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<PAGE>
EXHIBIT 10.3
1700 PACIFIC AVENUE
OFFICE LEASE
BY AND BETWEEN
F/P/D MASTER LEASE, INC.
AS LANDLORD,
AND
SERVICE ASSET MANAGEMENT COMPANY
AS TENANT
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TABLE OF CONTENTS
<TABLE>
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1. Definitions and Basic Lease Provisions
................................... 1
2. Leased Premises
.......................................................... 4
3. Lease Term
...............................................................
4
4. Acceptance of Leased Premises
............................................ 5
5. Rent Payments
............................................................ 5
6. Electricity
..............................................................
6
7. Services by Landlord
..................................................... 8
8. Service Interruptions
.................................................... 9
9. Operating Costs
.......................................................... 10
10. Security Deposit
......................................................... 12
11. Assignment and Subletting
................................................ 12
12. Repair and Maintenance by Tenant
......................................... 15
13. Alterations and Additions by Tenant
...................................... 16
14. Use and Occupancy
........................................................ 18
15. Mechanics' Liens - Tenant's Obligations
.................................. 20
16. Limitations on Liability of Landlord; Waiver
............................. 21
17. Tenant's Indemnification of Landlord: Assumption: Employees'
Claims ...... 22
18. Tenant's Insurance
....................................................... 23
19. Landlord's Insurance
..................................................... 24
20. Rights Reserved by Landlord
.............................................. 24
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21. Fire or Other Casualty
................................................... 27
22. Condemnation
.............................................................
27
23. Taxes on Tenant's Property
............................................... 28
24. Waiver of Subrogation
.................................................... 29
25. Surrender Upon Termination or Expiration; Holdover
....................... 29
26. Removal of Tenant's Property
............................................. 30
27. Events of Default
........................................................ 31
28. Landlord's Remedies
...................................................... 32
29. No Implied Waiver
........................................................ 34
30. Waiver by Tenant
......................................................... 35
31. Attorneys' Fees and Legal Expenses
....................................... 35
32. Subordination
............................................................ 35
33. Quiet Enjoyment
.......................................................... 36
34. Notice of Landlord's Default
............................................. 37
35. Rules and Regulations
.................................................... 37
36. Estoppel Certificate
..................................................... 37
37. Notices
..................................................................
37
38. Hazardous Materials
...................................................... 38
39. Business Purpose
......................................................... 39
40. Severability
.............................................................
39
41. No Merger
................................................................
39
42. Force Majeure
............................................................ 40
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43. Brokerage; Mutual Indemnities
............................................ 40
44. Gender
...................................................................
40
45. Joint and Several Liability
.............................................. 41
46. No Representations
....................................................... 41
47. Entire Agreement; Amendments
............................................. 41
48. Paragraph Headings
....................................................... 41
49. Binding Effect
........................................................... 41
50. Exhibits
.................................................................
41
51. Counterparts
.............................................................
42
52. Rental Tax
...............................................................
42
53. Parking
..................................................................
42
54. Tenant's Service Providers
............................................... 43
55. Security Disclaimer
...................................................... 43
56. Intentionally Deleted
.................................................... 44
57. Relocation of the Leased Premises
........................................ 44
58. Limitation of Actions
.................................................... 46
59. Execution and Approval of Lease
.......................................... 46
60. Right of First Notice
.................................................... 46
61. Option to Extend Lease Term
.............................................. 47
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OFFICE LEASE
This Office Lease (this LEASE) is entered into as of May 20,
1998 (the
DATE OF THIS LEASE), by F/P/D Master Lease, Inc., a Texas
corporation
(LANDLORD), and Service Asset Management Company, a North
Carolina corporation
(TENANT).
1. DEFINITIONS AND BASIC LEASE PROVISIONS.
Some of the basic provisions and defined terms of this Lease are
as
follows:
PROJECT: 1700 Pacific Avenue, Dallas, Texas, including the
LAND described on EXHIBIT B, the Building, the
On-Site Garage, the concourse, lobbies, plazas,
walkways, open spaces, landscaped areas, and similar
public areas located on, above, beneath or
immediately adjacent to the Land, and any truck
accessways, loading docks, or similar facilities
which serve the Building, the Off-Site Garage, and
the Building's interest in pedestrian tunnels,
skybridges or parking garages now or hereafter
connecting the Building to any building or garage
that may be located on any other block adjacent to or
nearby the block in which the Building is located.
BUILDING: The building located on the Land, known as 1700
Pacific Avenue, located at 1700 Pacific Avenue,
Dallas, Texas 75201.
LEASED PREMISES: 31,478 Rentable Square Feet as shown on EXHIBIT
A.
Suite 1400 on Floor 14 of the Building and Suite 1500
on Floor 15 of the Building.
TENANT'S PROPORTIONATE 2.348%, determined by dividing the number
of Rentable
SHARE: Square Feet contained in the Leased Premises by the
Total Building Area. The Tenant's Proportionate Share
shall change if the size of the Leased Premises
changes as a result of expansions, reductions, or
otherwise.
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TOTAL BUILDING AREA: 1,340,481 Rentable Square Feet.
MINIMUM RENT: $ 0.00 per month for months 1 through 6
$ 39,347.50 per month for months 7 through 42
$ 44,593.83 per month for months 43 through 66
$ 47,217.00 per month for months 67 through 90
$ 52,463.33 per month for months 91 through 126
RENT: The Minimum Rent and all other amounts payable by
Tenant to Landlord under this Lease, including
Tenant's Proportionate Share of Total Electricity
Costs for the Project and Excess Operating Costs.
COMMENCEMENT DATE: June 1, 1998. (See Paragraph 3)
EXPIRATION DATE: November 30, 2008. (See Paragraph 3)
LEASE TERM: 126 Months, ending on the Expiration Date.
BASE YEAR FOR OPERATING Calendar year 1998.
COSTS:
TENANT'S BROKER: Trinity Advisory Group, Inc.
LANDLORD'S BROKER: Faison-Stone, Inc., a Texas corporation.
SECURITY DEPOSIT: $ N/A
OFF-SITE GARAGE: The approximately 1400 space parking garage on
the
western end of the block bounded by Harwood, Pearl,
Main, and Elm Streets in Dallas, Texas.
ON-SITE GARAGE: The approximately 300 space parking garage that
is
part of the Building.
PAGE 2
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PARKING: 4 spaces (Reserved or Unreserved) in the On-Site
Garage, 27 Unreserved spaces in the Off-Site Garage,
and, subject to availability up to 60 additional
unreserved spaces in the Off-Site Garage on a
month-to-month basis. (See Paragraph 53)
PERMITTED USE: General business offices.
TENANT PARTY(IES): Tenant and its directors, shareholders,
partners,
trustees, members, agents, contractors,
subcontractors, employees, licensees, servants, and
invitees and all persons and entities claiming
through any of these persons or entities.
Addresses for notices under this Lease:
LANDLORD: F/P/D Master Lease, Inc.
c/o Faison-Stone, Inc.
1700 Pacific Avenue, Suite 4500
Dallas, Texas 75201
Attention: M. Scott Ozymy
Fax: (214) 969-0384
TENANT: Service Asset Management Company
1700 Pacific Avenue, Suite 1400
Dallas, Texas 75201
Attention: William D. Gross
Fax: (214)________-______________
with a copy to:
Service Asset Management Company
6907 Capital of Texas Highway #230
Austin, Texas 78755-0800
Attention: Roger J. Engemoen, Jr.
Fax: (512) 231-8526
PAGE 3
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2. LEASED PREMISES.
Landlord, in consideration of the Rent and the obligations of
Tenant under
this Lease, leases the Leased Premises to Tenant and Tenant
leases the
Leased Premises from Landlord, subject to the terms of this
Lease. The
number of RENTABLE SQUARE FEET in the Leased Premises and the
Project is
the square footage of the applicable portion of the Project, is
stipulated
for all purposes to be the number of Rentable Square Feet set
forth in
Section 1 and is binding on Landlord and Tenant subject to
changes in the
size of the Leased Premises.
3. LEASE TERM.
(a) The Lease Term begins on the earliest to occur of: (1) the
date
Tenant occupies any part of the Leased Premises; (2) the
Commencement Date; or (3) the Ready for Occupancy Date
(defined
below); and ends on the Expiration Date. Notwithstanding the
foregoing, if the Ready for Occupancy Date occurs before May
22,
1998, then the Lease Term shall begin on the earlier of (i) the
date
Tenant occupies any part of the Lease Premises or May 25, 1998,
and
if the Ready for Occupancy Date occurs on or after May 25, 1998
and
before July 3, 1998, then the Lease Term shall begin on the
earlier
of (i) the date Tenant occupies any part of the Lease Premises,
or
(ii) July 3, 1998.
(b) Subject to Paragraph 3(c) below, if the Ready for Occupancy
Date
does not occur by the Commencement Date for any reason other
than
omission, delay, or default by any Tenant Party, Tenant's
obligation
to pay Rent does not commence until the Ready For Occupancy
Date
occurs and the Expiration Date is extended for a period of
time
equal to the time period beginning on the Commencement Date
and
ending on the day before the Ready for Occupancy Date. This
abatement of Rent is Tenant's sole and exclusive remedy and is
full
settlement of all claims that Tenant has against Landlord by
reason
of the Leased Premises not being ready for occupancy by Tenant
on
the Commencement Date.
(c) If Tenant occupies any part of the Leased Premises before
the
Commencement Date or the Ready for Occupancy Date, as
applicable,
the Lease Term and Tenant's obligation to pay Rent commence on
the
date Tenant occupies the Leased Premises and the Expiration Date
is
126 months after the date on which Tenant's occupancy
commences.
Tenant is deemed to occupy the Leased Premises when Tenant
takes
possession of any part of the Leased Premises for any
purpose,
including placing furniture and installing Tenant's equipment in
the
Leased Premises.
(d) When the first day of the Lease Term is established pursuant
to this
Paragraph 3, Landlord shall prepare and Landlord and Tenant
shall
exchange a letter acknowledging that date and, if the
Expiration
Date changes under this Paragraph, the Expiration Date.
PAGE 4
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(e) The READY FOR OCCUPANCY DATE is the earlier to occur of:
(1) the date that Landlord notifies Tenant that the City of
Dallas
has approved the Leased Premises for occupancy; or
(2) the date the City of Dallas would have approved the
Leased
Premises for occupancy but for delays caused by any Tenant
Party;
provided, if Landlord performs any Additional Work (defined
in
EXHIBIT F), the Ready for Occupancy Date is deemed accelerated
by
the number of days in the Additional Work Period (defined in
EXHIBIT
F).
4. ACCEPTANCE OF LEASED PREMISES.
Tenant's occupancy of the Leased Premises is conclusive evidence
that
Tenant: (A) accepts the Leased Premises as suitable for the
purposes for
which they are leased; (B) accepts the Leased Premises and the
Project as
being in a good and satisfactory condition; and (C) waives any
defects in
the Leased Premises and the Project; provided, however, that by
occupying
the Lease Premises, Tenant shall not be deemed to have accepted
or waived
any defect therein about Tenant, in the exercise of reasonable
care, could
not have learned prior to occupying the Leased Premises.
5. RENT PAYMENTS.
(a) The installment of Minimum Rent due for the seventh (7th)
month of
the Lease Term is payable by Tenant when this Lease is
executed.
Subsequent installments of Minimum Rent are payable by Tenant
in
advance on the first day of each calendar month during the
Lease
Term beginning on the first day of the eighth full calendar
month
after the Commencement Date (or the Ready for Occupancy Date,
if
applicable). Minimum Rent for any partial calendar month is
prorated
on a per diem basis.
(b) All Rent is payable by Tenant at the times and in the
amounts
specified in this Lease in legal tender of the United States
of
America to Landlord at the following address or to any other
person
or at any other address as Landlord may from time to time
designate
by notice to Tenant:
F/P/D Master Lease, Inc.
P.O. Box 844792
Dallas, Texas 75284-4792
(c) Rent is payable by Tenant without notice, demand,
abatement,
deduction, or set off. Tenant's obligation to pay Rent is
independent of any obligation of Landlord under
PAGE 5
<PAGE>
this Lease. If any installment of Rent is not paid within 5
days
after it is due, Tenant shall pay a late charge in an amount
equal
to 10% of the delinquent installment of Rent when it pays
the
delinquent installment. In addition, any Rent not paid when due
(and
which represents amounts not already specified as bearing
interest
under other provisions of this Lease) bears interest from the
due
date until the date paid at a rate (the INTEREST RATE) equal to
the
lesser of the highest rate allowable under applicable law or 18%
per
annum.
6. ELECTRICITY.
(a) Landlord, subject to payment by Tenant as specified below,
shall
furnish electricity as follows:
- up to 2 watts per Rentable Square Foot in the Leased
Premises
at 277 volts for lighting; and
- up to 1.25 watts per Rentable Square Foot in the Leased
Premises at 120 volts for office machines.
If Tenant wants to use any office equipment or lighting that
will
cause Tenant's electricity requirements to exceed the
specified
levels or that will generate, excess heat, Tenant must give
Landlord
prior notice specifying Tenant's excess electricity requirements
and
the specific equipment that generates excess heat. If the
excess
electricity requirements can be supplied without, in Landlord's
sole
opinion, overloading the existing Building systems, or if
the
additional equipment necessary to supply Tenant's excess
electricity
requirements can be installed without, in Landlord's sole
opinion,
creating a dangerous condition in the Building, Landlord
shall
supply Tenant's excess electricity requirements and Tenant shall
pay
Landlord the cost of supplying the excess electricity
requirements,
including all installation costs, on demand as additional
Rent.
(b) If Tenant's electricity use exceeds the specified limits,
Landlord
may, at its sole option, either:
- install separate submeter(s) for all or any part of the
Leased
Premises and Tenant shall pay Landlord the installation cost
and the cost of the excess electricity as metered on demand
as
additional Rent; or
- if Landlord does not elect to install separate
submeter(s),
cause Landlord's engineer to determine the amount of excess
electricity to be allocated to Tenant based on the power
requirements of the equipment or lighting and Tenant shall
pay
Landlord the cost of the excess electricity as reasonably
determined by Landlord's engineer on demand as additional
Rent.
PAGE 6
<PAGE>
(c) If Tenant's electricity use exceeds the specified limits or
any of
Tenant's equipment generates excess heat, Landlord may also, at
its
sole option and without any obligation to do so, install
supplemental air conditioning units in the Leased Premises to
offset
the heat-generating effect of Tenant's excess electricity usage
and
Tenant's equipment and Tenant shall pay Landlord the
installation
cost and the cost of operation, use, repair, and replacement of
the
supplemental air conditioning units on demand as additional
Rent.
(d) The obligation of Landlord to furnish electricity is subject
to the
rules and regulations of the supplier of electricity and of
any
municipal or other governmental authority regulating the
business of
providing electricity. Landlord is not liable to any Tenant
Party
for any failure or defect in the supply or character of
electricity
furnished to the Leased Premises due to any requirement, act,
or
omission of the entity supplying electricity to the Project.
(e) Tenant shall pay to Landlord, without any set off or
deduction,
beginning on the Commencement Date, Tenant's Proportionate Share
of
Total Electricity Costs for the Project (defined below) incurred
in
the use, occupancy, and operation of the Project and all
related
improvements and appurtenances, including electricity used
for
heating and air-conditioning and perimeter lighting for the
Project,
net of Submetered Power (defined below).
(f) The term TOTAL ELECTRICITY COSTS FOR THE PROJECT means the
total
electricity cost charged to Landlord by the entity supplying
electricity to the Building, and the Building's share of
electricity
costs charged for other portions of the Project, including
taxes,
but may not include any administrative fee or charge by
Landlord.
The term SUBMETERED POWER means all supplemental electricity
that is
separately submetered by Landlord and paid by tenants in the
Building or that is separately tracked and calculated by
Landlord's
engineer and paid by tenants in the Building.
