1
EXHIBIT 10.11
OFFICE LEASE
BETWEEN
BSDAL I LIMITED PARTNERSHIP, A GEORGIA LIMITED PARTNERSHIP,
LANDLORD
AND
MARKETING SPECIALISTS SALES COMPANY, A TEXAS CORPORATION,
TENANT
April 27, 1998
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LEASE SUMMARY
DATE: APRIL 27, 1998
LANDLORD: BSDAL I LIMITED PARTNERSHIP, a Georgia limited partnership
TENANT: MARKETING SPECIALISTS SALES COMPANY, a Texas corporation
SUITE NUMBER: 200
LEASED PREMISES
AND FLOOR(S): 32,756 square feet of Rentable Area located on the 2nd floor
AREA OF THE LEASED PREMISES: FLOOR(S) USABLE AREA RENTABLE AREA
2nd 29,778 32,756
TOTAL 2ND 29,778 32,756
RENTABLE AREA OF THE BUILDING: 124,358 square feet of Rentable Area
TENANT'S SHARE: 26.34%
LEASE TERM: Five (5) Years
COMMENCEMENT DATE: October 1, 1998
EXPIRATION DATE: September 30, 2003
BASE RENT:
Portion Annual Base Annual Base Monthly Base
of Lease Term Rental/RSF Rental Rental
Months 1-60: $22.00 $720,632.00 $60,052.67
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ROOF RENT
[EXHIBIT E, PARAGRAPH 7]: $150.00/month
SECURITY DEPOSIT: $0
TENANT'S BROKER AND THE STAUBACH COMPANY
ADDRESS FOR Southwest Corporate Services
NOTICES: 0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
TENANT'S ADDRESS FOR Prior to Commencement Date:
NOTICES: MARKETING SPECIALISTS SALES COMPANY
00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Mr. Xxxx Xxxxx
with a copy to: RICHMONT
00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq., Associate General Counsel
Commencement Date and thereafter:
MARKETING SPECIALISTS SALES COMPANY
00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Mr. Xxxx Xxxxx
with a copy to: RICHMONT
00000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq., Associate General Counsel
LANDLORD'S ADDRESS FOR BSDAL I LIMITED PARTNERSHIP
NOTICES: 00 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx Xxxxx
with a copy to: Parker, Hudson, Rainer & Xxxxx XXX
000 Xxxxxxxxx Xxxxxx Xxxxxx
0000 Xxxxxxx Xxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
PARKING SPACES: Four (4) spaces for each 1,000 square feet of Usable Area of the Leased Premises
LANDLORD'S ALLOWANCE: $20.00 per square foot of Rentable Area of Leased Premises, for total Landlord's
[EXHIBIT D] Allowance of $655,120.
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LEASE INDEX
PAGE
ARTICLE I. LEASED PREMISES....................................................................................- 1 -
1.1 LEASE OF LEASED PREMISES....................................................................- 1 -
1.2 PREPARATION OF LEASED PREMISES..............................................................- 2 -
ARTICLE II. TERM AND RENT ..................................................................................- 3 -
2.1 TERM........................................................................................- 3 -
2.2 BASE RENT...................................................................................- 5 -
2.3 ADDITIONAL RENT.............................................................................- 6 -
ARTICLE III. SECURITY DEPOSIT ...............................................................................- 9 -
ARTICLE IV. USE AND ACCEPTANCE ..............................................................................- 9 -
4.1 USE.........................................................................................- 9 -
4.2 ADA........................................................................................- 10 -
4.3 ACCEPTANCE.................................................................................- 11 -
ARTICLE V. OPERATIONS: UTILITIES: SERVICES ...............................................................- 12 -
5.1 OPERATION..................................................................................- 12 -
5.2 HOURS OF OPERATION.........................................................................- 12 -
5.3 UTILITIES AND SERVICES.....................................................................- 12 -
5.4 INTERRUPTION OF SERVICES...................................................................- 14 -
5.5 METERING ELECTRICITY.......................................................................- 14 -
ARTICLE VI. REPAIRS AND MAINTENANCE ........................................................................- 15 -
6.1 LANDLORD'S OBLIGATIONS.....................................................................- 15 -
6.2 TENANT'S OBLIGATIONS.......................................................................- 15 -
ARTICLE VII. ALTERATIONS: TENANT'S PROPERTY ...............................................................- 16 -
7.1 ALTERATIONS BY TENANT......................................................................- 16 -
7.2 CONTRACTORS' INSURANCE REQUIREMENTS........................................................- 16 -
7.3 TENANT'S PROPERTY..........................................................................- 16 -
ARTICLE VIII. HAZARDOUS MATERIALS ..........................................................................- 17 -
8.1 TENANT'S OBLIGATIONS AND LIABILITIES.......................................................- 17 -
8.2 DEFINITION.................................................................................- 17 -
8.3 INSPECTION.................................................................................- 17 -
8.4 DEFAULT....................................................................................- 18 -
8.5 LANDLORD WARRANTY..........................................................................- 18 -
ARTICLE IX. ASSIGNMENT AND SUBLETTING.......................................................................- 18 -
ARTICLE X. CASUALTY OR EMINENT DOMAIN ....................................................................- 20 -
10.1 DAMAGE TO PROPERTY.........................................................................- 20 -
10.2 RENT ABATEMENT.............................................................................- 21 -
10.3 EMINENT DOMAIN.............................................................................- 21 -
ARTICLE XI. INDEMNIFICATION AND INSURANCE...................................................................- 22 -
11.1 INDEMNIFICATION............................................................................- 22 -
11.2 TENANT'S INSURANCE.........................................................................- 23 -
11.3 SURVIVAL OF INDEMNITIES....................................................................- 23 -
11.4 LANDLORD'S INSURANCE.......................................................................- 23 -
ARTICLE XII. RIGHT OF ENTRY ................................................................................- 23 -
ARTICLE XIII. PROPERTY LEFT ON THE LEASED PREMISES .........................................................- 24 -
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ARTICLE XIV. SIGNS AND ADVERTISEMENTS ......................................................................- 24 -
ARTICLE XV. NOTICES ........................................................................................- 24 -
ARTICLE XVI. MECHANIC'S LIENS...............................................................................- 25 -
ARTICLE XVII. SUBORDINATION; ATTORNMENT; NONDISTURBANCE ....................................................- 25 -
17.1 SUBORDINATION..............................................................................- 25 -
17.2 ATTORNMENT.................................................................................- 26 -
17.3 CONFIRMING AGREEMENT.......................................................................- 26 -
17.4 NONDISTURBANCE.............................................................................- 26 -
ARTICLE XVIII. COMPLIANCE WITH LAW AND RULES AND REGULATIONS ...............................................- 26 -
ARTICLE XIX. LANDLORD'S LIEN ...............................................................................- 27 -
ARTICLE XX. ESTOPPEL CERTIFICATE ...........................................................................- 27 -
ARTICLE XXI. HOLDING OVER ..................................................................................- 28 -
ARTICLE XXII. TENANT'S STATUS ..............................................................................- 28 -
22.1 POWER AND AUTHORITY........................................................................- 28 -
22.2 AUTHORIZATION..............................................................................- 28 -
ARTICLE XXIII. DEFAULTS AND REMEDIES .......................................................................- 29 -
23.1 DEFAULT BY TENANT..........................................................................- 29 -
23.2 LANDLORD REMEDIES..........................................................................- 29 -
23.3 REMEDIES CUMULATIVE........................................................................- 31 -
23.4 MISCELLANEOUS..............................................................................- 31 -
23.5 ATTORNEY'S FEES............................................................................- 32 -
23.6 LANDLORD'S DEFAULT.........................................................................- 32 -
23.7 TENANT'S REMEDIES..........................................................................- 32 -
ARTICLE XXIV. MISCELLANEOUS ................................................................................- 33 -
24.1 NO PARTNERSHIP.............................................................................- 33 -
24.2 NO REPRESENTATIONS BY LANDLORD.............................................................- 33 -
24.3 ABANDONMENT................................................................................- 33 -
24.4 SEVERABILITY OF PROVISIONS.................................................................- 33 -
24.5 INTERIOR CONSTRUCTION......................................................................- 34 -
24.6 RELOCATION OF LEASED PREMISES..............................................................- 34 -
24.7 BENEFITS AND BURDENS.......................................................................- 34 -
24.8 WAIVER OF SUBROGATION. ...................................................................- 34 -
24.9 LANDLORD'S LIABILITY.......................................................................- 34 -
24.10 BROKERAGE..................................................................................- 35 -
24.11 RECORDING..................................................................................- 35 -
24.12 GOVERNMENTAL SURCHARGE.....................................................................- 35 -
24.13 SPECIAL PROVISIONS.........................................................................- 35 -
24.14 ENTIRE AGREEMENT...........................................................................- 35 -
24.15 FORCE MAJEURE..............................................................................- 35 -
24.16 QUIET ENJOYMENT............................................................................- 35 -
24.17 CHOICE OF LAW..............................................................................- 36 -
24.18 CONSENT....................................................................................- 36 -
24.19 RIGHT OF OFFSET............................................................................- 36 -
24.20 PRIME RATE.................................................................................- 37 -
24.21 EXHIBITS...................................................................................- 37 -
24.22 TIME OF ESSENCE............................................................................- 37 -
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EXHIBITS
A - LEGAL DESCRIPTION
B - FLOOR PLAN OF LEASED PREMISES
C - RULES AND REGULATIONS
D - TENANT IMPROVEMENT AGREEMENT
X-0 XXXX XXXXXXXX XXXXXXXXX
X-0 SCHEDULE FOR PLANNING, PRICING AND CONSTRUCTION OF
TENANT IMPROVEMENTS
D-3 SUPPLEMENT TO BASE BUILDING CONDITION
D-4 LIST OF APPROVED GENERAL CONTRACTORS AND SPECIALTY
TRADE SUBCONTRACTORS
E - ADDITIONAL PROVISIONS
X-0 XXXXX XXXXXXX XXXX
X-0 RESERVED PARKING SPACES
E-3 LETTER OF CREDIT AMORTIZATION SCHEDULE
E-4 APPROVED LETTER OF CREDIT FORM
F - BOMA STANDARDS (1989 VERSION)
G - COMMENCEMENT DATE AGREEMENT
H - OPERATING EXPENSE EXCLUSIONS
I - PLAT FOR SIGN LOCATION
J - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
K - LIST OF MORTGAGES
L - JANITORIAL SPECIFICATIONS
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OFFICE LEASE
THIS LEASE, is made and entered into on this 27 day of April,
1998, between BSDAL I LIMITED PARTNERSHIP, a Georgia limited partnership
("Landlord"), and MARKETING SPECIALISTS SALES COMPANY ("Tenant"), a Texas
corporation.
ARTICLE I. LEASED PREMISES
1.1 LEASE OF LEASED PREMISES.
(a) Landlord, in consideration of the rents and of the terms
and conditions hereinafter contained, does hereby lease to Tenant, and
Tenant does hereby rent from Landlord, subject to the provisions of
Paragraphs 1.1(c), 1.2 and Exhibit D hereto, the entire second (2nd)
floor (the "Leased Premises") of the building known as the 00000
Xxxxxxxxxx Xxxxx ("Building"). The Leased Premises are projected to
have approximately 32,756 square feet of Rentable Area (as hereinafter
defined), with the exact Rentable Area of the Leased Premises to be
determined in accordance with Paragraph 1.1(b). The Building which is
situated at the xxxxxxxxx xxxxxx xx Xxxxxxxxxx Xxxx and the North
Dallas Tollway, Dallas, Texas, on the land described on Exhibit A
hereto ("Property"), and the floor plan of the Leased Premises is
attached as Exhibit B hereto.
(b) After Landlord and Tenant have approved the "Drawings and
Specifications" for the Leased Premises as provided in Exhibit D
hereto, Landlord shall cause its architect to measure the "Usable Area"
of the Leased Premises and the Building in accordance with the Standard
Method for Measuring Floor Area in Office Buildings, American National
Standard ANSI Z65.1-1980 (Reaffirmed 1989), approved by the American
National Standards Institute, Inc. on June 21, 1989, published by the
Building Owners and Managers Association, and attached as Exhibit F
hereto. Tenant shall have ten (10) days after receipt of such
certification to confirm the calculations of Landlord's architect and
to notify Landlord of any objection thereto; if Tenant fails to notify
Landlord of any such objections within such ten (10) day period, then
the certification of Landlord's architect shall be deemed confirmed by
Tenant and binding on both parties hereto. If Landlord and Tenant are
unable to agree upon the Usable Area of the Leased Premises or any
other portion of the Building, either party may submit the subject
matter of their dispute to binding arbitration by the American
Arbitration Association office in Dallas, Texas in accordance with the
rules thereof. The "Rentable Area" of the Leased Premises, for all
purposes of this Lease, shall be the sum of (i) the Usable Area of the
portion of the Leased Premises, if any, located on any floor of the
Building leased entirely by Tenant multiplied by 1.10, plus (ii) the
Usable Area of the portion of the Leased Premises, if any, located on
any floor not leased entirely by Tenant multiplied by 1.15. After
Landlord's architect certifies its calculation of the Usable Area of
the Leased Premises and Tenant has confirmed, or is deemed to have
confirmed, such calculations, all calculations set forth in the Lease
based on the area of the Leased Premises, including, without
limitation,
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Base Rent, Tenant's Share and Landlord's Allowance for Tenant
Improvement Costs, shall be adjusted based on the Usable Area certified
by Landlord's architect and the Rentable Area determined as provided
above.
