LEASE AGREEMENT
2020 DAIRY ASHFORD PLAZA
BY AND BETWEEN
DAP PLAZA
("LANDLORD")
AND
TAX MASTERS, INC.
("TENANT")
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Page
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SEC. 1
LEASED PREMISES
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1
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SEC. 2
TERM:
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SEC. 3
USE:
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2
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SEC. 4
SECURITY DEPOSIT:
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2
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SEC. 5
BASE RENT:
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2
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SEC. 6
ADDITIONAL RENT:
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3
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SEC. 7
SERVICE AND UTILITIES:
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6
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SEC. 8
MAINTENANCE, REPAIRS AND USE:
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9
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SEC. 9
QUIET ENJOYMENT:
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10
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10
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SEC. 11
FURNITURE, FIXTURES AND PERSONAL PROPERTY:
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11
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SEC. 12
SUBLETTING AND ASSIGNMENT:
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12
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SEC. 13
FIRE AND CASUALTY:
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14
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SEC. 14
CONDEMNATION:
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15
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SEC. 15
DEFAULT BY TENANT:
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15
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SEC. 16
REMEDIES OF LANDLORD:
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16
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SEC. 17
LIEN FOR RENT:
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18
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SEC. 18
LANDLORD'S DEFAULT
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18
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SEC. 19
TENANT'S REMEDIES:
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19
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SEC. 20
NON-WAIVER•
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19
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SEC. 21
LAWS AND REGULATIONS; RULES AND REGULATIONS.
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19
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SEC. 22
ASSIGNMENT BY LANDLORD; LIMITATION OF LANDLORD'S
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LIABILITY:
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19
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SEC. 23
SEVERABILITY:
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20
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SEC. 24
SIGNS:
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20
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SEC. 25
SUCCESSORS AND ASSIGNS:
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20
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SEC. 26
SUBORDINATION:
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20
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SEC. 27
TAX PROTEST.
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21
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SEC. 28
HOLDING OVER:
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21
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SEC. 29
INDEPENDENT OBLIGATION TO PAY RENT:
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21
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SEC. 30
INDEMNITY; RELEASE AND WAIVER.
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22
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SEC. 31
INSURANCE:
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23
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SEC. 32
ENTIRE AGREEMENT:
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23
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SEC. 33
NOTICES:
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23
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SEC. 34
COMMENCEMENT DATE:
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23
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SEC. 35
RELOCATION OF TENANT:
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23
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SEC. 36
BROKERS:
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24
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SEC. 37
ESTOPPEL CERTIFICATES:
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24
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SEC. 38
NAME CHANGE:
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24
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SEC. 39
BANKRUPTCY:
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24
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SEC. 40
TELECOMMUNICATIONS PROVIDERS:
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25
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SEC. 41
HAZARDOUS SUBSTANCES:
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25
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SEC. 42
NO MONEY DAMAGES FOR FAILURE TO CONSENT; WAIVER OF CERTAIN
DAMAGES:
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26
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SEC. 43
ACKNOWLEDGMENT OF NON-APPLICABILITY OF DTPA:
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26
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SEC. 44
ATTORNEYS' FEES:
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27
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SEC. 45
AUTHORITY OF TENANT:
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27
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SEC. 46
INABILITY TO PERFORM:
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27
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SEC. 47
JOINT AND SEVERAL TENANCY:
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27
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SEC. 48
EXECUTION OF THIS LEASE AGREEMENT:
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27
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SEC. 49
WAIVER OF TRIAL BY JURY; COUNTERCLAIM:
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27
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SEC. 50
CALCULATION OF TIME PERIODS
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27
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SEC. 51
ANTI-TERRORISM LAWS
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27
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SEC. 52
FINANCIAL STATEMENTS
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28
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SEC. 53
RENEWAL OPTION:
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28
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SEC. 54
RIGHT OF FIRST OFFER
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29
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SEC. 55
PURCHASE OPTION
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30
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SEC. 56
MEMORANDUM OF LEASE
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30
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SEC. 57
TENANT'S EXCLUSIVE USE
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30
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SEC. 58
BACK UP GENERATOR
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31
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SEC. 59
EXHIBITS
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31
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EXHIBITS:
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EXHIBIT A -
SITE PLAN
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EXHIBIT B -
LEGAL DESCRIPTION OF THE LAND
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EXHIBIT C -
PARKING AGREEMENT
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EXHIBIT D -
RULES AND REGULATIONS
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EXHIBIT E -
ACCEPTANCE OF PREMISES MEMORANDUM
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EXHIBIT F -
TENANT'S ESTOPPEL CERTIFICATE
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EXHIBIT G -
LEASEHOLD IMPROVEMENTS
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EXHIBIT H - AIR
CONDITIONING AND HEATING SERVICES
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EXHIBIT I -
INSURANCE REQUIREMENTS
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EXHIBIT J -
PURCHASE OPTION
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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)
(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"):
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Months Following the
Commencement Date
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Annual Base Rent Rate Per
Square Foot of Net Rentable
Area
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1-6
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$0.00
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$0.00
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7-26
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$7.50
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$809,175.00
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27-46
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$8.50
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$917,065.00
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47-66
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$9.50
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$1,024,955.00
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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
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:
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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.
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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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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.
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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.
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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.
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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.
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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.
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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.
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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.
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All costs
incurred by Landlord for the purpose of reducing Operating
Expenses, including, without limitation, the cost of all tax
protests.
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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
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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Domestic water
at those points of supply provided for general use of the tenants
of the Building;
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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;
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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;
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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;
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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;
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All Building
standard fluorescent bulb replacement (including replacement of
defective ballasts) and all Building standard incandescent bulb
replacement in the Complex;
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Non-exclusive
passenger elevator service to the Leased Premises twenty-four (24)
hours per day; and
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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.
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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.
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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
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.
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
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
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:
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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,
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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,
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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),
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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,
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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,
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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
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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.
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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.
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.
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;
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.
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:
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Landlord leases
other space in the Building prior to re-letting the Leased
Premises;
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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);
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Landlord
refuses to relet the Leased Premises to any person or entity whose
creditworthiness Landlord in good faith deems
unacceptable;
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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;
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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;
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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;
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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
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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;
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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.
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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