COMMERCIAL LEASE
ARTICLE 1.00 BASIC LEASE TERMS
1.01 PARTIES. This lease agreement ("Lease") is entered into by and
between the following Lessor and Lessee:
▇▇▇▇▇▇▇▇▇ FREEWAY PROPERTIES, a Texas joint venture ("Lessor")
K-C AVIATION, INC., a Delaware corporation ("Lessee")
1.02 LEASED PREMISES. In consideration of the rents, terms, provisions
and covenants of this Lease, Lessor hereby leases, lets and demises to
Lessee the following described premises ("leased premises"):
approximately 3.421 acres of land, described on Exhibit "A" attached
hereto and made a part hereof, including a building containing
approximately 47,518 rentable square feet, commonly known as ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
1.03 TERM. Subject to and upon the conditions set forth herein, the
term of this Lease shall commence on the later to occur of (i) May 1, 1997,
or (ii) five (5) business days after the completion by Lessor of all ACM
Abatement Work (hereinafter defined) (the "Commencement Date") and shall
continue thereafter for a period of five (5) years following the
Commencement Date unless sooner terminated in accordance with the terms and
provisions of this Lease. Lessee shall have a renewal option for one sixty
(60) month "Renewal Term," as described in Exhibit "D" attached hereto and
made a part hereof.
1.04 BASE RENT AND SECURITY DEPOSIT.
(a) Base rent shall be payable in the following respective amounts
(regardless of whether the actual square footage of the building comprising
a portion of the leased premises is proven to be greater or less than the
approximate square footage set forth in section 1.02 above): (i) commencing
on the Commencement Date through and including the thirty-sixth (36th)
month of the term of this Lease, base rent shall be payable in equal
consecutive monthly installments of Fifteen Thousand Eight Hundred
Thirty-Nine and 33/100 Dollars ($15,839.33) each; and (ii) commencing on
the first (1st) day of the thirty-seventh (37th) month of the term of this
Lease through and including the sixtieth (60th) month of the term of this
Lease, base rent shall be payable in equal consecutive monthly installments
of Sixteen Thousand Four Hundred Thirty-Three and 31/100 Dollars
($16,433.31) each. If the final day of the 36th month of the term of this
Lease occurs on a day other than the first day of a calendar month, then
the base rent for that calendar month shall be prorated between $15,839.33
and $16,433.31 based upon the applicable number of days in that calendar
month which occur, respectively, before and after the last day of such 36th
month.
(b) There shall be no security deposit.
1.05 ADDRESSES. Unless and until changed by written notice from one
party to the other in accordance with the provisions of section 13.06 of
this Lease, the respective addresses of the parties for notices pursuant to
this Lease are as follows:
Lessor's Address: Lessee's Address:
▇▇▇▇▇▇▇▇▇ Freeway Properties K-C Aviation, Inc.
c/o Cencor Realty Services 7440 Aviation Place
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to: With a copy to:
Jenkens & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Knight, P.C.
a Professional Corporation ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq. Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
1.06 PERMITTED USE. General office use and jet engine overhaul (but
with no testing of jet engines at the leased premises), and no other use
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld or delayed. With regard to Lessee's use of the leased
premises for jet engine overhaul, Lessor's inclusion of same as a
"Permitted Use" refers only to permission from Lessor, subject to
Applicable Laws (as defined in section 3.03 below) and applicable deed
restrictions, if any; and in no way should it be deemed as a representation
or warranty from Lessor that such use is permitted under Applicable Laws
and applicable deed restrictions.
ARTICLE 2.00 RENT
2.01 BASE RENT. Lessee agrees, without demand, setoff or deduction
(except as expressly provided in this Lease), to pay monthly as base rent
during the term of this Lease the sum of money set forth in section 1.04 of
this Lease, which amount shall be payable to Lessor at the address shown
above. One monthly installment of rent shall be due and payable on the
Commencement Date for the first month's rent and a likely monthly
installment shall be due and payable on or before the first day of each
calendar month succeeding the Commencement Date during the term of this
Lease; provided, if the Commencement Date or the expiration date of this
Lease should be a date other than the first day of a calendar month, the
monthly rental set forth above shall be prorated to the end of that
calendar month, and all succeeding installments of rent shall be payable on
or before the first day of each succeeding calendar month during the term
of this Lease. Lessee shall pay, as additional rent, all other sums due
under this Lease.
2.02 PROPERTY TAX AND INSURANCE ESCALATIONS. In the event Lessor's Tax
and Insurance Expenses for the leased premises shall, in any calendar year
during the term of this Lease, exceed the actual Tax and Insurance Expenses
paid or incurred by Lessor for the leased premises for the calendar year
1997 (the "Base Year"), Lessee agrees to pay as additional rent such excess
Tax and Insurance Expenses. Accordingly, Lessee shall not be liable or
responsible for payment of any excess Tax and Insurance Expenses pursuant
to this section 2.02 during the Base Year and such liability or
responsibility shall not begin accruing until January 1, 1998; provided,
however, that if the Tax and Insurance Expenses paid or incurred by Lessor
for the leased premises for the calendar year 1998 are less than those paid
or incurred by Lessor for the calendar year 1997, the Base Year shall be
the calendar year 1998. Notwithstanding the foregoing, with regard to that
portion of Tax and Insurance Expenses comprised of real property taxes,
Lessee shall only be responsible for such tax expenses to the extent they
exceed the greater of (i) the actual tax expenses incurred by Lessor for
the leased premises for the Base Year or (ii) the tax expenses that would
have been incurred by Lessor for the leased premises for the Base Year had
this Lease been in effect and had Lessee been in occupancy of the leased
premises on January 1, 1997. Lessor may invoice Lessee monthly for the
estimated Tax and Insurance Expenses for each calendar year, which amount
shall be adjusted each year based upon anticipated Tax and Insurance
Expenses. Within nine months following the close of each calendar year,
Lessor shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. In the event the
accounting shows that the total of the monthly payments made by Lessee
exceeds the amount of additional rent due by Lessee under this section, the
accounting shall be accompanied by a refund. In the event the accounting
shows that the total of the monthly payments made by Lessee is less than
the amount of additional rent due by Lessee under this section, the account
shall be accompanied by an invoice for the additional rent. Notwithstanding
any other provision in this Lease, during the year in which the Lease
terminates, Lessor, prior to the termination date, shall have the option to
invoice Lessee for the excess Tax and Insurance Expenses based upon the
previous year's Tax and Insurance Expenses. If this Lease shall terminate
on a day other than the last day of a calendar year, the amount of any
additional rent payable by Lessee applicable to the year in which such
termination shall occur shall be prorated on the ratio that the number of
days from the commencement of the calendar year to and including the
termination date bears to 365. Lessee shall have the right, at its own
expense and within a reasonable time (not to exceed six (6) months after
Lessee's receipt of an invoice from Lessor), to audit Lessor's books
relevant to the additional rent payable under this section upon reasonable
notice to Lessor, but not more than once each calendar year, and if all of
the following apply to such audit: (i) the audit is conducted by an
independent certified accountant who is compensated at an hourly rate
(i.e., as opposed to a contingency method of compensation), and (ii) the
audit discloses an overpayment by Lessee of more than five percent (5%),
the Lessor shall pay for the reasonable cost of such audit. Lessee agrees
to pay any additional rent due under this section within thirty (30) days
following receipt of the invoice or accounting showing additional rent due.