(g) If Landlord at any time elects to install submeters
measuring
electricity used in the Building or the Leased Premises, which
may
include submeters measuring electricity used for heating and
cooling
the Building or Leased Premises, then Tenant's Proportionate
Share
of those actual costs will be based on actual use as measured by
the
submeters, but, with any areas sharing a submeter being prorated
on
the basis that the area of the Leased Premises bears to the
total
area covered by the submeters.
(h) Landlord shall bill Tenant for Tenant's electricity charges
under
this Paragraph monthly and Tenant shall pay its electricity
charges
within 10 business days after receipt of each bill. Landlord
shall
bill Tenant for Tenant's electricity charge for the last full
or
partial month of the Lease Term as soon as practicable after
the
termination or expiration of this Lease and Tenant shall pay
the
bill within 10
PAGE 7
<PAGE>
business days after receipt. Tenant's obligation to pay the
bill
survives the termination or expiration of the Lease.
7. SERVICES BY LANDLORD.
Landlord shall maintain the Building, the On-Site Garage, the
Off-Site
Garage and all common areas (exclusive of those portions of the
Lease
Premises Tenant is obligated to maintain hereunder) in
accordance with
standards customarily followed in the maintenance of first-class
buildings
comparable to the Building in the downtown Dallas central
business
district. Landlord, subject to payment by Tenant as specified
below, shall
furnish the following services for the Leased Premises:
- air conditioning, both heating and cooling (as required by
the
seasons), from 8:00 a.m. to 6:00 p.m. on weekdays and on
Saturdays
from 8:00 a.m. to 1:00 p.m., except on Holidays (as defined
below)
(the HVAC Standard Hours) amounts as are in the sole judgment
of
Landlord reasonably required for comfortable use and occupancy
under
normal business operations. Circulating air is not available
other
than through the Building's HVAC system. If Tenant requires
HVAC
services at any time other than HVAC Standard Hours, Landlord
shall
furnish after-hours HVAC service for the times specified in
a
request by Tenant received by the Project manager before 2:00
p.m.
on the business day the extra usage is required. Requests
received
after that deadline will be handled in accordance with
Landlord's
Building Policies in effect at the time. Tenant acknowledges
receipt
of a copy of the current Building Policies. Landlord may
make
changes in the Building Policies and the changes become
effective
when a copy of the revised Building Policies is delivered to
Tenant.
Tenant shall pay Landlord as additional Rent for extra
service
within 5 days after receipt of a bill therefor the greater of
(A)
the actual cost of the extra service [if more than one tenant
has
requested and is furnished after-hours HVAC service for the
same
hour(s) the charge will be prorated if reasonably possible], or
(B)
$50 per hour per floor (whole or partial) of after-hours
HVAC
service. HOLIDAYS are New Year's Day, Memorial Day,
Independence
Day, Labor Day, Thanksgiving, and Christmas. BUSINESS DAYS
are
weekdays other than Holidays.
- cold water (at the normal temperature of the water supply to
the
Building) for lavatory and toilet purposes, water for
drinking
purposes, and hot water (from the regular Building supply at
prevailing temperatures) for lavatory purposes to restrooms
located
in the core area of the Building only, all water service to be
at
supply points provided for general use of tenants of the
Building
through fixtures installed by Landlord, or by Tenant with
Landlord's
prior consent;
- janitor and maid service to the Leased Premises in accordance
with
Exhibit G on days other than Fridays, Saturdays, and
Holidays;
PAGE 8
<PAGE>
- window washing and wall cleaning as determined by Landlord in
its
reasonable discretion;
- operator-less passenger elevators for ingress and egress to
and from
the floor(s) on which the Leased Premises are located
(provided,
Landlord may reasonably limit the number of elevators to be
in
operation on Saturdays, Sundays, and Holidays) and freight
elevator
service in common with other tenants but only when scheduled
through
the Project manager;
- common area rest room facilities; and
- electric lighting for all common areas and special service
areas of
the Building in the manner and to the extent deemed by Landlord
to
be reasonable and standard, including replacement of
florescent
light tubes in Building standard light fixtures.
BUILDING STANDARD HOURS are weekdays, excluding Holidays, from
8:00 a.m.
to 6:00 p.m. Landlord may lock the Buildings at all times other
than
during Building Standard Hours; provided, however, that Tenant
shall at
all times have access to the Leased Premises by keys, magnetic
cards, or
other access device provided by Landlord in accordance with this
Lease,
subject to reasonable access control measures instituted by
Landlord after
Building Standard Hours.
8. SERVICE INTERRUPTIONS.
(a) Landlord does not warrant that the services provided by
Landlord
will be free from any slow-down, interruption, or stoppage
by
governmental bodies, regulatory agencies, utility companies,
and
others supplying services or caused by the maintenance,
repair,
replacement, or improvement of any equipment involved in the
furnishing of the services or caused by changes of services,
alterations, strikes, lock-outs, labor controversies, fuel
shortages, accidents, acts of God, the elements, or other
causes
beyond the reasonable control of Landlord. Landlord shall use
due
diligence to resume the service upon any slowdown, interruption,
or
stoppage.
(b) No slow-down, interruption, or stoppage of the services may
be
construed as an eviction, actual or constructive, of Tenant or
cause
an abatement of Rent or in any manner or for any purpose
relieve
Tenant from its obligations under this Lease. Landlord is not
liable
for damage to persons or property, or in default under this
Lease,
as a result of any slow-down, interruption, or stoppage.
(c) Notwithstanding the foregoing, if there occurs an
interruption in
HVAC, electricity, water or elevator services ("ESSENTIAL
SERVICES"), such interruption is not caused by Tenant or a
Tenant
Party, such interruption renders at least 50% of the Leased
Premises
untenantable, and such interruption continues to render at least
50%
of the
PAGE 9
<PAGE>
Lease Premises untenantable for (i) 5 consecutive business days
if
caused by Landlord's negligence or willful misconduct, or (ii)
30
consecutive days if not caused by Landlord's negligence or
willful
misconduct, then Rent shall abate as to that portion of the
Leased
Premises rendered untenantable from the 6th consecutive business
day
or the 31st day, as the case may be, of such interruption and
for as
long as such interruption continues thereafter. The
foregoing
remedies shall be Tenant's sole and exclusive remedies with
respect
to interruption of services.
9. OPERATING COSTS.
(a) The term OPERATING COSTS means those expenses (other than
expenses
for electricity) directly incurred in the management,
operation,
maintenance, repair, and security of the Project, including but
not
limited to the cost of all utilities, building supplies,
janitorial
service, maintenance, repairs, fire and extended coverage,
public
liability, and other insurance costs, all labor and employee
benefit
costs (including wages, salaries, and fees of all personnel
engaged
in the management, operation, maintenance, repair, and security
of
the Project), ad valorem taxes and assessments (both regular
and
special), costs that reduce operating expenses or are required
to
meet Applicable Laws [defined in Paragraph 14(a)], management
fees,
consulting fees, legal fees, accounting fees, the Building's
share
of fees, charges, taxes, expenses and other amounts due in
connection with pedestrian tunnels, pedestrian skybridges,
parking-garages, City of Dallas property required to be
maintained
or operated by Landlord, and other elements of the Project or
other
facilities that benefit the Building, and the fair market rental
of
the Project managers' offices, together with payments or
credits
Landlord makes to any tenant or tenants in the Project in lieu
of
Landlord providing any of the services or paying for any of
the
costs. If for any time period in question the Project is less
than
95% occupied, Landlord shall increase Operating Costs as though
the
Project were 95% occupied.
(b) The term EXCESS OPERATING COSTS means the amount by which
the
Operating Costs for any calendar year after the Base Year exceed
the
Operating Costs for the Base Year. Landlord shall calculate
Operating Costs and Excess Operating Costs on a Rentable Square
Foot
basis by dividing the aggregate costs by the Total Building
Area. If
the amount of ad valorem taxes and assessments for the Base Year
is
subsequently modified, the modified amount is deemed to be the
ad
valorem taxes and assessments for the Base Year and is
substituted
for the original amount of taxes and assessments in the
calculation
of Operating Costs for the Base Year.
(c) If there are Excess Operating Costs for any calendar year,
Tenant
shall pay to Landlord as additional Rent an amount equal to
the
product of the Excess Operating Costs (on a Rentable Square
Foot
basis) multiplied by the number of Rentable Square Feet in
the
Leased Premises. If the amount of ad valorem taxes and
assessments
for the Base Year is reduced under subparagraph (b), Tenant
shall
pay to Landlord as
PAGE 10
<PAGE>
additional Rent any underpayment in Excess Operating Costs
resulting
from the recalculation of the Operating Costs for the Base
Year
within 30 days after delivery of any invoice therefor.
(d) On or before December 1 of the Base Year and each
subsequent
calendar year, Landlord shall deliver to Tenant Landlord's
reasonable estimate of the Excess Operating Costs for the
next
calendar year. Tenant shall pay to Landlord monthly as
additional
Rent, in advance on or before the first day in each
succeeding
calendar month, an amount equal to one twelfth (l/12th) of
the
product of the number of Rentable Square Feet in the Leased
Premises
times Landlord's estimated Excess Operating Costs for the
applicable
calendar year. Landlord may adjust its estimate by notice to
Tenant
at any time during the applicable calendar year if actual
Excess
Operating Costs are substantially different from the estimate,
and
thereafter payments by Tenant under this Paragraph adjust
accordingly. The term CALENDAR YEAR includes partial calendar
years.
(e) No later than July 1 of each calendar year, Landlord shall
deliver
to Tenant a statement (EXCESS OPERATING COSTS STATEMENT)
certified
by an authorized representative of Landlord setting out in
reasonable detail the actual Excess Operating Costs for the
prior
calendar year. If the estimated payments made by Tenant during
the
prior calendar year exceed Tenant's share of actual Excess
Operating
Costs for that year, Landlord shall credit the difference
against
the next ensuing installments of estimated payments by Tenant
under
this Paragraph. If the estimated payments made by Tenant during
the
prior calendar year under this Paragraph are less than
Tenant's
share of the actual Excess Operating Costs for that year,
Tenant
shall pay the amount of the difference to Landlord in cash
within 30
days after delivery of any invoice therefor by Landlord
accompanied
by a statement of the actual Excess Operating Costs for that
year as
additional Rent.
(f) Notwithstanding the foregoing, Operating Costs that are
controllable
(which excludes electricity, taxes, utilities and insurance)
shall
not increase, on a cumulative compounded basis by more than
eight
percent (8%) per year during the Lease Term.
(g) If Operating Costs for any calendar year (other than taxes,
utility
or insurance) increase by more than 5%, Tenant, at its expense,
may
inspect, audit, and copy Landlord's books and records concerning
the
applicable Excess Operating Costs Statement at Landlord's
Project
Manager's offices during normal office hours within 6 months
after
the date of the Excess Operating Costs Statement by giving
Landlord
at least 30 days' prior notice. Tenant may not be in
Landlord's
Project Manager's offices for more than a total of 5 business
days.
Tenant shall make reasonable efforts to minimize any disruption
to
Landlord's business while in Landlord's project manager's
offices.
Landlord will use reasonable efforts to cooperate with the
conduct
PAGE 11
<PAGE>
of such audit. Tenant shall deliver to Landlord a copy of the
audit
within 10 days after it is finalized.
- If Tenant disputes any Excess Operating Costs Statement as
a
result of its audit and Landlord does not contest the
accuracy
of Tenant's dispute, within 10 business days after demand,
Landlord shall reimburse Tenant the amount of any
overpayment
or Tenant shall pay Landlord the amount of any underpayment,
together with interest thereon from the date due until paid
at
the Interest Rate. If Landlord contests the results of
Tenant's audit, Landlord and Tenant shall use reasonable
efforts to resolve their differences. If Landlord and Tenant
are unable to resolve their differences after using
reasonable
efforts, then, prior to the institution of legal action,
Landlord and Tenant agree to attempt to resolve such dispute
by participating in non-binding mediation. If Tenant retains
a
third party (AUDITOR) to audit any Excess Operating Costs
Statement, the Auditor must be a nationally recognized
accounting firm that is not being compensated by Tenant on a
contingency fee basis. Prior to conducting an audit, Tenant
and any Auditor shall execute Landlord's standard form of
confidentiality agreement relating to the audit.
- Tenant may not conduct an audit of any Excess Operating
Costs
Statement if Tenant is in default under this Lease at the
time
Tenant delivers its notice to Landlord requesting the audit
or
at the time the audit would be conducted. Except for
Affiliate, as hereinafter defined, sublessees or assignees,
no
subtenant may conduct an audit and no assignee may conduct
an
audit for any period during which the assignee was not in
possession of the Leased Premises.
10. SECURITY DEPOSIT. Intentionally Deleted.
11. ASSIGNMENT AND SUBLETTING.
(a) Tenant may not, without Landlord's prior written consent,
except as
specified in subparagraph 11(i) below; (1) assign or transfer
this
Lease or any interest therein; (2) permit any assignment of
this
Lease or any interest therein by operation of law; (3) sublet
the
Leased Premises or any part thereof; (4) grant any license,
concession, or other right of occupancy of any portion of the
Leased
Premises; (5) mortgage, pledge, or otherwise encumber its
interest
in this Lease; or (6) permit the use of the Leased Premises by
any
parties other than Tenant and its employees. Landlord's consent
to
any assignment, subletting, or reorganization is not a waiver
of
Landlord's right to approve or disapprove any subsequent
assignment,
subletting, or reorganization. Tenant and any guarantor of
Tenant's
obligations under this Lease (GUARANTOR, whether one or more)
shall
remain jointly and severally liable for the
PAGE 12
<PAGE>
payment of Rent and performance of all other obligations under
this
Lease after any assignment or subletting. If Tenant is a
partnership, Tenant, Guarantor, and the general partners of
Tenant
prior to its reorganization shall remain jointly and
severally
liable for the payment of Rent and performance of all other
obligations under this Lease after any reorganization.
(b) If an Event of Default (defined in Paragraph 27) occurs
while the
Leased Premises or any part thereof are assigned or sublet,
Landlord, in addition to any other remedies under this Lease
or
provided by law, may at its option collect directly from the
assignee or sublessee all rents payable to Tenant under the
assignment or sublease and apply the rent against any sums due
to
Landlord under this Lease. Tenant authorizes and directs any
assignee or sublessee to make payments of rent directly to
Landlord
upon receipt of notice from Landlord. No direct collection of
rent
by Landlord from any assignee or sublessee is a novation or
a
release of Tenant or Guarantor from the performance of their
obligations under this Lease or under any guaranty executed
by
Guarantor. Receipt by Landlord of rent from any assignee,
sublessee,
or occupant of the Leased Premises is not a waiver of the
covenant
against assignment and subletting or a release of Tenant or
Guarantor.
(c) If Tenant wants to assign or sublease all or part of the
Leased
Premises, it shall deliver a notice to Landlord specifying the
name
of, financial information for, and the nature of the business of
the
proposed assignee or subtenant, and the proposed effective date
of
the assignment or sublease. Tenant may not assign or sublease
all or
any part of the Leased Premises at any time when Tenant is
in
default under this Lease, whether or not an Event of Default
has
occurred.
(d) Landlord has a period of 20 days from receipt of Tenant's
notice to
notify Tenant that Landlord elects, in Landlord's sole
discretion,
to:
(1) terminate this Lease as to the space that is the subject
of
Tenant's notice as of the date specified by Tenant, and if
more than thirty percent (30%) of the Leased Premises,
whether
through one or more transactions, will be subject to
assignments or subleases as a results of the proposed
sublease
or assignment, Landlord shall have the right to terminate
the
Lease in its entirety;
(2) consent to the assignment or sublease; provided, if the
rent
payable to the Tenant by the sublessee is greater than the
Minimum Rent, fifty percent (50%) of the excess rent is
payable by Tenant as additional Rent to Landlord on the same
dates Tenant pays Minimum Rent; or
(3) refuse to consent to Tenant's assignment or sublease of
that
space and to continue this Lease in effect.