(c) Landlord warrants and represents (subject to the
exclusions set forth in Section 2.08 of Exhibit D respecting Drawings
and Specifications) that the Building, all systems therein, all Common
Areas (as defined in Paragraph 2.3(b)(iii)) located on the Property,
and the Tenant Improvements (as hereinafter defined in Paragraph 2.1)
to the Leased Premises to be constructed and installed pursuant to the
provisions of the Tenant Improvement Agreement attached as Exhibit D
hereto and Tenant's use thereof for general office purposes shall be in
compliance in all material respects with all applicable governmental
codes and regulations, all zoning and other land use matters, all
building codes (including, without limitation, Title III of the
American with Disabilities of Act of 1990 and the Texas Architectural
Barriers Act) as in effect on the Fixturing Date and all Building
systems and equipment and the Tenant Improvements will be in first
class condition and good operating order consistent with Class "A"
office buildings (constructed since 1992) within the North Dallas
Tollway/LBJ Freeway corridor in Dallas, Texas, on the Commencement
Date. The warranties and representations of Landlord set forth in this
Paragraph 1.1(c) shall expire and be of no further force or effect as
of the first (1st) anniversary of the date of Substantial Completion
(as defined in Exhibit D) of the Tenant Improvements.
1.2 PREPARATION OF LEASED PREMISES.
(a) Landlord shall construct or install in the Leased Premises
the Tenant Improvements, as defined in and to be constructed or
installed pursuant to the provisions of the Tenant Improvement
Agreement which is attached hereto as Exhibit D. Landlord and Tenant
agree to comply with all of the terms and provisions of the Tenant
Improvement Agreement, including, without limitation, the obligation to
pay, as additional rental, all amounts due Landlord under Paragraph 3
thereof according to the payment procedures contained therein.
(b) If Tenant causes the improvements to the Leased Premises
to exceed in value the value of the Base Building Condition plus
Landlord's Allowance for Tenant Improvement Costs (as such terms are
defined in the Tenant Improvement Agreement), and if the installation
or construction of such improvements causes an increase in the ad
valorem taxes on the Building, then Tenant shall pay from time to time,
as additional rental, any such increase in ad valorem taxes on demand
of Landlord, provided, however, that Tenant shall have no liability
hereunder for any such increase in ad valorem taxes unless the Tenant
Improvement Costs exceed $30.00 per square foot of Rentable Area of the
Leased Premises.
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ARTICLE II. TERM AND RENT
2.1 TERM.
(a) This Lease Agreement shall continue in full force for a
period beginning on the Commencement Date (as hereinafter defined) and
ending on the date (the "Expiration Date") that is five (5) years after
the Commencement Date ("Term"). The Commencement Date is defined as
12:01 a.m. on the date that is one hundred twenty (120) days (the
"Move-in Period") after the earlier to occur of (i) the date upon which
the improvements to be constructed by Landlord in the Leased Premises
pursuant to the Tenant Improvement Agreement attached hereto as Exhibit
D hereto (the "Tenant Improvements") are "Substantially Complete" (as
that term is defined in Exhibit D), or (ii) the date the Tenant
Improvements would have been Substantially Complete but for delays
caused by Tenant (such as, by way of illustration and not limitation,
selection of long lead-time items, delays in approving drawings and
specifications and construction budgets, failure to cooperate with the
contractors completing the Tenant Improvements and failure to complete
installation of cabling and other fixtures and equipment); provided,
however, that no Tenant delays will be deemed to have occurred unless
and until Tenant has received notice of such delay from Landlord and
Tenant has failed to correct such delay within the following time
periods after receipt of such notice:
with respect to design-related delays (such as selection of
long lead-time items): three (3) business days;
with respect to failure to meet scheduled deadlines: no notice
or cure for Tenant; and
with respect to field problems or other delays: one (1)
business day;
and further provided that such occurrence actually causes a delay in
Landlord's completion of the Tenant Improvements as evidenced by a
change order issued to Landlord's Contractor extending the contract
completion date for the Tenant Improvements, except, however, if
Landlord delays certain work in order to accommodate completion of
Tenant's Work (such as by way of illustration and not limitation,
deferring installation of ceiling tiles to facilitate any work Tenant
desires to perform in the plenum area), delay in completing such work
shall be deemed a delay caused by Tenant. Such earlier date determined
pursuant to clauses (i) and (ii) of the immediately preceding sentence
is herein referred to as the "Fixturing Date." Tenant Improvements to
the Leased Premises shall be deemed "Substantially Complete" when
Landlord has obtained a temporary or permanent Certificate of Occupancy
for the Leased Premises or other document sufficient for Tenant's legal
occupancy of the Leased Premises and Tenant's Architect (as defined in
Exhibit D) has issued a Certificate of Substantial Completion (as
defined in Exhibit D). Notwithstanding the immediately preceding
sentence, if Landlord believes that the Tenant Improvements were
"Substantially Complete" prior to
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the date so certified by Tenant Architect's in its Certificate of
Substantial Completion, Landlord may submit the issue of when the
Tenant Improvements were "Substantially Complete" to binding
arbitration by the American Arbitration Association office in Dallas,
Texas in accordance with the rules thereof. Tenant's certification of
the date of "Substantial Completion" shall be given no greater weight
than other evidence presented in such arbitration proceeding. Such
arbitration must select as the date of Substantial Completion either
the date asserted by Landlord or the date stated in Tenant's
Architect's Certificate of Substantial Completion. Pending the outcome
of any such arbitration, the obligations of Tenant shall be determined
on an interim basis using the date that is most closely in the middle
between Landlord's date and Tenant's Architect's date (if two dates are
most closely in the middle, then the parties shall use the later of
those two dates), and all obligations of Tenant hereunder shall be
adjusted between Landlord and Tenant within fifteen (15) days after the
decision of the arbitration panel is delivered to Landlord and Tenant.
Furthermore, in no event shall the Tenant Improvements be deemed
"Substantially Complete" as of a date later than the date that is
thirty (30) days prior to the first day on which Tenant opens the
Leased Premises for the conduct of business to the public for the first
time. Landlord and Tenant agree, upon request by the other, to execute
and deliver a Commencement Date Agreement stating the actual date on
which the term commences in the form attached hereto as Exhibit G.
(b) Notwithstanding the provisions of Paragraph 2.1(a), if,
for any reason, Landlord cannot deliver possession of the Leased
Premises to Tenant on the Fixturing Date, Landlord shall not be subject
to any liability, nor shall such failure affect the validity of this
Lease or the obligations of Tenant hereunder except as otherwise
provided herein. If Landlord is unable to deliver possession of the
Leased Premises by the Fixturing Date for any reason other than delay
caused by Tenant (including changes in the Drawings and
Specifications), the Fixturing Date, the Commencement Date and the
Expiration Date shall each be postponed by the number of days delivery
of possession of the Leased Premises is so delayed. The remedies
provided herein shall be Tenant's only remedy for Landlord's failure to
deliver possession of the Leased Premises; provided, however, that
Tenant shall receive two (2) days of free rent for each day after June
15, 1998 (as such date may be postponed due to delays caused by Tenant
and Force Majeure) that Substantial Completion of the Tenant
Improvements has not occurred; and provided further that the Move-in
Period shall be extended by one (1) day for each day that Tenant is
delayed in installing its cabling (beyond June 1, 1998) or its
furniture, fixtures or equipment (beyond June 15, 1998) because of a
delay caused by Landlord or Force Majeure occurring during the Move-In
Period. No Landlord delay shall be deemed to have occurred, however,
unless and until Landlord has received notice of such delay from Tenant
and Landlord has failed to correct such delay within the same
applicable period after receipt of such notice as provided for Tenant
in Paragraph 2.1(a) above. Except as aforesaid, no delay of possession
shall operate to relieve Tenant of Tenant's obligations to Landlord
(including the payment of rent and other amounts) as provided in this
Lease. Notwithstanding the foregoing, if the Fixturing Date has not
occurred on or before September 1, 1998 (which deadline shall be
deferred one (1) day for each day of delay caused by Tenant or Force
Majeure), Landlord shall pay to Tenant as liquidated damages and not as
penalty the sum of Twenty Five Thousand and No/100 Dollars
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($25,000.00) for each month or part thereof beyond August 1, 1998 (or
such later date to account for delays caused by Tenant or Force
Majeure, as aforesaid) that the Fixturing Date is delayed. Said amounts
shall be paid to Tenant within thirty (30) days after written demand
therefor, or, at Tenant's option, Tenant may offset such liquidated
damages from the Base Rent (as defined below) and/or Additional Rent
(as defined below) due hereunder until same has been paid in full. If
the Fixturing Date has not occurred on or before December 1, 1998
(which deadline shall be deferred one (1) day for each day of delay
caused by Tenant or Force Majeure), Tenant, at its option at any time
thereafter but prior to the Fixturing Date, may terminate this Lease by
notice to Landlord and both parties shall thereupon be released from
all obligations under this Lease.
(c) From and after June 1, 1998 (subject to Force Majeure and
delays caused by Tenant), Tenant shall have the right to enter the
Leased Premises concurrently with Landlord's completion of the Tenant
Improvements for the purpose of installing cabling and other related
above-ceiling work in the Leased Premises. All provisions of this Lease
shall apply to Tenant's use and occupancy of the Leased Premises from
and after the time when Tenant makes its entry; provided, however, that
such occupancy shall be free of Base Rent and other charges hereunder
until the Commencement Date. Notwithstanding the foregoing, if Tenant
enters the Leased Premises prior to the Fixturing Date, Tenant shall
not perform any work if, in Landlord's reasonable judgment, the
performance of such work would interfere with or result in a delay in
the Substantial Completion of the Tenant Improvements. From and after
the Fixturing Date, Tenant shall have the right to occupy the Leased
Premises to install furniture, fixtures and equipment, and thereafter
to conduct business from the Leased Premises. Such period from the
Fixturing Date to the Commencement Date shall be free of Base Rent or
Additional Rent, but shall otherwise be subject to and in accordance
with all of the terms and conditions of this Lease.
2.2 BASE RENT. For the use and occupancy of the Leased Premises, Tenant
shall pay rent to Landlord starting on the Commencement Date of the Lease Term
at an annual rate of Twenty-Two and No/100 Dollars ($22.00) per square foot of
Rentable Area (the "Base Rent") of the Leased Premises, payable in twelve (12)
equal monthly installments, in advance, on the Commencement Date and the first
day of each month thereafter during the Term hereof; provided, however, that
Base Rent for any partial calendar month during the Term shall be prorated on a
per diem basis. Base Rent and all other sums, whether designated Additional Rent
or otherwise, payable to Landlord under this Lease shall be payable in U.S.
Dollars at the office of Landlord, or at such other place or places as Landlord
may designate in writing. All rent payable under this Lease shall be paid by
Tenant without notice or demand, both of which are expressly waived by Tenant.
Rent and other monies due Landlord under this Lease not paid when due shall bear
interest at the "Prime Rate" (as defined in Paragraph 24.20) plus two percent
(2%) per annum (but not in excess of the maximum lawful rate) from the date the
same is due until paid. Base Rent payable under this Lease shall be paid in
advance by Tenant in monthly installments as set forth above without demand,
offset or deduction, except as otherwise expressly provided in this Lease.
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2.3 ADDITIONAL RENT
(a) It is understood that the Base Rent set forth in Paragraph
2.2 of the Lease was negotiated in anticipation that the operating
expenses (including taxes but excluding electricity, which shall be
separately charged to Tenant as provided in Paragraph 2.3(c) below)
attributable to the Leased Premises would not exceed $6.17 per square
foot of Rentable Area of Leased Premises (the "Operating Expense Base")
during any calendar year of the Term. In order that the rent payable
throughout the term of this Lease shall reflect any increase in such
costs, Tenant agrees to pay to Landlord, as "Additional Rent," "Tenants
Share" (as hereinafter defined) respecting increases in Operating
Expenses and "Tenant's pro rata share" (as hereinafter defined) of
electricity costs as provided in Paragraph 2.3(c) below.
(b) Definitions
(i) "Tenant's Share" shall mean the amount of
Tenant's pro rata share of the increase in Operating Expenses
over the Operating Expense Base during each calendar year
(calculated on a square foot of Rentable Area basis annualized
to ninety-five percent (95%) occupancy of the total Rentable
Area of the Building as provided in clause (ii) below).
"Tenant's pro rata share," for purposes of this Lease, shall
be equal to the proportion which the Rentable Area of the
Leased Premises bears to the greater of (i) the actual area
under lease in the Building or (ii) ninety-five percent (95%)
of the total Rentable Area of the Building. Tenant's Share
shall be paid as Additional Rent as provided in this Paragraph
2.3.
(ii) Operating Expenses shall be computed based on
expenses incurred or paid on behalf of Landlord and determined
in accordance with generally accepted accounting principles
which shall be consistently applied. Subject to the
limitations hereinafter set forth respecting the matters
described in Exhibit H hereto, "Operating Expenses" shall mean
all expenses, costs and disbursements of every kind which
Landlord shall pay in connection with the operation of the
Building, including but not limited to gas, oil, steam,
chilled water, coal or any other energy sources utilized for
the operational use and maintenance of the Building (but
expressly excluding electricity), outside services including
window cleaning, carpet cleaning, drapery or venetian blind
cleaning, security, rental of equipment, personal property
repairs, maintenance of the Building, equipment, supplies,
materials, administrative expenses, legal and professional
fees, insurance, real estate taxes, property taxes, special
assessments, janitorial including salaries and wages and all
other Tenant benefits and reasonable management fees.
Operating Expenses shall include the cost, as reasonably
amortized by Landlord with interest at the rate of ten percent
(10%) per annum of the unamortized amount, of any capital
improvement made after the completion of the initial
construction of the Building which reduce other operating
expenses, provided that the amount of such cost included in
Operating Expenses in any given calendar year shall not exceed
the amount by which Operating Expenses
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were reduced in such calendar year as a result of such
expenditure. Operating Expenses shall not include the items
set forth in the list of Operating Expense exclusions attached
hereto as Exhibit H. If the average occupancy level of the
Building was less than ninety-five (95%) percent of the total
Rentable Area of the Building during a calendar year, the
actual Operating Expenses, for that calendar year shall be
adjusted to equal Landlord's reasonable estimate of Operating
Expenses had ninety-five (95%) percent of the total Rentable
Area of the Building been occupied.
