EXHIBIT 10.9
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ONE HANOVER PARK
LEASE AGREEMENT
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TABLE OF CONTENTS
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1. Definitions and Basic Provisions......................................... 1
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2. Lease of Premises; Parking Privileges; Sign Rights....................... 2
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3. Services by Landlord..................................................... 3
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4. Adjustment of Base Rental................................................ 4
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5. Electricity.............................................................. 6
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6. Payments and Performance................................................. 7
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7. Installation of Improvements; ADA Compliance............................. 7
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8. Early Occupancy.......................................................... 8
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9. Limited Right to Calculate Rentable Space; Subsequent Liquidation........ 8
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10. Repairs and Reentry...................................................... 9
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11. Alterations and Additions by Tenant; Security System; Rooftop Satellite
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Dish..................................................................... 9
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12. Entry for Repairs and Inspection......................................... 10
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13. Mechanic's Liens......................................................... 10
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14. Tenant's Use............................................................. 10
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15. Laws and Regulations; Rules of the Building.............................. 11
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16. Indemnity, Liability and Loss or Damage.................................. 11
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17. No Subrogation; Insurance................................................ 12
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18. Fire and Casualty........................................................ 12
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19. Condemnation............................................................. 13
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20. [Intentionally Deleted].................................................. 13
21. Assignment and Subletting................................................ 13
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22. Holding Over............................................................. 15
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23. Abandoned Property....................................................... 15
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24. Taxes.................................................................... 15
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25. Transfer of Landlord's Rights............................................ 16
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26. Default.................................................................. 16
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27. Security Deposit......................................................... 18
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28. Landlord's Lien and Security Interest.................................... 19
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29. Remedies................................................................. 20
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30. Joint and Several Liability.............................................. 20
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31. Constructive Eviction.................................................... 20
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32. Building Name............................................................ 20
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33. Subordination............................................................ 20
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34. Lease Certificates; Financial Statements................................. 21
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35. Limitation of Landlord Liability......................................... 22
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36. Consents................................................................. 22
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37. Notices.................................................................. 22
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38. Brokerage................................................................ 22
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39. Force Majeure............................................................ 22
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40. No Third Party Beneficiary............................................... 23
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41. Severability............................................................. 23
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42. Binding Effect........................................................... 23
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43. Applicable Law; Consent to Jurisdiction.................................. 23
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44. Entire Agreement; No Warranties.......................................... 23
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45. NO IMPLIED REPRESENTATIONS............................................... 23
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46. Effective Date; Counterparts; Telecopy Transmission...................... 23
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Exhibits and Rider
Exhibit A: Legal Description of the Land
Exhibit B: Floor Plan of the Premises
Exhibit C: Parking Privileges
Exhibit D: Leasehold Improvements Agreement
Exhibit E: Building Rules and Regulations
Exhibit F: Brokerage Agreement with ▇▇▇▇▇▇ International
Rider No. 1: Tenant's Option to Renew
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LEASE AGREEMENT
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THIS LEASE AGREEMENT (this "Lease") is entered into by the Landlord and
Tenant hereinafter named.
1. Definitions and Basic Provisions. The terms defined below shall have
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the respective meanings stated when used elsewhere in this Lease, and such terms
and the following basic provisions constitute an integral part of this Lease:
(a) "Landlord": INTERVEST-PARKWAY, LTD., a Texas limited partnership.
(b) "Tenant": ENTRUST, INC., a Maryland corporation.
(c) "Premises": certain space in an office building owned by Landlord (the
"Building") known as One Hanover Park, located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(sometimes also referred to as "North Dallas Parkway"), in the Town of Addison,
Texas, on a 5.692-acre tract of land (the "Land") situated in the Town of
Addison, Dallas County, Texas, described on Exhibit A attached hereto and made a
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part hereof for all purposes. The Premises is to be located on the eighth (8th)
floor of the Building, being referred to as Suite 800 and being all of the
Rentable Space on the eighth floor, and as shown on the floor plan attached
hereto as Exhibit B and made a part hereof for all purposes. Subject to
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Paragraph 9 below, the parties hereby agree that for purposes of this Lease the
Premises shall contain approximately 25,251 square feet of Rentable Space (as
defined below), and that there shall be approximately 195,194 square feet of
Rentable Space in the Building.
(d) "Lease Term": a period of eighty-six (86) months, commencing on the
later of January 1, 2002, or fifteen (15) days after the Substantial Completion
of the Landlord's Work described in Paragraph 1(b) of the Leasehold Improvements
Agreement attached hereto as Exhibit D (the later of such alternatives being
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hereinafter referred to as the "Commencement Date").
(e) "Base Rental": Subject to Paragraph 4 of this Lease, the Base Rental
shall be as follows:
Annual Base Rental
Per Square Foot
Months of Rentable Space Monthly Base Rental
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1 and 2 zero -0-
3 - 26 $24.50 $51,554.12
27 - 62 $25.50 $53,658.37
after 62 $26.50 $55,762.62
If the Commencement Date does not occur on the first day of a calendar month,
then "Month 1" in the above chart shall commence on the Commencement Date and
shall end one month later (e.g., assuming a Commencement Date of January 10,
2002, then "Month 1" in the above chart would end on February 9, 2002); and in
such event, the Base Rental for each calendar month during which the Base Rental
increases will be equal to the sum of (i) the product of the lower Base Rental
alternative times a fraction the numerator of which is the number of days in the
calendar month which occur during which the lower Base Rental applies and the
denominator of which is the total number of calendar days in the particular
calendar month, and (ii) the product of the higher Base Rental alternative times
a fraction the numerator of which is the number of days in the calendar month
which occur during which the higher Base Rental applies Lease Term and the
denominator of which is the total number of calendar days in the particular
calendar month. Tenant shall pay the Base Rental to Landlord, in care of
Landlord's Property Manager in the management office of the
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Building, being currently Suite 200 of the Building - or at such other place as
Landlord may designate from time to time in writing -- in monthly installments,
in advance and without demand on the first day of each calendar month during and
throughout the Lease Term.
(f) "Prepaid Rental": None.
(g) "Security Deposit": $334,575.72, of which $55,762.62 shall be paid by
Tenant to Landlord on the date of execution of this Lease, and $278,813.10 shall
be paid by Tenant to Landlord on or before January 5, 2002. The Security Deposit
shall be held by Landlord pursuant to the provisions of Paragraph 27 of this
Lease.
(h) "Sole Permitted Use": General office use (which may include limited
marketing activities, incidental storage and other incidental uses, but may not
include any manufacturing nor any research involving chemicals and/or other
physical materials), consistent with a reputable office building and subject to
Paragraph 14 and other relevant provisions of this Lease.
(i) "Base Expense Amount": The aggregate of annual "Operating Expenses"
(as defined in Paragraph 4 of this Lease) incurred in connection with the
Building during calendar year 2002.
(j) "Leasing Agents": Stream Realty Partners, L.P., Dallas, Texas
(representing Landlord) and ▇▇▇▇▇▇ International (representing Tenant). With
regard to ▇▇▇▇▇▇ International ("Tenant's Broker"), both Landlord and Tenant's
Broker hereby disclose to Tenant that a net profits interest in the Building is
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owned by Windjammer Equity Partners, a Texas general partnership which is
affiliated with ▇▇▇▇▇▇ Development Services, Inc. and ▇▇▇▇▇▇ Realty Group, Ltd.,
and that such entities are likewise affiliated with Tenant's Broker; and both
Landlord and Tenant hereby waive any conflict of interest with regard to
Tenant's Broker arising out of such net profits interest.
(k) "Property Manager": Transwestern Property Company, Dallas, Texas,
subject to change by Landlord upon written notice to Tenant.
(l) "Rentable Space": The total area attributable to a leased premises
within the Building, i.e., being deemed by the parties to be appropriate for
purposes of determining the Base Rental, the Allowance, rental adjustments, etc.
under this Lease, with such total attributed area being determined by (a) using
the American National Standard method for measuring Rentable Area in office
buildings, as described in the pamphlet entitled "Standard Method for Measuring
Floor Area in Office Buildings", published by the Building Owners and Managers
Association International (ANSI/BOMA Z65.1-1996), and then (b) adjusting the
floor-by-floor results thus achieved by the factor being used by Landlord to
more uniformly allocate to the tenants in the Building the first floor lobby,
the elevator lobbies and the other common areas of the Building.
(m) "Normal Business Hours": 7:00 a.m. until 6:00 p.m. on weekdays (except
holidays, as defined below), and from 8:00 a.m. until 1:00 p.m. on Saturdays
(except holidays). For purposes of this Lease, holidays are deemed to mean the
following:
January 1st New Years Day
Last Monday in May Memorial Day
July 4th Independence Day
First Monday in September Labor Day
Fourth Thursday in November
plus Friday following Thanksgiving Holidays
December 25th Christmas Day
2. Lease of Premises; Parking Privileges; Sign Rights. (a) In
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consideration of the obligation of Tenant to pay rent as provided in this Lease,
and in further consideration of the other terms, covenants and conditions of
this Lease, Landlord hereby leases to Tenant, and
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Tenant hereby takes from Landlord, the Premises for the Lease Term specified
herein, all upon and subject to the terms and conditions set forth in this
Lease. Landlord hereby covenants that Tenant, upon paying rent as herein
reserved, and performing all covenants and agreements contained in this Lease on
the part of Tenant, shall have quiet and peaceful possession of the Premises.
(b) In addition, at all times during the Lease Term, and conditioned upon
the Lease being in full force and effect and there being no uncured default
under this Lease by Tenant, Landlord hereby agrees to make parking privileges
available to Tenant, as explained on, and governed by, Exhibit C attached to
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this Lease. In this regard, Tenant acknowledges that in order for Landlord to be
able to comply with parking allotments for all tenants in the Building, Tenant
must assure that the aggregate of all parking utilized by Tenant, its owners,
officers, employees, agents and invitees, does not exceed the parking allotment
for Tenant as specified in Exhibit C.
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(c) In addition, commencing five (5) business days after the Effective
Date of this Lease and continuing for as long as Entrust, Inc. or any assignee
or subtenant of Entrust, Inc. which assumes such status after having complied
with Paragraph 21 below (any such party being hereinafter referred to as a
"Permitted Occupier") occupies at least 8,000 square feet of the Premises, such
Permitted Occupier - but only one party in the event more than one subtenant
occupies at least 8,000 square feet of the Premises - shall have the exclusive
right to fascia signage on the crown of the Building, with the Permitted
Occupier's fascia signage to be located solely on the northeastern portion of
the crown of the Building (i.e., in the same area as the "FINOVA" sign is
currently located). In order to exercise this right, Tenant will provide
Landlord with specifics regarding the exact location, manner of installation,
size, shape, specifications and design of the sign for Landlord's approval,
which shall not be unreasonably withheld or delayed; moreover, Tenant shall be
solely responsible for obtaining any and all necessary approvals from any city
government or other zoning or regulatory authority (as to which Landlord makes
no representations or warranties). The cost of Tenant's sign, as well as all
costs and liability incurred in removing the "FINOVA" sign and installing
Tenant's sign, shall be borne solely by Tenant; provided, however, that upon
final installation of Tenant's new sign, Landlord shall reimburse Tenant for the
reasonable portion of Tenant's cost which is attributable to the removal of the
"FINOVA" sign and whatever repairs to the Building were necessitated by such
removal of the "FINOVA" sign (i.e., the cost which Tenant would not have borne
if the "FINOVA" sign had not been in place). At the conclusion of the Lease
Term, if Landlord so requests, Tenant shall, at its sole expense, promptly
remove its sign and restore any damage caused to the Building by the sign.
3. Services by Landlord. At all times during the Lease Term, and
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conditioned upon the Lease being in full force and effect and there being no
uncured default under this Lease by Tenant, Landlord shall furnish the following
services to the Premises, all of such services to be at Landlord's cost and
expense except as specifically provided to the contrary elsewhere in this Lease:
(a) Cold and warm water at those points of supply provided for general use
of tenants in the Building.
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(b) Heated and refrigerated air conditioning in season during Normal
Business Hours and at such temperatures and in such amounts as are reasonably
considered by Landlord to be standard and as is consistent in quality and
quantity as furnished in other comparable quality office buildings in the
vicinity of the Building. Such services at all other times and on Sundays and
holidays shall be furnished only at the request of Tenant, who shall bear the
entire cost thereof (with Landlord hereby representing to Tenant that the
current cost to tenants in the Building of after-hours service is $55.00 per
hour for the eighth floor of the Building). Whenever machines or equipment that
generate abnormal heat and affect the temperature otherwise maintained by the
air conditioning system are used in the Premises, Landlord shall have the right
to install supplemental air conditioning units in the Premises; and the cost
thereof, including the cost of installation, operation, use and maintenance,
shall be paid by Tenant to Landlord promptly on demand.
(c) Elevator service in common with other tenants for ingress and egress
from the Premises, provided that Landlord may reasonably limit the number of
elevators to be in operation at times other than Normal Business Hours.
(d) Janitorial cleaning services as may, in the reasonable judgment of
Landlord, be required in the normal operation of the Building (but no less
frequently than five times per week).
(e) Electric current in the manner and to the extent reasonably deemed by
Landlord to be standard for office use.
The failure to any extent to furnish or any stoppage of these defined utilities
and services resulting from any cause whatsoever shall not render Landlord
liable in any respect for damages to either person, property or business, nor be
construed as an eviction of Tenant, nor entitle Tenant to any abatement of rent,
nor relieve Tenant from fulfillment of any covenant or agreement contained
herein. Should any malfunction of the Building improvements or facilities occur
for any reason, Landlord shall use reasonable diligence to repair same promptly.
Tenant shall have no claim for rebate or abatement of rent or damages on account
of such malfunction or of any interruptions in service occasioned thereby or
resulting therefrom; provided, however, that if any interruption or cessation of
service continues for ten (10) consecutive business days after written notice
from Tenant to Landlord (and to any mortgagee of Landlord of whom Tenant has
received written notice, designating a specific address for notice to such
mortgagee), identifying the problem with reasonable specificity and being
labeled "URGENT/IMMEDIATE ACTION REQUIRED" in all capital letters, and if such
interruption or cessation after the 10-business-day cure period causes the
Premises to be untenantable in the reasonable judgment of Tenant, then
notwithstanding any provision of this Lease to the contrary, Tenant's Base
Rental and Tenant's share of Operating Expenses under this Lease will ▇▇▇▇▇ as
of the eleventh (11th) business day and continue abated until the service is
resumed.
4. Adjustment of Base Rental. The Base Rental payable pursuant to this
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Lease shall be adjusted upward from time to time in accordance with the
following provisions:
(a) Tenant's Base Rental is based, in part, upon the assumption that
Landlord is contributing as its share of the annual Operating Expenses [as
defined in Paragraph 4(e) hereof] of the Building an amount up to the Base
Expense Amount. Tenant shall during the term of this Lease pay, as an adjustment
to Base Rental pursuant to this Lease, an amount equal to the product of the
following: (i) the excess (the "Excess"), if any, from time to time of the
annual Operating Expenses in the Building over the Base Expense Amount, times
(ii) a fraction, the numerator of which is the number of square feet of Rentable
Space in the Premises and the denominator of which is the number of square feet
of Rentable Space in the Building. At any time prior to or during any calendar
year of Tenant's occupancy, Landlord may make a good faith estimate of the
Excess, if any, for the current or immediately succeeding calendar year and upon
thirty (30) days' written notice to Tenant shall require the monthly payment of
Base Rental to be adjusted in accordance with such estimate. Tenant's
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proportionate share of any such estimated Excess shall be payable in equal
monthly installments over the remaining months of the calendar year after notice
of such estimate is delivered to Tenant. Any amounts paid based on such an
estimate shall be subject to adjustment pursuant to Paragraph 4(b) when actual
Operating Expenses are available for each calendar year.
(b) By April 1 of each calendar year during Tenant's occupancy, or as soon
thereafter as practical, Landlord shall furnish to Tenant a statement of
Landlord's actual Operating Expenses for the previous calendar year. If any
additional Base Rental collected for a prior year, as a result of Landlord's
estimate of the Excess, is in excess of the additional Base Rental actually due
during such prior year, then Landlord shall refund to Tenant any overpayment (or
at Landlord's option, apply such amount against rentals due or to become due
hereunder). Likewise, Tenant shall pay to Landlord, within forty-five (45) days
after having received a written invoice, any underpayment with respect to the
prior year.