2.03 DEFINITION OF TAX AND INSURANCE EXPENSES. The term "Tax and
Insurance Expenses" shall mean all real property taxes, general and special
assessments (with Lessor being required to either elect the installment
treatment for special assessments or otherwise treat Tax and Insurance
Expenses as though Lessor had elected the installment treatment with regard
to special assessments) and taxes or assessments on rentals, including dues
and assessments by means of deed restrictions and/or owners' associations
which accrue against the leased premises during the term of this Lease; and
all insurance premiums Lessor is required to pay or reasonably deems
necessary to pay, including public liability insurance, with respect to the
leased premises.
2.04 LATE PAYMENT CHARGE. Other remedies for nonpayment of rent
notwithstanding, if the monthly base rental payment is not received by
Lessor on or before the tenth day of the month for which the rent is due,
or if any other payment of rent due Lessor by Lessee is not received by
Lessor on or before the tenth day following the date on which such payment
is due to Lessor, a late payment charge of three percent (3%) of such past
due amount shall become due and payable in addition to such amounts owed
under this Lease.
2.05 INCREASE IN INSURANCE PREMIUMS. If an increase in any insurance
premiums paid by Lessor for the leased premises is caused by Lessee's use
of the leased premises in a manner other than as set forth in section 1.06,
or if Lessee vacates the leased premises and causes an increase in such
premiums, then Lessee shall pay as additional rent the amount of such
increase to Lessor.
2.06 HOLDING OVER. In the event that Lessee does not vacate the leased
premises upon the expiration of this Lease, Lessee shall be a tenant at
will for the holdover period and all of the terms and provisions of this
Lease shall be applicable during that period, except that Lessee shall pay
Lessor as base rent for the period of such holdover an amount equal to one
and one-fourth (1 1/4) times the base rent which would have been payable by
Lessee had the holdover period been a part of the original term of this
Lease. Lessee agrees to vacate and deliver the leased premises to Lessor
upon Lessee's receipt of notice from Lessor to vacate. No holding over by
Lessee, whether with or without the consent of Lessor, shall operate to
extend the term of this Lease.
ARTICLE 3.00 OCCUPANCY AND USE
3.01 USE. Lessee warrants and represents to Lessor that the leased
premises shall be used and occupied only for the purposes which are
permitted in section 1.06. Lessee shall occupy the leased premises, conduct
its business and control its agents, employees, invitees and visitors in
such a manner as is lawful, reputable and will not create a nuisance.
Lessee shall neither permit any waste on the leased premises nor allow the
leased premises to be used in any way which would, in the reasonable
opinion of Lessor, be extra hazardous on account of fire or which would in
any way increase or render void the fire insurance on the leased premises.
If at any time during the term of this Lease the State Board of Insurance
or other insurance authority imposes an additional penalty or surcharge in
Lessor's insurance premiums because of Lessee's original or subsequent
placement or use of storage racks or bins, method of storage or nature of
Lessee's inventory or any other act of Lessee, Lessee agrees to pay as
additional rent the increase in Lessor's insurance premiums. With specific
regard to the hazardous or possibly hazardous materials used in connection
with Lessee's intended business at the leased premises, Lessee agrees as
follows: (i) Lessee shall include in Lessee's Work (hereinafter defined)
whatever fixtures and improvements may be required by Applicable Laws in
connection with the handling of such materials; (ii) Lessee shall use all
such materials in accordance with all Applicable Laws; (iii) at the
conclusion of the term of this Lease, Lessee shall provide to Lessor a
Phase I environmental survey of the leased premises prepared by an
independent environmental engineer reasonably acceptable to Lessor, who has
been fully apprised of Lessee's operations at the leased premises; and (iv)
Lessee, at its sole cost and expense, shall (a) cause such additional
studies to be performed on the leased premises as are recommended by such
environmental survey to investigate or assess the obligations of Lessee
under Applicable Laws pertaining to the environment based on Lessee's
operations at the leased premises or conditions observed at the leased
premises, and (b) perform or cause to be performed such remedial work as is
recommended by such environmental survey, to the extent required by
Applicable Laws pertaining to the environment, to the extent and only to
the extent that such remedial work is necessary as the result of the acts
of Lessee, its agents, employees or invitees during the term of this Lease.
3.02 SIGNS. No sign of any type or description shall be erected,
placed or painted in or about the leased premises except those signs
submitted to Lessor in writing and approved by Lessor in writing, and which
signs are in conformance with Lessor's sign criteria established for the
leased premises. Notwithstanding the foregoing, Lessor agrees that Lessee
shall be allowed to erect or install, at Lessee's sole cost and expense,
exterior signage on the leased premises, provided that such exterior
signage shall in all respects be in compliance with all Applicable Laws and
applicable deed restrictions (as to which Lessor makes no representations
or warranties to Lessee), as well as being approved in writing by Lessor
with respect to location, size, materials, color, graphics and layout. Any
such signage shall be constructed and maintained by Lessee at its sole cost
and expense, in accordance with any and all applicable restrictive
covenants, approval rights of any existing property association and any and
all other applicable laws, rules, ordinances and regulations and in
accordance with Lessor's signage criteria as the same may be reasonably
amended by Lessor from time to time. Lessor agrees that its approval of any
signage requested by Lessee shall not be unreasonably withheld or delayed.
3.03 COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Lessee, at Lessee's
sole cost and expense, shall comply with all laws, ordinances, orders,
rules and regulations of state, federal, municipal or other agencies or
bodies having jurisdiction over use, condition and occupancy of the leased
premises. Lessee must use and maintain the leased premises in a clean,
careful, safe and proper manner and in compliance with all applicable laws,
ordinances, orders, rules and regulations of all governmental entities and
regulatory agencies (collectively, "Applicable Laws"), including Applicable
Laws pertaining to health, safety, disabled persons and the environment;
provided, however, that Lessee shall not be required to make any structural
changes or repairs to the leased premises unless the need for such
structural changes or repairs is caused by Lessee, its agents, employees,
invitees or others for whom Lessee is responsible pursuant to the terms and
provisions of this Lease. Notwithstanding anything to the contrary
contained elsewhere in this section 3.03, it is expressly agreed and
understood that Lessee's obligation to comply with all Applicable Laws does
not apply to any violations of Applicable Laws which were in effect and the
leased premises was not in compliance with or were being violated
immediately prior to the time Lessee accepted the leased premises,
including without limitation, any existing environmental contamination.
Further, Lessor, at Lessor's sole cost and expense, shall be responsible
for any structural changes or other repairs, alterations or other actions
necessary to bring the leased premises into compliance with Applicable Laws
as in effect immediately prior to the time Lessee accepted the leased
premises, including without limitation, all Applicable Laws pertaining to
health, safety, the environment and disabled persons. Lessee will comply
with the rules and regulations of the leased premises adopted by Lessor
which are set forth on Exhibit "B" attached to this Lease. Lessor shall
have the right at all times to change and amend the rules and regulations
in any reasonable manner as may be deemed advisable for the safety, care,
cleanliness, preservation of good order and operation or use of the leased
premises. All changes and amendments to the rules and regulations of the
leased premises will be sent by Lessor to Lessee in writing and shall
thereafter be carried out and observed by Lessee.