(iii) The "Common Areas" are those areas which are
furnished and may be furnished from time to time in and on the
Building for the general common and non-exclusive use of
Tenant, their officers, agents, employees, customers, invitees
and licensees, including, without limitation, delivery
passages, pedestrian sidewalks and malls, passenger and
service elevators, escalators, hallways, stairways, fire
exits, comfort stations and lobby areas. The Building and its
structural components (including doors and windows) shall be
deemed part of the Common Areas notwithstanding that all parts
or components thereof may not be capable of common and
non-exclusive use.
If Landlord makes any capital improvement during the term of
this Lease in order to comply with safety and/or any other requirements
of any federal, state or local law or governmental regulation, then the
Tenant's proportionate share of the reasonable annual amortization of
the cost of such improvement and the interest necessary to amortize
such costs shall be deemed an Operating Expense in each of the calendar
years during which such amortization occurs, and Tenant shall be
responsible for Tenant's pro rata share of any such charges; provided,
however, that Tenant shall not have any obligation if such capital
improvement is made necessary by any non-compliance by Landlord with
any such law or regulation as in effect on the Fixturing Date.
(c) Electricity - In addition to Tenant's Share respecting
increases in Operating Expenses, Tenant shall pay to Landlord, as a
part of the Additional Rent hereunder, Tenant's pro rata share of the
entire cost to Landlord of electricity provided to the Building.
(d) Payment of Additional Rent - Landlord shall make a
reasonable estimate of the Additional Rent payable by Tenant for the
upcoming year, and Tenant shall pay to Landlord the Additional Rent, as
so estimated, without demand, deduction or set-off, in 12 equal monthly
installments during each year, each such installment being due with
installments of Base Rent.
(e) Adjustment of Additional Rent - If the Additional Rent
paid by Tenant with respect to a calendar year, based upon Landlord's
estimate, differs from the actual amount of Additional Rent due and
payable for such year, as reflected in an operating statement for such
year prepared by Landlord and delivered to Tenant, the difference shall
be payable by Landlord or Tenant, as the case may be, in a lump sum on
the first day of the second month
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14
following the month in which Landlord renders its operating statement
to Tenant. Failure to give Tenant an actual operating statement shall
not constitute a waiver by Landlord of its right to require an increase
in Additional Rent.
(f) Verification of Operating Statement - Upon request by
Tenant, and at Tenant's cost and expense, Landlord shall furnish Tenant
such information as may be necessary for Tenant to verify Operating
Expenses and shall cooperate in good faith with Tenant in verifying the
operating statement. Within ninety (90) days after Tenant receives the
operating statement, Tenant may contest the statement by written notice
to Landlord, which notice shall specify the particular areas of
Operating Expenses that Tenant desires to contest; provided, however,
that no such contest shall entitle Tenant to withhold or delay amounts
due to Landlord as set forth in the operating statement. If no such
contest is made by written notice to Landlord delivered within such
90-day period, such statement shall be binding upon Tenant in all
respects. If Tenant timely contests such statement, Tenant shall have
the right to inspect and examine, at reasonable times during normal
business hours, Landlord's books of account and records pertaining to
the Operating Expenses of the Building for the calendar year in
question, all at Tenant's sole cost and expense. Such inspection shall
be conducted by an independent certified public accountant or by
Tenant's accounting department, and in no event shall the inspector be
compensated on a contingent fee basis. Such inspection shall be
conducted in Landlord's office, at Tenant's expense, and shall be
completed, with written notice to Landlord of the results thereof, by
no later than forty-five (45) days after the date of Tenant's notice of
contest delivered to Landlord pursuant to the foregoing provisions of
this Paragraph 2.3(f); any matters not specifically disputed in the
written notice filed with Landlord after such audit has been completed
shall be final and binding upon Tenant in all respects. Landlord may
have an agent or employee present during such inspection and audit. If
the contest ultimately results in Landlord and Tenant agreeing that
Tenant has overpaid Landlord for its share of Operating Expenses, such
overpayment shall be refunded by Landlord to Tenant within thirty (30)
days after the date such contest is so resolved.
(g) Operating Expenses Cap - Notwithstanding anything in this
Paragraph 2.3 to the contrary, Tenant's Share of increases in
"controllable" Operating Expenses (as that term is hereinafter defined)
in any calendar year during the Term shall not exceed the amount by
which (x) such "controllable" Operating Expenses attributable to the
Leased Premises for the immediately preceding calendar year (grossed up
as provided in Paragraph 2.3(b)(ii) and in Paragraph 2.3(j), if not a
full calendar year, but in no event less than $3.37 per square foot of
Rentable Area of the Leased Premises) multiplied by 105% exceeds (y)
$3.37 per square foot of Rentable Area of the Leased Premises. For the
purposes of this Paragraph 2.3(g), "controllable" Operating Expenses
are defined to be all Operating Expenses other than those expenses the
increase in which is beyond the reasonable control of Landlord. Without
limiting the foregoing, (i) examples of increases in Operating Expenses
that are beyond the reasonable control of Landlord include all
increases in utility costs, insurance costs and property taxes, and
(ii) examples of increases in Operating Expenses that are
"controllable" include (A) all property management fees (which
themselves shall be subject to a limitation as provided in
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Exhibit H hereto) and expenses, (B) security, maintenance and
engineering costs, (C) legal, accounting, audit and related
professional expenses, and (D) landscaping, janitorial, trash removal
and related expenses; provided, however, that to the extent the
foregoing expenses include labor costs that are directly affected by
changes in the federal minimum wage law, increases in such labor costs
that result from increases in the federal minimum wage shall not be
deemed "controllable" costs. Landlord and Tenant further acknowledge
and agree that the additional rent payable under Paragraph 2.3(c) above
for electricity costs shall not be subject to any limitation under this
Paragraph 2.3(g).
(h) Additional Rent -All costs and expenses which Tenant
assumes and agrees to pay Landlord pursuant to this Lease shall be
deemed Additional Rent, and, in the event of non-payment thereof,
Landlord shall have all rights and remedies provided for in the case of
non-payment of Base Rent.
(i) Operating Expense Differential - If the Operating Expenses
attributable to the total Leased Premises in any calendar year of the
Term are less than the Operating Expense Base ("Operating Expense
Differential"), then the Operating Expense Differential for such
calendar year shall be credited against the next payment or payments of
rent or Additional Rent becoming due under this Lease until such credit
is exhausted.
(j) Partial Year - If the Lease Term commences on a day other
than January 1 of a calendar year or expires on a day other than
December 31 of a calendar year, the Operating Expenses for any such
partial year shall be "grossed up" to the amount that Operating
Expenses would have been for the entire calendar year, and the amount
of Additional Rent payable pursuant to this Paragraph 2.3, and the
amount of any Operating Expense Differential payable to Tenant pursuant
to Paragraph 2.3(i), shall be the product of multiplying the Additional
Rent (or Operating Expense Differential) which otherwise would have
been payable for the full calendar year by a fraction, the numerator of
which is the actual number of days of the calendar year in question
included within the Lease Term, and the denominator of which is 365.
(k) Survival - The expiration or termination of this Lease
shall not affect the obligations of Landlord and Tenant pursuant to
this Paragraph 2.3 to be performed subsequent to such expiration or
termination.
ARTICLE III. SECURITY DEPOSIT
[INTENTIONALLY DELETED]
ARTICLE IV. USE AND ACCEPTANCE
4.1 USE. Tenant shall use the Leased Premises for general office
purposes, and for no other purpose without the prior written consent of
Landlord. Tenant will not use or occupy the
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Leased Premises for any unlawful purpose, and will comply with all present and
future laws, ordinances, regulations, and orders of the United States of
America, the state in which the Leased Premises are located, and all other
governmental units or agencies having jurisdiction over the property and the
Leased Premises. Tenant agrees to conduct its business in a reputable manner.
Tenant shall not cause, maintain or permit any storage outside of the Leased
Premises other than in storage areas, if any, leased by Landlord to Tenant for
such purposes (without Landlord having any obligation to do so), shall not
commit or suffer any waste upon the Leased Premises, or any nuisance or other
act or thing which may disturb the quiet enjoyment of any other tenant in the
Building. No use shall be made or permitted to be made of the Leased Premises,
nor acts done, which will increase the existing rate of insurance upon the
Building or cause the cancellation of any insurance policy covering the
Building, or any part thereof. Tenant shall not sell, or permit to be kept or
used, in or about the Leased Premises, any article which may be prohibited by
the standard form of fire insurance policy. Tenant shall, at its sole cost and
expense, comply with any and all requirements, pertaining to the Leased
Premises, of any insurance organization or company, necessary for the
maintenance or reasonable fire and public liability insurance covering the
Leased Premises, Building and appurtenances. Tenant agrees to pay to Landlord,
as Additional Rent, any increase in premiums on policies which may be carried by
Landlord covering damages to the Building and/or other improvement within the
Leased Premises and loss of rent caused by fire and the perils normally included
in extended coverage above the rates for the least hazardous type of occupancy
of the Leased Premises for office operations, in addition to the payment
required of Tenant pursuant to this Lease. Notwithstanding anything to the
contrary in this Lease, and so long as Tenant's use of the Leased Premises is
for general office purposes, Tenant shall have no liability for any such
increase in premiums on said policies carried by Landlord. For avoidance of
doubt, Landlord shall review the final drawings and specifications prepared by
Tenant's Architect (as hereinafter defined in Exhibit D) during the time period
for such review set forth in the schedule attached as Exhibit D-2 to Exhibit D.
If Landlord fails to object within said review period, such failure to object
shall be conclusive evidence that Tenant's general office use of the Leased
Premises (if not modified during the Lease Term) will not cause any such
increase in premiums for said policies and Tenant shall have no liability
hereunder with respect to such general office use (if not modified as
aforesaid).
4.2 ADA. In connection with completion of the Tenant Improvements and
thereafter, so long as this Lease continues in effect, Landlord will comply with
Landlord's ADA Compliance Obligations and Tenant will comply with Tenant's ADA
Compliance Obligations. For purposes of the foregoing, the following terms shall
have the following meanings:
(a) "ADA Requirements" shall mean the requirements of Title
III of the Americans with Disabilities Act of 1990 (the "Act"), the
Texas Architectural Barriers Act (the "Texas Act") and all rules and
regulations promulgated with respect thereto, as such Act, Texas Act
and rules and regulations exist on the date of this Lease, and as the
same may be amended thereafter from time to time.
(b) "Landlord's ADA Compliance Obligations" shall mean all
required compliance with ADA Requirements with respect to the Building
shell, access to the Building, all
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Building systems (including, without limitation, mechanical,
electrical, plumbing, and elevator systems) all structural components
of the Building, all Common Areas, and any other portions of the
Building not located within the Leased Premises or the premises of any
other tenant, other than such compliance made necessary by changes in
use of or modifications to the Leased Premises by Tenant.
(c) "Tenant's ADA Compliance Obligations" shall mean,
collectively (i) all required compliance with ADA Requirements with
respect to tenant improvements located in the Leased Premises; plus
(ii) all required compliance with ADA Requirements with respect to any
other portion of the Building or Common Areas to the extent such
compliance is made necessary solely by changes in use of or
modifications to the Leased Premises by Tenant; provided, however, that
Tenant shall not be obligated for compliance with ADA Requirements
respecting the Building or Common Areas outside the Leased Premises
resulting from modifications to the Leased Premises by Tenant unless
Landlord informs Tenant of such compliance obligation at the time
Landlord approves the plans for such modifications.
For purposes of this Paragraph 4.2, any Building-standard bathrooms located on a
floor wholly occupied by Tenant, which, if located on a multi-tenant floor would
be available for use by all tenants of the Building, shall be deemed Common
Areas for purposes of this Paragraph 4.2 unless the design, lay-out or fixturing
of such bathrooms has been modified by Tenant, in which event such bathrooms
shall be deemed part of the Leased Premises for purposes of this Paragraph 4.2.
4.3 ACCEPTANCE. The taking of possession of the Leased Premises by
Tenant on the Fixturing Date shall be conclusive evidence that Tenant accepts
the Leased Premises "as-is," and the Leased Premises were in good and
satisfactory condition and suitable for the use intended by Tenant at the time
such possession was taken, subject to:
(a) the provisions of the Certificate of Substantial
Completion and the "Punch List" as prepared by Tenant's Architect (as
hereinafter defined in Exhibit D);
(b) all of Landlord's warranties and obligations with respect
to the Building and the Leased Premises as set forth elsewhere in this
Lease and the Exhibits hereto (including those warranties set forth in
Paragraph 1.1(c) and Section 2.08 of Exhibit D to this Lease); and
(c) any latent defects (i.e., defects not reasonably
detectable by the inspection of the Leased Premises contemplated by
Section 2.07 of Exhibit D to this Lease) in either the Base Building
Condition or the Leased Premises not otherwise identified at the time
of such possession, but, with respect to the Leased Premises only (and
not the Base Building Condition), those defects must be identified in
writing to Landlord not less than two (2) weeks prior to the first
(1st) anniversary of the date of Substantial Completion of the Tenant
Improvements.
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ARTICLE V. OPERATIONS: UTILITIES: SERVICES
5.1 OPERATION. Landlord shall operate the Building in accordance with
standards customarily followed in the operation of comparable commercial office
buildings in the Dallas, Texas area.
5.2 HOURS OF OPERATION. The Building will be open from 7:30 a.m. to
6:00 p.m., Monday through Friday, and from 8:00 a.m. to 1:00 p.m. on Saturday,
holidays excepted ("Business Hours"). The Building will be closed on Sundays and
on the following holidays: New Year's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, Christmas Day and other days as are locally observed by
landlords in comparable commercial office buildings in the Dallas, Texas area.
Tenant shall have access to the Leased Premises 24 hours per day every day of
the week.