(c) Tenant shall have the right at any time within 180 days after Tenant's
receipt of Landlord's statement of the previous year's Operating Expenses (but
not after such 180-day period), to perform an annual audit at Tenant's expense
on Landlord's books and records to the extent necessary to verify Landlord's
calculation of the Excess, if any, and Tenant's actual additional rent for such
previous year, provided (i) that such audit is conducted by a reputable,
independent certified public accounting firm, (ii) that the auditor's fee
structure is based upon an hourly rate (as opposed to a contingency fee
arrangement), (iii) that both Tenant and the auditor sign a confidentiality
agreement in favor of Landlord, agreeing not to disclose to any other party the
information obtained in the audit (subject to the requirements of litigation and
to exception for information which is clearly and obviously known to the public,
e.g., the number of floors in the Premises), and (iv) that the auditor's report
reflecting the results of such audit is promptly delivered to Landlord. Any such
audit shall be conducted, if at all, (A) within one hundred eighty (180) days
after Tenant's receipt of the annual statement from Landlord, (B) during
Landlord's normal business hours, (C) at the place in Dallas County, Texas,
where Landlord maintains its records (or such other place in such County as
Landlord shall deliver the appropriate records) and (D) only after Landlord has
received at least twenty (20) days prior written notice. If the audit report
reflects that Tenant was overcharged or undercharged in the audited calendar
year, and provided Landlord does not dispute the audit results within ninety
(90) days after having received a written copy of the audit report ("Landlord's
Review Period"), Tenant will within forty-five (45) days after Landlord's Review
Period pay to Landlord the amount of any underpayment or, if applicable,
Landlord shall pay to Tenant the amount of any overpayment. If the amount
evidenced by an audit performed on behalf of Tenant evidences that Tenant was
overcharged by more than 5% of the total amount for additional rent authorized
under this Lease, then if (1) Landlord fails to dispute such finding within
Landlord's Review Period, or (2) Landlord agrees with such finding or (3)
following a dispute of Tenant's audit by Landlord, the reconciled audits still
evidence that Tenant was overcharged by more than 5% of the additional rent
authorized under this Lease, Landlord will pay all of Tenant's reasonable costs
of Tenant's audit. Landlord, within Landlord's Review Period, may elect to
dispute Tenant's audit by giving written notice to Tenant of Landlord's
election. Upon giving notice of Landlord's dispute of Tenant's audit, Landlord
will retain a certified public accountant or other person experienced in
auditing operating expenses in office buildings to audit the additional rent;
and upon completion of said audit, Landlord's and Tenant's respective auditors
will meet to reconcile all material differences in the audit. Failure by Tenant
to exercise an audit right or Landlord to dispute any Tenant audit within the
specified time period or the failure of either party to otherwise fail to
contest or dispute the allocation of additional rent as provided above, is
deemed a waiver of the applicable audit or dispute right and any right to
contest the additional rent charges (undercharges or overcharges) for the
applicable Lease year and, accordingly, is deemed acceptance of the additional
rent charges as submitted to and reviewed by Tenant.
(d) Notwithstanding anything to the contrary contained herein, if the
Building is not fully occupied during any calendar year of the Lease Term,
Operating Expenses and the
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Excess for purposes of Paragraphs 4(a) and 4(b) hereof shall be determined as if
the Building had been fully occupied during such year and Operating Expenses had
been in an amount which would be normal if the Building were fully occupied. For
the purposes of this Lease, "fully occupied" shall mean (i) occupancy of 95% of
the Rentable Space in the Building if the occupancy of the Building is less than
95% of said Rentable Space, or (ii) the actual percentage of occupancy of the
net rentable space in the Building if the occupancy of the Building is equal to
or greater than 95% of said net rentable space.
(e) The term "Operating Expenses" shall mean all costs of management,
operation, and maintenance of the Land, the Building, the garage associated with
the Building, all other improvements on the Land and all appurtenances thereto,
as well as any Office Complex (defined below) of which the Building is a part,
including the costs of maintaining any common facilities allocated from time to
time to the Building, all accrued and based on an annual period consisting of a
calendar year, as determined by generally accepted accounting principles. By way
of illustration but not limitation, Operating Expenses shall include
expenditures for maintenance and repairs; a reasonable amortization of any
capital expenditures incurred by Landlord with a principal purpose to (i) effect
a reduction in the Operating Expenses of the Building, or (ii) keep the Building
in compliance with all applicable governmental rules and regulations from time
to time; assessments and governmental charges (including taxes on rents or
services); ad valorem property taxes with respect to such year; charges for
water, sewerage, and gas; cleaning, including supplies, janitorial services and
pest control; licenses, permits and inspection fees; refuse collection;
insurance; administrative expenses, including on-site and off-site (but if
off-site, equitably prorated to account for service to the Building) office rent
for not more than 1,174 square feet of leased premises (not to exceed the
general range of market rents, as such range may be from time to time, for
management offices of comparable size in comparable buildings in the vicinity of
the Building), salaries and other expenses for labor and management, office
equipment, telephone, and supplies; management fees payable by Landlord with
respect to the Land, Building and common facilities (not to exceed the general
range of a market management fees, as such range may be from time to time, for
management fees of comparable buildings in the vicinity of the Building); a
reasonable allocation of the salary and other compensation paid to persons
servicing the Building; fire protection; snow and ice removal; landscape
maintenance; professional services; and security (if and to the extent provided
by Landlord, i.e., with Landlord making no representation or warranty to Tenant
in this regard). If the Building is part of an office building complex (an
"Office Complex") owned by Landlord, or owned by one or more entities affiliated
with Landlord, then Landlord may allocate to the Building a reasonable
proportion of Operating Expenses incurred in connection with the Office Complex.
Notwithstanding anything to the contrary contained above, the following shall be
excluded from Operating Expenses: depreciation of the original construction of
the Building; capital expenditures other than those referenced in the previous
sentence; cost of Building alterations or renovations for other tenants in the
Building; electricity, advertising; commissions paid for leasing; cost of
repairs occasioned by fire, windstorm, or other casualty (but only to the extent
reimbursed by insurance proceeds); and wages, salaries, or other compensation
paid to any executive above the grade of building manager (i.e., with the
director of engineering and/or operations not being deemed to be included in
this proscription).
5. Electricity. (a) Tenant agrees that in addition to Tenant's obligations
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to pay Base Rental (Paragraph 1(e) of this Lease) and to make escalation
payments resulting from Operating Expenses (Paragraph 4 of this Lease), as well
as Tenant's obligations pursuant to other provisions in this Lease, Tenant shall
pay all electrical expenses attributable to the Premises, as follows: (i) if and
to the extent that all or portions of the Premises are separately metered for
electrical consumption, Tenant shall promptly pay all charges for electrical
consumption directly to the utility company which supplies electricity to the
Premises; (ii) for that portion of electrical consumption which is allocable to
rented space (e.g., within the Premises itself), Tenant shall promptly reimburse
Landlord for Tenant's prorata share (i.e., a fraction the numerator of which is
the Rentable Space in the Premises and the denominator of which is the Rentable
Space in all occupied leased premises in the Building) of such charges for
electrical consumption paid by Landlord to the utility company which supplies
electricity to
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the Building, and (iii) for all other electricity consumed in connection with
the Building, Tenant shall promptly reimburse Landlord for Tenant's prorata
share (i.e., a fraction the numerator of which is the Rentable Space in the
Premises and the denominator of which is the Rentable Space in the Building,
whether or not occupied) of such charges for electrical consumption paid by
Landlord to the utility company which supplies electricity to the Building;
moreover, with regard to Tenant's obligations pursuant to items (ii) and (iii)
above, Landlord may, either during or prior to any calendar year, make a good
faith reasonable estimate of the cost for such electrical consumption for the
current or immediately succeeding calendar year and Tenant's respective shares
of such total cost, and upon thirty (30) days' written notice to Tenant may
require the monthly payment of such estimated cost in advance. In such event,
Tenant's proportionate share of any such estimated cost shall be payable in
equal monthly installments over the remaining months of the calendar year after
notice of such estimate is delivered to Tenant. Any amounts paid based on such
an estimate shall be subject to adjustment between Landlord and Tenant (i.e., in
the same manner as the potential adjustment of Operating Expenses payments
pursuant to Paragraph 4(b) above) when actual costs are determined for the
applicable calendar year.
(b) Landlord hereby represents and warrants to Tenant that the electrical
equipment and facilities in the Building (i) are currently capable of supplying
to the Premises six (6) ▇▇▇▇▇ per square foot of Usable Area of the Premises,
with the Usable Area of the Premises to be determined by reference to the
American National Standard method for measuring Usable Area in office buildings,
as described in the pamphlet entitled "Standard Method for Measuring Floor Area
in Office Buildings," published by the Building Owners and Managers Association
International (ANSI/BOMA Z65.1-1996), such electrical capacity being "below
ceiling" and excluding HVAC, and (ii) can be made capable of supplying to the
Premises nine (9) ▇▇▇▇▇ per square foot of Usable Area of the Premises, provided
that Tenant incurs all costs associated with such expansion of capacity. Without
Landlord's prior written consent, Tenant shall not install any equipment in the
Premises that will exceed the capacity of the Building electrical system serving
the Premises.
6. Payments and Performance. Tenant agrees to pay all rents and sums
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provided to be paid by Tenant pursuant to this Lease at the times and in the
manner herein provided, without any setoff, deduction or counterclaim
whatsoever. Should this Lease commence on a day other than the first day of a
calendar month or terminate on a day other than the last day of a calendar
month, the rent for such partial month shall be proportionately reduced. The
Base Rental for the first partial month, if any, shall be payable at the
beginning of said period or as Prepaid Rental. The obligation of Tenant to pay
rentals is an independent covenant, and no act or circumstance whatsoever,
whether such act or circumstance constitutes a breach of covenant by Landlord or
not, shall release Tenant from the obligation to pay rentals. Time is of the
essence in the performance of all of Tenant's obligations hereunder. In the
event any rental is not received within ten (10) days after its due date for any
reason whatsoever, or if any rental payment is by check which is returned for
insufficient funds, then in addition to the past due amount Tenant shall pay to
Landlord a late charge in an amount equal to five percent (5%) of the rental
then due, in order to compensate Landlord for its administrative and other
overhead expenses. Any such late charge shall be payable on demand as additional
rental. In addition, if rental is paid by a check which is returned for
insufficient funds, Tenant shall immediately make the required payment to
Landlord in good funds; moreover, in such event Tenant shall also pay to
Landlord not only the late charge specified above in this Paragraph 6 (i.e., if
and to the extent that such dishonored check causes the rental to become past
due by more than ten days), but also an additional fee of $250.00 to compensate
Landlord for its expense and effort in connection with the dishonored check.
7. Installation of Improvements; ADA Compliance. All improvements to be
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installed in the Premises at the commencement of this Lease shall be installed
as specified in the Leasehold Improvements Agreement attached hereto as Exhibit
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D and made a part hereof. Tenant will assure that the plans and specifications
-
for its improvements, as well as its business operations within the Premises,
comply with the Americans With Disabilities Act of 1990, as amended, and all
related state and local laws (collectively, the "ADA"); and Landlord
7
agrees that the remainder of the Building, i.e., other than the Premises, shall
be in compliance with the ADA.
8. Early Occupancy. Landlord shall permit Tenant to occupy the Premises
---------------
prior to the Commencement Date, as soon as the Premises are ready for occupancy
(with Landlord hereby assuring Tenant that, subject to Paragraph 39 of this
Lease, Landlord anticipates that the Premises will be ready for Tenant's
occupancy no later than thirty-five days after the Effective Date of this
Lease); and if Tenant so occupies the Premises prior to the Commencement Date,
all of the terms and provisions of this Lease other than the obligation to pay
rent shall be in full force and effect upon Tenant's early occupancy; however,
notwithstanding such early occupancy, the Lease Term shall commence only on the
Commencement Date.
9. Limited Right to Calculate Rentable Space; Subsequent Liquidation. (a)
-----------------------------------------
Landlord and Tenant agree that at any time within sixty (60) days after the
Commencement Date of this Lease, either party may, at its sole expense, employ a
licensed architect to calculate the Rentable Space of the Premises and/or of the
Building. If the architect performing any such services should issue a written
statement within ninety (90) days after the date of this Lease, which indicates
that the Rentable Space specified for either the Premises or the Building should
be modified (a "Modification Statement"), and if the other party to this Lease
agrees with such Modification Statement, then Landlord and Tenant shall execute
a written Amendment to Lease confirming the mutually agreed information and the
appropriate rental adjustment which results from the corrected information
(e.g., increasing or decreasing the Base Rental proportionate with the increase
or decrease in the Rentable Space). If the architect performing any such
services should issue a Modification Statement within ninety (90) days after the
Commencement Date of this Lease, and if the other party to this Lease does not
agree with such Modification Statement, then the other party may, at its sole
expense, within sixty (60) days after the date of the Modification Statement,
employ a licensed architect to review and respond to the Modification Statement
(the "Response"). If the two architects fail to reach agreement within thirty
(30) days after the date of the Response, then they shall select a third
licensed architect (either by agreement between the two architects or, if they
fail to agree on the third architect, by requesting that the Dallas chapter of
the American Institute of Architects provide the third architect), with the fees
of the third architect to be shared equally by Landlord and Tenant. Upon
agreement between the two architects selected by the parties, or upon the final
decision of the third architect, Landlord and Tenant shall execute a written
Amendment to Lease confirming the final determination and, if necessary, the
appropriate rental adjustment.
(b) Notwithstanding anything contained in this Lease to the contrary, both
Landlord and Tenant acknowledge and confirm their mutual desire to have all
financial obligations under this Lease fixed and liquidated as soon as possible
so that they can account for and plan such obligations with greater certainty.
Accordingly, the parties agree that if neither party employs a licensed
architect to perform any of the above-listed services within sixty (60) days
after the Commencement Date of this Lease, or if no Modification Statement is
delivered within ninety (90) days after the Commencement Date of this Lease,
then the provisions of Paragraph 9(a) shall be null and void and of no further
force or effect; and in such event (i) so that both parties to this Lease can be
assured that they will not have to expend monies for professional fees regarding
Rentable Space determinations after the deadlines established in Paragraph 9(a),
they hereby agree that the Rentable Space for the Premises and for the Building,
as specified in Paragraph 1(c) above, shall conclusively be deemed to be
applicable to this Lease; and (ii) so that both parties to this Lease can be
assured as to their financial obligations after the deadlines established in
Paragraph 9(a), they further agree that Base Rental, the Allowance, rental
adjustments and all other aspects of this Lease which are based in whole or in
part upon Rentable Space shall be deemed to be liquidated and no longer subject
to adjustment based upon inaccuracies and/or errors, if any, in the Rentable
Space determinations specified in Paragraph 1(c).
8
10. Repairs and Reentry. Tenant will, at Tenant's own cost and expense,
-------------------
maintain and keep the Premises and any alterations and additions thereto in
sound condition and good repair, and shall pay for the repair of any damage or
injury done to the Building or any part thereof by Tenant or Tenant's agents,
employees and invitees; provided, however, that Tenant shall make no repairs to
the Premises without the prior written consent of Landlord. The performance by
Tenant of its obligation to maintain and make repairs shall be conducted only by
contractors approved by Landlord after plans and specifications have been
approved by Landlord. Tenant will not commit or allow any waste or damage to be
committed on any portion of the Premises, and upon the termination of this Lease
by lapse of time or otherwise, Tenant shall deliver up the Premises to Landlord
in as good condition as at date of possession, ordinary wear and tear excepted.
Upon such termination of this Lease, Landlord shall have the right to reenter
and resume possession of the Premises. Notwithstanding the foregoing provisions
of this Paragraph 10, any repairs to the Premises or the Building that are
necessitated because of any damage caused by fire or other casualty shall be
governed by the provisions of Paragraph 18 below. Landlord shall be responsible
for maintenance to the exterior, structural and common areas of the Building.
11. Alterations and Additions by Tenant; Security System; Rooftop
-------------------------------------------------------------
Satellite Dish.
