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LEASE AGREEMENT

Lease Agreement

LEASE AGREEMENT | Document Parties: TAXMASTERS, INC. | Lebear Corp You are currently viewing:
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TAXMASTERS, INC. | Lebear Corp

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Title: LEASE AGREEMENT
Governing Law: Texas     Date: 8/10/2009

LEASE AGREEMENT, Parties: taxmasters  inc. , lebear corp
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Exhibit 10.5

 

 


 

LEASE AGREEMENT

 

2020 DAIRY ASHFORD PLAZA

 

 

BY AND BETWEEN

 

DAP PLAZA

 

("LANDLORD")

 

AND

 

TAX MASTERS, INC.

 

("TENANT")

 

 

 

 

 

 


 

 

 

 Page

SEC. 1  LEASED PREMISES

1

SEC. 2  TERM:

 

SEC. 3  USE:

2

SEC. 4  SECURITY DEPOSIT:

2

SEC. 5  BASE RENT:

2

SEC. 6  ADDITIONAL RENT:

3

SEC. 7  SERVICE AND UTILITIES:

6

SEC. 8  MAINTENANCE, REPAIRS AND USE:

9

SEC. 9  QUIET ENJOYMENT:

10

SEC. 10  ALTERATIONS •

 10

SEC. 11  FURNITURE, FIXTURES AND PERSONAL PROPERTY:

 11

SEC. 12  SUBLETTING AND ASSIGNMENT:

12

SEC. 13  FIRE AND CASUALTY:

14

SEC. 14  CONDEMNATION:

 15

SEC. 15  DEFAULT BY TENANT:

15

SEC. 16  REMEDIES OF LANDLORD:

16

SEC. 17  LIEN FOR RENT:

18

SEC. 18  LANDLORD'S DEFAULT

18

SEC. 19  TENANT'S REMEDIES:

 19

SEC. 20  NON-WAIVER•

 19

SEC. 21  LAWS AND REGULATIONS; RULES AND REGULATIONS.

 19

SEC. 22  ASSIGNMENT BY LANDLORD; LIMITATION OF LANDLORD'S

 

 

 

LIABILITY:

19

SEC. 23  SEVERABILITY:

20

SEC. 24  SIGNS:

20

SEC. 25  SUCCESSORS AND ASSIGNS:

20

SEC. 26  SUBORDINATION:

20

SEC. 27  TAX PROTEST.

21

SEC. 28  HOLDING OVER:

21

SEC. 29  INDEPENDENT OBLIGATION TO PAY RENT:

21

SEC. 30  INDEMNITY; RELEASE AND WAIVER.

22

SEC. 31  INSURANCE:

23

SEC. 32  ENTIRE AGREEMENT:

23

SEC. 33  NOTICES:

23

SEC. 34  COMMENCEMENT DATE:

23

SEC. 35  RELOCATION OF TENANT:

23

SEC. 36  BROKERS:

24

SEC. 37  ESTOPPEL CERTIFICATES:

24

SEC. 38  NAME CHANGE:

24

SEC. 39  BANKRUPTCY:

24

SEC. 40  TELECOMMUNICATIONS PROVIDERS:

25

SEC. 41  HAZARDOUS SUBSTANCES:

25

 

 

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SEC. 42  NO MONEY DAMAGES FOR FAILURE TO CONSENT; WAIVER OF CERTAIN DAMAGES:

26

SEC. 43  ACKNOWLEDGMENT OF NON-APPLICABILITY OF DTPA:

26

SEC. 44  ATTORNEYS' FEES:

27

SEC. 45  AUTHORITY OF TENANT:

27

SEC. 46  INABILITY TO PERFORM:

27

SEC. 47  JOINT AND SEVERAL TENANCY:

27

SEC. 48  EXECUTION OF THIS LEASE AGREEMENT:

27

SEC. 49  WAIVER OF TRIAL BY JURY; COUNTERCLAIM:

27

SEC. 50  CALCULATION OF TIME PERIODS

27

SEC. 51  ANTI-TERRORISM LAWS

27

SEC. 52  FINANCIAL STATEMENTS

28

SEC. 53  RENEWAL OPTION:

28

SEC. 54  RIGHT OF FIRST OFFER

29

SEC. 55  PURCHASE OPTION

30

SEC. 56  MEMORANDUM OF LEASE

30

SEC. 57  TENANT'S EXCLUSIVE USE

30

SEC. 58  BACK UP GENERATOR

31

SEC. 59  EXHIBITS

31

 

EXHIBITS:

 

EXHIBIT A - SITE PLAN

 

EXHIBIT B - LEGAL DESCRIPTION OF THE LAND

 

EXHIBIT C - PARKING AGREEMENT

 

EXHIBIT D - RULES AND REGULATIONS

 

EXHIBIT E - ACCEPTANCE OF PREMISES MEMORANDUM

 

EXHIBIT F - TENANT'S ESTOPPEL CERTIFICATE

 

EXHIBIT G - LEASEHOLD IMPROVEMENTS

 

EXHIBIT H - AIR CONDITIONING AND HEATING SERVICES

 

EXHIBIT I - INSURANCE REQUIREMENTS

 

EXHIBIT J - PURCHASE OPTION

 

EXHIBIT K - FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 


 

 

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LEASE AGREEMENT

 

Office Building

 

This Lease Agreement (this "Lease Agreement") is made and entered into as of the date set forth on the signature page between DAP PLAZA, a California limited partnership registered to do business in Texas as "DAP Plaza, Ltd.", hereinafter referred to as "Landlord", and TAX MASTERS, INC., a Nevada corporation, hereinafter referred to as "Tenant":

 

WITNESSETH:

 

SEC. I LEASED PREMISES In consideration of the mutual covenants as set forth herein, Landlord and Tenant hereby agree as follows:

 

A. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for the rental and on the terms and conditions hereinafter set forth the office building located at 2020 Dairy Ashford Road, Houston, Harris County, Texas 77077 (the "Building") and situated on that certain tract or parcel of land more particularly described by metes and bounds on Exhibit B attached hereto and made a part hereof for all purposes (the "Land"), which Building includes approximately one hundred seven thousand eight hundred ninety (107,890) square feet of Net Rentable Area (as hereinafter defined) on floors one (1) through six (6) thereof, as indicated on the site plan attached hereto as Exhibit A (the Building, including such Net Rentable Area, shall be referred to herein as the "Leased Premises"). Said Building is located on and constitutes a part of that certain office building complex located on the Land comprised of the Building, the Adjacent Building (hereinafter defined) and all common driveways, entrances, exits, parking lots, parking garages, and sidewalks serving the same (hereinafter collectively, the "Development"). Tenant agrees that the Net Rentable Area of the Leased Premises described herein is a reasonable approximation and is not subject to revision whether or not the actual size is more or less. Subject to Section 9.B below, Landlord hereby grants Tenant, its employees, invitees and other visitors, a nonexclusive license for the Term of this Lease Agreement and all extensions and renewals thereof over, across and upon all driveways, entrances, exits, parking lots, parking garages, sidewalks and other common areas of the Development, subject however to Sections 9.B and 19 below and Exhibit C hereof, to use the same for the purpose for which they were designed, including without limitation ingress and egress to the Leased Premises.

 

B. The term "Net Rentable Area" shall mean the net rentable area measured according to standards similar to those published by the Building Owners and Managers Association International, Publication ANSI Z 65.1-1996, as amended or replaced from time to time (the "Modified BOMA Standard"). If the Building is ever demolished, altered, remodeled, renovated, expanded or otherwise changed in such a manner as to alter the amount of space contained therein, then the Net Rentable Area of the Building shall be adjusted and recalculated by using the Modified BOMA Standard.

 

C. Landlord also leases to Tenant certain parking spaces on the terms and conditions set forth in Exhibit C attached hereto and made a part hereof for all purposes.

 

D. The Leased Premises shall be delivered to Tenant and Tenant shall accept same, in its current "AS IS, WHERE IS" condition subject to the construction of the Landlord's Work, as set forth and described on Exhibit G attached hereto and made a part hereof for all purposes. Tenant acknowledges that no representations as to the repair of the Leased Premises or the Building, nor promises to alter, remodel or improve the Leased Premises or the Building, have been made by Landlord, except as are expressly set forth in this Lease Agreement.

 

SEC. 2 TERM:

 

A. The term of this Lease Agreement (the "Term") shall commence on the day that is one hundred eighty (180) days following the earlier to occur of (i) the day that is sixty (60) days following the Effective Date or (ii) the date upon which Tenant has obtained all third party permits and approvals (with respect to which permits and approvals Tenant shall use its good faith and diligent efforts to obtain) necessary for Tenant to commence, or cause the commencement of, the construction and installation of the Leasehold Improvements (as defined on Exhibit G)

 

 

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(such date being herein referred to as the "Commencement Date") and, unless sooner terminated or renewed and extended in accordance with the terms and conditions set forth herein, shall expire at 11:59 p.m. on the day preceding the day that is sixty-six (66) months following the Commencement Date (the "Expiration Date").

 

B. This Lease Agreement shall be effective as of the Effective Date (as hereinafter defined) and in the event Tenant, prior to the Commencement Date, (i) completes the Leasehold Improvements substantially in accordance with the approved Construction Drawings (as defined on Exhibit G) and (ii) occupies the Leased Premises for purposes of conducting its operations therein, such entry shall be subject to the terms and conditions of this Lease Agreement, except that Base Rent and Additional Rent (each as hereinafter defined) shall not commence to accrue as a result of such entry until the Commencement Date.