3.04 WARRANTY OF POSSESSION. Lessor warrants that it has the right and
authority to execute this Lease, and Lessee, upon payment of the required
rents and subject to the terms, conditions, covenants and agreements
contained in this Lease, shall have possession of the leased premises
during the full term of this Lease as well as any extension or renewal
thereof. Lessor shall not be responsible for the acts or omissions of any
third party that may interfere with Lessee's use and enjoyment of the
leased premises; provided, however, Lessor agrees to utilize reasonable
efforts in a good faith attempt to prevent any third party from interfering
with or continuing to interfere with Lessee's use and enjoyment of the
leased premises.
3.05 INSPECTION. Lessor or its authorized agents shall at any and all
reasonable times have the right to enter the leased premises to inspect the
same, to supply any service to be provided by Lessor, to show the leased
premises to prospective purchasers or lessees (which right to show the
leased premises to prospective lessees shall be limited to the last one
hundred eighty [180] days of the term of this Lease, as the same may have
been extended hereunder), and to alter, improve or repair the leased
premises in accordance with the terms of this Lease; provided, however,
that except in the event of an emergency, Lessor or its authorized agents
shall at all times be accompanied by a representative of Lessee. Lessee
hereby waives any claim for damages for injury or inconvenience to or
interference with Lessee's business, any loss of occupancy or use of the
leased premises, and any other loss occasioned thereby. Lessor shall at all
times have and retain a key with which to unlock all of the doors in, upon
and about the leased premises. Lessee shall not change Lessor's lock system
or in any other manner prohibit Lessor from entering the leased premises.
Lessor shall have the right to use any and all means which Lessor may deem
proper to open the leased premises in an emergency without liability
therefor. Notwithstanding anything to the contrary contained hereinabove,
Lessor agrees to (a) utilize reasonable efforts (except in the event that
an emergency either exists or reasonably appears to exist or be imminent)
to give Lessee twenty-four (24) hours advance written notice of any
intended entry by Lessor or its agents or representatives upon the leased
premises during regular business hours and (b) utilize reasonable efforts
in a good faith attempt to cause as little interruption and interference
with the conduct of business by Lessee in the leased premises as is
reasonably practicable.
3.06. TITLE REPORT. Within five (5) days after execution of this
Lease, Lessor shall, at Lessor's sole cost and expense, deliver to Lessee a
current commitment for title insurance or other comparable evidence of
title to the leased premises issued by a title company and copies of all
underlying documents shown as exceptions to title affecting the leased
premises. In the event that such title commitment or underlying exception
documents are unacceptable to Lessee for any reason, in Lessee's sole and
absolute discretion, Lessee shall have the right, at Lessee's option, to
terminate this Lease by delivering a written termination notice to Lessor
within ten (10) days after Lessee's receipt of such title commitment and
underlying exception documents.
ARTICLE 4.00 UTILITIES AND SERVICE
4.01. UTILITIES. Lessee shall pay the cost of all utility services,
including, but not limited to, initial connection charges, all charges for
gas, electricity, water, sanitary and storm sewer service, and for all
electric lights. Lessee shall pay all costs caused by Lessee introducing
excessive pollutants or solids other than ordinary human waste into the
sanitary sewer system, including permits, fees and charges levied by any
governmental subdivision for any such pollutants or solids. Lessee shall be
responsible for the installation and maintenance of any dilution tanks,
holding tanks, settling tanks, sewer sampling devices, sand traps, grease
traps or similar devices as may be required by any governmental subdivision
for Lessee's use of the sanitary sewer system. Lessor shall not be required
to pay for any utility services, supplies or upkeep in connection with the
leased premises. Notwithstanding anything set forth in this Lease to the
contrary, Lessee shall be solely liable and obligated for, and shall make
payment directly to the service provider for, any and all electrical power
now or hereafter provided to the leased premises and any and all janitorial
and/or cleaning services utilized by Lessee in connection with the leased
premises, and Lessor shall have no duty, obligation or responsibility
whatsoever with respect to the providing of any such services.
4.02 THEFT OR BURGLARY. Lessor shall not be liable to Lessee for
losses to Lessee's property or personal injury caused by criminal acts or
entry by unauthorized persons into the leased premises.
ARTICLE 5.00 REPAIRS AND MAINTENANCE
5.01 LESSOR REPAIRS. Lessor shall maintain only the roof (but not the
HVAC Units which shall be maintained at the sole cost and expense of
Lessee, except that Lessor shall be responsible for ensuring that all parts
of the leased premises, including without limitation the HVAC Units,
plumbing and electrical systems, sprinkler system and doors to the leased
premises, are initially in good working order and Lessor will promptly
repair same for a period of ninety (90) days following the Commencement
Date of this Lease), foundation, and the structural soundness of the
exterior walls (excluding windows, window glass, plate glass and doors) of
the building comprising a part of the leased premises, except for damages
caused by the negligence of Lessee, its agents, employees, contractors,
guests and invitees which damage shall be repaired at the sole cost and
expense of Lessee and which will constitute additional rent due hereunder
upon demand by Lessor therefor. Lessor agrees to utilize reasonable efforts
to effectuate and promptly complete any maintenance or repairs required to
be performed by Lessor hereunder in a manner calculated to cause as little
interruption and interference with the conduct of business by Lessee in the
leased premises as is reasonably practicable. In addition, if Lessor fails
to perform any of its repair and maintenance obligations hereunder and such
default is not cured by Lessor in accordance with the terms and provisions
of section 11.03 hereinbelow, then Lessee shall have the right to perform
such repair and maintenance obligations as are reasonably necessary to
either (a) prevent any damage to Lessee's inventory or other personal
property and/or (b) obviate any material and adverse effects to Lessee's
business operations resulting therefrom. Any and all reasonable costs and
expenses paid or incurred by Lessee in performing any of Lessor's
maintenance obligations in accordance with the terms, conditions and
requirements of the immediately preceding sentence, may be offset by Lessee
against the next accruing installments of rent hereunder.
5.02 LESSEE REPAIRS. Lessee shall, as its sole cost and expense,
maintain, repair and replace all other parts of the leased premises in good
repair and condition, including, but not limited to, heating, ventilating
and air conditioning systems (save and except for Lessor's obligation to
maintain the HVAC Units for the first ninety (90) days following the
Commencement Date), down spouts, dock bumpers, drives and parking areas,
lawn and landscape irrigation equipment, lawn and landscape maintenance
(i.e., keeping same in substantially the same condition as now exists,
ordinary wear and tear and damage from fire or other casualty excepted),
pest control and extermination, trash pick-up and removal, and painting the
building and exterior doors. Lessee shall repair and pay for any damage
caused by any act or omission of Lessee or Lessee's agents, employees,
invitees, licensees or visitors. If Lessee fails to make the repairs or
replacements promptly as required herein, Lessor may, at its option and
after the expiration of any applicable notice and cure period, make the
repairs and replacements and the cost of such repairs and replacements
shall be charged to Lessee as additional rent and shall become due and
payable by Lessee within thirty (30) days from receipt of Lessor's invoice.
5.03 REQUEST FOR REPAIRS. All requests for repairs or maintenance that
are the responsibility of Lessor pursuant to any provision of this Lease
must be made in writing to Lessor at the address of Lessor set forth in
section 1.05.