--------------
(a) Tenant shall make no alterations in or additions to the Premises
without the prior written consent of Landlord (which Landlord agrees it will not
unreasonably withhold as long as Tenant describes the requested alterations or
additions with reasonable specificity). If and upon Landlord's approval of same,
all alterations and additions to the Premises will be performed by Tenant at
Tenant's cost and expense. All alterations, additions, and improvements made to
or fixtures or improvements placed in or upon the Premises by either party
(except only moveable trade fixtures of Tenant) shall be deemed a part of the
Building and the property of the Landlord at the time they are placed in or upon
the Premises, and they shall remain upon and be surrendered with the Premises as
a part thereof at the termination of this Lease, unless Landlord shall elect
otherwise, whether such termination shall occur by the lapse of time or
otherwise. In the event Landlord shall elect that certain alterations, additions
and improvements made by Tenant in the Premises shall be removed by Tenant,
Tenant shall remove them and Tenant shall restore the Premises to its original
condition, at Tenant's own cost and expense, prior to the termination of the
Lease Term.
(b) The parties contemplate that Tenant will wish to install its own
security system for the Premises (but not extending to any other portions of the
Building other than the Premises). Tenant shall have the right to install its
own security system for the Premises after obtaining the prior written consent
of Landlord for the type of equipment and manner of installation; and in this
regard Landlord agrees that its consent not to be unreasonably withheld or
delayed.
(c) Tenant shall have the nonexclusive right to install, operate, and
maintain a single satellite dish and related equipment (the "Satellite
Equipment") in an area on the roof designated by Landlord (the "Roof Space"), to
use solely in connection with Tenant's business in the Premises. In conjunction
with Tenant's right to use Roof Space, as provided in the immediately preceding
sentence, Tenant shall also have the right to install and maintain associated
wiring from the Premises to the Satellite Equipment on the Roof Space through
parts of the Building not leased to Tenant. Tenant shall assure that its
Satellite Equipment does not interfere with other equipment currently located on
the roof of the Building. In addition, none of Tenant's installations or
equipment may be visible at the ground level in the vicinity of the Building;
however, Tenant may install visual barriers around the Satellite Equipment,
consistent in appearance with a first-class office building, that are seen from
the ground level in the vicinity of the Building. Tenant shall have access to
the roof and Tenant's equipment relating to the Satellite Equipment at all times
throughout the Lease Term; moreover, Tenant at its option and at its sole
expense may install security fencing around its Satellite Equipment provided
that Tenant receives Landlord's prior approval for the plans and specifications
with respect thereto (not to be unreasonably withheld or delayed). Tenant's
Satellite Equipment, and the associated wiring thereto, shall be installed in
accordance with all
9
applicable laws and regulations, as well as plans and specification approved by
Landlord (which approval shall not be unreasonably withheld or delayed), by
contractors selected and employed by Tenant. All work relating to the Satellite
Equipment shall be coordinated with Landlord's roofing contractor so as not to
adversely affect any warranties in respect of the roof . The maintenance and
operation of Tenant's Satellite Equipment shall be accomplished at Tenant's
expense by Tenant or contractors selected and employed by Tenant. Any Satellite
Equipment installed on the roof by Tenant and any connecting wiring to the
Premises shall remain Tenant's property notwithstanding attachment to the
Building, may be removed by Tenant at any time, and shall be removed by Tenant
at the conclusion of the Lease Term (i.e., with Tenant restoring any damage to
the Roof Space, or elsewhere in or on the Building, which may have been caused
by the installation or its removal).
12. Entry for Repairs and Inspection. Landlord and its agents and
--------------------------------
representatives shall have the right to enter into and upon any and all parts of
the Premises at all reasonable hours (or, in any emergency, at any hour) to
inspect same or clean or make repairs or alterations or additions as Landlord
may deem necessary, and Tenant shall not be entitled to any abatement or
reduction of rent by reason thereof. During the period of 180 days prior to the
expiration date of this Lease, Landlord and Landlord's agents may exhibit the
Premises to prospective tenants at reasonable hours and upon prior notice to
Tenant.
13. Mechanic's Liens. Nothing contained in this Lease shall authorize
----------------
Tenant to do any act which shall in any way encumber the title of Landlord in
and to the Premises or the Building or any part thereof; and if any mechanic's
or materialman's lien is filed or claimed against the Premises or Building or
any part thereof in connection with any work performed, materials furnished or
obligation incurred by or at the request of Tenant, Tenant will promptly pay
same or cause it to be released of record. If the lien is not released of record
and default in payment thereof shall continue for twenty (20) days after written
notice thereof from Landlord to Tenant, Landlord shall have the right and
privilege at Landlord's option of paying the same or any portion thereof without
inquiry as to the validity thereof, and any amounts so paid, including expenses
and interest, shall be repaid to Landlord immediately on demand therefor.
14. Tenant's Use. Tenant will be solely responsible for obtaining all
------------
necessary certificates (e.g., Certificate of Occupancy) and licenses necessary
for Tenant's occupancy of the Premises and conducting its business therein.
Tenant will not occupy or use any portion of the Premises for any purpose other
than the Sole Permitted Use or for any purpose which is unlawful or which, in
the good faith judgment of Landlord, is disreputable or which is hazardous due
to risk of fire, explosion or other casualty. Tenant will not permit occupancy
or use of the Premises by more than four (4) persons per 1,000 square feet of
Rentable Space of the Premises; nor will Tenant permit anything to be done which
will in any way (i) increase the rate of fire and casualty insurance on the
Building or its contents, (ii) tend to lower the first-class character of the
Building, (iii) create unreasonable elevator loads or otherwise interfere with
standard building operations, or (iv) affect the structural integrity or design
capabilities of the Building or any portion thereof (e.g., a floor being
occupied by Tenant). In the event that, by reason of any act or conduct or
business of Tenant, there shall be any increase in the rate of insurance on the
Building or its contents created by Tenant's acts or conduct or business, then
Tenant hereby agrees to pay Landlord the amount of such increase on demand.
Tenant will conduct its business, and control its agents, employees, and
invitees in such a manner as not to create any nuisance or interfere with, annoy
or disturb other tenants or Landlord in the management of the Building.
Notwithstanding anything to the contrary which may be contained in this
Paragraph 14 or in Exhibit E attached to this Lease, Landlord hereby agrees to
Tenant's use of the following vendors for it use of the Premises: AT&T, UUNet,
SWBell, Nortel Networks, VTEL, Lanstar, Inc., Discovery Cablings System, and
Honeywell. In addition, Landlord further agrees that Tenant shall have the right
to select its own vendors/contractors for audio-visual, information-technology
and security improvements; provided, however, that Tenant must inform Landlord
of which vendor(s)/contractor(s) Tenant has selected for such improvements.
10
15. Laws and Regulations; Rules of the Building. (a) Tenant at its sole
-------------------------------------------
expense will maintain the Premises in a clean and healthful condition and will
comply with all laws, ordinances, orders, rules and regulations of any
governmental authority having jurisdiction over the use, conditions or occupancy
of the Premises. Without limiting the generality of the foregoing, Tenant shall
comply strictly and in all respects with the requirements of all Hazardous Waste
Laws and shall indemnify Landlord and hold Landlord harmless from and against
any liability, costs or expenses that may arise on account of the release,
discharge, storage, disposal, treatment, processing or other handling or
discovery of any Hazardous Substance within the Premises, or the discharge,
release, disposal, storage, treatment, processing or other handling of any
Hazardous Substance by Tenant, its employees, agents, contractors, or invitees
anywhere on the Land or within the Building, or being taken from the Land or
Building off site. As used herein, "Hazardous Substance" means any substance,
material or matter that may give rise to liability under any Hazardous Waste
Laws, including (but not limited to) medical waste and petroleum products or
petroleum wastes. "Hazardous Waste Laws" shall mean any local, state or federal
laws, rules, ordinances, regulations, and policy and guidance statements by the
Environmental Agencies, either in existence as of the date hereof, or enacted,
promulgated or issued after the date of this Lease, that concern the management,
control, discharge, treatment, containment or removal of substances or materials
that are or may become a threat to public health or the environment.
(b) Tenant and Tenant's agents, employees, and invitees will comply fully
with all Rules and Regulations of the Building which are attached hereto as
Exhibit E and made a part hereof as though fully set out herein. As more
---------
particularly provided therein, Landlord shall at all times have the right to
change such rules and regulations or to amend them in such reasonable manner as
may be deemed advisable for the safety, protection, care and cleanliness of the
Building and appurtenances and for preservation of good order therein, all of
which rules and regulations, changes and amendments will be forwarded to Tenant
in writing and shall be complied with and observed by Tenant; provided, however,
that no new rules or regulations shall deprive Tenant of any rights expressly
granted to Tenant pursuant to this Lease.
16. Indemnity, Liability and Loss or Damage. By moving into the Premises
---------------------------------------
or taking possession thereof, Tenant accepts the Premises as suitable for the
purposes for which they are leased and accepts the Building and each and every
appurtenance thereof, and waives any and all defects therein (with the exception
of latent defects of which Tenant gives Landlord written notice within one year
after the Commencement Date). Neither Landlord nor Property Manager shall be
liable to Tenant or Tenant's agents, employees, guests, invitees or any person
claiming by, through or under Tenant for any injury to person, loss of or damage
to property, or for loss of or damage to Tenant's business, occasioned by or
through the acts or omissions of Landlord and/or Property Manager, or by any
cause whatsoever except Landlord's and/or Property Manager's negligence or such
party's intentional act or omission (with the term "omission," for purposes of
this Paragraph 16, not being deemed to include Landlord's or Property Manager's
failure to prevent Tenant or Tenant's employees, agents, contractors or
invitees, from performing a negligent or willful act). Unless arising from or
out of Landlord's and/or Property Manager's negligence or such party's
intentional act or omission, neither Landlord nor Property Manager shall be
liable for, and Tenant shall indemnify both Landlord and Property Manager and
save them harmless from, all suits, actions, damages, liability and expense in
connection with loss of life, bodily or personal injury or property damage
arising from or out of any occurrence in, upon, at or from the Premises or the
occupancy or use by Tenant of the Premises or any part thereof, or occasioned
wholly or in part by any action or omission of Tenant, its agents, contractors,
employees, invitees, or licensees. If either Landlord or Property Manager, or
both, shall, without any negligence or any intentional act or omission on its or
their part, be made a party to any action commenced by or against Tenant, Tenant
shall protect and hold harmless from loss whichever of Landlord and/or Property
Manager may be made a party and shall pay all costs, expenses, and reasonable
attorney's fees to Landlord and/or Property Manager incurred in connection
therewith.
17. No Subrogation; Insurance. (a) Tenant hereby waives any cause of
-------------------------
action it might have against Landlord and/or Property Manager on account of any
loss or damage that
11
is insured against under any insurance policy that covers the Premises, Tenant's
fixtures, personal property, leasehold improvements or business and which names
Tenant as an additional named insured. Landlord and/or Property Manager hereby
waive any cause of action they might have against Tenant because of any loss or
damage that is insured against under any insurance policy that covers the
Building or any property of Landlord used in connection with the Building and
which names Landlord and/or Property Manager as a party insured; provided,
however, that Tenant shall remain liable to Landlord for the amount of the
"deductible" applicable to Landlord's insurance coverage. This provision is
cumulative of Paragraph 16.
(b) Tenant shall procure and maintain throughout the term of this Lease a
policy or policies of insurance, at its sole cost and expense, insuring Tenant
as Named Insured and Landlord and Property Manager as additional insureds
against any and all liability for injury to or death of a person or persons,
occasioned by or arising out of or in connection with the use or occupancy of
the Premises, the limits of such policy or policies to be in an amount not less
than $1,000,000.00 with respect to injuries to or death of any one person and in
an amount of not less than $1,000,000.00 with respect to any one accident or
disaster, and shall furnish evidence satisfactory to Landlord of the maintenance
of such insurance. Tenant shall obtain a written obligation on the part of each
insurance company to notify Landlord at least 10 days prior to cancellation of
such insurance. It is recommended that Tenant carry fire and extended coverage
insurance on its personal property, as Landlord shall in no event be required to
rebuild, repair or replace any part of the furniture, equipment, fixtures and
other improvements which may have been placed by Tenant on or within the
Premises.
18. Fire and Casualty. (a) If the Premises are damaged by fire or other
-----------------
casualty and if such damage is not susceptible of repair within 180 days (as
estimated, as soon as reasonably practicable after the occurrence of such
damage, by an architect of recognized good reputation selected by Landlord),
then in such event this Lease, at the option of Landlord exercised by giving
written notice thereof to Tenant within 30 days after receipt of a certificate
of the architect so selected, shall terminate as of the date of such loss, and
Tenant shall pay the rent hereunder apportioned to the time of such loss and
shall pay all other obligations of Tenant owing on the date of termination, and
Tenant shall immediately surrender the Premises to Landlord.
(b) If the damage described above is susceptible of repair within 180
days, or if the damage is not susceptible of repair within 180 days but Landlord
fails to exercise its option to terminate this Lease, Landlord shall enter and
make the necessary repairs without affecting this Lease, but the rent hereunder
shall be reduced or abated as shall be equitable, in the good faith judgment of
Landlord, until such repairs are made, unless such damage has been so slight
that Tenant's occupancy of the Premises is not materially interfered with, in
which case the rent hereunder shall not be abated or reduced. Notwithstanding
the foregoing, Landlord shall have the option to terminate this Lease and shall
not be obligated to repair the Premises or the Building if the damage is not
covered by insurance or if Landlord's mortgagee applies any portion of the
insurance proceeds to the unpaid balance of its loan.
(c) In the event the Building is so badly damaged or injured by fire or
other casualty, even though the Premises may not be affected, that Landlord
decides, within 90 days after such destruction, not to rebuild or repair the
Building (such decision being vested exclusively in the discretion of Landlord),
then in such event Landlord shall so notify Tenant in writing and this Lease
shall terminate as of the date of Landlord's written notice to Tenant effecting
its decision not to rebuild, and the Tenant shall pay rent hereunder apportioned
to the date of such notice (subject to subparagraph (b) immediately above) and
shall pay all other obligations of Tenant owing on the date of termination, and
Tenant shall immediately surrender the Premises to Landlord.
(d) Notwithstanding the foregoing provisions of this Paragraph 18, Tenant
agrees that if the Premises or any other portion of the Building is damaged by
fire or other casualty
12
resulting from the fault or negligence of Tenant or any of its agents,
employees, or invitees, then there shall be no abatement of rent before or
during the repair of such damage.
19. Condemnation. If all of the Premises, or so much thereof as would
------------
materially interfere with Tenant's use of the remainder, shall be taken or
condemned for any public use or purpose by right of eminent domain, with or
without litigation, or be transferred by agreement in connection with or in lieu
of or under threat of condemnation, then the term of this Lease and the
leasehold estate created hereby shall terminate as of the date title shall vest
in the condemnor or transferee. If only a portion of the Building, but not the
Premises, is taken or condemned or transferred as aforesaid, Landlord shall have
the option to terminate this Lease effective as of the date title shall vest in
the condemnor or transferee. Landlord shall receive the entire award from any
taking or condemnation (or the entire compensation paid because of any transfer
by agreement), and Tenant shall have no claim thereto.
20. [Intentionally Deleted].
21. Assignment and Subletting. (a) In the event that Tenant desires to
-------------------------
assign or mortgage this Lease or sublet all or any part of the Premises (with
the term "sublet" being deemed, for purposes of this Paragraph 21, to include
Tenant's grant of a license, concession or other right of occupancy of any
portion of the Premises), Tenant shall notify Landlord in writing (a "Proposal
Notice") and shall state in the Proposal Notice the name of the proposed
assignee, mortgagee or sublessee and the terms of the proposed assignment,
mortgage or sublease. In the Proposal Notice Tenant shall also provide financial
information and state the nature and character of the business of the proposed
assignee, mortgage or sublessee. Notwithstanding such Proposal Notice to
Landlord, Tenant shall not assign or mortgage this Lease or any right hereunder
or interest herein, except as permitted in subsection (d) below; and subject to
subsection (d) below, Tenant shall not sublet the Premises in whole or in part
or grant any license, concession or other right of occupancy of any portion of
the Premises, without the prior written consent of Landlord which, subject to
subsection (b) below, shall not be unreasonably withheld, delayed or
conditioned. Any such assignment, mortgage or subletting without Landlord's
consent shall be void and shall, at the sole option of the Landlord, be deemed a
breach of this Lease; provided, however, that if Tenant submits a written
request to Landlord which includes reasonably sufficient information relating to
the identity of the proposed assignee or subtenant and the terms of the proposed
transaction (e.g., whether an assignment or sublease, the location and amount of
space to be involved, the anticipated use of the proposed assignee or subtenant)
and if Landlord fails to respond to Tenant in writing, denying Tenant's request,
within ten (10) business days after having received such written request, then
Landlord shall be deemed to have consented to Tenant's written request.
