OFFICE LEASE
BY AND BETWEEN
SANDLER LEGACY, LTD.,
AS LANDLORD,
AND
DENBURY MANAGEMENT, INC.,
AS TENANT
TABLE OF CONTENTS
1. Definitions and Basic Lease Provisions......................................1
2. Premises....................................................................2
3. Design, Construction, Lease Term............................................3
4. Acceptance of Premises......................................................5
5. Rent Payments...............................................................5
6. Electricity.................................................................7
7. Services by Landlord........................................................7
8. Service Interruptions.......................................................8
9. Operating Costs; Property Taxes and Assessments............................10
10.Rental Tax.................................................................15
11.INTENTIONALLY DELETED........................................................
12.Assignment and Subletting..................................................15
▇▇.▇▇▇▇▇▇ and Maintenance by Tenant...........................................16
14.Alterations and Additions by Tenant........................................17
15.Use and Occupancy..........................................................18
16. Parking.................................................................19
17.Signage....................................................................19
18.Mechanics' Liens...........................................................20
19.Limitations on Liability of Landlord; Waiver...............................20
20.Indemnification............................................................21
21.Tenant's Insurance ........................................................22
22.Landlord's Insurance.......................................................24
23.Rights Reserved by Landlord................................................24
24.INTENTIONALLY DELETED......................................................26
▇▇.▇▇▇▇ or Other Casualty.....................................................26
26.Condemnation...............................................................27
27.Taxes on Tenant's Property.................................................28
28.Waiver of Subrogation......................................................28
29.Surrender Upon Termination or Expiration; Holdover.........................28
30.Tenant's Property..........................................................29
▇▇.▇▇▇▇▇▇ of Default..........................................................29
32.Remedies...................................................................30
▇▇.▇▇ Implied Waiver..........................................................32
34.Waiver by Tenant...........................................................32
35.INTENTIONALLY DELETED......................................................32
36.Attorneys' Fees and Legal Expenses.........................................32
37.Subordination..............................................................33
38.Quiet Enjoyment............................................................33
39.Notice to Landlord.........................................................33
40.Rules and Regulations......................................................34
41.Estoppel Certificate.......................................................34
42.Notices....................................................................34
43.Hazardous Materials........................................................35
OFFICE LEASE
▇▇.▇▇▇▇▇▇▇▇ Purpose...........................................................35
45.Severability...............................................................35
▇▇.▇▇ Merger..................................................................36
47.Force Majeure..............................................................36
48.Brokerage..................................................................36
49.Gender.....................................................................36
50.Joint and Several Liability................................................36
51.Representations............................................................36
52.Entire Agreement, Amendments...............................................38
53.Paragraph Headings.........................................................38
54.Binding Effect.............................................................38
55.Exhibits...................................................................38
56.Counterparts...............................................................38
57.Tenant's Service Providers.................................................38
58.Option to Extend Lease Term................................................38
59.Expansion Space. .........................................................40
60.Right of First Notice / First Refusal......................................40
61.Execution and Approval of Lease............................................41
62.Antennas...................................................................41
63.Landlord's/Tenant's Approval...............................................41
64.EDS Contract...............................................................41
EXHIBITS:
A: Legal Description of the Land
A-1: Site Plan
B: Floor Plan of the Premises
B-1: Design Schedule
B-2: Sample Budget
C: Tenant Finish Construction
D: Rules and Regulations
D-1: Janitorial Specifications Service Schedule
E: Contractor Insurance Requirements
F: Estoppel Certificate
G: Floor Plans of the First Notice Space and Expansion Space
H: Guaranty
I: Assignment and Assumption of Agreement of Sale
OFFICE LEASE
OFFICE LEASE
This Office Lease (this "Lease") is entered into as of August 6, 1997 (the
"date of this Lease"), by Sandler Legacy, Ltd., a Texas limited partnership
("Landlord"), and Denbury Management, Inc., a Texas corporation ("Tenant").
1. Definitions and Basic Lease Provisions.
Some of the basic provisions and defined terms of this Lease are as follows:
Project: Denbury Park, associated parking garages, the
Building (as defined below), the Common Areas (as
defined below) and the Land (herein so called)
described by the metes and bounds legal
description on Exhibit A, located in Plano, Collin
County, Texas. A site plan depicting the location
of the Building, the parking areas, driveways,
entrances and exits thereto, sidewalks, lobbies,
elevators, corridors, stairways, landscaped areas
and other generally understood public or common
areas and improvements provided by Landlord for
the general use of tenants, their agents,
employees and invitees (the "Common Areas"), and
the Land will be attached hereto as Exhibit A-1
and made a part hereof for all purposes (the "Site
Plan") upon the mutual approval of the Final
Plans.
Building: Denbury I, an approximately 100,000 square foot
four (4) story office building and related parking
garage to be constructed on and located in the
Project and identified on the Site Plan.
Premises: Approximately 50,000 Rentable Square Feet (as
shown and cross-hatched on the floor plan(s) of
the Premises which will be attached hereto as
Exhibit B and made a part hereof for all purposes
upon the mutual - approval of the Final Plans)
being all of Floor(s) 3 and 4 of the Building.
Total Building Area: 100,000 Rentable Square Feet.
Minimum Rent: $20.55 per Rentable Square Foot [estimated:
$85,625 per month for months 1-64 (subject to
adjustment pursuant to Paragraph 5(d))]; and
$22.50 per Rentable Square Foot [estimated:
$93,750 per month for month 65-124 (subject to
adjustment pursuant to Paragraph 5(d))].
Rent: The Minimum Rent and all other amounts payable by
Tenant to Landlord under this Lease.
Estimated
Commencement Date: November 1, 1998.
Expiration Date: One hundred twenty-four (124) months from
the Commencement Date (estimated expiration date:
February 28, 2009).
Lease Term: 124 months, ending on the Expiration Date.
OFFICE LEASE Page 1
Expense Stop: $4.24 per Rentable Square Foot per year (not
including Taxes).
Tenant's Broker: ▇▇▇▇▇▇ International.
Landlord's Agent: Sandler Southwest Corp.
Permitted Use: General office uses and other non-governmental
uses consistent with comparable premises in
Comparable Buildings.
Parking: See Section 16.
Tenant Party(ies): Tenant and its agents, employees, licensees,
servants, and contractors.
Guarantor: Denbury Resources, Inc.
Addresses for notices under this Lease:
LANDLORD: TENANT: Before Occupancy: After Occupancy:
Sandler Legacy, Ltd. Denbury Management, Inc. Denbury Management,Inc.
c/o Sandler Southwest Corp. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.,▇▇▇▇▇ 200 [at the address of the
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Premises]
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attn: Chief Financial Officer Attn: Chief Financial
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Officer
Fax: (▇▇▇)▇▇▇-▇▇▇▇ Fax:
2. Premises.
Landlord, in consideration of the Rent and the obligations of Tenant under
this Lease, hereby leases the Premises to Tenant and Tenant takes the
Premises from Landlord subject to the terms of this Lease. The calculation
of the number of Rentable Square Feet in the Premises and the Building is
subject to measurement and verification by Landlord's and Tenant's
architect, and in the event of a variation, Landlord and Tenant agree to
amend this Lease accordingly. For purposes of this Lease, "Rentable Square
Feet,"shall be calculated under the American National Standard Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1--1996 or successor
standard(s), adopted by the Building Owners and Managers Association
International (BOMA).
3. Design; Construction; Lease Term.
(a) Design Schedule. Attached hereto as Exhibit B-1 and incorporated
herein by reference is a design schedule (the Design Schedule) which sets
forth the design approval deadlines of Landlord and Tenant and the time
periods within which each party's obligations are to be performed.
Landlord and Tenant acknowledge that strict adherence to the Design
Schedule is essential for an orderly and timely completion of the
construction of the Project and the Tenant Finish Work (defined in Exhibit
C). Landlord and Tenant have each designated ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇, respectively, to act as their sole representatives in connection
with all approvals regarding the design and construction of the Project
(including the Premises), and such individuals have the full authority of
Landlord and Tenant to act on their behalf in connection with such
matters.
OFFICE LEASE Page 2
(b) Design & Budget. Landlord and Tenant shall, in accordance with the
deadlines set forth in the Design Schedule, mutually approve the
preliminary plans for the Project and the final plans and specifications
for the Project (the Final Plans). Landlord and Tenant shall also mutually
approve the budget for the Project (the Approved Budget), which budget
shall be in the form of the sample budget attached to this Lease as
Exhibit B-2.
Tenant may terminate this Lease by written notice to Landlord, with such
termination being effective on the day Landlord receives such notice, if
(i) Tenant has been working with Landlord in good faith to agree upon
Final Plans and an Approved Budget and Landlord and Tenant have not been
able to agree upon the Final Plans and the Approved Budget within 45 days
after the deadline for each item as set forth in the Design Schedule
(provided that Tenant may only terminate for budget reasons if the budget
exceeds $148.23 per Rentable Square Foot area in the Building), and (ii)
Tenant's written notice of termination is received by Landlord no later
than 5 days before the expiration of the Inspection Period (including
extensions of such period, if any) defined in the Agreement of Sale
(defined in Paragraph 64); provided, however, that Tenant may terminate
this Lease after the expiration of the Inspection Period, but prior to the
commencement of construction of the Project, if (1) Tenant provides
Landlord with written notice of its termination, (2) along with such
notice, Tenant reimburses Landlord for Landlord's costs incurred in
connection with this Lease and the Agreement of Sale (including, but not
limited to, the ▇▇▇▇▇▇▇ Money (defined in the Agreement of Sale) deposited
by Landlord under the Agreement of Sale, due diligence costs associated
with Landlord's purchase of the Property (as defined in the Agreement of
Sale), attorneys fees and costs incurred by Landlord in connection with
the Agreement of Sale and in negotiating and documenting this Lease and
other reasonable costs and expenses incurred by Landlord in connection
with this Lease, the Agreement of Sale and the purchase of the Property
thereunder) and (3) Tenant accepts an assignment and assumption of the
Agreement of Sale from Landlord to Tenant and Seller (defined in the
Agreement of sale) consents to such assignment and assumption.
(c) Construction. Landlord shall, after Landlord and Tenant have approved
the Approved Budget , execute and deliver a construction contract (the
"Construction Contract") with ▇.▇. ▇▇▇▇▇▇▇▇▇, Inc.(which is approved by
Landlord and Tenant), or another contractor acceptable to both Landlord
and Tenant (the "General Contractor"), for the construction of the Project
(such construction of the Project along with the Tenant Finish Work is
hereinafter referred to as the "Work"). Landlord agrees, at its sole cost
and expense, (i) to finance the construction of and to cause the Work
under the Construction Contract (relating to the Project) to be
constructed during the contract period set forth in the Construction
Contract in a good and workmanlike manner, in compliance with all
Applicable Laws (as hereinafter defined) in the location set forth on and
otherwise in accordance with the Site Plan, and in accordance with the
Final Plans, (ii) subject to the provisions of Exhibit C, to finance the
construction of and to cause the Tenant Finish Work under the Construction
Documents to be constructed in a good and workmanlike manner, in
compliance with all Applicable Laws (as hereinafter defined) and in
accordance with the Construction Documents and (iii) to comply with the
obligations of the "Owner" under the Construction Contract and to cause
the General Contractor to fully comply with its obligations under the
Construction Contract. Upon the request of Tenant, Landlord shall submit
to Tenant a schedule/timeline for the construction of the Work.
(d) Material Changes. Any material change (as defined in this paragraph
3(d)) to the Final Plans, Approved Budget or Construction Contract
requires Tenant's prior written approval, such approval not to be
unreasonably withheld or delayed. If Tenant does not notify Landlord of
Tenant's approval or disapproval as soon as reasonably practicable, but in
any event within 10 business days following Tenant's receipt of a request
for Tenant's approval, Tenant is deemed to approve the change. A material
change is a change to the Final Plans, Approved Budget or Construction
Contract which: (i) changes the overall appearance, functionality or
quality of the construction of the Project or (ii) causes an increase to
the amounts of the line items in the Approved Budget for (A) interim
interest and lease up ($12.80 per Rentable Square Foot of area in the
Building), (B) developer's overhead ($4.50 per Rentable Square Foot of
area in the Building) or (C) any change in finish out ($20.00 per Rentable
Square Foot of area in the Building), or (iii) causes the cost of a budget
item to increase by more than $20,000 for any single occurrence over the
term of the Construction Contract or which Landlord expects, in Landlord's
reasonable opinion, to result in an increase to the total cost of the
Project set forth in the Approved Budget.
OFFICE LEASE Page 3
(e) Cost. Landlord shall provide regular monitoring of the Budget, showing
actual cost for activities budgeted or estimated costs and advise Tenant
whenever projected costs exceed budgets or estimates and the reasons
therefor.
(f) Term. The Lease Term begins on the earlier to occur of (1) the date
Tenant occupies any part of the Premises (other than for the purposes
described in Paragraph 3(k) or Paragraph I of Exhibit C) or (2) the Ready
for Occupancy Date (defined below), subject to adjustment as provided by
Paragraphs E, F and G of Exhibit "C" (the Commencement Date) and ends on
the Expiration Date.
(g) Delay. If the Ready for Occupancy Date does not occur by the Estimated
Commencement Date, Landlord is not liable to Tenant and Tenant waives all
claims against Landlord for any damages Tenant incurs as a result of the
Ready for Occupancy Date not occurring by the Estimated Commencement Date;
provided, however, that the foregoing waiver and release does not apply to
the remedies set forth in Paragraph (h) below.
(h) Remedies. Notwithstanding the foregoing,
(i) if the Ready for Occupancy date does not occur by January 1, 1999
(as extended one day for each day of Tenant Delay and Uncontrollable
Delay), Tenant shall be credited with two (2) days' Rent for each day
the Ready for Occupancy Date is delayed after January 1, 1999; such
credit shall be applied to the Rent and other sums due under this
Lease upon the occurrence of the Commencement Date of this Lease; and
(ii) if the Ready for Occupancy Date does not occur by May 1, 1999 (as
extended one day for each day of Tenant Delay and Uncontrollable
Delay), Tenant has the one time right to terminate this Lease by
providing to Landlord written notice of its election to terminate the
Lease by 5:00 pm on May 6, 1999; if such notice is received by
Landlord before such time and date, this Lease terminates on May 7,
1999 and Landlord shall reimburse Tenant for Tenant's out-of-pocket
costs for the Tenant Finish Work expended by Tenant prior to the
termination date which are reasonably substantiated to Landlord by
Tenant and thereafter the parties shall be discharged from all
obligations hereunder.
(i) Confirmation of Commencement Date. When the Commencement Date is
determined, Landlord and Tenant shall exchange a letter acknowledging that
date and the Expiration Date. If any dispute arises regarding those dates,
a certificate, furnished by an architect mutually agreed to by Landlord's
and Tenant's architect, which may be the Construction Manager (as defined
in Exhibit C) (the "Independent Architect") certifying: (i) the date
Landlord substantially completed the Premises and the Tenant Finish Work,
and (ii) the Ready for Occupancy Date, is conclusive and binding upon
Landlord and Tenant.
(j) Ready for Occupancy Date. The Ready For Occupancy Date is the date on
which all of the following events have occurred and Tenant shall have
received written notice thereof from Landlord: (a) Tenant receives a
certificate from Landlord's Architect (substantially in the form of the
AIA certificate of substantial completion) confirming the Substantial
Completion (as defined below) of the Premises and the Tenant Finish Work
and the common facilities for access and service to the Premises, in a
good and workmanlike manner, except for items of work and adjustment of
equipment and fixtures which can be completed after occupancy has been
taken without causing unreasonable interference with Tenant's use of the
Premises (the "punch-list items") in accordance with the Final Plans and
Applicable Laws (b) actual possession of the Premises, free and clear of
all tenancies, occupants and liens, has been delivered to Tenant in a
broom-clean condition with all matters of access unobstructed and free
OFFICE LEASE Page 4
from debris, and (c) all water, electricity and other utilities are
operating properly; provided, if Landlord performs any Additional Work
(defined in Exhibit C), the Ready for Occupancy Date is deemed accelerated
by the number of days in the Additional Work Period (defined in Exhibit
C). For purposes of this Lease, the term "Substantial Completion" or
"substantially completed" means that a certificate of occupancy has been
issued with respect to the Premises, and the only remaining work required
to be completed, if any, are the punchlist items. Within thirty (30) days
of the Substantial Completion of the Premises, Tenant shall provide to
Landlord a punch list, which punch list shall consist of those decorative
and minor mechanical type adjustments which do not materially interfere
with Tenant's use of the Premises. Upon receipt of the punch list,
Landlord shall, at Landlord's sole cost and expense, proceed to diligently
remedy all items on the list within ninety (90) days after Landlord's
receipt of the punch list.
(k) Early Access by Tenant. Tenant shall have the right to enter the
Premises thirty (30) days prior to the Ready for Occupancy Date for the
purpose of installing, at Tenant's expense, Tenant's telephone equipment,
computer equipment and such other furniture, trade fixtures and equipment
as allowed by the building and fire departments, and for the performance
of specialized finish work not performed by Landlord as part of the Tenant
Finish Work, provided that neither Tenant nor its employees, contractors,
agents or representatives shall delay or interfere in any way with
Landlord's or its contractors' or subcontractors' completion of the Base
Building or Tenant Finish Work. All such activities by Tenant shall be
scheduled and coordinated through Landlord and its contractors and Tenant
shall be responsible for all damage to the Premises caused by its entry.
Landlord shall have no liability for any injury to Tenant's employees,
contractors, agents or representatives, or for damage to any property of
Tenant, its employees, contractors, agents or representatives occurring
prior to the Commencement Date except to the extent caused by the
negligence or willful misconduct of Landlord, its employees, contractors
or agents.
4. Acceptance of Premises.
Except as otherwise provided in Paragraph 3(j) and Exhibit C, Tenant's
occupancy of the Premises is conclusive evidence that Tenant: (A) accepts
the Premises as suitable for the purposes for which they are leased; (B)
accepts the Premises and the Project as being in a good and satisfactory
condition; and (C) waives any defects in the Premises and the Project (not
including punch list items). Except as otherwise provided in Paragraphs
19, 20 and 32(e) and Exhibit C, Landlord is not liable to any Tenant Party
for any injury or damage to person or property due to the condition or
design of, or any defect in, the Project that exists now or occurs in the
future and Tenant, for itself and all other Tenant Parties, 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
Premises and the Project.
5. Rent Payments.
(a) Subject to the last sentence of this Paragraph 5(a), the first
installment of Minimum Rent is payable by Tenant on the Commencement Date
and subsequent installments of Minimum Rent are payable by Tenant in
advance on the first day of each calendar month during the Lease Term
beginning on the first day of the first full calendar month after the
Commencement Date. Minimum Rent for any partial calendar month is prorated
on a per diem basis. Provided that there is not an Event of Default under
this Lease, Tenant is not obligated to pay Rent or any other sums due
under this Lease for the first four (4) months following the Commencement
Date.
OFFICE LEASE Page 5
(b) 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 the notice address for Landlord or to any other person or at
any other address as Landlord may from time to time designate by notice to
Tenant.
(c) Rent is payable by Tenant without notice, demand, abatement, deduction
or setoff, 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 5 days after
notice from Landlord that such installment is past due, Tenant shall pay a
late charge in an amount equal to 10% of the delinquent installment of
Rent when it pays the delinquent installment.
(d) Subject to the provisions of Paragraph 3(b) and (d), if the cost of
the Building and related improvements (including the Base Building
improvements (as defined in Exhibit C), the Architectural Allowance, the
Work Allowance, the Common Areas, the covered walkway between the Building
and the structured parking garage, the structured parking garage, an
outdoor patio/seating area and an interior stairwell between the third
(3rd) and fourth (4th) floors of the Building ) (the Total Building Cost)
either is less than or exceeds $148.23 per Rentable Square Foot (as
certified by the Independent Architect), Landlord will, within the first 4
months following the Commencement Date, adjust the Minimum Rent for the
first 5 years of the Lease Term in accordance with the following formula:
Total Building Cost x 11.0% (annual rate of return)
+ ($4.24 per Rentable Square Foot Expense Stop [not including
Taxes] x total Rentable Square Feet in the Building)
= Total Minimum Rent for the Building.
Total Minimum Rent for the Building/Total Rentable Square Feet in
the Building
= Minimum Rent on a per Rentable Square Foot basis.
For example, if the Total Building Cost equals $16,000,000, the Building
contains 100,000 Rentable Square Feet and the Premises contain 50,000
Rentable Square Feet , the Minimum Rent during the first 5 years of the
Lease Term is calculated as follows: $16,000,000 x 11% = $1,760,000;
$1,760,000 + $424,000 = $2,184,000; $2,184,000/100,000 = $21.84; ($21.84 x
50,000 Rentable Square Feet)/12 = $91,000 Minimum Rent per month.
The Minimum Rent during each of years 6-10 of the Lease Term shall be the
product of the Minimum Rent in year 5 of the Lease Term multiplied by
1.12. For example, if Minimum Rent per month for the fifth year of the
Lease Term equals $91,000, the Minimum Rent during each of years 6-10 of
the Lease Term shall be equal to $101,920 per month.
At any time prior to the date which is 12 months after the Commencement
Date, Tenant shall have the right, at its own expense, to audit Landlord's
books and records relevant to or which support the calculation of Total
Building Cost. If any such audit reveals any excess amounts included in
Total Building Cost or any other amounts not previously included in the
Approved Budget or otherwise approved by Tenant, such amount(s) shall be
deducted from Total Building Cost for purposes of determining any
adjustments in Minimum Rent pursuant to this Section 5(d). If Tenant does
not exercise its right to audit Landlord's books and records within such
12 month period, Tenant is deemed to have accepted the Total Building Cost
and to have waived its right to audit Landlord's books and records
regarding the Total Building Cost.
