowledge, and deliver to Landlord an
Estoppel Certificate in substantially the form attached as Exhibit F.
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Section 12.06 Financial Statements
Tenant will, from time to time, within twenty (20) days after receipt
of a request for same, furnish to Landlord copies of its most current
financial statements as filed with the United States Securities and
Exchange Commission. Landlord will be authorized to deliver such
financial statements to any existing or proposed partner, investor,
lender or purchaser, or any agent or employee of any such parties.
Section 12.07 Notices
All notices, requests, approvals, and other communications required or
permitted to be delivered under this Lease must be in writing and are
effective:
(a) on the same business day sent, if sent by telecopier prior to
5:00 P.M., Austin, Texas time and the sending telecopier
generates a written confirmation of sending;
(b) the next business day after delivery on a business day to a
nationally-recognized-overnight-courier service for prepaid
overnight delivery;
(c) if orderly delivery of the mail is not then disrupted or
threatened, in which event some method of delivery other than the
mail must be used, 3 days after being deposited in the United
States mail, certified, return receipt requested, postage
prepaid; or
(d) upon receipt if delivered personally or by any method other than
by telecopier (with written confirmation),
nationally-recognized-overnight-courier service, or mail;
in each instance addressed to Landlord or Tenant, as the case may be,
at the address or the addresses (if more than one) specified for such
party in the Basic Lease Provisions, or to any other address or
addresses either party may designate by 10 days' prior notice to the
other party.
Section 12.08 Business Purpose
Tenant represents that this Lease is executed by Tenant, and all
obligations of Tenant arising out of this Lease are, primarily for
business or commercial purposes and not for personal, family, or
household purposes.
Section 12.09 Severability
Each of the terms of this Lease is, and must be construed to be,
separate and independent. If any of the terms of this Lease or its
application to any person or circumstances is to any extent invalid
and unenforceable, the remainder of this Lease, or the application of
that term to persons or circumstances other than those as to which it
is invalid or unenforceable, are not affected thereby.
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Section 12.10 No Merger
The fact that the same person may acquire or hold, directly or
indirectly, this Lease or the leasehold estate hereby created or any
interest in this Lease or in the leasehold estate as well as the fee
estate in the Leased Premises or any interest in the fee estate does
not cause a merger of this Lease or of the leasehold estate hereby
created with the fee estate in the Leased Premises.
Section 12.11 Force Majeure
When this Lease prescribes a period of time for action to be taken by
Landlord or Tenant, other than the payment of Rent hereunder, Landlord
and Tenant are not liable or responsible for, and there is excluded
from the computation for the period of time, any delays due to
strikes, acts of God, shortages of labor or materials, war,
governmental laws, regulations, restrictions, or any other cause of
any kind that is beyond the control of Landlord or Tenant.
Section 12.12 Gender
Words of any gender used in this Lease include any other gender and
words in the singular number include the plural, unless the context
otherwise requires.
Section 12.13 Joint and Several Liability
If there is more than one Tenant, the obligations imposed upon Tenant
under this Lease are joint and several. If Tenant is a general or
limited partnership, each general partner of Tenant is jointly and
severally liable for the obligations imposed upon Tenant under this
Lease.
Section 12.14 No Representations
Landlord or Landlord's agents made no representations or promises with
respect to the Leased Premises or the Building except as expressly set
forth in this Lease. No rights, easements, or licenses are acquired by
Tenant by implication or otherwise except as expressly set forth in
this Lease.
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Section 12.15 Entire Agreement; Amendments
This Lease is the entire agreement between the parties and supersedes
all negotiations, considerations, representations, and understandings
between Landlord and Tenant prior to the date hereof. No act or
omission of any employee or agent of Landlord or of Landlord's Broker
may alter, change, or modify any of the terms of this Lease. No
amendment or modification of this Lease is binding unless expressed in
a written instrument executed for that purpose by Landlord and Tenant.
Section 12.16 Section Headings
The section headings in this Lease are for convenience only and in no
way enlarge or limit the scope or meaning of the paragraphs in this
Lease.