Notwithstanding any assignment, mortgage or subletting consented to by Landlord,
Tenant and each assignee shall at all times remain fully responsible and liable
for the payment of the rent herein specified and for compliance with all of
Tenant's other covenants and obligations under this Lease. No consent to any
assignment or mortgage of this Lease or any subletting of the Premises shall
constitute a waiver of the provisions of this paragraph except as to the
specific instance covered thereby. Unless Landlord's denial of consent either is
attributable primarily to a malicious intent to injure Tenant or is clearly
unreasonable (i.e., as opposed to a good-faith difference of opinion between
Landlord and Tenant), Landlord shall not be liable to Tenant for wrongfully
denying its consent to an assignment or subletting under this Lease and Tenant's
sole remedy on account thereof shall be to enforce specific performance of
Landlord's obligation to consent; moreover, in no event shall Tenant assert any
damage claim for consequential damages relating to lost profits (as opposed to
rent forgiveness).
(b) Landlord and Tenant hereby agree that the granting of consent by
Landlord (i.e., if such consent is granted) shall, at a minimum, be
preconditioned upon the fulfillment of the following requirements of Landlord,
as well as any other reasonable requirements of Landlord:
(1) Landlord shall be entitled to review Tenant's Proposal Notice
for at least ten (10) business days after receiving same from Tenant;
(2) Tenant shall remain primarily liable under this Lease and shall
confirm such continuing liability in the assignment documentation;
13
(3) Any proposed assignee shall assume, in a written instrument
reasonably acceptable to Landlord, all of the obligations of Tenant
hereunder;
(4) No use shall be employed in connection with the Premises other
than the Permitted Use set forth in this Lease;
(5) The Premises shall remain intact and shall not be altered in any
manner whatsoever unless Tenant and the prospective assignee or sublessee
shall pay the entire cost thereof, and Landlord's prior written approval
is obtained pursuant to Paragraph 10 above;
(6) Any proposed subtenant or assignee must be consistent with a
first-class office building, and the tangible net worth of any proposed
assignee (but not necessarily any proposed subtenant) must be reasonably
sufficient for the obligations under this Lease;
(7) Any use of the Premises permitted hereunder by the proposed
sublessee/assignee must not (i) violate or create any potential violation
of any laws, nor (ii) violate Paragraph 14 or any other provisions of this
Lease, nor (iii) violate any other agreements affecting the Premises, the
Building or Landlord;
(8) The use of the proposed subtenant/assignee will not in
Landlord's reasonable judgment create traffic congestion or an
unreasonable burden on existing parking, elevators or other Building
Systems;
(9) No assignment or sublease shall be to a person or entity with
whom Landlord is then actively negotiating or has actively negotiated with
within the previous six (6) months;
(10) No assignment or sublease shall be to a person or entity who is
then a tenant in the Building, except to the extent that Landlord cannot
provide such tenant the amount of space which such tenant needs; and
(11) Tenant shall pay any and all reasonable attorney's fees or
other costs associated with Landlord's review and approval of a
prospective assignee or sublessee, not to exceed $1,000.00.
(c) In the event of a sublease approved by Landlord where the monthly
rental per square foot of space subleased which is payable by any sublessee to
Tenant (including any bonuses or any other consideration paid directly or
indirectly by the sublessee to Tenant) exceeds the monthly rental per square
foot for the same space payable for the same month by Tenant to Landlord, then
after Tenant is reimbursed for any finish-out costs, brokerage commissions and
other leasing costs incurred by Tenant as a result of such sublease, Tenant
shall be obligated to pay one-half of such excess to Landlord as additional rent
hereunder within twenty (20) days after it is received by Tenant from the
sublessee. In the event of an assignment approved by Landlord where Tenant
receives any consideration from an assignee other than the assumption by the
assignee of Tenant's obligations hereunder, then after Tenant is reimbursed for
any finish-out costs, brokerage commissions and other leasing costs incurred by
Tenant as a result of such assignment, Tenant shall be obligated to pay one-half
of such consideration to Landlord as additional rent hereunder within twenty
(20) days after the date it is received by Tenant.
(d) Notwithstanding anything contained above in this Paragraph 21, Tenant
shall have the right, without Landlord's having either approval rights pursuant
to this Paragraph 21 (but with Tenant still being obligated to notify Landlord),
to assign this Lease, sublet or otherwise grant occupancy permission to all or a
portion of the Premises to (i) any Affiliate (as hereinafter defined) of Tenant,
(ii) any successor to Tenant through merger or consolidation or the acquisition
of substantially all the assets or stock of Tenant, or (iii) any Affiliate of
any of the entities described in the preceding clause
14
(ii). The term "Affiliate" means any person or entity that owns, is owned by or
is under common control with, the person or entity in question.
22. Holding Over. Should Tenant continue to hold the Premises after this
------------
Lease terminates, whether by lapse of time or otherwise, such holding over
shall, unless otherwise agreed to by Landlord in writing, constitute and be
construed as a tenancy at will at a daily rental equal to one-thirtieth (1/30)
of an amount equal to 150% of the amount of the monthly rental payable during
the last month prior to the termination of this Lease, and upon and subject to
all of the other terms and provisions set forth herein except any right to renew
this Lease. This provision shall not be construed, however, as permission by
Landlord for Tenant to hold over.
23. Abandoned Property. All personal property of Tenant remaining in the
------------------
Premises after the expiration of the Lease Term or after the abandonment of the
Premises by Tenant may be treated by Landlord as having been abandoned by
Tenant, and Landlord shall have the right to remove such personal property from
the Premises without any obligation to deliver such personal property to Tenant
and without any liability to Tenant whatsoever, it being agreed that Tenant
shall have no right to reclaim such property. Landlord shall have no duty to
notify Tenant that Landlord may dispose of Tenant's property. Tenant shall be
presumed conclusively to have abandoned the Premises if the amount of Tenant's
property removed or being removed by Tenant from the Premises is substantial
enough to indicate a probable intent to abandon the Premises, and such removal
is not within the normal course of Tenant's business, or if Tenant removes or is
removing any material amount of Tenant's personal property from the Premises at
a time when Tenant is in default in the payment of rental due hereunder and such
removal is not within the normal course of Tenant's business. Nothing contained
in this paragraph shall prejudice or impair Landlord's rights as a lienholder
and secured party under Paragraph 28 hereof, and the rights granted to Landlord
under this paragraph shall be cumulative of its rights as a lienholder and
secured party.
24. Taxes. (a) Tenant shall be liable for all taxes levied or assessed
-----
against all personal property, furniture and fixtures placed by Tenant, or on
Tenant's behalf, in the Premises. If any such taxes for which Tenant is liable
are levied or assessed against Landlord or Landlord's property and if Landlord
elects to pay the same or if the assessed value of Landlord's property is
increased by inclusion of personal property, furniture or fixtures placed by
Tenant in the Premises, and Landlord elects to pay the taxes based on such
increase, Tenant shall pay Landlord upon demand that part of such taxes for
which Tenant is primarily liable hereunder.
(b) Tenant agrees that, as between Tenant and Landlord, Landlord has the
sole and absolute right to contest taxes levied against the Premises and the
Building (other than taxes levied directly against Tenant's personal property
within the Premises). Accordingly, Tenant, to the maximum extent permitted by
law, irrevocably waives any and all rights that Tenant may have to receive from
Landlord a copy of notices received by Landlord regarding the appraisal or
reappraisal, for tax purposes, of all or any portion of the Premises or the
Building (including, without limitation, any rights set forth in ss.41.413 of
the Texas Property Tax Code, as such section may be amended and/or supplemented
from time to time). Additionally, Tenant, to the maximum extent permitted by
law, hereby assigns to Landlord any and all rights of Tenant to protest or
appeal any governmental appraisal or reappraisal of the value of all or any
portion of the Premises or the Building (including, without limitation, any
rights set forth in ss.41.413 and ss.42.015 of the Texas Property Tax Code, as
such sections may be amended and/or supplemented from time to time). To the
maximum extent permitted by law, Tenant agrees that it will not protest or
appeal any such appraisal or reappraisal before a governmental taxing authority
without the express written authorization of Landlord.
25. Transfer of Landlord's Rights. In the event Landlord transfers its
-----------------------------
interest in the Building, Landlord shall thereby be released from any further
obligations hereunder, and Tenant agrees to look solely to the successor in
interest of the Landlord for the performance of such obligations.
15
26. Default. (a) The following events shall be deemed to be events of
-------
default by Tenant under this Lease: (i) Tenant shall fail to pay any rental or
other sums payable by Tenant hereunder as and when such rental or other sums
become due and payable and any such failure shall continue for a period of ten
(10) days after written notice from Landlord to Tenant (provided, however, that
if in any calendar year Landlord has given at least two written notices of
rental defaults to Tenant, then for the remainder of that particular calendar
year the grace period shall be reduced to five days and there shall be no
requirement of written notice from Landlord to Tenant); (ii) Tenant shall fail
to comply with any other provision, condition or covenant of this Lease and any
such failure shall continue for a period of twenty (20) days after Landlord
gives written notice thereof to Tenant (or such additional time, up to an
additional 30 days, as may be reasonably necessary to so comply, as long as
Tenant is working diligently to cure such failure); (iii) Tenant shall abandon,
vacate or fail to physically occupy any substantial portion of the Premises;
(iv) any petition shall be filed by or against Tenant or any guarantor of
Tenant's obligations under this Lease pursuant to any section or chapter of the
present federal Bankruptcy Act or under any future federal Bankruptcy Act or
under any similar law or statute of the United States or any state thereof, or
Tenant or any guarantor of Tenant's obligations under this Lease shall be
adjudged bankrupt or insolvent in proceedings filed under any section or chapter
of the present federal bankruptcy act or under any future federal bankruptcy act
or under any similar law or statute of the United States or any state thereof;
(v) Tenant or any guarantor of Tenant's obligations under this Lease shall
become insolvent or make a transfer in fraud of creditors; (vi) Tenant or any
guarantor of this Lease shall make an assignment for the benefit of creditors;
or (vii) a receiver or trustee shall be appointed for Tenant or any of the
assets of Tenant.
(b) Upon the occurrence of any event of default, Landlord shall have the
option to do any one or more of the following without any further notice or
demand, in addition to and not in limitation of any other remedy permitted by
law or by this Lease:
(1) Landlord may enforce, by all legal suits and other means, its rights
hereunder, including the collection of Base Rental and any other
sums payable by Tenant hereunder, without reentering or resuming
possession of Premises and without terminating this Lease.
(2) Landlord may do whatever Tenant is obligated to do by the provisions
of this Lease; and to the extent that Landlord deems it necessary or
otherwise appropriate for Landlord to enter the Premises, Landlord
may enter the Premises, by force if necessary (but only if and to
the extent permitted by law), in order to accomplish this purpose.
Tenant hereby waives any and all claims for damages caused by
Landlord's actions pursuant to this subparagraph (b)(2), and Tenant
also agrees to reimburse Landlord immediately upon demand for any
expenses which Landlord may incur in thus effecting compliance with
this Lease on behalf of Tenant.
(3) If (but only if) Tenant is in arrears in its rentals by more than
one month, Landlord may enter upon and take possession of the
Premises without terminating this Lease and expel or remove Tenant
and its effects therefrom without being liable to prosecution of any
claims for damages therefor, and Landlord may relet the Premises for
the account of Tenant. Tenant shall pay to Landlord all arrearages
of Base Rental and other sums due and owing by Tenant to Landlord,
and Tenant shall also pay to Landlord during each month of the
unexpired Lease Term the installments of Base Rental and other sums
due hereunder, less such part, if any, that Landlord shall have been
able to collect from a new tenant upon reletting. In this regard the
parties further agree that although Landlord shall use its
reasonable efforts to relet the Premises after Tenant has vacated
the Premises, Landlord shall have no obligation to agree to any
lease terms which it deems to be unacceptable, nor shall Landlord be
obligated (i) to travel outside a radius of thirty (30) miles from
its principal
16
office in order to meet with a prospective tenant, (ii) to accept a
prospective tenant for the Premises (or any portion thereof) which
is an existing or prospective tenant elsewhere in the Building, or
(iii) to expend monies for finish-out requested by a prospective
tenant unless Landlord, in its sole and absolute discretion,
approves both the lease terms and the credit of such prospective
tenant. Tenant further agrees that in the event of any reletting,
Tenant shall pay to Landlord on demand all Reimbursable Costs
prescribed in the final portion of this Paragraph 26. In the event
Landlord exercises the rights and remedies afforded to it under this
Paragraph 26(b)(3) and then subsequently elects to terminate this
Lease, Tenant shall be liable to Landlord for damages as set forth
in the final two sentences of Paragraph 26(b)(5) below and Landlord
shall have the right at any time to demand final settlement as
provided therein.
(4) If (but only if) Tenant is in arrears in its rentals by more than
one month, Landlord may enter upon the Premises by use of a
duplicate key, a master key, an electronic pass card, a locksmith's
entry procedures or any other means not involving personal
confrontation, and change, alter or modify the door locks on all
entry doors of the Premises, thereby excluding Tenant and its
agents, employees, representatives and invitees, from the Premises.
In such event Landlord shall not be obligated to place any written
notice on the Premises explaining Landlord's action; moreover,
Landlord shall not be required to provide the new key (if any) to
Tenant until and unless all rental defaults of Tenant have been
fully cured.
(5) If (but only if) Tenant is in arrears in its rentals by more than
one month, Landlord may terminate this Lease, in which event Tenant
shall immediately surrender the Premises to Landlord, but if Tenant
shall fail to do so, Landlord may without notice and without
prejudice to any other remedy Landlord may have, enter upon and take
possession of the Premises and expel or remove Tenant and its
effects without being liable to prosecution or any claim for damages
therefor; and upon any such termination, Tenant agrees that in
addition to its liability for the payment of arrearages of Base
Rental and other sums due and owing by Tenant to Landlord under this
Lease upon such termination, Tenant shall be liable to Landlord for
damages. Tenant shall pay to Landlord as damages on the same days as
Base Rental and other payments are expressed to be due under the
provisions of this Lease, the total amount of such Base Rental and
other payments, less such part, if any, of such payments that
Landlord shall have been able to collect from a new tenant upon
reletting. In this regard the parties further agree that although
Landlord shall use its reasonable effort to relet the Premises after
Tenant has vacated the Premises, Landlord shall have no obligation
to agree to any lease terms which it reasonably deems to be
unacceptable, nor shall Landlord be obligated (i) to travel outside
a radius of thirty (30) miles from its principal office in order to
meet with a prospective tenant, (ii) to accept a prospective tenant
for the Premises (or any portion thereof) which is an existing or
prospective tenant elsewhere in the Building, or (iii) to expend
monies for finish-out requested by a prospective tenant unless
Landlord, in its sole and absolute discretion, approves both the
lease terms and the credit of such prospective tenant. Tenant
further agrees that in the event of any reletting, Tenant shall pay
to Landlord on demand all Reimbursable Costs prescribed in the final
portion of this Paragraph 26. Landlord shall have the right at any
time to demand final settlement. Upon demand for a final settlement,
Landlord shall have the right to receive, and Tenant hereby agrees
to pay, as damages for Tenant's breach and in addition to the
Reimbursable Costs prescribed in the final section of this Paragraph
26, the difference between the total rental provided for in this
Lease for the remainder of the Lease Term and the reasonable rental
value of the Premises for such period, such difference to be
discounted to present value at a
17
rate equal to the rate of interest allowed by law (at the time the
demand for final settlement is made) when the parties to a contract
have not agreed on any particular rate of interest (or, in the
absence of such law, at the rate of 6% per annum).