5.3 UTILITIES AND SERVICES. Landlord shall provide Tenant with the
following utilities and services:
(a) Central heat and air-conditioning, in season, during
Business Hours at such temperatures and in such amounts as may be
required to reasonably heat or cool the Leased Premises at expected
occupant densities for a Class "A" office environment under normal
outside weather conditions (for the time of year), subject to and in
accordance with the "HVAC Design Criteria" specified in Exhibit D-3 to
Exhibit D hereto. Landlord reserves the right to prohibit the use of
machines and equipment that would cause Tenant's use of the Leased
Premises to exceed the HVAC Design Criteria, unless and until
arrangements are made by Tenant, acceptable to Landlord, to obtain and
install in the Leased Premises at Tenant's cost supplementary
air-conditioning equipment, and the cost of operation and maintenance
of such equipment shall be paid by Tenant on the Base Rent payment
dates at Landlord's cost therefor (without profit xxxx-up by Landlord).
For avoidance of doubt, Landlord shall review the final drawings and
specifications prepared by Tenant's Architect (as hereinafter defined
in Exhibit D) during the time period for such review set forth in the
schedule attached as Exhibit D-2 to Exhibit D, and shall also review
such equipment specifications as provided to Landlord prior to such
review period. If Landlord fails to object within said review period to
the use of the equipment specified by Tenant in such specifications,
such failure to object shall constitute Landlord's agreement that, as
long as the Tenant Improvements are completed in accordance with the
reviewed plans and specifications, and are not modified, Landlord will
not require supplemental HVAC service to be installed and operated at
Tenant's expense solely by reason of the installation and use by Tenant
of such equipment of the types and in the quantities so specified,
unless such supplemental HVAC service is desired by Tenant. Landlord
and Tenant acknowledge that Tenant may not provide to Landlord
specifications or quantities as to every piece of equipment that Tenant
intends to use in the Leased Premises and that Landlord's consulting
engineer may make reasonable assumptions respecting equipment for which
no specifications or quantities are provided. The protections afforded
Tenant by, and the limitations of
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Landlord's rights set forth in, the preceding provisions of this
paragraph are conditioned upon, limited by and subject to the accuracy
of such reasonable assumptions, and Landlord will not be bound to the
extent such reasonable assumptions are not correct. Should Tenant
desire either heating or air-conditioning at times other than Business
Hours, Landlord shall furnish such services as requested by Tenant upon
not less than six (6) hours notice from Tenant, which charges Tenant
shall promptly pay upon invoice from Landlord. Payments for such
additional services shall be deemed additional rental due from Tenant.
Landlord and Tenant agree that the rate to be charged to Tenant during
the first twelve (12) months of the Lease Term for heating, air
conditioning and ventilating service during hours other than Business
Hours shall be Thirty and No/100 Dollars ($30.00) per hour per floor.
Any increase in such charge thereafter shall include only actual
increases in the cost to Landlord of providing such after-hours service
(without profit markup by Landlord).
(b) Hot and cold water to serve the Leased Premises as
required for lavatory and drinking purposes and such other uses as are
permitted pursuant to this Lease.
(c) Janitorial services five (5) nights per week (as
determined by Landlord), excluding holidays, in accordance with the
janitorial specifications attached as Exhibit L hereto.
(d) Electricity to the Leased Premises sufficient to meet the
"Electrical Design Criteria" as defined in Exhibit D-3 to Exhibit D
attached hereto.
(e) Standard passenger and freight elevator service, if
applicable, when the Building is open, and at least one passenger
elevator when the Building is closed.
(f) Security for the Building, which shall consist of (i) a
card-key access system limiting access to the Building during other
than Business Hours and (ii) a roving night guard who cruises the
Building and parking areas between the hours of 4:00 p.m. and 11:59
p.m., Monday through Friday, and 8:00 a.m. and 1:00 p.m. on Saturday.
(g) Building standard routine maintenance of all common and
service areas of the Building and of the elevators, mechanical,
electrical (including replacement of Building standard fluorescent and
incandescent bulbs in the Common Areas of the Building and throughout
the Leased Premises), plumbing, and other standard component systems
and equipment of the Building.
Landlord shall not be obligated to furnish services or utilities, other than
those specified in this Paragraph 5.3. If Landlord elects to furnish services or
utilities requested by Tenant in addition to those specified in this Paragraph
5.3, Tenant shall pay to Landlord a charge therefor as hereinafter provided
within ten (10) days after receipt of Landlord's invoices therefor. If Tenant
shall fail to make any such payment, Landlord may, upon written notice to Tenant
as provided in Paragraph 23.1 of this Lease, and in addition to Landlord's other
remedies under this Lease, discontinue any or all
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of the additional services. Except as otherwise expressly provided in this
Lease, all additional utilities and services shall be provided at a rate equal
to Landlord's cost in providing such utilities and services (without profit
markup by Landlord).
5.4 INTERRUPTION OF SERVICES. Landlord shall not be in default under
this Lease and shall not be liable to Tenant for failure to provide services
pursuant to this Article if failure to provide the services is caused by factors
outside of Landlord's reasonable control. Notwithstanding the foregoing or
anything to the contrary in this Lease, in the event of an interruption for any
reason other than Force Majeure or act or omission by Tenant or its agents,
employees or contractors in the aforementioned central heat and air
conditioning, plumbing, or electrical services serving the Leased Premises which
renders the Leased Premises or any part thereof not reasonably usable by Tenant
(and such part of the Leased Premises is in fact not used by Tenant solely by
reason of such interruption, except for such limited use as Tenant may require
on an emergency basis) in the ordinary conduct of its business for any period in
excess of five (5) consecutive business days after Landlord has received written
notice from Tenant as provided in Paragraph 23.1 of this Lease of such
interruption, Base Rent and Additional Rent shall be abated proportionately
thereafter until such time as Landlord restores such interrupted utilities and
services or otherwise provides substantially the same service by temporary or
alternative means (such temporary or alternative service reasonably allowing
Tenant to use the Leased Premises for general office purposes in a manner
consistent with such use under circumstances in which such temporary or
alternative means are not required). If such interruption of the utilities and
services renders the entire Leased Premises not reasonably usable (and the
Leased Premises are in fact not used by Tenant solely by reason of such
interruption, except for such limited use as Tenant may require on an emergency
basis) for a continuous period in excess of forty-five (45) consecutive business
days, or for ninety (90) or more business days (whether or not consecutive) in
any twelve (12) month period, in each case following such written notice to
Landlord of each occurrence of such interruption, then, in addition to any
rental abatement, Tenant shall be entitled to terminate this Lease by giving
Landlord twenty-four (24) hours written notification, to be given during such
period of interruption, and Tenant shall have no further obligation or liability
to Landlord under this Lease (other than amounts outstanding under this Lease
that existed prior to the interruption of such utilities and services).
5.5 METERING ELECTRICITY. If Landlord shall determine that Tenant's
proposed or actual consumption of electricity is in excess of what the standard
consumption would be for general office use during Business Hours, then Landlord
may either charge Tenant directly for such excess services or require Tenant to
enter into a contract for electrical service to the Leased Premises directly
with the provider of electrical service to the Building. Tenant shall pay the
entire cost and expense of installing and maintaining meters, panels, wiring and
other items required to accommodate excess services to Tenant. For avoidance of
doubt and notwithstanding the foregoing, Landlord shall review the Drawings and
Specifications prepared by Tenant's Architect and any equipment specifications
and quantities provided by Tenant to Landlord five (5) days after Tenant
furnishes same to Landlord (per the schedule in Exhibit D-2 to Exhibit D) to
determine if Tenant's estimated consumption of electricity during Business Hours
with respect to the quantities of equipment so disclosed to Landlord will exceed
the "Electrical Design Criteria" (as specified in Exhibit D-3 to
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Exhibit D) and shall advise Tenant of its findings. If Landlord's review
determines that Tenant's estimated consumption of electricity will not exceed
the Electrical Design Criteria, such determination shall be conclusive evidence
that Tenant's actual consumption of electricity will not require supplemental
metering, and Landlord shall have no right (i) to charge Tenant directly for
such excess services with respect to the use of such equipment in such
quantities during Business Hours, (ii) to require Tenant to enter into a
contract for electrical service with respect to such equipment use, or (iii) to
require Tenant to pay for separate metering with respect to such equipment use.
If Landlord's review determines that Tenant's estimated consumption of
electricity will exceed the Electrical Design Criteria, Tenant shall have the
option of revising its Drawings and Specifications and its equipment
specifications and quantities to reduce its estimated consumption of
electricity. Landlord shall not charge Tenant for consumption of electricity
that is separately metered pursuant to this paragraph in an amount greater than
Landlord's average cost at the Building for electrical consumption during the
period for which such charge is assessed (without profit xxxx-up by Landlord),
which charges Tenant will promptly pay upon invoice from Landlord. If Tenant
disputes Landlord's requirement for any supplemental metering of electricity,
then either party may submit the subject matter of such dispute to binding
arbitration by the American Arbitration Association office in Dallas, Texas, in
accordance with the Construction Industry Rules thereof.
ARTICLE VI. REPAIRS AND MAINTENANCE
6.1 LANDLORD'S OBLIGATIONS. Landlord shall keep and maintain in good
repair and working order and make all repairs to and perform necessary
maintenance upon the structural components and elements, and electrical,
plumbing and mechanical systems (including such electrical, plumbing and
mechanical systems installed within the Leased Premises as part of the Base
Building Systems and Tenant Improvements pursuant to Exhibit D-1 and, in part,
Exhibit D-3 of Exhibit D, but not including supplemental HVAC equipment or
systems installed solely pursuant to Section 5.3(a) or as desired by Tenant) of
the Building and all parts and appurtenances, which are required in the normal
maintenance and operation of the Building consistent with the standards of a
Class "A" office building in the North Dallas Tollway/LBJ Freeway corridor in
Dallas, Texas. The cost and expense of any maintenance or repair to the Building
or such systems necessary due to the acts or omissions of Tenant or Tenant's
agents, employees, contractors, invitees, licenses or assignees, shall be
reimbursed by Tenant to Landlord upon demand as Additional Rent.
6.2 TENANT'S OBLIGATIONS. Tenant, at its sole cost and expense, shall
keep and maintain in good repair and working order and make all repairs to and
perform necessary maintenance within and upon the Leased Premises, including
Tenant's improvements, and all parts and appurtenances thereof (except for the
aforementioned electrical, plumbing and mechanical systems installed by Landlord
or Landlord's Contractor within the Leased Premises as part of the Base Building
Systems and Tenant Improvements pursuant to Exhibit D-1 and, in part, Exhibit
D-3 of Exhibit D, but Tenant shall be responsible for maintaining at its expense
any supplemental HVAC equipment or systems installed solely pursuant to Section
5.3(a) or as desired by Tenant), which are required in the normal maintenance
and operation of the Leased Premises.
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ARTICLE VII. ALTERATIONS: TENANT'S PROPERTY
7.1 ALTERATIONS BY TENANT. Tenant shall not, without Landlord's
approval, make any alterations, additions or improvements in or on the Leased
Premises. All alterations, additions or improvements to the Leased Premises made
by Tenant shall become the property of Landlord at the expiration of the term of
this Lease. Landlord reserves the right to require Tenant to remove any
alteration, improvement or addition made to the Leased Premises by Tenant, and
to repair and restore the Leased Premises to a condition substantially
equivalent to the condition of the Leased Premises prior to any such alteration,
addition or improvement, provided, however, that the foregoing shall not apply
to the Tenant Improvements installed by Landlord pursuant to Exhibit D, unless
Landlord expressly discloses to Tenant in writing at the time of the approval
thereof that such removal shall be required, or to any other alterations,
additions or improvements made with Landlord's approval, unless Landlord
expressly discloses to Tenant in writing at the time of the approval thereof
that such removal shall be required. Landlord agrees that it will not require
such removal unless the alteration, addition or improvement shall make the cost
of renovating the Leased Premises for office use following the expiration or
termination of this Lease materially more expensive than if such alteration,
addition or improvement had not been made. By way of illustration and not
limitation, the installation of raised flooring for a computer room,
interconnecting stairwell, additional toilet rooms, health club or any other
item that is required to be removed by an express provision of this Lease would
constitute alterations, additions or improvements that would make the cost of
renovating the Leased Premises following expiration or termination of this Lease
materially more expensive, but partitioning, special entry lobby features such
as a plaster or sheetrock ceiling (provided ceiling height is maintained at nine
(9) feet), special lighting or special partition finishes or surfaces (such as
glass block) would not.
7.2 CONTRACTORS' INSURANCE REQUIREMENTS. In the event Landlord gives
its approval to Tenant pursuant to Paragraph 7.1, Tenant shall require any third
party vendor or contractor performing work on the Leased Premises to carry and
maintain at no expense to Landlord: (a) Commercial General Liability Insurance
with a combined single limit of $1,000,000 bodily injury and property damage per
occurrence; (b) Auto Liability insurance with a combined single limit of
$1,000,000; and (c) Workers' Compensation insurance in accordance with
applicable state law and Employer's Liability insurance with limits of not less
than $100,000/$100,000/$500,000. Tenant shall obtain a Certificate of Insurance
prior to commencement of work and Landlord and Tenant are to be additional
insureds as respects the liability coverages.
7.3 TENANT'S PROPERTY. Tenant, at its expense and at any time and from
time to time, may install in and remove from the Leased Premises its trade
fixtures, equipment, removable walls and wall systems, furniture and
furnishings, provided such installation or removal is accomplished without
damage to the Leased Premises or the Building and the installation does not
interfere with the other tenants and their guests use of the Building. On or
prior to the termination date, Tenant shall remove all of Tenant's property from
the Leased Premises and repair any damage to the Leased Premises caused by such
removal. All property of Tenant remaining on the Leased Premises after the
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expiration of the term of this Lease shall be deemed to have been abandoned and
may be removed by Landlord, and Tenant shall reimburse Landlord for the cost of
such removal.