PAGE 13
<PAGE>
If Landlord does not notify Tenant of Landlord's election within
the
20-day period, Landlord is deemed to elect option (3).
(e) Any change in a majority of the voting rights or other
control
rights of Tenant is an assignment for purposes of this
Paragraph, If
Tenant is a partnership, then any transfer of a general
partnership
interest is an assignment for purposes hereof.
(f) As a condition to the effectiveness of each assignment
or
subletting, and whether or not Landlord's prior consent is
required
for the assignment or subletting, Tenant shall pay to Landlord
its
reasonable administrative and legal costs in connection
therewith,
not to exceed $1,000.
(g) Any attempted assignment or sublease by Tenant or any
attempted
reorganization of Tenant in violation of the terms of this
Paragraph
is void.
(h) Tenant may not enter into any sublease, license, concession
or other
agreement for any use, occupancy or utilization of the
Leased
Premises that provides for a rental or other payment for the
use,
occupancy, or utilization based in whole or in part on the
net
income or profits derived by any person from the premises so
leased,
used, occupied, or utilized.
(i) Tenant may, without the prior consent of Landlord, sublet
all or any
part of the Leased Premises to an Affiliate (defined below),
or
assign this Lease to an Affiliate, so long as (i) Tenant
provides
Landlord a copy of the sublease or the assignment within 10
days
after its execution, (ii) the transaction was not entered into
as a
subterfuge to avoid the obligations and restrictions of this
Lease,
(iii) the assignee or sublessee is engaged in a business
customarily
acceptable for a tenant in a first-class high-rise building
in
Dallas, Texas, (iv) the assignee's or sublessee's proposed use
of
the Leased Premises does not violate this Lease, and (v) the
assignee's or sublessee's net worth, creditworthiness and
financial
standing is equal to or better than Tenant's as of the date of
such
assignment or sublease. Landlord has no obligation to recognize
an
Affiliate as the tenant under this Lease unless Landlord
timely
receives a complete copy of the assignment or sublease. Tenant
and
Guarantor remain jointly and severally liable for the payment
of
Rent and performance of all other obligations under this Lease
after
any assignment or subletting to an Affiliate. The term
AFFILIATE
means any entity that acquires all or part of Tenant, or that
is
acquired in whole or in part by Tenant, or which entity
controls,
directly or indirectly, Tenant. For purposes of this
subparagraph,
CONTROL means the possession, directly or indirectly, of the
power
to direct or cause the direction of the management and policies
of a
corporation, whether through the ownership of voting securities
or
by contract or otherwise.
PAGE 14
<PAGE>
(j) If Landlord exercises its termination right set forth in
subparagraph 11(d)(l) above, the number of reserved (if any)
and
unreserved parking spaces allocated to Tenant reduces
proportionately, effective as of the date of termination.
(k) Notwithstanding the foregoing, Landlord will not
unreasonably
withhold its approval of an assignment of this Lease or a
sublease
of a portion of the Leased Premises so long as the following
conditions are satisfied: (i) the assignee or sublessee is of a
kind
and type and has a net worth and creditworthiness comparable
to
other tenants customarily found in or comparable with
first-class
office buildings in the downtown Dallas central business
district
comparable to the Building; (ii) the assignee or sublessee
is
engaged in a business customarily acceptable for a tenant in
a
first-class office building in the downtown Dallas central
business
district comparable to the Building; (iii) the assignee's or
sublessee's proposed use of the Leased Premises does not
violate
this Lease or any restriction applicable to the Building; (iv)
at
the time of such assignment or subletting, this Lease is in
full
force and effect and there is no uncured Event of Default; (v)
the
assignee or sublessee shall not use the Leased Premises or
the
Building in a manner that adversely interferes with, burdens the
use
of or otherwise increases the use of the public areas of the
Project, any Building system, or the use of the elevators or
any
Building system; and (vi) in no event shall the following be
considered as suitable assignees or sublessees under this Lease:
any
governmental body, agency or bureau (of the United States,
any
state, county, municipality or any subdivision thereof); any
foreign
government or subdivision thereof; any health care professional
or
health care service organization; schools or similar
organizations;
employment agencies; radio, television or other
communication
stations; restaurants; and retailers offering retail services
from
the Leased Premises.
(l) Notwithstanding the giving by Landlord of its consent to
any
sublease or assignment with respect to the Leased Premises,
no
sublessee or assignee may exercise any renewal options,
expansion
options, rights of first offer or similar rights under this
Lease
except in accordance with a separate written agreement entered
into
directly between such sublessee or assignee and Landlord,
provided
Tenant continues to be liable for the performance of all
obligations
hereunder, as increased or otherwise affected by the exercise
of
such rights. Tenant may not exercise any renewal options,
expansion
options, rights of first offer or similar rights under this
Lease if
Tenant has assigned any portion of its interest in this Lease
or
subleased any portion of the Leased Premises.
12. REPAIR AND MAINTENANCE BY TENANT.
(a) Except for those repairs and maintenance obligations
required to be
undertaken by Landlord as expressly provided in this Lease,
Tenant
shall keep the Leased Premises [including, without
limitation,
Standard Improvements and Tenant Improvements
PAGE 15
<PAGE>
(both as defined in Exhibit F)] and all fixtures installed by or
on
behalf of Tenant in good and tenantable condition. Tenant
shall
promptly make all necessary non-structural repairs and
replacements
to its fixtures and Tenant Improvements, all at Tenant's
expense,
under the supervision and with the approval of Landlord. All
repairs
and replacements must be equal in quality and class to the
original
work. Without diminishing this obligation of Tenant, if Tenant
fails
to make any repairs and replacements within 15 days after
the
occurrence of the damage or injury, Landlord may at its option
make
the repairs and replacements and Tenant shall pay Landlord on
demand
as additional Rent the costs incurred by Landlord plus an
administrative fee equal to 10% of the costs; provided,
however,
that with respect to any repair which reasonably requires more
than
15 days to complete, Landlord shall not have the right to make
such
repair or replacement as long as Tenant commences such repair
within
such 15 day period and thereafter diligently pursues such repair
to
completion.
(b) Tenant shall pay the cost of repairs and replacements due to
damage
or injury to the Project or any part thereof caused by any
Tenant
Party or by any malfunction or misuse of any equipment installed
by
or on behalf of Tenant. This amount is payable by Tenant to
Landlord
on demand as additional Rent, plus interest at the Interest
Rate
from the date of payment by Landlord until paid by Tenant. If
Tenant
requests Landlord to perform any maintenance or repairs to
the
Leased Premises, over and above the services required to be
performed by Landlord pursuant to Paragraph 7, Tenant shall pay
the
actual cost thereof, plus an administrative fee equal to 10% of
the
actual cost thereof, to Landlord as additional Rent within 5
business days after demand.
(c) Tenant also shall pay the actual cost, plus an
administrative fee
equal to 10% of the actual cost thereof, to Landlord as
additional
Rent within 5 days after demand, of replacing fluorescent
light
tubes in Building standard light fixtures located in the
Leased
Premises.
13. ALTERATIONS AND ADDITIONS BY TENANT.
(a) Tenant may not make or permit any alterations, improvements,
or
additions in or to the Leased Premises or the Project
without
Landlord's prior consent. Provided Tenant has notified Landlord
in
writing at least 10 days prior to the commencement of any such
work
within the Leased Premises, Landlord will not unreasonably
withhold
its approval of non-structural alterations or physical additions
to
the Leased Premises which cost $10,000 or less in each case
subject
to the following limitations: (i) such alterations and
additions
will not impair the structural integrity of the Building, (ii)
such
alterations and additions will not affect the mechanical,
electrical, plumbing, heating, air-conditioning or
ventilation
systems of the Leased Premises, (iii) such alterations and
additions
are accomplished in a good and workmanlike
PAGE 16
<PAGE>
manner and in accordance with all applicable governmental
requirements, (iv) such alterations and additions are not
visible
from outside the Leased Premises, and (v) Tenant obtains all
applicable governmental permits and approvals required in
connection
with such alterations and additions. All alterations, additions,
and
improvements made to, or fixtures or other improvements placed
in or
upon, the Leased Premises, whether temporary or permanent in
character, by either party (except only Tenant's movable
trade
fixtures, office furniture, and equipment) are a part of the
Project
and are the property of Landlord when they are placed in the
Leased
Premises without compensation to Tenant. Alterations,
improvements,
and additions in and to the Leased Premises requested by Tenant
must
be made in accordance with complete and accurate plans and
specifications and construction documents [including,
without
limitation, complete mechanical, electrical and plumbing
(MEP)
requirements] prepared by Tenant and approved in advance by
Landlord. All work must be performed at Tenant's expense either
by
Landlord or by contractors and subcontractors approved in
advance by
Landlord. If the work is not performed by Landlord, then all
work
performed by Tenant's contractors and subcontractors is subject
to
the following conditions:
(1) Each contractor and subcontractor must deliver evidence
satisfactory to Landlord that the insurance specified on
EXHIBIT D is in force prior to commencing work.
(2) Tenant shall ensure that all workers are cooperative
with
Project personnel and comply with all Project Rules and
Regulations.
(3) Tenant must deliver to Landlord evidence that Tenant has
obtained all necessary governmental permits and approvals
for
the improvements or alterations prior to starting any work.
(4) All construction must be done in a good and workmanlike
manner
and is subject to approval by Landlord during and after
construction to determine compliance with the approved plans
and specifications and construction documents, in its sole
discretion.
(5) Lien releases from each contractor and subcontractor must
be
submitted to Landlord within 5 days after completion of the
work performed by the contractor or subcontractor.
(6) Within 30 days after completion of any improvements or
alterations, Tenant, at its cost, shall deliver to Landlord
2
reproducible copies of "as-built" plans and specifications
(1/8" scale) for each floor where alterations or
improvements
were made.
PAGE 17
<PAGE>
All changes to the plans and specifications and construction
documents are also subject to Landlord's prior approval.
(b) Tenant must use Landlord's fire protection contractor and
must
either (1) use Landlord's MEP engineer to prepare the MEP
portions
of the plans and specifications and construction documents, or
(2)
reimburse the cost of one review by Landlord's MEP engineer of
the
plans and specifications and the construction documents.
Landlord
shall cause its fire protection contractor and MEP engineer
to
perform the work for Tenant at Landlord's contracted rates.
(c) All alterations and improvements by Tenant must comply with
all
Applicable Laws. Tenant and its consultants must coordinate
any
alterations or additions relating to compliance with Access
Laws
with Landlord and Landlord's Access Law compliance plan for
the
Project in preparing the plans and specifications and
construction
documents. If Tenant's alterations or additions to the
Leased
Premises or the manner in which Tenant uses the Leased
Premises
cause Landlord to make any alterations or improvements to
the
Project to comply with the provisions of the Americans With
Disabilities Act of 1990 (as amended), the Texas
Architectural
Barriers Act (as amended) [Tex. Rev. Civ. Stat. Ann. Art. 9102],
and
any similar law, rule or regulation relating to access by
disabled
persons to the Leased Premises or the Project (collectively,
ACCESS
LAWS), Tenant shall reimburse Landlord for the cost of the
alterations or improvements upon demand as additional Rent.
Neither
Landlord's approval of Tenant's plans and specifications for
the
alterations or improvements nor Landlord's acceptance of
Tenant's
as-built plans is a confirmation or agreement by Landlord that
the
improvements and alterations comply with Applicable Laws.
(d) Within 30 days after Tenant installs any telephone or data
cables,
whether or not in connection with an alteration or addition to
the
Leased Premises, Tenant, at its cost, shall deliver to Landlord
2
reproducible copies of "as-built" plans and specifications (1/8
"
scale) showing the location of the telephone and data
cables.
(e) As between Landlord and Tenant, for purposes of the
insurance
requirements of Paragraph 18, Tenant has an insurable interest
in
all of the Tenant Improvements and alterations made by Tenant in
the
Leased Premises, but all of the Tenant Improvements and
alterations
shall be surrendered to Landlord with the Leased Premises upon
the
expiration or earlier termination of the Lease as set forth
in
Paragraph 25 of the Lease.
14. USE AND OCCUPANCY.
(a) The Leased Premises may be used and occupied by Tenant only
for
general business offices and incidental uses and for no
other
purpose without Landlord's prior consent, in its sole
discretion.
Tenant shall use and maintain the Leased Premises in a
clean,
PAGE 18
<PAGE>
careful, safe, and proper manner and shall comply with all
laws,
ordinances, orders, rules, and regulations of all
governmental
bodies (state, federal, and municipal) applicable to or
having
jurisdiction over the use, occupancy, operation, and maintenance
of
the Leased Premises and the Project, including without
limitations
all applicable environmental laws and the Access Laws (those
laws,
ordinances, orders, rules, decisions, and regulations being
called
APPLICABLE LAWS).
(b) Tenant may not deface or injure the Leased Premises or the
Project
or any part thereof or overload the floors of the Leased
Premises.
Tenant may not commit waste or permit waste to be committed or
cause
or permit any nuisance on or in the Leased Premises or the
Project.
Tenant shall pay Landlord on demand as additional Rent for
any
damage to the Leased Premises or to any other part of the
Project
caused by any negligence or willful act or any misuse or
abuse
(whether or not the misuse or abuse results from negligence
or
willful acts) by Tenant or any Tenant Party or any other
person
(except Landlord or any of its agents, employees, or
contractors)
authorized by Tenant to enter upon the Leased Premises.
(c) Tenant may not use or allow the Leased Premises to be used
for any
purpose prohibited by any Applicable Law, or by any
restrictive
covenants applicable to the Project, or as a manned express
mail
pick up center for delivery services like Airborne and
Federal
Express, or for the sale of bakery products for dessert
items
including cookies, fudge slices, bar type cookies and cakes,
cupcakes and brownies, whether the product is sold packaged
or
unpackaged if the sales would constitute more than 10% of
Tenant's
gross receipts, or for a mini-bank or bank. Tenant may not
sell,
purchase, or give away, or permit, except with Landlord's
prior
approval, the sale, purchase, or gift of food in any form by or
to
any Tenant Party or any other parties at the Leased Premises or
the
Project. Tenant also will not use any part of the Leased
Premises
for the following uses: health care services, telephone or
telegraph
agency, radio, television or other communication station,
employment
agency, public restaurant or bar, retail, wholesale or discount
shop
for sale of merchandise, retail service shop, school or
classroom,
or governmental or quasi-governmental bureau, department or
agency.
Tenant shall conduct its business and occupy the Leased Premises
and
control all Tenant Parties so as not to create any nuisance
or
interfere with, annoy, or disturb any other tenants in the
Project
or Landlord in its management of the Project and so as not to
injure
the reputation of the Project.
(d) Tenant may not erect, place, or allow to be placed any
sign,
advertising matter, stand, booth, or showcase in or upon the
doorsteps, vestibules, halls, corridors, doors, walls, windows,
or
pavement of the Project visible outside the Leased Premises
(except
for lettering on the door or doors to the Leased Premises as
allowed
by the Rules and Regulations attached as EXHIBIT D) without
the
prior consent of Landlord; provided, however, that on the
interior
of any floor leased entirely by Tenant, Tenant may
PAGE 19
<PAGE>
install signage approved by Landlord, which approval shall not
be
unreasonably withheld, that is not visible from the exterior of
the
Leased Premises.
(e) Tenant may not use or allow or permit the Leased Premises to
be used
in any way or for any purpose that:
(1) Landlord deems hazardous on account of the possibility of
fire
or other casualty;
(2) is visible from the exterior of the Leased Premises,
adversely
affects ventilation in other areas of the Project, creates
unreasonable elevator loads, causes structural loads to be
exceeded, or creates unreasonable noise levels;
(3) increases the rate of fire or other insurance for the
Project
or its contents or in respect of the operation of the
Project;
or
(4) renders the Project uninsurable at normal rates by
responsible
insurance carriers authorized to do business in the State of
Texas or renders void or voidable any insurance on the
Project.