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law or
equity. Any entry by Landlord upon the Premises may be by use of a master or
duplicate key or electronic pass card or any locksmith's entry procedure or
other peaceable means. Any reletting by Landlord shall be without notice to
Tenant, and if Landlord has not terminated this Lease, the reletting may be in
the name of Tenant or Landlord, as Landlord shall elect. Any reletting shall be
for such term or terms (which may be greater or less than the period which
constitutes the balance of the Lease Term) and on such terms and conditions
(which may include free rent, rental concessions or tenant inducements of any
nature) as Landlord in its absolute discretion may determine, and Landlord may
collect and receive any rents payable by reason of such reletting. In the event
of any reletting, Tenant shall pay to Landlord on demand the cost of renovating,
repairing and altering the Premises for a new tenant or tenants, and the cost of
advertisements, brokerage fees, reasonable attorney's fees and other costs and
expenses incurred by Landlord in connection with such reletting (the
"Reimbursable Costs"). In the event any rentals actually collected by Landlord
upon any such reletting for any calendar month are in excess of the amount of
rental payable by Tenant under this Lease for the same calendar month, the
amount of such excess shall belong solely to Landlord, and Tenant shall have no
right with respect thereto (except, however, same shall be applied to Tenant's
deficiency, if any). In the event it is necessary for Landlord to institute suit
against Tenant in order to collect the rental or any other sum due hereunder or
any deficiency between the rental and any other sum provided for by this Lease
for a calendar month and the rental and any other sum actually collected by
Landlord for such calendar month, Landlord shall have the right to allow such
deficiency to accumulate and to bring an action upon several or all of such
rental deficiencies at one time. Any suit shall not prejudice in any way the
right of Landlord to bring a similar action for any subsequent rental deficiency
or deficiencies.
27. Security Deposit. The Security Deposit shall be held by Landlord in a
----------------
separate account, i.e., an account expressly identified as being Tenant's
Security Deposit and without Landlord's using any monies in the account for
purposes other than refunding the Security Deposit or applying all or a portion
of the Security Deposit to cure Tenant's defaults. The account will be
maintained in a financial institution selected by Landlord; and provided that
Tenant complies with the reasonable requests of the financial institution (such
as supplying Tenant's taxpayer identification number and executing forms
required by the financial institution), all interest accruing on the account
shall be paid annually to Tenant. It is expressly understood and agreed that the
Security Deposit is intended solely as security for the performance by Tenant of
Tenant's covenants and obligations under this Lease and it shall not be
considered an advance payment of rental or a measure of Landlord's damages in
case of default by Tenant upon the occurrence of any event of default by Tenant
or upon termination of this Lease. Landlord may, from time to time, without
prejudice to any other remedy, use the Security Deposit to the extent necessary
to make good any arrearages of rent or to satisfy any other covenant or
obligation of Tenant hereunder. Following any such application of the Security
Deposit, Tenant shall pay to Landlord on demand the amount so applied in order
to restore the Security Deposit to its original amount. If Tenant is not
in default at the conclusion of the 81st month of the Lease Term, then Landlord
shall immediately return to Tenant one-sixth of the Security Deposit, thereby
retaining in Landlord's account five-sixths of the Security Deposit which
Landlord held through the first 81 months of the Lease Term. If Tenant is not in
default at the conclusion of the 82nd month of the Lease Term, then Landlord
shall immediately return to Tenant another one-sixth of the Security Deposit,
thereby retaining in Landlord's account two-thirds of the Security Deposit which
Landlord held through the first 81 months of the Lease Term. If Tenant is not in
default at the conclusion of the 83rd month of the Lease Term, then Landlord
shall immediately return to Tenant another one-sixth of the Security Deposit,
thereby retaining in Landlord's account one-half of the Security Deposit which
Landlord held through the first 81 months of the Lease Term. If Tenant is not in
default at the conclusion of the 84th month of the Lease Term, then Landlord
shall immediately return to Tenant another one-sixth of the Security Deposit,
thereby retaining in Landlord's account one-third of the Security Deposit which
Landlord held through the first 81 months of the Lease Term. If Tenant is not in
18
default at the conclusion of the 85th month of the Lease Term, then Landlord
shall immediately return to Tenant another one-sixth of the Security Deposit,
thereby retaining in Landlord's account one-sixth of the Security Deposit which
Landlord held through the first 81 months of the Lease Term. Upon the
termination of this Lease, the balance of the Security Deposit shall be returned
by Landlord to Tenant, except to the extent applied by Landlord to make good any
arrearages of rent or to satisfy any other covenant or obligation of Tenant
hereunder. If Intervest-Parkway, Ltd. or any subsequent Landlord transfers its
interest in the Premises during the term of this Lease, the assigning Landlord
shall assign the Security Deposit to the transferee; and upon such assignment
and the assignee's assumption of the Landlord's obligations under this Lease,
the assigning Landlord shall not have any further liability for the return of
such Security Deposit.
28. Landlord's Lien and Security Interest. Landlord shall have a
-------------------------------------
Landlord's statutory lien, and in addition thereto Landlord shall have, and
Tenant hereby grants unto Landlord, a security interest in all of the goods,
wares, furniture, fixtures, office equipment, supplies and other property of
Tenant now or hereafter placed in, upon, or about the Premises and all proceeds
thereof, as security for all of the obligations of Tenant under this Lease,
provided that Tenant shall have the right to make sales of its goods, wares and
merchandise to its customers in the normal and regular course of its business
conducted in the Premises free and clear of the aforesaid lien and security
interest. Tenant shall not remove any of said personal property from the
Premises until all of Tenant's obligations under this Lease have been satisfied
in full. Upon the occurrence of an event of default by Tenant, Landlord may, in
addition to any other remedies provided herein, enter upon the Premises and take
possession by peaceable means of any and all goods, wares, equipment, fixtures,
furniture, improvements and other personal property of Tenant situated on the
Premises, without liability for trespass or conversion, and sell the same at
public or private sale, with or without having such property at the sale, after
giving Tenant reasonable notice of the time and place of any public sale or of
the time after which any private sale is to be made; and at any such sale the
Landlord or its assigns may purchase unless otherwise prohibited by law. The
proceeds from any such disposition, less any and all expenses connected with the
taking of possession, holding and selling of the property (including reasonable
attorney's fees and other expenses), shall be applied as a credit against the
indebtedness secured by the security interest granted in this Paragraph 28. Any
surplus shall be paid to Tenant or as otherwise required by law; and Tenant
shall pay any deficiencies forthwith. Upon request by Landlord, Tenant agrees to
execute and deliver to Landlord a financing statement in form sufficient to
perfect the security interest of Landlord in the aforementioned property and
proceeds thereof under the provisions of the Texas Uniform Commercial Code. Upon
request by Landlord, Tenant shall provide the name and address of any entity
that has, or claims to have, an interest in any property located on the Premises
and a description of such property. Failure to provide such list shall result in
a presumption that all property located in the Premises belongs to Tenant free
from all claims. Without intending to exclude any other manner of giving Tenant
any required notice, any requirement of reasonable notice to Tenant of
Landlord's intention to dispose of any collateral pursuant to the enforcement of
said security interest shall be met if such notice is given in the manner
prescribed in Paragraph 37 of this Lease at least five days before the time of
any such disposition. Landlord shall have all of the rights and remedies of a
secured party under law.
29. Remedies. No act or thing done by Landlord or its agents during the
--------
term hereof shall be deemed an acceptance of an attempted surrender of the
Premises, and no agreement to accept a surrender of the Premises shall be valid
unless made in writing and signed by Landlord. No reentry or taking possession
of the Premises by Landlord shall be construed as an election on its part to
terminate this Lease, unless a written notice of such intention is given to
Tenant. Notwithstanding any such reletting or reentry or taking possession,
Landlord may at any time thereafter elect to terminate this Lease for a previous
default. Landlord's acceptance of rent following an event of default hereunder
shall not be construed as Landlord's waiver of such event of default. No waiver
by Landlord of any
19
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other
violation or breach of any of the terms, provisions and covenants herein
contained. Forbearance by Landlord to enforce one or more of the remedies herein
provided upon an event of default shall not be deemed or construed to constitute
a waiver of any other violation or default. The failure of Landlord to enforce
the rules described in Paragraph 15 against Tenant or any other tenant in the
Building shall not be deemed a waiver of any such rules. No provisions of this
Lease shall be deemed to have been waived by Landlord unless such waiver is in
writing and is signed by Landlord. The rights granted to Landlord in this Lease
shall be cumulative of every other right or remedy which Landlord may otherwise
have at law or in equity, and the exercise of one or more rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of other
rights or remedies. If Landlord brings any action under this Lease, or consults
or places this Lease or any amount payable by Tenant hereunder with an attorney
for the enforcement of any of Landlord's rights hereunder, then Tenant agrees to
pay to Landlord the reasonable attorney's fees and other costs and expenses
incurred by Landlord in connection therewith.
30. Joint and Several Liability. If there are two or more parties
---------------------------
comprising Tenant, the obligations imposed upon Tenant pursuant to this Lease
shall be joint and several. If there is a guarantor of Tenant's obligations
under this Lease, the obligations of Tenant shall be joint and several
obligations of Tenant and such guarantor, and Landlord need not first proceed
against Tenant hereunder before proceeding against such guarantor; nor shall any
such guarantor be released from its guarantee for any reason whatsoever,
including, without limitation, any amendment of this Lease, any forbearance by
Landlord or waiver of any of Landlord's rights, the failure to give Tenant or
such guarantor any notices, or the release of any party liable for the payment
of Tenant's obligations hereunder.
31. Constructive Eviction. Tenant shall not be entitled to claim a
---------------------
constructive eviction from the Premises unless Tenant shall have first notified
Landlord in writing of the condition or conditions giving rise thereto, and, if
the complaints be justified, unless Landlord shall have failed to remedy such
conditions within a reasonable time after receipt of said notice.
32. Building Name. Landlord reserves the right at any time to change the
-------------
name by which the Building is designated, and Landlord shall have no obligation
or liability whatsoever for costs or expenses incurred by Tenant as a result of
such name change of the Building.
33. Subordination. (a) This Lease and all rights of Tenant hereunder are
-------------
subject and subordinate to any deeds of trust, mortgages or other instruments of
security which do now or may hereafter cover the Building and the Land or any
interest of Landlord therein, and to any and all advances made on the security
thereof, and to any and all increases, renewals, modifications, consolidations,
replacements and extensions of any of such deeds of trust, mortgages or
instruments of security. This provision is hereby declared by Landlord and
Tenant to be self-operative and no further instrument shall be required to
effect such subordination of this Lease. Tenant shall, however, upon demand at
any time or times execute, acknowledge and deliver to Landlord any and all
commercially reasonable instruments and certificates that, in the reasonable
judgment of Landlord, may be necessary or proper to confirm or evidence such
subordination provided that such instruments and certificates do not diminish,
remove or adversely affect any of Tenant's rights under this Lease or increase
any of Tenant's obligations, monetary or otherwise, under this Lease. However,
notwithstanding the generality of the foregoing provisions of this Paragraph 33,
Tenant agrees that any such mortgagee shall have the right at any time to
subordinate any such deeds of trust, mortgages or other instruments of security
to this Lease on such terms and subject to such conditions as such mortgagee may
deem appropriate in its discretion. Tenant further covenants and agrees upon
demand by Landlord's mortgagee at any time, before or after the institution of
any proceedings for the foreclosure of any such deeds of trust, mortgages or
other instruments of security, or sale of the Building pursuant to any such
deeds of trust, mortgages or other instruments of security or voluntary sale, to
attorn to such purchaser upon any such sale and to recognize and attorn to such
purchaser as Landlord under this Lease. The agreement of Tenant to attorn upon
demand of Landlord's mortgagee contained in the immediately preceding sentence
shall survive any such
20
foreclosure sale or trustee's sale. Tenant hereby agrees to execute, acknowledge
and deliver to Landlord's mortgagee any and all instruments and certificates
that in the judgment of Landlord's mortgagee may be necessary or proper to
confirm or evidence such attornment, provided that such instruments and
certificates are commercially reasonable and do not diminish, remove or
adversely affect any of Tenant's rights under this Lease or increase any of
Tenant's obligations, monetary or otherwise, under this Lease.
(b) Notwithstanding subparagraph 33(a) above, Landlord agrees that as a
condition precedent to the effectiveness of any such subordination and prior to
or contemporaneously with Tenant's being obligated to execute any instrument or
certificate of subordination or attornment, the holder of any mortgage, ground
lease or other security instrument to which this Lease is to be subordinated,
shall execute a written non-disturbance agreement in a form reasonably
acceptable to Tenant and comparable to the form normally used by such holder for
non-disturbance agreements.
34. Lease Certificates; Financial Statements. Tenant agrees to furnish
----------------------------------------
from time to time, within ten (10) days after requested by Landlord, a
certificate signed by Tenant and addressed to Landlord -- or at Landlord's
direction to any potential successor to Landlord or any existing or potential
holder of a deed of trust or mortgage covering the Land and Building or any
interest of Landlord therein -- confirming the following (to the extent true,
and stating specific exceptions, if applicable): that this Lease is then
presently in full force and effect and specifying any modifications; that the
term of this Lease has commenced and the full rental is then accruing hereunder;
that Tenant has accepted possession of the Premises and that any improvements
required by the terms of this Lease to be made by Landlord have been completed
to the satisfaction of Tenant; that no rent under this Lease has been paid more
than thirty (30) days in advance of its due date; that the address for notices
to be sent to Tenant is as set forth in this Lease; that Tenant, as of the date
of such certificate, has no charge, lien or claim of offset under this Lease or
otherwise against rents or other charges due or to become due hereunder; and
that to the knowledge of Tenant, Landlord is not then in default under this
Lease. The certificate shall, if requested by Landlord or if Tenant so chooses
(i.e., regardless of whether or not requested by Landlord) make reference to the
Security Deposit prescribed in this Lease. Tenant shall not be required in the
certificate to amend the terms and provisions of this Lease; however, the
certificate shall also contain an acknowledgment by Tenant of receipt of notice
of the assignment of this Lease to such holder and the agreement by Tenant with
such holder that from and after the date of such certificate, Tenant will not
pay any rent under this Lease more than 30 days in advance of its due date, will
not surrender or consent to the modification of any of the terms of this Lease
nor to the termination of this Lease by Landlord, and will not seek to terminate
this Lease by reason of any act or omission of Landlord until Tenant shall have
given written notice of such act or omission to the holder of such deed of trust
or mortgage (at such holder's last address furnished to Tenant) and until the
same period of time (if any) as Landlord is provided in this Lease shall have
elapsed following the giving of such notice, during which period such holder
shall have the right, but shall not be obligated, to remedy such act or
omission. Notwithstanding the immediately preceding sentence to the contrary, if
Tenant's certificate is executed before the assignment of Landlord's interest in
the Lease to such holder, then the agreement of Tenant described in such
sentence will be of no effect under such certificate unless Tenant is furnished
with a copy of the assignment to such holder within ninety (90) days after the
date of such certificate. Tenant shall also furnish to Landlord when requested
by Landlord, but no more often than one time per calendar year, a statement of
the financial condition of Tenant prepared by an independent Certified Public
Accountant and in form reasonably satisfactory to Landlord.
35. Limitation of Landlord Liability. The liability of Landlord to Tenant
--------------------------------
for any default by Landlord under the terms of this Lease shall be limited to
the interest of Landlord in the Building and the Land, and Landlord shall not be
personally liable for any deficiency. This clause shall not be deemed to limit
or deny any remedies which Tenant may have in the event of default by Landlord
hereunder which do not involve the personal liability of Landlord.
Notwithstanding anything to the contrary contained in this Lease, in the event
Landlord sells, assigns, transfers or conveys its interest in the Land, Landlord
shall have no
21
liability for any acts or omissions that occur after the date of said sale,
assignment, transfer or conveyance.
36. Consents. In all circumstances under this Lease where the prior
--------
consent of one party (the "consenting party"), whether it be Landlord or Tenant,
is required before the other party (the "requesting party") is authorized to
take any particular type of action, such consent shall not be withheld in a
wholly unreasonable and arbitrary manner; however, the requesting party agrees
that its exclusive remedy if it believes that consent has been withheld
improperly (including, but not limited to, consent required from Landlord
pursuant to Paragraph 11 or Paragraph 21 of this Lease) shall be to institute
litigation either for a declaratory judgment or for a mandatory injunction
requiring that such consent be given (with the requesting party hereby waiving
any claim for damages, attorneys fees or any other remedy unless the consenting
party refuses to comply with a court order or judgment requiring it to grant its
consent).
37. Notices. Any notice required or permitted to be given hereunder by one
-------
party to the other shall be deemed to be given when deposited in the United
States mail (or, with regard to notices being given from an office in Canada,
Canadian mail), certified or registered mail, return receipt requested, with
sufficient postage prepaid, or hand delivered, addressed to the respective party
to whom notice is intended to be given at the address of such party set forth
below its name where it has executed this Lease. Either party hereto may at any
time by giving written notice to the other party in the aforesaid manner
designate any other address in substitution of the foregoing address to which
any such notice shall be given.