ARTICLE VIII. HAZARDOUS MATERIALS
8.1 TENANT'S OBLIGATIONS AND LIABILITIES. Tenant shall not cause or
permit any Hazardous Material to be brought upon, kept or used in or about the
Building or the Property by Tenant, its agents, employees, contractors, or
invitees (except for such minimal quantities as are normal and reasonable for a
general office occupancy, provided the use, storage and disposition thereof
shall at all times be in strict compliance with the requirements of applicable
laws, ordinances, codes, rules and regulations). If Tenant breaches the
foregoing covenant, Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims, judgments, damages, penalties, fines, costs or
liabilities (including, without limitation, diminution in value of the Building
or the Property, damages for the loss or restriction on use of rentable or
usable space or of any amenity of the Building or the Property, damages arising
from any adverse impact on marketing of space, and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees) which arise during or
after the Lease Term as a result of such contamination. This indemnification of
Landlord by Tenant, includes, without limitation, costs incurred in connection
with any investigations of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Property. Without limiting the foregoing, if the
presence of Hazardous Material in the Building or on the Property caused by
Tenant results in any contamination of the Building or the Property, Tenant
shall promptly take all actions at its sole expense as are necessary to return
the Building and the Property to the conditions existing prior to the
introduction of any such Hazardous Material in the Building or the Property,
provided that Landlord's approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as such actions would not
potentially have any material adverse long-term or short-term effect on the
Building or the Property. The foregoing indemnity shall survive the expiration
or earlier termination of this Lease.
8.2 DEFINITION. As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste, including, but not limited to
those substances, materials and wastes listed in the United States Department of
Transportation Hazardous Materials Table (49 CFR 172.101) or by the
Environmental Protection Agency as hazardous substances (40 CFR Part 261) and
amendments thereto, or such substances, materials and wastes that are or become
regulated under any applicable local, state or federal law.
8.3 INSPECTION. Landlord and its agents shall have the right, but not
the duty, to inspect the Leased Premises at any time to determine whether Tenant
is complying with the terms of this Lease. If Tenant is not in compliance with
this Lease, Landlord shall have the right to immediately enter upon the Leased
Premises to remedy any contamination caused by Tenant's failure to comply,
notwithstanding any other provisions of this Lease. Landlord shall use its best
efforts to minimize interference with Tenant's business but shall not be liable
for interference caused thereby.
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8.4 DEFAULT. Any default under this Article VIII shall be a material
default enabling Landlord to exercise any of the remedies set forth in this
Lease, notwithstanding the notice and cure provision of Paragraph 23.1 (which
shall not be applicable hereto); provided, however, that Landlord shall first
have notified Tenant in writing of Tenant's default under any provision of this
Article VIII and Tenant shall have failed to cure such default within twenty
(20) days after receipt thereof from Landlord (unless, (x) with respect to such
default which cannot in the exercise of reasonable diligence be cured within
twenty (20) days, Tenant, in good faith, after receiving such notice, shall have
commenced and thereafter diligently performed all action necessary to cure such
default or (y) with respect to such default that results in an emergency
condition, Tenant fails to remove such emergency condition immediately).
8.5 LANDLORD WARRANTY. Landlord represents and warrants as of the
Fixturing Date that, (i) to the best of its knowledge and belief, based in part
on that certain report, dated May 22, 1997, prepared by ATC Associates, inc.,
there are no Hazardous Materials located on or under the Property, the Building
or the Leased Premises; and (ii) Landlord has not received notice from any
governmental agency, entity, or other person regarding violations with respect
to any Hazardous Materials or laws or regulations regulating Hazardous
Materials. Landlord shall indemnify Tenant against all reasonable costs actually
incurred by Tenant to comply with applicable laws and regulations relating to
Hazardous Materials, to the extent any Hazardous Materials are located in, on or
under the Property, the Building or the Leased Premises as a result of
Landlord's actions prior to the Fixturing Date or to the extent Landlord causes
or permits Hazardous Materials to be brought on or into the Property, the
Building or the Leased Premises during the Lease Term by persons other than
Tenant, or its agents, employees, contractors, subtenants, invitees or
licensees.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Tenant shall not assign, transfer or encumber this Lease or any part
hereof and shall not sublet, grant licenses or concessions, nor allow any other
occupant to come in, with or under Tenant, nor shall Tenant permit this Lease or
the leasehold estate hereby created to become vested in or owned by any other
person, firm or corporation by operation of law or otherwise without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed. For purposes of this Article IX, Landlord shall be
deemed to have been reasonable in withholding its consent to a proposed
assignment or sublease if Landlord bases its withholding of consent on such
factors (by way of illustration and not limitation) as the identity and business
reputation of the proposed assignee or subtenant, the relationship of the
proposed assignee or subtenant to the tenant mix in the Building, the type or
nature of the proposed assignee's or subtenant's business, the creditworthiness
of the proposed assignee or subtenant, written objection by another tenant of
the Building to such assignment or subletting, and any agreement or leasing
restrictions with existing tenants or other third parties that prohibit Landlord
from leasing to the proposed assignee or subtenant. If Tenant is a corporation
or limited liability company, then any type of transfer or assignment, whether
by merger, consolidation, liquidation, or otherwise, or any change in the
ownership or power to vote a majority of Tenant's outstanding voting stock shall
constitute a prohibited assignment for the purposes of this Article IX.
Acceptance of rent by Landlord from
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anyone other than Tenant shall not be construed as a waiver by Landlord of the
actions prohibited by this Article IX, nor as a release of Tenant from any
obligation or liability under this Lease. In the event Landlord consents to an
assignment or sublet by Tenant, Tenant shall not be relieved from its
obligations under this Lease.
In lieu of giving any consent to a sublet or an assignment of all the
Leased Premises, Landlord may, at Landlord's option, elect to terminate this
Lease. In the case of a proposed subletting of a portion of the Leased Premises,
Landlord may, at Landlord's option, elect to terminate the Lease with respect to
that portion of the Leased Premises being proposed for subletting. The effective
date of any such termination shall be thirty (30) days after the proposed
effective date of any proposed assignment or subletting. In the event Landlord
within one (1) year of such termination enters into a lease for the portion of
the Leased Premises for which the Lease has been so terminated with the person
or entity to whom Tenant has proposed to assign this Lease or sublease the
subject portion of the Leased Premises, then Landlord shall pay to Tenant fifty
percent (50%) of any subrentals or assignment fees or other rentals attributable
to the terminated portion of the Term in excess of the rental provided in this
Lease with respect to the subject portion of the Leased Premises for such
terminated portion of the Term, after deduction therefrom of Landlord's
out-of-pocket costs of such reletting attributable to such terminated portion of
the Term, including, without limitation, reasonable brokerage commissions and
fees, attorneys' fees, and tenant improvement costs.
The option to consent or not consent to a proposed assignment or
sublease or to terminate this Lease, or this Lease with respect to the subject
space, as the case may be, shall be exercisable by Landlord in writing within a
period of fifteen (15) days after Landlord's receipt of Tenant's written request
for such consent, together with a copy of the proposed sublease or assignment
and such other information as Landlord may reasonably require to evaluate
Tenant's request. Failure to elect to consent, not consent or terminate within
such fifteen (15) day period shall entitle Tenant to send Landlord a notice
advising Landlord that, if Landlord does not elect to consent, not consent or
terminate within three (3) business days after Landlord's receipt of such second
notice, such failure shall be deemed Landlord's consent to the proposed
assignment or sublease.
Fifty percent (50%) of any proceeds in excess of Base Rent and Tenant's
Additional Rent which is received by Tenant pursuant to an assignment of
subletting consented to by Landlord, less reasonable brokerage commissions
actually paid by Tenant, and less other reasonable costs incurred by Tenant in
connection with making the space available for lease, shall be remitted to
Landlord as extra rent within 10 days of receipt by Tenant. For purposes of this
paragraph, all money or value in whatever form received by Tenant from or on
account of any person or entity as consideration for an assignment or subletting
shall be deemed to be proceeds received by Tenant pursuant to an assignment or
subletting.
Notwithstanding anything to the contrary in this Article IX, Tenant
shall have the right to assign this Lease or sublet the Leased Premises without
notice (except as hereinafter provided) to or consent by Landlord to any firm,
person, corporation, partnership, limited liability company, trust or other
entity which controls, is controlled by, or is under common control with Tenant,
Richmont
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Marketing Specialists, Inc., or Richmont Corporation (a "Tenant Affiliate"), or
into which or with which Tenant shall merge or consolidate, or which acquires
all or substantially all of the stock or assets of Tenant, provided (i) the
assignee or transferee's verifiable tangible net worth after any such merger,
consolidation, or asset acquisition shall not be less than Tenant's verifiable
tangible net worth immediately prior to such transaction, (ii) such Tenant
Affiliate or other permitted assignee or transferee must conduct a business in
the Leased Premises consistent with the character of the Building, and (iii)
Tenant gives Landlord written notice of such assignment or subletting not later
than thirty (30) days after the effective date thereof. The terms "control,"
"controlling," and "controlled by," as used in the immediately preceding
sentence, means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of any firm, person,
corporation, partnership, limited liability, trust or other entity (whether
through the ownership of voting securities, by contract or otherwise). No such
subletting or assignment shall relieve Tenant of its primary liability under
this Lease.
ARTICLE X. CASUALTY OR EMINENT DOMAIN
10.1 DAMAGE TO PROPERTY. If the Leased Premises are made substantially
untenantable by fire or other casualty, Landlord shall engage a registered
architect to provide to both Landlord and Tenant within forty-five (45) days of
the casualty date an estimate of the time needed to restore the Leased Premises
to tenantability, and Landlord shall provide to Tenant such estimate and all
other relevant information in Landlord's possession within five (5) days after
Landlord's receipt thereof. If the time needed to restore the Leased Premises
(including the Tenant Improvements as originally constructed pursuant to Exhibit
D) to tenantability exceeds one hundred fifty (150) days, or if the restoration
would commence during the last twelve (12) months of the Lease Term, then either
Tenant or Landlord may elect to terminate this Lease as of the date of such fire
or other casualty by delivery of notice of termination to the other party within
twenty (20) days after Tenant's receipt of the architect's estimate.
If the Leased Premises are damaged by fire or other casualty but are
not made substantially untenantable, then Landlord shall proceed with reasonable
diligence to repair and restore the Leased Premises (including the Tenant
Improvements as originally constructed pursuant to Exhibit D), other than
leasehold improvements paid for by Tenant, unless such damage occurs during the
last six (6) months of the Lease Term, in which event Landlord or Tenant shall
have the right to terminate this Lease as of the date of such fire or other
casualty by delivery of written notice of termination to the other party within
thirty (30) days after said casualty date.
Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed to secure debt covering
the Leased Premises or Building requires that any insurance proceeds in excess
of $500,000.00 be paid to it, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within thirty
(30) days after such requirement is made by any such holder, whereupon the Lease
shall end on the date of such damage as if the date of such damage were the date
originally fixed in this Lease for the expiration
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of the Term. Notwithstanding the foregoing, Landlord shall not terminate this
Lease unless Landlord also terminates the leases of all Building tenants in
effect at such time, including the lease of Hartford Fire Insurance Company, if
such lease is then in effect.
10.2 RENT ABATEMENT. Commencing with the date of such casualty, the
Base Rent and Additional Rent provided for herein shall xxxxx pro rata to the
extent that, and for so long as, any portion of the Leased Premises are not
reasonably usable by Tenant in the ordinary conduct of its business; provided,
however, that if the casualty if due primarily to the act or neglect of Tenant,
its employees, agents or contractors, such abatement shall be limited to the
amount of rent insurance proceeds available to Landlord on account of abated
rent for the Leased Premises.
10.3 EMINENT DOMAIN. In the event the whole or any substantial part of
the Building or the Leased Premises shall be taken or condemned by any competent
authority for any public or quasi-public use or purpose, this Lease shall
terminate as of the date of the taking of possession by the condemning
authority, and rent shall be apportioned as of said date. In the event less than
a substantial part of the Building or the Leased Premises shall be taken or
condemned for any public or quasi-public use or purpose so as to render the
Leased Premises or any part thereof not reasonably usable by Tenant in the
ordinary conduct of its business, or if any adjacent property or street shall be
condemned or improved in such manner as to require the use of any part of the
Leased Premises or the Building, then at the election of Landlord expressed by
delivery of written notice to Tenant within ninety (90) days after said date of
taking, condemnation or improvement, this Lease shall terminate as of said date
without any payment to Tenant therefor. All income, rent, awards or interest
derived from any such taking or condemnation shall belong to and be the property
of Landlord, and Tenant hereby assigns Tenant's interest, if any, in such award
to Landlord.
Notwithstanding the foregoing, Tenant shall have all rights permitted
under the laws of the State of Texas to appear, claim and prove in proceedings
relative to such taking (i) the value of any fixtures, furnishings, and other
personal property which are taken but which under the terms of this Lease Tenant
is permitted to remove at the end of the Lease Term, (ii) the unamortized cost
(such costs having been amortized on a straight line basis over the lease term
excluding any renewal term) of Tenant's Improvements which are taken that Tenant
is not permitted to remove at the end of the Lease Term and which were installed
solely at Tenant's expense (i.e., not paid for by Landlord or purchased with
Landlord's Allowance for Tenant Improvement Costs), and (iii) relocation and
moving expenses, but not the value of Tenant's leasehold estate created by this
Lease; provided, however, that no such claim will be permitted to the extent it
diminishes the award Landlord receives from the condemning authority. If this
Lease is terminated in accordance with this Paragraph 10.3, the Base Rent and
the Additional Rent shall be apportioned on a per diem basis and shall be
payable through the effective date of the termination.
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ARTICLE XI. INDEMNIFICATION AND INSURANCE
11.1 INDEMNIFICATION. Except as otherwise expressly provided in this
Lease, Landlord shall not in any event be responsible for loss of property from
or for damage to person or property occurring in or about the Leased Premises,
however caused, including but not limited to any damage from steam, gas,
electricity, water, plumbing, rain, snow, leakage, breakage or overflow, whether
originating in the Leased Premises, premises of other tenants, or any part of
the Building whatsoever.