If insurance premiums are increased because of Tenant's use of
the
Leased Premises, then, in addition to any other remedies
Landlord
may have, Tenant shall pay the amount of the increase to
Landlord as
additional Rent within 5 days after demand.
15. MECHANICS' LIENS - TENANT'S OBLIGATIONS.
Tenant may not cause or permit any mechanic's or materialman's
lien to be
placed upon Landlord's interest in the Project or the Leased
Premises or
any part thereof or against Landlord's interest under this Lease
by any
contractor, subcontractor, laborer, or materialman performing
any labor or
furnishing any materials to Tenant for any improvement,
alteration, or
repair of or to the Leased Premises, the Project, or any part
thereof. If
any lien is filed on Landlord's interest or Tenant's interest in
the
Leased Premises, Tenant shall cause the same to be discharged of
record
within 20 days after filing. If Tenant does not discharge the
lien within
the 20-day period, then, in addition to any other right or
remedy of
Landlord, Landlord may, but is not obligated to, discharge the
lien by
paying the amount claimed to be due or by procuring the
discharge of the
lien by deposit in court or bonding. Any amount paid by Landlord
relating
to any lien not caused by Landlord, and all reasonable legal and
other
expenses of Landlord, including reasonable attorneys' fees, in
defending
any action or in procuring the discharge of any lien, with
interest
thereon at the Interest Rate from date of payment by Landlord
until paid
by Tenant, is payable by Tenant to Landlord on demand as
additional Rent.
PAGE 20
<PAGE>
16. LIMITATIONS ON LIABILITY OF LANDLORD; WAIVER.
(a) To the fullest extent permitted by law, Tenant, on its
behalf and on
behalf of all Tenant Parties, waives all claims (in law, equity,
or
otherwise) against Landlord and Landlord's officers,
directors,
shareholders, partners, trustees, members, agents,
employees,
property manager and independent contractors (singularly, a
Landlord
Party and collectively, Landlord Parties) arising out of,
knowingly
and voluntarily assumes the risk of, and agrees that
Landlord
Parties are not liable to any Tenant Parties for any of the
following:
(1) any injury or damage to person or property (including
the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
condition or design of, or any defect in, the Leased
Premises
or Project that exists now or occurs in the future, except
for
Landlord's gross negligence or willful misconduct;
(2) any injury or damage to person or property (including
the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
Leased Premises or Project or related improvements or
appurtenances being out of repair, or defects in or failure
of
pipes or wiring, or backing up of drains, or the bursting or
leaking of pipes, faucets, and plumbing mixtures, or gas,
water, steam, electricity, or oil leaking, escaping, or
flowing into the Leased Premises, unless caused by
Landlord's
willful misconduct or gross negligence;
(3) any loss or damage caused by the acts or omissions of
other
tenants in the Project or of any other persons, excepting
only
the willful misconduct or gross negligence of duly
authorized
employees and agents of Landlord; or
(4) any loss or damage to property or person occasioned by
theft,
fire, act of God, public enemy, injunction, riot,
insurrection, war, court order, requisition, order of
governmental authority, and any other cause beyond the
control
of Landlord Parties.
(b) Notwithstanding the foregoing or anything else to the
contrary
contained in this Lease, the liability of Landlord to any
Tenant
Party for any default, indemnity by, or other obligation or
liability of Landlord under this Lease is limited to the
interest of
Landlord in the Project. No Landlord Party has any personal
liability for any amounts payable or obligations performable
by
Landlord under this Lease.
(c) The provisions of this Paragraph 16 shall survive the
expiration or
earlier termination of this Lease.
PAGE 21
<PAGE>
17. TENANT'S INDEMNIFICATION OF LANDLORD; ASSUMPTION; EMPLOYEES'
CLAIMS.
(a) Tenant shall indemnify, defend, and hold Landlord Parties
harmless
from all fines, suits, losses, costs, liabilities, claims,
demands,
actions, and judgments (collectively, claims) arising out of
or
relating to any of the following:
(1) any breach or default in performance of any obligation
on
Tenant's part to be performed under this Lease, whether
before
or during the Lease Term or after its expiration or earlier
termination;
(2) any act, omission, negligence, or misconduct of Tenant or
any
Tenant Party, or of any other person entering upon the
Leased
Premises under or with the express or implied invitation or
permission of Tenant;
(3) any alterations, activities, work, or things done,
permitted,
allowed, or suffered by Tenant Parties in, at, or about the
Leased Premises or the Project, including the violation by
Tenant or any Tenant Party of any law, ordinance, or
governmental order of any kind; and
(4) the occupancy or use by Tenant or any Tenant Party of
the
Leased Premises or the Project.
(b) Tenant is not required to indemnify, defend, or hold
Landlord
Parties harmless from any claim, demand, fine, suit, loss,
liability, action or judgment arising solely from Landlord's
gross
negligence or willful misconduct (except for damage to the
Tenant
Improvements or Tenant's personal property, fixtures, furniture,
and
equipment in the Leased premises to the extent that such damage
is
covered by insurance that Tenant is required to carry under
this
Lease (or would have been covered had Tenant carried the
insurance
required under the provisions of this Lease).
(c) If any Landlord Party is made a party to any litigation
commenced
against any Tenant Party or relating to this Lease or to the
Leased
Premises, against which Tenant has agreed to indemnify
Landlord
Parties pursuant to this Lease, then Tenant shall pay all costs
and
expenses, including attorneys' fees and court costs, incurred by
or
imposed upon the Landlord Party by virtue of the litigation.
The
amount of all costs and expenses, including attorney's fees
and
court costs, is a demand obligation payable by Tenant to
Landlord as
additional Rent bearing interest at the Interest Rate from the
date
of payment by Landlord until paid by Tenant.
(d) Deleted.
(e) The provisions of this Paragraph 17 survive the expiration
or
earlier termination of this Lease.
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<PAGE>
(f) The indemnification provisions of this Paragraph 17 shall
not be
construed or interpreted as in any way restricting, limiting,
or
modifying Tenant's insurance or other obligations under this
Lease
and is independent of Tenant's insurance and other obligations
under
this Lease.
18. TENANT'S INSURANCE.
(a) Tenant shall, at its expense, maintain at all times during
the Lease
Term (and prior to the Lease Term with respect to activities
of
Tenant under the Lease at the Project) insurance as set forth
below:
(1) Commercial General Liability Insurance (1986 ISO Form or
its
equivalent) written on an "occurrence" basis with respect to
the business carried on, in or from the Leased Premises and
Tenant's use and occupancy of the Leased Premises (including
a
contractual liability) in an amount not less than $1,000,000
per occurrence and $2,000,000 general aggregate per location
for bodily injury and property damages (or with increased
limits as may be required from time to time by Landlord by
giving notice to Tenant) and without any deductible;
(2) Statutory Workers' Compensation Insurance in compliance
with
the Worker's Compensation Laws of the state in which the
Leased Premises is located and including at least
100/500/100
Employers Liability Insurance.
(3) Excess/Umbrella Liability Insurance, applying on at least
a
"following form" basis, with a minimum limit of $3,000,000
each Occurrence and Aggregate, where applicable; and
(4) "ISO Special Form" Property Insurance, including but not
limited to, coverage for:
(A) All office furniture, trade fixtures, office equipment,
merchandise, and all other items of Tenant's property
in, on, at, or about the Leased Premises and the
Building, including property installed by, for, or at
the expense of Tenant;
(B) Tenant Improvements; and
(C) Except for Standard Improvements, all other
improvements, betterments, alterations, and additions to
the Leased Premises.
Tenant's Property Insurance must also fulfill the following
requirements:
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<PAGE>
(AA) It must be written on the equivalent of an ISO "Special
Form" Property Insurance Form or an equivalent form
acceptable to Landlord;
(BB) It must include earthquake and flood as covered causes
of losses;
(CC) It must include an agreed amount endorsement for not
less than one-hundred percent (100%) of the full
replacement cost (new without deduction for
depreciation) of the covered items and property; and
(DD) It must have a deductible no greater than $25,000 for
each loss.
It is the parties' intent that Tenant structure its property
insurance program so that no coinsurance penalty is imposed
and
there are no valuation disputes with any insurer or with
Landlord.
The property insurance coverage must include vandalism and
malicious
mischief coverage.
(b) Tenant's policies must be written by an insurance company
or
companies with a current A.M. Best's rating of A- IX or better
and
be admitted to do business in the State of Texas. Landlord,
any
mortgagees, any lessor under any ground, primary, or master
lease,
and Landlord's property management company must be named as
additional insureds without restriction under the liability,
property and umbrella policies. Tenant shall obtain a
written
obligation on the part of each insurance company to notify
Landlord
at least 45 days prior to cancellation, non-renewal, or
material
reduction of the coverage.
(c) Tenant shall deliver copies of duly executed certificates
of
insurance to Landlord prior to occupying any part of the
Leased
Premises, and on an annual basis thereafter. If Tenant fails
to
comply with these insurance requirements, Landlord may obtain
the
required insurance and Tenant shall pay to Landlord on demand
as
additional Rent the premium cost thereof plus interest at
the
Interest Rate from the date of payment by Landlord until paid
by
Tenant.
19. LANDLORD'S INSURANCE.
Landlord shall carry, or cause to be carried: (A) Commercial
General
Liability Insurance with limits of liability of not less than
$1,000,000
each occurrence, single limit Bodily Injury and Property Damage
combined;
and (B) the equivalent of ISO Special Form Property Insurance
insuring the
Project for the full replacement value thereof, excluding
Tenant
Improvements and Tenant's merchandise, trade fixtures,
furnishings,
equipment, personal property, and any alterations or additions
made by
Tenant.
20. RIGHTS RESERVED BY LANDLORD.
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<PAGE>
Landlord reserves the following rights, exercisable without
notice and
without liability to, and without consent of, any Tenant Party
for damage
or injury to property, persons, or business and without
effecting an
eviction, constructive or actual, or disturbance of Tenant's use
or
possession or giving rise to any claim for set-off or abatement
of Rent:
(a) To change the Building's or the Project's name or street
address;
provided Landlord shall reimburse Tenant for the cost of a 1
month
supply of stationery.
(b) To install, affix, and maintain any signs on the exterior
and
interior of the Project.
(c) To designate and approve, prior to installation, all types
of window
shades, blinds, drapes, awnings, window ventilators, and
similar
equipment, and to control all internal lighting that is visible
from
the exterior of the Project.
(d) To designate, restrict, and control all sources within the
Project
where Tenant may obtain ice, drinking water, towels, toilet
supplies, catering, food and beverages, and like or other
services
on the Leased Premises and, in general, the exclusive right
to
designate, limit, restrict, and control any business and any
service
in or to the Project and its tenants.
(e) To enter upon the Leased Premises with reasonable notice
(except in
the case of an emergency when no notice shall be required)
at
reasonable hours to inspect, clean, or make repairs or
alterations
to the Leased Premises (but without any obligation to do so,
except
as expressly specified in this Lease), to make repairs or
alterations to any part of the Building or the Building
systems
(including adjacent premises), to show the Leased Premises
to
prospective lenders, purchasers, and, during the last 12 months
of
the Lease Term, to show the Leased Premises to prospective
tenants
at reasonable hours and, if the Leased Premises are vacant,
to
prepare them for re-occupancy. Notwithstanding the
foregoing,
Landlord shall not enter into areas previously designated in
writing
by Tenant as high security areas unless (i) Landlord shows
cause
therefor and is accompanied by a representative of Tenant, or
(ii)
in the event of an emergency. Landlord's obligations under
this
Lease shall be reduced to the extent of Tenant's refusal to
grant
access to such portions of the Leased Premises.
(f) To retain at all times, and to use in appropriate instances,
keys to
all doors within and into the Leased Premises. No locks may
be
changed or added without the prior consent of Landlord.
(g) To decorate and make repairs, alterations, additions,
changes, or
improvements, whether structural or otherwise, in and about
the
Project, and for those purposes to enter upon the Leased
Premises
and, during the continuance of the work, temporarily close
doors,
entryways, public space, and corridors in the Project, to
interrupt
or temporarily suspend Project services and facilities, and
to
change the arrangement
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<PAGE>
and location of entrances or passageways, doors and
doorways,
corridors, elevators, stairs, toilets, or other public parts of
the
Project, all without abatement or set off of Rent or affecting
any
of Tenant's obligations under this Lease, so long as the
Leased
Premises are reasonably accessible. In exercising the
foregoing
rights, Landlord agrees to use reasonable efforts not to
unreasonably interfere with the conduct of Tenant's business in
the
Leased Premises, including making reasonable efforts to
cause
voluntary and intentional total interruptions of Essential
Services
to occur after Building Standard Hours.
(h) To have and retain a paramount title to the Leased Premises
and the
Project free and clear of any act of Tenant purporting to burden
or
encumber the Leased Premises or the Project.
(i) To grant to anyone the exclusive right to conduct any
business or
render any service in or to the Project, provided the
exclusive
right does not operate to exclude Tenant from the uses
expressly
permitted in this Lease.
(j) To approve the weight, size, and location of safes, heavy
equipment,
file cabinets, book shelves, and other heavy items in and about
the
Leased Premises and the Project and to require all those items
and
all furniture to be moved into and out of the Project and the
Leased
Premises only at times and in a manner specified by
Landlord.
Movements of Tenant's property into or out of the Project and
within
the Project are entirely at the risk and responsibility of
Tenant.
To require permits before allowing Tenant's property to be
moved
into or out of the Project.
(k) To take reasonable measures as Landlord deems advisable for
the
security of the Project and its occupants including, without
limitation, the search of all persons entering or leaving
the
Project, the evacuation of the Project for cause, suspected
cause,
or for drill purposes, the temporary denial of access to the
Project, and the closing of the Project after Building
Standard
Hours, subject to Tenant's right to admittance when the Project
is
closed after Building Standard Hours under reasonable
regulations
Landlord may prescribe from time to time.
(1) To transfer, assign, or convey, in whole or in part, the
Project and
Landlord's rights under this Lease. If Landlord transfers,
assigns,
or conveys its rights under this Lease, Landlord is released
from
any further obligations under this Lease and Tenant shall
look
solely to the successor in interest of Landlord for performance
of
the obligations of "Landlord" under this Lease.
PAGE 26
<PAGE>
21. FIRE OR OTHER CASUALTY.
(a) If the Leased Premises or any part thereof are damaged by
fire or
other casualty, Tenant shall give prompt notice thereof to
Landlord.
If the Project or the Building is so damaged by fire or
other
casualty that substantial alteration or reconstruction of
the
Project or the Building is, in Landlord's sole opinion,
required
(whether or not the Leased Premises are damaged) or if any
mortgagee
under a mortgage or deed of trust covering the Project requires
that
the insurance proceeds payable as a result of the fire or
other
casualty be used to retire the mortgage debt, Landlord may, at
its
sole option, terminate this Lease by giving Tenant notice of
termination within 90 days after the date of the damage. If
Landlord
terminates this Lease under this Paragraph, the Rent abates as
of
the date of the damage.
(b) If Landlord does not elect to terminate this Lease, Landlord
shall
within 90 days after the date of the damage commence to repair
and
restore the Project (except that Landlord is not responsible
for
delays outside its control) to substantially the same condition
in
which it was immediately prior to the casualty. Upon such
damage,
Tenant shall assign to Landlord (or Landlord's designee) all
insurance proceeds payable to Tenant under the property
insurance
required pursuant to Paragraph 18 (save and except proceeds paid
for
loss of Tenant's personal property) and Landlord shall repair
and
replace the Standard Improvements, Tenant Improvements and
alterations installed in the Leased Premises; provided that
Landlord
shall in no event be obligated to expend for such repair or
replacement amounts in excess of the insurance proceeds
available to
Landlord (over and above amounts going to the mortgagee of
the
Building and/or Project). Landlord is not liable for any
inconvenience or annoyance to any Tenant Party or injury to
the
business of Tenant resulting in any way from casualty damage or
the
repairs; provided, during the time and to the extent the
Leased
Premises are unfit for occupancy, Landlord shall, either
furnish
Tenant with comparable office space at prevailing market rates
or a
fair diminution of Rent, in accordance with the mutual agreement
of
Landlord and Tenant at the time.