38. Brokerage. Landlord and Tenant warrant to each other that they have
---------
not had any dealings with any broker or agent in connection with the negotiation
or execution of this Lease except for the Leasing Agents listed in Paragraph
1(j); and each party agrees to indemnify the other party and hold the other
party harmless from and against any and all costs, expenses or liability for
commissions or other compensation or charges claimed by any other broker or
agent, through commitments of the indemnifying party with respect to this Lease.
Landlord agrees that it shall be solely responsible to pay any fees or
commissions that are due the Leasing Agents as a consequence of this Lease,
pursuant to separate agreements between Landlord and each of the Agents; and in
this regard, Landlord confirms that the brokerage agreement attached as Exhibit
F to this Lease (i) is a true and correct copy of the brokerage agreement
between Landlord and ▇▇▇▇▇▇ International, i.e., representing Tenant in this
transaction, and (ii) is incorporated into this Lease and made a part hereof.
39. Force Majeure. Whenever a period of time is herein prescribed for
-------------
action to be taken by Landlord or Tenant, the party taking the action shall not
be liable or responsible for, and there shall be excluded from the computation
for any such period of time, any reasonable delays due to strikes, riots, acts
of God, shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
reasonable control of such party; provided, however, in no event shall the
foregoing apply to the financial obligations of either Landlord or Tenant to the
other under this Lease, including Tenant's obligation to pay Base Rentals and
all other amounts payable to Landlord hereunder.
40. No Third Party Beneficiary. This Lease is for the sole benefit of
--------------------------
Landlord, its successors and assigns, and Tenant, its permitted successors and
assigns, and it is not for the benefit of any third party.
41. Severability. If any clause or provision of this Lease is illegal,
------------
invalid or unenforceable under present or future laws effective during the term
of this Lease, then and in that event, it is the intention of the parties hereto
that the remainder of this Lease shall not be affected thereby, and it is also
the intention of the parties to this Lease that in lieu of each clause or
provision that is illegal, invalid or unenforceable, there be added as a part of
this Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
22
42. Binding Effect. The provisions of this Lease shall be binding upon and
---------------
inure to the benefit of Landlord and Tenant, respectively, and to their
respective heirs, personal representatives, successors and assigns, subject to
the provisions of Paragraph 21, ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ 35 and Paragraph 46
hereof.
43. Applicable Law; Consent to Jurisdiction. This Lease shall be governed
---------------------------------------
by and construed in accordance with the laws of the State of Texas and the laws
of the United States applicable to transactions in the State of Texas. Tenant
hereby irrevocably agrees that any legal action or proceeding against it with
respect to this Lease may be maintained in the courts of county where rent is
payable under this Lease, or at Landlord's option in the U.S. District Court for
the Northern District of Texas; and Tenant hereby consents to the jurisdiction
and venue of such courts.
44. Entire Agreement; No Warranties. This Lease contains the entire
-------------------------------
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous agreements, understandings,
promises, and representations made by either party to the other concerning the
subject matter hereof and the terms applicable hereto. It is expressly agreed by
Tenant, as a material consideration for the execution of this Lease, that there
have been no agreements pertaining to the Premises, the Building or this Lease
not incorporated in writing herein and that this Lease shall not be altered,
waived, amended or extended, except by a written agreement signed by the parties
hereto, unless otherwise expressly provided herein. Landlord's duties and
warranties are limited to those set forth in this Lease, and shall not include
any implied duties or warranties, all of which are hereby disclaimed by Landlord
and waived by Tenant. In particular, Landlord disclaims, and Tenant waives, any
warranty that the Premises are suitable or fit for any particular purpose or
use.
45. NO IMPLIED REPRESENTATIONS. LANDLORD AND TENANT HEREBY ACKNOWLEDGE
--------------------------
THAT THEY ARE NOT RELYING UPON ANY BROCHURE, RENDERING, INFORMATION,
REPRESENTATION, PROMISE OR UNDERSTANDING OF THE OTHER, OR OF ANY LEASING AGENT,
EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE.
46. Effective Date; Counterparts; Telecopy Transmission. The submission by
---------------------------------------------------
Landlord of this instrument to Tenant for examination, negotiation or signature
does not constitute an option for, or a representation by Landlord regarding, a
prospective lease. This Lease shall be effective if and when (and only if and
when) it has been executed by both Landlord and Tenant, it being agreed in this
regard that execution may be by means of counterpart signatures on like copies
of this Lease and that the telecopy transmission by a party of a copy of this
Lease signed by such party shall be effective to bind such party to the terms of
this Lease and, accordingly, shall be effective as the delivery by such party to
the other party of a signed copy of this Lease. When such condition has been
satisfied, the effective date of this Lease shall be the latest date
accompanying a signature by Landlord and Tenant below; and if either or both
signatures fail to be accompanied by a date, then the date of such signature(s)
shall be established by the best alternative evidence. If for any reason
whatsoever this Lease has not been fully executed within fifteen (15) business
days after the signature of the first party to sign, then this Lease shall be
null and void and of no force or effect.
23
[signatures on the next page]
24
LANDLORD:
--------
INTERVEST-PARKWAY, LTD.,
a Texas limited partnership
By: Intervest Equity Group, L.L.C., a Texas
limited liability company, its sole
General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Manager
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Date of Signature: November 15, 2001
TENANT:
------
ENTRUST, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: Chief Financial Officer
----------------------------------------
Address (Before Commencement Date):
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
------------------------------------
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Address (After Commencement Date):
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Date of Signature: November 16, 2001
25
EXHIBIT A TO LEASE AGREEMENT
----------------------------
The Land
A 5.692-acre tract of land situated in the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Survey, Abstract ▇▇.
▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇; said tract being a portion of the
17.09 acre tract of land described in deed to Intervest-Parkway Ltd., a Texas
Limited Partnership, recorded in Volume 96251, Page 5754 of the Deed Records of
Dallas County, Texas; said tract also being ▇▇▇ ▇, ▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
Addition, an addition to the Town of Addison as recorded in Volume 98096, Page
▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇; said 5.692 acre tract being more
particularly described as follows:
COMMENCING, at the 5/8-inch iron rod found, said point being in the southwest
line of the Dallas North Parkway (a 200 feet wide right-of-way), and the
northwest corner of Bent Tree Towers, an addition to the Town of Addison, Texas,
according to the plat recorded in Volume 78188, Page 2026 of the Deed Records of
Dallas County, Texas;
THENCE, South 42 degrees, 00 minutes, 34 seconds West, along the northwest line
of said Bent Tree Towers Addition, a distance of 10.00 feet to a 1/2-inch iron
rod with "▇▇▇▇▇▇▇ ▇▇▇▇" cap found for corner at the POINT OF BEGINNING; said
point being the east corner of said lot 2;
THENCE, South 42 degrees, 00 minutes, 34 seconds West, along the northwest line
of said Bent Tree Towers Addition, a distance of 622.45 feet to a 1/2-inch rod
with "▇▇▇▇▇▇▇ ▇▇▇▇" cap found; said point being in a northeast line of Westgrove
Drive (a 64 foot wide right-of-way); said point being the beginning of a
non-tangent curve in the left whose center bears South 22 degrees, 55 minutes,
29 seconds West, a distance of 809.00 feet from said point;
THENCE, northwesterly, along said northeast right-of-way line and said curve to
the left, through a central angle of 15 degrees, 22 minutes, 35 seconds, an arc
distance of 217.11 feet, a chord bearing of North 74 degrees, 45 minutes, 48
seconds West, a chord distance of 216.48 feet to an 1/2-inch rod with "▇▇▇▇▇▇▇
▇▇▇▇" cap found; said point being in the southeast line of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇ Addition, an addition to the Town of Addison, Texas according to the
plat recorded in Volume 78004, Page 007 of the Deed Records of Dallas County,
Texas;
THENCE, North 07 degrees, 34 minutes, 37 seconds East, departing said northeast
right-of-way line of Westgrove Drive an along the southeast line of said Lot 1,
a distance of 460.85 feet to a 5/8-inch iron rod found at the most southerly
east corner of said Lot 1;
THENCE, South 48 degrees, 01 minutes, 15 seconds East, a distance of 17.60 feet
to a 1/2-inch rod with "▇▇▇▇▇▇▇ ▇▇▇▇" cap found for corner;
THENCE, South 82 degrees, 25 minutes, 23 seconds East, a distance of 47.57 feet
to an 1/2-inch iron rod with "▇▇▇▇▇▇▇ ▇▇▇▇" cap found for corner;
THENCE, North 42 degrees, 00 minutes, 34 seconds East, a distance of 312.94 feet
to a 1/2-inch rod with "▇▇▇▇▇▇▇ ▇▇▇▇" cap found for corner, said point being in
the said southwest right-of-way line of Dallas North Parkway;
THENCE, South 47 degrees, 59 minutes, 26 seconds East, with said northwest
right-of-way line, a distance of 397 feet to the POINT OF BEGINNING;
CONTAINING, 247,960 square feet or 5.692 acres of land, more or less.
26
EXHIBIT B TO LEASE AGREEMENT
----------------------------
[Floor Plan of the Premises]
27
EXHIBIT C TO LEASE AGREEMENT
----------------------------
Parking Privileges
1. Parking Spaces. At all times during the Lease Term, and conditioned upon
--------------
the Lease being in full force and effect and there being no uncured
default under this Lease as defined in Paragraph 26 of this Lease,
Landlord hereby agrees to make available to Tenant 100 parking permits, of
which 70 parking permits shall be allocated to the garage associated with
the Building and 30 shall be allocated to the surface of the Land (i.e.,
outside the garage). None of the permits will be for reserved spaces.
2. Parking Rental. During the primary term of this Lease, i.e., the Lease
--------------
Term specified in Paragraph 1(e) of this Lease, no rentals shall be
charged for the parking permits. If Tenant exercises its renewal option
pursuant to Rider No. 1 of this Lease, then during the renewal term the
rent for all parking permits which are allotted to Tenant pursuant to
Paragraph 1 immediately above shall be the rate which is from time to time
designated by Landlord as standard for the Building. During any such
renewal term, Landlord shall provide Tenant at least thirty (30) days
notice of any change in the parking rates, and Tenant shall pay the
adjusted rent after the expiration of the 30-day notice period. All
payments of rent for parking spaces shall be made (i) at the same time as
each Base Rental is due under the Lease and (ii) to Landlord or to such
persons as Landlord may direct from time to time.
3. Parking; Allocation Devises. Landlord reserves the right to change its
---------------------------
system for allocating parking spaces, e.g., magnetic parking cards,
parking stickers and other devices or forms of identification. If Landlord
issues magnetic parking cards, parking stickers or any other device or
form of identification, they shall remain the property of Landlord and
shall not be transferable. Tenant will be obligated to pay a replacement
charge, equal to the amount posted from time to time by Landlord, for loss
or other replacement of any magnetic parking card or parking sticker
issued by Landlord.
4. Damage. If Landlord temporarily fails or is temporarily unable to provide
------
any parking space to Tenant pursuant to Paragraph 1 above because of fire
or other damage or because of any condemnation, such failure or inability
shall not be deemed to be a default by Landlord as to permit Tenant to
terminate this Lease; nor shall such event permit any abatement of rentals
as long as Landlord provides reasonably acceptable substitute parking
within ten (10) days after, as applicable (the applicable alternative
being referred to herein as a "Parking Rights Event"): (i) the date of the
damage or condemnation taking, if such action makes parking obviously
impossible (e.g., a fire where the entire garage is destroyed), or (ii) if
the damage or condemnation does not make parking impossible but
nevertheless prevents Tenant from exercising its parking rights pursuant
to this Exhibit, the date of Landlord's receipt of a written notice from
Tenant, labeled "URGENT/IMMEDIATE ACTION REQUIRED" in all capital letters,
alerting Landlord to Tenant's lack of parking spaces. If reasonably
acceptable substitute parking (or the originally designated parking, as
described in Paragraph 1 above) is not made available to Tenant within
such 10-day period after the Parking Rights Event, then notwithstanding
any provision of this Lease to the contrary, and as Tenant's sole remedy
and relief, Tenant's Base Rental and Tenant's share of Operating Expenses
under this Lease will be equitably reduced to account for such
unavailability as of the eleventh (11th) day and shall continue so reduced
until reasonably acceptable substitute parking (or the originally
designated parking, as described in Paragraph 1 above) has been made
available. In the event that Landlord and Tenant disagree as to either (i)
whether Landlord has provided reasonably acceptable substitute parking or
(ii) the amount of any equitable reduction in Tenant's Base Rental and
Tenant's share of Operating Expenses (either such disagreement being
referred to herein as a "Parking Rights Dispute"), then in either such
event either Landlord or Tenant may, at its option and upon written notice
to the other party, elect to have such Parking Rights Dispute resolved by
arbitration conducted in Dallas County, Texas, under the procedures set
forth below. First, the party desiring that such Parking Rights Dispute be
arbitrated (the "Originator") shall give written notice to that effect to
the other party (the "Recipient"), specifying in its notice the name and
address of the person designated to act as arbitrator on behalf of the
Originator (which arbitrator must be an independent certified public
accountant with at least five years of experience in consulting with
landlords or tenants in commercial
28
real estate matters and must not be affiliated with, or otherwise engaged
in a business relationship with, either party to the arbitration). Within
five (5) business days after the Recipient's receipt of such notice from
the Originator, the Recipient may give written notice to the Originator
specifying the name and address of the person designated by the Recipient
to act as arbitrator (the second arbitrator) on its behalf (which
arbitrator must also be an independent certified public accountant with at
least five years of experience in consulting with landlords or tenants in
commercial real estate matters and must not be affiliated with, or
otherwise engaged in a business relationship with, either party to the
arbitration). If the Recipient fails to notify the first party of the
appointment of its arbitrator within the 5-business day time period
specified above, or if within twenty (20) days after the second arbitrator
is appointed, the two arbitrators have not reached a joint decision as to
the Parking Rights Dispute presented to them for resolution, the Parking
Rights Dispute shall be submitted to the American Arbitration Association
(or the successor thereof should the American Arbitration Association be
dissolved or restructured); and regardless of whether the arbitration is
conducted privately (i.e., two arbitrators selected by the parties) or
under the auspices of the American Arbitration Association (or its
successor), such arbitration shall be conducted in accordance with the
arbitration rules for the real estate industry of that Association (or its
successor). To the extent that legal questions are considered, the
arbitrator(s) shall apply the law of the State of Texas. The arbitration
award shall be binding upon both parties and, if not honored by a party,
shall be the basis for a judgment entered in any court of competent
jurisdiction. The arbitration award shall also designate which party
should bear the expense of the arbitration (excluding attorneys fees, with
each party hereby agreeing that it must pay its own legal fees); provided,
however, that it is hereby agreed as a general instruction to the
arbitrator(s) that all expenses of the arbitration, other than a party's
legal fees and the other the fees and expenses incurred by the respective
parties in preparing for and presenting their arguments to the
arbitrator(s), shall be shared equally between Landlord and Tenant unless
the arbitration award specifies a winning party and a losing party and
further specifies and directs that the losing party should pay the
arbitration expenses.
5. Rules and Regulations. A condition of any parking shall be compliance by
---------------------
the ▇▇▇▇▇▇ with garage or lot rules and regulations, including any sticker
or other identification system which may be established by Landlord. The
following rules and regulations are in effect until notice is given to
Tenant of any change. Landlord reserves the right to modify and/or adopt
such other reasonable and generally applicable rules and regulations for
the applicable parking areas as it deems necessary for the operation of
such areas.
(a) Cars must be parked entirely within the painted stall lines.
(b) All directional signs and arrows must be observed.
(c) The speed limit shall be five (5) miles per hour.
(d) Parking is prohibited in areas not striped for parking, aisles,
areas where "no parking" signs are posted, in cross-hatched areas
and in such other areas as may be designated by Landlord or
Landlord's agent(s) including, but not limited to, areas designated
as "Visitor Parking" or reserved spaces not rented under this
Agreement.
(e) Every ▇▇▇▇▇▇ is required to park and lock his or her own car. All
responsibility for damage to cars or persons or loss of personal
possessions is assumed by the ▇▇▇▇▇▇.