Tenant agrees to indemnify and hold harmless Landlord from and against
all claims of whatever nature arising from any accident, injury or damage to
person or property during the Term of this Lease in or about the Leased Premises
or arising from any accident, injury or damage to personal property occurring
outside the Leased Premises but within the Building or the Property, where such
accident, injury or damage results or is claimed to have resulted from an act,
omission or negligence on the part of Tenant, or on the part of any of its
licensees, agents, invitees, servants or employees. This indemnity agreement
shall include indemnity against all costs, claims, expenses, penalties, liens
and liabilities including attorney's fees incurred in or in connection with any
such claims or proceedings brought thereon and the defense thereof.
Notwithstanding anything in this Paragraph 11.1 to the contrary, Tenant shall
have no obligation to indemnify and hold Landlord harmless from and defend
Landlord against any claim or liability for any injury or death to any person or
damage to any property arising from (i) any acts of gross negligence or
intentional tort committed by Landlord or its agents, employees or contractors;
or (ii) any acts of negligence committed by Landlord or its agents, employees or
contractors, but only to the extent such acts of negligence have been found to
be the acts of Landlord or its agents, employees or contractors and to be the
primary cause of the damage or injury that is the subject of the claim and such
finding is entered as a final, nonappealable judgment against Landlord.
Landlord agrees to indemnify and hold harmless Tenant from and against
all claims of whatever nature arising from any accident, injury or damage to
person or property occurring outside the Leased Premises but within the Building
or the Property where such accident, injury or damage results or is claimed to
have resulted from an act, omission or negligence on the part of Landlord, or on
the part of any agent, employee or contractor of Landlord. This Indemnity
Agreement shall include indemnity against all costs, claims, expenses,
penalties, liens and liabilities including attorneys' fees incurred in or in
connection with any such claims or proceedings brought thereon and the defense
thereof. Notwithstanding anything in this Paragraph 11.1 to the contrary,
Landlord shall have no obligation to indemnify and hold Tenant harmless from and
defend Tenant against any claim or liability for any injury or death to any
person or damage to any property arising from (i) any acts of gross negligence
or intentional tort committed by Tenant or its agents, employees or contractors;
or (ii) any acts of negligence committed by Tenant or its agents, employees or
contractors but only to the extent such acts of negligence have been found to be
the acts of Tenant or its agents, employees or contractors and to be the primary
cause of the damage or injury that is the subject of the claim and such finding
is entered as a final, nonappealable judgment against Tenant.
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11.2 TENANT'S INSURANCE. Tenant will maintain Commercial General
Liability insurance with respect to the Leased Premises naming Landlord as
additional insured, with a combined single limit of $2,000,000 bodily injury and
property damage per occurrence and $2,000,000 aggregate limit applicable to this
location, and Auto Liability insurance with a combined single limit of
$2,000,000. This insurance coverage shall extend to any liability of Tenant
arising out of the indemnities provided for in this Lease. Landlord and
Landlord's mortgagee, if any, shall be named as an additional insured and the
insurance shall be primary to any insurance maintained by Landlord, without
contribution; provided, however, that Tenant shall have no obligation to name
Landlord's mortgagee, if any, as an additional insured unless Landlord requests
such in writing. Tenant shall deliver to Landlord a Certificate of Insurance at
least seven (7) days prior to the commencement of the term of this Lease and a
renewal certificate at least seven (7) days prior to the expiration of the
Certificate it renews. Said Certificate must provide thirty (30) days prior
notice to Landlord in the event of material change or cancellation. Tenant also
agrees to maintain broad form Commercial Property insurance coverage under ISO
form CP1030 or like coverage under a non-ISO form covering all Tenant's personal
property, improvements and betterments to their full replacement value and
Worker's Compensation insurance in accordance with applicable state law and
Employer's Liability insurance with limits of not less than
$100,000/$100,000/$500,000. Tenant agrees that if its use and occupancy of the
Leased Premises cause the property insurer to raise premiums as a result of such
use or occupancy, then Tenant will directly reimburse Landlord for the cost of
such increased premium. Tenant agrees to comply with all reasonable
recommendations from any insurer of the property that result as a direct result
of Tenant's use of the Leased Premises.
11.3 SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold
harmless agreement contained herein shall survive the expiration or termination
of this Lease.
11.4 LANDLORD'S INSURANCE. Landlord shall at all times during the Lease
Term carry the casualty insurance required by the deed of trust or mortgage, if
any, covering the Property, including the Building, and all improvements
constructed therein or elsewhere on the Property (which casualty insurance as of
the effective date of this Lease is builder's risk insurance in an amount at
least equal to the replacement cost of the Building, but not less than the
balance that is owed under the mortgage). Landlord shall at all times during the
term of this Lease maintain commercial general liability insurance as required
by said deed of trust or mortgage, if any. Said casualty and commercial general
liability insurance shall be maintained at the expense of Landlord (subject to
Paragraph 2.3) with an insurance company(ies) licensed to do business in Texas,
which insurer shall be financially sound.
ARTICLE XII. RIGHT OF ENTRY
Landlord reserves the right to use the Building and every part thereof,
and Tenant shall permit access to the Leased Premises to Landlord, Landlord's
property manager or Landlord's agents or attorneys at all reasonable times and
upon reasonable advance notice to Tenant (except in emergencies) for inspection
and cleaning and from time to time to repair as provided in Paragraph 6.1,
maintain, alter, improve and remodel the Building and each part thereof; Tenant
shall not be
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entitled to any compensation, damages or abatement or reduction in rent on
account of any such repairs, maintenance, alterations, improvements or
remodeling. Landlord reserves the right at any time and from time to time to
enter and be upon the Leased Premises for the purpose of examining same.
Landlord shall have the right, at reasonable hours, and upon six (6) hours
advance notice to Tenant, to enter upon the Leased Premises or exhibit the same
to prospective tenants, lenders or insurers. Landlord will cooperate with Tenant
so that any entry into the Leased Premises by Landlord permitted under this
Article XII will not unreasonably interfere with the conduct of Tenant's
business in the Leased Premises, and Tenant will cooperate with Landlord to
accommodate Landlord's need to make repairs, maintenance, alterations,
improvements or remodeling in a timely and cost effective manner. Landlord shall
take commercially reasonable precautions to mitigate the disruption of Tenant's
operations in the Leased Premises resulting from any entry permitted under this
Article XII during Business Hours.
ARTICLE XIII. PROPERTY LEFT ON THE LEASED PREMISES
Upon the expiration of this Lease or if the Leased Premises should be
vacated at any time, or abandoned by Tenant, or this Lease should terminate for
any cause, and at the time of such termination, vacation, abandonment Tenant or
Tenant's agents, or any other person should leave any property of any kind or
character on or in the Leased Premises, the property shall be deemed abandoned.
Landlord, Landlord's property manager or Landlord's agents or attorneys shall
have the right and authority, without notice to Tenant, Tenant's agents, or
anyone else, to remove and destroy or to sell or authorize disposal of such
property, or any part thereof, without being in any way liable to Tenant for the
abandoned property. The abandoned property shall belong to Landlord as
compensation for the removal and disposition of said property.
ARTICLE XIV. SIGNS AND ADVERTISEMENTS
Except as otherwise provided in this Lease or the Exhibits thereto, no
exterior signs, advertisements, posters on windows, decorations or other
fixtures shall be erected by Tenant without the prior written consent of
Landlord. Tenant, at its sole cost and expense, shall be entitled (subject to
Landlord's review and approval) to install appropriate signage, including
Tenants' corporate name and logo, in the elevator lobbies and on entrance doors
to the Leased Premises on all floors occupied entirely by Tenant. Landlord
reserves the right to review and approve the location, color, size,
configuration, materials, workmanship and design of such signage. Upon the
expiration or earlier termination of this Lease, Tenant shall remove all such
signage and shall repair any damage to the Building caused by the installation
or removal of such signage.
ARTICLE XV. NOTICES
Any notice, demand, request, consent, approval or communication under
this Lease shall be in writing and shall be deemed to have been duly given and
received at the time and on the date when personally delivered, or 1 day after
being delivered to a nationally recognized commercial carrier service for
next-day delivery or 3 days after deposit in the United States mail, certified
or registered
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mail with a return receipt requested, with all postage prepaid, addressed to
Landlord or Tenant (as the case may be) at their respective addresses set forth
in the Lease Summary.
ARTICLE XVI. MECHANIC'S LIENS
Tenant and any vendor, contractor or subcontractor performing work on
behalf of Tenant shall keep the Building, the Property, the Leased Premises and
the improvements at all times during the Term of this Lease, free of mechanic's
and materialmen's liens and other liens of like nature. Tenant at all times
shall fully protect and indemnify Landlord against all such liens or claims and
against all attorneys fees and other costs and expenses growing out of or
incurred by reason or on account of any such liens or claims. Should Tenant fail
fully to discharge any such lien or claim, Landlord, in its sole discretion, may
pay the same or any part thereof, and Landlord shall be the sole judge of the
validity of said lien or claim. All amounts so paid by Landlord, together with
interest thereon at the "Prime Rate" (as defined in Paragraph 24.20) plus two
percent (2%) per annum (but not in excess of the maximum lawful rate) from the
time of payment by Landlord until repayment by Tenant, shall be paid by Tenant
upon demand, and if not so paid, shall continue to bear interest at the
aforesaid rate, payable monthly as Additional Rent. Notwithstanding the
foregoing, Tenant shall not have any liability for nor shall Tenant indemnify
Landlord against any such mechanic's or materialmen's liens and other liens of
like nature placed on the Leased Premises, the Property or the Building by
Landlord's Contractor (as hereinafter defined in Exhibit D), or any of
Landlord's Contractor's subcontractors, suppliers, or materialmen, or other
contractors employed by Landlord, arising out of or related in any way to the
Tenant Improvements constructed under Landlord's supervision pursuant to Exhibit
D, to the extent the cost of such Tenant Improvements is to be paid with the
proceeds of Landlord's Allowance for Tenant Improvement Costs (as defined in
Exhibit D). Nothing in the immediately preceding sentence shall relieve Tenant
of any obligation under this Article XVI or elsewhere in this Lease for liens
arising due to Tenant's failure timely to pay Tenant's Costs (as defined in
Exhibit D) as provided in Exhibit D.
ARTICLE XVII. SUBORDINATION; ATTORNMENT; NONDISTURBANCE
17.1 SUBORDINATION. Landlord may, from time to time, grant first lien
deeds of trust, security deeds, mortgages or other first lien security interests
covering its estate in the Building (each a "Mortgage"). Tenant agrees that this
Lease shall be subject and subordinate to each Mortgage, including any
modifications, extensions or renewals thereof and advances thereunder from time
to time in effect. Tenant shall, upon request, from time to time execute and
deliver to Landlord or the holder of any Mortgage any instrument requested by
Landlord or the holder of such Mortgage to evidence the subordination of this
Lease to any such Mortgage, provided, however, that such future lender,
mortgagee, or ground lessor provides to Tenant a commercially reasonable
subordination, non-disturbance, and attornment agreement (Tenant hereby
accepting for such purpose an agreement in the form attached as Exhibit J
hereto). Landlord warrants and represents to Tenant that all existing mortgagees
and ground lessors having an interest in the Building or the Property are
identified on Exhibit K attached hereto.
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17.2 ATTORNMENT. Tenant agrees to recognize and attorn to any party
succeeding to the interest of Landlord as a result of the enforcement of any
Mortgage (including the transferee as the result of a foreclosure or deed in
lieu of foreclosure), and to be bound to such party under all the terms,
covenants and conditions of this Lease for the balance of the Term, including
any extended term, with the same force and effect as if such party were the
original Landlord under this Lease.
17.3 CONFIRMING AGREEMENT. Upon the request of Landlord, Tenant agrees
to execute a subordination and attornment agreement incorporating the provisions
set forth above and otherwise in form reasonably acceptable to Landlord.
Tenant's agreement to subordinate this Lease to any ground lessor or mortgagee
and/or attorn to any party succeeding to the interest of Landlord as provided in
Paragraphs 17.1 and 17.2 above is expressly contingent upon Landlord obtaining
from any such party a commercially reasonable subordination, non-disturbance and
attornment agreement (Tenant hereby accepting for such purpose an agreement in
the form of Exhibit J hereto).
17.4 NONDISTURBANCE. Landlord shall cause any lessor under a future
ground lease or the holder of any present or future Mortgage encumbering the
Building, the Property or both to provide Tenant with an agreement in recordable
form stating that such lessor or holder, as the case may be, will not disturb
Tenant's occupancy of the Leased Premises in the event of a foreclosure of such
Mortgage or a termination of such ground lease, provided there is not a breach
or default by Tenant under this Lease which is not cured within any applicable
cure period. Such agreement must expressly recognize Tenant's right of offset
contained in Paragraph 24.19 of this Lease, recognize Landlord's obligation for
payment of brokerage fees as provided in Paragraph 24.10, and assume Landlord's
obligation to provide Landlord's Allowance for Tenant Improvement Costs due to
Tenant, as provided in Exhibit D. Tenant hereby accepts an agreement in the form
of Exhibit J attached hereto as fully satisfying the requirements of this
Paragraph 17.4.
ARTICLE XVIII. COMPLIANCE WITH LAW
AND RULES AND REGULATIONS
18.1 Tenant, at Tenant's expense, shall comply with all laws, rules,
orders, ordinances, directions, regulations and requirements of federal, state,
county and municipal authorities pertaining to Tenant's use of the Leased
Premises and with the recorded covenants, conditions and restrictions (provided,
however, that Landlord provides a written copy of said covenants, conditions,
and restrictions to Tenant within thirty (30) days after the date of this
Lease), regardless of when they became effective, including, without limitation,
all applicable federal, state and local laws, regulations or ordinance
pertaining to air and water quality, Hazardous Materials (as hereinafter
defined), waste disposal, air emissions and other environmental matters, all
zoning and other land use matters, and utility availability, and any direction
of any public officer or officers, pursuant to law, which shall impose any duty
upon Landlord or Tenant with respect to the use or occupation of the Leased
Premises.