(c) If the damages are caused by the negligence or willful
misconduct of
any Tenant Party, Rent does not abate and Tenant shall pay
to
Landlord on demand as additional Rent any damages in excess of
the
amount paid by insurance proceeds received by Landlord.
22. CONDEMNATION.
(a) If all or substantially all of the Project or the Building
is taken
for any public or quasi-public use under any governmental
law,
ordinance, or regulation or by right of eminent domain or is
sold to
the condemning authority in lieu of condemnation, then this
Lease
terminates as of the date which is 7 days prior to the date
when
physical
PAGE 27
<PAGE>
possession of the portion of the Building or Project is taken by
the
condemning authority. If less than all or substantially all of
the
Project or the Building is taken or sold, Landlord (whether or
not
the Leased Premises are affected) may terminate this Lease by
giving
notice to Tenant within 90 days after the right of election
accrues,
in which event this Lease terminates as of the date which is 7
days
prior to the date when physical possession of the portion of
the
Building and Project is taken by the condemning authority.
(b) If this Lease is not terminated upon any taking or sale of
less than
all or substantially all of the Project:
(1) the Rent reduces by an amount representing that part of
the
Rent properly allocable to the portion of the Leased
Premises
taken or sold; and
(2) Landlord shall, at Landlord's sole expense, restore the
Project to substantially its former condition to the extent
reasonably deemed feasible by Landlord, but:
(A) Landlord's restoration obligation does not exceed the
scope of the work done by Landlord in originally
constructing the Project and installing Standard
Improvements in the Leased Premises; and
(B) Landlord is not required to spend for the work an amount
in excess of the amount received by Landlord as
compensation or damages (over and above amounts going to
the mortgagee of the property taken) for the part of the
Project so taken.
(C) Landlord is entitled to receive all of the compensation
awarded upon a taking of any part or all of the Project,
including any award for the value of the unexpired Lease
Term. Tenant is not entitled to and expressly waives all
claim to any compensation; provided, Tenant is entitled
to receive any award for damages to the Tenant
Improvements not paid for by Landlord.
23. TAXES ON TENANT'S PROPERTY.
Tenant shall pay, and indemnify, defend, and hold Landlord
harmless
against, all taxes levied or assessed against personal
property,
furniture, fixtures, or other improvements placed by or for
Tenant in the
Leased Premises. If any taxes for which Tenant is liable are
levied or
assessed against Landlord or Landlord's property and if Landlord
is
required to pay the taxes or if the assessed value of Landlord's
property
is increased by inclusion of personal property, furniture,
fixtures, or
other improvements placed by or for Tenant in the Leased
Premises and
Landlord elects to pay the increased taxes, Tenant shall pay to
Landlord
on demand as
PAGE 28
<PAGE>
additional Rent that part of the taxes for which Tenant is
liable under
this Paragraph. If Landlord is advised of any increase in
property
valuation which could give rise to a property tax increase for
which
Landlord is entitled to indemnification under this Paragraph 23,
then
Landlord shall promptly notify Tenant of such increase and
Tenant shall
thereafter have the right to contest such increase provided
Tenant
contests such increase in accordance with all applicable laws as
to
Tenant's personal property only and Tenant either pays the
resulting tax
increase before it becomes due or provides Landlord with
adequate security
for the payment of such tax and any penalty and interest should
the
contest be denied.
24. WAIVER OF SUBROGATION.
Each party waives all claims that arise or may arise in its
favor against
the other party, or anyone claiming through or under them, by
way of
subrogation or otherwise, during the Lease Term or any extension
or
renewal thereof, for all losses of, or damage to, any of its
property
(whether or not the loss or damage is caused by the fault or
negligence of
the other party or anyone for whom the other party is
responsible), which
loss or damage is covered by valid and collectible fire and
extended
coverage insurance policies, to the extent that the loss or
damage is
recovered under the insurance policies. These waivers are in
addition to,
and not in limitation of, any other waiver or release in this
Lease with
respect to any loss or damage to property of the parties. Since
these
mutual waivers preclude the assignment of any claim by way of
subrogation
(or otherwise) to an insurance company (or any other person),
each party
shall immediately give each insurance company issuing to it
policies of
fire and extended coverage insurance written notice of the terms
of these
mutual waivers, and have the insurance policies properly
endorsed, if
necessary, to prevent the invalidation of the insurance
coverages by
reason of these waivers.
25. SURRENDER UPON TERMINATION OR EXPIRATION; HOLDOVER.
(a) Upon the Expiration Date or any earlier termination of this
Lease,
Tenant shall: (1) surrender to Landlord possession of the
Leased
Premises in good repair and condition, reasonable wear and tear
and
damages or destruction by any insured casualty excepted, and
(2)
deliver to Landlord all keys to the Leased Premises and all
parking
access cards. If Tenant does not immediately surrender
possession,
Landlord may enter upon and take possession of the Leased
Premises
and expel or remove Tenant and any other person who may be
occupying
the Leased Premises, or any part thereof, by force if
necessary,
without having any civil or criminal liability therefor.
(b) If Tenant or any of its successors in interest continues to
hold any
part of the Leased Premises after the termination of this Lease,
the
holding over is a tenancy at sufferance at a monthly rental
equal to
175% of the monthly Minimum Rent payable at the time of
termination,
plus the payment of all other Rent payable under this Lease.
While
Tenant or its successor continues to hold the Leased Premises
after
the
PAGE 29
<PAGE>
termination of this Lease, the tenancy is subject to all terms
of
this Lease; provided, all expansion rights, first refusal
rights,
first notice rights, first offer rights, and renewal rights
automatically terminate. Landlord shall have the right to
terminate
such tenancy at any time at will on one (1) day notice.
(c) No payments of money by Tenant to Landlord after the
termination of
this Lease reinstate, continue, or extend the Lease Term and
no
extension of this Lease after the termination or expiration
thereof
is valid unless it is reduced to writing and signed by Landlord
and
Tenant. Nothing in this Paragraph may be construed to give
Tenant
the right to hold over beyond the Expiration Date or any
earlier
termination of this Lease or preclude Landlord from having the
right
to dispossess or otherwise terminate Tenant's right of
possession.
Any month-to-month tenancy is terminable upon notice from
Landlord.
26. REMOVAL OF TENANT'S PROPERTY.
(a) All furniture, movable trade fixtures, and equipment
installed by or
on behalf of Tenant remains the property of Tenant and must
be
removed by Tenant at its sole risk and expense at the
termination of
this Lease, but may not be removed prior to the termination of
this
Lease without Landlord's prior consent. Any removal of
Tenant's
property must be accomplished in a good and workmanlike manner
so as
not to damage the Leased Premises or the Project. Tenant, or
Landlord at Tenant's expense, shall repair any damage to the
Leased
Premises or the Project caused by any removal. All
furniture,
movable trade fixtures, and equipment installed by Tenant
not
removed within 15 days after termination of the Lease are
conclusively presumed to be abandoned by Tenant. Landlord may,
at
its option, take the possession of the property (including
any
special use improvements) and either (1) declare it to be
the
property of Landlord by notice to Tenant or (2) at the sole risk
and
expense of Tenant and without payment of any compensation to
Tenant,
remove it or any part thereof in any manner, that Landlord
chooses
and store, sell, or otherwise dispose of it without
incurring
liability to Tenant or any other person. All amounts payable
to
Landlord under this Paragraph plus interest at the Interest
Rate
from date of payment by Landlord until paid by Tenant are due
on
demand as additional Rent.
(b) Upon request of Landlord, Tenant shall also remove, at its
sole risk
and expense, any special use improvements installed by or on
behalf
of Tenant in connection with the completion of the Tenant
Finish
Work (as defined in EXHIBIT F), any Additional Work, or
otherwise.
The term SPECIAL USE IMPROVEMENTS means all special
improvements
installed specifically for use by Tenant and includes,
without
limitation, telephone and data cables, computer floors and
cables,
cafeteria equipment, telephones and telephone equipment,
supplemental air conditioning units and related equipment,
equipment
supplying excess electricity to the Leased Premises, and
similar
items. Any removal must be accomplished in a good and
PAGE 30
<PAGE>
workmanlike manner so as not to damage the Leased Premises or
the
Project. Tenant, or Landlord at Tenant's expense, shall repair
any
damage to the Leased Premises or the Project caused by any
removal.
27. EVENTS OF DEFAULT.
The following are events of default (EVENTS OF DEFAULT) by
Tenant under
this Lease:
(a) Tenant fails to pay any Rent when due and the failure
continues for
a period of 5 days.
(b) Tenant fails to comply with any of the terms of this Lease,
other
than the payment of Rent, and does not cure the failure within
20
days after Landlord delivers notice of the failure to Tenant or,
if
such failure is one which cannot be cured within such 20 day
period,
Tenant fails to begin curing such failure within such 20 day
period
and diligently pursue such cure to completion within 40 days
after
the expiration of such 20 day period.
(c) Tenant or Guarantor becomes insolvent, makes a transfer in
fraud of
creditors, commits any act of bankruptcy, makes an assignment
for
the benefit of creditors, or admits in writing its inability to
pay
its debts as they become due.
(d) Tenant or Guarantor files a petition under any section or
chapter of
the Bankruptcy Code of the United States, as amended, or under
any
similar law or statute of the United States or any state
thereof, or
Tenant or Guarantor is adjudged bankrupt or insolvent in
proceedings
filed against Tenant or Guarantor, or a petition or answer
proposing
the adjudication of Tenant or Guarantor as a bankrupt or its
reorganization under any present or future federal or state
bankruptcy or similar law is filed in any court and the
petition
or answer is not discharged or denied within 120 days after
filing.
(e) A receiver or trustee is appointed for all or substantially
all of
the assets of Tenant or Guarantor or of the Leased Premises or
of
any of Tenant's property located therein in any proceeding
brought
by Tenant or Guarantor, or any receiver or trustee is appointed
in
any proceeding brought against Tenant or Guarantor and is
not
discharged within 120 days after appointment or Tenant or
Guarantor
shall consent to or acquiesce in the appointment.
(f) Tenant, if a natural person, dies or becomes incapacitated
or, if
Tenant is not a natural person, Tenant is dissolved or ceases
to
exist.
(g) Tenant's leasehold estate is taken on execution or other
process of
law in any action against Tenant.
PAGE 31
<PAGE>
(h) Tenant does not conduct its business in any substantial
portion of
the Leased Premises for more than 5 days.
28. LANDLORD'S REMEDIES.
If an Event of Default occurs, Landlord may then or any time
thereafter
while the Event of Default continues and without any further
notice or
opportunity to cure except as expressly set forth in this
Paragraph pursue
any one or more of the following remedies:
(a) Terminate this Lease (without terminating Tenant's
obligation to pay
Rent for the balance of the Lease Term) by giving notice to
Tenant,
in which event Tenant shall immediately surrender the Leased
Premises to Landlord. If Tenant fails to surrender the
Leased
Premises, Landlord may, without prejudice to any other remedy it
has
for possession or arrearages in Rent, take possession of the
Leased
Premises and expel or remove Tenant and any other person
occupying
the Leased Premises, or any part thereof, without being liable
for
prosecution or any claim of damages. Tenant shall pay to
Landlord on
demand as additional Rent the amount of all loss and damage
Landlord
suffers by reason of the termination, whether through inability
to
relet the Leased Premises on satisfactory terms or otherwise.
Except
to the extent required by law, Landlord has no duty to re-let
the
Leased Premises. Landlord's damages specifically include, but
are
not limited to: (1) all reasonable expenses necessary to re-let
the
Leased Premises including the cost of renovating, repairing,
and
altering the Leased Premises for a new tenant or tenants,
advertisements, and brokerage fees; and (2) any increase in
insurance premiums caused by the vacancy of the Leased
Premises.
Nothing in this Lease limits Landlord's right to prove and
obtain in
bankruptcy or insolvency proceedings damages by reason of
the
termination of this Lease in an amount equal to the maximum
allowed
by any statute or rule of law in effect at the time when the
damages
are to be proved, whether or not the amount is greater, equal
to, or
less than the amount of the loss or damages referred to
above.
(b) Take possession of the Leased Premises and remove Tenant or
any
other person occupying the Leased Premises, or any part
thereof,
without having any civil or criminal liability and without
terminating this Lease. Landlord may (but is under no
obligation,
except as may be required by law, to) re-let the Leased Premises
or
any part thereof for the account of Tenant, in the name of
Tenant or
Landlord or otherwise, without notice to Tenant for a term or
terms
(which may be greater or less than the period that would
otherwise
have constituted the balance of the Lease Term) and on
conditions
(which may include concessions or free rent) and for uses as
Landlord in its sole discretion may determine. Landlord may
collect
and receive any rents payable by reason of any re-letting.
Tenant
shall pay Landlord on demand as additional Rent all
reasonable
expenses necessary to re-let the Leased Premises, which includes
the
cost of renovating, repairing, and altering the Leased Premises
for
a new tenant or tenants, advertisements, and brokerage fees, as
well
as any deficiency
PAGE 32
<PAGE>
that may arise by reason of the reletting. Landlord is not
liable
for any failure to re-let the Leased Premises or any part
thereof or
for any failure to collect any Rent due upon any re-letting.
No
taking of possession of the Leased Premises by Landlord is
an
election on Landlord's part to terminate this Lease unless a
notice
of termination is given to Tenant under subparagraphs (a) or
(e).
(c) Enter upon the Leased Premises without having any civil or
criminal
liability and do whatever Tenant is obligated to do under the
terms
of this Lease. Tenant shall reimburse Landlord on demand as
additional Rent for any expenses Landlord incurs in
performing
Tenant's obligations under this Lease, together with interest at
the
rate of 18% per annum from the date incurred until repaid by
Tenant.
Landlord is not liable for any damages resulting to Tenant
from
Landlord's actions or omissions in performing Tenant's
obligations,
whether caused by the negligence of Landlord or otherwise.
(d) Interrupt or cause the interruption of any utility service
serving
the Leased Premises, deactivate Tenant's parking access
cards,
suspend elevator service to the Leased Premises, remove, alter,
or
change any door, window, attic hatchway cover to the Leased
Premises, or any lock, latch, hinge, hinge pin, doorknob, or
other
mechanism connected to any door, window, or attic hatchway cover
to
the Leased Premises, and intentionally prevent Tenant from
entering
the Leased Premises without resort to judicial process. Landlord
is
under no obligation to restore any door, window, or attic
hatchway
cover or any lock, latch, hinge, hinge pin, doorknob, or
other
mechanism attached thereto or to deliver or make available to
Tenant
any key to any door, window, or attic hatchway cover until
Tenant
fully cures all Events of Default then existing under this
Lease.
(e) Terminate this Lease and forthwith repossess the Leased
Premises and
remove all persons or property therefrom, 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, without
limitation, attorneys' fees and costs of suit), (ii) the cost
as
reasonably estimated by Landlord of any alterations of, or
repairs
to, the Leased Premises which are necessary or proper to prepare
the
same for reletting, (iii) the unpaid Rent owed at the time
of
termination, plus interest thereon from due date at the rate of
18%
per annum, (iv) the present value of the balance of the Rent for
the
remainder of the Term less the present value of the fair
market
rental value (and in computing the fair market rental value
the
factors taken into account shall include without limitation
the
market rental concessions and the time necessary to relet the
Leased
Premises) of the Leased Premises for said period (in each case
using
a discount rate of 8% per annum), and (v) any other sum of money
and
damages owed by Tenant to Landlord.