 

SEC. 3 USE: Landlord acknowledges that Tenant's business operations consist of advising and counseling both consumers and businesses in connection with, and the preparation of, federal, state and local income tax returns and other tax related matters and that Tenant intends to conduct such operations in the Leased Premises (collectively " Tenant's Intended Use ") Accordingly, the Leased Premises shall be used and occupied by Tenant solely for general office purposes and any uses ancillary to the same and to Tenant's Intended Use, including by way of example but not limitation the operation of phone banks, computer processing services and office reproduction services, and for no other purpose (save and except a retail sundry/news kiosk and/or deli/snack bar shall be permitted on the first floor as uses ancillary to Tenant's Intended Use so long as same are located within the first floor of the Building, do not have independent access to the exterior of the Building and are not advertised for use to the general public). In the event the Tenant elects to use the Leased Premises for any such ancillary uses, Tenant shall be required to obtain and maintain throughout the Term all permits and licenses required by applicable governmental authority or governing body to operate such ancillary uses in the Leased Premises. The Leased Premises shall not be used for any purpose which would tend to lower the current character of the Building, create unreasonable elevator loads or otherwise interfere with standard Building operations and Tenant shall not engage in any activity which does not comply with Rules and Regulations set forth on Exhibit D hereto.

 

SEC. 4 SECURITY DEPOSIT: Reserved.

 

SEC. 5 BASE RENT:

 

A. As part of the consideration for the execution of this Lease Agreement, Tenant covenants and agrees and promises to pay Landlord base rent according to the following schedule (the "Base Rent"):

 

Months Following the

Commencement Date

Annual Base Rent Rate Per

Square Foot of Net Rentable Area

 

Annual Base Rent

Monthly 

Payment

1-6

$0.00

 

 

$0.00

$0.00

7-26

$7.50

 

 

$809,175.00

$67,431.25

27-46

$8.50

 

 

$917,065.00

$74,422.08

47-66

$9.50

 

 

$1,024,955.00

$85,412.92

 

 

The Base Rent shall be payable to Landlord at the address of the Landlord's property manager set forth in Section 31 below (or such other address as may be designated by Landlord in writing from time to time) in monthly installments in legal tender of the United States of America, in advance, without demand, set-off or counterclaim except as herein expressly provided, on or before the first day of each calendar month during the Term hereof; provided, however, the first monthly payment of Base Rent (i.e. Base Rent payable with respect to the seventh (7th) month of the Term) shall be made on the Effective Date. If the Term of this Lease Agreement as described above commences on other than the first day of a calendar month or terminates on other than the last day of a calendar month, then the installments of Base Rent for such month or months shall be prorated and the installment or installments so prorated shall be paid in advance. The payment for such prorated month shall be calculated by multiplying the monthly installment by a fraction, the numerator of which shall be the number of days of the Term occurring during said commencement or termination month, as the case may be, and the denominator of which shall be thirty (30).

 

B. In addition to the foregoing Base Rent and the Additional Rent to be paid by Tenant pursuant to Section 6 below, Tenant agrees to pay to Landlord as additional rent all charges for any services, goods or materials

 

 

 

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furnished by Landlord at Tenant's request which are not required to be furnished by Landlord under this Lease Agreement, as well as other sums payable by Tenant hereunder, within ten (10) days after Landlord renders a statement therefor to Tenant. In the event Tenant fails to pay Rent (as hereinafter defined) within ten (10) days of the date due, a late charge equal to five percent (5°/0) of the amount unpaid shall be immediately due and payable.

 

SEC. 6 ADDITIONAL RENT:

 

A. As part of the consideration for the execution of this Lease Agreement, and in addition to the Base Rent specified above, Tenant covenants and agrees to pay, for each Lease Year (as hereinafter defined) during the Term, as additional rent (the "Additional Rent"), one hundred percent (100%) of the Operating Expenses (as hereinafter defined) for that Lease Year; provided, however, the Operating Expenses for the initial Lease Year of the Term shall in no event exceed Six and 70/100 Dollars ($6.70) per square foot of Net Rentable Area of the Leased Premises. For purposes of calculating Additional Rent under this Section 6, the Controllable Operating Expenses (defined below) for each Lease Year after the initial Lease Year that may be included in Operating Expenses for such Lease Year shall not be more than five percent (5%) greater than the Controllable Operating Expenses for the then previous Lease Year. "Controllable Operating Expenses" shall mean all items of Operating Expenses which are within the reasonable control of Landlord, but specifically excluding taxes, utilities, costs associated with providing security to the Complex, insurance, costs incurred to comply with governmental requirements, wages and salaries affected by the minimum wage, and other costs beyond the reasonable control of Landlord. For purposes hereof, the initial "Lease Year" shall be the period commencing on the Commencement Date and continuing through the day that is twelve (12) months following the Commencement Date. Each "Lease Year" after the initial Lease Year shall be a consecutive twelve (12) month period commencing on the first day immediately following the preceding Lease Year.

 

B. All Operating Expenses shall be determined in accordance with generally accepted accounting principles ("GAAP"), consistently applied and shall be computed on the accrual basis. As of the date of this Lease Agreement, Landlord owns the office building located at 2000 Dairy Ashford Road, Houston, Harris County, Texas 77077 (the "Adjacent Building") located within the Development. Accordingly, if any of the Operating Expenses described in this Section 6.B are attributable to both the Complex (hereinafter defined) and the Adjacent Building, and if so then only such portion thereof as are properly allocable (determined using Landlord's good faith) to the Complex shall be included in Operating Expenses, provided that in no event shall the portion attributable to the Leased Premises exceed a fraction, the numerator of which shall be the Net Rentable Area of the Leased Premises and the denominator of which shall be the total Net Rentable Area of the Development, which the parties agree shall be no less than 109,974 square feet. The term "Operating Expenses" as used herein shall mean all expenses, costs and disbursements in connection with the ownership, operation, management, maintenance and repair of the Building, the Land, related pedestrian walkways, landscaping, fountains, roadways and parking facilities (inc)uding the Parking Facilities [as defined on Exhibit C] ), and such additional facilities to service any of the foregoing in subsequent years as may be necessary or desirable in Landlord's discretion (the Building, the Land and said additional facilities being hereinafter sometimes referred to as the "Complex"), including but not limited to the following:

 

 

(1)

Wages and salaries of all employees exclusively engaged in the operation, security, cleaning and maintenance of the Complex, including customary taxes, insurance and benefits relating thereto, excluding, however, leasing agents and any other wages or salaries of employees by Landlord in the general operation of Landlords' business and not exclusively in connection with the operation of the Complex.

 

 

(2)

All supplies, tools, equipment and materials used exclusively in operation and maintenance of the Complex, provided that the cost of any equipment and tools shall be amortized over the useful life of such equipment and tools according to GAAP.

 

 

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(3)

Cost of all utilities for the Complex, including but not limited to the costs of water, electricity for the driveways and sidewalks, gas, heating, lighting, air conditioning and ventilation; provided, however, the cost of providing electricity to the Leased Premises and the Parking Facilities shall not be included in Operating Expenses, but shall be paid by Tenant pursuant to the terms and provisions of Section 7.E hereof.

 

 

(4)

Cost of all Required Services set forth in Section 7.A below, including without limitation, janitorial and day porter service, maintenance and service agreements for the Complex and the equipment therein, including alarm service, security service, window cleaning, janitorial service, trash removal and elevator maintenance.

 

 

(5)

Cost of all insurance relating to the Complex which Landlord is required to maintain pursuant to Section 31 below or any other insurance that Landlord elects to obtain and maintain, including but not limited to casualty and liability insurance applicable to the Complex and Landlord's personal property used in connection therewith; the amount of the deductible paid by Landlord or deducted from any insurance proceeds paid to Landlord shall also constitute an Operating Expense.

 

 

(6)

All ad valorem taxes and assessments and other governmental charges (whether federal, state, county or municipal and whether they be by taxing districts or authorities presently taxing the Leased Premises or by others subsequently created or otherwise) and any other taxes and improvement assessments attributable to the Complex, or its operation or the revenues or rents received therefrom (whether directly or indirectly through the use of a franchise, margin or other similar tax and whether or not such taxes allow for the deduction of expenses in calculating the base amount on which the tax is levied), but excluding, however, federal and state taxes on income and any penalties assessed as a result of late payment(s) by Landlord (collectively, "Taxes"); provided, however, that if at any time during the Term, new taxes, assessments, levies, impositions or charges are imposed on the rents received from the Complex or the rents reserved herein or any part thereof (whether directly or indirectly through the use of a franchise, margin or other similar tax), or the present method of taxation or assessment shall be so changed that the whole or any part of the taxes, assessments, levies, impositions or charges now levied, assessed or imposed on real estate and the improvements thereof shall be discontinued and as a substitute therefor, or in lieu of an increase to the tax rate thereof, taxes, assessments, levies, impositions or charges shall be levied, assessed and/or imposed wholly or partially as a capital levy or otherwise on the rents received from the Complex in lieu of ad valorem taxes or the rents reserved herein or any part thereof (whether directly or indirectly through the use of a franchise, margin or similar tax and whether or not such taxes allow for the deduction of expenses in calculating the base amount on which the tax is levied) in lieu of ad valorem taxes, then such substitute or additional taxes, assessments, levies, impositions or charges, to the extent so levied, assessed or imposed, shall be deemed to be included within Taxes to the extent that such substitute or additional tax would be payable if the Complex were the only property of the Landlord subject to such tax. It is agreed that Tenant will also be responsible for ad valorem taxes on its personal property and on the value of leasehold improvements to the extent that the same exceed standard building allowance. Landlord agrees that so long as it owns both the Building and Adjacent Building it will not seek to separately assess such buildings for ad valorem tax purposes; provided, however, the foregoing shall not be construed to prohibit Landlord from selling either of the buildings while retaining the other and in such event, Landlord shall be permitted to have the buildings separately assessed for ad valorem tax purposes.

 

 

(7)

Amortization of the cost of installation of capital investment items that have been (whether before or during the Term or are hereafter installed for the purpose of reducing Operating Expenses or which may be required by any laws, ordinances, orders, rules, regulations and requirements which impose any duty with respect to or otherwise relate

 

 

 

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to the use, condition, occupancy, maintenance or alteration of the Complex, whether now in force or hereafter enacted. All such costs which relate to the installation of such capital investment items shall be amortized over the reasonable life of the capital investment item, with the reasonable life and amortization schedule being determined in accordance with GAAP as reasonably determined by Landlord.