5.04 LESSEE DAMAGES. Subject to the controlling terms and provisions
of section 7.04 below, Lessee shall not allow any damage to be committed by
Lessee or Lessee's agents, employees, invitees, licensees or visitors on
any portion of the leased premises and at the termination of this Lease, by
lapse of time or otherwise, Lessee shall deliver the leased premises to
Lessor in as good condition as existed at the Commencement Date of this
Lease, ordinary wear and tear and damage from casualty excepted. The cost
and expense of any repairs necessary to restore the condition of the leased
premises shall be borne by Lessee.
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
6.01 ASBESTOS SURVEY AND ACM ABATEMENT WORK. Lessee, at Lessee's sole
cost and expense, has caused that certain asbestos survey of the leased
premises entitled Report of Survey for Asbestos-Containing Materials, dated
April 23, 1997, prepared by Law Engineering & Environmental Services, Inc.
(the "ACM Survey") to be performed. Lessee has delivered a copy of the ACM
Survey to Lessor. Lessee and Lessor hereby agree that Lessor shall, on or
before the later to occur of (i) ten (10) business days after execution of
this Lease, or (ii) the date on which Lessee no longer has a right to
terminate this Lease pursuant to section 6.2 below, cause a contractor to
commence and diligently pursue to completion within fifteen (15) days after
commencement the abatement and removal of all acoustic wall tile in the
former computer room, all mechanical equipment insulation above the cooler
and in the HVAC and boiler room, and the two sinks with ACM sink
undercoating, all as referenced in the ACM Survey (the "ACM Abatement
Work"), with all of such ACM Abatement Work to be performed and completed
in accordance with Applicable Laws. Except for the completion of the ACM
Abatement Work and Lessor's warranty that all portions of the leased
premises shall be initially in good working order (including Lessor's
obligation to promptly repair same for a period of ninety (90) days
following the Commencement Date of this Lease), Lessee acknowledges and
agrees that Lessee will accept the leased premises "AS IS" and in its
present condition as of the Commencement Date, and that, except as provided
in sections 5.01 and 6.03 of this Lease, Lessor shall have no other
obligations to alter, refurbish, repair or otherwise improve the leased
premises.
6.02 ENVIRONMENTAL SURVEY. Within thirty (30) days after execution of
this Lease, Lessee, at Lessee's sole cost and expense, shall cause an
environmental survey (the "Environmental Survey") of the leased premises to
be performed. In the event that the results of the Environmental Survey are
unacceptable to Lessee for any reason, in Lessee's sole and absolute
discretion, Lessee shall have the right, at Lessee's option, to terminate
this Lease by delivering a written termination notice to Lessor within ten
(10) days after Lessee's receipt of the Environmental Survey. Regardless of
whether or not Lessee terminates this Lease pursuant to the immediately
preceding sentence, Lessee shall promptly deliver a copy of the
Environmental Survey to Lessor.
6.03 LESSEE IMPROVEMENTS. Upon Lessee's occupancy of the leased
premises, Lessee may perform the work ("Lessee's Work") described in
Exhibit "C" attached hereto and made a part hereof, which Lessee's Work is
hereby deemed approved by Lessor for all purposes. Lessor hereby agrees to
perform, at its sole cost and expense, any and all future removal,
encapsulation or other abatement or handling of asbestos and/or asbestos
containing material as is required by Applicable Laws or which is not
unreasonably requested by Lessee in connection with (i) Lessee's Work, or
(ii) any future alterations, additions or improvements to the leased
premises permitted by the terms of this Lease. Notwithstanding the
foregoing, however, Lessee agrees that, with the exception of the ACM
Abatement Work prescribed in section 6.1 above, Lessee will not request
that Lessor remove, encapsulate or ▇▇▇▇▇ any asbestos and/or asbestos
containing material referred to in the ACM Survey (e.g., the wallboard
joint compound and paint texture or the resilient flooring and associated
mastic referenced in the summary set forth on page 4 of the ACM Survey),
unless the building materials associated with such items are (a) being
altered by Lessee in such a manner that the asbestos contained in such
items will be disturbed or (b) are being removed. Such removal,
encapsulation or other abatement or handling shall be performed by Lessor
(i) in accordance with the schedule of such work established by Lessee,
provided Lessee is not unreasonable in establishing such schedule, and (ii)
in a manner that will minimize interference with Lessee's business in the
leased premises. Except with respect to Lessee's Work and interior,
non-structural alterations or additions to the leased premises costing less
than $50,000, Lessee shall not make or allow to be made any alterations or
physical additions in or to the leased premises without first obtaining the
written consent of Lessor, which consent shall not be unreasonably withheld
or delayed. Any alterations, physical additions or improvements to the
leased premises made by Lessee shall at once become the property of Lessor
and shall be surrendered to Lessor upon the termination of this Lease. This
clause shall not apply to moveable equipment, furniture or trade fixtures
owned by Lessee, which may be removed by Lessee at the end of the term of
this Lease if Lessee is not then in default and if such equipment and
furniture are not then subject to any other rights, liens and interest of
Lessor.
ARTICLE 7.00 CASUALTY AND INSURANCE
7.01 SUBSTANTIAL DESTRUCTION. If the building and/or other
improvements comprising a part of the leased premises should be totally
destroyed by fire or other casualty, or if the leased premises should be
damaged so that rebuilding cannot reasonably be substantially completed
within ninety (90) working days after the date of written notification by
Lessee to Lessor of the destruction, this Lease shall, at the option of
Lessor or Lessee [exercised by written notice to the other party on or
before that date which is thirty (30) days after the damage or
destruction], terminate and the rent shall be abated for the unexpired
portion of the Lease, effective as of the date of the written notification.
7.02 PARTIAL DESTRUCTION.
(a) If the building and/or other improvements comprising a part of
the leased premises should be partially damaged by fire or other
casualty, and rebuilding or repairs can reasonably be completed
within ninety (90) working days from the date of written
notification by Lessee to Lessor of the destruction, this Lease
shall not terminate, and Lessor shall proceed with reasonable
diligence to rebuild or repair the building or other improvements
to substantially the same condition in which they existed prior
to the damage. However, Lessor's duty or obligation to repair or
rebuild the leased premises shall be limited to the extent, and
only to the extent, that Lessor actually receives insurance
proceeds in connection with any such damage or destruction after
payment of all of Lessor's reasonable costs and expenses in
obtaining such insurance proceeds.
(b) Notwithstanding the preceding subsection, in the event that
Lessor fails to substantially complete the necessary repairs or
rebuilding within one hundred twenty (120) working days from the
date of written notification by Lessee to Lessor of the
destruction, Lessee may at its option terminate this Lease by
delivering written notice of termination to Lessor before such
time as Lessor has substantially completed the repairs or
rebuilding, whereupon all rights and obligations under this Lease
shall cease to exist.
(c) If the leased premises are to be rebuilt or repaired and are
untenantable in whole or in part following the damage, and the
damage or destruction was not caused or contributed to by act or
negligence of Lessee, its agents, employees, invitees, or those
for whom Lessee is responsible, the rent payable under this Lease
during the period for which the leased premises are untenantable
shall be adjusted to such an extent as may be fair and reasonable
under the circumstances.