Section 12.17 Binding Effect
All terms of this Lease are binding upon the respective heirs,
personal representatives, successors, and, to the extent assignment is
permitted, assigns of Landlord and Tenant.
Section 12.18 Counterparts
This Lease may be executed in two or more counterparts, each of which
is deemed an original and all of which together constitute one and the
same instrument.
Section 12.19 Rental Tax
Tenant shall pay as Rent all licenses, charges, and other fees of
every kind and nature as and when they become due arising out of or in
connection with Tenant's use and occupancy of the Leased Premises and
the Building (including the adjacent parking garage), including but
not limited to license fees, business license taxes, and privilege,
sales, excise, or other taxes (other than income) imposed upon Rent or
upon services provided by Landlord or upon Landlord in an amount
measured by Rent received by Landlord.
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Section 12.20 No Personal Liability of Landlord
If Landlord shall fail to perform any covenant, term or condition of
this Lease and, as a consequence, if Tenant shall recover a money
judgment against Landlord, except in the case of a recovery for fraud,
such judgment shall be satisfied only out of the proceeds received at
a judicial sale upon execution and levy against the right, title and
interest of Landlord in the Building and in the rents or other income
from the Building receivable by Landlord, and neither Landlord nor
Landlord's affiliate companies nor their respective owners, partners,
venturers, shareholders, directors or officers shall have any
personal, corporate or other liability hereunder. Tenant covenants and
agrees not to bring suit against: (i) the owners, partners, venturers,
shareholders, directors or officers of Landlord and/or affiliate of
Landlord; or (ii) any affiliate of Landlord.
Section 12.21 Authority to Sign Lease
If Tenant is a corporation or a partnership (general or limited), each
person(s) signing this Lease as an officer or partner of Tenant
represents to Landlord that such person(s) is authorized to execute
this Lease without the necessity of obtaining any other signature of
any other officer or partner, that the execution of this Lease has
been authorized by the board of directors of the corporation or by the
partners of the partnership, as the case may be, and that this Lease
is fully binding on Tenant. Landlord reserves the right to request
evidence of the approval of this Lease and authorization of Tenant's
signatories to bind Tenant, which evidence shall be satisfactory in
form and content to Landlord and its counsel.
Section 12.22 Execution and Approval of Lease
Employees and agents of Landlord and of Landlord's Broker have no
authority to make or agree to make a lease or any other agreement or
undertaking in connection herewith. The submission of this Lease for
examination and negotiation is not an offer to lease, agreement to
reserve, or option to lease the Leased Premises. This Lease is
effective and binding on Landlord only upon the execution and delivery
of this Lease by Landlord and Tenant.
ARTICLE XIII - ADDITIONAL AGREEMENTS
All additional agreements between Landlord and Tenant, if any, with
respect to this Lease and the Leased Premises are set out on Exhibit G
attached hereto and incorporated herein by reference.
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ARTICLE XIV - EXHIBITS AND ATTACHMENTS
The following exhibits are attached to and made a part of this Lease:
Exhibit A [Land], Exhibit B [Leased Premises], Exhibit B-1 [Reserved
Parking], Exhibit C [Building Core and Shell], Exhibit D [Building
Rules and Regulations], Exhibit E [Insurance Requirements], Exhibit F
[Estoppel Certificate], Exhibit G [Additional Agreements], Exhibit H
[Option to Extend Lease Term] and Exhibit I [Subordination, Attornment
and Non-Disturbance Agreement]. The Tenant Work Letter is also
attached.
This Lease is executed in multiple originals as of the Effective Date.
LANDLORD:
▇▇▇▇▇ TWO PARTNERSHIP, LTD.,
a Texas limited partnership
By: ▇▇▇▇▇ TWO MANAGEMENT CORP., a Texas
corporation, its general partner
By:
L. ▇▇▇▇ ▇▇▇▇▇▇, President
TENANT:
WESTECH CAPITAL CORP., a New York
corporation
By: /s/ ▇▇▇ ▇. VAN ERT
------------------------------------
Name: ▇▇▇ ▇. Van Ert
------------------------------------
Title: President
-----------------------------------
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