OFFICE LEASE Page 6
6. Electricity.
(a) Landlord shall furnish electricity as follows: (i) up to 3 1/2 ▇▇▇▇▇
per Rentable Square Foot in the Premises at 120 volts for lighting; and
(ii) up to 4 ▇▇▇▇▇ per Rentable Square Foot in the Premises at 120 volts
for office machines. If Tenant's use will exceed the specified limits,
Tenant must give Landlord prior notice specifying Tenant's excess
requirements. If the excess electricity requirements can be supplied
without, in Landlord's opinion, overloading the existing Building systems
or the additional equipment necessary to supply Tenant's excess
electricity requirements can be installed without, in Landlord's opinion,
creating a dangerous condition in the Building, Landlord shall supply
Tenant's excess electricity requirements and Tenant shall pay Landlord the
actual cost of supplying the excess electricity requirements, including
all reasonable installation costs, within thirty (30) days after
Landlord's written demand as additional Rent.
(b) If Tenant's electricity use exceeds the specified limits, Landlord
shall cause Landlord's engineer to reasonably determine, at Tenant's sole
cost and expense, the amount of excess electricity to be allocated to
Tenant based on the power requirements of the equipment or lighting and
Tenant shall pay Landlord the actual cost of the excess electricity
allocated to Tenant as additional Rent. Landlord may also, at its sole
option and without any obligation to do so, install supplemental air
conditioning units in the Premises to offset the heat-generating effect of
Tenant's excess electricity usage as determined above and Tenant shall pay
Landlord the reasonable installation cost and the actual cost of
operation, use, repair, and replacement of the supplemental air
conditioning units within thirty (30) days after Landlord's written demand
as additional Rent.
(c) The obligation of Landlord to furnish 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. Except as otherwise provided in Paragraph 8 of this Lease,
Landlord is not liable to Tenant for any failure or defect in the supply
or character of electricity furnished to the Premises due to any
requirement, act, or omission of the entity supplying electricity to the
Project.
7. Services by Landlord.
Landlord, subject to payment by Tenant as specified below, shall furnish
the following services to the Building, the Common Areas (as applicable)
and the Premises in amounts, quantities, temperatures and during time
periods consistent with first-class 80,000 to 200,000 square foot
multi-tenant office buildings of a similar type and quality in the North
Dallas Tollway/Parkway Corridor (the "Comparable Buildings") and such
other building services as are customarily provided by Comparable
Buildings and as may be required by law or directed by governmental
authority for the comfortable use of the Premises throughout the year.
(a) Air conditioning, both heating and cooling (as required by the
seasons), from 7:00 a.m. to 6:00 p.m. on weekdays and on Saturdays from
8:00 a.m. to 1:00 p.m., except on Holidays (as defined in Exhibit D) (the
HVAC Standard Hours) at a dry bulb temperature of 70-74 degrees Fahrenheit
during the HVAC Standard Hours. Circulating air is not available other
than through the Building's HVAC system. If Tenant requires HVAC services
at any time other than HVAC Standard Hours, Landlord shall furnish HVAC
services for the portions of the Premises specified in a request by Tenant
using a code-activated, phone-in/computer service on a floor by floor
basis. Tenant shall pay Landlord as additional Rent for each hour of HVAC
in excess of HVAC Standard Hours an amount equal to Landlord's actual cost
for such HVAC services, including any reasonable administrative costs
incurred by Landlord in providing such service.
OFFICE LEASE Page 7
(b) Cold (at the normal temperature of the water supply to the Building)
and hot water for lavatory and toilet purposes, with water service to be
at supply points provided for general use of tenants of the Building
through fixtures installed by Landlord, or by Tenant with Landlord's prior
consent;
(c) Janitor service to the Premises on a five (5) day per week basis
(other than Holidays) and per the specifications attached as Exhibit D-1
attached hereto;
(d) Window and glass washing (exterior and interior) at least three (3)
times per year at such intervals as determined by Landlord in its
reasonable discretion;
(e) Operator-less passenger elevators for ingress and egress to and from
the floor(s) on which the Premises are located (provided that Landlord may
reasonably limit the number of elevators to be in operation on Saturdays,
Sundays, and Holidays) and freight elevator service in common with other
tenants but only when scheduled through the Project manager;
(f) Common area rest room facilities; and
(g) Electric lighting for all common areas of the Building in the manner
and to the extent consistent with Comparable Buildings.
Building Standard Hours are weekdays, excluding Holidays, from 7:00 a.m.
to 6:00 p.m. and Saturdays from 8:00 a.m. to 1:00 p.m. Landlord may lock
the Building at all times other than during Building Standard Hours;
provided, however, Tenant shall be provided key access to the Building,
the Common Areas and the Premises twenty-four (24) hours a day, seven (7)
days a week. During hours other than Buildings Standard Hours, Landlord
shall provide a restricted access system (i.e. key access only) to the
Premises and any stairwell or elevator leading to the Premises. Landlord
makes no warranty or representation to any Tenant Party as to the adequacy
of the foregoing restricted access security system or the security of the
Project and all Tenant Parties waive all claims against Landlord which are
related directly or indirectly to such system or the security of the
Project, except as otherwise provided in Paragraphs 20 and 32(e).
8. Service Interruptions.
(a) Landlord does not warrant that the services provided by Landlord will
be free from any slow-down, interruption, or stoppage under voluntary
agreement between Landlord and 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, lock-outs, labor controversies, fuel shortages,
accidents, acts of God, the elements, or other causes beyond the
reasonable control of Landlord. Except as otherwise provided in this
Paragraph 8, Paragraphs 20 and 32(e), no slow down, interruption, or
stoppage of the services may be construed as an eviction, actual or
constructive, of Tenant or cause an abatement of Rent or in any manner or
for any purpose relieve Tenant from its obligations under this Lease.
Except as otherwise provided in this Paragraph 8, Paragraphs 20 and 32(e)
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 stoppage.
Landlord shall use due diligence to resume the service upon any slow-down,
interruption, or stoppage. Notwithstanding the foregoing, if Tenant is
prevented from using, in its reasonable and customary manner, all or part
of the Premises (the "Affected Area") as a result of an Abatement Event
(as defined below), and if this Abatement Event continues for three (3)
OFFICE LEASE Page 8
consecutive business days after Landlord's receipt of notice from Tenant
of the Abatement Event (the "Eligibility Period"), the Rent and all other
sums payable under this Lease shall be abated or reduced after the
expiration of the Eligibility Period for such time that Tenant continues
to be prevented from using, in Tenant's reasonable and customary manner,
the Affected Area in the proportion that the Rentable Square Feet of the
Affected Area bears to the total Rentable Square Feet of the Premises. In
addition, Tenant shall be entitled to exercise the remedies set forth in
Section 32(e) below.
An "Abatement Event" is:
(i) A dangerous condition or Landlord's performance of or failure to
perform any repair, maintenance, alteration that substantially
interferes with Tenant's use of or access to the Premises (after the
initial construction of the Building);
(ii) Any failure of or interruption in utilities or other services
required to be supplied by Landlord to the Premises, the Building or
the Project;
(iii) Any failure of Landlord to provide Tenant with reasonable access
to the Premises, the Building, or the Project; or
(iv) Without in any way affecting or otherwise limiting the events set
forth in Subparagraphs (i) - (iii) of this Paragraph 8(a), any failure
of Landlord or Landlord's lender to cure a breach, default or
noncompliance under this Lease after notice to Landlord and Landlord's
lender under Subparagraph 32(e) and expiration of the Cure Period
(defined in Subparagraph 32(e)).
(b) If any Abatement Event is not cured within thirty (30) days (the
Initial Thirty Days) after the expiration of the Eligibility Period,
Tenant may terminate this Lease in accordance with the provisions of this
paragraph if:
(i) after the Initial Thirty Days, Tenant gives written notice to
Landlord and Landlord's lender (or lenders, as the case may be) (the
"First Notice") of the Abatement Event and Tenant's intent to
terminate this Lease as a result of the Abatement Event;
(ii) at least thirty (30) days after Tenant provides the First Notice,
Tenant gives an additional written notice (the "Second Notice") to
Landlord and Landlord's lender (or lenders, as the case may be) of the
Abatement Event and Tenant's intent to terminate this Lease as a
result of the Abatement Event; and
(iii) within thirty (30) days after the Second Notice, the Abatement
Event is still not cured.
If the provisions of Subparagraphs (i), (ii) and (iii) are met, Tenant
may terminate this Lease, by giving written notice to Landlord, as to
one of the following:
(x) The Affected Area, in which event the Rent and all other sums due
under this Lease payable by Tenant shall be adjusted accordingly and
the parties shall amend this Lease to reflect the reduced size of the
Premises;
(y) The entire Premises, in which event the termination shall be
effective on Tenant's vacation of the entire Premises but in no event
more than six (6) months after Landlord's receipt of the termination
notice.
OFFICE LEASE Page 9
9. Operating Costs; Property Taxes and Assessments.
(a) The term Operating Costs means those reasonable expenses directly
incurred in the management, operation, maintenance, repair, and security
of the Project (unless otherwise excluded pursuant to the terms of this
Lease) (computed on a cash basis in accordance with generally accepted
accounting principles consistently applied) which are generally comparable
to the operating expenses of Comparable Buildings, including, but not
limited to: fees assessed by Legacy Park against the Project, the cost of
all utilities (except sub-metered, excess or allocated utility charges
billed separately to any tenant and specifically excluding any costs,
expenses or charges relating to the development of the Project, bringing
such utilities to the Premises and any "tap-in" fees), building supplies,
janitorial service, maintenance, repairs, fire and extended coverage,
public liability, and other insurance, all labor and employee benefit
costs (including wages, salaries, and fees of all personnel whose duties
are directly connected with the management, operation, maintenance,
repair, and security of the Project (but not including executives above
the level of Building manager)), costs and the annual amortized amount of
capital expenditures that are reasonably expected by Landlord to
materially reduce Operating Costs or are required to meet governmental
regulations which were not required in connection with the Project when
permits for the construction of the project were obtained (Capital Item or
Capital Items) (all such Capital Items shall be amortized on a straight
line basis (including interest on the unamortized cost at the prime rate
of interest (as set forth in the Wall Street Journal) plus 1% per annum)
over their useful life as reasonably determined by Landlord), legal fees,
the fair market rental of the Building manager's office, management fees
at reasonable market rates consistent with the services rendered,
consulting fees (other than legal), accounting fees, and payments under
any agreement related to sharing Building costs with future phases of the
Project. If for any time period in question the Project is less than 95%
occupied, Landlord shall increase those elements of Operating Costs that
vary based on the occupancy rate of the Project as though the Project were
95% occupied as provided below.
Notwithstanding anything to the contrary in the Lease, the phrase
"Operating Costs" shall not include the following:
(1) Capital expenditures (required to be capitalized in
accordance with generally accepted accounting principles) and
costs incurred in connection with the original construction of
the Building, the Project and the Common Areas or in connection
with any additions to or major change in the Building, the
Project and the Common Areas, such as adding or deleting floors,
including increased real estate taxes and other operating costs
related thereto; provided, however, that the capital expenditures
and costs referred to in this subparagraph (1) do not include
Capital Items;
(2) Payments of principal and interest or other finance
charges made on any debt, refinancing costs, points, fees and
premiums on any mortgages, and other debt costs, if any;
(3) Except in each instance where the expense is a Capital
Item, costs of repairing, replacing or correcting design or
construction defects of the Building, the Project, the Common
Areas, or the Building equipment, the cost of any work or service
performed for any facility other than the Project, and the costs,
including legal fees and expenses, resulting from noncompliance
of the Premises, the Common Areas, the Project or the Building,
OFFICE LEASE Page 10
or by Landlord or any tenant, with any applicable ordinance,
rule, regulation or law (existing as of the date building permits
are issued for the Project) or Landlord's violation of any lease,
or, except as otherwise provided to the contrary in this Lease,
the costs to remove hazardous materials from the Project;
(4) Costs or expenses relating to another tenant's space
that were (i) incurred in rendering any service or benefit to
such tenant that Landlord was not required, or were for a service
in excess of the service that Landlord was required to provide
Tenant hereunder, or (ii) otherwise in excess of the Building
standard services then being provided by Landlord to all tenants
of Building, whether or not such other tenant is actually charged
therefore by Landlord, or (iii) charged separately to such
tenant;
(5) Brokerage or other leasing commissions, advertising and
promotional expenditures incurred by Landlord in soliciting new
tenants, marketing costs, legal fees, space planners' fees and
other costs incurred in connection with the development or
leasing of the Building (including Tenant);
(6) Costs of repairs, restoration, replacement or other work
(i) for which Landlord is reimbursed by any tenant or occupant of
the Building or the Project, (ii) occasioned by fire, wind storm
or other casualty of an insurable nature (whether such
destruction be total or partial) and paid for by the insurance
required to be carried by Landlord under this Lease (whether or
not such insurance is actually carried by Landlord to the extent
such insurance is either (A) one of the policies set forth in
Paragraph 22 or, (B) if it is insurance which Landlord is
required to carry because it is consistent with that which is
carried by landlord's of Comparable Buildings, Tenant must have
given Landlord prior written notice of Landlord's requirement to
carry such insurance) or otherwise paid by insurance then in
effect obtained by Landlord or any tenant's carrier or by anyone
else including warranties, or (iii) occasioned by the exercise by
a governmental authority of the right of eminent domain, whether
such taking be total or partial to the extent Landlord is
compensated for such work by such governmental authority;
(7) Any bad debt loss, rent loss, or reserves for bad debts
or rent loss;
(8) Costs associated with the operation of the business of
the partnership or entity which constitutes Landlord as the same
are distinguished from the costs of operation of the Building,
such as: general overhead and administrative expenses,
partnership accounting and legal matters, costs of any lawsuits
with any mortgagee (except as the actions of Tenant may be in
issue), and costs of selling, syndicating, financing,
refinancing, exchanging, mortgaging or hypothecating any of
Landlord's interest in the Building or the Project, including
brokerage commissions, attorney's and accountant's fees, closing
costs, title insurance premiums, transfer taxes and interest
charges resulting from such transaction;
(9) Costs, fines, penalties, legal fees, court costs and
interest incurred due to the late payment of taxes, utility bills
and other costs, unless incurred for the benefit of tenants of
the Building or the Project generally or if the failure to pay
was reasonable under the circumstances, in which event the sum
actually received by Landlord therefrom shall be contributed by
Landlord towards payment of future Operating Costs for the
Project;
(10) Ground or underlying lease rentals;
(11) Allowances, concessions, and other costs, including
permit, license and inspection costs, incurred in completing,
fixturing, furnishing, renovating or otherwise with respect to
OFFICE LEASE Page 11
the installation of tenant or other occupant improvements made
for tenants or other occupants in the Building or the Project or
incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant space for tenants or other
occupants of the Building or the Project;
(12) Salaries of officers and executives of Landlord and
Landlord's general corporate overhead (including salaries,
equipment, supplies, accounting and legal fees, rent and other
occupancy costs) and profit increment paid to Landlord, the
Building management company or to subsidiaries or affiliates of
Landlord for goods and/or services in the Building, the Project
or the Common Areas to the extent the same exceeds the costs of
such services rendered by unaffiliated third parties of
comparable skill, competence, stature and reputation, and the
cost of any work or service performed for any facility other than
the Project (except that the foregoing shall not limit the
management fee paid in connection with the management of the
Project (subject to the provisions of Subparagraph 9(a) above);
(13) The costs of installing, operating and maintaining any
specialty service such as an observatory, broadcast facilities,
luncheon club, athletic or recreational club (not including any
workout facility in the Project), restaurant, delicatessen, hair
salon or other retail uses or commercial concessions operated by
Landlord in the Project;
(14) Electric power and other utility costs directly metered
and charged to any tenant or for which any tenant directly
contracts with the local public service company;
(15) Costs arising from Landlord's political or charitable
contributions and for the acquisition, maintenance and insuring
of sculpture, paintings, fountains or other objects of art
located in the Building not depicted in the Final Plans;
(16) Costs for which Landlord has been compensated by a
management fee (in accordance with customary practices in Dallas,
Texas) to the extent that the inclusion of such costs in
Operating Costs would result in a double charge to Tenant;
(17) Costs (including attorneys' fees and costs of
settlement judgments and payments in lieu thereof), penalties or
liquidated damages arising from claims, disputes or potential
disputes in connection with potential or actual claims,
litigation or arbitrations pertaining to the enforcement of
Leases.
(18) Any recalculation of or additional operating costs
actually incurred more than twenty (20) months prior to the year
in which Landlord proposes that such costs be included in
Operating Costs, except to the extent such delay was caused by
governmental requirements or an Uncontrollable Delay; and
(19) Non-cash items, such as depreciation, amortization and
interest payments (not including Capital Items), except on
materials, tools, supplies and vendor-type equipment purchased by
Landlord to enable Landlord to supply services which Landlord
might otherwise have contracted for with a third party, where
such depreciation, amortization and interest payments would
otherwise have been included in the charge for such third party
services, all as determined in accordance with generally accepted
accounting principles, consistently applied, and when
depreciation or amortization is permitted or required, the item
shall be amortized on a straight-line basis over its reasonable
anticipated useful life.
OFFICE LEASE Page 12
Such Operating Costs shall be "net" only, and for that purpose shall be
reduced by the amounts of any cash discounts, reimbursements, refunds or
credits received by Landlord (net of the reasonable costs and expenses of
obtaining the same, if any) with respect to any item of cost that is
included in Operating Costs other than reimbursements by other tenants in
the nature of operating costs similar to those reimbursements required of
Tenant. In the event any such reimbursement, refund or credit is received
by Landlord in a later calendar year, it shall be applied against the
Operating Costs for such later calendar year; provided, however, that if
the term of the Lease has expired, Tenant's pro rata share of such item
shall be promptly refunded by Landlord to Tenant. No item of expense shall
be included in or deducted from such charges and Operating Costs more than
once under any circumstances. Landlord shall use its best efforts, in good
faith, to effect an equitable proration of bills for services rendered to
the Building and to any other property owned by Landlord. Landlord will
not collect or be entitled to collect Operating Costs in an amount which
is in excess of one hundred percent (100%) of the Operating Costs actually
paid by Landlord in connection with the operation of the Building and the
Project and other than Landlord's management fee, Landlord shall make no
profit from Landlord's collection of the Operating Costs. Landlord shall
pay all Operating Costs in a timely manner prior to delinquency.
With respect to the adjustment or increase in particular items of
Operating Costs described in Section 9(a) of the Lease, such adjustment
shall be calculated as follows: Operating Costs paid or incurred by
Landlord during any calendar year or partial calendar year of the term of
this Lease during which the occupancy rate in the Building is less than
ninety-five percent (95%) of the rentable area thereof shall be adjusted
(assuming a tax appraisal of the Building as though it were completed and
95% occupied) to allocate the actual cost of providing services which vary
directly with the level of occupancy of the Building to the rentable
square feet receiving such service by multiplying the cost of the variable
service by a fraction, the numerator of which is ninety-five and the
denominator of which is the percentage of the Building's total rentable
square feet receiving such service. In making the foregoing determination
and gross-up adjustment, only those cost components of the operating costs
actually incurred for such calendar year or partial calendar year that are
considered to be variable costs under generally accepted accounting
principles (i.e., those costs that vary directly with the level of
occupancy of the Building) shall be adjusted to reflect the amount thereof
that would have been incurred if the Building were 95% occupied for the
entire calendar year. If any such variable cost represents a cost that is
either entirely attributable to the Common Areas or is attributable both
to the Common Areas and tenant-occupied portions of the Building, then,
for purposes of making the foregoing determination and adjustment, no
adjustment or gross-up shall be made with respect to such variable cost or
the portion thereof that is attributable to the Common Areas.
(b) The term Excess Operating Costs means the amount, if any, by which the
Operating Costs for the Project for any calendar year, expressed as an
amount per Rentable Square Foot of area in the Building, exceeds the
Expense Stop.
(c) If there are Excess Operating Costs for any calendar year, Tenant
shall pay to Landlord as additional Rent, a sum equal to the Excess
Operating Costs (per Rentable Square Foot of area in the Building)
multiplied by the number of Rentable Square Feet in the Premises (Tenant's
Share).
(d) On or before December 15 of the year in which the Commencement Date
occurs and each subsequent calendar year, Landlord shall deliver to
Tenant, Landlord's reasonable estimate of the Excess Operating Costs on a
Rentable Square Foot basis for the next calendar year and the Taxes owed
for the next calendar year. Tenant shall pay to Landlord monthly as
additional Rent, in advance on or before the first day in each succeeding
calendar month, an amount equal to one twelfth (1/12th) of the estimate of
Tenant's Share and, subject to the provisions of Paragraph 9(g), an amount
equal to one twelfth (1/12th) of the estimate of Taxes. Landlord may
reasonably adjust its estimate by notice to Tenant at any time during the
applicable calendar year if actual Excess Operating Costs are
substantially different from the estimate, and thereafter payments by
Tenant under this Paragraph adjust accordingly. The term calendar year
includes partial calendar years.
OFFICE LEASE Page 13
(e) No later than May 1 of each calendar year, Landlord shall deliver to
Tenant a statement certified by an authorized representative of Landlord
setting out in reasonable detail the actual Operating Costs and the Excess
Operating Costs for the prior calendar year. If the estimated payments
made by Tenant during the prior calendar year exceed Tenant's Share of
actual Excess Operating Costs for that year, Landlord shall credit the
difference against the next ensuing installments of estimated payments by
Tenant under this Paragraph, or, at Tenant's option, refund such amount in
cash to Tenant. If the estimated payments made by Tenant during the prior
calendar year under this Paragraph are less than Tenant's Share of the
actual Excess Operating Costs for that year, Tenant shall pay the amount
of the difference to Landlord in cash within 30 days after delivery of any
invoice therefor by Landlord accompanied by a statement of the actual
Operating Costs and the Excess Operating Costs for that year as additional
Rent.
Notwithstanding anything in this Lease to the contrary, Tenant shall have
the right, at its own expense, to audit Landlord's books relevant to the
additional rent due under this Lease within one (1) year after the
furnishing of the statement set forth above. Such an audit must be
performed by a certified public accounting firm which will not charge a
fee based on the amount of additional Rent that the accountant is able to
save the Tenant by the audit. The audit must be conducted at Landlord's
principal accounting offices (or such other location of relevant books and
records) during normal business hours after at least 10 days notice is
given to Landlord. There shall be no more than one (1) audit of Operating
Costs or Taxes for any twelve-month (12-month) period. Unless Tenant takes
written exception to any item in the statement within twelve (12) months
after the furnishing of that statement, the statement shall be considered
as final and accepted by Tenant.