7.3 INSURANCE.
(a) Lessee must procure and maintain throughout the term of this
Lease and any extensions or renewals of the term of this Lease
commercial general liability insurance (including blanket
contractual liability coverage), which shall cover any claims for
bodily injury, death and/or property damage occurring in or
resulting from any occurrence on the leased premises, including
injury, death and/or damage caused by the condition of or any
defect in the building or other improvements comprising a part of
the leased premises. The policies evidencing such insurance must
be in form reasonably satisfactory to Lessor, must name Lessor as
an additional insured, must be issued by insurance companies
reasonably acceptable to Lessor, and must afford immediate
protection to the limit of not less than $1,000,000 per accident.
With respect to each policy evidencing such liability insurance,
Lessee shall obtain any available endorsements reasonably
required by Lessor. Lessee shall also deliver the policy or a
certificate evidencing the same to Lessor prior to occupying the
leased premises or commencing the construction of any
improvements thereon or in the building comprising a part of the
leased premises, and Lessee shall deliver a certificate of
renewal from the applicable insurer at least ten days prior to
the expiration of the policy. In addition, Lessee shall obtain
and deliver to Lessor a written obligation on the part of each of
its insurance companies to notify Lessor at least 10 days prior
to any cancellation of or material change to such insurance.
(b) Lessor shall at all times during the term of this Lease maintain
a policy or policies of insurance with the premiums paid in
advance, issued by and binding upon an insurance company
reasonably acceptable to Lessee, insuring the building against
all risk of direct physical loss in an amount equal to the full
replacement cost of the building structure and its improvements
as of the date of the loss; provided, Lessor shall not be
obligated in any way or manner to insure any personal property
(including, but not limited to, any furniture, machinery, goods
or supplies) of Lessee upon or within the leased premises. Lessor
shall at times during the term of this Lease maintain a policy or
policies of general liability insurance with the premiums paid in
advance, issued by and binding upon an insurance company
reasonably acceptable to Lessee, with respect to Lessor's
activities in the leased premises, such insurance to afford
minimum protection of not less than One Million Dollars
($1,000,000.00) combined single limit coverage of bodily injury,
death, property damage or a combination thereof. Lessor shall not
be required to maintain insurance against thefts within the
leased premises. Lessee accepts responsibility for keeping all
personal property and equipment in the leased premises adequately
insured and for maintaining adequate business interruption
insurance. Lessee shall have no right in claim to the proceeds of
any policy of insurance maintained by Lessor even though the cost
of such insurance is borne by Lessee as set forth in Article
2.00.
7.04 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Lessor and Lessee hereby waive and release each other of
and from any and all right of recovery, claim, action or cause of action,
against each other, their agents, officers and employees, for any loss or
damage that is insurable pursuant to customary insurance coverage and
occurs to the leased premises, improvements to the leased premises or
personal property within the leased premises, by reason of fire or the
elements, regardless of cause or origin, including negligence of Lessor or
Lessee and their agents, officers and employees; provided, however, that
this waiver of subrogation shall not apply to the deductible (up to a
maximum deductible of $50,000) which is applicable to the insurance
coverage of each respective waiving party. Lessor and Lessee agree
immediately to give their respective insurance companies which have issued
policies of insurance covering all risk of direct physical loss, written
notice of the terms of the mutual waivers contained in this section, and to
have the insurance policies properly endorsed, if necessary, to prevent the
invalidation of the insurance coverages by reason of the mutual waivers.
WITHOUT LIMITATION, IT IS THE INTENTION OF LESSOR AND LESSEE THAT THE
FOREGOING RELEASES BY LESSOR AND LESSEE BE EFFECTIVE NOTWITHSTANDING ANY
NEGLIGENCE (BUT NOT GROSS NEGLIGENCE) ON THE PART OF THE OTHER PARTY.
7.05 HOLD HARMLESS. Lessee shall indemnify and hold Lessor harmless of
and from any loss, attorneys' fees, expenses, claims, fines, suits, costs
and liability of every kind arising because of any bodily injury, death
and/or damage to property occurring in or resulting from any occurrence in
the leased premises during the term of this Lease and any holdover period
save and except for any costs occasioned by the negligence or willful
wrongful acts of Lessor or Lessor's agents or employees. Except to the
extent caused by a breach of this Lease or the negligence or willful
wrongful acts of Lessor or Lessor's agents or employees, Lessor shall not
be liable to Lessee's employees, agents, invitees, licensees or visitors,
or to any other person, for any injury to person or damage to property on
or about the leased premises caused by any act or omission of Lessee, its
agents, servants or employees, or of any other person entering upon the
leased premises under express or implied invitation by Lessee, or caused by
the improvements located on the leased premises becoming out of repair, the
failure or cessation of any service provided by Lessor, or caused by
leakage of gas, oil, water or steam or by electricity emanating from the
leased premises.
ARTICLE 8.00 CONDEMNATION
8.01 SUBSTANTIAL TAKING. If all or a substantial part of the leased
premises are taken for any public or quasi-public use under any
governmental law, ordinance or regulation, or by right of eminent domain or
by purchase in lieu thereof, and the taking would prevent or materially
interfere with the use of the leased premises for the purpose for which it
is then being used, this Lease shall at the option of Lessor or Lessee
[exercised by written notice to the other party on or before that date
which is thirty (30) days after the date of the taking] terminate and the
rent shall be abated during the unexpired portion of this Lease effective
on the date physical possession is taken by the condemning authority.
Lessee shall have no claim to the condemnation award or proceeds in lieu
thereof. Notwithstanding anything to the contrary contained hereinabove,
Lessee shall have the right to recover from the condemning authority, but
not Lessor, any compensation as may be separately awarded to Lessee on
account of moving and relocation expenses and depreciation to and removal
of Lessee's physical property and all other interest and property (but
expressly excluding any improvements constructed and installed in the
leased premises and any other property which would otherwise be or become
the property of Lessor upon the termination or expiration of this Lease)
for which Lessee is entitled to compensation from such condemning authority
under common law or applicable statutes, so long as and conditioned upon
any award to Lessee not having the effect of reducing the award which
Lessor would otherwise be entitled to receive under common law or
applicable statutes.
8.02 PARTIAL TAKING. If a portion of the leased premises shall be
taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain or by purchase in
lieu thereof, and this Lease is not terminated as provided in section 8.1
above, Lessor shall restore and reconstruct the building and other
improvements on the leased premises to the extent necessary to make it
reasonably tenantable. The rent payable under this Lease during the
unexpired portion of the term shall be adjusted to such an extent as may be
fair and reasonable under the circumstances. Lessee shall have no claim to
the condemnation award or proceeds in lieu thereof. Notwithstanding
anything set forth herein to the contrary, Lessor's obligation to restore
and/or reconstruct the building and other improvements under this section
8.02 shall be limited to the extent, and only to the extent, that
condemnation proceeds are actually received by Lessor in connection with
any such taking after payment of all of Lessor's reasonable costs and
expenses in obtaining such condemnation proceeds. In the event that Lessor
fails to restore or reconstruct the building and other improvements on the
leased premises within one hundred twenty (120) working days from the date
of such taking, Lessee shall have the right to terminate this Lease by
delivering written notice of such termination to Lessor. Notwithstanding
anything to the contrary contained hereinabove, Lessee shall have the right
to recover from the condemning authority, but not Lessor, any compensation
as may be separately awarded to Lessee on account of moving and relocation
expenses and depreciation to and removal of Lessee's physical property and
all other interest and property (but expressly excluding any improvements
constructed and installed in the leased premises and any other property
which would otherwise be or become the property of Lessor upon the
termination or expiration of this Lease) for which Lessee is entitled to
compensation from such condemning authority under common law or applicable
statutes, so long as and conditioned upon any award to Lessee not having
the effect of reducing the award which Lessor would otherwise be entitled
to receive under common law or applicable statutes.