(f) Spaces which are designated for small, intermediate or full-sized
cars shall be so used. No intermediate or full-size cars shall be
parked in parking spaces limited to compact cars.
(g) No cars shall remain parked in the garage or on the Land for a
continuous period of more than three (3) days.
6. Special Provisions Regarding Over-Parking. Landlord agrees to use its good
-----------------------------------------
faith efforts to monitor the parking usage of tenants in the Building and
attempt to restrict tenants against permitting their owners, officers,
employees, agents and invitees to utilize more parking spaces than they
are allotted pursuant to their respective leases. Tenant agrees to
cooperate with
29
Landlord's efforts in this regard. In addition, and without limiting the
generality of the immediately preceding sentence, Tenant further agrees
that if and to the extent requested in writing by Landlord because of
Landlord's concern that Tenant's owners, officers, employees, agents
and/or invitees are utilizing more parking spaces than Tenant has been
allotted under this Exhibit C, then at Landlord's option any one or more
---------
of the following shall apply (i.e., the following are cumulative and not
mutually exclusive):
(a) Tenant shall deliver written notices to all employees and other
persons who might be utilizing parking spaces, advising them of the
parking limits under this Exhibit C.
---------
(b) Tenant shall furnish to Landlord a complete list of license numbers
of all automobiles operated by Tenant and its owners, officers,
employees, agents and invitees who might be utilizing parking
spaces.
(c) If any automobile or other vehicle owned by Tenant or any of its
employees, agents or other invitees is utilizing a parking space in
excess of those allotted to Tenant under this Exhibit C, Tenant
---------
shall pay to Landlord as additional rent upon demand an amount equal
to the daily rate or charge for such parking as established by
Landlord from time to time for each day, or part thereof, that such
automobile or other vehicle is so parked.
(d) If any overparking by Tenant, its employees, agents and other
invitees, persists after written notice thereof from Landlord to
Tenant, such continued overparking shall constitute a failure of
Tenant to comply with this Exhibit C; and such written notice from
---------
Landlord shall constitute the "written notice thereof" which is
contemplated in item (ii) of Section 26(a) of this Lease, i.e., the
overparking shall constitute an event of default under this Lease if
not cured within 30 days after such written notice.
30
EXHIBIT D TO LEASE AGREEMENT
----------------------------
Leasehold Improvements Agreement
THIS LEASEHOLD IMPROVEMENTS AGREEMENT (this "Agreement") is entered into
in connection with the attached Lease Agreement (the "Lease") between
INTERVEST-PARKWAY, LTD. ("Landlord"), and ENTRUST, INC. ("Tenant"), for leased
premises (the "Premises") in One Hanover Park, 16633 Dallas Parkway, Addison,
Texas. In the event of a conflict between the provisions of this Agreement and
the provisions of the Lease, the provisions of this Agreement will control.
1. Premises Condition: Landlord's Work. (a) Subject to the provisions in
-----------------------------------
subsection (b) of this Paragraph 1 and other express provisions of this
Agreement, Tenant has agreed to accept the Premises "as is," in their presently
existing condition. Tenant acknowledges having inspected the Premises.
(b) Notwithstanding subparagraph (a) above to the contrary, Landlord
agrees that it will at its sole expense (i) thoroughly clean the carpets and
walls of the Premises, including the elevator lobby walls in the Premises, (ii)
reseat and clean all light fixtures, and replace burnt-out lights, in the
Premises, (iii) clean all rest rooms in the Premises and repair any broken
equipment in those rest rooms, (iv) assure that all existing Building systems --
including, but not limited to, electrical, sprinkler, life/safety, plumbing,
heat, air conditioning systems and their distribution into the Premises -- are
in good working order (it being understood and agreed that this subsection (iv)
is not intended to require that any new Building systems be added but only that
existing Building systems be in good working order at the Commencement Date of
the Lease Term), (v) assure that the IT closet air conditioner is in good
working order as of the Commencement Date of the Lease Term, (vi) assure that
the ice maker and built-in appliances are in good working order as of the
Commencement Date of the Lease Term, (vii) laminate repairs on millwork, if and
to the extent necessary, (viii) remove the interior glass FINOVA logo in the
reception area of the Premises, and (ix) remove the interior stairway between
the 7th floor and the 8th floor of the Building (i.e., the stairway which the
prior tenant of the Premises, Finova Capital Corporation, had constructed for
its own internal use) and repair the floor of the 8th floor after such removal
(all such work being herein referred to as "Landlord's Work"). Landlord agrees
that Landlord's Work will include re-carpeting the floor area where the stairway
had been located; however, if Tenant requests any special carpeting or similar
cosmetic work to such floor area, i.e,. other than Landlord's merely patching
the area, then the substantial completion of the Landlord's Work will be deemed
to have occurred when the stairway has been removed and the structural element
of the floor area has been replaced. For purposes of Paragraph 1(d) of the main
body of this Lease, "Substantial Completion" of Landlord's Work will be deemed
to have occurred when the Premises are in a condition that Tenant can reasonably
begin performing its finish-out work and move into the Premises; however,
notwithstanding the Substantial Completion of Landlord's Work, Landlord agrees
that it will continue performing Landlord's Work until it has been completed.
2. Other Work. Any work other than the Landlord's Work specified in
----------
Paragraph 1(b) above shall be the responsibility of Tenant and shall be effected
only after Landlord has approved the plans and specifications for such work
(Landlord's approval not to be unreasonably withheld as long as the plans and
specifications are professionally prepared with reasonably satisfactory
specificity). Construction of any leasehold improvements shall be carried out by
contractors employed by Tenant. Tenant shall be solely responsible for all
payments and other liabilities or obligations to, and any liens or claims
asserted by, contractors or other persons employed by Tenant in connection with
its leasehold improvements. Tenant's contractor(s) for any leasehold
improvements shall provide proof of adequate insurance as reasonably required by
Landlord. Tenant shall in no event allow the attachment of any mechanic's
artisans, materialman's or similar liens to the Premises, the Building or the
Land. Tenant shall cause all leasehold improvements to be construed in a good
and workmanlike manner, and all work shall be done using commercial quality
materials. Tenant shall obtain, and shall promptly deliver to Landlord when
obtained, lien releases on all work performed by Tenant in the Building. The
Contractor will be required to cooperate with Landlord in the performance of its
work and to comply with all Building rules relating to construction work
performed in the Building.
3. Reimbursement by Landlord. In addition to the reimbursement prescribed
-------------------------
in Paragraph 2(c) of the main body of this Lease (i.e., for the increased cost
of removing the "FINOVA" sign on the crown of the Building), Landlord shall also
reimburse Tenant for up to $3,800.00 of
31
Tenant's bona fide out-of-pocket expense in replacing carpet in the lobby of the
Premises where the internal stairway referred to in Paragraph 1 above had been
located.
32
EXHIBIT E TO LEASE AGREEMENT
----------------------------
Building Rules and Regulations
1. Sidewalks, doorways, vestibules, corridors, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any purpose other
than ingress and egress to and from the Premises and for going from or to
another part of the Building.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable
materials shall be thrown or placed therein. Damage resulting to any such
fixtures or appliances or surrounding areas from misuse by Tenant shall be
repaired at the sole cost and expense of Tenant, and Landlord shall not in any
case be responsible therefor.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other parts of the Building except of such color,
size and style and in such places as shall be first approved in writing by
Landlord. No nails, hooks or screws shall be driven or inserted in any part of
the Building except by the Building maintenance personnel nor shall any part of
the Building be defaced by Tenant. No curtains or other window treatments will
be placed between the glass and the Building standard window treatments.
4. Landlord will provide and maintain an alphabetical directory of each
Tenant's firm name on the first floor (main lobby) of the Building. No other
directory shall be permitted unless previously consented to by Landlord in
writing.
5. Tenant shall not place any additional lock or locks on any doors in or
to the Premises without Landlord's prior written consent. A reasonable number of
keys to the locks on the doors which access the Premises from the Common Areas
shall be furnished by Landlord to Tenant, and Tenant shall not have any
duplicate keys made. Upon termination of the Lease, Tenant shall return all keys
to Landlord and shall provide to Landlord a means of opening all safes, cabinets
and vaults being left with the Premises.
6. With respect to work being performed by Tenant in the Premises with the
approval of Landlord, Tenant will refer all contractors, contractor's
representatives and installation technicians rendering any service to them to
Landlord for Landlord's supervision, approval and control before the performance
of any contractual services. This provision shall apply to work performed in the
Building including, but not limited to, installation of telephones, telegraph
equipment, electrical devices and attachments, and any and all installation of
every nature affecting floors, walls, woodwork, trim, windows, ceilings,
equipment and any other physical portion of the Building. Tenant must have
Landlord's written approval prior to employing any contractor. Any and all such
contractors shall comply with these Rules and Regulations for such services
including, but not limited to, insurance requirements. All work in or on the
Building shall comply with any and all codes.
7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of any bulky materials, merchandise or materials
which require use of elevators or stairways, or movement through the Building
entrances or lobby shall be restricted to such hours as Landlord shall
designate. All such movement shall be under the supervision of Landlord and in
the manner agreed between Tenant and Landlord by prearrangement before
performance. Such prearrangement initiated by Tenant will include determination
by Landlord, and subject to its decision and control, as to the time, method and
routing of movement and as to limitations for safety or other concerns which may
prohibit any article, equipment or any other item from being brought into the
Building. Tenant is to assume all risk as to damage to articles moved and injury
to person or public engaged or not engaged in such movement, including
equipment, property and personnel of Landlord and other tenants if damaged or
injured as a result of acts in connection with carrying out this service for
Tenant from the time of entering the property to completion of work; and
Landlord shall not be liable for acts of any person engaged in, or any damage or
loss to any of said property or persons resulting from any act in connection
with such service performed for Tenant.
33
8. Landlord shall have the power to prescribe the weight and position of
safes and other heavy equipment, which shall, in all cases, be positioned to
distribute the weight and stand on supporting devices approved by Landlord. All
damage done to the Building by taking in or putting out any property of Tenant,
or done by Tenant's property while in the Building, shall be repaired at the
expense of Tenant.
9. Tenant, in its capacity as an employer, shall establish -- and shall
use reasonable measures to enforce -- a policy for its employees which prohibits
firearms (including, but not limited to, concealed handguns) in the Building and
the Premises.
10. Tenant shall cooperate with Landlord's employees in keeping its
Premises neat and clean. Tenant shall not employ any person for the purpose of
such cleaning other than the Building's cleaning and maintenance personnel.
Landlord shall be in no way responsible to Tenant, its agents, employees or
invitees for any loss of property from the Premises or public areas or for any
damage to any property thereon from any cause whatsoever.
11. To insure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, etc. shall be delivered to the Premises except by
persons appointed or approved by Landlord in writing.
12. Corridor doors, when not in use, shall be kept closed.
13. Should Tenant require telegraphic, telephonic, annunciator or other
communication service, Landlord will direct the electrician in writing where and
how wires are to be introduced and placed and none shall be introduced or placed
except as Landlord shall direct. Electric current shall not be used for power in
excess of standard office use or heating without Landlord's prior written
permission.
14. Tenant shall not make or permit any improper odors or noises in the
Building or otherwise interfere in any way with other tenants or persons having
business with them.
15. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways. No animals shall be brought into or kept in, on or about
the Premises.
16. No machinery other than standard office equipment shall be operated by
Tenant in its Premises without the prior written consent of Landlord, nor shall
Tenant use or keep in the Building any flammable or explosive fluid or
substance.
17. No portion of the Premises shall at any time be used or occupied as
sleeping or lodging quarters.
18. Landlord will not be responsible for money, jewelry or other personal
property lost or stolen in or from the Premises or public areas regardless of
whether such loss or theft occurs when the area is locked against entry or not.
19. Landlord reserves the right to rescind any of these rules and
regulations and to make such other and further rules and regulations as in its
judgment shall from time to time be advisable for the safety, protection, care
and cleanliness of the Building, the use and operation thereof, the preservation
of good order therein and the protection and comfort of the tenants and their
agents, employees and invitees, which rules and regulations, when made and
written notice thereof is given to Tenant, shall be binding upon Tenant in like
manner as if originally herein prescribed; provided, however, that no new rules
or regulations shall deprive Tenant of any rights expressly granted to Tenant
pursuant to this Lease.
34
EXHIBIT F TO LEASE AGREEMENT
----------------------------
Brokerage Agreement with ▇▇▇▇▇▇ International
INTERVEST-PARKWAY, LTD.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
November 1, 2001
Mr. Ran ▇▇▇▇▇▇, President
▇▇▇▇▇▇ International
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
RE: Proposed lease (the "Lease") between the undersigned as Landlord
(hereinafter referred to as "Landlord") and Entrust Technologies, Inc.
(hereinafter referred to as "Tenant"), covering approximately 25,251
rentable square feet (the "Premises"), in the development known as One
Hanover Park located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ (such structure hereinafter referred to as the
"Building").
Ladies and Gentlemen:
This letter agreement (this "Agreement") will confirm our agreement concerning
the payment of a commission to ▇▇▇▇▇▇ International ("Broker") in consideration
of your brokerage services heretofore rendered and to be rendered in connection
with the Lease.
A. Conditions
----------
By your acceptance of this Agreement, you acknowledge and confirm to the
following: (i) that Landlord shall have the sole, exclusive and absolute right
to decline to entertain or to reject the terms of any proposed Lease for any
reason whatsoever without incurring any liability to you, notwithstanding the
extent to which negotiations may commence or continue and notwithstanding that
Landlord or Tenant may be arbitrary in refusing to execute or deliver the Lease;
(ii) that in the event the Lease is not fully executed within ninety (90) days
from the date of this Agreement, this Agreement shall be deemed terminated, and
of no further force or effect unless Landlord, in its sole discretion, elects to
extend the term of this Agreement; (iii) that no other broker has been granted
the right, whether exclusive or otherwise, to represent the Tenant in connection
with the Lease; (iv) that Broker is duly licensed pursuant to the Real Estate
License Act of the State of Texas; and (iv) that Broker either already has
provided, or will immediately provide, Tenant with a written disclosure as to
the net profits interest in the Building which is owned by Windjammer Equity
Partners, a Texas general partnership which is
35
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 2
affiliated with ▇▇▇▇▇▇ Development Services, Inc. and ▇▇▇▇▇▇ Realty Group, Ltd.,
i.e., such entities likewise being affiliated with Broker, and will provide
Landlord with evidence that such disclosure has been delivered.
In addition, if a Lease is executed, you agree that no commission shall be due
and payable if the Lease contains any conditions to its effectiveness or any
rights exist on the part of the Tenant to terminate the Lease prior to the
commencement of the term, until all conditions are satisfied or until the time
to exercise such options has expired. Accordingly, in the event that all
conditions are not satisfied or any option is exercised so that the Lease is
terminated prior to the commencement of the term, then no commission or other
compensation shall be payable to you. Notwithstanding the extent to which
negotiations may heretofore or hereafter commence or continue, you agree that no
commission or other compensation shall be payable to you if any of the
conditions of the foregoing paragraph are not fulfilled for any reason
whatsoever including, without limitation, Tenant's or Landlord's arbitrary
refusal or inability to execute and unconditionally deliver the Lease; and in
such an event you agree that you shall not have any right to and shall not
assert any claim against Landlord for a commission or other compensation
rendered in connection with the Lease or otherwise.
If a Lease is executed where pursuant to this commission agreement Broker is
entitled to receive a commission in connection with the primary term of the
Lease, and if the Lease contains a renewal option, then if and upon the exercise
of such renewal option by Tenant (and the execution of any necessary lease or
addendum), pursuant to the express provisions of the Lease affording Tenant such
option, Broker shall be entitled to an additional commission, as described
below, if -- but only if -- Broker is the only authorized broker representing
Tenant with regard to such renewal and Broker is in fact active in negotiations
with respect to such renewal option. Similarly, if a Lease is executed where
pursuant to this commission agreement Broker is entitled to receive a commission
in connection with the primary term of the Lease, and if the Lease provides for
any expansion option or right of first refusal option, then if and upon the
exercise of such expansion option or right of first refusal option by Tenant
(and the execution of any necessary lease or addendum), pursuant to the express
provisions of the Lease affording Tenant such option, Broker shall be entitled
to an additional commission, as described below, if -- but only if -- Broker is
the only authorized broker representing Tenant with regard to such expansion
option or right of first refusal option and Broker is in fact active in
negotiations with respect to such expansion option or right of first refusal
option.