Tenant shall bear all fees and costs of the audit, unless the audit
determine that Operating Costs and Taxes taken as a whole for any calendar
year were overstated by five percent (5%) or more, in which case Landlord
shall pay for the reasonable costs of that audit. If any such audit
reveals an overpayment of Operating Costs or Taxes for the period covered
by such annual statement, then, at Tenant's sole option, the amount of
such overpayment shall be credited against the next installment of Minimum
Rent and all other sums due from Tenant under this Lease or refunded to
Tenant within thirty (30) days of receipt of written demand by Tenant. If
such audit reveals an underpayment of Operating Costs or Taxes for the
period covered by such annual statement, then Tenant shall pay the amount
of such underpayment with Tenant's next monthly installment of Minimum
Rent, or if the term has expired, within sixty (60) days after receipt of
the audit results.
Pending resolution of any disputes over Operating Costs and Taxes, Tenant
shall pay to Landlord any undisputed additional Rent alleged to be due
from Tenant as reflected on Landlord's statement or any invoice issued on
the basis of Landlord's statement. If Tenant withholds any disputed
portion of the additional Rent, Tenant must commence an audit under this
Subparagraph 9(e) within 30 days of the date Tenant withholds such amount.
(f) Notwithstanding anything to the contrary contained herein, Tenant's
Share of the actual Controllable Operating Expenses (as hereinafter
defined) for any calendar year shall not increase on an annual basis by
more than eight percent (8%) per annum, on a noncumulative basis, Tenant
shall have no obligation to pay Controllable Operating Expenses for any
calendar year during the term of this Lease in excess of 108% of Tenant's
Share of the previous year's Controllable Operating Expenses,
noncumulative, and Landlord shall disregard any such excess in calculating
the amount that Tenant is required to pay under this Lease with respect to
the Excess Operating Costs. For the purposes of this provision,
"Controllable Operating Expenses" shall mean all Operating Costs excluding
Taxes (defined in (g) below), premiums for fire and extended coverage,
public liability and other insurance and utilities after any costs
attributable to above building standard utility usage by other tenants
have been deducted).
OFFICE LEASE Page 14
(g) Tenant shall pay to Landlord, Tenant's pro rata share of the Taxes for
the Project for a tax year or partial tax year either (i) within thirty
(30) days of Landlord's demand therefor or, (ii) if Landlord is required
to escrow Taxes by Landlord's lender, in accordance with the provisions of
Section 9(d) above. Landlord shall pay all Taxes in a timely manner prior
to delinquency. The term "Taxes" includes all real property taxes and
assessments of any governmental entity assessed or imposed upon the
Project during the Term of this Lease, but shall not include (A) any
special assessment for highway, street or traffic control improvements,
for sanitary or storm sewers, for utilities or for off-site improvements
of any nature whatsoever made in connection with the development of the
Project, the Building, the Common Areas or other development, mitigation,
impact, concurrence, connection and tap-in fees,
contributions-in-aid-of-construction or other fees assessed by any utility
or governmental entity as a requirement or condition for furnishing
utility or municipal services to the Project, the Premises or the Building
(but only to the extent the useful life exceeds the initial term of the
Lease), or (B) any franchise, income, corporate, personal property,
capital levy, capital stock, gross receipts, excess profits, transfer,
revenue, estate, inheritance, gift, devolution or succession tax payable
by Landlord. With respect to the tax years in which the term of this Lease
begin and end, Tenant shall pay only that proportion of the property taxes
for such tax years relating to the period following the Commencement Date
that the Lease is in effect.
10. Rental Tax.
Tenant shall pay as additional Rent all licenses, charges, and other fees
of every kind and nature imposed or levied by an applicable governmental
authority, as and when they become due arising out of or in connection
with Tenant's use and occupancy of the Premises and the Project (including
the parking garages), including but not limited to license fees, business
license taxes, and privilege, sales, excise, or other taxes (other than
income) imposed by such applicable governmental authority upon Rent or
upon services provided by Landlord or upon Landlord in an amount measured
by Rent received by Landlord.
11. INTENTIONALLY DELETED.
12. Assignment and Subletting.
(a) Except as otherwise provided in Paragraph 12(f), Tenant may not,
without Landlord's prior consent (which shall not be unreasonably withheld
or delayed): (1) assign or transfer this Lease or any interest therein;
(2) permit any assignment of this Lease or any interest therein by
operation of law; (3) sublet the Premises or any part thereof; (4) grant
any license, concession, or other right of occupancy of any portion of the
Premises; (5) mortgage, pledge, or otherwise encumber its interest in this
Lease; or (6) permit the use of the Premises by any parties other than
Tenant and its employees. Landlord's consent to any assignment or
subletting is not a waiver of Landlord's right to approve or disapprove
any subsequent assignment or subletting. Tenant and any guarantor of
Tenant's obligations under this Lease, if any (Guarantor, whether one or
more) remain jointly and severally liable for the payment of Rent and
performance of all other obligations under this Lease after any assignment
or subletting. Any change in a majority of the voting rights or other
control rights of Tenant is an assignment for purposes of this Paragraph.
If Tenant is a partnership, then any transfer of a general partnership
interest is an assignment for purposes hereof. Any attempted assignment or
sublease by Tenant in violation of the terms of this Paragraph is void.
(b) Landlord, in addition to any other remedies under this Lease or
provided by law, may at its option during the continuance of an Event of
Default collect directly from the assignee or sublessee all rents payable
OFFICE LEASE Page 15
to Tenant under the assignment or sublease and apply the rent against any
sums due to Landlord under this Lease. Tenant authorizes and directs any
assignee or sublessee to make payments of rent directly to Landlord upon
receipt of notice from Landlord. No direct collection of rent by Landlord
from any assignee or sublessee is a novation or a release of Tenant or
Guarantor from the performance of their obligations under this Lease or
under any guaranty executed by Guarantor. Receipt by Landlord of rent from
any assignee, sublessee, or occupant of the Premises is not a waiver of
the covenant against assignment and subletting or a release of Tenant or
Guarantor.
(c) If Tenant wants to assign or sublease all or part of the Premises, it
shall (i) deliver a notice to Landlord that it intends to assign or
sublease all or a portion of the Premises at least 30 days prior to the
date Tenant supplies the following information to Landlord, which
information must be submitted to Landlord so that Landlord may evaluate
such proposed assignment or sublease: the name of, financial information
for, and the nature of the business of the proposed assignee or subtenant,
and the proposed effective date and terms of the assignment or sublease
(the "Transfer Information"). Tenant may not assign or sublease all or any
part of the Premises at any time when an Event of Default has occurred.
(d) Landlord has a period of 5 business days from its receipt of the
Transfer Information to notify Tenant that Landlord elects, in Landlord's
sole discretion, to: (1) with respect to an assignment, terminate this
Lease as to the space that is the subject of Tenant's notice as of the
date specified by Tenant, and with respect to a sublease, at Tenant's
option, either temporarily terminate this Lease as to the space that is
the subject of Tenant's notice for the term of the sublease or permanently
terminate this Lease as to the space that is the subject of Tenant's
notice for the remainder of the term of this Lease (as extended, if
applicable); (2) consent to the assignment or sublease; provided, however,
that twenty-five percent (25%) of the Profits (defined below) is payable
by Tenant as additional Rent to Landlord on the same dates Tenant pays
Minimum Rent; or (3) subject to the provisions of Paragraph 12(a), refuse
to consent to Tenant's assignment or sublease of that space and to
continue this Lease in effect. If Landlord does not notify Tenant of
Landlord's election within the 30-day period, Landlord is deemed to elect
option (3).
(e) "Profits" means all minimum rent, additional rent, and other
consideration payable by the sublessee or assignee to Tenant (including
any up front cash payments and any payment in excess of fair market value
for services rendered by Tenant to such sublessee or assignee in
connection with the sublease or assignment), after deducting therefrom
Tenant's reasonable out-of-pocket costs and expenses in making such
assignment or sublease (reasonably substantiated to Landlord), including
vacancy cost (on completely vacated space), reasonable attorneys' fees,
any tenant improvements allowance granted to the assignee or subtenant,
the unamortized costs of any tenant improvements to the Premises paid by
Tenant (over the Work Allowance), and all fair market brokerage
commissions and fees, less the Rent payable by Tenant under this Lease for
the portion of the Premises subject to the assignment or sublease.
(f) Notwithstanding anything to the contrary contained in this Lease,
Landlord's consent shall not be required to any assignment and/or
subletting (i) to any parent, affiliate or wholly-owned subsidiary of
Tenant, or person or entity that, directly or indirectly controls, is
under common control with or is controlled by Tenant, or (ii) to any
corporation or other entity which succeeds to all or substantially all of
the assets and business of Tenant.
13. Repair and Maintenance by Tenant.
(a) Tenant shall keep the Premises and all fixtures installed by or on
behalf of Tenant in good and tenantable condition, ordinary wear and tear,
damage by fire, casualty, condemnation and defects excepted (which defects
Landlord is required to repair pursuant to Paragraph M of Exhibit C).
OFFICE LEASE Page 16
Landlord represents and warrants to Tenant that all items which Tenant is
required to maintain and repair under this Lease shall be in good working
condition as of the Commencement Date. The provisions of this Section
13(a) shall not be construed to obligate Tenant to keep, maintain or
repair the Premises in better condition than existed on the Commencement
Date of this Lease. Notwithstanding anything in the Lease to the contrary,
Tenant shall have no obligation to repair or replace any major component
of the Premises (including, without limitation, heating and air
conditioning compressors and condensers), any damage or condition due to
or caused by reasonable wear and tear, depreciation and obsolescence, or
damage caused by fire, tornado or other casualty or by any condemning
authority, the negligence or intentional acts or omissions of Landlord, or
Landlord's failure to make repairs required of it hereunder, or defective
design or construction. In such case, Landlord shall proceed with due
diligence to make such repairs or replacements, at its sole cost and
expense, and the Lease shall continue in full force and effect. 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 Project all at Tenant's expense, under the
supervision and with the approval of Landlord. All repairs and
replacements must be equal in quality and class to the original work.
Without diminishing this obligation of Tenant, if Tenant fails to make any
repairs and replacements within 5 days after the occurrence of the damage
or injury (provided, that, in the event such failure cannot reasonably be
cured by Tenant within such five (5) day period, Tenant shall have an
additional period of time as is reasonable under the circumstances for
Tenant to cure said default provided that Tenant has commenced the cure
and at all times diligently pursues said cure), Landlord may at its option
make the repairs and replacements and Tenant shall pay Landlord within
thirty (30) days after Landlord's written demand as additional Rent the
actual costs incurred by Landlord, plus the prime rate per annum interest
from the date which is twenty (20) days after the date of payment by
Landlord.
(b) Tenant shall pay the cost of repairs and replacements due to damage or
injury to the Project or any part thereof caused by any Tenant Party,
ordinary wear and tear, damage by fire, casualty, condemnation and defects
excepted. This amount is payable by Tenant to Landlord within thirty (30)
days after Landlord's written demand as additional Rent plus the prime
rate per annum interest from date which is twenty (20) days after the date
of payment by Landlord. If Tenant requests Landlord to perform any
maintenance or repairs to the Premises, over and above the services
required to be performed by Landlord pursuant to Paragraph 7, Tenant shall
pay the actual cost thereof, plus an administrative fee equal to 5% of the
actual cost thereof, to Landlord as additional Rent within thirty (30)
days after written demand.
(c) Landlord shall, at Landlord's sole cost and expense, make all
necessary repairs, maintenance and replacements to the Project, the
Premises (except as expressly set forth in Section 13(a) and (b) above),
the Building and the Common Areas, including the exterior walls, roof,
glass, doors, exterior doors, windows, corridors, foundation, floor slabs,
load-bearing columns, other structural components, the mechanical and
electrical systems and equipment (pipes, fixtures, electrical wiring,
breakers and switches), bathrooms, exterior lighting, landscaping and
other common areas of the Building as may be necessary to keep such items
in good working order, condition and repair and in serviceable condition
consistent with Comparable Buildings, and Landlord shall keep the Building
in a clean and neat condition and shall keep all equipment used in common
with other tenants, such as elevators, plumbing, heating, air-conditioning
and similar equipment, in good condition and repair consistent with
Comparable Buildings.
14. Alterations and Additions by Tenant.
(a) Tenant may not make or permit any structural or material
non-structural alterations, improvements, or additions in or to the
Premises or the Project without Landlord's prior consent. Except as
otherwise provided to the contrary in this Paragraph 14, all alterations,
additions, and improvements made to, or fixtures or other improvements
placed in or upon, the Premises, whether temporary or permanent in
character, by either party (except only movable office furniture and
equipment not attached to the Building) are a part of the Project and are
the property of Landlord when they are placed in the Premises without
compensation to Tenant. Notwithstanding the foregoing, Tenant may install
OFFICE LEASE Page 17
trade fixtures, shelving and partitions without Landlord's consent and
Tenant may make alterations and improvements to the interior of the
Premises without Landlord's prior written consent (as long as Tenant acts
in accordance with all other provisions of this Paragraph 14) under the
following circumstances :
(1) At least fifteen (15) days before construction is begun,
Tenant gives Landlord written notice of the nature and extent
of the intended alterations and improvements, specifying the
contractor that Tenant intends to use;
(2) The proposed alterations and improvements do not affect the
exterior appearance or structure of the Building or those
portions of the Building systems that are located outside the
Premises;
(3) The proposed alterations and improvements could not result in
Landlord's being required to perform any work (including, but
not limited to, work resulting from ADA and TABA (defined
below) requirements);
(4) The proposed alterations and improvements do not involve the
installation of stairways, vaults, or other equipment or
improvements that would cost more to remove than ordinary
improvements for general office use; and
(6) The particular alterations and improvements, (together with
all other alterations and improvements made within twelve (12)
months of the particular alterations and improvements), does
not cost more than $100,000 in the aggregate.
At the time of Landlord's consent to an alteration or improvement,
Landlord must notify Tenant which alterations or improvements are
required to be removed by Tenant upon termination of the Lease and
Tenant shall have no obligation to remove any other alteration or
improvement made by Tenant to the Premises. Notwithstanding the
foregoing, all of Tenant's trade fixtures, shelving and partitions,
along with Tenant's equipment, shall remain the property of Tenant
during the term of the Lease, any renewals thereof and upon the
expiration or termination of the Lease.
(b) All alterations and improvements made by Tenant must comply with all
Applicable Laws (defined below), including without limitation, all
applicable environmental laws and the Americans With Disabilities Act of
1990 ("ADA") and the Texas Architectural Barriers Act ("TABA"). If
Tenant's use of the Premises causes Landlord to make any alterations or
improvements to the Project to comply with the provisions of ADA, Tenant
shall reimburse Landlord for the cost of the alterations or improvements,
within thirty (30) days after Landlord's written demand, as additional
Rent. 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) Notwithstanding anything to the contrary contained in this Lease, in
no event shall Landlord be entitled to receive or charge a construction
management or construction supervision fee or any other fee in connection
with such alterations, additions or improvements.
OFFICE LEASE Page 18
(d) The provisions of this Paragraph 14 do not apply to the Tenant Finish
Work contemplated by Exhibit C.
15. Use and Occupancy.
The Premises may be used and occupied by Tenant only for the uses set
forth on page 1 of this Lease. Tenant shall use and maintain the Premises
in a clean, careful, safe, and proper manner and shall comply with all
laws, ordinances, orders, rules, and regulations (Applicable Laws) of all
governmental bodies (state, federal, and municipal) applicable to or
having jurisdiction over the use of the Premises and the Rules and
Regulations attached hereto and incorporated herein for all purposes.
Tenant shall initially occupy the Premises within a reasonable time after
the Commencement Date. Notwithstanding any provision contained herein to
the contrary, neither Tenant nor anyone on behalf of Tenant has made or
makes any representation, warranty or covenant, either express or implied,
to operate Tenant's business in the Premises (except for Tenant's
obligation to initially occupy the Premises) and Tenant shall not be
obligated to operate or conduct Tenant's business or maintain any physical
presence in the Premises (except for Tenant's obligation to initially
occupy the Premises). Tenant shall also be permitted to have microwave
cooking and vending machines on the Premises. Provided that Tenant
occupies at least 50% of the Building, Landlord shall not, without the
prior written approval of Tenant, directly or indirectly lease or permit
the use of any space on, around, or in the Building or the Project
(including the roof) to another oil and gas company during the term of
this Lease and any renewals or extensions thereof, nor allow any signage
to any such company.
16. Parking.
(a) During the initial Lease Term and any renewals or extensions thereof,
Landlord shall provide, at no additional charge to Tenant, unreserved
parking spaces at a ratio of approximately 1 space for each ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Feet leased in the Building (some of the unreserved parking spaces
will be comprised of covered parking spaces which will be provided at a
ratio of approximately 1 covered parking space for each ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Feet leased in the Building (and 50 of such covered parking spaces
may be reserved for Tenant) (collectively, the "Parking Allocation");
provided, however, to the extent other spaces in the parking lot (over and
above the Parking Allocation) are not being used, Tenant shall have the
right to use any unused spaces until such additional spaces are required
by Landlord for new tenants of the Project. Tenant may use all or any
portion of the Parking Allocation. Tenant acknowledges and agrees that,
subject to Tenant's rights under this Paragraph 16(a) to parking spaces in
accordance with the ratios set forth above, Landlord may provide up to 50
covered reserved parking spaces to other tenants in the Building.
Landlord's reserved covered parking spaces (for other tenants) and
Tenant's reserved covered parking spaces shall be at locations to be
mutually agreed upon by Landlord and Tenant. Upon written request by
Landlord, Tenant must deliver to Landlord a list of the automobile license
numbers of Tenant's employees who will be using such Parking.
(b) Tenant is not assigned designated parking spaces, but is permitted to
use (subject to the limitations set forth in (a) above), whatever
unreserved stalls are available, on a first-come, first-served basis in
areas of the parking garage designated from time to time by Landlord.
(c) All Tenant Parties must comply with all traffic, security, safety, and
other rules and regulations promulgated from time to time with respect to
the parking area. Landlord shall keep the parking areas in a neat, clean
and orderly condition, lighted and landscaped, and repair any damage to
the facilities thereof and replace same when necessary.
OFFICE LEASE Page 19
17. Signage.
Tenant shall have the right to install, at Landlord's sole cost and
expense ( to the extent included in the Work Allowance (as defined in
Exhibit C)), a nonilluminated sign that identifies only Tenant on the
monument sign located on Tennyson Parkway by the Building at a location
specified by Landlord. The design and specifications of such signage shall
be set forth in the Construction Documents for the Tenant Finish Work.
Tenant shall also have the right to use its logo on signage in the
reception area of the Premises at Tenant's expense, which signage shall
remain the property of Tenant at the end of the term of this Lease.
Landlord covenants and agrees that it will not, at any time during the
term of this Lease, install, erect, maintain or permit any electric or
other signs, projections or any obstructions of any kind in front of the
Building that shall interfere with the unobstructed view of Tenant's
signage. Landlord represents that it has no knowledge of any governmental
restrictions or other agreements which would prevent Tenant from
installing its signage (except as may be required by Legacy Park).
Landlord agrees to use its best efforts to assist Tenant in obtaining all
governmental approvals necessary to install Tenant's signage. Landlord
shall not place any signage on the Building or the parking structure or
grant to any other tenants in the Building any such signage rights without
the prior written consent of Tenant. Tenant's right to signage are subject
to the following:
(a) The installation of the sign must comply with all Applicable Laws and
private restrictive covenants (including those imposed by Legacy
Park) (collectively, the Applicable Sign Requirements). Tenant
acknowledges that Landlord's approval of the sign does not imply that
the sign complies with the Applicable Sign Requirements.
(b) Tenant's rights under this Paragraph terminate automatically if the
Leased Premises are reduced to less than 1 full floor in the
Building.
(c) Tenant shall maintain its sign in good condition and repair at all
times, ordinary wear and tear, damage by casualty or condemnation and
defects excepted.
18. Mechanics' Liens. Tenant may not cause or permit any mechanic's or
materialman's lien to be placed upon Landlord's interest in the Project or
the Premises or any part thereof by any contractor, subcontractor,
laborer, or materialman performing any labor or furnishing any materials
to Tenant for any improvement alteration, or repair of or to the Premises,
the Project or any part thereof. If any lien is filed on Landlord's
interest or Tenant's interest in the Premises, Tenant shall cause the same
to be discharged within 30 days after filing, unless caused by the
negligence or willful misconduct of Landlord or Landlord's Parties.
However, nothing herein contained shall prevent Tenant from contesting, in
good faith, and at its own expense, any such lien or claim of lien. If
Tenant does not discharge the lien within the 30-day period (and Tenant is
not contesting such claim in good faith during such period in accordance
with this Paragraph 18), 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, is payable by Tenant
to Landlord within thirty (30) days after Landlord's written demand as
additional Rent.
19. Limitations on Liability of Landlord; Waiver.
(a) To the fullest extent permitted by law, and except as provided in
Paragraphs 3(g), 3 (h), 3(j), 8, 13(c), 20, 32(e) and Exhibit C,
Tenant, on its behalf and on behalf of all Tenant Parties, waives all
claims (in law, equity, or otherwise) against Landlord and Landlord's
OFFICE LEASE Page 20
officers, directors, shareholders, partners, trustees, members,
agents, employees, property manager and independent contractors
(singularly, a Landlord Party and collectively, Landlord Parties)
arising out of, knowingly and voluntarily assumes the risk of, and
agrees that Landlord Parties are not liable to any Tenant Parties for
any of the following:
(1) any injury or damage to person or property (including the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
condition or design of, or any defect in, the Premises or
Project that exists now or occurs in the future, except for
Landlord's negligence or willful misconduct;
(2) any injury or damage to person or property (including the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
Premises or Project 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 fixtures, or gas, water, steam,
electricity, or oil leaking, escaping, or flowing into the
Premises, unless caused by Landlord's wilful misconduct or
negligence;
(3) any loss or damage caused by the acts or omissions of other
tenants in the Project or of any other persons, excepting only
the willful misconduct or 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 Parties.