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
9.01 LESSOR ASSIGNMENT. Lessor shall have the right to sell, transfer
or assign, in whole or in part, its rights and obligations under this Lease
and in the leased premises. Any such sale, transfer or assignment shall
operate to release Lessor from any and all liabilities under this Lease
arising after the date of such sale, assignment or transfer. Additionally,
Lessee shall continue to make payment of all rent and other amounts due and
payable from Lessee to Lessor hereunder to the named Lessor at the address
set forth in section 1.05 hereinabove until such time as Lessee receives an
instrument executed by both the Lessor and such transferee or assignee,
giving notice of such transfer or assignment and instructions for the
delivery of payments and notices by Lessee to such transferee or assignee
and affirming the assumption (by the transferee or assignee identified
therein) of all obligations and responsibilities of Lessor under the Lease
which are properly due, performable, allocable and attributable to any
period of time subsequent to the date of such transfer or conveyance.
9.02 LESSEE ASSIGNMENT. Lessee shall not assign, in whole or in part,
this Lease, or allow it to be assigned, in whole or in part, or sublet the
leased premises, in whole or in part, without the prior written consent of
Lessor (which consent shall not be unreasonably withheld or delayed). In no
event shall any such assignment or sublease ever release Lessee or any
guarantor from any obligation or liability hereunder; moreover, in the
event that Lessee shall receive any payments from an assignee or sublessee
in excess of (i) the base rent and other payments required to be paid by
Lessee pursuant to this Lease and (ii) any refurbishment, commissions or
other expenses Lessee may incur in connection with such assignment or
subletting, then Lessee shall promptly forward all such excess payments to
Lessor. Notwithstanding the foregoing provisions of this Article 9.00 to
the contrary, Lessee may from time to time, without Lessor's consent,
assign this Lease or sublet the leased premises, or any portion thereof, to
any parent or subsidiary of Lessee or the guarantor of this Lease or any
subsidiary of a parent corporation of either Lessee or the guarantor of
this Lease (hereinafter collectively referred to as a "Related Party").
Further, any sale or exchange of Lessee's stock on a nationally recognized
exchange, any change in ownership of Lessee as a result of a merger,
consolidation, reorganization or the exchange of stock between Lessee's
parent company or a subsidiary of Lessee or of Lessee's parent company or
the sale of all or substantially all of Lessee's stock or assets shall not
be considered an assignment under this article 9.00 and Lessee shall have
no obligation to obtain Lessor's consent in the event of any of such
events.
9.03 CONDITIONS OF ASSIGNMENT. If Lessee desires to assign or sublet
all or any part of the leased premises, Lessee shall so notify Lessor at
least fifteen (15) days in advance of the date on which Lessee desires to
make such assignment or sublease. Lessee shall provide Lessor with a copy
of the proposed assignment or sublease and such information as Lessor might
request concerning the proposed sublessee or assignee to allow Lessor to
make informed judgments as to the financial condition, reputation,
operations and general desirability of the proposed sublessee or assignee.
Within ten (10) days after Lessor's receipt of Lessee's proposed assignment
or sublease and all required information concerning the proposed sublessee
or assignee, Lessor shall have the following options: (1) consent to the
proposed assignment or sublease; or (2) refuse to consent to the proposed
assignment or sublease, which refusal shall be deemed to have been
exercised unless Lessor gives Lessee written notice providing otherwise.
Upon the occurrence of an event of default, if all or any part of the
leased premises are then assigned or sublet, Lessor, in addition to any
other remedies provided by this Lease or provided by law, may, at its
option, collect directly from the assignee or sublessee all rents becoming
due to Lessee by reason of the assignment or sublease. Any collection
directly by Lessor from the assignee or sublessee shall not be construed to
constitute a novation or a release of Lessee or any guarantor from the
further performance of its obligations under this Lease. The terms of this
section 9.03 shall not apply to an assignment or subletting to a Related
Party.
9.04 SUBORDINATION. Lessee accepts this Lease subject and subordinate
to any recorded mortgage or deed of trust lien presently existing or
hereafter created upon the leased premises and to all existing recorded
restrictions, covenants, easements and agreements with respect to the
leased premises, subject to and conditioned upon, Lessor causing any holder
of any lien(s) now or hereafter affecting the project or any part thereof
to execute and deliver the agreement hereinafter described in this section
9.04. Lessee agrees upon demand to execute additional instruments
subordinating this Lease as Lessor may reasonably require. If the interests
of Lessor under this Lease shall be transferred by reason of foreclosure or
other proceedings for the enforcement of any mortgage or deed of trust lien
on the leased premises, Lessee shall be bound to the transferee (sometimes
called the "Purchaser"), under the terms, covenants and conditions of this
Lease for the balance of the term remaining, including any extensions or
renewals, with the same force and effect as if the Purchaser were Lessor
under this Lease, and Lessee agrees to attorn to the Purchaser, including
the mortgagee under any such mortgage if it be the Purchaser, as its
Lessor. Provided further, as a material inducement to cause Lessee to enter
into this Lease, Lessor agrees to cause the holder of any existing or
future lien placed against the leased premises or any portion thereof to
enter into an agreement with Lessee making this Lease expressly subject and
subordinate to such lien and all renewals, modifications, consolidations,
replacements and extensions thereof, wherein the Lessee shall agree to
attorn to the Purchaser at any foreclosure sale of such lien and such
agreement shall contain a covenant binding upon the holder of such lien to
the effect that, as long as there shall be no event of default on the part
of Lessee entitling Lessor to terminate this Lease, or if any such event of
default exists, any time in which to cure the event of default as contained
herein shall not have expired, (a) this Lease shall not be terminated or
modified in any respect whatsoever nor shall the rights of Lessee hereunder
or its occupancy of the leased premises be affected in any manner by reason
of such lien or any foreclosure action or other proceeding that may be
instituted in connection therewith or in lieu thereof and (b) Lessee shall
not be named by such holder as a defendant in any such foreclosure action
or other proceeding. Lessee and Lessor agree to execute (together with any
future holder of any lien[s] hereafter placed against the leased premises
or any portion thereof), within thirty (30) days following receipt of
written request therefor from Lessor or Lessee (as the case may be), such
an agreement containing the aforesaid terms, together with such additional
changes as the future holder of any such lien(s) may otherwise reasonably
require.
9.05 ESTOPPEL CERTIFICATES. Lessee agrees to furnish, from time to
time, within ten days after receipt of a request from Lessor or Lessor's
mortgagee, a statement certifying, if applicable, the following: Lessee is
in possession of the leased premises; the Lease is in full force and
effect; the Lease is unmodified (or, if modified, describing such
modifications); Lessee claims no present charge, lien, or claim of offset
against rent; the rent is paid for the current month, but is not prepaid
for more than one month and will not be prepaid for more than one month in
advance; and there is no existing default by reason of some act or omission
by Lessor. Lessor agrees to furnish, from time to time, within ten days
after receipt of a request from Lessee, a statement certifying, if
applicable, the following: the Lease is in full force and effect; the Lease
is unmodified (or, if modified, describing such modifications); Lessor
claims no present charge, lien, or claim against Lessee (other than base
rent and Tax and Insurance Expenses); and there is no existing default by
reason of some act or omission by Lessee.