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<PAGE>
(f) If Tenant violates Section 27 (h), then Landlord, as its
sole and
exclusive remedy, shall have the right, but not the obligation,
at
Landlord's sole option, to terminate this Lease by delivering
to
Tenant 30 days' prior written notice of the effective date of
such
termination.
No repossession of or reentering all or any part of the Leased
Premises,
and no re-letting of the Leased Premises or any part thereof,
relieves
Tenant or Guarantor of any liabilities or obligations under this
Lease,
all of which survive repossession or re-entering by Landlord. If
Landlord
repossesses or re-enters all or any part of the Leased Premises
after an
Event of Default, Tenant shall pay to Landlord the Rent required
to be
paid by Tenant. No right or remedy of Landlord under this Lease
is
intended to be exclusive of any other right or remedy. Each
right and
remedy of Landlord is cumulative and all other rights or
remedies under
this Lease or now or hereafter existing at law, in equity or by
statute.
In addition to other remedies provided in this Lease, Landlord
is
entitled, to the extent permitted by applicable law, to
injunctive relief
in case of the violation, or attempted or threatened violation,
of any of
the terms of this Lease, or to a decree compelling specific
performance of
the terms of this Lease. Notwithstanding anything in this Lease
to the
contrary, if Landlord is deemed to have a duty to mitigate its
damages
arising from a default by Tenant under this Lease, then
Landlord's duty to
mitigate shall be limited to using reasonable and good faith
efforts to
relet the Leased Premises, which duty to relet the Leased
Premises shall
not (i) require Landlord to give priority to the Leased Premises
over
other premises owned or managed by Landlord or its affiliates,
(ii)
require Landlord to relet for less than market rent, or (iii)
require
Landlord to relet to a tenant (or for a use) which is not in
keeping with
the first-class character of the Project.
29. NO IMPLIED WAIVER.
The failure of Landlord or Tenant to insist at any time upon the
strict
performance of any of the terms of this Lease or to exercise any
option,
right, power, or remedy contained in this Lease is not a waiver
of the
right or remedy for the future. The waiver of any breach of this
Lease or
violation of the Rules and Regulations attached to this Lease
does not
prevent a subsequent act, which would have originally
constituted a breach
or violation, from having all the force and effect of an
original breach
or violation. No express waiver affects any terms other than the
ones
specified in the waiver and those only for the time and in the
manner
specifically stated. Acceptance by Landlord of any Rent after
the breach
of any of the terms of this Lease or violation of any Rule or
Regulation
is not a waiver of the breach or violation or the right to
collect
applicable late charges and interest, and no waiver by Landlord
of any of
the terms of this Lease is effective unless expressed in writing
and
signed by Landlord.
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<PAGE>
30. WAIVER BY TENANT.
Tenant waives and surrenders for itself and all persons or
entities
claiming by, through, and under it, including creditors of all
kinds: (A)
any right and privilege which it or any of them has under any
present or
future constitution, statute, or rule of law to redeem the
Leased Premises
or to have a continuance of this Lease for the Lease Term
after
termination of Tenant's right of occupancy by order or judgment
of any
court or by any legal process or writ, or under the terms of
this Lease;
(B) the benefits of any present or future constitution, statute,
or rule
of law that exempts property from liability for debt or for
distress for
Rent; (C) any provision of law relating to notice or delay in
levy of
execution in case of eviction of a tenant for nonpayment of
Rent; (D) any
rights, privileges, and liens set out under Sections 91.004 and
93.003 of
the Texas Property Code (as amended), and Tenant exempts
Landlord from any
liability or duty thereunder; and (E) any rights of Tenant to
contest
reappraisals of the Project (but not ad valorem taxes on
Tenant's personal
property in the Leased Premises) under Sections 41.143 and
42.015 of the
Texas Tax Code (as amended).
31. ATTORNEYS' FEES AND LEGAL EXPENSES.
If either party files litigation concerning the interpretation
or
enforcement of this Lease, the prevailing party is entitled to
recover
from the losing party the prevailing party's reasonable
attorneys' fees,
court costs, and expenses, whether at the trial or appellate
level.
32. SUBORDINATION.
(a) This Lease and all rights of Tenant under this Lease are
subject and
subordinate to:
(1) any mortgage or deed of trust secured by a first lien
against
the Project;
(2) all increases, renewals, modifications, consolidations,
replacements, and extensions of any first lien mortgage or
deed of trust;
(3) all ground, primary, or master leases now or hereafter
affecting the Building, the Project, or any portion thereof;
and
(4) all leases, restrictions, easements, and encumbrances
recorded
in the Real Property Records of Dallas County, Texas, to the
extent they validly affect the Project.
Tenant shall, upon demand at any time or times, execute,
acknowledge, and deliver to Landlord, or to Landlord's first
mortgagee or any lessor, any instruments that may be necessary
or
proper to more effectively effect or evidence this subordination
to
any first mortgage, first deed of trust, or ground, primary,
or
master lease.
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<PAGE>
(b) If any first mortgage or first deed of trust against the
Project is
foreclosed, or if any ground, primary, or master lease is
terminated, Tenant shall, upon request by the purchaser at
the
foreclosure sale or the lessor under any ground, primary or
master
lease:
(1) attorn to the purchaser or lessor and recognize the
purchaser
or lessor as "Landlord" under this Lease; and
(2) execute, acknowledge, and deliver to the purchaser or
lessor
an instrument in appropriate form acknowledging the
attornment.
(c) Tenant waives the provisions of any statute or rule of law,
now or
hereafter in effect, that may give or purport to give Tenant
any
right or election to terminate or otherwise adversely affect
this
Lease and the obligations of Tenant under this Lease if any
foreclosure sale or ground, primary, or master lease
termination
occurs. This Lease is not affected in any way whatsoever by
any
foreclosure sale or ground, primary or master lease
termination
unless the holder(s) of the indebtedness or other
obligations
secured by the mortgages or deeds of trust declare
otherwise.
(d) Notwithstanding the foregoing, any such first mortgagee or
holder of
a first deed of trust or lessor under a ground, primary, or
master
lease shall have the right, unilaterally, at any time to fully
or
partially subordinate any such mortgage, deed of trust, or
ground,
primary or master lease or other security instruments to this
Lease
on such terms and subject to such conditions as such first
mortgagee
or ground, primary, or master lessor may consider appropriate in
its
sole discretion. Upon request, Tenant shall execute an
instrument
confirming any such full or partial subordination.
(e) Notwithstanding the foregoing, Tenant shall have the right
to
approve any subordination and non-disturbance agreements
required of
Tenant, provided that Tenant hereby approves any subordination
and
non-disturbance agreement that is not materially different from
the
Subordination, Non-Disturbance and Attornment Agreement entered
into
by Tenant and Landlord's First Mortgagee in connection with
the
execution and delivery of this Lease.
33. QUIET ENJOYMENT.
If Tenant pays the Rent when due and timely performs all other
obligations
of Tenant under this Lease, then Tenant may peaceably and
quietly enjoy
the Leased Premises during the Lease Term without any
disturbance from
Landlord or from any other person claiming by, through, or under
Landlord,
but not otherwise, subject to the terms of this Lease and of the
deeds of
trust, mortgages, ground, primary, or master leases, pedestrian
tunnel
agreements,
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<PAGE>
skybridge agreements, parking garage operating agreements,
ordinances,
leases, utility easements, and agreements affecting the
Project.
34. NOTICE OF LANDLORD'S DEFAULT.
If any act or omission by Landlord occurs that would give Tenant
the right
to damages from Landlord or the right to terminate this Lease
due to
constructive or actual eviction from all or part of the Leased
Premises or
otherwise, Tenant may not sue for damages or exercise any right
to
terminate until (A) it gives notice of the act or omission to
Landlord and
Landlord's first mortgagee, or ground, primary, or master
lessor, if any,
and (B) a reasonable period of time for remedying the act or
omission
elapses following the giving of the notice, during which time
Landlord,
its agents, employees, first mortgagee or ground, primary, or
master
lessor, are entitled to enter the Leased Premises and cure the
act or
omission. During the period after the giving of the notice and
during the
curing of the act or omission, the Rent payable by Tenant abates
only to
the extent that any part of the Leased Premises is untenantable.
For
purposes of this Paragraph, Landlord's first mortgagee's name
and address
for notice purposes are: Pacific-St. Paul Partners, L.P., c/o
Dang Phan,
Donaldson, Lufkin & Jenrette, 277 Park Avenue, 19th Floor,
New York, NY
10172.
35. RULES AND REGULATIONS.
All Tenant Parties must comply with the Rules and Regulations
(as changed
from time to time as hereinafter provided) attached as EXHIBIT
C. Landlord
may at any time make reasonable changes to the Rules and
Regulations or
promulgate other Rules and Regulations as Landlord deems
advisable for the
safety, care, cleanliness, or orderliness of the Project. No
changes are
effective until a copy of the changes is delivered to Tenant.
Tenant is
responsible for the compliance with the Rules and Regulations by
all
Tenant Parties. Landlord shall use reasonable efforts to
enforce
compliance by all other tenants with the Rules and Regulations
from time
to time in effect, but Landlord is not responsible to Tenant for
failure
of any person to comply with the Rules and Regulations.
36. ESTOPPEL CERTIFICATE.
Tenant shall, from time to time on not less than 10 days' prior
notice by
Landlord, execute, acknowledge, and deliver to Landlord an
Estoppel
Certificate in substantially the form attached as EXHIBIT E.
37. NOTICES.
All notices, requests, approvals, and other communications
required or
permitted to be delivered under this Lease must be in writing
and are
effective:
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<PAGE>
(a) on the business day sent if sent by telecopier prior to 5:00
p.m.,
Dallas, Texas time, and the sending telecopier generates a
written
confirmation of sending;
(b) the next business day after delivery on a business day to
a
nationally-recognized- overnight-courier service for prepaid
overnight delivery;
(c) if orderly delivery of the mail is not then disrupted or
threatened,
in which event some method of delivery other than the mail must
be
used, 3 days after being deposited in the United States
mail,
certified, return receipt requested, postage prepaid; or
(d) upon receipt if delivered personally or by any method other
than by
telecopier (with written confirmations
nationally-recognized-overnight-courier service, or mail;
in each instance addressed to Landlord or Tenant, as the case
may be, at
the address specified in Paragraph 1 of this Lease, or to any
other
address either party may designate by 10 days' prior notice to
the other
party.
With respect to any default notice to Landlord, a copy of the
notice must
be sent on the same date as sent to Landlord to:
Baker & Botts, L.L.P.
800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: Jonathan W. Dunlay
Telecopier No.: (214) 953-6503
38. HAZARDOUS MATERIALS.
(a) Tenant may not:
(1) cause or permit the escape, disposal, or release in the
Leased
Premises or the Project of any biologically active,
chemically
active, or hazardous substances or materials (collectively,
HAZARDOUS SUBSTANCES); or
(2) bring, or permit any other Tenant Party to bring, any
hazardous substances into the Leased Premises or the
Project.
The term HAZARDOUS SUBSTANCES includes, but is not limited to,
those
described in the Comprehensive Environmental Response
Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601
et
seq., the Resource Conservation and Recovery Act, as amended,
42
U.S.C. Section 6901 et seq., the Texas Water Code,
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<PAGE>
the Texas Solid Waste Disposal Act, and other applicable state
or
local environmental laws and the regulations adopted under
those
acts.
(b) If any lender or governmental agency requires testing to
ascertain
whether or not a release of hazardous substances has occurred in
or
on the Leased Premises or the Project based on probable cause
that a
release occurred and was caused by any Tenant Party, then
Tenant
shall reimburse the reasonable costs of the testing to Landlord
on
demand as additional Rent.
(c) Tenant shall execute affidavits, representations, and the
like from
time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence of hazardous
substances
in the Leased Premises and the Project.
(d) Tenant shall indemnify Landlord in the manner elsewhere
provided in
this Lease from any release of hazardous substances in or on
the
Leased Premises or the Project caused or permitted by any
Tenant
Party.
(e) Landlord shall not cause or permit the escape, disposal or
release
in the Leased Premises or the Project of any hazardous
substances in
violation of law or bring any hazardous substances into the
Leased
Premises or the Project in violation of laws.
(f) These covenants survive the expiration or earlier
termination of
this Lease.
39. BUSINESS PURPOSE.
Tenant represents that this Lease is executed by Tenant, and
all
obligations of Tenant arising out of this Lease are, primarily
for
business or commercial purposes and not for personal, family, or
household
purposes.
40. SEVERABILITY.
Each of the terms of this Lease is, and must be construed to be,
separate
and independent. If any of the terms of this Lease or its
application to
any person or circumstances is to any extent invalid and
unenforceable,
the remainder of this Lease, or the application of that term to
persons or
circumstances other than those as to which it is invalid or
unenforceable,
are not affected thereby.
41. NO MERGER.
The fact that the same person may acquire or hold, directly or
indirectly,
this Lease or the leasehold estate hereby created or any
interest in this
Lease or in the leasehold estate as well as the fee estate in
the Leased
Premises or any interest in the fee estate does not cause a
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<PAGE>
merger of this Lease or of the leasehold estate hereby created
with the
fee estate in the Leased Premises.
42. FORCE MAJEURE.
When this Lease prescribes a period of time for action to be
taken by
Landlord or Tenant, Landlord or Tenant is not liable or
responsible for,
and there is excluded from the computation for the period of
time, any
delays due to strikes, acts of God, shortages of labor or
materials, war,
governmental laws, regulations, restrictions, or any other cause
of any
kind that is beyond the control of Landlord or Tenant, provided
that the
foregoing shall not apply to Tenant's obligation to pay amounts
payable
under this Lease, which amounts shall be paid on the dates and
within the
time periods provided in this Lease without extension or delay,
except as
provided in Section 8(c).
43. BROKERAGE; MUTUAL INDEMNITIES.
(a) Tenant warrants that it has had no dealings with any broker
or agent
in connection with the negotiation or execution of this Lease
other
than Tenant's Broker and Landlord's Broker (collectively,
BROKERS).
Tenant shall indemnify, defend, and hold Landlord harmless
against
all costs, expenses, attorneys' fees, or other liability for
commissions or other compensation or charges claimed by any
broker
or agent other than Brokers claiming by, through, or under
Tenant
with respect to this Lease or any renewal or extension or
with
respect to any expansion of the Leased Premises.
(b) Landlord warrants that it has had no dealings with any
broker or
agent in connection with the negotiations or execution of this
Lease
other than Brokers. Landlord shall indemnify, defend, and
hold
Tenant harmless against all costs, expenses, attorneys' fees,
or
other liability for commissions or other compensation or
charges
claimed by any broker or agent, including Brokers, claiming
by,
through or under Landlord with respect to this Lease or any
renewal
or extension or with respect to any expansion of the Leased
Premises.
(c) Any brokerage commissions payable to Brokers are payable by
Landlord
pursuant to the terms of separate agreements between Landlord
and
Brokers.
44. GENDER.
Words of any gender used in this Lease include any other gender
and words
in the singular number include the plural, unless the context
otherwise
requires.
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<PAGE>
45. JOINT AND SEVERAL LIABILITY.
If there is more than one Tenant, the obligations imposed upon
Tenant
under this Lease are joint and several. If Tenant is a general
or limited
partnership, each general partner of Tenant is jointly and
severally
liable for the obligations imposed upon Tenant under this
Lease.
46. No REPRESENTATIONS.
LANDLORD OR LANDLORD'S AGENTS MADE NO REPRESENTATIONS OR
PROMISES WITH
RESPECT TO THE LEASED PREMISES OR THE PROJECT EXCEPT AS
EXPRESSLY SET
FORTH IN THIS LEASE. NO RIGHTS, EASEMENTS, OR LICENSES ARE
ACQUIRED BY
TENANT BY IMPLICATION OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH
IN THIS
LEASE.