(b) Notwithstanding the foregoing or anything else to the contrary
contained in this Lease, the liability of Landlord to any Tenant
Party for any default or indemnity by Landlord under this Lease is
limited to the interest of Landlord in the Project and the rental
income stream derived therefrom. No Landlord Party has any personal
liability for any amounts payable or obligations performable by
Landlord under this Lease. Notwithstanding anything contained to the
contrary in this Lease, Landlord shall not be exculpated for fraud or
the intentional misappropriation of any monetary amounts arising out
of this Lease and the non-recourse provision contained herein shall
not limit or deny any remedies that Tenant may have hereunder which
do not involve personal liability.
(c) The provisions of this Paragraph 19 shall survive the expiration or
earlier termination of this Lease.
20. Indemnification.
(a) Tenant shall indemnify, defend, and hold all Landlord Parties (other
than invitees) harmless from:
(1) all fines, suits, losses, costs, liabilities, claims,
demands, actions, and judgments of every kind and character
due to any breach by Tenant under this Lease; and
OFFICE LEASE Page 21
(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 by the negligence or intentional act of Tenant or any
Tenant Party (Tenant's Acts) (except to the extent caused by
Landlord's negligence or wilful misconduct), or when the
injury or damage is the result, proximate or remote, of the
violation by Tenant or any Tenant Party of any law, ordinance,
or governmental order of any kind.
If any Landlord Party (other than invitees) is made a party to any
litigation for which Tenant is required to indemnify the Landlord
Party (other than invitees) under this Lease, then Tenant shall pay
all reasonable costs and expenses, including attorneys' fees and
court costs, incurred by or imposed upon the Landlord Party (other
than invitees) by virtue of the litigation. The amount of all costs
and expenses, including attorney's fees and court costs, is payable
by Tenant to Landlord as Rent within 30 days after Tenant's receipt
of an itemized statement of the costs and expenses incurred by
Landlord.
(b) Landlord shall indemnify, defend, and hold all Tenant Parties (other
than invitees) harmless from:
(1) all fines, suits, losses, costs, liabilities, claims, demands,
actions, and judgments of every kind and character due to 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 any Tenant Party (other than
contractors and invitees) due to injury or damage to person or
property to the extent that the damage or injury is caused by
the negligence or intentional act of Landlord or a Landlord
Party (except to the extent caused by Tenant's Acts), or when
the injury or damage is the result, proximate or remote, of
the violation by Landlord or any Landlord Party of any law,
ordinance, or governmental order of any kind.
If any Tenant Party (other than contractors and invitees) is made a
party to any litigation for which Landlord is required to indemnify
the Tenant Party (other than contractors and invitees) under this
Lease, then Landlord shall pay all reasonable costs and expenses,
including attorneys' fees and court costs, incurred by or imposed
upon the Tenant Party (other than contractors and invitees) by virtue
of the litigation within 30 days after receipt of an itemized
statement of the costs and expenses from Tenant.
(c) The party seeking indemnification ("Indemnitee") shall give the
indemnifying party ("Indemnitor") written notification of any claim
covered by Indemnitor's indemnification within sixty (60) days after
Indemnitee becomes aware of such claim. Indemnitee shall promptly
furnish Indemnitor, upon written request, any and all information
available to Indemnitee which is necessary for Indemnitor to comply
with Indemnitor's obligations hereunder. Indemnitee shall fully and
promptly cooperate with Indemnitor in Indemnitor's defense against
any such claim and Indemnitee shall not compromise or settle any
claim without Indemnitor's prior written consent. Any such compromise
or settlement of such claim by Indemnitee without Indemnitor's prior
written consent shall be conclusively deemed to be a waiver by
Indemnitee of any responsibility of Indemnitor to Indemnitee in
connection with such claim. Notwithstanding the foregoing, if
Indemnitee requests the indemnity in writing from Indemnitor and
either (1) Indemnitee receives no response from Indemnitor within
fifteen (15) days after Indemnitee's written request for indemnity or
(2) Indemnitor denies liability (in writing) and does not defend
Indemnitee as provided herein, Indemnitee may conduct its defense and
compromise or settle the subject claim without any waiver of
Indemnitee's claim against Indemnitor for indemnity.
OFFICE LEASE Page 22
(d) The provisions of this Paragraph 20 survive the expiration or earlier
termination of this Lease.
21. Tenant's Insurance.
(a) Tenant shall, at its expense, maintain at all times during the Lease
Term (and prior to the Lease Term with respect to activities of
Tenant under the Lease at the Project) insurance as set forth below:
(1) Commercial General Liability Insurance (1986 ISO Form or its
equivalent) written on an "occurrence" basis with respect to
the business carried on, in or from the Premises and Tenant's
use and occupancy of the Premises (including a contractual
liability) in an amount not less than $1,000,000 per
occurrence and $2,000,000 general aggregate per location 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) and with a $25,000 deductible;
(2) Statutory Workers' Compensation Insurance in compliance with
the Worker's Compensation Laws of the state in which the
Premises is located and including at least 500/500/500
Employers Liability Insurance.
(3) Excess/Umbrella Liability Insurance, applying on at least a
"following form" basis, with a minimum limit of $3,000,000
each Occurrence and Aggregate, where applicable; and
(4) "ISO Special Form" Property Insurance, including but not
limited to, coverage for:
(A) All office furniture, trade fixtures, office equipment,
merchandise, and all other items of Tenant's property
in, on, at, or about the Premises and the Building,
including property installed by, for, or at the expense
of Tenant (excluding Tenant Finish Work);
(B) Except for Tenant Finish Work, all other improvements,
betterments, alterations, and additions to the Premises.
Tenant's Property Insurance must also fulfill the following
requirements:
(AA) It must be written on the equivalent of an ISO "Special
Form" Property Insurance Form or an equivalent form
acceptable to Landlord;
(BB) It must include an agreed amount endorsement for not
less than one-hundred percent (100%) of the full
replacement cost (new without deduction for
depreciation) of the covered items and property; and
(CC) It must have a deductible no greater than $10,000 for
each loss.
It is the parties' intent that Tenant structure its property
insurance program so that no coinsurance penalty is imposed and there
are no valuation disputes with any insurer or with Landlord. The
property insurance coverage must include vandalism and malicious
mischief coverage.
OFFICE LEASE Page 23
(b) Tenant's policies must be written by an insurance company or
companies with a current A.M. Best's rating of A- IX or better and be
admitted to do business in the State of Texas. Landlord and
Landlord's property management company must be named as additional
insureds without restriction under the liability and umbrella
policies. Tenant shall obtain a written obligation on the part of
each insurance company to notify Landlord at least 30 days prior to
cancellation, non-renewal, or material reduction of the coverage.
(c) Tenant shall deliver copies of duly executed certificates of
insurance to Landlord prior to occupying any part of the Premises,
and on an annual basis thereafter. If Tenant fails to comply with
these insurance requirements (after notice to Tenant and 5 business
days to cure such failure) , Landlord may obtain the required
insurance and Tenant shall pay to Landlord within thirty (30) days
after Landlord's written 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.
(d) Provided that Guarantor has and continues to have a net worth in
excess of One Hundred Million Dollars ($100,000,000) as evidenced by
audited financial statements, Tenant shall have the right to satisfy
the property insurance requirements of Tenant set forth in this
Paragraph 21 in the form of a reasonably acceptable "self-insurance"
program. Such program must be consistent with reasonably prudent and
sound business practices. This Paragraph 21(d)shall in no way limit
or diminish the rights that Landlord would have had as an additional
insured under any insurance policy, or the rights it would have had
under any other provision of this Lease to receive from Tenant an
amount equal to all or any portion of any insurance policy proceeds
that would have been payable to Landlord or Tenant, under any
required policy of insurance which was not maintained by Tenant as a
result of such self-insurance program. Furthermore, this Paragraph
21(d) shall in no way limit or diminish the waiver of subrogation
rights and obligations provided in Paragraph 28, nor the rights that
Landlord's insurance carriers would have had under "other insurance"
or similar clauses in Landlord's insurance policies if Tenant had not
satisfied its insurance requirements with said self- insurance
program.
22. Landlord's Insurance.
Landlord shall carry, or cause to be carried: (A) public liability
insurance with limits of liability of not less than $1,000,000.00 for
personal injury or death arising out of any one occurrence; and (B)
insurance for fire, extended coverage, vandalism and malicious mischief,
insuring the Project, including the Building, the Common Areas and the
Premises (including Tenant Finish Work) and all appurtenances thereto in
an amount equal to the full replacement cost of the Building, the Premises
(including the Tenant Finish Work) and Common Areas, excluding Tenant's
merchandise, trade fixtures, furnishings, equipment, personal property,
and any alterations or additions made by Tenant. All policies of insurance
to be procured by Landlord shall be issued by insurance companies licensed
to do business in Texas with such insurers maintaining at least an "A"
rating from the A.M. Best and Company. Tenant has no interest in any
insurance policies carried by Landlord. Landlord shall deliver copies of
duly executed certificates of insurance to Tenant prior to Tenant
occupying any part of the Premises, and on an annual basis thereafter. In
addition, Landlord shall obtain a written obligation on the part of each
insurance company to notify Tenant at least 30 days prior to cancellation,
non-renewal, or material reduction of the coverage Landlord is required to
maintain under this Paragraph 22. Landlord shall also maintain during the
term of this Lease and any extensions thereof all of the following
insurance, and any other insurance in such amounts and with such limits,
consistent with landlords of Comparable Buildings: (i) products liability
insurance; (ii) boiler and machinery insurance; (iii) plate-glass
insurance; and (iv) rental loss and/or business interruption insurance,
with respect to the Building, the Common Areas and the Premises.
OFFICE LEASE Page 24
23. Rights Reserved by Landlord.
Except as otherwise provided to the contrary in this Lease, Landlord
reserves the following rights, exercisable upon reasonable notice to
Tenant but without liability except as otherwise provided to the contrary
in this Lease, for damage or injury to property, persons, or business and
without effecting an eviction, constructive or actual, or disturbance of
Tenant's use or possession or giving rise to any claim for set-off or
abatement of Rent so long as such changes do not materially adversely
affect Tenant's beneficial use of, business in or access to the Premises,
the Building, the Common Areas and/or the Project and do not reduce the
Parking Allocation:
(a) To reasonably change the Building's or the Project's name or street
address.
(b) To reasonably install, affix, and maintain any signs on the exterior
and interior of the Project.
(c) To reasonably 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 Project.
(d) To reasonably designate, restrict, and control all sources within the
Project where Tenant may obtain ice, drinking water, towels, toilet
supplies, catering, food and beverages, and like or other services on the
Premises (excluding Tenant's lunchroom, kitchens, and coffee bars which
are reserved for Tenant's exclusive use) and, in general, the exclusive
right to designate, limit, restrict, and control any business and any
service in or to the Project and its tenants.
(e) To enter upon the Premises at reasonable hours to inspect, clean, or
make repairs or alterations to the 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, to show
the Premises to prospective lenders, purchasers, and, during the last 9
months of the Lease Term, to show the Premises to prospective tenants at
reasonable hours and after reasonable notice to Tenant and, if the
Premises are vacant, to prepare them for re-occupancy; provided that
Landlord uses commercially reasonable efforts to avoid unreasonable
interference with Tenant's use of the Premises and only when accompanied
by a representative of Tenant (except in the case of an emergency).
(f)To retain at all times, and to use in appropriate instances, keys to
all doors within and into the Premises. Except as otherwise provided to
the contrary in this Lease, no locks may be changed or added without the
prior consent of Landlord. Notwithstanding anything contained herein to
the contrary, Tenant may install a lock on the door of storage
rooms/vaults (shown on the Final Plans) at Tenant's sole cost and expense,
and Tenant shall be under no obligation to provide to Landlord copies of
such keys for the storage rooms/ vaults. Access to such storage
rooms/vaults shall be provided to Landlord only when accompanied by
Tenant.
(g) To decorate and make repairs, alterations, additions, changes, or
improvements, whether structural or otherwise, in and about the Project,
and for those purposes to enter upon the Premises (in accordance with the
limitations set forth above) and, during the continuance of the work,
temporarily close doors, entryways, public space, and corridors in the
Project to temporarily interrupt or temporarily suspend Project services
and facilities, and subject to the limitations set forth herein, to change
the arrangement and location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, toilets, or other public parts of
the Project all without abatement or setoff of Rent or affecting any of
Tenant's obligations under this Lease, so long as the Premises are
reasonably accessible, except as otherwise provided to the contrary in
this Lease.
OFFICE LEASE Page 25
(h) To have and retain a paramount title to the Premises and the Project
free and clear of any act of Tenant purporting to burden or encumber the
Premises or the Project.
(i) To reasonably grant to anyone the exclusive right to conduct any
business or render any service in or to the Project, 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 and other heavy
equipment and articles in and about the Premises and the Project and to
require all those items and furniture and similar items to be moved into
and out of the Project and the Premises only at times and in a manner
specified by Landlord. Movements of Tenant's property into or out of the
Project and within the Project are entirely at the risk and responsibility
of Tenant. To require permits before allowing Tenant's property to be
moved into or out of the Project.
(k) To have access for Landlord and other tenants in the Project to any
mail chutes or other depositories located on the 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 Project and its occupants including, without limitation,
the search of all persons entering or leaving the Project, the evacuation
of the Project for cause, suspected cause, or for drill purposes, the
temporary denial of access to the Project and the closing of the Project
after Building Standard Hours, subject to Tenant's right to admittance
when the Project 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 Project and
Landlord's rights under this Lease. If Landlord transfers, assigns, or
conveys its rights under this Lease, Landlord is released from any further
obligations under this Lease arising after such transfer and Tenant shall
look solely to the successor in interest of Landlord for performance of
the obligations of "Landlord" under this Lease; provided, however, that
the transferee expressly assumes Landlord's obligations under this Lease
and Tenant receives written notification of such transfer and the name and
address of the transferee.
(n) Notwithstanding the provisions of Subparagraph (g) above, Landlord
shall not intentionally, without Tenant's prior written approval,
materially diminish access, ingress or egress to the Premises, materially
diminish the amount of available parking or the proximity of such parking
to the Premises, or diminish the visibility of the Premises from any
public street adjacent to the Premises in any material manner which may
negatively impact Tenant's business or its rights to the quiet use and
possession of the Premises.
24. INTENTIONALLY DELETED.
25. Fire or Other Casualty.
(a) If the Premises or any part thereof are damaged by fire or other
casualty, Tenant shall give prompt notice thereof to Landlord. If the
Project, the Building, the Common Areas or the Premises is so damaged by
fire or other casualty that substantial alteration or reconstruction of
the Project, the Common Area, the Building or the Premises is required or
if any mortgagee under a mortgage or deed of trust covering the Project
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
option, terminate this Lease by giving Tenant notice of termination within
OFFICE LEASE Page 26
45 days after the date of the damage. If Landlord terminates this Lease
under this Paragraph, the Rent and all other sums due under this Lease
abates as of the date of the damage.
(b) If Landlord does not elect to terminate this Lease, Landlord shall
within 45 days after the date of the damage notify Tenant of the estimated
time to repair the damage. If (1) the damages are not caused by the
negligence or willful misconduct of any Tenant Party, (2) Landlord's
estimate of the time needed to repair and restore the Project exceeds 180
days from the date Landlord gives Tenant notice of the estimate of time to
repair, and (3) 25% or more of the Leased Premises are untenantable,
Tenant may terminate this Lease by giving notice of termination to
Landlord within 15 days after Tenant's receipt of Landlord's notice
specifying Landlord's time estimate for the repairs.
(c) If Landlord or Tenant do not elect to terminate this Lease, Landlord
shall within 60 days of the date of the damage commence to repair and
restore the Project, the Building, the Common Areas and the Premises
(including the Tenant Finish Work) (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 and complete
such repairs within 90 days of the date Landlord commences such repairs if
the casualty affects less than fifty percent (50%) of the Premises,
Project, Building or Common Areas of the Project or within 200 days of the
date Landlord commences such repairs if the casualty affects more than
fifty percent (50%) of the Premises, Project, Building or Common Areas of
the Project. 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. Except as
otherwise provided to the contrary in this Lease, Landlord is not liable
for any inconvenience or annoyance to Tenant 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 Premises are unfit for occupancy,
Landlord shall ▇▇▇▇▇ Rent for the unused portions of the Premises from the
date of the damage until substantially restored by Landlord.
(b) If the damages are caused by the negligence or willful misconduct of
any Tenant Party, Rent does not ▇▇▇▇▇, unless such loss of rent is covered
by Landlord's rent interruption insurance. Any insurance carried by
Landlord or Tenant against loss or damage to the Project or to the
Premises is for the sole benefit of the party carrying the insurance and
under its sole control.
26. Condemnation.
(a) If all or substantially all of the Project or the Building, the Common
Areas or the Premises 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,
Landlord shall immediately provide Tenant written notice of any proposed
taking, and this Lease terminates as of the date when physical possession
of the portion of the Project, the Building, the Common Areas or the
Premises is taken by the condemning authority. If less than all or
substantially all of the Project, the Building, the Common Areas or the
Premises is taken or sold, Landlord may terminate this Lease by giving
notice to Tenant within 30 days after the right of election accrues, in
which event this Lease terminates as of the date when physical possession
of the portion of the Project, the Building, the Common Areas or the
Premises is taken by the condemning authority.
(b) If any taking reduces the size of the Premises or the number of
parking spaces available to Tenant by more than 25%, Tenant may terminate
this Lease effective as of the date of the taking by giving notice of
termination to Landlord within 30 days after the date of the taking.
(c) If this Lease is not terminated upon any taking or sale of less than
all or substantially all of the Project, the Building, the Common Areas or
the Premises:
OFFICE LEASE Page 27
(i) the Rent reduces by an amount representing that part of the
Rent properly allocable to the portion taken or sold; and
(ii) Landlord shall, at Landlord's sole expense, restore the
Project, the Building, the Common Areas or the Premises
(including the Tenant Finish Work) to substantially its former
condition; provided Landlord's restoration obligation does not
exceed the scope of the work done by Landlord in originally
constructing the Project and installing tenant finish
improvements in the Premises; and provided further 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 Project so taken.
(iii) Landlord is entitled to receive all of the compensation
awarded upon a taking of any part or all of the Project
including any award for the value of the unexpired Lease Term.
Tenant is not entitled to and expressly waives all right to
any compensation; provided, Tenant is entitled to make a claim
for damages for the fair market value of Tenant's furniture,
fixtures and other personal property and equipment,
unamortized Tenant improvements that have been paid for by
Tenant, loss of good will, interruption of or damage to
Tenant's business and moving expenses.
27. 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
Premises (other than the Tenant Finish Work) 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
Premises (other than the Tenant Finish Work) and Landlord elects to pay
the increased taxes, Tenant shall pay to Landlord within thirty (30) days
after Landlord's written demand as additional Rent that part of the taxes
for which Tenant is liable under this Paragraph so long as evidence
reasonably satisfactory to Tenant of such increase and the basis therefore
is provided to Tenant within thirty (30) days of Landlord's receipt
thereof.
28. 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, 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.
OFFICE LEASE Page 28
29. Surrender Upon Termination or Expiration; Holdover.
(a) Upon the Expiration Date or any earlier termination of this Lease,
Tenant shall: (1) surrender to Landlord possession of the Premises in good
repair and condition, reasonable wear and tear and damages or destruction
by any casualty, condemnation and defects excepted, and (2) deliver to
Landlord all keys to the Premises and all parking access cards. If Tenant
does not immediately surrender possession, Landlord may peaceably enter
upon and take possession of the Premises and peaceably expel or remove
Tenant and any other person who may be occupying the Premises, or any part
thereof, without having any civil or criminal liability therefor.
(b) If Tenant or any of its successors in interest continues to hold any
part of the Premises for more than thirty (30) days after the termination
of this Lease, the holding over is a tenancy from month-to-month at a
monthly rental equal to 150% of the monthly Minimum Rent payable at the
time of termination, plus the payment of all other Rent payable under this
Lease. While Tenant or its successor continues to hold the Premises after
the termination of this Lease, the month-to-month tenancy is subject to
all terms of this Lease; provided, all expansion rights, rights of first
refusal, first notice, and first offer, and all extension rights
automatically terminate.
(c) No payments of money by Tenant to Landlord after the termination of
this Lease reinstate, continue, or extend the Lease Term and no extension
of this Lease after the termination or expiration thereof is valid unless
it is reduced to writing and signed by Landlord and Tenant. Nothing in
this Paragraph may be construed to give Tenant the right to hold over
beyond the Expiration Date or any earlier termination of this Lease or
preclude Landlord from having the right to dispossess or otherwise
terminate Tenant's right of possession. Any month-to-month tenancy is
terminable at any time upon 30 days written notice from Landlord.
30. Tenant's Property.
(a) All furniture, movable trade fixtures, and equipment installed by
Tenant remains the property of Tenant and must be removed by Tenant at the
termination of this Lease. Any removal of Tenant's property must be
accomplished in a good and workmanlike manner so as not to damage the
Premises or the Project. Tenant or Landlord at Tenant's expense, shall
repair any damage to the Premises or the Project caused by any removal.
All furniture, movable trade fixtures, and equipment installed by Tenant
not removed within 30 days after termination of the Lease are conclusively
presumed to be abandoned by Tenant.
(b) Tenant shall not be required to remove any improvements installed by
or on behalf of Landlord or Tenant in connection with the completion of
the Tenant Finish Work (as defined in Exhibit C), any Additional Work, or
otherwise.
31. Events of Default.
The following are events of default ("Events of Default") by Tenant under
this Lease:
(a) Tenant fails to pay any Rent when due and the failure continues for a
period of 10 days after written notice thereof by Landlord to Tenant, but
in no event shall Landlord be required to provide such notice to Tenant
more than twice in any calendar year.
OFFICE LEASE Page 29
(b) Tenant fails to comply with any of the terms of this Lease, other than
the payment of Rent and does not cure the failure within 30 days after
Landlord delivers notice of the failure to Tenant; provided, however, in
the event such failure cannot reasonably be cured by Tenant within thirty
(30) days after written notice from Landlord, Tenant shall have an
additional period of time as is reasonable under the circumstances for
Tenant to cure said default provided that Tenant has commenced the cure
and at all times diligently pursues said cure.