ARTICLE 10.00 LIENS
10.01 LESSOR'S LIEN. Lessor hereby waives any statutory or other
landlord's lien upon Lessee's personal property or any other property
located within the leased premises that may be available to Lessor to
secure the performance of Lessee's obligations under this Lease.
ARTICLE 11.00 DEFAULT AND REMEDIES
11.01 DEFAULT BY LESSEE. The following shall be deemed to be events of
default by Lessee under this Lease: (1) Lessee shall fail to pay when due
any installment of rent or any other payment required pursuant to this
Lease and the failure is not cured within ten (10) days after written
notice thereof; (2) Lessee shall abandon any substantial portion of the
leased premises; (3) Lessee shall fail to comply with any term, provision
or covenant of this Lease, other than the payment of rent, and the failure
is not cured within thirty (30) days after written notice to Lessee, or if
such failure cannot reasonably be cured within such thirty (30) day period,
within such period of time as is reasonably necessary; provided, however,
that Lessee commences the cure of such failure within such thirty (30) day
period and diligently pursues such cure to completion; or (4) Lessee or any
guarantor under this lease shall file a petition or be adjudged bankrupt or
insolvent under any applicable federal or state bankruptcy or insolvency
law or admit that it cannot meet its financial obligations as they become
due; or a receiver or trustee shall be appointed for all or substantially
all of the assets of Lessee; or Lessee shall make a transfer in fraud of
creditors or shall make an assignment for the benefit of creditors,
generally.
11.02 REMEDIES OF LESSOR. Upon the occurrence of any event of default
set forth in this Lease, Lessor shall have the option without any notice to
Lessee (except as expressly provided below) and with or without judicial
process, to pursue any one or more of the remedies set forth herein without
any notice or demand: (1) Lessor may pursue all of its rights at law and in
equity. (2) Lessor may enter upon and take custodial possession of the
leased premises, by picking or changing locks if necessary, and lock out,
expel or remove Lessee and any other person who may be occupying all or any
part of the leased premises without being liable for any claim for damages,
and relet the leased premises on behalf of Lessee and receive the rent
directly by reason of the reletting. Lessee agrees to pay Lessor on demand
any deficiency that may arise by reason of any reletting of the leased
premises; further, Lessee agrees to reimburse Lessor for any reasonable
expenditures made by it in order to relet the leased premises, including,
but not limited to, remodeling and repair costs. (3) Lessor may enter upon
the leased premises, by picking or changing locks if necessary, without
being liable for any claim for damages, and do whatever Lessee is obligated
to do under the terms of this Lease. Lessee agrees to reimburse Lessor on
demand for any expenses which Lessor may incur in effecting compliance with
Lessee's obligations under this Lease; further, Lessee agrees that Lessor
shall not be liable for any damages resulting to Lessee from effecting
compliance with Lessee's obligations under this Lease. (4) Lessor may
terminate this Lease, in which event Lessee shall immediately surrender the
leased premises to Lessor, and if Lessee fails to surrender the leased
premises, Lessor may, without prejudice to any other remedy which it may
have for possession or arrearages in rent enter upon and take possession of
the leased premises, by picking or changing locks if necessary, and lock
out, expel or remove Lessee and any other person who may be occupying all
or any part of the leased premises without being liable for any claim for
damages. With specific regard to an abandonment by Lessee of the leased
premises or a termination of Lessee's right to possession of the leased
premises, Lessor shall use reasonable efforts to mitigate its damages by
attempting to relet the leased premises; however, Lessor shall have no
obligation to agree to any lease terms which it reasonably deems to be
unacceptable, nor shall Lessor be obligated to (i) travel outside a radius
of thirty (30) miles from Dallas County, Texas, in order to meet with a
prospective tenant, or (ii) expend monies for finish-out requested by a
prospective tenant unless Lessor in its reasonable discretion approves both
the lease terms and the credit of such prospective tenant.
11.03 DEFAULT BY LESSOR. All covenants of Lessee in the Lease are
independent covenants, not conditioned upon Lessor's satisfaction of its
obligations hereunder, except to the extent otherwise specifically provided
herein. Lessee waives any statutory lien it may have against the rent due
under this Lease or against Lessor's property in Lessee's possession. If
Lessor defaults in the performance of any of its obligations under this
Lease, it will have thirty (30) days to cure after Lessee delivers written
notice to Lessor of the default; or if the default is of a nature to
require more than thirty (30) days to remedy, Lessor will have the time
reasonably necessary to cure it. Whenever a period of time is prescribed in
the Lease for action to be taken by Lessor or Lessee, Lessor or Lessee, as
applicable, will not be liable or responsible for, and there shall be
excluded from the computation for any such period of time, any delays due
to strikes, riots, acts of God, shortages of labor or materials, war,
Applicable Laws or any other causes of any kind whatsoever which are beyond
the control of Lessor or Lessee, as applicable.
ARTICLE 12.00 DEFINITIONS
12.01 ABANDON. "Abandon" means the vacating of all or a substantial
portion of the leased premises by Lessee, whether or not Lessee is in
default of the rental payments due under this Lease.
12.02 ACT OF GOD OR FORCE MAJEURE. An "act of God" or "force majeure"
is defined for purposes of this Lease as strikes, lockouts, sitdowns,
material or labor restrictions by any governmental authority, unusual
transportation delays, riots, floods, washouts, explosions, earthquakes,
fire, storms, weather (including wet grounds or inclement weather which
prevents construction), acts of the public enemy, wars, insurrections and
any other cause not reasonably within the control of Lessor or Lessee, as
applicable, and which by the exercise of due diligence Lessor is unable,
wholly or in part, to prevent or overcome.
12.03 COMMENCEMENT DATE. "Commencement Date" shall be the date set
forth in section 1.03. The Commencement Date shall constitute the
commencement of the term of this Lease for all purposes, whether or not
Lessee has actually taken possession. Notwithstanding anything set forth in
this Lease to the contrary, all possession and/or occupancy of the leased
premises by Lessee prior to the Commencement Date shall be subject to all
of the terms and provisions of this Lease, save and except only those
provisions requiring the payment of rent.
ARTICLE 13.00 MISCELLANEOUS
13.01 WAIVER. Failure of Lessor or Lessee to declare an event of
default immediately upon its occurrence, or delay in taking any action in
connection with an event of default, shall not constitute a waiver of the
default, but Lessor or Lessee, as applicable, shall have the right to
declare the default at any time and take such action as is lawful or
authorized under this Lease. Pursuit of any one or more of the remedies set
forth in article 11.00 above shall not preclude pursuit of any one or more
of the other remedies provided elsewhere in this Lease or provided by law,
nor shall pursuit of any remedy constitute forfeiture or waiver of any rent
or damages accruing to Lessor or Lessee by reason of the violation of any
of the terms, provisions or covenants of this Lease. Failure by Lessor or
Lessee to enforce one or more of the remedies provided upon an event of
default shall not be deemed or construed to constitute a waiver of the
default or of any other violation or breach of any of the terms, provisions
and covenants contained in this Lease.