18.2 The rules and regulations attached as Exhibit C ("Rules and
Regulations") are Landlord's Rules and Regulations for the Building. Tenant
shall faithfully observe and comply with
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such Rules and Regulations and such reasonable changes therein (whether by
modification, elimination, addition or waiver) as Landlord may hereafter make
and communicate in writing to Tenant, which shall be necessary or desirable for
the reputation, safety, care or appearance of the Building and the Property or
the preservation of good order therein or the operation or maintenance of the
Building and the Property or the equipment thereof or the comfort of tenants or
others in the Building and the Property. In the event of a conflict between the
provisions of this Lease, the provisions of this Lease shall control.
ARTICLE XIX. LANDLORD'S LIEN
Notwithstanding any of Landlord's statutory or common law
rights, the parties agree that any Landlord's lien and/or security interest in
Tenant's property specifically excludes Tenant's business records. Further,
Landlord agrees to subordinate any liens and/or security interests (including,
but not limited to, the statutory landlord's lien) to any lien securing
financing of Tenant's personal property located in the Leased Premises.
ARTICLE XX. ESTOPPEL CERTIFICATE
Tenant shall from time to time, upon not less than ten (10) days prior
written notice by Landlord, to execute, acknowledge and deliver to Landlord a
statement in writing:
(a) Stating that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the Lease is in
full force and effect as modified and stating the modifications).
(b) Stating the dates to which the rent and other charges
hereunder have been paid by Tenant.
(c) Stating whether or not to the best knowledge of Tenant,
Landlord is not in default in the performance of any covenant,
agreement or condition contained in this Lease, and if so, specifying
any such default of which Tenant may have knowledge.
(d) Stating the address to which notices to Tenant should be
sent pursuant to Article XV of this Lease.
(e) Stating such other matters as Landlord may reasonably
require.
Any such statement delivered pursuant hereto may be relied upon by any
owner of the Building and/or the Leased Premises, any prospective purchaser of
the Building and/or Leased Premises, any mortgagees or prospective mortgagee of
the Building and/or Leased Premises, any prospective assignee of any such
mortgagee, or any prospective purchaser of the Property.
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ARTICLE XXI. HOLDING OVER
Provided Tenant gives Landlord not less than six (6) months advance
notice thereof, Tenant shall be permitted to retain possession of the Leased
Premises after the expiration of the Term of this Lease without any modification
of this Lease or other written agreement between the parties for a period not to
exceed two (2) months after the Expiration Date. Such occupancy shall be
pursuant to all of the terms and conditions of this Lease, except that Tenant
shall pay Base Rent during such period in an amount equal to one hundred
twenty-five percent (125%) of the Base Rent in effect immediately prior to the
expiration of the Term, and except that, after the expiration of such two (2)
month period, the foregoing provisions of this Article XXI shall no longer be
effective. After the expiration of such two (2) month period, Tenant shall
instead be permitted to retain possession of the Leased Premises for an
additional period not to exceed twelve (12) months, under the same terms and
conditions as the initial two (2) month holdover, except that Tenant shall be a
month-to-month tenant (i.e., either Landlord or Tenant may terminate such
tenancy upon not less than thirty (30) days advance written notice), and Tenant
shall pay Base Rent in an amount equal to one hundred seventy-five percent
(175%) of the Base Rent in effect immediately prior to the expiration of the
Term. After the expiration of such twelve (12) month period or earlier
termination of such month-to-month tenancy by Landlord or Tenant, or at any
other time after the expiration or termination of this Lease during which Tenant
remains in occupancy of the Leased Premises without the express right to do so
under this Article XXI, Tenant shall be a tenant-at-sufferance, and (i) until
Tenant relinquishes possession of the Leased Premises, Tenant shall pay rent in
an amount equal to two hundred percent (200%) of the Base Rent in effect
immediately prior to the expiration of the Term, and (ii) Tenant shall pay to
Landlord all direct and consequential damages sustained by reason of Tenant's
retention of possession for lost rentals, leasing fees, advertising costs,
marketing costs, holdover or alternative space rents, tenant finish expense and
relocation costs. There shall be no renewal of this Lease by operation of law.
ARTICLE XXII. TENANT'S STATUS
Tenant represents and warrants to Landlord that:
22.1 POWER AND AUTHORITY. Tenant has the right, power and authority to
execute and deliver this Lease and to perform the provisions hereof and is, to
the extent required, qualified to transact business and in good standing under
the laws of the State of Texas.
22.2 AUTHORIZATION. The execution of this Lease by Tenant, or by the
persons or other entities executing this Lease on behalf of Tenant, and the
performance by Tenant of Tenant's obligations under this Lease in accordance
with the provisions hereof have been, to the extent required, duly authorized by
all necessary action of Tenant.
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ARTICLE XXIII. DEFAULTS AND REMEDIES
23.1 DEFAULT BY TENANT. Tenant shall be in default under this Lease if:
(a) Tenant shall fail to pay when due any Base Rent,
Additional Rent or other payment to be made by Tenant under this Lease
and the failure continues for a period of ten (10) days after notice
from Landlord (provided that Landlord shall only be obligated to give
Tenant notice of any rent default twice in any twelve (12) month
period, and thereafter Tenant shall be deemed in default within ten
(10) days after failure to make such payment without requirement of
notice from Landlord);
(b) Tenant violates or breaches, or fails to fully and
completely observe, keep, satisfy, perform and comply with, any
agreement, term, covenant, condition, requirement, restriction or
provision of this Lease and the violation or breach continues for a
period of twenty (20) days after written notice from Landlord (if the
matter in question is not reasonably susceptible of cure by Tenant
within the twenty-day period, then Tenant shall have such additional
time as may reasonably be necessary, but no more than an additional
seventy (70) days, within which to effect curative action provided that
Tenant institutes the curative action within the twenty-day period and
prosecutes the same diligently to completion);
(c) Tenant becomes insolvent, or makes an assignment for the
benefit of creditors; or any action is brought by Tenant seeking its
dissolution or liquidation of its assets or seeking the appointment of
a trustee, interim trustee, receiver or other custodian for any of its
property.
(d) Tenant commences a voluntary proceeding under the Federal
Bankruptcy Code, or any reorganization or arrangement proceeding is
instituted by Tenant for the settlement, readjustment, composition or
extension of any of its debts upon any terms; or any action or petition
is otherwise brought by Tenant seeking similar relief or alleging that
it is insolvent or unable to pay its debts as they mature; or if any
action is brought against Tenant seeking its dissolution or
liquidations of any of its assets, or seeking the appointment of a
trustee, interim trustee, receiver or other custodian for any of its
property, and any such action is consented to or acquiesced in by
Tenant or is not dismissed within 3 months after the date upon which it
was instituted.
23.2 LANDLORD REMEDIES. Upon the occurrence of a default by Tenant, as
described in Paragraph 23.1 above or elsewhere in this Lease, Landlord shall
have the option to do and perform any one or more of the following, in addition
to, and not in limitation of, any other remedy or right permitted or available
at law or in equity or by this Lease:
(a) Terminate Tenant's right to possession of the Leased
Premises, in which case Tenant shall immediately surrender possession
of the Leased Premises to Landlord. In such event, Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord by
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reason of Tenant's default, including (i) the worth at the time of the
court award of the unpaid Base Rent, Additional Rent and other charges
and additional rentals which had been earned at the time of the
termination; (ii) the worth at the time of the court award of the
amount by which the unpaid Base Rent, Additional Rent and other charges
and additional rentals which would have been earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; (iii) the worth at
the time of the court award of the amount by which the unpaid Base
Rent, Additional Rent and other charges and additional rentals which
would have been paid for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; and (iv) such other amounts as are
necessary to compensate Landlord for the detriment caused by Tenant's
failure to perform its obligations under the Lease, including, but not
limited to, the cost of recovering possession of the Leased Premises,
expenses of reletting, including necessary renovation or alteration of
the Leased Premises, Landlord's reasonable attorneys' fees incurred in
connection therewith, and any real estate commission paid or payable.
As used in subparagraphs (i) and (ii) above, the "worth at the time of
the court award" is computed by allowing interest at the "Prime Rate"
(as defined in Section 24.20) plus two percent (2%) per annum, but not
exceeding the maximum lawful rate. As used in subparagraph (iii) above,
the "worth at the time of the court award" is computed by discounting
such amount at the discount rate of the Federal Reserve Bank situated
nearest to the location of the Building at the time of award plus two
percent (2%).
(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant shall have
abandoned the Leased Premises. In such event, Landlord shall be
entitled to enforce all of Landlord's rights and remedies under this
Lease, including the right to recover the rent as it becomes due
hereunder.
(c) Terminate this Lease. No such termination of this Lease
shall affect Landlord's rights to collect Base Rent, Additional Rent or
other amounts and additional rentals due for the period prior to
termination. In the event of any termination of this Lease, in addition
to any other remedies set forth above, Landlord shall have the right to
recover from Tenant upon such termination damages in an amount
determined as provided in Paragraph 23.2(a) above.
(d) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of Texas.
Landlord's exercise of any right or remedy shall not prevent it from
exercising any other right or remedy. No action taken by or on behalf
of Landlord under this section shall be construed to be an acceptance
of a surrender of this Lease.
(e) For avoidance of doubt, and notwithstanding anything to
the contrary herein, Tenant's liability in connection with any
reletting of the Leased Premises upon the default by Tenant shall not
be increased as a result of reletting costs appropriately allocated and
attributed to any part of a lease term under such reletting that
extends beyond the term of this Lease, as extended (assuming this Lease
were not terminated prior to its scheduled expiration
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date, as extended) (the "Tail Period"). By way of example, Tenant shall
have no liability for any of the following costs to the extent
appropriately allocated and attributed to any such Tail Period: (i)
brokerage fees associated with reletting of the Leased Premises, (ii)
costs of renovation or alterations in the Leased Premises, or (iii) of
Landlord's attorneys' fees.
(f) For avoidance of doubt, Landlord has a duty to mitigate
damages under this Lease when Tenant is in default and either (i)
Tenant has abandoned the Leased Premises, (ii) Tenant has vacated the
Leased Premises or (iii) Tenant's right to possession of the Leased
Premises has been terminated by Landlord in accordance with this Lease.
Landlord and Tenant acknowledge and agree that Landlord shall have
taken "objectively reasonable efforts" to mitigate damages if Landlord
has done the following:
(A) Place the Leased Premises in Landlord's inventory
of available space within forty-five (45) days after Tenant no
longer occupies the Leased Premises following such default
(and the expiration of the applicable notice and cure
periods);
(B) Market Landlord's available inventory (including,
without limitation, the Leased Premises) to area brokers
within forty-five (45) days after Tenant no longer occupies
the Leased Premises following such default (and the expiration
of the applicable notice and cure periods), provided, however,
that Landlord shall be under no obligation to give the Leased
Premises preferential marketing over other available inventory
in the Building;
(C) After (A) and (B) above have been complied with,
advertise the space for lease in a suitable trade journal or
newspaper at least once per month (it being agreed that an
advertisement respecting the availability of space generally
in the Building, without specific reference to the Leased
Premises, will satisfy this requirement); and
(D) After (A) and (B) above have been complied with,
show the space to prospective tenants who request to see it.
23.3 REMEDIES CUMULATIVE. The foregoing remedies are cumulative of, and
in addition to, and not restrictive or in lieu of, the other remedies provided
for herein or allowed by law or in equity, and may be exercised separately or
concurrently, or in any combination, and pursuit of any one or more of such
remedies shall not constitute an election of remedies which shall exclude any
other remedy available to Landlord.
23.4 MISCELLANEOUS. No agreement to accept a surrender of the Leased
Premises and no act or omission by Landlord or Landlord's agents during the Term
shall constitute an acceptance or surrender of the Leased Premises or a
termination of this Lease unless made in writing and signed by Landlord. No
re-entry or taking possession of the Leased Premises by Landlord shall
constitute an election by Landlord to terminate this Lease unless a written
notice of such intention is given to
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Tenant. Landlord's forbearance in pursuing or exercising one or more of its
remedies shall not be deemed or construed to constitute a waiver of any default
or any remedy, and no waiver by Landlord of any right or remedy on one occasion
shall be construed as a waiver of that right or remedy on any subsequent
occasion or as a waiver of any right or remedy then or thereafter existing. No
failure of Landlord to pursue or exercise any of its rights or remedies or to
insist upon strict compliance by Tenant with any term or provision of this
Lease, and no custom or practice at variance with the terms of this Lease, shall
constitute a waiver by Landlord of the right to demand strict compliance with
the terms and provisions of this Lease.
23.5 ATTORNEY'S FEES. In the event of any legal action or proceeding
brought by either party against the other arising out of this Lease, or breach
thereof, the prevailing party shall be entitled to recover reasonable attorneys'
fees and costs incurred in such action (including, without limitation, all costs
of appeal) and such amount shall be included in any judgment rendered in such
proceeding.
23.6 LANDLORD'S DEFAULT. Landlord shall be in default under this Lease
if Landlord breaches any warranty, or any covenant, duty, or obligation required
to be performed by Landlord under this Lease, and the breach continues for a
period of twenty (20) days after notice from Tenant (if the matter in question
is not reasonably susceptible of cure by Landlord within the twenty-day period,
then Landlord shall have such additional time as may reasonably be necessary,
but no more than an additional seventy (70) days, within which to effect
curative action provided that Landlord institutes the curative action within the
twenty-day period and prosecutes the same diligently to completion).