(c) Tenant or Guarantor becomes insolvent, makes a transfer in fraud of
creditors, commits any act of bankruptcy, makes an assignment for the
benefit of creditors, or admits in writing its inability to pay its debts
as they become due.
(d) Tenant or Guarantor files a petition under any section or chapter of
the Bankruptcy Code of the United States, as amended, or under any similar
law or statute of the United States or any state thereof, or Tenant or
Guarantor is adjudged bankrupt or insolvent in proceedings filed against
Tenant or Guarantor, or a petition or answer proposing the adjudication of
Tenant or Guarantor as a bankrupt or its reorganization under any present
or future federal or state bankruptcy or similar law is filed in any
court, and the petition or answer is not discharged or denied within 120
days after filing.
(e) A receiver or trustee is appointed for all or substantially all of the
assets of Tenant or Guarantor of the Premises or of any of Tenant's
property located therein in any proceeding brought by Tenant or Guarantor,
or any receiver or trustee is appointed in any proceeding brought against
Tenant or Guarantor and is not discharged within 60 days after appointment
or Tenant or Guarantor shall consent to or acquiesce in the appointment.
(f) Tenant, if a natural person, dies or becomes incapacitated or, if
Tenant is not a natural person, Tenant is dissolved or ceases to exist.
(g) Tenant's leasehold estate is taken on execution or other process of
law in any action against Tenant.
32. Remedies.
If an Event of Default occurs, Landlord may then or any time thereafter
while the Event of Default continues pursue any one or more of the
following remedies:
(a) Terminate this Lease by giving ten (10) days' written notice to
Tenant, in which event Tenant shall immediately surrender the Premises to
Landlord. If Tenant fails to surrender the Premises, Landlord may, without
prejudice to any other remedy, take possession of the Premises and
peaceably expel or remove Tenant and any other person occupying the
Premises, or any part thereof, without being liable for prosecution or any
claim of damages. Tenant shall pay to Landlord within thirty (30) days
after Landlord's written demand as additional Rent the amount of all loss
and damage Landlord suffers by reason of the termination, whether through
inability to re-let the Premises on satisfactory terms or otherwise, equal
to the sum of (x) all Rent accrued hereunder through the date of
termination, and (y) an amount equal to the total Rent that Tenant would
have been required to pay for the remainder of the Lease Term discounted
to present value at a per annum rate equal to the discount rate of the
Federal Reserve Bank of Dallas plus one percent (1%) minus the then
present value of the Premises for such period, similarly discounted.
Landlord has no duty to re-let the Premises. In addition to the foregoing,
Landlord's damages specifically include, but are not limited to: (1) all
reasonable expenses necessary to re-let the Premises including the cost of
repairing the Premises, advertisements, brokerage fees and the unamortized
portion of the Work Allowance ; and (2) any increase in insurance premiums
caused by the vacancy of the Premises, so long as written evidence
OFFICE LEASE Page 30
reasonably satisfactory to Tenant of such increased cost and the basis
therefor is provided to Tenant within thirty (30) days of Tenant's request
therefor. Nothing in this Lease limits Landlord's right to prove and
obtain in bankruptcy or insolvency proceedings damages by reason of the
termination of this Lease in an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when the damages are to be
proved, whether or not the amount is greater, equal to, or less than the
amount of the loss or damages referred to above. Landlord and Tenant agree
that Landlord's termination of this Lease does not relieve Tenant from the
consequences of an Event of Default. If Landlord's termination of this
Lease terminates Tenant's liability for the Rent, Tenant agrees that
Tenant is still liable for contractual damages as provided in this
Paragraph (a).
(b) Take possession of the Premises and peaceably remove Tenant or any
other person occupying the Premises, or any part thereof, without having
any civil or criminal liability and without terminating this Lease.
Landlord may (but is under no obligation to) re-let the Premises or any
part thereof for the account of Tenant and on conditions and for uses as
Landlord in its sole discretion may determine. Landlord may collect and
receive any rents payable by reason of any re-letting (including any rent
paid which is in excess of Tenant's Rent). Tenant shall pay Landlord
within thirty (30) days after Landlord's written demand as additional Rent
either (1) all reasonable expenses necessary to re-let the Premises, which
includes the cost of repairing the Premises, advertisements, and brokerage
fees, all Rent accrued through the rental commencement date of a new
tenant, as well as any deficiency that may arise by reason of the
re-letting as and when the same became due and payable or (2) an amount
equal to the total Rent that Tenant would have been required to pay for
the remainder of the Lease Term discounted to present value at a per annum
rate equal to the discount rate of the Federal Reserve Bank of Dallas plus
one percent (1%) minus the then present value of the Premises for such
period, similarly discounted. Landlord is not liable for any failure to
re-let the Premises or any part thereof or for any failure to collect any
Rent due upon any re-letting. No taking of possession of the Premises by
Landlord is an election on Landlord's part to terminate this Lease unless
a notice of termination is given to Tenant under subparagraph (a).
(c) Peaceably enter upon the Premises without having any civil or criminal
liability and do whatever Tenant is obligated to do under the terms of
this Lease. Tenant shall reimburse Landlord within thirty (30) days after
Landlord's written demand as additional Rent for any expenses Landlord
incurs in performing Tenant's obligations under this Lease, together with
interest at the maximum rate permitted by law from the date the expense is
paid by Landlord until repaid by Tenant. Landlord is not liable for any
damages resulting to Tenant from Landlord's actions or omissions in
performing Tenant's obligations, whether caused by the negligence of
Landlord or otherwise.
(d) Landlord may, without further notice of any kind to Tenant, interrupt
or cause the interruption of any utility service and elevators serving the
Premises, remove, alter, or change any door, window, attic hatchway cover
to the Premises, or any lock, latch, hinge, hinge pin, doorknob, or other
mechanism connected to any door (including keys to the Premises and
Building) window, or attic hatchway cover to the Premises and parking
access cards, if any, and intentionally prevent Tenant from entering the
Premises without resort to judicial process, so long as Landlord complies
with all Applicable Laws. Landlord is under no obligation to restore any
door, window, or attic hatchway cover or any lock, latch, hinge, hinge
pin, doorknob, or other mechanism attached thereto or to deliver or make
available to Tenant any key to any door, window, or attic hatchway cover
until Tenant fully cures all Events of Default then existing under this
Lease.
No repossession of or re-entering all or any part of the Premises under
subparagraphs (b), (c), or (d) above or otherwise and no re-letting of the
Premises or any part thereof under subparagraph (b) relieves Tenant or
Guarantor of any liabilities or obligations under this Lease, all of which
survive repossession or re-entering by Landlord. If Landlord repossesses
or re-enters all or any part of the Premises after an Event of Default,
OFFICE LEASE Page 31
Tenant shall pay to Landlord the Rent required to be paid by Tenant as and
when the same become due and payable under this Lease (except as otherwise
provided in this Paragraph 32(a) and (b)). No right or remedy of Landlord
under this Lease is intended to be exclusive of any other right or remedy.
Each right and remedy of Landlord is cumulative and all other rights or
remedies under this Lease or now or hereafter existing at law, in equity
or by statute. In addition to other remedies provided in this Lease,
Landlord, to the extent permitted by applicable law, may seek injunctive
relief in case of the violation, or attempted or threatened violation, of
any of the terms of this Lease, or to a decree compelling specific
performance of the terms of this Lease. Notwithstanding anything to the
contrary contained in this Lease, (i) Landlord shall not be entitled to
use force in the exercise of any of its remedies hereunder and shall have
an obligation to Tenant to mitigate Landlord's damages arising out of
Tenant's default hereunder and (ii) in no event shall Landlord have the
right to accelerate the expiration date of this Lease or all or any
portion of the rental or other sums due under this Lease, except as
expressly provided in Paragraphs 32(a) and (b).
(e) In the event of any breach, default, or noncompliance hereunder by
Landlord, Tenant shall, before exercising any right or remedy provided
herein or by law, give Landlord and Landlord's lender (or lenders, as the
case may be), for which tenant has been provided names and addresses,
written notice of the claimed breach, default, or noncompliance. For the
thirty (30) days following the giving of the notice(s) required by the
foregoing portion of this Paragraph (or such longer period of time as may
be reasonably required to cure a matter which, due to its nature, cannot
reasonably be rectified within thirty (30) days provided that Landlord has
commenced the cure and at all times diligently pursues said cure) [except
with respect to emergency repairs or maintenance which are, in Tenant's
reasonable opinion, necessary for Tenant's occupancy of the Premises,
which must be undertaken by Landlord within twenty-four (24) hours after
the receipt of verbal notice, so long as such verbal notice is immediately
followed by written notice to Landlord] (the "Cure Period"), Landlord and
Landlord's lender have the right to cure the breach, default, or
noncompliance involved.
If, after the expiration of the Cure Period, Landlord or Landlord's lender
has failed to cure the breach, default, or noncompliance which is the
subject of Tenant's notice to Landlord and Landlord's lender under this
Subparagraph (e), Tenant may, at its option, in addition to the remedies
set forth in Paragraphs 8(a)- (c) above and any other remedies available
at law or in equity, cure such breach, default, or noncompliance and
deduct all sums reasonably expended by Tenant in effecting the cure from
the Rent. If requested by Landlord, Tenant shall provide Landlord with
evidence of the amounts expended by Tenant, including, copies of all
contracts, receipts, paid vouchers and any other documentation (including,
without limitation, "as-built" drawings, air/water balancing reports,
permits and inspection certificates) in connection with Tenant's cure. If
Tenant's cure will affect any Building systems, the Building's roof or
structure, Tenant shall endeavor to use Landlord's contractors and
engineers to effect Tenant's cure and shall, at a minimum, cooperate with
Landlord's engineers to avoid compromising any of the Building systems.
Tenant shall assign any warranties it receives in connection with Tenant's
cure to Landlord after the completion of the cure.
33. No Implied Waiver.
The failure of Landlord or Tenant 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 to this Lease 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. 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, and no waiver by Landlord or Tenant of
OFFICE LEASE Page 32
any of the terms of this Lease is effective unless expressed in writing
and signed by Landlord or Tenant.
34. 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 of them has under any present or
future constitution, statute, or rule of law to redeem the 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, and (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.
35. INTENTIONALLY DELETED.
36. 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, whether at the trial or appellate level.
37. Subordination.
(a) Subject to the provisions of the SNDA (defined below), this Lease and
all rights of Tenant under this Lease are subject and subordinate to any
mortgage or deed of trust secured by a first lien against the Project, all
increases, renewals, modifications, consolidations, replacements, and
extensions of any first lien mortgage or deed of trust and all leases,
restrictions, easements, and encumbrances recorded in the Real Property
Records of Collin County, Texas, to the extent they validly affect the
Project. Tenant shall, within thirty (30) days after Landlord's written
demand at any time or times, execute, acknowledge, and deliver to
Landlord, or to Landlord's first mortgagee, any instruments that may be
necessary or proper to more effectively effect or evidence this
subordination to any first mortgage or first deed of trust (subject to the
provisions of the SNDA). Notwithstanding anything to the contrary
contained in this Lease, as a condition to Tenant's obligations under this
Lease, Landlord shall obtain appropriate non-disturbance agreements in
favor of Tenant from Landlord's existing Lender in form and substance
reasonably satisfactory to Tenant (the "SNDA"). Landlord shall obtain an
SNDA from its future lenders.
(b) If any first mortgage or first deed of trust against the Project is
foreclosed, Tenant shall, upon request by the purchaser at the foreclosure
sale attorn to the purchaser and recognize the purchaser as "Landlord"
under this Lease and execute, acknowledge, and deliver to the purchaser an
instrument in appropriate form acknowledging the attornment, subject to
any SNDA.
(c) Except as otherwise provided to the contrary in this Lease, 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.
OFFICE LEASE Page 33
38. Quiet Enjoyment.
If Tenant pays the Rent when due and performs all other obligations of
Tenant under this Lease, then Tenant may peaceably and quietly enjoy the
Premises during the Lease Term without any disturbance from Landlord or
from any other person claiming by, through, or under Landlord, but not
otherwise, subject to the terms of this Lease, the deeds of trust,
mortgages, ground leases, ordinances, leases, utility easements, and
agreements to which this Lease is subordinate.
39. Notice to Landlord.
Subject to the provisions of Paragraph 8 and 32 (e), if any act or
omission by Landlord occurs that would give Tenant the right to damages
from Landlord or the right to terminate this Lease due to constructive or
actual eviction from all or part of the Premises or otherwise, Tenant may
not ▇▇▇ for damages or exercise any right to terminate until (A) it gives
notice of the act or omission to Landlord and Landlord's first mortgagee,
if any, so long as Tenant is provided with such Mortgagee's address prior
to the date of such notice and (B) the period of time for remedying the
act or omission provided to Landlord herein elapses following the giving
of the notice, during which time Landlord, its agents, employees, and
first mortgagee are entitled to enter the Premises and cure the act or
omission. Subject to the provisions of Paragraphs 8 and 32(e), during the
period after the giving of the notice and during the curing of the act or
omission, the Rent payable by Tenant abates only to the extent that any
part of the Premises is inaccessible or untenantable.
40. Rules and Regulations.
All Tenant Parties must comply with the Rules and Regulations (as
reasonably changed from time to time as hereinafter provided) attached as
Exhibit D. Except as otherwise provided to the contrary in this Lease,
Landlord may at any time change the Rules and Regulations or promulgate
other Rules and Regulations as Landlord deems advisable for the safety,
care, cleanliness, or orderliness of the Project. 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 all Tenant Parties.
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.
41. Estoppel Certificate.
Tenant shall, from time to time upon not less than 15 days' prior notice
by Landlord, execute, acknowledge, and deliver to Landlord an Estoppel
Certificate in substantially the form attached as Exhibit F; provided,
however, Tenant shall not be required to produce such Estoppel Certificate
more than twice in any calendar year.
42. Notices.
All notices, requests, approvals, and other communications required or
permitted to be delivered under this Lease must be in writing and are
effective on the business day sent if delivered by telecopier or
facsimile; or 3 days after being deposited in the United States mail,
certified, return receipt requested, postage prepaid; or upon receipt if
delivered personally, by reputable overnight courier or by any method
other than by telecopier (with written confirmation) or mail, in each
instance addressed to Landlord or Tenant, as the case may be, at the
address specified in Paragraph 1 of this Lease, or to any other address
either party may designate by 10 days' prior notice to the other party.
OFFICE LEASE Page 34
43. Hazardous Materials.
(a) Tenant may not cause (including through Tenant's selection of building
materials for the Tenant Finish Work) the escape, disposal, or release in
the Premises or the Project of any biologically active, chemically active,
or hazardous substances or materials (collectively, "hazardous
substances") in violation of Applicable Laws or bring, or cause any other
Tenant Party to bring, any hazardous substances into the Premises or the
Project in violation of Applicable Laws. 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; provided,
however, the term "hazardous substances" shall not include any materials
or substances necessary, useful, or otherwise utilized by Tenant in
connection with Tenant's business (as long as such materials or substances
are for general office use and are not in reportable quantities) or any
conditions, substances or materials existing in, on, under or about the
Project, the Land, the Building and/or the Premises prior to the
Commencement Date.
(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
Premises or the Project based on probable cause that a release occurred
and was caused by any Tenant Party and hazardous substances are in fact
present and caused by a Tenant Party, then Tenant shall reimburse the
reasonable costs of the testing to Landlord within thirty (30) days after
Landlord's written demand as additional Rent. 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 Premises and the Project. Tenant
shall indemnify Landlord in the manner elsewhere provided in this Lease
from any release of hazardous substances in or on the Premises or the
Project in violation of Applicable Laws caused by any Tenant Party.
Landlord shall indemnify Tenant in the manner elsewhere provided in this
Lease from any release of hazardous substances in or on the Premises or
the Project in violation of Applicable Laws caused by a Landlord Party.
These covenants survive the expiration or earlier termination of this
Lease.
(c) Landlord represents and warrants to Tenant that, to Landlord's
knowledge, the Project and all improvements therein will be constructed
without the use of asbestos or any other hazardous substances known to be
hazardous at the time of its installation, and, to the best of Landlord's
knowledge, no hazardous substances currently affect the Project. Tenant
shall be responsible for any costs incurred by Landlord or any other
tenant as a result of Tenant's violation of this Paragraph 43. For
purposes of this Paragraph 43, the term "Landlord's knowledge" means the
present, actual knowledge of persons directly employed by Landlord or any
of its Affiliates.
Tenant acknowledges that Landlord may incur costs for complying with laws,
codes, regulations or ordinances relating to hazardous substances which
are not the responsibility of either Landlord or Tenant under this Lease,
including the following: (a) hazardous substances present in the soil or
ground water on the Project of which Landlord has no knowledge as of the
date hereof; (b) a change in laws, codes, regulations or ordinances which
relate to hazardous substances which make that hazardous substances which
is present on the Project as of the date hereof, whether known or unknown
to Landlord, a violation of such new laws, codes, regulations or
ordinances; (c) hazardous substances that migrates, flows, percolates,
diffuses or in any way moves onto or under the Project after the date
hereof; (d) hazardous substances present on or under the Project as a
result of any discharge, dumping or spilling (whether accidental or
otherwise) on the Project by other tenants of the Project or their agents,
OFFICE LEASE Page 35
employees, contractors or invitees, or by others. Tenant agrees that the
costs incurred by Landlord for complying with laws, codes, regulations or
ordinances relating to hazardous substances on the Project shall be an
Operating Cost unless the cost of such compliance, as between Landlord and
Tenant, is made the responsibility of Tenant pursuant to any other
Paragraph under this Lease or such costs are the result of Landlord's
actions or otherwise caused by Landlord or Landlord's breach of this
Paragraph 43(c). To the extent any such Operating Costs relating to
hazardous substances is subsequently recovered or reimbursed through
insurance, or recovery from responsible third parties, or other action,
Tenant shall be entitled to a proportionate reimbursement to the extent it
has paid its share of such Operating Costs to which such recovery or
reimbursement relates.
44. 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.
45. 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.
46. 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 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
Premises.
47. Force Majeure.
When this Lease prescribes a period of time for action to be taken by
either Landlord or Tenant (except for monetary obligations) such party
shall not be liable or responsible for, and there shall be 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
such party, so long as such party is using all reasonable means to
minimize or avoid such delays and the economic impact thereof.
48. Brokerage.
Landlord and Tenant each warrant that it has had no dealings with any
broker or agent in connection with the negotiation or execution of this
Lease other than Tenant's Broker and Landlord's Agent (collectively,
"Brokers"). Landlord and Tenant shall each indemnify, defend, and hold the
other harmless against all costs, expenses, attorneys' fees, or other
liability for commissions or other compensation or charges claimed by any
broker or agent other than Brokers claiming by, through, or under such
party with respect to this Lease or any renewal or extension or with
respect to any expansion of the Premises. Any brokerage commissions
payable to Brokers are payable by Landlord pursuant to the terms of
separate agreements between Landlord and Brokers.
OFFICE LEASE Page 36
49. 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.
50. Joint and Several Liability.
If there is more than one Tenant or Landlord , the obligations imposed
upon Tenant or Landlord under this Lease are joint and several.
51. Representations.
Except as otherwise provided to the contrary in this Lease, Landlord or
Landlord's agents make no representations or promises with respect to the
Premises or the Project 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. In addition to any
other representations, warranties and covenants of Landlord contained in
the Lease, Landlord represents, warrants (as of the date hereof and the
Commencement Date) and covenants to Tenant as follows:
(i) Subject to the provisions of Paragraph 64, Landlord is or
will be the owner of the Building, the Project and the Common
Areas and the execution of the Lease by Landlord will not result
in or create a default under any loan, lease, or to the best of
Landlord's knowledge, any other agreement to which Landlord is a
party;
(ii) Subject to the provisions of this Lease allocating
responsibility for compliance with Applicable Laws, Landlord
shall continue to operate and maintain the Building, the Project
and the Common Areas in compliance with all Applicable Laws,
during the term of the Lease and any renewals thereof;
(iii) Landlord shall not create or allow any nuisances to
exist in the Building, the Project or the Common Areas,
including, without limitation, any offensive odors into the
Premises emanating from any restaurant, if any, now or hereafter
located in the Building, the Project or the Common Areas, which
unreasonably interfere with the conduct of Tenant's business in
the Premises;
(iv) The Lease does not and shall not conflict with any other
leases in the Building or any rights granted to other tenants in
the Building;
(v) The Lease, and the terms hereof, are binding upon
Landlord;
(vi) Landlord is not in default under any mortgage, ground
lease or deed of trust currently encumbering the Building, the
Project or the Common Areas or any part thereof; and
(vii) Landlord shall not knowingly permit, or intentionally
suffer, anything to be or remain upon or about the Building, the
Project or the Common Areas which will invalidate any policy of
insurance which Landlord or Tenant may now or hereafter have upon
the Building, the Project, the Common Area or the Premises.
OFFICE LEASE Page 37
If Landlord fails to comply with any of the foregoing, Tenant must
deliver notice of non-compliance to Landlord and Landlord is not in
default if it cures such failure within thirty (30) days after
Tenant's notice; provided, however, that Landlord shall have an
additional period of time as is reasonable under the circumstances
for Landlord to cure said failure provided that Landlord has
commenced the cure and at all times diligently pursues said cure.
In addition to any other representations, warranties and covenants of
Tenant contained in the Lease, Tenant represents, warrants (as of the
date hereof and the Commencement Date) and covenants to Landlord as
follows:
(i) The execution of the Lease by Tenant will not result in or
create a default under any loan, lease, or to the best of
Tenant's knowledge, any other agreement to which Tenant is a
party (including the Agreement of Sale (defined below));
(ii) Subject to the provisions of this Lease allocating
responsibility for compliance with Applicable Laws, Tenant shall
continue to operate and maintain the Premises in compliance with
all Applicable Laws, during the term of the Lease and any
renewals thereof;
(iii) Tenant shall not create or allow any nuisances to exist
in the Premises, including, without limitation, any offensive
odors or noises emanating from the Premises which unreasonably
interfere with the conduct of other tenants in the Project;
(iv) The Lease, and the terms hereof, are binding upon Tenant;
(v) Tenant shall not knowingly permit, or intentionally
suffer, anything to be or remain upon or about the Building, the
Project or the Common Areas which will invalidate any policy of
insurance which Landlord or Tenant may now or hereafter have upon
the Building, the Project, the Common Area or the Premises.