13.02 ACT OF GOD. Lessor or Lessee, as applicable, shall not be
required to perform any covenant or obligations in this Lease, or be liable
in damages to Lessee or Lessor, as applicable, so long as the performance
or non-performance of the covenant or obligation is delayed, caused or
prevented by an act of God, force majeure or by Lessee or Lessor, as
applicable. Notwithstanding anything to the contrary contained or implied
elsewhere herein, it is expressly agreed that the mere inability to pay any
monetary amounts shall not be deemed to constitute an "act of God" or
"force majeure" hereunder.
13.03 ATTORNEYS' FEES. In the event either party defaults in the
performance of any of the terms, covenants, agreements or conditions
contained in this Lease and the other party places in the hands of an
attorney the enforcement of all or any part of this Lease, the collection
of any rent due or to become due or recovery of the possession of the
leased premises, the non-prevailing party agrees to pay the prevailing
party's costs of collection, including reasonable attorneys' fees for the
services of the attorney, whether suit is actually filed or not.
13.04 SUCCESSORS. This Lease shall be binding upon and inure to the
benefit of Lessor and Lessee and their respective heirs, personal
representatives, successors and permitted assigns. It is hereby covenanted
and agreed that should Lessor's interest in the leased premises cease to
exist for any reason during the term of this Lease, then notwithstanding
the happening of such event (subject to the terms and provisions of section
9.1 hereof), this Lease nevertheless shall remain unimpaired and in full
force and effect, and Lessee hereunder agrees to attorn to the then owner
of the leased premises.
13.05 CAPTIONS. The captions appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any section.
13.06 NOTICE. All rent and other payments required to be made by
Lessee shall be payable to Lessor at the initial address for Lessor set
forth in section 1.05, or at any other address within Dallas County, Texas,
as Lessor may specify from time to time by written notice. All payments
required to be made by Lessor to Lessee shall be payable to Lessee at the
initial address for Lessee set forth in section 1.05, or at any other
address within Dallas County, Texas, as Lessee may specify from time to
time by written notice. Any notice or document required or permitted to be
delivered by the terms of this Lease shall be deemed to be delivered when
actually received at the office of the intended recipient or if earlier,
and regardless of whether or not actually received, two business days after
being deposited in the United States Mail, postage prepaid, certified mail,
return receipt requested, addressed to the intended recipient at its
respective address set forth in section 1.05.
13.07 SUBMISSION OF LEASE. Submission of this Lease to Lessee for
signature does not constitute a reservation of space or an option to lease.
This Lease is not effective until execution by and delivery to both Lessor
and Lessee.
13.08 ENTITY AUTHORITY. If Lessee or Lessor executes this Lease as a
corporation, each of the persons executing this Lease on behalf of Lessee
or Lessor, as applicable, does hereby personally represent and warrant that
Lessee or Lessor, as applicable, is a duly authorized and existing
corporation, that Lessee or Lessor, as applicable, is qualified to do
business in the state in which the leased premises are located, that the
corporation has full right and authority to enter this Lease, and that each
person signing on behalf of the corporation is authorized to do so. In the
event any representation or warranty is false, all persons who execute this
Lease shall be liable, individually, as Lessee or Lessor, as applicable.
13.09 SEVERABILITY. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to
any extent, the remainder of this Lease and the application of such
provisions to other persons or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.
13.10 LESSOR'S LIABILITY. If Lessor shall be in default under this
Lease and, if as a consequence of such default, Lessee shall recover a
money judgment against Lessor, such judgment shall be satisfied only out of
the right, title and interest of Lessor in the leased premises as the same
may then be encumbered and neither Lessor nor any person or entity
comprising Lessor shall be liable for deficiency. In no event shall Lessee
have the right to levy execution against any property of Lessor nor any
person or entity comprising Lessor other than its interest in the leased
premises as herein expressly provided.
13.11 INDEMNITY AND DISCLOSURE. Lessor agrees to indemnify and hold
harmless Lessee from and against any liability or claim, whether
meritorious or not, arising with respect to any broker whose claim arises
by, through or on behalf of Lessor, including but not limited to, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ of The Weitzman Group (the "Broker"), the Broker representing
Lessor in accordance with a separate written agreement executed by and
between Broker and Lessor. Lessee agrees to indemnify and hold harmless
Lessor from and against any liability or claim, whether meritorious or not,
arising with respect to any broker whose claim arises by, through or on
behalf of Lessee, save and except for the Broker who shall be paid by
Lessor as provided in the immediately preceding sentence and ▇▇▇▇ ▇▇▇▇▇▇ of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, who shall be paid by the Broker pursuant to a separate
written agreement executed by and between ▇▇▇▇ ▇▇▇▇▇▇ and the Broker.
Lessor, Broker and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ hereby advise Lessee that ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ is a principal in Lessor.
13.12 GOVERNING LAW; VENUE. This Lease shall be governed by the laws
of the State of Texas. Any legal action relating to this Lease shall be
conducted in Dallas County, Texas.
13.13 CONFIDENTIALITY. Lessor and Lessee hereby agree to hold in
strictest confidence and refrain from disclosing to any third party the
economic terms and conditions of this Lease, other than to their attorneys,
accountants, financial advisors, prospective purchasers, prospective
financial sources, prospective assignees or sublessees or as required by
law. Further, Lessor agrees that it will not publish or publicize in any
way (whether by press release, newspaper or magazine article or otherwise)
the fact that Lessee has leased the leased premises from Lessor). Either
party shall have the right to seek and obtain from a court of competent
jurisdiction, in an action for that purpose, a judgment enjoining and
prohibiting the other party from disclosing confidential information in
violation of this provision. The party bringing such action shall be
entitled to recover its attorneys' fees and court costs in any such action
in which it is successful.
ARTICLE 14.00 AMENDMENT AND LIMITATION OF WARRANTIES
14.01 ENTIRE AGREEMENT. IT IS EXPRESSLY AGREED BY LESSEE, AS A
MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE,
WITH THE SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE
AGREEMENT OF THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL
REPRESENTATIONS, WARRANTIES, UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR
PROMISES PERTAINING TO THIS LEASE OR TO THE EXPRESSLY MENTIONED WRITTEN
EXTRINSIC DOCUMENTS NOT INCORPORATED IN WRITING IN THIS LEASE.
14.02 AMENDMENT. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.
14.03 LIMITATION OF WARRANTIES. LESSOR AND LESSEE EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY,
HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING
OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE
EXPRESSLY SET FORTH IN THIS LEASE.
ARTICLE 15.00 EXHIBITS
The following Exhibits are attached hereto and hereby made a part of
this Lease for all purposes:
Exhibit "A": Description of Land
Exhibit "B": Rules and Regulations
Exhibit "C": Lessee's Work
Exhibit "D": Renewal Option
ARTICLE 16.00 SIGNATURES
SIGNED at Dallas, Texas this 29th day of April, 1997.
LESSOR LESSEE
▇▇▇▇▇▇▇▇▇ FREEWAY PROPERTIES, K-C AVIATION, INC., A DELAWARE
A TEXAS JOINT VENTURE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Venture Manager Title: President