 

 

(8)

The property management fees incurred by Landlord in connection with management of the Complex, not to exceed five percent (5%) of the sum of annual base rental and additional rent for the Complex.

 

 

(9)

Cost of repairs and general maintenance (excluding repairs and general maintenance paid by proceeds of insurance or by Tenant or other third parties) for the Complex and for the common areas of the Development, which common areas Landlord covenants to maintain in good condition and repair during the Term and any extensions of this Lease Agreement and shall include regular maintenance and repair (and resurfacing as necessary) of all parking lots, drive aisles, entrances and exits constituting common areas, all common lighting and any common signage shared by Tenant.

 

 

(10)

Reserved.

 

 

(11)

All costs incurred by Landlord for the purpose of reducing Operating Expenses, including, without limitation, the cost of all tax protests.

 

C. If the Term of this Lease Agreement commences or terminates on other than the first day of a calendar year, Tenant's Additional Rent shall be prorated for such commencement or termination year, as the case may be, by multiplying each by a fraction, the numerator of which shall be the number of days of the Term during the commencement or termination year, as the case may be, and the denominator of which shall be three hundred sixty five (365), and the calculation described in Section 6.E below shall be made as soon as reasonably possible after the termination of this Lease Agreement, Landlord and Tenant hereby agreeing that the provisions relating to said calculation shall survive the termination of this Lease Agreement.

 

D. On or about January 15 th of each calendar year during the Term, Landlord shall deliver to Tenant Landlord's good faith estimate of Tenant's Additional Rent (the "Estimated Additional Rent") for such year. The Estimated Additional Rent shall be paid in equal installments in advance on the first day of each month. If Landlord does not deliver an estimate to Tenant for any year by January 15 th of that year, Tenant shall continue to pay Estimated Additional Rent based on the prior year's estimate until Landlord's estimate is delivered to Tenant. From time to time, but in no event more than once during any calendar year, Landlord may revise its estimate of the Additional Rent for that year based on either actual or reasonably anticipated increases in Operating Expenses by sending written notice thereof to Tenant, and the monthly installments of Estimated Additional Rent shall be appropriately adjusted for the remainder of that year in accordance with the revised estimate so that by the end of the year, the total payments of Estimated Additional Rent paid by Tenant shall equal the amount of the revised estimate.

 

E. Within ninety (90) days after the end of each calendar year during the Term, Landlord shall provide Tenant a statement showing the actual Operating Expenses for said calendar year, broken down by category (e.g., janitorial, common area maintenance, landscaping maintenance, etc.) prepared in accordance with GAAP and certified as correct by an officer of Landlord, and a statement prepared by Landlord comparing Estimated Additional Rent paid by Tenant with actual Additional Rent. If the Estimated Additional Rent paid by Tenant, if any, exceeds the actual Additional Rent for said calendar year, Landlord shall pay Tenant an amount equal to such excess at Landlord's option, by either giving a credit against rentals next due, if any, or by direct payment to Tenant within thirty (30) days of the date of such statement. If the actual Additional Rent exceeds Estimated Additional Rent for said calendar year, Tenant shall pay the difference to Landlord within thirty (30) days of receipt of the statement. The provisions of this paragraph shall survive the expiration or termination of this Lease Agreement with respect to the calendar year immediately preceding and/or then in effect at the time of termination only. Any amount due to the Landlord as shown on Landlord's statement described above, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided above, without prejudice to any subsequent written exception

 

 

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made pursuant to Section 6.11. The Base Rent, Additional Rent and all other sums of money that become due and payable under this Lease Agreement shall collectively be referred to herein as "Rent".

 

F. All Additional Rent shall be paid by Tenant to Landlord contemporaneously with the required payment of Base Rent on the first day of each calendar month, monthly in advance, for each month of the Term, in lawful money of the United States at the address of the Landlord's property manager specified in Section 31 below (or such other address as may be designated by Landlord in writing from time to time). No payment by Tenant or receipt by Landlord of an amount less than the amount of Rent herein stipulated to be paid shall be deemed to be other than on account of the stipulated Rent, nor shall any endorsement on any check or any letter accompanying such payment of Rent be deemed an accord and satisfaction, but Landlord may accept such payment without prejudice to his rights to collect the balance of such Rent.

 

G. Landlord shall maintain full and complete records of Operating Expenses and exclusions therefrom in accordance with GAAP and good commercial practice and sufficient to enable Tenant to inspect and review Operating Expenses to confirm that Operating Expenses are being charged in accordance with this Lease Agreement. Not more than once per calendar year, and only on or before ninety (90) days following the date Landlord delivered the statement described in Section 6.E above to Tenant setting out the adjustment, if any, to the Estimated Additional Rent (the Estimated Additional Rent, as adjusted by such statement, is hereinafter referred to as the "Adjusted Additional Rent"), Tenant shall have the right, directly or through agents or contractors, to commence an inspection and review of Landlord's books and records pertaining to Operating Expenses and exclusions therefrom for the current period only, upon reasonable advance notice to and coordination with Landlord; provided, however, in no event will Landlord be obligated to permit any such inspection or review to be performed by a consultant or firm that is compensated by Tenant on a contingent fee or percentage of recovery basis. If Tenant fails to commence such inspection and review on or before the ninetieth (90 th ) day following the date Landlord delivered the statement described in Section 6.E above to Tenant or to complete such inspection and review and deliver the inspector's report to Landlord before the one hundred eightieth (180 (h ) day following the delivery of such statement, then Tenant shall conclusively be deemed to have accepted the Adjusted Additional Rent specified in such statement and to have waived any right to contest such amount in the future. The cost of any such inspection and review by Tenant shall be borne solely by Tenant. If following such inspection and review, it is conclusively determined that the Adjusted Additional Rent paid by Tenant exceeds the actual Additional Rent for said calendar year, Landlord shall pay Tenant an amount equal to such excess at Landlord's option, by either giving a credit against rentals next due, if any, or by direct payment to Tenant within thirty (30) days of the date of such determination. If as a result of such inspection and review, it is conclusively determined that the actual Additional Rent exceeds the Adjusted Additional Rent for said calendar year, Tenant shall pay to Landlord within thirty (30) days of the date of such determination, the positive difference between the amount that the actual Additional Rent exceeds the Adjusted Additional Rent for said calendar year. Notwithstanding the foregoing, if following such audit it is conclusively determined that the Adjusted Additional Rent exceeds the actual Additional Rent by more than five percent (5%) for the calendar year in question, Landlord shall reimburse Tenant for all of Tenant's reasonable out of pocket costs and expenses incurred by Tenant in connection with such audit.

 

H. Landlord and Tenant hereby each acknowledge and agree that they are knowledgeable and experienced in commercial transactions and further hereby acknowledge and agree that the provisions of this Lease Agreement for determining Operating Expenses and other charges are commercially reasonable and valid even though such methods may not state precise mathematical formulae for determining such Operating Expenses. ACCORDINGLY, TENANT HEREBY VOLUNTARILY AND KNOWINGLY WAIVES ALL RIGHTS AND BENEFITS TO WHICH TENANT MAY BE ENTITLED UNDER SECTION 93.012 OF THE TEXAS PROPERTY CODE, AS ENACTED BY HOUSE BILL 2186, 77 TH LEGISLATURE, AS SUCH SECTION NOW EXISTS OR AS SAME MAY BE HEREAFTER AMENDED OR SUCCEEDED.

 

SEC. 7  SERVICE AND UTILITIES:

 

A. Landlord shall furnish the following services and amenities (collectively, the "Required Services") to Tenant (and its assignees and sublessees permitted hereunder) while occupying the Leased Premises, the cost of which shall be reimbursed to Landlord as Operating Expenses (subject to the cap on increases set forth in Section 6 above), which Landlord covenants and agrees to so do in good faith and with due diligence:

 

 

 

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(1)

Domestic water at those points of supply provided for general use of the tenants of the Building;

 

 

(2)

Central heat, ventilation and air conditioning in season, at such times, at such temperatures and in such amounts as are considered by Landlord to be standard, but in keeping with the standards of other comparable office buildings located in the applicable submarket for the Building, all as more particularly described on Exhibit II attached hereto and made a part hereof for all purposes;

 

 

(3)

Electric lighting service for the Parking Facilities, driveways, sidewalks and service areas for the Building in the manner and to the extent deemed by Landlord to be in keeping with the standards of other comparable office buildings located in the applicable submarket for the Building; provided, however, the Parking Facilities described in Exhibit C attached hereto and made a part hereof for all purposes shall be illuminated between 6:00 p.m. and midnight from Monday through Saturday and between 6:00 p.m. and 9:00 p.m. on Sundays;

 

 

(4)

Janitorial service on a five (5) day week basis, in the manner and to the extent deemed standard by Landlord which shall include, among other things, regular emptying of all trash cans in the Building as well as the periodic emptying of any exterior trash cans serving the Complex, refilling toilet paper, paper towels and soap dispensers in the Building bathrooms and wiping down countertops in said Building bathrooms;

 

 

(5)

On-site security personnel and equipment for the Building, which shall include a roving security guard between 6:00 a.m. and midnight from Monday through Friday and between 6:00 a.m. and 9:00 p.m. on Saturdays, excluding Holidays (as defined in Exhibit D), who shall be reasonably available by telephone to escort employees of Tenant to their automobiles; provided, however, that Tenant agrees that Landlord shall not be responsible for the adequacy or effectiveness of such security provided that Landlord has exercised reasonable care in the selection of the security contractor and equipment;

 

 

(6)

Reserved;

 

 

(7)

All Building standard fluorescent bulb replacement (including replacement of defective ballasts) and all Building standard incandescent bulb replacement in the Complex;

 

 

(8)

Non-exclusive passenger elevator service to the Leased Premises twenty-four (24) hours per day; and

 

 

(9)

Day porter service for the Building for four (4) hours on each Saturday (excluding Holidays) during the Term, which shall include, among other things, refilling toilet paper, paper towels and soap dispensers in the Building bathrooms and wiping down countertops in said Building bathrooms.