52. Entire Agreement, Amendments.
This Lease is the entire agreement between the parties. All negotiations,
considerations, representations, and understandings between Landlord and
Tenant are incorporated in this Lease. 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 by Landlord
and Tenant.
53. Paragraph Headings.
The paragraph 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.
OFFICE LEASE Page 38
54. 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.
55. Exhibits.
The following exhibits are attached to and made a part of this Lease:
Exhibit A [Legal Description of Land], A-1 [Site Plan] B [Premises], B-1
[Design Schedule], B-2 [Sample Budget], C [Tenant Finish Construction], D
[Project Rules and Regulations], D-1 [Janitorial Specification, Service
Schedule], E [Contractor Insurance Requirements], F [Estoppel
Certificate], G [Expansion Space], H [Guaranty] and I [Assignment and
Assumption of Agreement of Sale].
56. 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.
57. Tenant's Service Providers.
Tenant shall cause all moving companies and other entities providing
services to Tenant in the Premises to deliver evidence satisfactory to
Landlord that the insurance specified in Exhibit E is in force prior to
entering the Project.
58. Option to Extend Lease Term.
(a) If Tenant is not in default under this Lease at the time of the
exercise of this option or at the commencement of the extended Lease
Term, Tenant may extend the Lease Term for 2 successive periods of 5
years each, exercisable by giving written notice (the Renewal Notice)
thereof to Landlord of its exercise of a renewal option at least 12
months prior to the expiration of the initial Lease term as to the
first renewal option and at least 12 months prior to the expiration
of the first renewal term as to the second renewal option. If the
Lease Term is extended under this Paragraph, the Lease Term is
extended upon the same terms as in the Lease, except that the Rent
and other applicable terms adjust based on the Market Rate (defined
below). Tenant has no further option or options to extend the Lease
Term after the options set forth above are exercised.
(b) "Market Rate" is ninety-five percent (95%) of the rental rate
(including market concessions) at which tenants lease comparable
space as of the commencement of the applicable option period, (or
adjusting the rental rate as appropriate for differences therein),
which is agreed by Landlord and Tenant or determined in accordance
with the provisions of the balance of this Paragraph, taking into
consideration use, location and floor level within the applicable
building, the location, quality, age and reputation of the building,
the definition of rentable area or net rentable area, as the case may
be, with respect to which such rental rates are computed, rent
concessions or other allowances, abatements, lease assumptions or
take-overs, differences in terms and provisions of the applicable
leases such as pass-throughs of operating expenses and taxes, moving
expenses, tenant improvements, parking rights, the term of the lease
(or renewal) under consideration, and the extent of services provided
thereunder, applicable distinctions between "gross" leases and "net"
leases, base year or expense stop figures for escalation purposes,
other tenant concessions and benefits such as new carpeting, paint
and wall coverings for the Premises, and any other relevant term or
OFFICE LEASE Page 39
condition in making such evaluation. For this purpose, "comparable
space" shall be office space in the Building and other Comparable
Buildings within a seven (7) mile radius of the Building that is:
(i) Not subleased;
(ii) Not subject to another tenant's guaranteed expansion
rights;
(iii) Comparable in size, location, and quality to the
Premises;
(iv) Leased for a term comparable to the applicable option
term; and
(v) Located in Comparable Buildings.
(b) Within thirty (30) days after Landlord's receipt of the Renewal
Notice, Landlord shall provide to Tenant its determination of the
Market Rate ("Landlord's Determination"). Within fifteen (15) days of
Tenant's receipt of Landlord's Determination, Tenant shall either
accept Landlord's Determination or propose a different Market Rate to
Landlord. If Landlord and Tenant are unable to agree upon a Market
Rate within thirty (30) days after Tenant's receipt of Landlord's
Determination, then Landlord and Tenant shall, within forty-five (45)
days of Tenant's receipt of Landlord's Determination, each
simultaneously submit to the other in writing its good faith estimate
of the Market Rate. If the higher of said estimates is not more than
one hundred and five percent (105%) of the lower of such estimates,
the Market Rate in question shall be deemed to be the average of the
submitted rates. If otherwise, within 15 days thereafter, Tenant may
either terminate this Lease effective as of the Expiration Date or
establish the rate by an arbitration to be held in Dallas, Texas in
accordance with the Real Estate Valuation Arbitration Rules of the
American Arbitration Association, except that the arbitration shall
be conducted by a single arbitrator and shall be on the basis that
the arbitrator shall pick one of the two rates submitted, being the
rate which is closer to the Market Rate as determined by the
arbitrator using the definition set forth in Paragraph 58. The
parties agree to be bound by the decision of the arbitrator, which
shall be final in this and non-appealable, and shall share equally
the costs of arbitration, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
During each of the renewal terms (if applicable), Tenant shall pay
additional Rent in accordance with the provisions of Paragraph 9
(c) Tenant may not assign this extension option to any assignee of the
Lease (other than as permitted in Section 12(f) of this Lease), nor
may any other sublessee or assignee exercise this extension option.
(d) If the term is extended, Landlord shall prepare, and Landlord and
Tenant will execute and deliver an amendment to the Lease extending
the Lease Term.
59. Expansion Space. Landlord hereby grants to Tenant the right to lease up to
10,000 square feet of additional space on the second floor of the Building
and identified and cross-hatched on Exhibit G (which - will be attached to
this Lease after the Final Plans are approved) (the "Expansion Space"),
for a period of eighteen (18) months after the Commencement Date. Tenant
shall give Landlord written notice of Tenant's election to exercise the
expansion option and such notice shall identify the portion of Expansion
Space covered by such notice. If Tenant exercises the expansion right
contained herein, the lease of the Expansion Space shall be on the same
terms and conditions as this Lease for the Premises, including the rental
rate, expense stop, tenant improvement obligations of Landlord and the
OFFICE LEASE Page 40
tenant improvement allowance and the Term shall be co-terminus with the
term of this Lease; provided, however, in the event the Expansion Space is
in a shell condition at the time of such exercise, then Landlord shall
construct certain tenant finish improvements to the Expansion Space in
accordance with plans and specifications prepared by Tenant and approved
by Landlord, which approval shall not be unreasonably withheld or delayed,
and Landlord shall contribute for such tenant improvements in an amount
equal to $20.00 per Rentable Square Foot (and Landlord acknowledges that
it is responsible for the construction of the Base Building). Rent for the
Expansion Space shall commence on the earlier of the Ready for Occupancy
Date (for the Expansion Space) or ninety (90) days after Tenant's written
notification of its intent to the Lease the Expansion Space. If Tenant
elects to Lease less than all of the Expansion Space, the expansion option
set forth herein shall remain in full force and effect for eighteen (18)
months after the Commencement Date on the remaining portion of the
Expansion Space, which remaining portion shall be subject to the Right of
First Refusal set for below upon the expiration of such eighteen (18)
month period. In the event Tenant exercises any of its renewal options
granted in the Lease, the exercise of the renewal option shall extend to
the Expansion Space.
60. Right of First Refusal
(a) In addition to the expansion option, the Tenant shall have an ongoing
right of first refusal to lease any space on the first and second floors
of the Building ("First Refusal Space") in accordance with the provisions
of this Paragraph 60 during the term of this Lease, as may be extended or
renewed. In the event Landlord receives an offer to lease all or any
portion of the First Refusal Space which Landlord is prepared to accept,
Landlord shall give Tenant notice of such offer, along with all of the
pertinent terms of such offer. Tenant may elect to Lease the portion of
the First Refusal Space which is the subject of such offer under the same
terms and conditions contained in such offer, (except that the term with
respect to such space shall be coterminous with this Lease, including any
renewals and extensions thereof and the Minimum Rent shall be adjusted to
reflect the portion of the rental rate contained in the offer which is
attributable to the amortization of any tenant finish allowance contained
in the offer so that the tenant finish is amortized over the remaining
term of this Lease rather than the term set forth in the offer). The
Tenant shall have six (6) business days to respond to any such offer. In
the event the Tenant does not elect to lease such space, Tenant's rights
under this Paragraph 60 with respect to such space terminates; (provided,
however, that Tenant shall continue to have a right of first refusal on
such space if (1) the prospective tenant does not sign a lease with
Landlord or (2) if the term of such prospective lease is less than the
remaining term on this Lease (as renewed and extended), in which case
Tenant shall again have a right of first refusal on such space when the
term on such lease expires); otherwise, Tenant's rights under this
Paragraph 60 shall be unaffected and the Tenant shall continue to have a
right of first refusal with respect to the balance of the First Refusal
Space.
(b) Landlord agrees to lease the portion of the second floor (which is not
subject to Tenant's expansion rights; approximately 15,000 rentable square
feet) to a minimum of two (2) other tenants, the largest of which cannot
be larger than 60% of the remaining space on the second floor
(approximately 9,000 Rentable Square Feet) and cannot have a lease term
longer than five (5) years (including renewal options). The remaining
space on the second floor (approximately 6,000 Rentable Square Feet) may
be leased to third parties, but with lease terms not exceeding thirty-six
(36) months (including renewal terms).
61. Execution and Approval of Lease.
Employees and agents of Landlord 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 Premises.
This Lease is effective and binding on Landlord only upon the execution
OFFICE LEASE Page 41
and delivery of this Lease by Landlord and Tenant. If Landlord's first
mortgagee requires any modifications of the terms of this Lease as a
condition to approving this Lease, such modifications shall be subject to
Tenant's prior written approval.
62. Antennas. Tenant may install, operate and maintain on the roof of the
Building antennas, satellite dishes, and other communication devices
solely for Tenant's use in connection with its occupancy of the Premises,
subject to Applicable Laws and Landlord's approval with respect to the
location, design and appearance thereof. There will be no charge applied
for use of such roof space for Tenant's antennas, satellite dishes and/or
communication devices. Tenant shall carry property damage insurance on
such antennas, satellite dishes and/or communication devices and shall be
responsible for any damage caused by the antennas, satellite dishes and/or
communication devices, including damage to the roof, rooftop equipment or
the Building, but specifically excluding any damage caused by the
negligence or willful misconduct of Landlord or Landlord's Parties.
Landlord covenants and agrees not to place or otherwise allow the
placement of any other antennas, satellite dishes and/or communication
devices on the roof of the Building which would materially interfere with
Tenant's use of Tenant's antennas, satellite dishes and/or communication
devices.
63. Landlord's/Tenant's Approval. Notwithstanding anything to the contrary
contained in this Lease, whenever the approval, permission or consent of
Landlord or Tenant is required or a determination is to be made in such
party's discretion, such approval, permission, determination or consent
shall not be unreasonably withheld, conditioned or delayed; provided,
however, that nothing in this Paragraph 63 shall require Landlord to
consent to (i) any use of the Premises for purposes other than those
described in Paragraphs 1 and 15, (ii) any Tenant alterations which would
adversely affect the Building systems or affect the exterior appearance of
the Building, or (iii) any of Tenant's signage. Whenever this Lease grants
Landlord or Tenant the right to take action, incur costs, make a judgment,
determination, estimate or request, or use discretion, establish rules and
regulations or make allocations or other determinations or otherwise,
Landlord and Tenant shall act reasonably and in good faith, and shall
taken no action which will result in the frustration of a sophisticated
landlord's, or a sophisticated tenant's commercially reasonable
expectations concerning the benefits to be enjoyed under a major office
lease in a Comparable Building, or otherwise under this Lease.
64. EDS Contract. Tenant has entered into an Agreement of Sale (the "Agreement
of Sale") with Electronic Data Systems Corporation for the purchase of the
Land. Concurrently with the execution and delivery of the Lease by
Landlord and Tenant, Tenant shall assign to Landlord and Landlord shall
accept from Tenant all of Tenant's right, title and interest in and to the
Agreement of Sale pursuant to an Assignment and Assumption of Agreement of
Sale (the "Assignment"), the form and substance of which is set forth on
Exhibit I attached hereto. In connection with the Agreement of Sale, (i)
Tenant shall retain all rights relating to the Option and the Option
Property (as such terms are defined therein) to the exclusion of Landlord,
(ii) upon EDS' consent to the Assignment, Landlord shall reimburse Tenant
for the ▇▇▇▇▇▇▇ Money deposited by Tenant thereunder, and (iii) Landlord
shall reimburse Tenant for all of Tenant's out-of- pocket costs and
expenses actually incurred in connection with the preparation, negotiation
and execution of the Agreement of Sale and the performance of buyer's
obligations thereunder (which amount of costs and expenses is set forth in
the Assignment and is conclusive and binding upon Tenant). Notwithstanding
anything in this Lease to the contrary, the validity of this Lease is
conditioned upon EDS consenting to the Assignment.
OFFICE LEASE Page 42
This Lease is executed in multiple originals as of the date first
above set forth.
LANDLORD:
SANDLER LEGACY, LTD.
a Texas limited partnership
By: SANDLER LEGACY GP CORP.
A Texas corporation
its general partner
By:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ President
TENANT:
DENBURY MANAGEMENT, INC.
a Texas corporation
By:
Name:
Title:
OFFICE LEASE Page 43
EXHIBIT A
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
LEGAL DESCRIPTION OF THE LAND
BEING a tract of land located in the ▇▇▇▇▇▇▇ ▇▇▇▇ Survey, Abstract No.
297, and being part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇ Lakes Addition, an addition to
the City of Plano, Texas as recorded in Cabinet H, Pages 527-530, Map
Records of Collin County, Texas, and also being part of a tract of land
described by instrument to Quorum Development Corporation as recorded in
Volume 1171, Page 174, of the Deed Records of Collin County, Texas, and
being more particularly described as follows:
COMMENCING at a point for a corner located at the intersection of the
proposed east right-of-way line of Windcrest Drive (60 feet wide) and the
south right-of-way line of Tennyson Parkway (121 feet wide), said point
bears North 68 degrees 08 minutes 15 seconds West, a distance of 2353.71
feet from EDS monument No. 10 (found brass disk in concrete), said corner
being on a circular curve to the left having a radius of 1382.71 feet and
whose chord bears South 61 degrees 35 minutes 46 seconds East, 411.64
feet;
THENCE Easterly, along said south right-of-way line, and along said curve
through a central angle of 17 degrees 07 minutes 16 seconds, an arc
distance of 413.18 feet to the POINT OF BEGINNING of the herein described
tract of land;
THENCE Easterly, continuing along said south right-of-way line, and along
said curve through a central angle of 17 degrees 50 minutes 36 seconds, an
arc distance of 430.61 feet to the point of tangency;
THENCE South 88 degrees 00 minutes 00 seconds East, continuing along said
south right-of-way line, a distance of 221.90 feet to a point for a corner
said corner being the northeast corner of said ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇;
THENCE South, departing said south right-of-way line and along the east
line of said ▇▇▇ ▇, ▇▇▇▇▇ ▇, distance of 232.13 feet to a point for a
corner said corner lying in the waters of White Rock Creek;
THENCE South, 11 degrees 53 minutes 47 seconds West, continuing along said
east line, a distance of 233.48 feet to a point for a corner said corner
lying in the waters of White Rock Creek;
THENCE North 88 degrees 00 minutes 00 seconds West, departing said east
line, and along a line parallel to Tennyson Parkway, a distance of 189.87
feet to the point of curvature of a circular curve to the right having a
radius of 1844.71 feet;
THENCE Westerly, continuing along said parallel line, and along said curve
through a central angle of 17 degrees 50 minutes 36 seconds, an arc
distance of 574.49 feet to a point for a corner;
THENCE North 19 degrees 50 minutes 36 seconds East, a distance of 462.00
feet to the POINT OF BEGINNING and containing a gross area of 332,883
square feet of 7.642 acres of land, said tract contains 115,018 square
feet of 2.640 acres of land located within the 100 year floodplain of
White Rock Creek leaving a net area of 217,865 square feet or 5.001 acres
of land more or less.
OFFICE LEASE
EXHIBIT A Solo Page
EXHIBIT A-1
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
SITE PLAN
OFFICE LEASE
EXHIBIT A-1 Solo Page
EXHIBIT B
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
FLOOR PLAN OF THE PREMISES
OFFICE LEASE
EXHIBIT B Solo Page
EXHIBIT B-1
Design Schedule
for
DENBURY PARK
DATE ITEM
8/15/97 Final preliminary site plan and preliminary building elevation
(Landlord)
8/22/97 Final Floor Plate Design (Landlord)
9/15/97 Final Civil Engineering Design (Landlord)
9/30/97 Final design for lobby, restrooms, & other common areas
(Landlord)
10/15/97 Final design for landscape and exterior amenities (Landlord)
11/1/97 Preliminary Space Plans complete (Tenant)
11/30/97 Initial Interior Construction Plans (Tenant)
12/5/97 Final Construction Documents (Landlord)
1/5/98 Finalize approved Budget (Landlord)
OFFICE LEASE
EXHIBIT B-1 Solo Page
EXHIBIT B-2
Sample Budget
DENBURY RESOURCES/LEGACY
100,000 s.f.
HARD COSTS Per Bldg. S.F.
----------- --------------
Land (Fixed Number) $ 1,200,000 $ 12.00
Building Shell (1) $ 6,200,000 $ 62.00
Parking Structure (2) $ 875,000 $ 8.75
Finish Out $ 2,000,000 $ 20.00
Landscaping (3) $ 175,000 $ 1.75
Miscellaneous (4) $ 150,000 $ 1.50
Total Hard Costs $10,600,000 $ 106.00
SOFT COSTS
----------
Architecture, Engineering & Interiors (5) $ 288,000 $ 2.88
Financing Fees & Lease Credit Enhancement (6) $ 690,000 $ 6.90
Interim Interest & Lease Up (7) $ 1,280,000 $ 12.80
Commissions (8) $ 1,130,000 $ 11.30
Taxes & Insurance (9) $ 60,000 $ 0.60
Legal & Closing (10) $ 75,000 $ 0.75
Developer's Overhead (11) $ 450,000 $ 4.50
Testing & Inspection (12) $ 50,000 $ 0.50
Marketing (13) $ 40,000 $ 0.40
Impact Fees (14) $ 60,000 $ 0.60
Miscellaneous & Contingencies (15) $ 100,000 $ 1.00
Total Soft Costs $ 4,223,000 $ 42.23
Total Costs $14,823,000 $ 148.23
NOTES
(1): Includes site work and shell office building. Shell office building
includes lobby finishout, bathrooms, elevators (2), decorative stairway
between 3rd and 4th floors, HVAC, card access and security system,
electrical distribution and ceiling grid. Does not include corridor walls.
(See outline specifications and scope of work attached.)
(2): This is a two level parking structure built of concrete with a top floor
shading device.
(3): $20,000 for indoor planting. $100,000 for site landscaping, trees, sod,
and irrigation systems.
$35,000 for landscape treatment and amenities around White Rock Creek
Flood Plain.
$20,000 for landscape architect and land planning fees.
(4): $20,000 for site and directional signage.
$30,000 furniture and accessories, including artwork in lobby.
$100,000 for cost overruns and change orders.
(5): $200,000 for building architecture, MEP engineer, civil engineer, and
structural engineer.
$85,000 for space planning and interiors.
(6): Assuming an $11 million loan, this is one point on interim and one point
on the permanent loan, with a fee to a credit enhancer of the lease to
permit securitization of debt at the higher rating.
(7): Construction timetable is estimated at 12 months. $650,000 is interest
during construction. $630,000 is interest during 4 month free rent period,
along with keeping 10,000 square feet vacant on the third floor for 18
months after completion and a lease up of 8 months on the remainder of the
space in the building.
(8): This represents 6% cash out commission of total lease consideration for
the value of total leases in the building.
(9): Builder's Risk insurance, liability coverage, and taxes during
construction. Contractor's payment and performance bond is included under
Building Shell.
(10): Attorney's fees for loan closing $20,000.
Title policy $55,000.
(11): Salaries for project management, both pre-development and while under
construction, along with allocated share of corporate overhead.
(12): $38,000 for materials and soils testing.
$12,000 for lender's construction inspections.
(13): Signage $ 5,000
Brochures $15,000
Party $20,000
(14): Fees paid to City of Plano for water and sewer, along with Building Permit
for the shell building.
Permit Fees for finishouts including in Finish Out.
(15): Party $20,000
Overrun of any soft costs $80,000. Remainder goes to Party.
OFFICE LEASE
EXHIBIT B-2 Solo Page
EXHIBIT C
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
TENANT FINISH CONSTRUCTION
A. BASE BUILDING. Landlord shall construct the base building at Landlord's
sole cost and expense and outside of the Work Allowance (the Base
Building) which shall include the following:
1. Installed building standard ceiling grid and ceiling tiles (per
Tenant's plans).
2. Installed and connected building standard parabolic light fixture per
each 65 usable square feet and any required relocation of fixtures
(per Tenant's plans).
3. Installed and fully balanced primary and secondary HVAC to the
Premises, including ducting and any required modifications (per
Tenant's plans).
4. Installed primary and secondary electrical distribution to the
Premises including all distribution panels, breaker boxes and any
required electrical meters for the Premises.
5. Installed sprinkler heads and required relocation of sprinkler heads
(per Tenant's plans).
6. Installed building standard window coverings/mini-blinds on all
exterior windows.
7. Installed corridor and/or demising wall studs in place with drywall
up, finished on one side and insulated for multi-tenant floors.
8. All columns, finished (i.e., drywalled), taped and bedded.
9. All surfaces beneath or above exterior windows are "furred" out,
drywalled, taped and bedded.
10. Fully finished Men's and Women's restrooms to a building standard
finish.
11. Elevators
12. Floors leveled to standard architectural tolerances
B. PLANS AND SPECIFICATIONS: Tenant shall submit to Landlord within the
number of days set forth on the Design Schedule space plan(s) and other
information (collectively the Space Plan) necessary or required to
OFFICE LEASE
EXHIBIT C Page 1
complete the initial plans and specifications (the Initial Construction
Documents) for the construction of the tenant finish in the Premises. The
tenant finish shall not include any of the Base Building items. Tenant
shall prepare and submit the Initial Construction Documents to Landlord
for Landlord's approval within the number of days after the date of this
Lease set forth on the Design Schedule (Landlord and tenant shall mutually
approve the Final Plans). Landlord shall provide Tenant an allowance of
$50,000 to be used for space planning and interior design of the Premises
(Architectural Allowance), which allowance may be used to pay for the
space planner and architect of Tenant's choice. The Architectural
Allowance shall be advanced in four (4) installments within ten days after
Tenant's request therefor, subject to reasonable substantiation of costs.