47. ENTIRE AGREEMENT; AMENDMENTS.
This Lease is the entire agreement between the parties. All
negotiations,
considerations, representations, and understandings between
Landlord and
Tenant are incorporated in this Lease. No act or omission of any
employee
or agent of Landlord or of Landlord's Broker may alter, change,
or modify
any of the terms of this Lease. No amendment or modification of
this Lease
is binding unless expressed in a written instrument executed by
Landlord
and Tenant.
48. PARAGRAPH HEADINGS.
The paragraph headings in this Lease are for convenience only
and in no
way enlarge or limit the scope or meaning of the paragraphs in
this Lease.
49. BINDING EFFECT.
All terms of this Lease are binding upon the respective heirs,
personal
representatives, successors, and, to the extent assignment is
permitted,
assigns of Landlord and Tenant.
50. EXHIBITS.
The following exhibits are attached to and made a part of this
Lease:
EXHIBIT A [Leased Premises],
EXHIBIT B [Land],
EXHIBIT C, [Project Rules and Regulations],
EXHIBIT D [Contractor Insurance Requirements],
EXHIBIT E [Estoppel Certificate),
EXHIBIT F [Tenant Finish Construction,] and
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<PAGE>
EXHIBIT G [Janitorial Specifications]
51. COUNTERPARTS.
This Lease may be executed in two or more counterparts, each of
which is
deemed an original and all of which together constitute one and
the same
instrument.
52. RENTAL TAX.
Tenant shall pay as additional Rent all licenses, charges, and
other fees
of every kind and nature as and when they become due arising out
of or in
connection with Tenant's use and occupancy of the Leased
Premises and the
Project (including the parking garages), including but not
limited to
license fees, business license taxes, and privilege, sales,
excise, or
other taxes (other than income) imposed upon Rent or upon
services
provided by Landlord or upon Landlord in an amount measured by
Rent
received by Landlord.
53. PARKING.
(a) During the Lease Term, Landlord shall provide, twenty-seven
(27)
unreserved parking spaces in the Off-Site Garage and four (4)
spaces
in the On-Site Garage, which four (4) spaces shall, at
Tenant's
option, be either reserved or unreserved spaces, and, subsequent
to
availability, on a month-to-month basis, up to sixty (60)
additional
unreserved spaces in the Off-Site Garage ("Temporary
Spaces"),
specified by Landlord and issue to Tenant one parking access
card
for each parking space. As rental for the parking spaces,
Tenant
shall pay (i) $75.00 per month (plus any applicable sales tax)
for
the first twenty-four (24) months of the Lease Term, $90.00
per
month (plus any applicable sales tax) for months twenty-five
(25)
through sixty (60) of the Lease Term, and the parking charge
(plus
any applicable sales tax) then imposed by Landlord thereafter
for
the unreserved parking spaces in the Off-Site Garage, (ii)
$125.00
per month (plus any applicable sales tax) for the first
twenty-four
(24) months of the Lease term, $135.00 per month (plus any
applicable sales tax) for months twenty-five (25) through sixty
(60)
of the Lease Term, and the parking charge (plus any applicable
sales
tax) then imposed by Landlord thereafter for the unreserved
parking
spaces in the On-Site Garage, and (iii) $225.00 per month (plus
any
applicable sales tax) for the first twenty-four (24) months of
the
Lease Term, $235.00 per month (plus any applicable sales tax)
for
months twenty-five (25) through sixty (60) of the Lease Term,
and
the parking charge (plus any applicable sales tax) then imposed
by
Landlord thereafter for the reserved parking spaces in the
On-Site
Garage. Prior to issuance of the parking access cards, Tenant
must
deliver to Landlord a list of the automobile license numbers
of
Tenant's employees who will be using the cards, together
with
Landlord's then current per card deposit. This deposit is
forfeited
to Landlord if any card is lost or damaged or not returned
to
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<PAGE>
Landlord on request and a new deposit must be delivered to
Landlord
before a replacement card is issued to Tenant.
(b) Except to the extent Tenant has exercised its option to
lease
reserved parking spaces as provided in Subparagraph (a)
above,
Tenant is not assigned designated parking spaces, but is
permitted
to use whatever unreserved stalls are available, on a first-
come,
first-served basis in areas of the parking garage designated
from
time to time by Landlord. If for any reason Landlord fails or
is
unable to provide parking spaces to Tenant or parking spaces in
the
parking garage are not available for use by Tenant Parties,
this
failure or inability is not a default by Landlord under this
Lease;
provided, however, that Landlord shall not intentionally
transfer
the parking garages in a manner designed to terminate
Tenant's
parking rights. If parking spaces are not available to Tenant
due to
intentional acts of Landlord for more than 10 consecutive
days,
Landlord shall use reasonable efforts to make available to
Tenant
sufficient substitute unassigned parking spaces (in the amount
of
those spaces not available to Tenant) within a one-half (1/2)
mile
radius until such parking spaces are again available to
Tenant.
(c) All Tenant Parties must comply with all traffic, security,
safety,
and other rules and regulations promulgated from time to time by
the
operator of the garage.
(d) During any renewal or extension of the Lease Term or during
any
holdover after the termination of this Lease, Landlord reserves
the
right to charge Tenant the parking charge (plus any applicable
sales
tax) then imposed by Landlord for parking at the Project.
(e) Upon thirty (30) days prior written notice, Landlord has the
right
to terminate any of the Temporary Spaces at any time and from
time
to time, including without limitation, at times necessary or
required for purposes of granting to new tenants of the
Building
rights to park in the Off-Site Garage.
54. TENANT'S SERVICE PROVIDERS.
Tenant shall cause all moving companies and other entities
providing
services to Tenant to deliver evidence satisfactory to Landlord
that the
insurance specified in EXHIBIT D is in force prior to entering
the
Project.
55. SECURITY DISCLAIMER.
ANY SECURITY MEASURES PROVIDED BY LANDLORD MAY NOT BE TREATED BY
TENANT AS
A GUARANTEE AGAINST CRIME. LANDLORD DOES NOT MAKE, AND TENANT
WAIVES, ANY
GUARANTY OR WARRANTY, EXPRESSED OR IMPLIED, WITH RESPECT TO
SECURITY AT
THE PROJECT OR IN THE BUILDING,
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<PAGE>
OR THAT ANY SECURITY MEASURES WILL PREVENT OCCURRENCES OR
CONSEQUENCES OF
CRIMINAL ACTIVITY. ANY MECHANICAL SECURITY DEVICES CAN BE
RENDERED
INOPERATIVE AT ANY TIME. LANDLORD IS NOT RESPONSIBLE FOR A
TEMPORARY
FAILURE OF SUCH DEVICES. IF SUCH DEVICES ARE IN NEED OF REPAIR,
TENANT
WAIVES ALL WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO
LANDLORD'S
REPAIR OF SUCH DEVICES. LANDLORD'S INSTALLATION OR USE OF ANY
SECURITY
MEASURE DOES NOT CONSTITUTE A VOLUNTARY UNDERTAKING OR AGREEMENT
BY
LANDLORD TO PROVIDE SECURITY TO ANY TENANT PARTY. LANDLORD MAY
MODIFY,
REDUCE OR ELIMINATE THE USE OF ANY SECURITY MEASURE AT ANY TIME
WITHOUT
NOTICE TO TENANT. NEITHER LANDLORD NOR ITS AGENTS, EMPLOYEES
OR
REPRESENTATIVES ARE LIABLE IN ANY WAY FOR ANY DISRUPTION IN THE
OPERATION
OR PERFORMANCE OF ANY SECURITY MEASURE. LANDLORD DOES NOT MAKE,
AND TENANT
WAIVES, ANY GUARANTY OR WARRANTY THAT THE PRESENCE OF ANY
SECURITY MEASURE
AT THE PROJECT OR IN THE BUILDING IN ANY WAY INCREASES THE
PERSONAL
SECURITY OF ANY TENANT PARTY OR ITS PROPERTY. LANDLORD IS NOT
LIABLE TO
ANY TENANT PARTY FOR ANY INJURY, DAMAGE OR LOSS WHATSOEVER WHICH
IS CAUSED
(A) AS A RESULT OF ANY PROBLEM, DEFECT, MALFUNCTION OR THE
FAILURE OF THE
PERFORMANCE OF ANY SECURITY MEASURE OR (B) BY ANY PERSON
ENGAGING IN
CRIMINAL ACTIVITY.
56. INTENTIONALLY DELETED
57. RELOCATION OF THE LEASED PREMISES.
(a) At any time during the Lease Term or any renewal or
extension
thereof, Landlord may relocate the Leased Premises within
the
Building by giving Tenant at least 30 days' prior notice,
subject to
the following:
(1) the premises being substituted for the Leased Premises
(the
SUBSTITUTE SPACE) may not be lower in the Building than
Floor
14, must be in the same elevator bank as the Leased
Premises,
and must contain approximately the same number of Rentable
Square Feet as the original Leased Premises; and
(2) Landlord shall reimburse Tenant for Tenant's actual
out-of-pocket expenses for moving Tenant's furniture,
equipment, supplies, telephones, and telephone equipment
from
the original Leased Premises to the Substitute Space within
30
days after receipt of a certified, itemized statement of
those
costs, together with paid invoices therefor.
PAGE 44
<PAGE>
(b) Tenant may, at its option, elect either to accept possession
of the
Substitute Space in its "AS IS" condition on the effective date
of
the relocation or to require Landlord to remodel the
Substitute
Space in the same manner as the original Leased Premises
were
remodeled under the terms of EXHIBIT F. Tenant may exercise
this
option by giving notice to Landlord within 10 days after the
date of
the relocation notice from Landlord. If Landlord does not
receive
notice of Tenant's exercise of this option within the 10-day
period,
Tenant is deemed to elect to require remodeling in accordance
with
EXHIBIT F.
(c) The Substitute Space is substituted for the original Leased
Premises
and becomes the Leased Premises on the Relocation Effective
Date
(defined below) on the same terms as under this Lease, except
that
if the Substitute Space contains more Rentable Square Feet than
the
original Leased Premises, the Minimum Rent, Tenant's
Electricity
Percentage, and Tenant's Excess Operating Costs Percentage
increase
proportionately; provided, the Minimum Rent increase is limited
to a
maximum increase of 5% even if the Substitute Space is more than
5%
larger than the original Leased Premises.
(d) The RELOCATION EFFECTIVE DATE is:
(1) the date specified in Landlord's relocation notice (which
date
may not be less than 90 days after the date, of the notice)
if
Tenant elects to take the Substitute Space as-is; or
(2) the date, Landlord substantially completes the remodeling
of
the Substitute Space, subject to the Tenant delay provisions
of EXHIBIT F, if Tenant exercises or is deemed to exercise
its
option to cause Landlord to remodel the Substitute Space.
(e) Tenant shall move from the original Leased Premises into
the
Substitute Space and surrender possession of the original
Leased
Premises to Landlord no later than the Relocation Effective
Date. If
Tenant continues to occupy the original Leased Premises after
the
Relocation Effective Date, then, Tenant shall:
(1) pay Rent for both the original Leased Premises and the
Substitute Space until Tenant surrenders the original Leased
Premises to Landlord; and
(2) pay to Landlord on demand as additional Rent any damages
that
Landlord incurs as a result of Tenant's failure to timely
surrender the original Leased Premises, including, but not
limited, to attorneys' fees and court costs incurred by
Landlord in enforcing Landlord's rights under this
Paragraph,
together with interest at the Interest Rate from the date of
demand until repaid by Tenant.
PAGE 45
<PAGE>
58. LIMITATION OF ACTIONS.
Any claim, demand, right, or defense of Tenant arising out of
this Lease
is barred unless Tenant commences an action or asserts an
affirmative
defense within 2 years after the date of the event giving rise
to Tenant's
claim, demand, right, or defense. Tenant represents and warrants
to
Landlord that Tenant has consulted with legal counsel regarding
the effect
of this Paragraph.
59. EXECUTION AND APPROVAL OF LEASE.
Employees and agents of Landlord and of Landlord's Broker have
no
authority to make or agree to make a lease or any other
agreement or
undertaking in connection herewith. The submission of this Lease
for
examination and negotiation is not an offer to lease, agreement
to
reserve, or option to lease the Leased Premises. This Lease is
effective
and binding on Landlord only upon the execution and delivery of
this Lease
by Landlord and Tenant. If Landlord's first mortgagee requires
any
modifications of the terms of this Lease as a condition to
approving this
Lease, other than a modification of the Minimum Rent, Tenant
shall execute
and deliver any required modifications within 10 days after
receipt of
Landlord's demand.
60. RIGHT OF FIRST NOTICE.
(a) If during the Lease Term space on floor 15 of the Building
(the
FIRST NOTICE SPACE) is available for lease and Landlord receives
an
expression of interest in the First Notice Space from a
prospective
tenant, Landlord shall deliver a notice to Tenant offering to
lease
the First Notice Space to Tenant. Landlord's notice must specify
the
First Notice Rate (defined below). The term AVAILABLE FOR
LEASE
means that the First Notice Space is not then subject to any
existing rights of third parties, including, without
limitation,
rights of first notice, expansion rights, extension rights,
options
to lease, or other rights.
(b) Tenant may elect to lease the First Notice Space by
delivering a
notice (the RESPONSE NOTICE) to Landlord within 5 days after
the
date of Landlord's notice specifying that Tenant elects either
(1)
to lease all, but not less than all, of the applicable First
Notice
Space offered or (2) to decline to lease the applicable First
Notice
Space offered.
(c) If (1) Landlord does not receive the Response Notice within
the
5-day period or (2) in the Response Notice Tenant does not elect
to
lease all of the applicable First Notice Space offered, Tenant
is
deemed to waive its right to lease the First Notice Space and
Tenant
has no further rights under this Paragraph, but Tenant shall
have a
continuing right of first notice with respect to the First
Notice
Space subsequently offered on terms materially different from
those
contained in Landlord's notice or if
PAGE 46
<PAGE>
Landlord does not enter into a binding commitment with the
prospective tenant within 120 days after delivery of
Landlord's
notice to Tenant.
(d) If Tenant timely delivers a Response Notice electing to
lease all of
the applicable First Notice Space offered, Tenant's lease of
the
applicable First Notice Space commences on the earlier of the
date
that Tenant occupies such First Notice Space or the date 60
days
after Landlord's receipt of the Response Notice and is on the
same
terms as this Lease except that the Rent and other applicable
terms
for the First Notice Space adjust based on the First Notice
Rate.
Landlord shall prepare and deliver to Tenant an amendment to
the
Lease adding the First Notice Space to the Leased Premises upon
the
terms specified in this Paragraph, Tenant shall execute, and
deliver
the amendment to Landlord within 10 days after Tenant's receipt
of
the amendment, and Landlord will deliver to Tenant a counterpart
of
the amendment executed by Landlord.
(e) Landlord is not obligated to offer the First Notice Space to
Tenant,
and Tenant may not exercise its option to lease the First
Notice
Space, if at the time Landlord would otherwise be obligated to
give
the Notice to Tenant, Tenant is in default under this Lease.
(f) The term FIRST NOTICE RATE means the Market Rate, as defined
in
Paragraph 61, as determined by Landlord in its sole
discretion,
provided the Rent components of the First Notice Rate will not
be
less than the Rent then being paid under this Lease.
(g) Tenant may not assign this option to lease the First Notice
Space to
any assignee of the Lease, nor may any sublessee or assignee
exercise this option.
61. OPTION TO EXTEND LEASE TERM.
(a) If Tenant is not in default under this Lease at the time of
the
exercise of this option or at the commencement of the extended
Lease
Term, Tenant may extend the initial Lease Term for 2 extension
terms
of 5 years each commencing on the next day after the initial
Expiration Date as to the first renewal term and on the next
day
after the expiration of the first renewal term as to the
second
renewal term by giving Landlord an extension notice at least
12
months, but not more than 15 months, prior to the (i)
initial
Expiration Date as to the first renewal option, and (ii) the
expiration of the first renewal term as to the second
renewal
option. If Tenant timely gives a valid extension notice, the
Lease
Term is extended for 5 years upon the same terms as in the
Lease,
except that the Rent and other applicable terms adjust based on
the
Market Rate (defined below) and Tenant has no further option
to
extend the Lease Term after these option's are exercised.