 

 

( 10)

Maintain and keep all portions of the Leased Premises and/or Complex, including without limitation the Building, not otherwise required to be maintained (a) by Landlord at its sole cost and expense under Section 8.A below, or (b) by Tenant under Section 8.0 below, in good condition and repair. Landlord's duties shall include by way of example and not limitation, the maintenance and repair (and replacement, if necessary) of (i) all areas available to the use and access by the general public, including flooring and wall coverings/treatments/painting, fountains, (ii) all HVAC systems serving the Building, including regular service contracts therefor, (iii) all plumbing (including restroom fixtures and equipment), (iv) all interior and exterior electric systems and drainage systems, (v) interior and demising walls, (vi) interior ceiling tiles, grids and finishing, (vii) regular emptying of any and all dumpster(s) serving the Building (which dumpster[s] Landlord agrees to provide to Tenant), (viii) keeping the parking areas and sidewalks of the Complex in a trash free and regularly swept condition, and (ix) routine landscaping maintenance and replacement, as necessary, for the Complex. All expenses incurred by Landlord in fulfilling its obligations under this Section 7.A(10) or Section 8 shall be included in Operating Expenses unless prohibited pursuant to Section 6.

 

 

7


 

 

 

B. The obligation of Landlord to provide the Required Services shall be subject to governmental regulation thereof (i.e., rationing, temperature control, etc.) and any such regulation that impairs Landlord's ability to provide the Required Services as herein stipulated shall not constitute a Landlord Event of Default (as hereinafter defined) hereunder but rather providing the applicable Required Services to the extent allowed pursuant to such regulations shall be deemed to be full compliance with the obligations and agreements of Landlord hereunder.

 

C. To the extent any of the Required Services require electricity, gas and water supplied by public utilities or others, Landlord's covenants hereunder shall only impose on Landlord the obligation to use its good faith efforts to cause the applicable public utilities or other providers to furnish the same. Failure by Landlord to furnish any of the Required Services to any extent, or any cessation thereof, due to failure of any public utility or other provider to furnish service to the Building, or any other cause beyond the reasonable control of Landlord, shall not render Landlord liable in any respect for damages to either person or property, nor be construed as an eviction of Tenant, nor work an abatement of Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof. Notwithstanding the foregoing, Landlord covenants and warrants that as of the Commencement Date such public utility service shall be available for the purpose of Landlord's provision of the Required Services and for Tenant's intended use of the Leased Premises. As used herein, the phrase "cause beyond the reasonable control of Landlord" shall include, without limitation, acts of the public enemy, restraining of government, unavailability of materials, strikes, civil riots, floods, hurricanes, tornadoes, earthquakes and other severe weather conditions or acts of God. In the event of any failure by Landlord to furnish any of the Required Services to any extent, or any cessation thereof, due to malfunction of any equipment or machinery, or any other cause within the reasonable control of Landlord, Tenant shall have no claim for rebate of Rent or damages on account thereof, provided that Landlord utilizes its reasonable efforts to promptly repair said equipment or machinery and to restore said Required Services as soon thereafter as is reasonably practicable. Notwithstanding anything to the contrary contained in this Lease Agreement, if: (a) any Essential Required Services (as hereinafter defined) are interrupted for any reason within Landlord's reasonable control, and Tenant is unable to and does not use the Leased Premises as a result of such interruption in accordance with Tenant's Intended Use; and (b) Tenant shall have given written or telephonic notice of such interruption to Landlord, and Landlord shall have failed to cure such interruption within twenty four (24 ) hours after receiving such notice, Rent shall abate commencing as of the twenty fifth (25 th ) hour following such notice until such Essential Required Services are restored. Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damages. The provisions of this Section 7.0 do not apply in the case of a casualty or condemnation under Sections 13 and 14 hereof, which provisions shall govern in such circumstances. As used herein, the term "Essential Required Services" means any one or more of the following services: HVAC, electricity, water, elevator service, telephone and telecommunication services (provided that Tenant shall be solely responsible for the cost of installation, maintenance and operation of any telephone/telecommunication services and all electric utility usage per separate meter as set forth in Section 7.E below).

 

D. Tenant hereby acknowledges and agrees that Landlord is obligated to provide only the Required Services and maintenance and repair obligations of Landlord under Section 8.A under this Lease Agreement, and that Landlord, its agents and representatives, have made no representations whatsoever of any additional services or amenities to be provided by Landlord now or in the future under this Lease Agreement. Notwithstanding the foregoing, Tenant recognizes that Landlord may, at Landlord's sole option, elect to provide additional services or amenities to the Building from time to time, and hereby agrees that Landlord's discontinuance of any provision of any such additional services or amenities shall not constitute a default of Landlord under this Lease Agreement nor entitle Tenant to any abatement of or reduction in Rent.

 

E. Tenant acknowledges that Landlord has previously installed meters or sub-meters for the purpose of metering or sub-metering electricity provided to the Building and the Parking Facilities. Accordingly, Landlord shall provide an invoice to Tenant for one hundred percent (100%) of the electricity provided to the Building and the Parking Facilities on a monthly basis in arrears based on the actual costs charged to Landlord for providing such

 

 

 

8


 

 

electricity to the Building and the Parking Facilities, which shall be paid by Tenant as Additional Rent on or before the first day of the following calendar month, along with the remainder of the Additional Rent then due and owing by Tenant. In the alternative, Landlord shall have the continuing right to require Tenant to procure electricity directly from a reputable third party service provider ("Provider") for Tenant's own account in which case Tenant shall be responsible for contracting with and the payment of such electricity directly to such Provider. In no event shall Tenant contract for such electrical service for a date beyond the I xpiration Date or, if applicable the last day of the Extended Term. In such event, Tenant shall require each Provider to comply with the Building's rules and regulations, all applicable laws, and Landlord's reasonable policies and practices for the Building. Tenant acknowledges Landlord's current policy that requires all Providers to be approved by Landlord and to enter into a written agreement acceptable to Landlord prior to gaining access to, or making any installations in or through, such area. Accordingly, Tenant shall give Landlord written notice sufficient for such purposes.

 

SEC. 8 MAINTENANCE, REPAIRS AND USE:

 

A. Landlord shall maintain and keep in good condition and repair (including replacement, if necessary)

(i) all exterior portions of the Building, including exterior walls, doors, and windows, (ii) the roof of the Building, which Landlord shall maintain in a leak free condition, (iii) all structural elements of the Building, and (iv) the base Building mechanical, electrical and plumbing systems of the Building, including the base Building heating, ventilation and cooling system for the Building.

 

B. Landlord, its officers, agents and representatives, subject to any security regulations imposed by any governmental authority, shall have the right to enter all parts of the Leased Premises at all reasonable hours to inspect, clean, make repairs, alterations and additions to the Leased Premises which it may deem necessary or desirable, or to provide any service which it is obligated to furnish to Tenant, and Tenant shall not be entitled to any abatement or reduction of Rent by reason thereof, provided that Landlord shall endeavor in good faith to perform such activities in such a fashion as to minimize interference with Tenant's business operations in the Leased Premises.

 

C. Landlord may, at its option and at the cost and expense of Tenant, repair or replace any damage or injury done to the Complex or any part thereof, caused by Tenant. Tenant's agents, employees, licensees, invitees or visitors; Tenant shall pay the cost thereof to Landlord on demand. Tenant further agrees to maintain and keep the floor and wall coverings of the interior of the Leased Premises not accessible to the general public and Tenant's furniture and fixtures installed in the Leased Premises in good repair and condition at Tenant's expense. The cost of maintaining and/or repairing or replacing any telephonic or telecommunications systems for the Leased Premises shall be Tenant's responsibility as well. Notwithstanding the foregoing, Tenant may, at its option and at the cost and expense of Landlord, repair or replace any damage or injury done to the Leased Premises or any part thereof, caused by Landlord, Landlord's agents, employees, licensees, invitees or visitors; Landlord shall pay the cost thereof to Tenant on demand. Tenant agrees not to commit or allow any waste or damage to be committed on any portion of the interior of the Leased Premises, and at the expiration or earlier termination of this Lease Agreement, to deliver up the Leased Premises to Landlord in as good condition as on the earlier to occur of (i) the Commencement Date or (ii) the date upon which Tenant occupies the Leased Premises for purposes of conducting its operations therein in accordance with Section 2.B above, ordinary wear and tear and casualty excepted, and upon such termination of this Lease Agreement, Landlord shall have the right to re-enter and resume possession of the Leased Premises.

 

D. Tenant will not use, occupy or permit the use or occupancy of the Leased Premises for any purpose which is directly or indirectly forbidden by law, ordinance or governmental or municipal regulation or order, or which may be dangerous to life, limb or property; or permit the maintenance of any public or private nuisance; or do or permit any other thing which may unreasonably interfere with, annoy or disturb the quiet enjoyment of any other tenant of the Building; if any; or keep any substance or carry on or permit any operation which might emit offensive odors or conditions into other portions of the Complex; or use any apparatus which might make undue noise or set up vibrations in the Complex; or permit anything to be done which would increase the fire and extended coverage insurance rate on the Building or contents and if there is any increase in such rates by reason of acts of Tenant, then Tenant agrees to pay such increase promptly upon demand therefor by Landlord. In the event Tenant fails to correct, cure or discontinue such prohibited or dangerous use within five (5) days following written notice from the Landlord, such failure shall constitute a Tenant Event of Default (as hereinafter defined) hereunder and Landlord shall have all of its remedies as set forth in this Lease Agreement.

 

 

 

9


 

 

SEC. 9 QUIET ENJOYMENT:

 

A. Tenant, on paying the said Rent and performing the covenants herein agreed to be by it performed, shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the said Term.