To the extent Tenant's actual costs of planning and interior design of the
Premises exceed $50,000, such excess up to $100,000 total shall be paid
fifty percent (50%) from the contingency line item of the Budget for the
Total Building Costs and fifty percent (50%) from the Work Allowance. MEP
Plans for the Premises will be included in the shell architectural and
engineering drawings provided by Landlord to Tenant.
Within 10 days after receipt of the Initial Construction Documents,
Landlord shall deliver to Tenant a notice either approving or disapproving
them. Any disapproval must specify in reasonable detail the reasons for
the disapproval. If Landlord requests any changes in the Initial
Construction Documents that vary from the Space Plan, any redrawing is at
Landlord's expense. If Tenant does not receive a notice from Landlord
disapproving the Initial Construction Documents within the 10-day period,
Landlord is deemed to approve the Initial Construction Documents. In the
event Landlord reasonably disapproves any portion of the Initial
Construction Documents, Landlord and Tenant shall promptly thereafter take
all such action as shall be reasonably required to provide for full
approval thereof. The approved Initial Construction Documents are referred
to as the Construction Documents and all work to be performed by Landlord
pursuant to the Construction Documents is referred to as the Tenant Finish
Work.
C. TENANT FINISH WORK. Landlord shall construct or cause to be constructed
the Tenant Finish Work in a good and workmanlike manner and of sound
construction and in every respect complying with all Applicable Laws, and
substantially in accordance with the Construction Documents and shall
cause the Premises to be fully built-out, completed and delivered to
Tenant. Tenant shall pay the Actual Cost (defined below) of all Tenant
Finish Work in excess of $20.00 per rentable square foot of the Premises
(the Work Allowance).
The term Actual Cost means the cost of all labor and materials and all
hard and soft costs, incurred by Landlord in performing the Tenant Finish
Work or the Additional Work (defined below), as applicable, in accordance
with the Budget.
The Tenant Finish Work shall be competitively bid by three (3) licensed
general contractors mutually acceptable to Landlord and Tenant, including,
without limitation, mill work, dry wall, electrical and plumbing (Tenant
agrees that Landlord may submit a bid as one of the general contracts) and
Landlord shall provide Tenant with a copy of all such bids. Tenant shall
have the right, at its sole discretion, to review and approve all such
bids and to select the lowest of the qualified bids. Unless Landlord acts
as the general contractor for the Tenant Finish Work, Landlord is not
entitled to receive or charge a construction management or construction
supervision fee or any other fee in connection with the Tenant Finish
Work.
If prior to commencement of the Tenant Finish Work Landlord determines,
based on construction bids received by Landlord, that the Actual Cost of
the Tenant Finish Work will exceed the Work Allowance, Tenant shall pay
the excess to Landlord in accordance with Paragraph J below.
OFFICE LEASE
EXHIBIT C Page 2
If during construction the Actual Cost of the Tenant Finish Work exceeds
the Work Allowance and all amounts previously paid by Tenant to Landlord
prior to the commencement of construction, Landlord shall submit interim
statements covering any excess actual costs incurred by Landlord under
this Paragraph and Tenant shall pay the amount of the excess costs to
Landlord in accordance with Paragraph J below.
If Landlord is not the general contractor and if any change orders are
executed during the progress of the Tenant Finish Work at the request of
Tenant, an Administrative Fee of 10% of the Actual Cost of the work
covered by the change order (not to exceed $500) is payable by Tenant to
Landlord.
D. ADDITIONAL WORK. If Landlord performs, at Tenant's request and upon
submission by Tenant and approval by Landlord of necessary plans and
specifications (as approved, the Additional Work Plans), any work over and
above the Tenant Finish Work (Additional Work), including any Additional
Work approved by change order or work order, the Additional Work is at
Tenant's expense, regardless of any remaining balance of the Work
Allowance, which shall be paid by Tenant in accordance with Paragraph J
below. If the Actual Cost of the Additional Work exceeds the estimated
amount paid by Tenant, Tenant shall pay the excess to Landlord in
accordance with Paragraph J below.
The Additional Work is not part of the Tenant Finish Work. If
Landlord agrees to perform any Additional Work, Landlord shall request
that the General Contractor estimate the additional amount of time that
will be added to the completion of the Tenant Finish Work because of the
Additional Work (the Additional Work Period). This estimate is conclusive
and binding on Landlord and Tenant for the purpose of establishing the
Ready for Occupancy Date, unless disputed by Tenant, in which event the
Independent Architect shall determine such additional amount of time.
E. LANDLORD DELAYS. The Ready for Occupancy Date shall be delayed one (1)
business day for each business day that (i) Landlord fails or refuses to
permit Tenant, its agents and contractors reasonable access to and use of
the Building or any Building facilities or services (including loading
dock, hoists or freight elevators) required for the orderly and efficient
performance of the work necessary to complete the Tenant Finish Work; ii)
Landlord fails or refuses to give authorizations or approvals to the Final
Plans, the Approved Budget, the Space Plans, Initial Construction
Documents or Construction Documents within the time periods required in
the Design Schedule, to the extent such delays necessarily cause the
commencement of construction of the Tenant Finish Work to occur after the
date set forth on the Design Schedule, despite reasonable efforts by
Tenant to avoid such delay in such commencement and Landlord's efforts to
expedite subsequent authorizations or approvals, (iii) any amendment,
changes or modifications to the Final Plans or Construction Contract
caused by Landlord which cause a delay in the completion of the Tenant
Finish Work or (iv) any other delays in the completion of the Tenant
Finish Work actively caused by Landlord (referred to herein as "Landlord
Delay(s)").
F. TENANT DELAYS: The Ready for Occupancy Date shall be accelerated one (1)
business day for each business day that Landlord is actually delayed in
completing the Project, Tenant Finish Work or any Additional Work as a
result of:
(1) Tenant failing or refusing to give authorizations or approvals to the
Final Plans, the Approved Budget, the Space Plans, Initial
Construction Documents or Construction Documents within the time
periods required in the Design Schedule, to the extent such delays
necessarily cause the commencement of construction of the Project or
Tenant Finish Work to occur after the date set forth on the Design
Schedule, despite reasonable efforts by Landlord to avoid such delay
in such commencement and Tenant's efforts to expedite subsequent
authorizations or approvals;
OFFICE LEASE
EXHIBIT C Page 3
(2) unilateral changes or modifications to the Final Plans, the Approved
Budget, the Space Plans, Initial Construction Documents, Construction
Documents or Additional Work Plans caused by Tenant which cause a
delay in the completion of the Project or Tenant Finish Work;
(3) Tenant's failure to promptly and timely furnish the Space Plan, the
Initial Construction Documents, or the Construction Documents to
Landlord within the time periods set forth in the Design Schedule and
this Exhibit C despite reasonable efforts by Landlord to avoid such
delay and Tenant's efforts to expedite subsequent documents;
(4) Tenant's request for materials, finishes, or installations other than
Landlord's Building standard items or long lead items (unless and to
the extent set forth in and approved by Landlord in the Construction
Documents);
(3) Material interference with the completion of the Work by any Tenant
Party;
G. UNCONTROLLABLE DELAYS. If an actual delay in connection with Landlord's
obligations under this Lease is a result of a strike or other labor
trouble, fire or other casualty, governmental preemption of priorities or
other controls in connection with a national or other public emergency or
shortages of fuel, supplies or labor resulting therefrom, or any other
cause beyond Landlord's reasonable control (collectively Uncontrollable
Delays), then each such Uncontrollable Delay shall extend the time for
performance by Landlord of Landlord's obligations hereunder by an amount
of time equal to the length of such Uncontrollable Delay so long as
Landlord uses all reasonable means to minimize or avoid such delay and
Landlord provides Tenant written notice of the occurrence of an
Uncontrollable Delay within 48 hours after such occurrence.
H. DEFECTIVE WORK.
(1) Tenant shall give Landlord a notice specifying any Work which remains
to be completed or which, if completed, is defective or otherwise not
in accordance with the Construction Documents, within one (1) year
after the Commencement Date and thereafter within one (1) year after
notice from Landlord that any of the work has been fully completed.
Landlord shall within sixty (60) days complete or cause the
completion of any incomplete work for which Landlord is responsible
or remedy or cause a remedy of defective work set forth in any such
notice.
(2) If Tenant shall fail to give such notice within one (1) year after
the Commencement Date, or within one (1) year after the receipt of
notice from Landlord that the Tenant Finish Work or the Additional
Work has been fully completed, as the case may be, then it shall be
deemed that such Work has been fully completed in accordance with the
Construction Documents. If Tenant shall give one or more such notices
within such one (1) year period, then it shall be deemed, except for
the items set forth in Tenant's notice, that all of the Work has been
completed in accordance with the Construction Documents.
I. EARLY ENTRY: Upon request by Tenant, Landlord shall permit Tenant and its
contractors to enter the Premises prior to the Ready for Occupancy Date,
in order that Tenant may perform through its own contractor(s) (who must
be approved by Landlord) other work and decorations Tenant wants in the
Premises while Landlord's contractors are working. This license to enter
prior to the Ready for Occupancy Date is subject to the following
conditions:
OFFICE LEASE
EXHIBIT C Page 4
(1) Tenant, its employees agents and contractor(s) must work in harmony
and not interfere with Landlord's contractors and subcontractors; and
(2) Tenant must deliver evidence to Landlord of compliance with the
requirements of Exhibit E prior to commencement of the work by
Tenant's contractor(s), if required by Landlord.
Landlord may revoke this license upon 48 hours' notice to Tenant if
the entry causes disharmony or interference with the Tenant Finish Work.
Landlord is not liable in any way for any injury, loss, or damage
that occurs to any of Tenant's decorations or installations made prior to
the Ready for Occupancy Date, the entry being solely at Tenant's risk
unless caused by Landlord's negligence or wilful misconduct. Tenant shall
indemnify, defend, and hold Landlord harmless from any claims, demands,
actions, losses, and damages arising from activities of Tenant's
contractors, workers, and mechanics (except as excluded in Paragraph 20
(b) of the Lease.
J. PAYMENTS BY TENANT: All amounts payable by Tenant under this Exhibit C are
payable to Landlord as additional Rent as follows: 50% payable prior to
the commencement of construction of the Tenant Finish Work and 50% upon
substantial completion of the Tenant Finish Work.
K. COMMINGLING OF ALLOWANCES: Tenant shall have the right to allocate amounts
contained within the Architectural Allowance to cover any excess in the
Actual Cost over and above the Work Allowance and/or to allocate amounts
from the Work Allowance to cover the costs and expenses associated with
preparation of the Construction Documents at Tenant's sole discretion,
without Landlord's approval. In the event any amounts remain unused in the
Architectural Allowance and/or the Work Allowance, such amounts shall be
credited against the Rent next becoming due and payable under this Lease.
L. APPROVAL OF CONSTRUCTION MANAGER: Prior to the commencement of the Work by
Landlord, Landlord shall designate a construction manager (who shall be
subject to the approval of Tenant) to monitor, supervise and otherwise
review and approve all aspects of the construction and completion of the
Work. All fees and expenses of such construction manager shall be paid by
Landlord and included in Total Building Costs.
M. ACCEPTANCE OF THE PREMISES: Landlord hereby represents, warrants and
covenants to the Tenant that the Project, the Building, the Common Areas
and the Premises shall be erected, installed, constructed, completed and
operated in a good and workmanlike first-class manner, structurally sound
and free of latent defects, in accordance with all Applicable Laws (in
effect at the time of construction) and the Final Plans. The Landlord
shall be responsible for compliance of the Project, the Building and the
Common Areas with all plans, specifications, codes and laws governing
Life/Fire safety, physical handicap, earthquake safety, environmental
issues, the Americans With Disabilities Act and the Texas Architectural
Barriers Act which are in effect at the time of construction. If the
Project, the Building or the Common Areas are found to be in
noncompliance, Landlord shall promptly remedy the violation at Landlord's
sole cost and expense. Acceptance of possession by Tenant of the Premises
shall not be a waiver of its rights to have Landlord deliver the completed
Work. Landlord shall promptly cure at its sole cost and expense any
omission or defects in the Project, the Building and/or Landlord's Work
discerned within one (1) year after the Commencement Date, which were not
known or readily discoverable upon acceptance of possession, and
thereafter shall remain liable for any latent defects in the Project, the
Building, the Premises and the Common Areas. Landlord shall promptly,
after receiving written notice thereof by Tenant, correct any and all such
defects or omissions at its sole cost and expense.
OFFICE LEASE
EXHIBIT C Page 5
N. CHANGE ORDERS. Tenant may request any change, addition or alteration in
the Tenant's final plans, specifications or improvements (a "Change
Order") by delivery of a written request therefor. Within fifteen (15)
days following receipt of such request, the Landlord shall promptly (i)
approve the Change Order, or (ii) provide the Tenant in writing the
reasons for disapproval of the Change Order. Failure of the Landlord to
approve or disapprove in writing the Change Order within said fifteen (15)
day period shall be conclusively deemed an approval thereof. In the event
the Landlord reasonably disapproves any portion of the Change Order, the
Landlord and the Tenant shall promptly thereafter take all such action as
shall be reasonably required to provide for full approval thereof.
EXHIBIT D
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
RULES AND REGULATIONS
1. Tenant's use and occupancy of the Premises shall be subject to the
following:
(a) Tenant may not deface or injure the Premises or the Project or any
part thereof or overload the floors of the Premises. Tenant may not
commit waste or permit waste to be committed or cause or permit any
nuisance on or in the Premises or the Project. Except as otherwise
provided to the contrary in this Lease, Tenant shall pay Landlord
within thirty (30) days after Landlord's written demand as additional
Rent for any damage to the Premises or to any other part of the
Project 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 any Tenant Party or any other person
(except Landlord or any of its agents, employees, or contractors) not
prohibited by Tenant from entering upon the Premises.
(b) Tenant may not use the Premises to be used for any purpose prohibited
by any Applicable Law, or by any restrictive covenants applicable to
the Project. Tenant shall conduct its business and occupy the
Premises and control all Tenant Parties so as not to create any
nuisance or unreasonably interfere with, annoy, or disturb any other
tenants in the Project or Landlord in its management of the Project.
(c) Except as otherwise provided to the contrary in this Lease, Tenant
may not erect, place, or allow to be placed any sign, advertising
matter, stand, booth, or showcase in or upon the doorsteps,
vestibules, halls, corridors, doors, walls, windows, or pavement of
the Project (except for lettering on the door or doors to the
Premises as allowed by the Rules and Regulations attached as Exhibit
D) without the prior consent of Landlord.
(d) Tenant may not knowingly use the Premises in any way or for any
purpose that:
OFFICE LEASE
EXHIBIT D Page 1
(1) Landlord deems hazardous on account of the possibility of fire
or other casualty;
(2) increases the rate of fire or other insurance for the Project
or its contents or in respect of the operation of the Project;
or
(3) renders the Project 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
Project.
If insurance premiums are increased because of Tenant's use of the
Premises, then, in addition to any other remedies Landlord may have,
Tenant shall pay the amount of the increase to Landlord as additional Rent
within 30 days after Landlord's written demand so long as written evidence
reasonably satisfactory to Tenant of such increased cost and the basis
therefore is provided to Tenant within thirty (30) days of the earlier of
Tenant's request therefore or Landlord's receipt thereof.
2. No birds, animals, reptiles, or any other creatures may be brought into or
about the Project.
3. Nothing may be swept or thrown into the corridors, halls, elevator shafts,
or stairways.
4. Tenant may not make any improper noises in the Building, create a
nuisance, or do anything which, in Landlord's sole judgment, unreasonably
interferes in any way with other tenants or persons having business with
them.
5. Except as otherwise contemplated by the Construction Documents, no
equipment of any kind may be operated on the Premises that could in any
way unreasonably annoy any other tenant in the Building.
6. Tenant shall cooperate with Building employees in keeping the Premises
neat and clean.
7. Corridor doors, when not in use, must be kept closed.
8. No bicycles or similar vehicles are allowed in the Building.
9. Except as otherwise provided to the contrary in this Lease and other than
with respect to the Tenant Finish Work, alterations, improvements, and
additions in and to the Premises requested by Tenant must be made in
accordance with plans and specifications approved in advance 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:
(a) Each contractor and subcontractor must deliver evidence satisfactory
to Landlord that the insurance specified on Exhibit E is in force
prior to commencing work.
(b) Tenant shall use reasonable efforts to ensure that all workers are
cooperative with Project personnel and comply with all Project Rules
and Regulations.
(c) Tenant must deliver to Landlord evidence that Tenant has obtained all
necessary governmental permits and approvals for the improvements or
alterations prior to starting any work.
OFFICE LEASE
EXHIBIT D Page 2
(d) 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.
(e) Lien releases from each contractor and subcontractor must be
submitted to Landlord within 15 days after completion of the work
performed by the contractor or subcontractor.
(f) Other than with respect to the Tenant Finish Work, within 30 days
after completion of any improvements or alterations, Tenant, at its
cost, shall deliver to Landlord 2 reproducible copies of "as-built"
plans and specifications (1/8" scale) for each floor where
alterations or improvements were made.
10. Tenant shall refer all contractors, contractor's representatives, and
installation technicians rendering any service on or to the Premises for
Tenant (pursuant to paragraph 14 of the Lease) to Landlord for Landlord's
approval and supervision for performance of any contractual service, other
than the installation of telephones, telephone equipment, office
equipment, or computer or telephone wiring.
11. No nails, hooks, or screws may be driven into or inserted in any part of
the Building (other than the Premises) except by Building maintenance
personnel.
12. Sidewalks, doorways, vestibules, halls, stairways, and similar areas may
not be obstructed by any Tenant Party, or used for any purpose other than
ingress and egress to and from the Premises, or for going from one part of
the Building to another part of the Building. No furniture may be placed
in front of the Building or in any lobby or corridor without prior consent
of Landlord.
13. Except as otherwise provided to the contrary in this Lease, any Tenant
Party who desires to enter the Building after Building Standard Hours, is
required to sign in upon entry and sign out upon leaving, giving the
location during their stay and their time of arrival and departure.
14. All deliveries must be made via the service entrance and service elevator
during normal working hours or at other times as Landlord may determine.
Prior approval must be obtained from the Landlord for all deliveries that
must be received after Building Standard Hours.
15. Subject to the terms of Section 23 of the Lease, Landlord or its agents or
employees may enter the Premises to examine the same or to make repairs,
alterations, or additions as Landlord deems necessary for the safety,
preservation, or improvement of the Building.
16. Landlord may require all Tenant Parties to evacuate the Building in the
event of an emergency or catastrophe.
17. Tenant may not knowingly do anything, in or about the Building, or bring
or keep anything in the Building that in any way increases the possibility
of fire or other casualty, or do anything in conflict with the valid laws,
rules, or regulations of any governmental authority.
18. No food may be distributed from Tenant's office without the prior approval
of the Building Manager.
19. Except as otherwise provided to the contrary in this Lease, (i) no
additional locks may be placed on any doors without the prior consent of
Landlord, (ii) all necessary keys must be furnished by Landlord and must
be surrendered to Landlord upon termination of this Lease, and (iii)
Tenant shall then give Landlord the combination for all locks on the doors
and vaults.
OFFICE LEASE
EXHIBIT D Page 3
20. Except as otherwise provided to the contrary in this Lease, Tenant shall
comply with parking rules and regulations as may be posted and distributed
from time to time.
21. Plumbing and appliances may be used only for the purposes for which
constructed. No sweeping, rubbish, rags, or other unsuitable material may
be thrown or placed therein. Any stoppage or damage resulting to any
fixtures or appliances from misuse by any Tenant or Party is payable by
Tenant.
22. Except as otherwise provided to the contrary in this Lease, no signs,
posters, advertisements, or notices may be painted or affixed on any
windows, doors, or other parts of the Building, except in colors, sizes,
and styles, and in places, approved in advance by Landlord. Landlord has
no obligation or duty to give this approval. Building standard suite
identification signs will be prepared by a sign writer approved by
Landlord. The cost of the Building standard signs is payable by Tenant.
Landlord may remove all unapproved signs without notice to Tenant, at the
expense of Tenant. Directories will be placed by Landlord, at Landlord's
expense, in conspicuous places in the Building. No other directories are
permitted.
23. No portion of the Building may be used as lodging rooms or for any immoral
or unlawful purposes.
24. Except as otherwise provided to the contrary in this Lease, Tenant may not
operate any coin or token operated vending machine or similar device for
the sale of any goods, wares, merchandise, food, beverages, or services,
including but not limited to pay lockers, pay toilets, scales, amusement
devices and machines for the sale of beverages, foods, candy, cigarettes
or other commodities, without the prior consent of Landlord.
25. Except as otherwise provided to the contrary in this Lease, Tenant must
obtain Landlord's prior approval, which is at Landlord's sole discretion,
for installation of any solar screen material, window shades, blinds,
drapes, awnings, window ventilators, or other similar equipment and any
window treatment of any kind whatsoever. Landlord may control all internal
lighting that is visible from the exterior of the Building and may change
any unapproved lighting without notice to Tenant at Tenant's expense.
26. Holidays are New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving, and Christmas. Business days are weekdays other than
holidays.
27. Tenant shall not knowingly permit any of its Tenant Party to hold, carry,
smoke, or dispose of a lighted cigar, cigarette, pipe, or any other
lighted smoking equipment in any common area of the Buildings, unless
designated as a "smoking area" by Landlord. The common areas includes, but
are not limited to, all rest rooms, common corridors, stairwells, elevator
lobbies, first floor lobbies, and other areas used in common with other
tenants and occupants of the Buildings.
28. Tenant shall notify the Building Manager when any furnishings or equipment
are to be taken into or out of the Building. Moving of those items must be
done under the supervision of the Building Manager, after receiving
approval from Landlord.
29. Landlord may prescribe the weight and position of safes and other heavy
equipment that may overstress any portion of the floor. All damage done to
the Building by the improper placing of heavy items that overstress the
floor will be repaired at the sole expense of the Tenant.