23.7 TENANT'S REMEDIES. Upon the occurrence of a default by Landlord,
as described in Paragraph 23.6 above or elsewhere in this Lease, and provided
such default results in an unsafe condition in the Leased Premises or the
Building posing an imminent threat of, or which in fact causes material harm to,
Tenant, Tenant's leasehold interest in and current and continued use and
occupancy of the Leased Premises, or Tenant's employees or property, Tenant
shall have the option, in addition to, and not in limitation of, any other
remedy or right permitted or available at law or in equity or by this Lease to
cure such default on behalf and at the reasonable expense of Landlord and do all
reasonably necessary work and make all reasonably necessary payments in
connection therewith; provided that Tenant shall not exercise such right to cure
until Tenant has provided Landlord, and any mortgagee described in Article XVII
above, ten (10) business days' written notice of Tenant's intent to cure such
performance or breach, together with a written estimate prepared by an
independent architect, engineer or contractor (or other similar professional) of
the cost of the appropriate curative action. If Landlord or its mortgagee
commences curative action within such ten (10) business day period, Tenant shall
not take any action so long as Landlord or its mortgagee is diligently
prosecuting such action to completion. Landlord shall reimburse Tenant for all
reasonable sums expended by Tenant in effecting such cure, including attorneys'
fees and expenses, but in no event greater than the estimate submitted by Tenant
to Landlord as provided above, within thirty (30) days of Tenant's written
demand to Landlord for payment (such demand accompanied by supporting invoices
and other documentation evidencing payment of such costs by Tenant), together
with interest
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thereon from the date until the date paid at the Prime Rate. In no event shall
any mortgagee of Landlord have any obligation to cure any default of Landlord,
except as may otherwise be expressly provided in any agreement between Tenant
and such mortgagee pursuant to Article XVII hereof.
ARTICLE XXIV. MISCELLANEOUS
24.1 NO PARTNERSHIP. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord and Tenant.
24.2 NO REPRESENTATIONS BY LANDLORD. Neither Landlord, Landlord's
property manager, nor any agent or employee of Landlord has made any
representations or promises with respect to Leased Premises, Building or the
Property except as set forth in this Lease, and no rights, privileges, easements
or licenses are acquired by Tenant except as herein expressly set forth.
24.3 ABANDONMENT. If Tenant shall abandon, vacate, or surrender the
Leased Premises or be dispossessed by process of law, then Landlord may, at its
option (without obligation), either (i) terminate this Lease and cause
possession of the Leased Premises to be returned to Landlord upon demand, or
(ii) terminate this Lease from time to time as to a portion or portions of the
Leased Premises and cause possession of such portion or portions of the Leased
Premises to be returned to Landlord upon demand, without terminating the Lease
as to the balance of the Leased Premises; in the event Landlord terminates this
Lease with respect to a portion of the Leased Premises in accordance with the
foregoing, Landlord shall be responsible for the construction of the demising
wall separating such space from the remainder of the Leased Premises, and
following any termination of this Lease as to a portion or portions of the
Leased Premises, Tenant shall have no further obligation to pay Base Rent or
future Additional Rent (other than Additional Rent attributable to any period
prior to such termination) with respect to such portion or portions of the
Leased Premises, but Tenant shall continue to be liable for all of its
obligations under this Lease with respect to such portion or portions of the
Leased Premises accruing prior to such termination and with respect to all
obligations under this Lease relating to those portions of the Leased Premises
for which this Lease has not been terminated. Landlord's remedies as set forth
in this Paragraph 24.3 shall be Landlord's sole and exclusive remedies at law or
in equity in the event that Tenant abandons, vacates or surrenders the Leased
Premises or is dispossessed by process of law and is not in default under this
Lease.
24.4 SEVERABILITY OF PROVISIONS. If any clause or provision of this
Lease shall be determined to be illegal, invalid or unenforceable under the
present or future laws effective during the term hereof, then and in that event
it is the intention of the parties that the remainder of this Lease shall not be
affected by the invalid clause and shall be enforceable to the fullest extent of
the law, and it is also the intention of the parties to this Lease that in place
of any such clause or provision that is illegal, invalid, or unenforceable there
be added as a part of his Lease a clause or provision as similar in terms to
such illegal, invalid or unenforceable clause or provision as may be possible
and be legal, valid and enforceable.
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24.5 INTERIOR CONSTRUCTION. The construction of Tenant's space,
including any Tenant finish or improvements, shall be completed pursuant to
Exhibit D attached hereto.
24.6 RELOCATION OF LEASED PREMISES. [Intentionally Deleted.]
24.7 BENEFITS AND BURDENS. The provisions of this Lease shall be
binding upon, and shall inure to the benefit of, the parties hereto and each of
their respective representatives, permitted successors and permitted assigns.
Landlord shall have the right, at any time and from time to time, to freely and
fully assign all or any part of its interest under this Lease for any purpose
whatsoever.
24.8 WAIVER OF SUBROGATION. NOTWITHSTANDING ANYTHING CONTAINED IN THIS
LEASE TO THE CONTRARY, LANDLORD AND TENANT HEREBY WAIVE AND RELEASE THEIR
RESPECTIVE RIGHTS OF RECOVERY TO AND SUBROGATION AGAINST THE OTHER FOR ANY
DIRECT OR CONSEQUENTIAL DAMAGE DUE TO ANY INJURY OR LOSS TO THE BUILDING, THE
LEASED PREMISES, OR ANY IMPROVEMENTS (INCLUDING THE TENANT IMPROVEMENTS)
THERETO, OR ANY PERSONAL PROPERTY OF SUCH PARTY THEREIN OR UNDER THE OTHER'S
CONTROL DUE TO FIRE OR OTHER CASUALTY (INCLUDING LIABILITY FOR LOSS OF RENT)
COVERED UNDER A POLICY OR POLICIES OF INSURANCE MAINTAINED BY THE DAMAGED PARTY
(OR WOULD BE COVERED, IF MAINTAINED, BY POLICIES WHICH ARE REQUIRED HEREUNDER OR
WHICH WOULD BE REQUIRED BUT FOR ANY SPECIFIC PROVISIONS FOR SELF-INSURANCE OR
FOR A DEDUCTIBLE), WHETHER OR NOT SUCH DAMAGE IS ATTRIBUTABLE TO THE NEGLIGENCE,
GROSS NEGLIGENCE, OR ACT OF EITHER PARTY OR ITS RESPECTIVE EMPLOYEES, AGENTS,
CONTRACTORS, INVITEES OR LICENSEES. EACH PARTY HERETO AGREES TO ADVISE ITS
INSURERS OF THE FOREGOING WAIVERS, TO HAVE SAID INSURANCE POLICIES PROPERLY
ENDORSED, IF NECESSARY, TO PREVENT INVALIDATION OF SAID INSURANCE COVERAGE BY
REASON OF SUCH WAIVERS, AND TO PROVIDE A COPY OF SUCH WAIVERS TO THE OTHER
PARTY.
24.9 LANDLORD'S LIABILITY. The obligations of Landlord under this Lease
do not constitute personal obligations of Landlord or the individual partners,
joint venturers, directors, officers, members, shareholders or beneficial owners
of Landlord, and Tenant shall look solely to Landlord's equity in the Leased
Premises and to no other assets of Landlord for satisfaction of any liability in
respect to this Lease. Tenant will not seek recourse against Landlord or such
individual entities or such other assets for such satisfaction. As used in this
Lease, the term "Landlord" means only the current owner or owners of the fee
title to the Leased Premises or the leasehold estate under a ground lease of the
Leased Premises at the time in question. Any Landlord who transfers its title or
interest is relieved of all liability with respect to the obligations of
Landlord under this Lease to be performed on or after the date of transfer.
24.10 BROKERAGE. This Lease has been negotiated through the agency of,
and Tenant warrants and represents to Landlord that no other broker was involved
with the leasing of the Leased Premises or the negotiation of this Lease, or is
entitled to any commission, except for, Tenant's Broker (as identified in the
Basic Lease Information). Landlord shall compensate Tenant's Broker for its
services in connection herewith pursuant to a separate commission agreement
between Landlord and Tenant's Broker. Tenant agrees to indemnify and hold
Landlord harmless against any other
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claims (including court costs and attorneys' fees) for commissions by any broker
other than Tenant's Broker.
24.11 RECORDING. Tenant shall not record this Lease without Landlord's
prior written consent, and such recordation shall, at the option of Landlord,
constitute a non-curable default of Tenant hereunder. Tenant shall upon request
of Landlord execute, acknowledge and deliver to Landlord a short-form memorandum
of this Lease for recording purposes.
24.12 GOVERNMENTAL SURCHARGE. Tenant agrees to pay as Additional Rent
upon demand, Tenant's Share of any parking charges, regulatory fees, utility
surcharges, or any other costs levied, assessed or imposed by, or at the
direction of, or resulting from statutes or regulations, or interpretations
thereof, promulgated by any federal, state, municipal or local government
authority in connection with the use or occupancy of the Leased Premises or the
parking facilities serving the Leased Premises.
24.13 SPECIAL PROVISIONS. Special provisions of this Lease are attached
hereto as Exhibit E and by this reference made a part thereof.
24.14 ENTIRE AGREEMENT. It is understood that there are no oral
agreements between the parties hereto affecting this Lease, and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease.
24.15 FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, the party taking the action shall not
be liable or responsible for, and there shall be excluded from the computation
for any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
reasonable control of such party; provided, however, in no event shall the
foregoing apply to the financial obligations of either Landlord or Tenant to the
other under this Lease, including Tenant's obligation to pay Base Rent,
Additional Rent or any other amount payable to Landlord hereunder.
24.16 QUIET ENJOYMENT. Landlord covenants and agrees that so long as
Tenant has committed no default under this Lease, Tenant's peaceful and quiet
possession of the Leased Premises during the Lease Term shall not be disturbed
by Landlord or by anyone claiming through or under Landlord, subject to the
terms of this Lease and to any mortgages, ground or underlying leases,
agreements and encumbrances to which this Lease is or may be subordinated.
24.17 CHOICE OF LAW.
(a) The laws of the State of Texas shall govern the validity,
performance and enforcement of this Lease, without regard to the
principles of conflicts of laws. Each party
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submits to the jurisdiction of any court of the State of Texas sitting
in Dallas County, Texas, or any United States federal court sitting in
Dallas County, Texas, for the purposes of any legal proceeding arising
out of this Lease, or the breach thereof, and agrees that service of
any process, summons, notice, or document by United States certified
mail or other available means of delivery to the address set forth
herein will be effective service of process for any legal proceeding
brought against such party in any such court. Each party waives any
objection to venue of any legal proceeding arising out of this Lease,
or the breach thereof, or any transaction contemplated hereby, which is
brought in the courts of the State of Texas sitting in Dallas County,
Texas, and waives and agrees not to plead or claim in any such court
that any such legal proceeding brought in any such court has been
brought in an inconvenient forum.
(b) Except as hereinafter provided, the parties hereto agree
to negotiate in good faith in an effort to resolve any dispute related
to or arising out of this Lease or the breach thereof that may arise
between the parties. If such dispute cannot be resolved by negotiation,
the parties agree to submit the dispute to mediation before resorting
to litigation. If the need for mediation arises, a mutually acceptable
mediator shall be chosen by the parties to the dispute who shall share
the cost of mediation services equally. Notwithstanding the foregoing,
the provisions of this Paragraph 24.17(b) shall not apply to disputes
relating to nonpayment of Base Rent or Additional Rent.
24.18 CONSENT. Except as otherwise expressly provided in this Lease,
any and all consents or approvals required to be obtained from either Tenant or
Landlord under this Lease shall not be unreasonably withheld, conditioned or
delayed.
24.19 RIGHT OF OFFSET. If all or any portion of Landlord's Allowance
for Tenant Improvement Costs due to Tenant remains unpaid after Tenant becomes
entitled to the payment thereof, or if any commission due Tenant's Broker is not
paid as and when due pursuant to the separate commission agreement between
Landlord and Tenant's Broker, then Tenant shall be entitled to offset the unpaid
and due amounts, together with interest thereon at the Prime Rate (as defined in
Paragraph 24.20) plus two percent (2%) per annum, but not exceeding the maximum
lawful rate, against Base Rent and Additional Rent becoming due under this
Lease. Notwithstanding the foregoing, Tenant shall not be entitled to offset any
amounts due Tenant's Broker unless and until Tenant has (i) given Landlord
notice of such payment obligation and not less than fifteen (15) days thereafter
to make the delinquent payment, (ii) paid the amount due to Tenant's Broker, and
(iii) provided Landlord with notice of such payment.
24.20 PRIME RATE. The term "Prime Rate" shall mean the rate of interest
announced from time to time by Citibank, N.A., or its direct or remote
successor, as its prime rate of interest. An increase or decrease in the Prime
Rate shall result in a corresponding increase or decrease in the rate of
interest being charged hereunder and shall take effect on the day the increase
or decrease in the Prime Rate is made effective. If Citibank, N.A., or its
direct or remote successor, shall abandon or abolish the practice of publishing
the Prime Rate, or should the same become unascertainable,
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Landlord shall designate a comparable reference rate which shall then be deemed
to be the Prime Rate under this Lease.
24.21 EXHIBITS. The Lease and the exhibits and addendum, if any,
specified in this Lease are attached to this Lease and by this reference made a
part hereof.
24.22 TIME OF ESSENCE. Subject to the provisions of Paragraph 24.15,
time is of the essence of this Lease.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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44
IN WITNESS WHEREOF, these presents have been executed on the respective
dates indicated below, effective, however, as of this day and year first above
written.
LANDLORD:
BSDAL I LIMITED PARTNERSHIP, a
Georgia limited partnership
By: Xxxxx & Company, Inc., a Georgia
corporation, its sole general partner
By: /s/ XXXXXX X. XXXXX
---------------------------------
Xxxxxx X. Xxxxx, President
Date: April 27, 1998
TENANT:
MARKETING SPECIALISTS SALES
COMPANY
By: /s/ XXXXXXX X. XXXX
----------------------------------------
Title: Chief Financial Officer
Date: April 27, 1998
[SIGNATURE PAGE TO OFFICE LEASE]
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