 

B. Notwithstanding anything herein to the contrary, Landlord hereby expressly reserves the right in its sole discretion to (i) temporarily or permanently change the location of, close, block or otherwise alter any streets, driveways, entrances, corridors, doorways or walkways leading to or providing access to the Complex or any part thereof or otherwise restrict the use of same provided such activities do not unreasonably impair Tenant's access to the Building and are performed at such hours and on such days so as to minimize interference with Tenant's business operations, (ii) construct, alter, remodel or repair one or more parking facilities (including garages) on the Land, provided such activities do not unreasonably impair access to the Building or reduce the amount of parking required to be provided to Tenant pursuant to Exhibit C hereunder. Notwithstanding the foregoing, Landlord shall not construct any improvements in, or alter or relocate the parking facilities and/or parking spaces located in the "No Change Area" shown on Exhibit C hereto unless Landlord is required to do so pursuant to any applicable laws and/or governmental rules, regulations, ordinances or restrictions. In addition, Landlord shall have the right, in its sole discretion, at any time during the Term to attach to any or all of the Building windows a glazing, coating or film or to install storm windows for the purpose of improving the Building's energy efficiency. Tenant shall not remove, alter or disturb any such glazing, coating or film. The addition of such glazing, coating or film, or the installation of storm windows or the exercise of any of Landlord's rights pursuant to this Section 9, shall in no way reduce Tenant's obligations under this Lease Agreement or impose any liability on Landlord and it is agreed that Landlord shall not incur any liability whatsoever to Tenant as a consequence thereof and such activities shall not be deemed to be a breach of any of Landlord's obligations hereunder. Landlord agrees to exercise good faith in notifying Tenant within a reasonable time in advance of any alterations, modifications or other actions of Landlord under this Section 9. Any diminution or shutting off of light, air or view by any structure which is now or may hereafter be effected on lands adjacent to the Building shall in no way affect this Lease Agreement or impose any liability on Landlord. Noise, dust or vibration or other incidents caused by or arising out of any work performed pursuant to the exercise of Landlord's rights reserved in this Section 9 or new construction of improvements on lands adjacent to the Building, whether or not owned by Landlord, or on the Land shall in no way affect this Lease Agreement or impose any liability on Landlord. Tenant agrees to cooperate with Landlord in furtherance of Landlord's exercise of any of the rights specified in this Section 9.

 

SEC. 10 ALTERATIONS:

 

A. Save and except for the alterations to be made by Tenant pursuant to Exhibit G hereto, Tenant shall not make or allow to be made (except as otherwise provided in this Lease Agreement) any alterations or physical additions (including fixtures) in or to the Leased Premises, without first obtaining the written consent of Landlord; provided, however, Landlord's consent to (i) any alterations or physical additions (including fixtures) to the Leased Premises which do not affect the HVAC, plumbing, electrical, fire protection or mechanical systems or structural elements of the Leased Premises or the Building or (ii) the placement of safes, vaults or other heavy furniture or equipment within the Leased Premises shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, from and after the Commencement Date, Tenant may (i) install and replace carpeting and other floor coverings as well as wallpaper, paint and other wall treatments within the interior areas of the Leased Premises not accessible to the general public without Landlord's consent and (ii) provided Tenant removes the same at the termination of the Lease Agreement and returns the Leased Premises to the condition it was in as of the Commencement Date (ordinary wear and tear, casualty and condemnation excepted) as set forth in Section 11 below, install and replace temporary cubicle dividers having a maximum height of five (5) feet or less within offices in the Leased Premises not accessible to the general public, and install and replace tenant's telephonic and telecommunications equipment, all without Landlord's consent. Landlord acknowledges that Tenant may install and replace certain high volume reproductive copying systems and other heavy equipment on the first floor of the Building and the same shall be acceptable to Landlord provided they are limited to the first floor of the Building. In addition, Tenant shall not be permitted to take x-rays or core drill or penetrate the floor of the Leased Premises or any other floor of the Building without first obtaining the Landlord's consent, not to be unreasonably withheld, conditioned or delayed. The reasonable cost of any consultant or engineer hired by Landlord in connection with such work undertaken by Tenant shall be paid for by Tenant as additional rent hereunder. Tenant shall submit requests for consent to make alterations or physical additions together with copies of the plans and specifications for

 

 

 

10


 

 

such alterations. Subsequent to obtaining Landlord's consent and prior to commencement of construction of the alterations or physical additions, Tenant shall deliver to Landlord the building permit, a copy of the executed construction contract covering the alterations and physical additions and evidence of contractor's and subcontractor's insurance, such insurance being with such companies, for such periods and in such amounts as Landlord may reasonably require, naming the Landlord Parties (as defined on Exhibit I) as additional insureds. Tenant shall pay to Landlord upon demand a review fee in the amount of Landlord's actual costs incurred to compensate Landlord for the reasonable cost of review and approval of the plans and specifications and for additional reasonable administrative costs incurred in monitoring the construction of the alterations. Tenant shall deliver to Landlord a copy of the "as-built" plans and specifications for all alterations or physical additions so made in or to the Leased Premises, and shall reimburse Landlord for the reasonable cost incurred by Landlord to update its current architectural plans for the Building.

 

B. Tenant shall indemnify, defend (with counsel reasonably acceptable to Landlord) and hold harmless the Landlord Parties from and against all costs (including attorneys' fees and costs of suit), losses, liabilities, or causes of action arising out of or relating to any alterations, additions or improvements made by Tenant to the Leased Premises, including but not limited to any mechanics' or materialmen's liens asserted in connection therewith.

 

C. Tenant shall not be deemed to be the agent or representative of Landlord in making any such alterations, physical additions or improvements to the Leased Premises, and shall have no right, power or authority to encumber any interest in the Complex in connection therewith other than Tenant's leasehold estate under this Lease Agreement. However, should any mechanics' or other liens be filed against any portion of the Complex or any interest therein (other than Tenant's leasehold estate hereunder) by reason of Tenant's acts or omissions or because of a claim against Tenant or its contractors, Tenant shall cause the same to be canceled or discharged of record by bond or otherwise within thirty (30) days after notice by Landlord. If Tenant shall fail to cancel or discharge said lien or liens, within said thirty (30) day period, which failure shall be deemed to be a Tenant Event of Default hereunder without the necessity of any further notice, Landlord may, at its sole option and in addition to any other remedy of Landlord hereunder, cancel or discharge the same and upon Landlord's demand, Tenant shall promptly reimburse Landlord for all costs incurred in canceling or discharging such lien or liens.

 

D. Tenant shall cause all alterations, physical additions, and improvements (including fixtures), constructed or installed in the Leased Premises by or on behalf of Tenant to comply with all applicable governmental codes, ordinances, rules, regulations and laws. Tenant acknowledges and agrees that neither Landlord's review and approval of Tenant's plans and specifications nor its observation or supervision of the construction or installation thereof shall constitute any warranty or agreement by Landlord that same comply with such codes, ordinances, rules, regulations and laws or release Tenant from its obligations under this Section 10.D.

 

E. Tenant shall be wholly responsible for any accommodations or alterations that are required by applicable governmental codes, ordinances, rules, regulations and laws to be made to the interior of the Building to accommodate disabled employees and customers of Tenant, including, without limitation, compliance with the Americans with Disabilities Act (42 U.S.C. §§ 12101 et seq.) and the Texas Architectural Barriers Act (Texas Government Code, Chapter 469) (collectively, the "Accommodation Laws"). Except to the extent provided below. Landlord shall be responsible for making all accommodations and alterations to the areas outside of the Building necessary to comply with the Accommodation Laws. Notwithstanding the foregoing, Landlord may perform, at Tenant's sole cost and expense, any accommodations or alterations that are required by the Accommodation Laws or that are required by any governmental official acting pursuant to the Accommodation Laws to any area outside of the Building which are triggered by any alterations or additions to the Leased Premises or by the proposed use of the Leased Premises as described in Section 3 and Tenant shall reimburse Landlord for such cost and expense upon demand.

 

SEC. 11 FURNITURE, FIXTURES AND PERSONAL PROPERTY: Tenant may remove its trade fixtures, office supplies and movable office furniture and equipment not attached to the Building provided: (a) such removal is made prior to the termination of this Lease Agreement; (b) Tenant is not then in default under this Lease Agreement beyond any applicable cure period at the time of such removal; and (c) Tenant promptly repairs all damage caused by such removal. All other property at the Leased Premises and any alterations or additions to the Leased Premises (including wall-to-wall carpeting, paneling or other wall covering) and any other article attached or

 

 

11


 

 

affixed to the floor, wall or ceiling of the Leased Premises shall become the property of Landlord at the end of the Term and shall remain upon and be surrendered with the Leased Premises as a part thereof at the termination of the Lease Agreement by lapse of time or otherwise, Tenant hereby waiving all rights to any payment or compensation therefor. lf, however, Landlord so requests in writing within sixty (60) days prior to the termination of this Lease Agreement, Tenant will, prior to termination of this Lease Agreement, remove any and all alterations, additions, fixtures, equipment and property placed or installed by Tenant in the Leased Premises and will repair any damage caused by such removal. In addition, Tenant shall be required prior to the termination of this Lease Agreement to remove all of its telecommunications equipment, including, but not limited to, all switches, cabling, wiring, conduit, racks and boards, wherever located. If Tenant does not complete all removals prior to the termination of this Lease Agreement, Landlord may remove such items (or contract for the removal of such items), Tenant shall reimburse Landlord upon demand for the costs incurred by Landlord in connection therewith and Tenant shall be deemed to be holding over pursuant to Section 26 below until such time as such items have been removed from the Leased Premises. This Section 11 shall survive the expiration or termination of this Lease Agreement.