B. Certain Definitions
-------------------
For purposes of this commission letter, the term "gross base rental" shall be
deemed to mean the basic minimum rental to be paid by Tenant under the Lease for
the use and occupancy of its Premises, minus (i) any rental waived during any
designated rental abatement period (ii) any increment of rental attributable to
the amortization of any tenant finish costs which are the responsibility of
Tenant but are financed by or through Landlord, (iii) any charges for electrical
consumption that may be imposed upon the Tenant; (iv) any escalation of such
rental measured by, based on, or indexed to inflation, (v) any escalations in
operating expenses to be paid by Tenant as reimbursements for costs and expenses
incurred or arising out of the ownership, operation, or use of the Building,
including, but not limited to costs and expenses of
36
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 3
maintenance, taxes, cleaning, repairs, insurance, utilities, guard services, and
labor with respect to the Building; (vi) any and all amounts paid by Landlord or
credited by Landlord against basic rental for Tenant's moving expenses or
charges; and (vii) the amount of any costs and expenses incurred or to be
incurred by Landlord in connection with Landlord's assumption of, or
reimbursement or other takeover obligation with respect to, Tenant's obligation
under any existing lease.
Also for purposes of this commission letter, the term "Security Deposit" shall
be deemed to mean a cash deposit paid by Tenant and held by Landlord in an
amount of $334,575.72, of which $55,762.62 shall be paid by Tenant to Landlord
on the date of execution of the Lease and $278,813.10 shall be paid by Tenant to
Landlord on or before January 5, 2002. Also for purposes of this commission
letter, the term "Security Deposit Contingency" shall be deemed to mean the
satisfaction of both of the following: (a) the Tenant's deposit of the
above-described Security Deposit as described above (or, if applicable, upon any
renewal, expansion or exercise of a right of first refusal), and (b) the Lease
containing a provision confirming that the Security Deposit serves as additional
security for the Tenant's performance of its obligations under the Lease and,
accordingly, can be drawn by Landlord upon any default by the Tenant in any such
performance.
C. Commission Terms
----------------
In the event that a commission ("Commission") is payable to you in accordance
with the provisions of this commission letter, i.e., subject to the satisfaction
of the terns and conditions of this agreement and the continuing truthfulness
and accuracy of all representations made herein by the Broker, the Broker agrees
to accept as its full and only compensation for its services rendered in
connection with the Lease, a Commission computed as follows:
1. Primary Term of Lease: With the "Security Deposit Contingency"
---------------------------------------------------------------
Satisfied by the Tenant.
------------------------
If the "Security Deposit Contingency" is satisfied in connection with the
primary term of the Lease, then the total Commission payable to the Broker shall
be a sum equal to four and one-half percent 4 1/2%) of the gross base rentals
(as hereinabove defined) payable by Tenant during the initial term of the
subject Lease on (a) the initial increment of space leased by Tenant in the
Building, plus (b) during the period after the commencement date, any additional
increments of space in the Building which Tenant has an absolute and binding
obligation to acquire under the terms of the Lease during the first twelve (12)
months of its term.
Subject to the foregoing provisions of this Agreement, the Commission shall be
paid by Landlord to Broker in the following installments:
(a) One-half (1/2) of the Commission shall be paid within thirty (30) days
after the last to occur of the following: (i) the receipt by the Landlord
of a fully executed Lease; (ii) the satisfaction of all contingencies in
the Lease (other than the construction obligations of the Landlord, if any,
under the Lease); and (iii) the Landlord's receipt of an invoice
37
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 4
from Broker, with respect to the Lease, such invoice to be delivered to the
Landlord no earlier than the satisfaction of items (i) and (ii) herein;
(b) The remaining one-half (1/2) of the Commission shall be paid within
thirty (30) days after receipt by Landlord of a subsequent invoice from
Broker with respect to the Lease, such subsequent invoice to be delivered
to the Landlord no earlier than the date upon which Tenant actually takes
occupancy of, accepts the condition of and commences business operations in
the Premises and then commences paying monthly rentals pursuant to the
Lease.
2. Renewal Term of Lease: With the "Security Deposit Contingency" Satisfied
-------------------------------------------------------------------------
by the Tenant.
--------------
If the "Security Deposit Contingency" is satisfied in connection with any
renewal term for which Broker is entitled to a Commission, then if and upon the
exercise of such renewal option by Tenant (and the execution of any necessary
lease or addendum), Broker shall be entitled to, and Landlord shall pay to
Broker, an additional Commission, equal to four and one-half percent (4.5%) of
the gross base rental, utilizing the applicable term of said elected renewal
option in determination of same. Subject to the foregoing provisions of this
Agreement the renewal option Commission shall be paid within thirty (30) days
after all of the following have occurred: (i) receipt by Landlord of a fully
executed renewal agreement, (ii) receipt by Landlord of an invoice from Broker
with respect to the renewal and (iii) the commencement of the renewal term.
3. Expansions or Rights of Refusal: With the "Security Deposit Contingency"
-------------------------------------------------------------------------
Satisfied by the Tenant.
------------------------
If the "Security Deposit Contingency" is satisfied to connection with any such
expansion or right of refusal for which Broker is entitled to a Commission, then
if and upon the exercise of such right or option by Tenant (and the execution of
any necessary lease or addendum), Landlord shall pay to Broker an additional
Commission, said additional Commission equal to four and one-half percent (4.5%)
of the gross base rental, utilizing the applicable term of said elected
expansion option or right of first refusal in the determination of same. Subject
to the foregoing provisions of this Agreement, the expansion option or right of
first refusal Commission shall be paid in the following installments:
(i) One-half (1/2) of the Commission shall be paid within thirty (30) days
after receipt by the Landlord of a fully executed lease amendment with
respect to the expansion option or right of first refusal and an invoice
from Broker, to be delivered to the Landlord only after the Commission is
earned as previously described herein; and
(ii) The remaining one-half (1/2) of the Commission shall be paid within
thirty (30) days after receipt by Landlord of a subsequent invoice from
Broker with respect to the expansion option or right of first refusal, such
subsequent invoice to be delivered after Tenant actually takes occupancy
of, accepts the condition of and commences business operations in the
premises covered by the expansion option or right of first refusal and then
commences paying monthly rentals with respect to such premises.
38
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 5
4. "Security Deposit Contingency" Not Satisfied by the Tenant.
----------------------------------------------------------
Notwithstanding anything to the contrary contained to paragraphs 1 through 3 of
this Article C, if all conditions to the Broker's receipt of a Commission other
than the "Security Deposit Contingency" have been satisfied but the "Security
Deposit Contingency" is not satisfied in connection with a transaction or
transactions described in one or more of those paragraphs, then for such
transaction the applicable commission paragraph above in this Article C will not
apply and instead the Commission for such transaction shall be six percent (6%)
of gross base rentals (as defined above) if and when paid by Tenant to Landlord
during the applicable term of the Lease. In such event, Landlord shall pay
installments of the Commission to Broker on a monthly basis, with each
installment to be equal to six percent (6%) of the amount of the gross base
rental actually received by Landlord from the Tenant during such month, and with
each installment of Commission to be paid by Landlord to Broker within thirty
(30) days after Landlord's receipt of the monthly installment of gross base
rental from the Tenant. In no event will an installment of Commission be due
from Landlord to Tenant for a month in which, for any reason whatsoever,
Landlord has not received the respective installment of gross base rental from
the Tenant. In addition, if Landlord incurs legal fees or other expenses in
connection with collection efforts to obtain the Tenant's payment of any gross
base rental, then Landlord shall be entitled to reduce its payment of the
immediately succeeding Commission installments, if any, by an amount equal to
six percent (6%) of all of Landlord's expenses. Finally, if the Tenant files for
bankruptcy, is declared a bankrupt or otherwise similarly becomes involved in
bankruptcy or insolvency proceedings, then this commission agreement shall
automatically terminate and be of no further force or effect, with Landlord
owing nothing to Broker regardless of whether or not Landlord obtains any
monetary recover pursuant to such proceedings.
D. Further Limitations
-------------------
In no event, notwithstanding the actual term of the Lease or any renewal option
granted in the Lease, will any Commission be payable for any gross base rental
or other charges payable by the Tenant for any year of the Lease term subsequent
to the tenth (10th) anniversary of the Commencement Date of the Lease. This
Article C supersedes anything to the contrary which may be stated or implied
elsewhere in this commission agreement.
In addition, and notwithstanding anything contained in Articles A through C
above, if there shall be any other claim or claims by a duly licensed broker
claiming by, through or under Broker or Tenant for a Commission or other
compensation with respect to the Lease, any renewal or extension thereof, or for
any expansion or exercise of a right of first refusal, Landlord shall not be
required to pay Broker any Commission until and unless all parties claiming a
Commission or other compensation release Landlord from such claims or a court
orders Landlord to pay the commission or other compensation. If Landlord is in
doubt as to whom a Commission or other compensation is payable, Landlord shall
have the right to pay the Commission to a court of competent jurisdiction and in
such event Landlord shall be released from all liability.
In no event shall Landlord be required to pay any Commission or other
compensation in excess of the amount set forth herein with respect to the Lease.
39
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 6
E. Miscellaneous
-------------
Broker will not advertise the lease transaction, nor place any notice thereof in
any newspaper or other publication, without first obtaining the prior written
approval of Landlord as to the contents thereof.
Notwithstanding anything herein contained to the contrary, in the event Landlord
sells or otherwise transfers ownership of the Building to a third party,
Landlord shall be relieved of all obligations hereunder if Landlord causes said
third party to assume Landlord's obligations hereunder.
Notwithstanding anything herein contained to the contrary, in the event that
Tenant enjoys a right or options to cancel the Lease (and for reasons unrelated
to casualty, condemnation, default, and the like), then no portion of the
commission in respect of any lease of space which is subject to a cancellation
right or option shall be payable until the time to exercise such option or right
has expired, and in the event such option or right is exercised, then no
commission or other compensation shall be payable in connection with the portion
of the Lease so canceled. Notwithstanding the foregoing, should the cancellation
payment, penalty or fee provided for in the Lease include the unamortized
brokerage commission, then Landlord shall pay to Broker a full commission as if
no such right or option to cancel existed.
This Agreement shall not be binding unless executed by both parties. When
executed by both parties, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns; and it can be modified only by a written instrument
signed by both Landlord and Broker. The provisions of this Agreement supersede
all previous oral and written understandings and agreements by the parties.
If the foregoing accurately sets forth our entire agreement concerning the
matters discussed herein, please sign and return the enclosed copies.
Sincerely,
INTERVEST-PARKWAY, LTD.,
a Texas limited partnership
By: Intervest Equity Group, L.C.,
a Texas limited liability company,
its sole General Partner
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Manager
40
Mr. Ran ▇▇▇▇▇▇
November 1, 2001
Page 7
ACCEPTED AND AGREED TO THIS 1st day of November, 2001
-----
BROKER:
▇▇▇▇▇▇ INTERNATIONAL
By: /s/ A. Ran ▇▇▇▇▇▇
---------------------------------------
Name: A. Ran ▇▇▇▇▇▇
-------------------------------------
Title: President
-----------------------------------
Tax I.D.
----------------------------------
Broker No.
-------------------------------
41
Rider No. 1
TENANT'S OPTION TO RENEW
------------------------
1. Tenant may, at its option, renew the term of this Lease for one (1)
additional term of thirty-six (36) months, provided that this Lease must be in
full force and effect under the original term or any valid renewal thereof, and
Tenant shall not be in default in any of its obligations under this Lease at the
time of exercise of such option or at the time the renewal term would begin.
Such renewal shall be upon the same terms and conditions as provided elsewhere
in this Lease, except that (i) the original term of this Lease may not be
renewed more often than the one time set forth above, (ii) Landlord shall have
no obligation to install improvements in the Premises nor to provide Tenant with
any allowance, and (iii) the annual Base Rental for such renewal period, i.e.,
to be payable in equal monthly installments in the same manner as during the
primary Lease Term, shall be the Prevailing Building Rental Rate (described
below). Such option shall be exercised by Tenant's giving notice to Landlord by
certified mail, return receipt requested, at least nine (9) months prior to the
end of the then-existing term; and, if not so exercised, such option shall
automatically expire and terminate (i.e., time being of the essence).
2. For purposes of determining the annual Base Rental for the extension
period, the "Prevailing Building Rental Rate" shall mean the annual rental rate
then being charged by landlords of comparable buildings and locations within a
5-mile radius of the Building (including what Landlord is then charging with
regard to the Building), for lease extensions or renewals of space entered into
within the 9-month period preceding the commencement of the extension term, for
leased premises comparable to the Premises, taking into consideration the
quality and class of the Building, the size and location of the Premises within
the Building, the sign rights granted to Tenant pursuant to Paragraph 2(c) of
the main body of this Lease, the financial condition of Tenant at the time of
the renewal, rental concessions then being granted by Landlord and other
landlords in comparable buildings and locations within a 5-mile radius of the
Building, the fact that no allowance is being provided in connection with
Tenant's extension, the date the particular rate under consideration is to
become effective, and the term of the lease under consideration.
3. Upon Tenant's exercise of the extension option pursuant to this Rider,
the parties shall attempt in good faith for twenty (20) days thereafter to agree
upon the Prevailing Building Rental Rate for the applicable extension term. If
Landlord and Tenant are unable to agree upon a Prevailing Building Rental Rate
within the above-stated twenty-day period, then Landlord and Tenant shall
attempt in good faith for an additional ten (10) days to agree upon a single
appraiser; and if Landlord and Tenant are so able to agree, the determination by
such single appraiser of a Prevailing Building Rental Rate (using the same
standards as set out above) shall be final and binding. If Landlord and Tenant
are unable to agree upon a single appraiser within the above-stated ten-day
period, then the following procedures shall apply:
(a) Within seven (7) days after the conclusion of the ten-day
period, each party shall submit to the other party an appraiser who must
be a member either of the American Institute of Real Estate Appraisers or
of the Society of Real Estate Appraisers and must have at least five (5)
years of experience appraising commercial properties in Dallas County,
Texas, and neither of whom may be a present or former employee or business
associate of either Landlord or Tenant. If one party does not submit an
appraiser within the seven-day period, then the appraiser submitted by the
other party will serve as the sole appraiser.
(b) The two appraisers so selected shall promptly proceed to
determine the Prevailing Building Rental Rate (using the same standards as
set out above); and if the two appraisers agree on such Prevailing
Building Rental Rate, their determination shall be final and binding on
all parties. If the two appraisers so selected are unable to agree on the
Prevailing Building Rental Rate but the appraisals are no more than ten
percent (10%) apart, computed from the base of the higher appraisal, the
two appraisals shall be averaged and the average shall constitute the
Prevailing Building Rental Rate. If the appraisals are separated by more
than ten percent (10%), such two appraisers shall select a third appraiser
(who, unless waived by both initial appraisers, shall have qualifications
comparable to
42
the two initially selected); and if the two appraisers are unable to agree
upon a third appraiser within fifteen (15) days, then they shall in lieu
thereof each select the names of two willing persons qualified to be
appraisers hereunder and from the four persons so named, one name shall be
drawn by lot by a representative of Landlord in the presence of a
representative of Tenant, and the person whose name is so drawn shall be
the third appraiser. If either of the first two appraisers fails to select
the names of two willing, qualified appraisers and to cooperate with the
other appraiser so that a third appraiser can be selected by lot, the
third appraiser shall be selected by lot from the two appraisers which
were selected by the other appraiser for the drawing. Any vacancy in the
office of the first two appraisers shall be filled by the party who
initially selected that appraiser, and if the appropriate party fails to
fill any vacancy within fifteen (15) days after such vacancy occurs, then
such vacancy shall be filled by the other party. Any vacancy in the office
of the third appraiser shall be filled by the first two appraisers in the
manner specified above for the selection of a third appraiser. The third
appraiser shall, within fifteen (15) days after having been selected,
render his or her opinion; and the average of the amounts proposed by the
two appraisers whose determinations most closely correspond to each other
shall constitute the Prevailing Building Rental Rate; provided, however,
that if all three appraisals vary by less than 15% from the average of the
three appraisals, then the average shall be the Prevailing Building Rental
Rate.
Each party shall pay the appraiser which was appointed by such party (or on
behalf of such party). With regard to any single appraiser, or a third
appraiser, all costs shall be shared equally by Landlord and Tenant.
43