PAGE 47
<PAGE>
(b) Within 30 days after Landlord receives Tenant's extension
notice,
Landlord shall deliver a notice to Tenant specifying the
Market
Rate. If Tenant does not approve Landlord's designation of
Market
Rate, then Tenant, as its sole remedy, may revoke its
exercise
notice by delivering a revocation notice to Landlord within 30
days
after Tenant's receipt of Landlord's notice specifying the
Market
Rate, but otherwise Tenant may not revoke its extension notice.
If
Tenant gives a revocation notice, the Lease Term ends on the
initial
Expiration Date as to the first renewal option or the expiration
of
the first renewal term as to the second renewal option and
Tenant
has no further rights under this Paragraph.
(c) The term MARKET RATE means the Minimum Rent that Landlord
quotes for
space similar to the Leased Premises for a 5-year term
commencing on
the same date as the extension term, as determined by Landlord
in
its sole discretion; provided, the Rent components of the
Market
Rate will not be less than the Rent being paid under this Lease
at
the end of the Lease Term.
(d) Tenant may not assign this extension option to any assignee
of the
Lease, nor may any sublessee or assignee exercise this
extension
option.
(e) If the Lease Term is extended under this Paragraph, Landlord
shall
prepare, and Landlord and Tenant will execute and deliver an
amendment to the Lease extending the Lease Term within 30 days
after
Tenant's election to renew the Lease Term.
This Lease is executed in multiple originals as of the date
first above
set forth.
PAGE 48
<PAGE>
LANDLORD:
F/P/D Master Lease, Inc.,
a Texas corporation
By: /s/ John B. Detwiler
----------------------------------------
Name: John B. Detwiler
Title: Asst. Vice President
TENANT:
Service Asset Management Company
a North Carolina corporation
By: /s/ Roger J. Engemoen, Jr.
----------------------------------------
Name: Roger J. Engemoen, Jr.
Title: President
PAGE 49
<PAGE>
EXHIBIT A
to Office Lease by and between
F/P/D Master Lease, Inc., as Landlord,
and
Service Asset Management Company, as Tenant
FLOOR PLAN OF THE LEASED PREMISES
A-l
<PAGE>
[FOURTEENTH FLOOR PLAN]
<PAGE>
[FIFTEENTH FLOOR PLAN]
<PAGE>
EXHIBIT B
to Office Lease by and between
F/P/D Master Lease, Inc., as Landlord
and
Service Asset Management Company, as Tenant
THE LAND
B-1
<PAGE>
PARCEL 1 (The Project Fee Tract)
Being all of that certain lot, tract or parcel of land, a part
of which
being situated in the Live Oak Office Building Addition in the
City of Dallas,
according to the Map thereof recorded in Volume 81122, Page
1117, of the Deed
Records of Dallas County, Texas, and in Lot 1, Block A/475
(Official City
Numbers) of the City of Dallas, and all of such land being
situated in the J.
Grigsby Survey, Abstract No. 495, in the City of Dallas, Dallas
County, Texas,
and being more particularly described as follows:
BEGINNING at a point for corner being the present intersection
of the
Northerly right-of-way line of Elm Street (an 80-foot public
right-of-way) with
the Westerly right-of-way line of North St. Paul Street (a
60-foot public
right-of-way);
THENCE South 14 degrees 00' 00" East, a distance of 14.50 feet
to a point
for corner;
THENCE South 76 degrees 00' 00" West, a distance of 394.56 feet
to a point
for corner, said point being in the Easterly right-of-way line
of Ervay Street
(a 50-foot public right-of-way);
THENCE North 14 degrees 00' 00" West, along the Easterly
right-of-way line
of Ervay Street, a distance of 230.50 feet to a point for
corner;
THENCE North 76 degrees 00' 00" East, a distance of 394.56 feet
to a point
for corner, said point being in the Westerly right-of-way line
of North St. Paul
Street;
THENCE South 14 degrees 00' 00" East, along the Westerly
right-of-way line
of North St. Paul Street, a distance of 24.00 feet to a point
for corner;
THENCE North 76 degrees 00' 00" East, a distance of 6.85 feet to
a point
for corner;
THENCE South 14 degrees 00' 00" East, a distance of 192.00 feet
to a point
for corner;
THENCE South 76 degrees 00' 00" West, a distance of 6.85 feet to
the
intersection of the Northerly right-of-way line of Elm Street
with the Westerly
right-of-way line of North St. Paul Street, being the POINT OF
BEGINNING, and
containing 92,261.38 square feet or 2.1180 acres of land.
Exhibit B- Page 1 of 43
<PAGE>
SAVE AND EXCEPT the following described Tracts A through G:
TRACT A (The Easterwood Leasehold Tract plus the Open Areas
Tract, the Mezzanine
Tracts, and the Subway Tunnel Tract conveyed by Southern
Methodist University)
Being all of that certain lot, tract, or parcel of land situated
in the
Live Oak Office Building Addition in the City of Dallas,
according to the Map
thereof recorded in Volume 81122, Page 1117, of the Deed Records
of Dallas
County, Texas, and situated in the J. Grigsby Survey, Abstract
No. 495, and
being part of Lot 1, Block A/475 (Official City Numbers) of the
City of Dallas,
Dallas County, Texas, and being more particularly described as
follows:
COMMENCING at a point being the present intersection of the
Northerly
right-of-way line of Elm Street (an 80-foot public right-of-way)
with the
Westerly right-of-way line of North St. Paul Street (a 60-foot
public
right-of-way); thence South 76 degrees 00' 00" West, along the
Northerly
right-of-way line of Elm Street, a distance of 267.90 feet to
the POINT OF
BEGINNING;
THENCE South 76 degrees 00' 00" West, a distance of 50.00 feet
along the
Northerly right-of-way line of Elm Street to a point for
corner;
THENCE North 14 degrees 00' 00" West, a distance of 47.53 feet
to a point
for corner;
THENCE North 45 degrees 33' 42" East, a distance of 57.99 feet
to a point
for corner;
THENCE South 14 degrees 00' 00" East, a distance of 76.91 feet
to a point
in the Northerly right-of-way line of Elm Street, being the
POINT OF BEGINNING,
and containing 3,110.90 square feet or 0.0714 acre of land.
TRACT B (The Open Areas Tract)
Being the surface estate only in and to the tract or parcel of
land more
particularly described below, such "surface" being all portions
of such land
above the depth which is the lesser of (a) four feet (4') below
the actual
surface as it presently exists on the date hereof, or (b) the
uppermost surfaces
of the underground improvements as constructed therein by First
City Center
Associates, which surface estate was reserved by the City of
Dallas in those
certain deeds to C F Pacific, Inc. recorded in Volume 81105,
Page 2790; Volume
81105, Page 2809; and Volume 81105, Page 2799, of the Deed
Records of Dallas
County, Texas, as such deeds have been corrected by that certain
Master
Corrective
Exhibit B- Page 2 of 43
<PAGE>
Deed from the City of Dallas to C F Pacific, Inc., dated June 1,
1984, and
recorded on June 14, 1984, in Volume 84118, Page 5300 of the
Deed Records of
Dallas County, Texas, and as such surface estate was conveyed by
First City
Center Associates to the City of Dallas by that certain Deed
(the "FCCA Open
Areas Deed"), dated June 1, 1984, and recorded on June 14, 1984,
in Volume
84118, Page 5325 of the Deed Records of Dallas County, Texas,
subject, however,
to the easements in favor of 1700 Pacific Associates Limited
Partnership, its
successors and assigns, as the assignee of First City Center
Associates pursuant
to the Special Warranty Deed and Assignment of Ground Leases
dated June 21, 1984
and recorded June 21, 1984 in Volume 84124, Page 402 of the Deed
Records of
Dallas County, Texas) granted and/or reserved in said deeds, as
more
specifically described hereinafter as Parcel 9 (The Open Areas
Easements Tract):
Being all of that certain lot, tract, or parcel of land, a part
of which
being situated in the Live Oak Office Building Addition in the
City of Dallas,
according to the Map thereof recorded in Volume 81122, Page 1117
of the Deed
Records of Dallas County, Texas, and in Lot 1, Block A/475
(Official City
Numbers) of the City of Dallas, Texas, and parts of which being
situated in the
rights-of-way of Pacific Avenue and Elm Street adjacent to said
Lot 1, Block
A/475, and all of such land being situated in the J. Grigsby
Survey, Abstract
No. 495, of the City of Dallas, Dallas County, Texas, and being
more
particularly described as follows:
BEGINNING at a point for corner being the present intersection
of the
Northerly right-of-way line of Elm Street (an 80-foot public
right-of-way) with
the Westerly right-of-way line of North St. Paul Street (a
60-foot public
right-of-way);
THENCE South 14 degrees 00' 00" East, along the Westerly
right-of-way line
of North St. Paul Street, a distance of 14.50 feet to a point
for corner;
THENCE South 76 degrees 00' 00" West, a distance of 394.56 feet
to a point
for corner, said point being in the Easterly right-of-way line
of Ervay Street
(a 50-foot public right-of-way);
THENCE North 14 degrees 00' 00" West, along the Easterly
right-of-way line
of Ervay Street, a distance of 230.50 feet to a point for
corner;
THENCE North 76 degrees 00' 00" East, a. distance of 394.56 feet
to a
point for corner, said point being in the Westerly right-of-way
line of North
St. Paul Street;
Exhibit B- Page 3 of 43
<PAGE>
THENCE South 14 degrees 00' 00" East, along the Westerly
right-of-way line
of North St. Paul Street, a distance of 16.00 feet to a point
for corner, said
point being the present intersection of the Westerly
right-of-way line of North
St. Paul Street with the Southerly right-of-way line of Pacific
Avenue (an
80-foot public right-of-way);
THENCE South 76 degrees 00' 00" West, along the Southerly
right-of-way
line of Pacific Avenue, a distance of 17.10 feet to a point for
corner;
THENCE South 45 degrees 47' 33" West, a distance of 43.20 feet
to a point
for corner;
THENCE North 44 degrees 15' 22" West, a distance of 6.62 feet to
a point
for corner;
THENCE South 45 degrees 44' 38" West, a distance of 21.80 feet
to a point
for corner;
THENCE North 44 degrees 15' 22" West, a distance of 30.20 feet
to a point
for corner;
THENCE South 45 degrees 44' 38" West, a distance of 66.80 feet
to a point
for corner;
THENCE North 44 degrees 15' 22" West, a distance of 30.00 feet
to a point
for corner;
THENCE South 45 degrees 44' 38" West, a distance of 125.80 feet
to a point
for corner;
THENCE South 44 degrees 15' 22" East, a distance of 30.00 feet
to a point
for corner;
THENCE South 45 degrees 44' 38" West, a distance of 67.00 feet
to a point
for corner;
THENCE South 44 degrees 15' 22" East, a distance of 16.95 feet
to a point
for corner, said point being in the Northerly boundary line of
the
above-described Tract A - The Easterwood Leasehold Tract;
THENCE South 45 degrees 33' 42" West, along the Northerly
boundary line of
the above-described Tract A - The .Easterwood Leasehold Tract, a
distance of
11.94 feet to a point for corner, said point being the Northwest
corner of the
said Tract A - The Easterwood Leasehold Tract;
Exhibit B- Page 4 of 43
<PAGE>
THENCE South 14 degrees 00' 00" East, along the Westerly
boundary-line of
the above-described Tract A - The Easterwood Leasehold Tract, a
distance of
47.53 feet to a point for corner, said point being in the
Northerly right-of-way
line of Elm Street;
THENCE North 76 degrees 00' 00" East, along the Northerly
right-of-way
line of Elm Street, a distance of 317.90 feet to the POINT OF
BEGINNING, and
containing 39,913.49 square feet or 0.9163 acres of land.
TRACT C (The North St. Paul Street Sidewalk Tract)
Being the surface estate only in and to the tract or parcel of
land more
particularly described below, such "surface" being all portions
of such land
above the depth which is the lesser of (a) four feet (4') below
the actual
surface as it presently exists, on the date hereof, or (b) the
uppermost
surfaces of the underground improvements as constructed therein
by First City
Center Associates, which surface estate was reserved by the City
of Dallas in
that certain deed to C F Pacific, Inc., recorded in Volume
81105, Page 2799, of
the Deed Records of Dallas County, Texas, as such deed has been
corrected by
that certain Master Corrective Deed from the City of Dallas to C
F Pacific,
Inc., dated June 1, 1984, and recorded on June 14, 1984, in
Volume 84118, Page
5300 of the Deed Records of Dallas County, Texas, and as such
surface estate was
conveyed by First City Center Associates to the City of Dallas
by that certain
Deed (the "FCCA Open Areas Deed"), dated June 1, 1984, and
recorded on June 14,
1984, in Volume 84118, Page 5325 of the Deed Records of Dallas
County, Texas,
subject, however, to the easements in favor of 1700 Pacific
Associates Limited
Partnership, its successors and assigns, as the assignee of
First City Center
Associates pursuant to the Special Warranty Deed and Assignment
of Ground Leases
dated June 21, 1984 and recorded June 21, 1984 in Volume 84124,
Page 402 of the
Deed Records of Dallas County, Texas) granted and/or reserved in
said deeds, as
more specifically described hereinafter as Parcel 9 (The Open
Areas Easements
Tract):
Being all of that certain lot, tract, or parcel of land, being
situated in
the J. Grigsby Survey, Abstract No. 495, Dallas County, Texas,
and being a part
of North St. Paul Street (a 60-foot public right-of-way)
adjacent to Lot 1,
Block A/475 (Official City Numbers) of the City of Dallas,
Dallas County, Texas,
and being more particularly described as follows:
BEGINNING at a point for corner being the present intersection
of the
Northerly right-of-way line of Elm Street (an 80-foot public
right-of-way) with
the Westerly right-of-way line of North St. Paul Street (a
60-foot public
right-of-way) ;
Exhibit B- Page 5 of 43
<PAGE>
THENCE North 14 degrees 00' 00" West, along the Westerly
right-of-way line
of North St. Paul Street, a distance of 192.00 feet to a point
for corner;
THENCE North 76 degrees 00' 00" East, a distance of 6.85 feet to
a point
for corner;
THENCE South 14 degrees 00' 00" East, along a line which is 6.85
feet
perpendicularly distant Northeast from, and parallel to, the
Westerly
right-of-way line of said North St. Paul Street, a distance of
192.00 feet to a
point for corner, said point being in the Northerly right-of-way
line of Elm
Street;
THENCE South 76 degrees 00' 00" West, along the Northerly
right-of-way
line of Elm Street, a distance of 6.85 feet to the POINT OF
BEGINNING, and
containing 1,315.2 square feet or 0.0302 acre of land.
TRACT D (The Mezzanine Tract - Concourse Level)
Being a subsurface estate only, bounded on the bottom at 443.0
feet above
mean sea level ("M.S.L.") and bounded at the top at 453.0 feet
above M.S.L., in
and to the following described tract or parcel of land, but
excluding from such
subsurface estate all existing structural columns, primary
support beams,
foundations, bearing walls, and other structural improvements
constructed
therein by First City Center Associates, and the land, areas,
and spaces in
which such structural improvements are located, which subsurface
estate was
granted from First City Center Associates to the City of Dallas
by that certain
Deed (the "FCCA Mezzanine Deed"), dated June 1, 1984, recorded
on June 14, 1984,
in Volume 84118, Page 5334 of the Deed Records of Dallas County,
Texas, and is
subject to the restrictions upon the City of Dallas and the
reservations,
easements, and interim rights in favor of 1700 Pacific
Associates Limited
Partnership, its successors and assigns, as the assignee of
First City Center
Associates pursuant to the Special Warranty Deed and Assignment
of Ground Leases
dated June 21, 1984 and recorded June 21, 1984 in Volume
| 