 

SEC. 12 SUBLETTING AND ASSIGNMENT:

 

A. At all times during the Term and any extensions hereof, Tenant shall have the right to sublet any portion of the Building, provided the proposed sublease does not cover more than 10,000 square feet of Net Rentable Area (the "Threshold Amoun("), without the necessity of Landlord's consent provided such sublease otherwise conforms with the standards set forth in subsections (1) through (7) below. Tenant shall further have the right to assign all or any portion of its interest in this Lease Agreement to any corporation, partnership, limited liability company or other such business entity the majority interest of which is owned or controlled by Tenant without Landlord's consent, provided the proposed assignment otherwise conforms with the standards set forth in subsections (3) and (4) below. Except as otherwise set forth above, Tenant may not assign this Lease Agreement or sublet more than the Threshold Amount of the Leased Premises, without Landlord's prior written consent, not to be unreasonably withheld, conditioned or delayed. With respect to any such assignment or sublease, Tenant shall give Landlord written notice (which shall specify the duration of said desired sublease or assignment, the date same is to occur, the exact location of the space affected thereby, the proposed rentals on a square foot basis chargeable thereunder and sufficient information of the proposed sublessee or assignee regarding its intended use, financial condition and business operations) at least forty-five (45) days in advance of the date on which Tenant desires to make such assignment or sublease or allow such a use or occupancy. With respect to assignments and any sublease requiring Landlord's consent, Landlord shall then have a period of thirty (30) days following receipt of such notice within which to notify Tenant in writing that Landlord either approves or rejects the proposed assignment or sublease (any such rejection to state in detail the rationale behind such rejection), otherwise the proposed assignment or sublease shall be deemed approved. Notwithstanding anything to the contrary, all subleases and assignments (except as otherwise set forth above) shall conform to the following standards and it shall not be unreasonable for Landlord to withhold consent to a proposed assignment or sublease requiring such consent if the following standards are not met, to wit:

 

 

(1)

the nature and character of the proposed assignee or sublessee and the principals thereof, their business and activities and intended use of the Leased Premises are not inconsistent with the current standards of the Building and/or would violate the use restrictions set forth in Section 3 above,

 

 

(2)

the proposed assignee or sublessee (or any party which, directly or indirectly, controls or is controlled by or is under common control with the proposed assignee or sublessee) may not be a department, representative or agency of any governmental body or then an occupant of any part of the Building or a party with whom Landlord is then negotiating to lease space in the Building or in any adjacent Building owned by Landlord or an affiliate of Landlord in and in the vicinity of the applicable submarket for the Building,

 

 

(3)

the form and substance of the proposed sublease or instrument of assignment shall be reasonably acceptable to Landlord (which acceptance by Landlord shall not be unreasonably withheld provided the same contains commercially standard clauses for an assignment of lease or sublease and provides that it is expressly subject to all of the terms and provisions of this Lease Agreement and to any matters to which this Lease Agreement is subject),

 

 

 

12


 

 

 

 

(4)

the proposed occupancy shall not (a) increase Landlord's cleaning requirements, (b) impose an extra burden upon the services to be supplied by Landlord to Tenant hereunder, (c) violate the current rules and regulations of the Building, or (d) cause alterations or additions to be made to the Building (excluding the Leased Premises) not otherwise permitted by Tenant without Landlord's consent,

 

 

(5)

Tenant enters into a written agreement with Landlord whereby it is agreed that fifty percent (50%) of any rent realized by Tenant as a result of said sublease or assignment to any party other than an Affiliate (as hereinafter defined) of Tenant in excess of the Base Rent and Additional Rent payable to Landlord by Tenant under this Lease Agreement and any and all sums and other considerations of whatsoever nature paid to Tenant by the assignee or sublessee for or by reason of such assignment or sublease, including, but not limited to, sums paid for the sale of Tenant's fixtures, leasehold improvements, equipment, furniture, furnishings or other personal property in excess of the fair market value thereof (that is, after deducting and giving Tenant credit for Tenant's reasonable costs directly associated therewith, including reasonable brokerage fees and the reasonable cost of remodeling or otherwise improving the Leased Premises for said assignee or sublessee but excluding any free rentals or the like offered to any such sublessee or assignee) shall be payable to Landlord as it accrues as additional rent hereunder. As used herein, (1) the term "Affiliate" means any person or entity controlled by, under common control with, or which controls, the Tenant, and (2) the term " control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the entity referred to, whether through ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controls" have meanings correlative to the foregoing,

 

 

(6)

the granting of such consent will not constitute a default under any other agreement to which Landlord is a party or by which Landlord is bound as of the Effective Date of this Lease Agreement, and

 

 

(7)

with respect of an assignment or sublease of space in excess of the Threshold Amount only, the creditworthiness of the proposed assignee or sublessee and the principals thereof is acceptable to Landlord, in Landlord's sole discretion.

 

B. No assignment or subletting by Tenant shall be effective unless Tenant shall execute, have acknowledged and deliver to Landlord, and cause each sublessee or assignee to execute, have acknowledged and deliver to Landlord, an instrument in form and substance reasonably acceptable to Landlord and the proposed assignee/sublessee in which (i) such sublessee or assignee adopts this Lease Agreement and assumes and agrees to perform jointly and severally with Tenant, all of the obligations of Tenant under this Lease Agreement, as to the space transferred to it, (ii) in the event of a subleases of less than the Threshold Amount such sublessee agrees to provide to Landlord, at their expense, direct access from a public corridor in the Building to the transferred space, (iii) such sublessee or assignee agrees to use and occupy the transferred space solely for the purpose specified in Section 3 and otherwise in strict accordance with this Lease Agreement and (iv) Tenant acknowledges and agrees that, notwithstanding such subletting or assignment, Tenant remains directly and primarily liable for the performance of all the obligations of Tenant hereunder (including, without limitation, the obligation to pay Rent), and Landlord shall be permitted to enforce this Lease Agreement against Tenant or such sublessee or assignee, or both, without prior demand upon or proceeding in any way against any other persons, provided that Landlord provides Tenant with copies of any and all notices required of Landlord hereunder at such time as the same are sent to the assignee/sublessee and the same opportunity to cure any default of the assignee/sublessee as is provided to the assignee/sublessee and agrees to accept the same from Tenant. Tenant shall, upon demand, reimburse Landlord for all reasonable expenses incurred by Landlord in connection with a request made by Tenant pursuant to this Section 12, including, without limitation, any investigations as to the acceptability of the proposed assignee or sublessee, all legal costs reasonably incurred in connection with the granting of any requested consent and a charge reasonably determined by Landlord to cover in-house time spent in respect of such request.

 

 

13


 

 

C. Any consent by Landlord to a particular assignment or sublease shall not constitute Landlord's consent to any other or subsequent assignment or sublease, and any proposed sublease or assignment by any assignee or sublessee shall be subject to the provisions of this Section 12 as if it were a proposed sublease or assignment by Tenant. The prohibition against an assignment or sublease described in this Section 12 shall be deemed to include a prohibition against (i) Tenant's mortgaging or otherwise encumbering its leasehold estate, (ii) an assignment or sublease which may occur by operation of law and (iii) permitting the use or occupancy of the Leased Premises, or any part thereof, by anyone other than Tenant (except as otherwise specifically permitted by this Lease Agreement), each of which shall be ineffective and void and shall constitute a Tenant Event of Default under this Lease Agreement unless consented to by Landlord in writing in advance. Notwithstanding the foregoing, Landlord acknowledges that as of the Effective Date of this Lease Agreement, Tenant is a corporation, the stock of which is publicly traded in accordance with the rules and regulations of the Securities Exchange Commission ("SEC"). Landlord covenants and agrees, therefore, that for purposes hereof, the issuance of any new stock, whether voting or otherwise, and/or the transfer of the ownership or voting rights in a controlling interest of the voting stock of Tenant at any time throughout the Term, shall not be deemed to be an assignment of this Lease provided the same complies with all applicable rules and regulations of the SEC and is approved by the SEC. Notwithstanding the foregoing, the transfer of the ownership or voting rights in a controlling interest of the voting stock of Tenant, if Tenant is a privately held corporation, at any time throughout the Term to any party other than a family member of the controlling shareholder of Tenant or a trust controlled by such controlling stockholder or its family member(s), shall be deemed to be an assignment of this Lease Agreement.

 

SEC. 13 FIRE AND CASUALTY:

 

A. In the event of a fire or other casualty in the Leased Premises, Tenant shall immediately give notice thereof to Landlord. If the Leased Premises shall be partially destroyed by fire or other casualty so as to render the Leased Premises untenantable in whole or in part. Rent shall abate thereafter as to the portion of the Leased Premises rendered untenantable until such time as the Leased Premises are made tenantable as reasonably determined by Landlord and Landlord agrees to commence and prosecute such repair work promptly and with all due diligence; provided, however, in the event such destruction (i) results in total or substantial damages to or destruction of the Building or (ii) results in the Leased Premises being untenantable in whole or in substantial part and either (a) the reasonable estimation of a responsible contractor selected by Landlord and reasonably acceptable to Tenant as to the amount of time necessary to rebuild or restore such destruction to the Leased Premises and all other portions of the Building exceeds six (6) months from the time such work is commenced, or (b) such casualty occurs during the last two (2) years of the Term or any Extended Term, then in either event of item (i) or (ii), Landlord or Tenant shall have the right to terminate this Lease Agreement effective as of the date of casualty or destruction by sending written notice to the other within sixty (60) days after the casualty event, subject to reasonable delays for insurance adjustments and upon such termination, all Rent owed up to the time of such destruction or termination shall be paid by Tenant. If any portion of Rent is abated under this Section 13, the parties may elect by mutual agreement to extend the expiration date of the Term of this Lease Agreement for the period of the abatement.

 

B. Notwithstanding anything in this Lease Agreement to the contrary, if the Leased Premises are damaged by fire or other casualty resulting from the fault or negligence of Tenant, or the agents, employees, licensees, customers or invitees of Tenant, such damage shall be repaired by and at the expense of Tenant under the direction and supervision of Landlord, and Rent shall continue without abatement.