OFFICE LEASE
EXHIBIT D Page 4
30. The persons employed to move Tenant's equipment, material, furniture, or
other property in or out of the building must be acceptable to Landlord.
The moving company must be a locally recognized professional mover, whose
primary business is the performing of relocation services, and must be
bonded and fully insured. A certificate or other verification of such
insurance must be received and approved by Landlord prior to the start of
any moving operations. Insurance must be sufficient, in Landlord's sole
opinion, to cover all personal liability, theft or damage to the project,
including but not limited to floor coverings, doors, walls, elevators,
stairs, foliage, and landscaping. Special care must be taken to prevent
damage to foliage and landscaping during adverse weather. All moving
operations will be conducted at such times and in such a manner as
Landlord will direct, and all moving will take place during non-business
hours unless Landlord agrees in writing otherwise. Tenant will be
responsible for the provision of building security during all moving
operations, and will be liable for all losses and damages sustained by any
party as a result of the failure to supply adequate security. Landlord
will have the right to prescribe the weight, size, and position of all
equipment, materials, furniture, or other property brought into the
building. Heavy objects will, if considered necessary by Landlord, stand
on wood strips of such thickness as is necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any
such property from any cause, and all damage done to the building by
moving or maintaining such property will be repaired at the expense of
Tenant. Landlord reserves the right to inspect all such property to be
brought into the building and to exclude from the building all such
property which violates any of these rules and regulations or the lease of
which these rules and regulations are a part. Supplies, goods, materials,
packages, furniture, and all other items of every kind delivered to or
taken from the Premises will be delivered or removed through the entrance
and route designated by Landlord, and Landlord will not be responsible for
the loss or damage of any such property unless such loss or damage results
from the negligence of Landlord, its agents, or employees.
31. Landlord will have the right to prohibit any advertising by Tenant
mentioning the building that, in Landlord' reasonable opinion, tends to
impair the reputation of the building or its desirability as a building
for offices, and upon written notice from Landlord, Tenant will refrain
from or discontinue such advertising.
32. Each Tenant will store all its trash and garbage within its premises. No
material will be placed in the trash boxes or receptacles if such material
is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage without
being in violation of any law or ordinance governing such disposal. All
garbage and refuse disposal will be made only through entryways and
elevators provided for such purposes and at such times as Landlord
designates. Removal of any furniture or furnishings, large equipment,
packing crates, packing materials, and boxes will be the responsibility of
each Tenant and such items may not be disposed of in the building trash
receptacles nor will they be removed by the building's janitorial service,
except at Landlord's sole option and at the Tenant's expense. No
furniture, appliances, 'equipment, or flammable products of any type may
be disposed of in the building trash receptacles.
33. Canvassing, peddling, soliciting, and distributing handbills or any other
written materials in the building are prohibited, and each Tenant will
cooperate to prevent the same.
34. The requirements of the Tenants will be attended to only upon application
by written, personal, or telephone notice at the office of the building.
Employees of Landlord will not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord.
35. A directory of the building will be provided for the display of the name
and location of Tenants only and such reasonable number of the principal
officers and employees of Tenants as Landlord in its sole discretion
approves, but landlord will not in any event be obligated to furnish more
than six (6) directory strips for each Tenant. Any additional names(s)
OFFICE LEASE
EXHIBIT D Page 5
that Tenant desires to place in such directory must first be approved by
Landlord, and if so approved, Tenant will pay to Landlord a charge, set by
Landlord, for each such additional name. All entries on the building
directory display will conform to standards and style set by Landlord in
its sole discretion. Space on any exterior signage will be provided in
Landlord's sole discretion. Except as otherwise provided to the contrary
in this Lease, no Tenant will have any right to the use of any exterior
sign.
36. Tenant will see that the doors of the premises are closed and locked and
that all water faucets, water apparatus, and utilities are shut off before
Tenant or Tenant's employees leave the premises, so as to prevent waste or
damage, and for any default or carelessness in this regard Tenant will
make good all injuries sustained by other Tenants or occupants of the
building or Landlord. On multiple-tenancy floors, all Tenants will keep
the doors to the building corridors closed at all times except for ingress
and egress.
37. Except as otherwise provided to the contrary in this Lease, neither
Landlord nor any operator of the parking areas within the project, as the
same are designated and modified by Landlord, in its sole discretion, from
time to time (the "parking areas") will be liable for loss of or damage to
any vehicle or any contents of such vehicle or accessories to any such
vehicle, or any property left in any of the parking areas, resulting from
fire, theft, vandalism, accident, conduct of other users of the parking
areas and other persons, or any other casualty or cause. Further, Tenant
understands and agrees that: (a) Landlord will not be obligated to provide
any traffic control, security protection or operator for the parking
areas; (b) Tenant uses the parking areas at its own risk; and (c) Landlord
will not be liable for personal injury or death, or theft loss of, or
damage to property, except as otherwise provided to the contrary in this
Lease. Tenant waives and releases Landlord from any and all liability
arising out of the use of the parking areas by Tenant, its employees,
agents, invitees, and visitors, whether brought by any of such persons or
any other person, except as otherwise provided to the contrary in this
Lease.
38. Tenant (including Tenant's employees, agents, invitees, and visitors) will
use the parking spaces solely for the purpose of parking passenger model
cars, small vans, and small trucks and will comply in all respects with
any rules and regulations that may be promulgated by Landlord from time to
time with respect to the parking areas. The parking areas may be used by
Tenant, its agents, or employees, for occasional overnight parking of
vehicles. Tenant will ensure that any vehicle parked in any of the parking
spaces will be kept in proper repair and will not leak excessive amounts
of oil or grease or any amount of gasoline. If any of the parking spaces
are at any time used (a) for any purpose other than parking as provided
above; (b) in any way or manner reasonably objectionable to Landlord; or
(c) by Tenant after, an Event of Default by Tenant under the lease,
Landlord, in addition to any other rights otherwise available to Landlord,
may consider such default any event of default under the lease.
39. Tenant's right to use the parking areas will be in common with other
Tenants of the project and with other parties permitted by Landlord to use
the parking areas. Except as otherwise provided to the contrary in this
Lease, Landlord reserves the right to assign and reassign, from time to
time, particular parking spaces for use by persons selected by Landlord.
Tenant will not park in any numbered space or any space designated as:
RESERVED, HANDICAPPED, VISITORS ONLY, or LIMITED TIME PARKING (or similar
designation).
40. Landlord may rescind any of these Rules and Regulations and make other
future Rules and Regulations as in the judgment of Landlord are from time
to time needed for the safety, protection, care, and cleanliness of the
Building, the operation thereof, the preservation of good order therein,
and the protection and comfort of its tenants, their agents, employees,
and invitees so long as Landlord provides Tenant with reasonable notice of
any proposed changes or amendments to such rules and regulations. Those
OFFICE LEASE
EXHIBIT D Page 6
rules, when made and notice thereof given to a tenant are binding upon the
Tenant in the same manner as the original rules; provided, however, that
no rules and regulations (including those set forth in this Exhibit D) are
inconsistent with the terms and provisions of this Lease and all shall be
uniformly applicable to all tenants and occupants of the Project and shall
be enforced by Landlord on a non-discriminatory basis.
OFFICE LEASE
EXHIBIT D Page 7
EXHIBIT D-1
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
JANITORIAL SPECIFICATIONS
SERVICE SCHEDULE
RESTROOMS
Daily Service:
1. The floors will be mopped and disinfected.
2. All fixtures will be scoured and disinfected and dry polish.
3. All mirrors will be washed and dry polished.
4. The stall partitions will be spot cleaned where necessary.
5. All dispensers such as hand soap, paper towels and toilet tissue will be
filled.
6. All waste receptacles will be emptied, cleaned and the trash removed.
Monthly Service:
1. The stall partitions, walls, sills, etc., will be thoroughly scoured and
polished clean.
2. The hard surface floors will be machine scrubbed and rinsed clean.
PUBLIC AREAS
Daily service:
1. All carpeted areas will be vacuumed.
2. Hard surface and resilient floors will be swept with a treated dustmop.
Main lobby will be polished daily.
3. All drinking fountains will be cleaned and dry polished.
4. All entry glass doors will be cleaned and metal work spot cleaned.
5. Elevator floors will be vacuumed.
6. The metal work in all elevators is to be polished nightly.
7. All walls will be spot cleaned to eliminate smudges, writing, etc.
8. All trash receptacles, ash trays or containers will be emptied and
cleaned.
9. Stairwells will be swept.
Weekly Service:
OFFICE LEASE
EXHIBIT D-1 Page 8
1. All hard surface or resilient floors will be polished.
2. All elevator tracks will be thoroughly vacuumed and polished.
3. All ducts, grills, vents, etc., will be cleaned on a continuous rotating
basis to keep clean at all times.
4. Stairwells will be swept and dusted.
OFFICE AREA
Daily Service:
1. All waste receptacles will be emptied.
2. All ash trays will be emptied and cleaned.
3. All resilient floors will be dust mopped with a treated mop.
4. All furniture and furnishings will be dusted.
5. The carpeting will be vacuumed daily and spot cleaned where necessary and
possible.
6. The partition glass will be spot cleaned.
7. Trash will be removed from containers in the building and placed in a
refuse area for pick-up.
8. All door glass will be cleaned.
9. The low ledges, ▇▇▇▇▇, rails, etc., will be dusted as needed.
10. Desks with glass tops will be washed and polished dry.
11. Emergency cleaning such as spillage, etc., will be performed as required.
12. All lights will be turned off upon completion of the work in the area.
Monthly Service:
1. The paneling will be dusted where applicable.
2. All picture glass and frames will be dusted and cleaned.
3. High dusting such as door tops, partition tops, high ledges, etc., will be
performed.
4. All project work such as blinds, grills, vents-ducts, etc., are to be
cleaned on a continuous rotating basis.
5. Hard surface floors will be polished or waxed, if needed but at least
bi-annually.
OFFICE LEASE
EXHIBIT D-1 Page 9
EXHIBIT E
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
CONTRACTOR INSURANCE REQUIREMENTS
All contractors, subcontractors, suppliers, service providers, moving companies,
and others performing work of any type for Tenant in the Project shall:
o carry the insurance listed below with companies acceptable to
Landlord; and
o furnish Certificates of Insurance to Landlord evidencing required
coverages at least 10 days prior to entry in the Project and
annually thereafter.
Certificates of Insurance must provide for 30 days' prior written notice of
cancellation, non-renewal or material reduction in coverage to Landlord, c/o
Sandler Southwest Corp., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Manager).
1. Workers Compensation: Statutory coverage in compliance with Workers
Compensation Laws of the state in which the Project is located.
2. Employers' Liability: With the following minimum limits of liability:
$100,000 Each Accident
$500,000 Disease-Policy Limit
$100,000 Disease-Each Employee
3. Commercial General Liability (1986 ISO Form or its equivalent): This
Insurance must provide contractual liability and a general aggregate limit
on a per location or per project basis. The minimum limits must be
$2,000,000 general aggregate and $1,000,000 per occurrence.
4. Automobile Liability: Insurance for claims arising out of ownership,
maintenance, or use of owned, non-owned, and hired motor vehicles at,
upon, or away from the Project with the following minimum limits:
$1,000,000 Each Accident Single Limit Bodily Injury and Property
Damage combined
OFFICE LEASE
EXHIBIT E Page 1
5. Umbrella: At least Following Form liability insurance, in excess of the
Commercial General Liability, Employers Liability, and Automobile
Insurance above, with the following minimum limits:
$3,000,000 Each Occurrence
$3,000,000 Aggregate - Where Applicable
6. General Requirements: All policies must be:
o written on an occurrence basis and not on a claims-made basis;
o except for the workers compensation insurance, endorsed to name as
additional insureds Landlord, Manager, and their respective
officers, directors, employees, agents, partners, and assigns; and
o endorsed to waive any rights of subrogation against Landlord,
Manager, and their respective officers, directors, employees,
agents, partners, and assigns.
OFFICE LEASE
EXHIBIT E Page 2
EXHIBIT F - ESTOPPEL CERTIFICATE
____________, 19___
___________________
___________________
___________________
Re: Office Lease dated ____________, 199_, between _________________
(Landlord), and _______________________________ (Tenant), a
____________________ (as amended, the Lease)
____________________________,____________, Texas (the Building)
Dear _______:
Tenant understands that you are purchasing the Project from Landlord and are
relying on this Estoppel Certificate in making your purchase.
For $10.00 and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Tenant certifies that:
7. Tenant is occupying and conducting business in the Premises.
8. The Minimum Rent under the Lease is $___________________ per month payable
in advance on the first day of each calendar month. Minimum Rent is paid
through ___________ 1, 19___.
9. The Lease is in full force and effect and Tenant has not assigned or
subleased its interest in the Lease except as specified on Schedule A
attached to this Estoppel Certificate.
10. A true and correct copy of the Lease and all amendments thereto is
attached as Schedule B to this Estoppel Certificate.
11. The Lease is the entire agreement between Landlord and Tenant concerning
the Premises.
12. The Lease Term expires on ______________, 19___.
13. Landlord has satisfied all of its obligations regarding the installation
of leasehold improvements, except as specified on Schedule A.
14. To the best knowledge of Tenant, after due inquiry, no Event of Default by
Tenant or default by Landlord has occurred under the Lease and is
continuing and no act or omission has occurred that with the giving of
notice or passage of time or both would constitute an Event of Default by
Tenant except as specified on Schedule A.
SCHEDULE A
15. Tenant is not entitled to any abatements, setoffs, or deductions from Rent
under the Lease except as specified in Schedule A.
16. No Rent has been paid more than one month in advance.
Defined terms in the Lease have the same meanings in this Estoppel Certificate.
BY:
Name:
Title:
SCHEDULE A
SCHEDULE A
1. List any assignments or subleases or state NONE:
2. List any Events of Default by Tenant or defaults by Landlord that have
occurred and are continuing or any acts or omissions that have occurred
that with the giving of notice or passage of time or both would constitute
an Event of Default by Tenant or state NONE:
3. List any abatements, setoffs, or deductions from Rent to which Tenant is
entitled at this time or state NONE:
SCHEDULE A
SCHEDULE B
COVER PAGE FOR COPIES OF LEASE AND AMENDMENTS
SCHEDULE B Solo Page
[EXHIBIT G]
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord
and
Denbury Resources, Inc., as Tenant
FLOOR PLANS OF THE FIRST NOTICE SPACE AND EXPANSION SPACE
EXHIBIT G - FLOOR PLANS OF THE FIRST NOTICE SPACE AND EXPANSION SPACE Page 1
---------------------------------------------------------------------
EXHIBIT H
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord,
and
Denbury Resources, Inc., as Tenant
GUARANTY
As a material inducement to Landlord to enter into the Lease, dated
___________________, 1997 (the "Lease"), between Denbury Management, Inc., a
Texas corporation, as Tenant, and Sandler Legacy, Ltd., a Texas limited
partnership, as Landlord, the undersigned ("Guarantor") unconditionally and
irrevocably guarantees the complete and timely performance of each obligation of
Tenant under the Lease and any extensions or renewals of and amendments to the
Lease. This Guaranty is an absolute, primary, continuing, and general guaranty
of payment and performance and is independent of Tenant's obligations under the
Lease. Guarantor waives any right to require Landlord to (a) join Tenant with
Guarantor in any suit arising under this Guaranty, (b) proceed against or
exhaust any security given to secure Tenant's obligations under the Lease, or
(c) pursue or exhaust any other remedy in Landlord's power. Landlord may,
without notice or demand and without affecting Guarantor's liability hereunder,
from time to time, compromise, extend or otherwise modify any or all of the
terms of the Lease. Guarantor waives all demands for performance, notice of
performance, and notice of acceptance of this Guaranty. The liability of
Guarantor under this Guaranty will not be affected by (1) the release or
discharge of Tenant from, or impairment, limitation or modification of, Tenant's
obligations under the Lease in any bankruptcy, receivership, or other debtor
relief proceeding, whether state or federal or whether voluntary or involuntary;
(2) the rejection or disaffirmance of the Lease in any such proceeding; or (3)
the cessation from any cause whatsoever of the liability of Tenant under the
Lease. Guarantor shall pay to Landlord all costs incurred by Landlord in
enforcing this Guaranty (including, without limitation, reasonable attorneys'
fees and expenses). Landlord shall not enforce this Guaranty against Guarantor
unless an Event of Default under the Lease has occurred and is continuing.
DENBURY RESOURCES, INC., a
Canadian corporation
By:________________________________
Name:______________________________
Title:_____________________________
EXHIBIT H - GUARANTY Page 1
--------------------
EXHIBIT I
to Office Lease by and between
Sandler Legacy, Ltd., as Landlord,
and
Denbury Resources, Inc., as Tenant
ASSIGNMENT AND ASSUMPTION OF AGREEMENT OF SALE
THIS ASSIGNMENT AND ASSUMPTION OF AGREEMENT OF SALE (this
"Assignment") is made and entered into this 6th day of August, 1997, by and
between DENBURY MANAGEMENT, INC. ("Assignor"), as assignor, and SANDLER LEGACY,
LTD. ("Assignee"), as assignee.
W I T N E S S E T H:
WHEREAS, Assignor has heretofore entered into a certain Agreement of
Sale, dated effective as of July 14, 1997, with Electronic Data Systems
Corporation, a Delaware corporation ("Seller"), as amended from time to time
(the Agreement of Sale, as amended from time to time, hereinafter referred to as
the "Contract"), pursuant to the terms of which, among other things, (i)
Assignor has agreed to purchase from Seller and Seller has agreed to sell to
Assignor the Property, and (ii) Assignor has obtained an option to purchase the
Option Property from Seller;
WHEREAS, Paragraph 9 in the Contract states, inter alia, that
Assignor shall have the right at Closing to designate a Nominee to take title to
the Property, provided that Assignor meets the Assignment Conditions;
WHEREAS, Assignor desires to assign to Assignee and Assignee desires
to take from Assignor all of Assignor's rights, titles, interests, obligations
and responsibilities created by reason of the Contract relating to the Property,
but specifically excluding Assignor's rights, titles and interests in the Option
and the Option Property and provisions of the Contract relating thereto;
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration in hand paid by Assignee to
Assignor, the receipt and sufficiency of which are hereby acknowledged and
confessed, Assignor and Assignee do hereby agree as follows:
1. All capitalized terms not defined herein shall have the meanings
ascribed to them in the Contract.
2. Assignor does hereby assign, transfer, sell, convey and set over
to Assignee, its successors and assigns, all of the rights, titles,
interests, obligations and responsibilities of Assignor as purchaser
(including any and all ▇▇▇▇▇▇▇ Money or other amounts previously paid by
Assignor) under the Contract relating to the Property, but specifically
excluding Assignor's rights, titles and interests in the Option and the
Option Property and provisions of the Contract relating thereto; TO HAVE
AND TO HOLD the same unto Assignee, its successors and assigns forever.
Assignee shall be the Nominee under the Contract.
REDAL:117086.2 28040-00001
1
3. Assignor does authorize and empower Assignee, upon Assignee's
performance of the terms and conditions contained in the Contract, to
enforce the performance of the terms and conditions contained in the
Contract relating to the Property to be performed by Seller and demand and
receive from Seller the Deed and all other documents and matters
covenanted to be given to the Assignor in the Contract relating to the
Property, in the same manner and to all intents and purposes as Assignor
itself could do were this Assignment not executed and made.
4. By accepting this Assignment and by its execution hereof, Assignee
assumes the payment and performance of, and agrees to pay, perform and
discharge, all the debts, duties and obligations of Assignor arising out
of the Contract relating to the Property. Assignor agrees to reimburse
Assignee for the incremental increases in Assignee's cost of inspecting
the Property by virtue of simultaneously inspecting the Option Property.
Assignee agrees to indemnify, hold harmless and defend Assignor from and
against any and all loss, cost and expense (including, without limitation,
reasonably attorneys' fees) resulting by reason of the failure of Assignee
to pay, perform or discharge any of the debts, duties or obligations
assumed or agreed to by Assignee hereunder.
5. Assignor and Assignee hereby certify that the copy of the Office
Lease (the "Lease") made and entered into by and between Assignee, as
landlord, and Assignor, as tenant, dated August 6, 1997, attached hereto
as Schedule 1 and made a part hereof for all purposes, is a true, correct
and complete copy of the Lease and that the Lease is in full force and
effect and has not been modified.
6. Notwithstanding anything to the contrary contained in this
Assignment, Assignee shall not succeed to the rights or obligations of
Assignor with respect to the Option or the Option Property.
7. Within three (3) business days after Seller has executed this
Assignment, Assignee shall pay to Assignor in immediately available funds
(i) the amount of the ▇▇▇▇▇▇▇ Money and interest accrued thereon through
the date of this Assignment, and (ii) all of Assignor's attorneys' fees
and expenses incurred prior to the execution of this Assignment in
connection with the negotiation and execution of the Contract in the
amount of $8,279.90.
8. All of the covenants, terms and conditions set forth herein shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
REDAL:117086.2 28040-00001
2
EXECUTED as of the day and year first above written.
ASSIGNOR:
DENBURY MANAGEMENT, INC.
a Texas corporation,
By:___________________________________
Name:_________________________________
Title:________________________________
Date of Execution:____________________
ASSIGNEE:
SANDLER LEGACY, LTD.,
a Texas limited partnership,
By:___________________________________
Name:_________________________________
Title:________________________________
Date of Execution:____________________
Seller hereby executes this Assignment solely for the purposes of acknowledging
the satisfaction of the Assignment Conditions and evidencing its approval of and
consent to Assignee (as Nominee under the Contract) and this Assignment and for
no other purposes.
SELLER:
ELECTRONIC DATA SYSTEMS CORPORATION,
a Delaware corporation,
By:___________________________________
Name:_________________________________
Title:________________________________
Date of Execution:____________________
REDAL:117086.2 28040-00001
3
The Title Company hereby acknowledges receipt of this Assignment and Assignee as
Nominee under the Contract.
TITLE COMPANY:
REPUBLIC TITLE OF TEXAS, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date of Execution:___________________
REDAL:117086.2 28040-00001
4
SCHEDULE 1
The Lease
REDAL:117086.2 28040-00001
5