 

C. Notwithstanding anything contained in this Section 13, in no event shall Landlord be required to expend more to reconstruct, restore and repair the Building than the amount actually received by Landlord from the proceeds of the property insurance carried by Landlord and Landlord shall have no duty to repair or restore any portion of any alterations, additions, installation or improvements in the Leased Premises or the decorations thereto except to the extent that the proceeds of the insurance carried by Tenant are timely received by Landlord. If Tenant desires any other additional repairs or restoration, and if Landlord consents thereto, it shall be done at Tenant's sole cost and expense subject to all of the applicable provisions of this Lease Agreement. Tenant acknowledges that Landlord shall be entitled to the full proceeds of any insurance coverage whether carried by Landlord or Tenant, for damage to any alterations, addition, installation, improvements or decorations which would become the Landlord's property upon the termination of this Lease Agreement.

 

 

14


 

 

SEC. 14 CONDEMNATION: If all of the Complex is taken or condemned, or acquired under threat of condemnation, by or at the direction of any governmental authority (a "Taking" or "Taken", as the context requires), or if so much of the Complex is Taken that, in Landlord's opinion, the remainder cannot be restored to an economically viable, quality office building, or if the awards payable to Landlord as a result of any Taking are, in Landlord's opinion, inadequate to restore the remainder to an economically viable, quality office building, Landlord may, at its election, exercisable by the giving of written notice to Tenant within sixty (60) days after the date of the Taking, terminate this Lease Agreement as of the date of the Taking or the date Tenant is deprived of possession of the Leased Premises (whichever is later). If this Lease Agreement is not terminated as a result of a Taking, Landlord shall restore the Leased Premises remaining after the Taking to a Building standard condition. During the period of restoration, Base Rent shall be abated to the extent the Leased Premises are rendered untenantable and, after the period of restoration, Base Rent and Tenant's pro rata share shall be reduced in the proportion that the area of the Leased Premises Taken or otherwise rendered untenantable bears to the area of the Leased Premises just prior to the Taking. If any portion of Base Rent is abated under this Section 14, Landlord may elect to extend the expiration date of the Term for the period of the abatement. All awards, proceeds, compensation or other payments from or with respect to any Taking of the Complex or any portion thereof shall belong to Landlord, Tenant hereby assigning to Landlord all of its right, title, interest and claim to same. Tenant shall have the right to assert a claim for and recover from the condemning authority, but not from Landlord, such compensation as may be awarded on account of Tenant's moving and relocation expenses, and depreciation to and loss of Tenant's movable personal property.

 

SEC. 15 DEFAULT BY TENANT: The occurrence of any one or more of the following shall constitute a "Tenant Event of Default" under this Lease Agreement:

 

A. The failure of Tenant to pay any Rent as and when due under this Lease Agreement such failure continuing for a period of ten (10) days after Landlord provides Tenant with written notice thereof; provided, however, Landlord shall have no obligation to provide such notice more than two (2) times in any calendar year;

 

B. The failure of Tenant to perform, comply with or observe any of the other covenants or conditions contained in this Lease Agreement and the continuance of such failure for the period of time as may be specified elsewhere in this Lease Agreement for such specific covenant or condition, or should no period of time be specified elsewhere in this Lease Agreement with respect to such specific covenant or condition, a period of thirty (30) days after written notice to Tenant; or, if such failure cannot reasonably be cured within said thirty (30) day period despite Tenant's diligent good faith efforts, the failure of Tenant to promptly commence its diligent good faith efforts to cure such failure within said thirty (30) day period and/or the continuance of to complete such cure in as diligent a fashion as possible, not to exceed ninety (90) days, subject to Force Majeure;

 

C. Tenant shall fail to execute and acknowledge or otherwise respond in good faith and in writing within ten (10) days after submission to Tenant of a request for confirmation of the subordination of this Lease Agreement pursuant to Section 24 or an estoppel certificate pursuant to Section 35;

 

D. Intentionally Omitted;

 

E. The filing of a petition by or against Tenant or any guarantor of Tenant's obligations under this Lease Agreement (i) naming Tenant or any guarantor as debtor in any bankruptcy or other insolvency proceeding, (ii) for the appointment of a liquidator or receiver for all or substantially all of Tenant's or any guarantor's property or for Tenant's interest in this Lease Agreement, or (iii) to reorganize or modify Tenant's or any guarantor's capital structure;

 

F. The admission by Tenant or any guarantor in writing of its inability to meet its obligations as they become due or the making by Tenant or any guarantor of an assignment for the benefit of its creditors;

 

G. The attempt by Tenant to assign this Lease Agreement or to sublet all or any part of the Leased Premises, the consent to which by Landlord is required under Section 12 hereof, without the prior written consent of Landlord;

 

 

 

15


 

 

H. Any holding over by Tenant in accordance with Section 28 with respect to all or any portion of the Leased Premises after the expiration or termination of the Lease Agreement;

 

I. The failure by Tenant to comply with the insurance requirements set forth in Exhibit 1 after having received ten (10) days' written notice thereof from Landlord; or

 

J. Provided Landlord is then the owner of the Adjacent Building and Landlord and Tenant have entered into a 2000 Lease Agreement (as hereinafter defined) covering space in the Adjacent Building pursuant to Tenant's exercise of its rights set forth in Section 54 of this Lease Agreement, an Event of Default (as defined in the 2000 Lease Agreement) shall have occurred under said 2000 Lease Agreement provided the same is (i) monetary in nature or otherwise material in nature and (ii) not disputed in good faith by and by written notice from Tenant.

 

SEC. 16 REMEDIES OF LANDLORD: Upon any Tenant Event of Default, Landlord may exercise any one or more of the following described remedies, in addition to all other rights and remedies provided at law or in equity:

 

A. Terminate this Lease Agreement by written notice to Tenant and forthwith repossess the Leased Premises and be entitled to recover forthwith as damages a sum of money equal to the total of (i) the cost of recovering the Leased Premises (including attorneys' fees and costs of suit), (ii) the cost of removing and storing any personal property, (iii) the unpaid Rent earned at the time of termination, plus interest thereon at the rate described in Section 5, (iv) the present value (discounted at the rate of eight percent (8%) per annum) of the balance of the Rent for the remainder of the Term less the present value (discounted at the same rate) of the fair market rental value of the Leased Premises for said period, taking into account the period of time the Leased Premises will remain vacant until a new tenant is obtained, and the cost to prepare the Leased Premises for occupancy and the other costs (such as leasing commissions, tenant improvement allowances and attorneys' fees) to be incurred by Landlord in connection therewith, and (v) any other sum of money and damages owed by Tenant to Landlord under this Lease Agreement.

 

B. Terminate Tenant's right of possession (but not this Lease Agreement) and may repossess the Leased Premises by forcible detainer suit or otherwise, without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant and without terminating this Lease Agreement. Landlord shall use reasonable efforts under the circumstances to mitigate its damages, including reletting the Leased Premises on such terms and conditions as Landlord in its reasonable discretion may determine (which may including a term different than the Term, rental concessions, alterations and repair of the Leased Premises); provided, however, Landlord hereby reserves the right (i) to lease any other comparable space available in the Building or in any adjacent building owned by Landlord prior to offering the Leased Premises for lease, and (ii) to refuse to lease the Leased Premises to any potential tenant which does not meet Landlord's standards and criteria for leasing other comparable space in the Building. For the purpose of such reletting Landlord shall have the right to decorate or to make any repairs, changes, alterations or additions in or to the Leased Premises as may be reasonably necessary or desirable. In the event that (i) Landlord shall fail to relet the Leased Premises, or (ii) the Leased Premises are relet and a sufficient sum shall not be realized from such reletting (after first deducting therefrom, for retention by Landlord, the unpaid Rent due hereunder earned but unpaid at the time of reletting plus interest thereon at the rate specified in Section 5, the cost of recovering possession (including attorneys' fees and costs of suit), all of the costs and expenses of such decorations, repairs, changes, alterations and additions, the expense of such reletting and the cost of collection of the rent accruing therefrom) to satisfy the Rent, then Tenant shall pay to Landlord as damages a sum equal to the amount of such deficiency. Any such payments due Landlord shall be made upon demand therefor from time to time and Tenant agrees that Landlord may file suit to recover any sums falling due under the terms of this Section 16 from time to time. No delivery to or recovery by Landlord of any portion due Landlord hereunder shall be any defense in any action to recover any amount not theretofore reduced to judgment in favor of Landlord, nor shall such reletting be construed as an election on the part of Landlord to terminate this Lease Agreement unless a written notice of such intention be given to Tenant by Landlord. Notwithstanding any such termination of Tenant's right of possession of the Leased Premises, Landlord may at any time thereafter elect to terminate this Lease Agreement. In any proceedings to enforce this Lease Agreement under this Section 16, Landlord shall be presumed to have used its reasonable efforts to relet the Leased Premises, and Tenant shall bear the burden of proof to establish that such reasonable efforts were not used.

 

 

 

16


 

 

C. Alter any and all locks and other security devices at the Leased Premises, and if it does so Landlord shall not be required to provide a new key or other access right to Tenant unless Tenant has cured all Events of Default; provided, however, that in any such instance, during Landlord's normal business hours and at the convenience of Landlord, and upon the written request of Tenant accompanied by such written waivers and releases as Landlord may require, Landlord will escort Tenant or its authorized personnel to the Leased Premises to retrieve any personal belongings or other property of Tenant not subject to the Landlord's lien or security interest described in Section 17. The provisions of this Section 16.0 are intended to override and control any conflicting provisions of the Texas Property Code.

 

D. All agreements and provisions to be performed by Tenant under any of the terms of this Lease Agreement shall be at Tenant's sole cost and expense and without any abatement of Rent. If Tenant shall fail to pay any sum of money, other than Base Rent, required to be paid by it hereunder and such failure shall continue for ten (10) days after notice thereof by Landlord, or should Tenant fail to perform any other obligation hereunder and such failure shall continue for thirty (30) days after notice thereof by Landlord (subject to the provision in Section 15.B above regarding matters that cannot be reasonably cured within 30 days) then Landlord may, but shall not be obligated so to do, and without waiving or releasing Tenant from any obligations, make any such payment or perform any such act on Tenant's part. All sums so paid by Landlord and all costs incurred by Landlord in taking such action shall be deemed Additional Rent hereunder and shall be paid to Landlord on demand, and Landlord shall have (in addition to all other rights and remedies of Landlord) the same rights and remedies in the event of the non­payment thereof by Tenant as in the case of default by Tenant in the payment of Rent.

 

E. Landlord covenants and agrees to use commercially reasonable efforts to mitigate Landlord's damages if a Tenant Event of Default occurs. Notwithstanding, Tenant agrees in favor of Landlord that Landlord shall not be deemed to have failed to mitigate damages, or to have used the efforts required by law to do so, because:

 

 

(1)

Landlord leases other space in the Building prior to re-letting the Leased Premises;

 

 

(2)

Landlord refuses to relet the Leased Premises to any affiliate of Tenant, or any principal of Tenant, or any affiliate of such principal (for purposes of this Lease, "affiliate" shall mean and refer to any person or entity controlling, under common control with, or controlled by, the party in question);

 

 

(3)

Landlord refuses to relet the Leased Premises to any person or entity whose creditworthiness Landlord in good faith deems unacceptable;

 

 

(4)

Landlord refuses to relet the Leased Premises to any person or entity because such use would, in the good faith opinion of Landlord, impose unreasonable or excessive demands upon the Building;

 

 

(5)

Landlord refuses to relet the Leased Premises to any person or entity, or any affiliate of such person or entity, who has been engaged in litigation with, or who has threatened litigation against, Landlord or any of its affiliates, or whom Landlord in good faith deems to be unreasonably or excessively litigious;

 

 

(6)

Landlord refuses to relet the Leased Premises because the tenant or the terms and provisions of the proposed lease are not approved by the holders of any liens or security interests in the Building or any part thereof, or would cause Landlord to breach or be in default of, or to be unable to perform any of its covenants under, any agreements between Landlord and any third party;

 

 

(7)

Landlord refuses to relet the Leased Premises because the proposed tenant is unwilling to execute and deliver Landlord's standard lease form without substantial tenant-oriented modifications or such tenant requires improvements to the Leased Premises to be paid at Landlord's cost and expense; or

 

 

17


 

 

 

(8)

Landlord refuses to relet the Leased Premises to a person or entity whose character or reputation, or the nature of whose business, Landlord in good faith deems unacceptable;

 

and it is further agreed that each and all of the grounds for refusal set forth in clauses (1) through (8) above, both inclusive, of this sentence are reasonable grounds for Landlord's refusal to relet the Leased Premises, or (as to all other provisions of this Lease Agreement) for Landlord's refusal to issue any approval, or take any other action, of any nature whatsoever under this Lease Agreement. In the event the waiver set forth in this Section 16.E shall be ineffective, Tenant further agrees in favor of Landlord, to the maximum extent to which it may lawfully and effectively do so, that the following efforts to mitigate damages if made by Landlord (and without obligating Landlord to render such efforts) shall be conclusively deemed reasonable, and that Landlord shall be conclusively deemed to have used the efforts to mitigate damages required by applicable law it Landlord places the Leased Premises on its inventory of available space in the Building; Landlord makes such inventory available to brokers who request same; and Landlord shows the Leased Premises to prospective tenants (or their brokers) who request to see it.

 

SEC. 17 LIEN FOR RENT: To secure payment of all rent due and to become due hereunder, and the faithful performance of all the other covenants of the Lease Agreement required to be performed by Tenant, Tenant hereby gives to Landlord an express contractual lien on and security interest in and to all property, chattels or merchandise which may be placed in the Leased Premises and also upon all proceeds of any insurance which may accrue to Tenant by reason of damage to or destruction of such property. All exemption laws are hereby waived by Tenant. This lien and security interest are given in addition to Landlord's statutory lien(s) and shall be cumulative thereto. This lien and security interest may be foreclosed with or without Court proceedings, by public or private sa)e, with or without notice and Landlord shall have the right to become purchaser, upon being the highest bidder at such sale. Upon request of Landlord, Tenant agrees to execute Uniform Commercial Code financing statements relating to the aforesaid security interest. Notwithstanding the foregoing. Landlord covenants and agrees that in the event Tenant, its subtenants or assigns, acquires and/or leases any or all of personal property to be installed and used upon the Leased Premises subject to retained title, equipment lease, conditional sale contract, chattel mortgage or other security agreement or lease (collectively, "Equipment Lender"), Landlord agrees to execute and deliver to any such secured creditor and/or lessor a subordination (or if so required by such Equipment Lender, a waiver) of any and all of the foregoing liens Landlord may have upon such personal property. Such subordination (or waiver, as the case may be) will be on a form provided by Tenant and reasonably acceptable to Landlord authorizing the Equipment Lender to enter upon the Leased Premises and remove such personal property in the event of default under the terms of the security agreement and/or lease.

 

SEC. 18 LANDLORD'S DEFAULT: The occurrence of any one or more of the following shall constitute a "Landlord Event of Default" under this Lease Agreement:

 

A. Landlord's failure, when required hereunder, to pay any sum that Landlord is required to pay or provide under this Lease Agreement if such failure continues for ten (10) days after written notice of such failure from Tenant to Landlord;

 

B. Landlord's failure, when required hereunder, to perform any other obligation of Landlord if such failure continues for thirty (30) days after written notice from Tenant to Landlord of such default, provided that if such failure cannot reasonably be cured by the end of such thirty (30) day period, Landlord shall not be in default if Landlord commences reasonable efforts to cure such failure within the thirty (30) day period and thereafter diligently prosecutes such cure to completion, but in no event shall such cure period be extended by more than ninety (90) days in the aggregate, subject to Force Majeure; and

 

C. The filing of a petition by or against Landlord (i) naming Landlord as a debtor in any bankruptcy or other insolvency proceeding, or (ii) for the appointment of a liquidator or receiver for all or substantially all of Landlord's property or for Landlord's interest in this Lease Agreement.

 

Notwithstanding Sections 18.A and 18.B above, if any provision of this Lease Agreement provides for a different notice period from Tenant upon Landlord's failure to perform an obligation, then such other notice period shall be the exclusive notice required from Tenant, and the notice provisions of this Section 18 shall not apply.

 

 

 

18


 

 

Notwithstanding anything to the contrary herein, specific termination rights granted to Tenant shall control over the cure periods specified in this Section 18.

 

SEC. 19 TENANT'S REMEDIES: If a Landlord Event of Default exists and provided no Tenant Event of Defaults is then existing, Tenant shall have the right to all remedies provided by law and equity or elsewhere in this Lease Agreement, including the right to injunctive relief or specific performance, the right to perform any obligations of Landlord on Landlord's behalf (but only in the event that the cost to remedy such Landlord Event of Default will be less than or equal to $10,000), in which case Landlord shall reimburse Tenant for any and all of Tenant's reasonable costs incurred in connection therewith within 30 days of Landlord's receipt of an invoice therefor (otherwise Tenant shall be entitle to offset Base Rent in satisfaction of the same) and the right to terminate the Lease Agreement. Notwithstanding the foregoing, Tenant shall not be entitled to exercise termination of the Lease Agreement as a remedy for any Landlord Event of Default unless (a) such default materially impairs Tenant's normal business operations in the Leased Premises, (b) Tenant gives Landlord a final notice indicating Tenant's intention to terminate the Lease Agreement and an additional ten (10) days in which to cure such default and (c) no Tenant Event of Default then exists. This Section 19 is in addition to, and does not limit Tenant's remedies as specified elsewhere in this Lease Agreement. In the event that Tenant takes such steps as may be necessary to cure a Landlord Event of Default, Tenant shall be entitled to recover from Landlord at the election of Tenant, all amounts expended by Tenant for such cure, together with reasonable attorneys' fees and interest at the rate of ten percent (10%) per annum thereon from the date expended by Tenant until the date paid. Tenant's rights and remedies contained herein (unless otherwise specifically limited) shall be cumulative and not exclusive.

 

SEC. 20 NON-WAIVER: Neither acceptance of Rent by Landlord nor failure by Landlord to exercise available rights and remedies, whether singular or repetitive, shall constitute a waiver of any of Landlord's rights hereunder. Waiver by Landlord of any right for any Tenant Event of Default shall not constitute a waiver of any right for either a subsequent Tenant Event of Default of the same obligation or any other Tenant Event of Default. No act or thing done by Landlord or its agent shall be deemed to be an acceptance or surrender of the Leased Premises and no agreement to accept a surrender of the Leased Premises shall be valid unless it is in writing and signed by a duly authorized officer or agent of Landlord. Likewise, failure by Tenant to exercise available rights and remedies, whether singular or repetitive, shall not constitute a waiver of any of Tenant's rights hereunder. Waiver by Tenant of any right for any Landlord's Event of Default of Tenant shall not constitute a waiver of any right for either a subsequent Landlord's Event of Default of the same obligation or any other Landlord's Event of Default.

 

SEC. 21 LAWS AND REGULATIONS; RULES AND REGULATIONS: Tenant shall comply with, and Tenant shall cause its visitors, employees, contractors, agents, invitees and licensees to comply with, all laws, ordinances, orders, rules and regulations of any state, federal, municipal and other agencies or bodies having any jurisdiction thereof relating to the use, condition or occupancy of the Leased Premises. Such reasonable rules and regulations as may be hereafter adopted by Landlord for the safety, care and cleanliness of the premises and the preservation of good order thereon, are hereby made a part hereof for all purposes and Tenant agrees to comply with all such rules and regulations. Landlord shall have the right at all times to change such rules and regulations or to amend them in any reasonable manner as may be deemed advisable by Landlord, provided that all of which changes and amendments will be equally applied to all tenants of the Development and will be sent by Landlord to Tenant in writing and shall be thereafter carried out and observed by Tenant. The current rules and regulations of the Building are set forth in Exhibit D attached heret


 
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